ITEM 4.1_updated Dev Agreement Gateway North 5th AdditionDEVELOPMENT AGREEMENT
GATEWAY NORTH FIFTH ADDITION
LOT 2, BLOCK I
BUILDING 2
THIS AGREEMENT, entered into this day of February, 2016, by and
between the CITY OF OTSEGO, a Minnesota municipal corporation ("CITY")
and DUKE REALTY LIMITED PARTNERSHIP, a Limited Partnership under the
laws of the State of Indiana ("DEVELOPER")
RECITALS
WHEREAS, DEVELOPER and CITY entered into that certain
Development Agreement Gateway North Fourth Addition dated September 25,
2014 (the `Building 3 Agreement") for the development of approximately 26.14
acres of land which included Lot 2, Block 1 ("Lot 2") and Lot 3, Block 1 ("Lot
3") as shown on the final plat for Gateway North Fourth Addition.
WHEREAS, although certain terms and conditions of the Building 3
Agreement apply to Lot 3, the City and Developer agreed that when a building is
to be constructed on Lot 3 the parties will enter into a separate development
agreement to address specific issues related to that bulding.
WHEREAS, DEVELOPER is the fee owner of certain parcels of land
described as follows:
LOT 1, BLOCK 1 GATEWAY NORTH FOURTH ADDITION, LOT 2,
BLOCK 1, GATEWAY NORTH FOURTH ADDITION, and LOT 3, BLOCK 1,
GATEWAY NORTH FOURTH ADDITION according to the Final Plat on file
and of record at the Office of the County Recorder, Wright County, Minnesota.
Lot 3, Block 1, Gateway North Fourth Addition, is proposed to be final
platted ("Fifth Addition Plat") as LOT 2, BLOCK 1, GATEWAY NORTH FIFTH
ADDITION (the "Subject Property"); and
WHEREAS, DEVELOPER has submitted site and building plans for
development of an industrial warehouse building on the Subject Property; and
WHEREAS, the Subject Property is part of a Planned Unit Development
("PUD") for 109.71 acres of property rezoned on June 12, 2006 as I-2 District
with a Planned Unit Development; and
WHEREAS, on September 20, 2006, the CITY and DEVELOPER entered
into that certain Development Agreement Gateway North ("Master Development
Agreement"); and
WHEREAS, the Master Development Agreement requires that the
DEVELOPER enter into additional Development Agreements with the CITY as a
condition of approval of individual developments; and
WHEREAS, in accordance with the Master Development Agreement,
DEVELOPER and CITY hereby agree that Building 2 shall be developed on the
Subject Property and within the Fifth Addition Plat in accordance with the terms
and conditions contained herein.
NOW THEREFORE, in consideration of the promises and mutual promises
hereinafter contained, it is agreed between the parties as follows:
1. Development Plans. The Subject Property shall be developed in
accordance with the plans, the cover sheet of which is attached to this
Agreement as Exhibit A, dated , 2016 and signed by the City
Engineer on file and of record at the CITY, and fully incorporated
herein by reference and the conditions stated below (hereinafter the
"Building 2 Development Plans"). If the Building 2 Development Plans
vary from the written terms of this Agreement, the Building 2
Development Plans shall control. Further, in the event of any conflict or
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variance between the Building 2 Development Plans and the
Development Plans (as defined in the Master Development Agreement),
the Building 2 Development Plans shall control.
2. Municipal Improvements. The Building 2 Development Plans include
certain Municipal Improvements as set forth on the attached Exhibit B.
3. Private Improvements. The DEVELOPER or any future owner of the
Subject Property ("Future Owner") agrees that it shall cause to be
constructed and installed certain private improvements ("Private
Improvements") on the Subject Property. All Private Improvements are
to be installed at DEVELOPER'S or Future Owner's sole cost and
expense pursuant to this Agreement and the Private Improvementsto the
Subject Property shall include those improvements shown on the
Building 2 Development Plans.
DEVELOPER or Future Owner shall construct such Private
hmprovements in accordance with all applicable building codes,
ordinances and CITY standards and the Building 2 Development Plans
furnished to the CITY and approved by the City Engineer. The
DEVELOPER shall obtain all necessary permits before construction of
a building. CITY shall provide adequate field inspection personnel to
assure acceptable quality control, which will allow certification of the
construction work. Within thirty (30) days after the completion of the
building and before any security is released (as more fully set forth in the
Master Development Agreement), the DEVELOPER or Future Owner
shall supply the CITY with a complete set of reproducible "as built" plans
and two (2) complete sets of blue line "as built" plans prepared in
accordance with CITY standards.
4. Grading, Landscaping and Drainage. The DEVELOPER or Future
Owner shall be responsible for grading, landscaping and storm water
management on the Subject Property as more fully set forth in this
Agreement and the Landscaping Plan.
A. Landscaping. DEVELOPER or Future Owner shall maintain the
sod and landscape of boulevard areas adjacent to the Subject
Property as shown in the Building 2 Development Plans through at
least one growing season and to the reasonable satisfaction of CITY.
The long term maintenance of sod and landscaping of boulevard
areas shall be the responsibility of DEVELOPER or any Future
Owner after purchase of the Subject Property. Further,
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DEVELOPER or Future Owner shall be responsible for mowing,
elimination of weeds and removal of any garbage or debris on the
Subject Property.
B. Erosion Control. The erosion control plan for the Subject Property
within the Building 2 Development Plans has been reviewed and
approved by CITY and shall be implemented by DEVELOPER prior
to grading of the Subject Property. All areas disturbed by the
excavation and backfilling operations shall be reseeded forthwith
after completion of work in that area. If DEVELOPER does not
comply with the erosion control plan and schedule or any erosion
control requirements, CITY may, with reasonable notice, take action
as it deems appropriate in accordance with all applicable laws,
ordinances or regulations or according to this Agreement.
C. Grading Plan. Grading of the Subject Property shall be in
accordance with the approved Grading Plan as provided in the
Building 2 Development Plans.
5. Pre -Construction Activity. DEVELOPER shall schedule a pre -
construction meeting with CITY to review the proposed schedule for
grading and construction of the Subject Property and related
improvements as set forth on the Building 2 Development Plans, and to
coordinate the schedule with the City Engineer.
6. Ownership of Improvements. Upon completion of the work and
construction required by this Agreement, improvements lying within
public easements on the Subject Property shall become CITY property
without further notice or action, except that those streets, which will be
maintained as private drives shall remain under DEVELOPER's
ownership subject to any and all necessary easements, including
necessary ingress and egress access to future lots. All storm ponds,
detention ponds and outlets on Outlots (specifically, Outlots A, B, C, D,
and E, as shown on the Final Plat for Gateway North Fourth Addition;
the "Pond Parcels") shall remain DEVELOPER property subject to any
easements and the functionality of such ponds and outlets shall be
maintained by the CITY. CITY hereby acknowledges and agrees that
the ownership of the Pond Parcels may be conveyed to the Gateway
North Business Owners' Association, Inc. ("Owners Association") and
such Owners Association shall maintain the landscaping and be
responsible for the maintenance, repair, replacement and utility costs for
the Pond Parcels which constitute a part of the common area, including,
but not limited to, any costs associated with the removal of
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sedimentation, fallen objects, debris and trash; mowing; outlet cleaning;
fountain maintenance; pumping and lighting of these areas to the extent
the CITY does not maintain the same as part of its stormwater
management program.
7. Clean Up. DEVELOPER shall promptly clean any and all dirt and
debris from streets resulting from construction work by DEVELOPER,
its agents or assigns during the work and construction required by this
Agreement.
8. AUAR. DEVELOPER has completed and AUAR (Alternative Urban
Areawide Review) affecting the Subject Property that the CITY
approved on June 26, 2006. DEVELOPER shall comply with all terms
and conditions of CITY approval of the AUAR and implement any and
all actions or mitigation required by CITY approval.
9. Administrative Fee. A one-time fee for CITY administration of the
development of the Subject Property is one (1%) percent of estimated
construction costs or $1,519.00.
10. Park and Trail Dedication. Park and Trail dedication requirements for
GATEWAY NORTH FIFTH ADDITION were satisfied with the Final
Plat of GATEWAY NORTH as set forth in the Master Development
Agreement.
11. Storm Water Fees. No Storm Water Fees are applicable to
GATEWAY NORTH FIFTH ADDITION as set forth in the Master
Development Agreement.
12. Sewer Availability Charges. The Sewer Availability Charges for
GATEWAY NORTH FIFTH ADDITION were satisfied with the Final
Plat of GATEWAY NORTH FOURTH ADDITION.
13. Sewer Connection Fees. Sanitary sewer connection fees are paid at the
time of issuance of a building permit. At the time of connection, the
DEVELOPER shall pay two (2) RECs at the current fee rates in effect at
the time of building permit approval for the Subject Property.
14. Water Availability Charges. The Water Availability Charges for
GATEWAY NORTH FIFTH ADDITION were satisfied with the Final
Plat of GATEWAY NORTH FOURTH ADDITION.
15. Water Connection Fees. Water connection fees are paid at the time of
issuance of a building permit. At the time of connection, the
DEVELOPER shall pay two (2) RECs at the current fee rates in effect at
the time of building permit approval for the Subject Property.
16. Street and Traffic Control Sign Fees. The fee amount for the Subject
Property was calculated as follows: 0 signs at $250.00 per sign or
$00.00.
17. CITY Engineering, Engineering Administration, Construction
Observation, and Legal Fee Escrow and City Fees. DEVELOPER
shall pay escrow for the CITY'S engineering, engineering
administration and construction observation services of Municipal
Improvements as set forth on Exhibit B, following execution of this
agreement, in the estimated amount set forth below. City engineering
administration will include consultation with DEVELOPER and its
engineer on status or problems regarding the Project, monitoring during
the warranty period, general administration and processing of requests
for reduction in security. Fees for this service shall be the actual amount
billed for those service estimated to be three percent (3%) of the
estimated construction cost of the improvements to be inspected,
assuming normal construction and project scheduling. DEVELOPER
shall pay for construction observation of the Municipal Improvements
performed by the City Engineer. Construction observation shall include
part or full time observation, as determined by the City Engineer, of the
Municipal Improvements and will be billed at hourly rates actually
required for said inspection estimated to be five percent (5%) of the
estimated construction cost of the improvements to be inspected. In the
event of prolonged construction or unusual problems, CITY will notify
DEVELOPER of anticipated cost overruns for engineering
administration and observation services.
The Escrow and Fee account for Building 2 shall include estimated
escrow for City Engineering, Engineering Administration and
Construction Observation limited to the Municipal Improvements
expenses and Legal expenses, and fees for City Administrative, Street
and Traffic Control Signs, Water and Sewer Availability Charges as
follows:
ESCROW AND FEES
City Construction Administration and Inspection Escrow $12,155.00
(estimated 8% of $151,932, actual billings to be paid)
no
Legal Fees (1 % of $151,932 actual billings to be paid) $1,519.00
City Administration Fees (1% of $151,932) $1,519.00
Street & traffic control sign Fees (0 at $250.00 per sign) $00.00
Sewer Availability Charge Fees $00.00
Water Availability Charge Fees $00.00
TOTAL $15,193.00
These Escrow and Fee amounts shall be submitted to CITY prior to
CITY executing this Agreement. Any Escrow amounts not utilized for
legal and engineering charges incurred by the City under this
Agreement shall be returned to DEVELOPER when all improvements
have been completed, all financial obligations to CITY satisfied, and all
required "as -built " plans have been received by CITY.
Engineering, planning and legal fees incurred prior to the execution of
this Agreement shall be deducted from escrow already submitted with
the Plat application or charged against the escrow herein established.
All other amounts listed as one-time fees are non-refundable and
available immediately for CITY use when posted.
18. Security. To ensure compliance with the terms of this Agreement, and
construction of all Municipal Improvements, DEVELOPER shall
furnish CITY with a cash escrow or Irrevocable Standby Letter of
Credit in the amount of $371,115.29, said amount calculated as follows:
Site Grading, Erosion & Sediment Control
Watermain- Lateral
Storm Sewer- Lateral
Engineering & Surveying Construction Services
Landscaping
SUBTOTAL
$90,750.00
$127,080.00
$24,852.00
$9,875.58
$44,334.65
$296,892.23
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TOTAL SECURITY ($296,892.23 x 125%) $371,115.29
The issuer and form of the security (other than cash escrow) shall be
subject to CITY approval, which approval shall not be unreasonably
withheld. The security shall be issued by a banking institution in good
standing as determined by CITY and approved by the City
Administrator. CITY shall have the ability to draw on the Security by
overnight courier delivery to the bank or branch bank issuing the Letter
of Credit.
The security shall be for a term ending December 31, 2016, and shall
contain an automatic renewal provision. CITY may draw down the
security for any violation of the terms of this Agreement, or upon
receiving notice of the pending expiration of the security. It shall be the
responsibility of DEVELOPER to infonn CITY at least thirty (30) days
prior to expiration of the security of the impending expiration and the
status of the Project relative to the security and this Agreement. If, for
whatever reason, the security lapses prior to complete compliance with
this Agreement (other than during any warranty period), DEVELOPER
shall immediately provide CITY with either an extension of the security
or an irrevocable letter of credit of the same amount upon notification of
the expiration. If the required improvements are not completed at least
thirty (30) days prior to the expiration of the security, CITY may also
draw down the security.
CITY may draw down the security for any violation of the terms of this
Agreement (after any reasonable notice to DEVELOPER and cure
periods). If the security is drawn down, the proceeds shall be used to
cure any default. CITY will, upon making determination of final costs
to cure any default, refund to the DEVELOPER any monies which
CITY has in its possession which are in excess of the security needed.
Upon receipt of proof satisfactory to CITY that work has been
completed and financial obligations to CITY have been satisfied, the
security will be reduced from time to time down to the amount of
warranty security as set forth in paragraph 19 of this Agreement.
The security shall not be reduced below ten percent (10%) of the posted
security until all improvements have been completed, all financial
obligations to CITY satisfied (which includes posting of warranty
security), and required "as built" plans have been received by CITY.
The intent of this Agreement that CITY shall have access to sufficient
security, either security or warranty security, to complete the Project
and insure warranty on all public improvements.
The security amount shall be submitted to CITY prior to execution of
the Agreement.
19. Warranty. DEVELOPER warrants all work required to be performed
by it against poor material and faulty worlmanship for a period of one
(1) year after its completion and acceptance by CITY. The amount of
posted security for warranty of public improvements to be posted by
DEVELOPER shall be in the amount of $27,327.30. The amount has
been determined by the City Engineer and is based upon the costs of the
raw materials and labor which would be necessary to correct the most
common deficiencies in the public improvements.
20. Intentionally Deleted.
21. Responsibility for Costs.
A. Except costs for construction of improvements such as site grading,
drainage, erosion and sediment control and wetland protection, if
any, within the Fifth Addition Plat and which are further identified
on Exhibit C attached hereto (the "Developer's Internal
Improvements") and except as otherwise set forth herein and in the
Master Development Agreement, DEVELOPER shall pay all costs
incurred by it or CITY in conjunction with the development of the
Subject Property including, but not limited to legal, planning,
engineering, and inspection expenses in connection with the
development of said Lot.
B. DEVELOPER shall hold CITY and its officers, employees and
agents harmless from claims made by itself and third parties for
damages sustained or costs incurred resulting from DEVELOPER's
acts or failures to act in connection with development of the Subject
Property by DEVELOPER. DEVELOPER shall indemnify CITY
and its officers, employees and agents for all costs, damages or
expenses which CITY may pay or incur in consequence of such
claims, including attorney's fees.
C. DEVELOPER shall reimburse CITY for costs incurred in the
enforcement of this Agreement, including engineering fees, planning
fees, attorney's fees, and costs and disbursements. CITY shall
reimburse DEVELOPER for costs incurred in the enforcement of
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this Agreement, including engineering fees, attorney's fees, and
costs and disbursements.
D. DEVELOPER shall pay in full all bills submitted to it by CITY for
obligations incurred under this Agreement and agreed to be paid by
DEVELOPER under this Agreement within thirty (30) days after
receipt. If the bills are not paid on time, and DEVELOPER does not
reasonably dispute the payment of amount of such bill CITY may
either reimburse itself from existing Escrow or Security or may halt
all Building 3 development work, and construction until all bills are
paid in full. Bills not paid within thirty (30) days shall accrue interest
at the rate of twelve percent (12%) per year.
22. Payment and Release of Special Assessment. The CITY hereby
agrees that, provided the DEVELOPER remits payment to the CITY in
the amount of Forty -Eight Thousand Seventy -Four and 53/100 Dollars
($48,074.53) on or before February 23, 2016, which assessment has
been prorated for the Subject Property, the CITY forever releases and
discharges any liability of the DEVELOPER and the Future Owner
from any further payment of any Special Assessment described in
Section 5 of the Master Development Agreement.
23. Miscellaneous.
A. Third parties shall have no recourse against CITY under this
Agreement.
B. If any portion, section, subsection, sentence, clause, paragraph or
phrase of this Agreement is for any reason held invalid, such
decision shall not affect the validity of the remaining portion of this
Agreement.
C. The action or inaction of CITY or DEVELOPER shall not constitute
a waiver or amendment to the provisions of this Agreement. To be
binding, amendments or waivers shall be in writing, signed by the
parties and approved by written resolution of the City Council.
CITY's or DEVELOPER's failure to promptly take legal action to
enforce this Agreement shall not be a waiver or release.
D. This Agreement shall run with the land, shall be recorded against the
title to the Subject Property, and shall be binding on all parties
having any right, title or interests in the Subject Property or any part
thereof, their heirs, successors and assigns.
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E. Each right, power or remedy herein conferred upon CITY or
DEVELOPER is cumulative and in addition to every other right,
power or remedy, express or implied, now or hereafter arising,
available to CITY or DEVELOPER, at law or in equity, or under
any other agreement, and each and every right, power and remedy
herein set forth or otherwise so existing may be exercised from time
to time as often and in such order as may be deemed expedient by
CITY or DEVELOPER and shall not be a waiver of the right to
exercise at anytime thereafter any other right, power or remedy.
F. DEVELOPER shall pay for all local costs related to drainage
improvements required to complete the construction of the Subject
Property according to the Development Plans. Local costs are costs
related required internal drainage improvements such as retention
ponds.
G. Should development of the Subject Property proceed at a pace
slower than anticipated, and for that reason, specific terms of this
Agreement become onerous or unduly burdensome to
DEVELOPER, upon DEVELOPER's application, CITY will enter
into negotiations regarding those specific terms and shall not
unreasonably withhold consent to appropriate changes in the terms
of this Agreement.
H. DEVELOPER shall demonstrate and maintain compliance with the
1991 Wetland Conservation Act, only to the extent said Act applies
to the Subject Property.
I. DEVELOPER shall be responsible for all on site drainage for the
Subject Property, as well as for any affects their actions may have on
adjoining properties.
24. Violation of Agreement. If while the escrow or security provided in
this Agreement is outstanding, a violation of any of the covenants or
agreements herein contained occurs and such violation is not cured
within thirty (30) days after written notice thereof from CITY to
DEVELOPER, CITY may draw upon the DEVELOPER's escrow or
security to cure any violation of the Agreement and to reimburse CITY
for any costs incurred in curing the violation.
25. Maintain Public Property Damaged or Cluttered During
Construction. DEVELOPER agrees to assume full financial
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responsibility for any damage which may occur to public property
including, but not limited to, street, street sub -base, base, bituminous
surface, curb, utility system including, but not limited to, watermain,
sanitary sewer or storm sewer when said damage occurs as a result of
construction activity which takes place during development of the
Subject Property by DEVELOPER or its contractors, except for damage
caused by CITY, its employees, agents or contractors. DEVELOPER
further agrees to pay all costs required to repair the streets and/or utility
systems damaged or cluttered with debris when occurring as a direct or
indirect result of the Developer's construction that takes place on the
Subject Property. In the event that DEVELOPER is required to maintain
or repair such damage and fails to maintain or repair the damaged public
property referred to aforesaid within thirty (30) days after written notice
from CITY or such longer period as may reasonably necessary or in the
event of an emergency as shorter time period as determined by CITY,
CITY may, upon notifying DEVELOPER undertake making or causing
it to be repaired or maintained. When CITY undertakes such repair,
DEVELOPER shall reimburse CITY for all its reasonable expenses
within thirty (30) of its billing to DEVELOPER. If DEVELOPER fails
to pay said bill within thirty (30) days, the security shall be responsible
for reimbursing CITY.
26. Non -Assignment Without Consent. The obligations of DEVELOPER
under this Agreement may be assigned by DEVELOPER if the
assignment is approved by CITY. However, DEVELOPER shall not be
released from its obligations under this Agreement until a written
request from the DEVELOPER is received by the CITYand the express
written consent of the City Council through Council resolution is
approved (such approval shall not be unreasonably withheld and is to be
provided to the DEVELOPER within 60 days of receipt of
DEVELOPER's request). Notwithstanding the foregoing, the CITY
hereby approves the assignment of this Development Agreement and
DEVELOPER's obligations hereunder to Wagner Spray Tech, Inc., a
Minnesota corporation ("Wagner"), provided the DEVELOPER and
Wagner execute and record an assignment of this Development
Agreement in the public records for the Subject Property and provide a
copy of same to the CITY.
27. Subordination. This Agreement must be recorded against the Subject
Property and all other liens, interests or mortgages shall be subordinate
to the terms and conditions this Agreement and said Agreement shall
not be subject to foreclosure by any other lien, interest or mortgage.
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28. Notices. Required notices to DEVELOPER shall either hand delivered
to DEVELOPER, it employees or agents, or mailed to DEVELOPER by
registered mail or sent by overnight delivery to the following address:
Duke Realty Limited Partnership, c/o Duke Realty Corporation, Attn:
Josh Budish, 1600 Utica Avenue South, Suite 250, St. Louis Park, MN
55416 with a copy to Lisa Starcevich, Duke Realty Corporation, 1301
W. 22nd Street, Suite 800, Oak Brook, IL 60523. Notice to CITY shall
be in writing and shall be either hand delivered to the City Clerk or
Deputy City Clerk or mailed by registered mail or sent by overnight
delivery to the following address: City of Otsego, City Hall, 13400 90tn
Street NE, Otsego, MN 55330, Attention: City Clerk. Notices to
Wagner, if applicable, shall be in writing and shall be either mailed by
registered mail or sent by overnight delivery to the following address:
Wagner Spray Tech Corporation, Attn: Daniel John, 1770 Fernbrook
Lane, Plymouth, MN 55309.
29. Agreement Effect. This Agreement shall be binding and extend to the
respective representatives, heirs, successors and assigns of the parties
hereto.
30. Amendment. This Agreement shall be amended only by addendum
executed by both parties to this Agreement.
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IN WITNESS WHEREOF, DEVELOPER and CITY have executed this
Agreement as of the day and year above first written.
CITY OF OTSEGO,
A municipal corporation
Jessica Stockamp, Mayor
Tami Loff, City Clerk -
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
BY: Duke Realty Corporation, its General Partner
By:
Steven W. Schnur
Executive Vice President, Central Region
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STATE OF MINNESOTA )
) ss.
COUNTY OF WRIGHT )
On this day of , 2016, before me personally appeared Jessica
Stockamp and Tami Loff to me known as the persons described in the foregoing
instrument and who did say they are, respectively, the Mayor and City Clerk of the
municipal corporation named therein and that said instrument was signed on
behalf of said municipal corporation by authority of its City Council and said
Jessica Stockamp and Tami Loff acknowledged said instrument to be the free act
and deed of said municipal corporation.
NOTARY PUBLIC
STATE OF )
ss.
COUNTY OF
On this day of , 2016, before me personally appeared Steven W.
Schnur to me known as the person described in the foregoing instrument and who
did say he is the Executive Vice President of Duke Realty Corporation, the
general partner of Duke Realty Limited Partnership and that said instrument was
signed on behalf of Duke Realty Limited Partnership with authority and on behalf
of the partnership and said Executive Vice President acknowledged said
instrument to be the free act and deed of said entity.
NOTARY PUBLIC
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EXHIBIT A
DEVELOPMENT PLANS FOR THE SUBJECT PROPERTY
Site Development Plans for LOT 2, BLOCK 1, GATEWAY NORTH FIFTH
ADDITION prepared by Sambatek, Inc. dated , 2016 and approved by
CITY , 2016 cover sheet attached.
EXHIBIT B
MUNICIPAL IMPROVEMENTS
Attached.
EXHIBIT C
DEVELOPER'S INTERNAL IMPROVEMENTS
[insert here]