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HomeMy WebLinkAboutRes 35-03 08/05/20037/25/03 8/5/03 rcjacobs 816/03 RESOLUTION NO. 35-03 A RESOLUTION AMENDING RESOLUTION NO. 64-01 AUTHORIZING THE EXECUTION OF A REDEVELOPMENT AND ECONOMIC INCENTIVE AGREEMENT BETWEEN THE VILLAGE OF MOUNT PROSPECT AND ROUSE-RANDHURST SHOPPING CENTER, LLC, A MARYLAND LIMITED LIABILITY COMPANY WHEREAS, on December 18, 2001, the corporate authorities of the Village of Mount Prospect (hereinafter referred to as "the Village'~ determined that it was in the best interests of the Village to enter into an Economic Incentive Agreement (hereinafter referred to as "the Agreemen¢') with Rouse-Randhurst Shopping Center, Inc. (hereinafter referred to as "Rouse-Randhurst") for the redevelopment of a certain portion of Randhurst Shopping Center in the Village of Mount Prospect; and WHEREAS, the Agreement, as approved was to become null and void if Tenant did not occupy the Store by January 1,2004; and WHEREAS, the Corporate Authorities have determined that it is in the best interests of the Village and its residents to extend the occupancy date and to make certain other changes in the Agreement; and WHEREAS, said Agreement, as amended, is a direct benefit to the Village of Mount Prospect and its residents by providing the basis for attracting a major new anChor tenant to the Randhurst Shopping Center. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK cOUNTY, ILLINOIS: S~ The Mayor and Board of Trustees of the Village of Mount Prospect are hereby authorized to execute the amended Redevelopment and Economic Incentive Agreement with Rouse-Randhurst Shopping Center, LLC, a Maryland limited liability company, the successor by merger of Rouse-Randhurst, attached hereto and made a part of this Resolution as Exhibit "A." OM P/Randhurst/COSTCO Page 2/2 ~C.,~gJA~L~: That this Resolution shall be in full force and effective from and after its passage and approval in the manner provided by law. AYES: Corcoran, Hoefert, Lohrstorfer, Skowron, Zadel NAYS: None ABSENT: Wilks PASSED and APPROVED this 5th day of August, 2003. ATTEST: ~-. Velma W/Lowe Village Clerk H:\CLKO\files\WiN\RES\Fina[ Vet - Amend COSTO Agrmt Aug 2003.doc [SSL 7/11/03] REDEVELOPMENT AND ECONOMIC INCENTIVE AGREEMENT BY AND BETWEEN ROUSE-RANDHURST SHOPPING CENTER, LLC, a Maryland limited liability company and VILLAGE OF MOUNT PROSPECT, an Illinois home rule municipal corporation August ,2003 -42HGO2:20025687.v I 1 REDEVELOPMENT AND ECONOMIC INCENTIVE AGREEMENT This REDEVELOPMENT AND ECONOMIC INCENTIVE AGREEMENT (this "Agreement") is entered into as of the __ day of August, 2003 by and among, ROUSE- RANDHURST SHOPPING CENTER, LLC, a Maryland limited liability company ("Developer"), and the VILLAGE OF MOUNT PROSPECT, an Illinois home rule municipal corporation (the "Village"). Developer and the Village are hereinafter individually sometimes referred to as a "Party" and collectively as the "Parties." RECITALS A. JP Morgan Chase Bank, as Trustee under Amended and Restated Declaration of Trust, dated November 13, 2001, as amended, for its Commingled Pension Trust Fund (Strategic Property) ("Owner"), is the owner of fee simple title to the real property located generally at the northeast comer of the intersections of Elmhurst and Rand Roads in the Village of Mount Prospect, Cook County, Illinois, which real estate is legally described on Exhibit A attached hereto (the "Property"). B. Developer is the ground lessee of the Property and owner of the regional shopping center commonly known as Randhurst Shopping Center ("Randhurst") located on the Property. Developer is the landlord for all retail leases at Randhurst and manages and operates Randhurst. For the purposes of this Agreement, the Property and Randhurst exclude the adjacent office building parcel located at the southeast comer of Euclid and Elmhurst Roads in the Village of Mount Prospect, Cook County, Illinois. C. Randhurst is the largest generator of combined sales and real estate tax revenue within the Village and provides a significant portion of the Village's revenues The commercial traffic generated by Randhurst also enhances the development and commercial viability of other Village revenue-generating enterprises located near Randhurst. D. Over the last four years or more, Randhurst has been significantly underutilized as evidenced by increasing vacancies and the stagnation in revenue generated by retail sales at Randhurst and a resulting reduction in sales tax revenues from Randhurst to the Village. E. As with most regional shopping centers, the economic strength and commercial viability of Randhurst are directly related to the strength, viability, traffic and sales generated by its primary anchor tenants. In the last two years, Montgomery Ward & Co., Incorporated, an Illinois company ("Ward"), and J. C. Penney Company, Inc. closed their respective anchor tenant stores at Randhurst (and Kohl's Corporation has indicated that it intends to close their store at Randhurst), causing significant impact on both the commercial viability o f Randhurst and the revenues generated by Randhurst. These closings resulted in direct loss of Sales Tax revenue to the Village. The closing of these anchor stores also creates the possibility for additional and more significant detriment to Randhurst, and, therefore, to the Village, based on the rights of other key tenants at the center to terminate leases or to reduce rents based on reduced anchor tenant occupancy and reduced sales at Randhurst. ~CHGO2:20025687.vl I F. Costco Wholesale Corporation, a Washington corporation ("Tenant"), subject to the execution of this Agreement, desires to lease from Developer (the "Lease") approximately 15 acres of the Property (the "Tenant Parcel") identified on the preliminary site plan attached hereto as Exhibit B (the "Site Plan") for construction and operation of the Store, as defined herein. The Store w ill b e constructed i n a manner generally consistent with t he Site P lan a nd a I1 exterior portions of walls of the Store exposed to Public roadways will be constructed of a combination of high quality architectural pre-cast concrete and masonry materials (e.g. concrete masonry units or similar). G. The Store is anticipated to provide a dramatic increase in commercial activity and revenues both directly through significant retail Store sales and indirectly by enhancing commercial activity at Randhurst and adjacent properties. These increased sales will also reduce the risk of further vacancies or rent reductions at Randhurst. H. Randhurst is currently improved with structures which, while generally monitored and updated to address life safety concerns, are otherwise older structures built under prior building codes and therefore no longer comply with the Village's current building codes. The parking lot, storm drainage, parking lot lighting and other improvements require some demolition, repair and replacement if the Tenant Parcel is to be redeveloped. I. Construction and operation of the Store involves numerous extraordinary costs, including without limitation, (1) asbestos abatement and other modifications due to existing improvements not complying with current building codes; (2)demolition of the Kohl's and J.C. Penney stores and most of the existing Wards' store, including removal of related basements; (3) demolition of existing m all stores and common areas t o accommodate t he S tore; (4) upgrade o f design a nd materials to satisfy the Village's development requirements; (5) buyout of potential exclusionary use rights which may conflict with the Store use; (6) economic costs related to establishing the Store in this marketplace; and (7) infrastructure improvements at Randhurst, such as parking lot and public and private utility improvements. As a result of these extraordinary costs, Developer and Tenant cannot complete t he Project without t he economic incentives provided for i n t his Agreement. J. The Village, based on the approximately 40 year history of Randhurst in the Village, has found that it is important to the economic and social welfare of the Village to maintain and to enhance the economic viability and benefits of Randhurst and to thereby assure opportunities for development and redevelopment by attracting sound and stable commercial growth within and surrounding Randhurst. K. The Village's corporate authorities have determined and made the following findings: The buildings on the Property have been significantly underutilized for at least two (2) years and, while generally monitored and updated to address life safety concerns, are otherwise older structures built under prior building codes and therefore no longer comply with current building codes; (2) The Project, as defined herein, is expected to create and to retain job opportunities within the Village; 2 .-CHGO2:20025687.vl I (3) The Project will serve to further development of areas adjacent to the Property; (4) Without this Agreement, the Project would not be possible; (5) The Developer meets high standards of creditworthy and financial strength as demonstrated by specific evidence of equity financing for not less than ten percent (10%) of the total Project cost; (6) The Project will strengthen the commercial sector of the Village; (7) The Project will enhance the tax base of the municipality; (8) This Agreement is in the best interest of the Village; and (9) The powers being exercised hereunder by the Village are in furtherance of and essential to the public interest. L. The Village seeks to encourage completion of the Project and, in order to make the Project economically feasible, the Village has agreed to reimburse Developer for certain costs of Developer and Tenant related to the Project. NOW,' THEREFORE, in consideration of the foregoing recitals, the covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: ARTICLE 1. RECITALS. The recitals set forth above are accurate and are expressly incorporated into this Agreement by this reference thereto as if fully set forth in this Article 1. ARTICLE 2. AUTHORITY. This Agreement is entered into by the Village pursuant to all or any of the following: (i) applicable provisions of the Illinois Constitution of 1970, including, without limitation, the "Intergovernmental Cooperation" and municipal debt provisions of Article VII, §10(a) and §7(5) respectively; (ii) 65 ILCS 5/8-11-20; (iii) the Village's authority as a home rule unit of local government and (iv) the Village's police power. ARTICLE 3. DEFINITIONS. (1) Annual Payment. Fifty percent (50%) of all Sales Taxes after a base amount of $3,500,000 of Sales Taxes in any Sales Tax Year is reached. (2) Commencement Date. The first day of the first full month following the date all of the following conditions are satisfied (i) construction of the Store is completed (as detemdned by the Village's issuance of a certificate of occupancy therefor), (ii) the Store is opened for business and (iii) retail sales activities commence therein. (3) Department. The Illinois Department of Revenue, or any other governmental entity responsible for distribution of Sales Tax revenues. 3 -CHGO2:20025687.vl I (4) (5) (6) (7) (8) (9) (10) (I1) Director. The Village's Director of Finance, or in his absence, the Village Manager. Force Maieure. Fire or other casualty, condemnation of a portion of the Property which materially affects retail sales at Randhurst, strike, lock-out, civil disorder, war, terrorist acts directly against the Property, acts of God, unforeseeable adverse weather conditions, any temporary or permanent injunction or other court order or other cause beyond any Party's reasonable control. Payment Date. Each July 31st after the Commencement Date until the Termination Date. Project. The asbestos abatement and demolition of the Kohl's, J.C. Penney's and most of the Ward's Store and a portion of existing mall stores and common areas, including removal of related basements, shoring up of portions of remaining Randhurst improvements, closing the building openings left by the demolition, backfill and compaction, construction and build out of the Store, new mall entry, retail a nd infrastructure improvements, such a s parking 1 ots, private a nd public utility improvements, economic incentives to offset possible conflicting exclusivity rights, upgraded design and features for t he S tore, execution o f t he Lease and commencement of operation of the Store at Randhurst. Reimbursement Amount. The sum of $5,000,000.00 plus simple interest figured at a rate of four and one-half percent (4.5%) annually on the unpaid balance, including any accrued interest. Reimbursement Period. The period of time from the Commencement Date to the Termination Date, provided that such period shall be extended for such period of time as the Store or a portion of Randhurst sufficient to materially affect retail sales at Randhurst is closed as a result of an occurrence of Force Majeure. Sales Tax Year. The first Sales Tax Year shall be from the Commencement Date through the next June 30th. The next 14 Sales Tax Years (if necessary) shall be from the next July 1st to June 30th. The last Sales Tax Year shall be from the next July 1st through the 15th anniversary of the Commencement Date. For the first and last years the base amount of $3,500,000 shall be prorated in direct proportion to the number of days in those Sales Tax Years. Sales Taxes. The combination of: (i) that net portion of taxes imposed by the State and collected from Randhurst for distribution to the Village pursuant to the Illinois Retailers' Occupation Tax Act or the Service Occupation Tax Act (collectively the "Tax Acts") as said acts may be amended or any other so-called "sales tax" or similar tax in the event such taxes are no longer collected and distributed pursuant to the Tax Acts and which are collected by the State (currently such n et portion i s 1% o f t he t oral a mount o f g ross sa les within t he Village which are subject to the Tax Acts); and (ii) the taxes now or which may hereafter be imposed by the Village as a home rule unit of local government and 4 -CHGO2:20025657.vll collected from Randhurst (up to the one-half of one percent (1/2%) level on the sale of respective items as now imposed by the Village) as a retailer's occupation tax, a service occupation tax, a use tax, or a service use tax; specifically excluding local Food and Beverage and Local Motor Fuel Tax. If the Village's tax under (ii) above is less than one-half of one percent (1/2%), then the amount due to Developer under (ii) above shall be reduced accordingly. Howet er, under no circumstances shall the amount due for the local sales tax, as stated above, exceed half of one percent (1/2%) even if that percentage is raised by the Village. If the percentage of Sales Taxes collected under (i) and (ii) above is decreased below the current rate of one and one~half percent (1.5%), then the Reimbursement Period and Termination Date shall be extended by a time period equal to the percentage of such decrease, subject to force majeure and final accounting and payment as otherwise provided herein. UNDER NO CIRCUMSTANCES SHALL SALES TAXES, INCLUDE ANY TAXES COLLECTED FROM ANY AREA OTHER THAN RANDHURST. (12) State. The State of Illinois. (13) Store. The approximately 150,000 square foot membership warehouse club and related tire, battery and automobile accessory sales and installation center and fueling facility and related parking Developer intends to construct or cause to be constructed on the Tenant's Parcel and any additions to such store. (14) Termination Date. The date which is the earlier of: (1) the date the Director makes final distribution of the full Reimbursement Amount, including all interest due Developer, and (2) the date Tenant ceases commercial operations at the Store for a period of one-hundred and eighty (180) consecutive days, subject to Force Majeure; and (3) Fifteen (15) years from the Commencement Date plus any time necessary for the Village to undertake final accounting and payment to Developer after such 15 year period: ARTICLE 4. REIMBURSEMENT TO DEVELOPER. A. Subject to the terms and conditions of this Agreement, the Village agrees to reimburse Developer for certain of Developer's and Tenant's costs of completion of the Project in an amount equal to the Reimbursement Amount. The Reimbursement Payments shall be sent to the Developer at the address set forth in Article 11. B. No later than July 31st of each year after the Commencement Date, and thirty (30) days after receipt of Sales Taxes and related tax information provided by the Department for the final Sales Tax Year, the Director shall (1) remit to the Developer the Annual Payment for the prior Sales Tax Year; and (2) deliver to Developer (with a copy to Tenant) a written statement (a "Remittance Statement") setting forth the amount of remitted sales tax and the calculation of the amount received from the Department and the balance of funds remaining to be paid. If at any time the State changes its policy with respect to providing information to the Village that is sufficient to allocate a portion of its Sales Tax receipts to Randhurst, the burden of securing this information shall be shared by Village and Developer. If for any reason the necessary 5 · --CHGO2:20025687.vl 1 th information is not received from the State prior to June 30 of each year, the Payment Date shall be extended by the number of days such information is late. C. For every Sales Tax Year commencing with the first Sales Tax Year, and until the Termination Date, the Village shall make disbursements of Sales Taxes received from the Department in accordance with the following provisions: (i) All monies paid to Developer by the Director shall be applied first to the payment of interest then due and the remainder shall be applied to reduce the balance of the Reimbursement Amount then remaining unreimbursed. (ii) On the Termination Date, any portion of the Reimbursement Amount which remains unpaid shall be deemed forever forgiven by Developer, absent default by Village hereunder. (iii) The Village shall have the right to prepay from any source the Reimbursement Amount in any amount or amounts at any time or times without penalty. (2) DEVELOPER SPECIFICALLY ACKNOWLEDGES THAT THE REIMBURSEMENT AMOUNT SHALL BE PAYABLE SOLELY FROM THE SALES TAXES COLLECTED AND REMITTED TO THE VILLAGE AS A RESULT OF SALES OCCURRING AT RANDHURST DURING THE REIMBURSEMENT PERIOD. DEVELOPER FURTHER ACKNOWLEDGES THAT THE VILLAGE'S OBLIGATIONS TO PAY THE REIMBURSEMENT AMOUNT SHALL CONSTITUTE LIMITED OBLIGATIONS OF THE VILLAGE AND THAT SAID OBLIGATIONS DO NOT NOW AND SHALL NEVER CONSTITUTE A GENERAL INDEBTEDNESS OF THE VILLAGE WITHIN THE MEANING OF ANY STATE OF ILLINOIS CONSTITUTIONAL OR STATUTORY PROVISION, AND SHALL NOT CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY OF THE VILLAGE OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWER. ARTICLE 5. [INTENTIONALLY LEFT BLANK[, ARTICLE 6. DOCUMENTATION OF SALES. A. The Village shall use its best efforts to secure an accounting, pursuant to the provisions of Section 5/8-11-16 of the Illinois Municipal Code 65 ILCS 5/8-11-16 (2000), to cause the Department to disclose to the Village the aggregate amount of Sales Tax collected on behalf of the Village from Randhurst. To the extent permitted by law, the Village shall disclose such amount t o Developer. T he Parties acknowledge, for purposes o f s aid Section 5/8-11 - 16, t hat Randhurst is a "shopping center" as defined in said Section, with 50 or more persons registered with the Department to pay Retailers Occupation Tax, and that this Agreement provides for provision of economic development and other services for the Village by Developer in exchange 6 42HGO2:20025687.vl l for payments based on retailers occupation tax collected on behalf of tile Village from persons within Randhurst. B. Developer shall use its commercially reasonable efforts to cause certified copies (i.e. certified by an officer of Tenant) of all ST-1 and/or ST-2 sales tax reporting forms, or any successor reporting forms filed with the Department relating to the operation of the Store, to be filed with the Director. C. At all times during the Term of this Agreement, Developer shall use its commercially reasonable efforts to cause Tenant to permit independent verification by the Director of the ST-1 and/or ST-2 reports filed with the Department, certified copies of which are to be submitted to the Director pursuant to Paragraph B above, including executing a suitable waiver pemdtting the Director to release to the Village the actual dollar amounts of Sales Taxes remitted on an individual basis. The Parties shall cooperate with each other and take all other reasonable actions to ensure accurate calculation of the Annual Payment. D. To the extent permitted by law, the Village shall endeavor to maintain the confidentiality of the information contained in the ST-1 and/or ST-2 reports filed with the Department and the Sales Tax revenue generated by Randhurst, but shall be permitted to disclose such information to such Village employees and consultants as the Village, in its sole discretion, deems appropriate in order to monitor compliance and audit this Agreement. The Village shall also disclose such information pursuant to the provisions of the Illinois Freedom of Information Act or similar statute unless it determines the request is exempt. E. Following the close of each fiscal year of the Village, the Village shall provide a certified copy of an accounting of the receipts of Sales Taxes and payment to the Developer. F. The Developer shall provide to the Village, not later than the Commencement Date, an accurate list of all retailers located within Randhurst. This list shall be updated monthly. To the extent (i) retail tenants at Randhurst provide their tax registration numbers, assigned to them by the Department, to Developer and (ii) Developer is permitted to disclose such numbers to Village, Developer will include such numbers with the list of retailers provided pursuant to this subparagraph. ARTICLE 7. TERM. On the Termination Date, this Agreement, subject to the provisions below, shall be and become null and void and of no further effect whatsoever, without further action on the part of the Village or any other person, firm or corporation. Notwithstanding the foregoing, this Agreement shall remain in effect for purposes of audit, final accounting, and payment and for purposes of enforcement actions hereon. ARTICLE 8. JEWEL RESTRICTIVE COVENANT. The Parties understand that the Tenant Parcel is arguably burdened by a restrictive covenant in favor of the Jewel Food Store located within Randhurst prohibiting the operation of any other food store and/or the sale of grocery products from any other store, within R. andhurst. This Agreement shall be valid only if the Village is provided with evidence satisfactory to the 7 --CHGO2:20025687.vl I Village Attorney prior to the Commencement Date that the restrictive covenant has been modified, waived, temfinated, released or that the Store otherwise is permitted to operate notwithstanding such restrictive covenant. It is also understood that in order to obtain from the Owner of the Jewel Store the right for the Store to operate, the Developer is being required to forego its right to receive a portion of rental from the Jewel Food Store. This Agreement to forego such rent from the Jewel Food Store is of the essence of this Agreement as it forms the basis of a portion of the Village's justification of its sales tax revenue sharing determination. The execution of this Agreement is the Developer's covenant that such waiver of a portion of rent has occurred and must be honored until the end of the Reimbursement Period. ARTICLE 9. INDEMNIFICATION. A. Developer covenants and agrees to indemnify and hold harmless the Village, and the Village officials, agents, employees, and representatives, from all costs, including expert witness and attorneys' fees, that may be incurred in defending all claims contesting the validity or legality of this Agreement (other than claims brought by or through the Village Board of Trustees, or Village officials or employees, or arising from the willful misconduct or negligence of the Village or Village officials, employees or anyone acting on their behalf); provided that Developer reserves the right, at Developer's option and cost, to assume the defense of such claim or action (including, but not limited to, the right to settle or compromise any claim or action for which Developer has assumed the defense) with counsel of Developer's choosing and the Parties expressly agree that, for so long as no conflicts of interest exist between them, the same attorney or attorneys may simultaneously represent the Village and Developer in any such proceeding and that in such event the Village shall take reasonable direction from the attorneys selected by Developer to defend the respective Parties. B. The Village covenants and agrees to indemnify and hold hamdess Developer, and Developer's agents, employees, and representatives, from all costs, including expert witness and attorneys' fees, that may be incurred in defending all claims challenging the validity or enforceability of t his Agreement brought b y t he Village's attorney, o r any Village o ~cial o r employee, or claims arising from the willful misconduct or negligence of the Village Board or the Village officials and employees, or anyone acting on their behalf, including all costs of defense and attorneys' fees; provided that the Village reserves the right, at the Village's option and the Village's cost, to assume the defense of such claim or action (including, but not limited to, the right to settle or compromise any claim or action for which the Village has assumed the defense) with counsel of the Village's choosing and the Parties expressly agree that, for so long as no conflicts of interest exist between them, the same attorney or attorneys may simultaneously represent the Village and Developer in any such proceeding and that in such event Developer shall take reasonable direction from the attorneys selected by the Village to defend the respective Parties. ARTICLE 10. MUTUAL ASSISTANCE. The Village and Developer agree to do all things necessary or appropriate to carry out, and to aid and assist each other in carrying out, the terms of this Agreement and in implementing the Parties' intent, as reflected by the terms of this Agreement, including, without limitation, the giving of such notices, the holdings of such public hearings, the enactment by the Village of such 8 -CHGO2:20025687.vl I resolutions and ordinances and the taking of such actions as may be necessary to enable the Parties compliance with the terms and provisions of this Agreement and as may be necessary to give effect to the terms and provisions of this Agreement and the Parties intentions as reflected by the terms of this Agreement. No waiver of Village regulations shall be inferred from this Agreement, except as specifically set forth. ARTICLE 11. NOTICES. Any notice to be given or served hereunder or under any document or instrument executed pursuant hereto shall be in writing and shall be (i) delivered personally, with a receipt requested therefor; or (ii) sent by telecopy facsimile; or (iii) sent by a recognized overnight courier service; or (iv) delivered by United States registered or certified mail, return receipt requested, postage prepaid. All notices shall be addressed to the Parties at their respective addresses set forth below, and the same shall be effective (a) upon receipt or refusal if delivered personally or by telecopy facsimile; (b) one (1) business day after depositing with such an ovemight courier service or (c) two (2) business days after deposit in the mails, if mailed. A Party may change its address for receipt of notices by service of a notice of such change in accordance herewith. All notices by telecopy facsimile shall be subsequently confirmed by U.S. certified or registered mail. All notices to the Village shall be sent to: Village of Mount Prospect 100 South Emerson Street Mount Prospect, Illinois 60056 Attn: Village Manager With copy to: Everette M. Hill, Jr. Klein, Thorpe & Jenkins Ltd. 20 North Wacker, Suite 1660 Chicago, Illinois 60606 All notices to Developer shall be sent to: Rouse-Randhurst Shopping Center, LLC 10275 Little Patuxent Parkway Columbia, Maryland 21044-3456 Attn: General Counsel 9 42HGO2:20025687.vl 1 With copies to: Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027 Attn: Gail Tsuboi Director of Property Management J.P. Morgan Investment Management, Inc. 522 Fifth Avenue New York, NY 10036 Attn: SherylM. Crosland Vice President and Mark A. Gershon, Esq. Piper Marbury Rudnick and Wolfe 203 North LaSalle Street Chicago, Illinois 60601-1293 ARTICLE 12. DEFAULT/REMEDIES. The failure of a Party to materially comply with its obligations under this Agreement or the material breach of any representation or warranty of a Party hereunder shall constitute a default by such Party. The Party claiming the occurrence of such default shall notify the other Party of same and shall demand performance by giving the defaulting P arty a thirty (30) day written notice specifying the default and this Agreement shall, at the election of the non- defaulting party, after such thirty (30) day period, automatically terminate or the non-defaulting Party may file an action for specific performance unless, within such thirty (30) day period (a) the defaulting Party, (i) cures such default, or (ii) commences action to cure such default and completes the curing of such default within a reasonable time or (b) the Party claiming default, by written notice to the defaulting Party, either waives the default or grants the defaulting Party a longer period to cure. In the event: (i) the Village fails to make payments due to Developer or to materially perform its non-monetary obligations as and when herein provided; and (ii) within thirty days after the occurrence of such default the Village fails to commence perfmmance, Developer may seek to compel the Village to perform such obligations and/or to make such payments or, with respect to any monetary obligation, to seek damages for breach of contract limited to an amount equal to the amounts due to Developer hereunder. 10 --.CHGO2:20025687.vl 1 ARTICLE 13. MISCELLANEOUS. (a) Governing Law. This Agreement shall be governed by the laws of the State of Illinois. (b) Integration. This Agreement contains the entire agreement of the Parties with respect to the transactions contemplated by this Agreement. All prior agreements, negotiations, and understandings are expressly merged herein and superseded hereby. All exhibits of this Agreement are expressly incorporated herein by this reference thereto. (c) Severabilit¥. Each section of this Agreement, and each sentence, clause or phrase contained in such section, shall be considered severable and if, for any reason, any section, or any sentence, clause or phrase contained in such section, is determined to be invalid or unenforceable, such invalidity or unenforceability shall not impair the operation or affect enforceability or validity of the remaining portions of this Agreement. (d) Amendment. This Agreement may be amended by, and only by, a written instrument authorized in accordance with law and signed by both Parties. (e) Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon: (i) the Village and any successor corporate authorities of the Village; and (ii) Developer and its successors and, only if and when expressly designated in writing as such by Developer in its sole discretion, Developer's grantees, lessees and assigns. If Owner, or any affiliate of Owner, succeeds to all or substantially all of Developer's interest in Randhurst, then Owner, or such affiliate, as the case may be, or any successor to the foregoing, shall receive the benefits of and be bound by the terms of this Agreement. Any right of assignment by the Developer that is contemplated in this subparagraph shall, absent written approval by Village, be subject to the following restrictions: (i) Any assignment shall be to a party or entity acquiring all or substantially all of Developer's interest in Randhurst or to Owner (Developer agrees to use commercially reasonable efforts to give Village sixty (60) days prior written notice of such assignment and to coordinate a meeting between the Village and such assignee); and. (ii) Randhurst shall at all times continue to be operated as a "Retail Shopping Center" ("Retail Shopping Center" shall mean a regional retail center similar to Randhurst, but shall specifically not include a retail center where a majority of retail sales are based on resale of used goods or sale of salvaged goods). 11 ,..CHCK)2:20025687.vl 1 Construction. Section or other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (g) Time is of the Essence. Time is of the essence of this Agreement and of each and every provision hereof. ARTICLE 14. COSTCO. This Agreement shall become null and void if Tenant does not occupy the Store by July 1, 2005. I2 · .-CHoo2:20025687.v I I IN WITNESS WItEREOF, the Parties have executed this Agreement on the dates set forth below their respective signatures, to be effective~as of the Effective Date. VILLAGE OF MOUNT PROSPECT, an Illinois home rule municipal corporation ' Gerald L. Farley, Village Precd~nt ROUSE-RANDHURST SHOPPING CENTER, LLC, a Maryland limited liability company By Name: Its: ATTEST /'- J ..~ Velm~..'Lowe-' ' ~' ~ [SEAL] 13 -.CHGO2:20025687.vI 1 TAT OV ) COUNTY OF ) I, the undersigned, a Notary Public in and for the County and State aforesaid, do hereby certify that , of Rouse-Randhurst Shopping Center, LLC, a Maryland limited liability company, who is personally known to me to be the of said corporation, appeared before me this day in person and acknowledged that he/she signed and delivered the foregoing Redevelopment and Economic Incentive Agreement as his/her own free and voluntary act and as the free and voluntary act of said corporation for the purposes therein set forth. Given under my hand and official seal this day of ,2003. Notary Public 14 .-CHGO2 :20025687. v l I TATE OF ILLINOIS COUNTY OF COOK ) ) ss. ) I, the undersigned, a Notary Public in and for the County and State aforesaid, do hereby certify that Gerald L. Farley and Velma W. Lowe, personally known to me to be the Village President and Village Clerk, respectively, of the VILLAGE OF MOUNT PROSPECT, and personally known to me to be the same persons whose names are subscribed to the foregoing Redevelopment and Economic Incentive Agreement, appeared before me this day in person and severally acknowledged that as such Village President and Village Clerk, they signed and delivered said Agreement as such Village President and Village Clerk, and caused the corporate seal of said Village to be affixed thereto, pursuant to authority given by the Board of Trustees of said Village, as their free and voluntary act and as the free and voluntary act and deed of said Village, for the purposes therein set forth. Given under my hand and official seal, this '-~"fk. day of ~0-0[~3 . ,2003. Notary PublicTM 15 · ~CHGO2:20025687.vl 1 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Lots ! and 2 in Randhurst Center Resubdivision No. 1 (less any portion previously taken for state highway purposes), being a resubdivision of Lot 1 in Randhurst Center, being a resubdivision of part of the Southeast ~A of Section 27, Township 42 North, Range 11, East of the Third Principal Meridian, and the North seventy (70) feet of the West seventy (70) feet of the South one hundred twenty (120) feet of the East half (1/2) of the South East Quarter (1/4) of Section 27, Township 42 North, Range 11, East of the Third Principal Meridian, all in Cook County, Illinois. A-1 ~CHGO2:20025687.vl I EXHIBIT B PRELIMINARY SITE PLAN B-1 -4~HGO2:20025657.v 11