Memorandum of Understanding

This Memorandum of Understanding is for a Development Agreement between the Town of Blacksburg (the Town), Montgomery County, Virginia (the County), the Montgomery County Economic Development Authority (the EDA) and Midtown Blacksburg, LCC (Midtown)(collectively the Parties), and is entered into to facilitate the proposed redevelopment of the Old Blacksburg Middle School (OBMS). The OBMS redevelopment presents a unique opportunity for the Parties to work together to execute a quality project that: (i) improves the quality of life for residents; and (ii) increases the localities tax base, through the implementation of the Master Plan for the Development of the Old Blacksburg Middle School dated June 24, 2011, as adopted by the Town and the County. This Memorandum of Understanding (MOU) is intended to set forth the terms of the Development Agreement between the parties. Upon execution of this MOU, the terms will be reduced to a formal Agreement for the Development of Midtown Blacksburg (the Development Agreement). I. Agreement Regarding the Miller Street Promenade, the Main Street Lawn, the Village Green, the Dell and Spring Park.

The proposed Midtown redevelopment of OBMS site will create a new entrance to Blacksburgs downtown district. The project will allow for a mixed-use development combining commercial and residential uses, connected by significant public spaces and parks. The architecture will be a modern take on the vernacular of Blacksburg, befitting the cutting-edge companies located within and a reflection of Blacksburgs vibrant technology community. Central to this vision are five public areas, shown on the Master Plan and designated as the Miller Street Promenade, the Main Street Lawn, the Midtown Village Green, the Dell and Spring Park. They are intended to create a pedestrian-friendly entrance to and gathering spaces within the Midtown Blacksburg redevelopment site. The proposed development will be consistent with the vision and uses contained in the approved OBMS Master Plan, while also reflecting certain modifications necessary to bring that vision to reality and meet the needs of the prospective tenants and their employees, as reflected in the proposed rezoning submittal and Master Plan. A.
1.

Miller Promenade. Midtown will dedicate to the Town of Blacksburg the area designated on the Master Plan as the Miller Promenade. 2. The Miller Promenade will be designed to provide pedestrian and bikeway connectivity into the Midtown site and then to the adjacent Village Green, with a focus on providing a connector from Midtown to the Huckleberry Trail on the other side of the existing Miller Street adjacent to the library. 3. Midtown will design the Miller Promenade improvements jointly with the Town. The Town will apply for and, upon receipt, dedicate available Virginia Department of Transportation (VDOT) matching funds for construction of these improvements. Construction of the Miller Promenade will be bid and managed by the Town. Midtown will provide a commitment for the required local dollar match. 4. The Parties anticipate that the Miller Promenade will be utilized for public events and activities provided that access to Midtowns entrances and

tenant spaces are preserved at all times. The Parties also acknowledge that portions of the Miller Promenade may be used for outdoor dining areas of adjacent restaurants, in accordance with Town regulations and licenses for same. 5. The Town will be responsible for maintenance of the Miller Promenade and cleanup related to all public, town and community events held on Miller Promenade. B. Main Street Lawn. 1. Midtown will retain ownership of the area designated as the Main Street Lawn on the Master Plan, and grant an easement for public use to the Town. Midtown recognizes the need to encourage public use of this area of its property. The Main Street Lawn area will serve as both an entrance to the Midtown site, a place to watch Blacksburgs traditional parades, and a public gateway to the downtown. 2. Midtown will grant a non-exclusive easement to the Town of Blacksburg allowing public use of the Main Street Lawn. 3. Midtown will locate a bus stop and shelter on the north end of the Lawn, closest to the Miller Promenade. 4. The Parties agree that the Main Street Lawn may vary in its depth from Main Street, as necessary to accommodate architectural elements of the commercial buildings, public outdoor seating areas (including fenced seating areas dedicated to private restaurants and other exclusive tenant uses), and landscape/hardscape design. 5. Midtown will design the Main Street Lawn improvements jointly with the Town. The Town will apply for and, upon receipt, dedicate available Virginia Department of Transportation (VDOT) matching funds for construction of these improvements, if such funds are approved for application to the costs of constructing the Main Street Lawn. Construction of the Main Street Lawn will be bid and managed by the Town. Midtown will provide a commitment for the required local dollar match. C. 1. Midtown Village Green Event Space and Lawn. Midtown will retain ownership of the area designated as the Midtown Village Green, as shown on the Master Plan, but will grant an easement for public use to the Town. Midtown recognizes the need to activate and encourage public use of the Midtown Village Green Event Space and Lawn, and the Parties agree that the Village Green will serve as a special event public space and lawn where town and community events and festivals may be held. The Midtown Village Green Event Space and Lawn will also be made available to Midtown and its tenants for event use, as approved by Midtown; with the lawn area remaining open to the public for recreational use other then at times where Midtown or its tenants are hosting private events. An example of such private events would be for a restaurant to host a wedding reception or graduation dinner, etc., on the lawn.

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The Parties anticipate that the Midtown Village Green Event Space and Lawn and surrounding Miller Loop may occasionally be closed off with bollards for public, town and community events and festivals at times requested by the Town and agreeable to Midtown and its tenants, with reasonable access for Midtowns tenants being preserved at all times. The Town will be responsible for maintenance and cleanup related to all public, town and community events, along with providing staffing, security and insurance coverage acceptable to Midtown.

D.

The Dell Park. Midtown will dedicate to the Town the area shown on the Master Plan as the Dell Park in order to provide a public park for Town residents. The Dell Park shall also be used to meet the required open space for the Midtown Village Planned Residential District. The Town agrees to apply for funding to develop the Dell Park, including continuing the multiuse Path from the terminus of Miller Street to Willard Street. Spring Park. Midtown will dedicate to the Town the area shown on the Master Plan as Spring Park in order to provide a park area that is open to the public. Spring Park shall also be used to meet the required open space for the Midtown Village Planned Residential District.

E.

II.

Reservation of Flex-Housing Block for Work Force and/or Senior Housing. 1. Midtown recognizes the interest of the Town in providing a location for potential workforce housing and/or senior housing in Midtown Village. In order to provide an opportunity for the Town to pursue such uses, either directly or in partnership with Midtown or other for profit or nonprofit partners, Midtown commits to reserve the area designated on the Master Plan as the Flex-Housing Block for this purpose. 2. For a twenty four (24) month period following the approval of the Midtown Rezoning, Midtown will offer to the Town for purchase the Flex-Housing Block (the Option Period). The purchase price for the Flex-Housing Block, unless otherwise agreed to in writing by the Parties, shall be the proportionate share of Midtowns land cost and infrastructure costs allocable to this acreage, with no mark-up or profit to Midtown. 3. If the Town does not elect, prior to the end of the Option Period to purchase the Flex-Housing Block, then Midtown shall be free to develop this site in conformity with the Master Plan for market-rate sale or lease residential uses. 4. The Parties agree that any development of the Flex-Housing block shall utilize architecture that is consistent with and complimentary to the architecture of the Midtown Village Planned Residential District. III. Public Streets. 1. The EDA will dedicate to the Town the areas designated on the Master Plan as Public Streets, namely, New Church Street, Miller Avenue and the Miller Loop (the Public Streets). 2. The Town will apply for and, upon receipt, dedicate available Virginia Department of Transportation (VDOT) matching funds for

construction of the Public Street improvements. If such funds are approved for application to the costs of constructing all or a portion of the Public Streets, then Midtown will design the Public Street improvements jointly with the Town. Construction of the Public Streets that are eligible for VDOT matching funds will be bid and managed by the Town. Midtown will provide a commitment for the required local dollar match. 3. Midtown will construct, at its cost, and in accordance with applicable VDOT requirements, any Public Streets not funded by the VDOT matching program, as shown on the Master Plan. IV. Tax Rebates to Fund Public Improvements at Midtown. 1. The Parties agree with the findings of the Towns consultants on the Master Plan, that execution of the Master Plan and the desired high quality mixed-use redevelopment of the OBMS site will require both structured parking and public funding participation. 2. The Parties further acknowledge that 8.16 acres of the site are being deeded to the Town for parks, public streets and the Miller Promenade. Additionally, another 1.16 acres, will have easements to the Town for public use. In total, these two areas represent fortythree percent (43%) of the total area of the OBMS property. 3. In exchange for the commitments made by Midtown herein, and in order to offset the costs of the public improvements and structured parking on the site, the Town agrees, on an annual basis, to rebate to Midtown fifty percent (50%) of the real estate, lodging, and meals taxes collected from owners of and tenants of the Midtown Property. This rebate shall be available for a period of twenty-five (25) years from the date that a certificate of occupancy is first issued for each parcel. 4. In exchange for the commitments made by Midtown herein, and in order to offset the costs of the public improvements and structured parking on the site, the County agrees, on an annual basis, to rebate to Midtown fifty percent (50%) of the real estate, and other taxes collected from owners of and tenants of the Midtown Property. This rebate shall be available for a period of twenty-five (25) years from the date that a certificate of occupancy is first issued for each parcel. 5. As a condition of the foregoing tax rebates, Midtown will enter into: (a) a Performance Agreement in a format acceptable to the Town of Blacksburg; and (b) a Performance Agreement acceptable to Montgomery County and the EDA; each of which shall condition the continued receipt of these tax rebates on Midtowns development of the OBMS site in conformity with the provisions of this MOU, and the provisions of the Master Plan, the Proffer Statement included in the rezoning application, and such other conditions as may be agreed to by the Parties.

IN WITNESS WHEREOF, the parties, by their respective signatures below, agree to the foregoing terms of this MOU, and to work together to reduce it to a formal Development Agreement within sixty (60) days of the date of this Agreement. Effective this __ day of ______, 2013, by and between:

[signatures to follow on next page] The Town of Blacksburg: _____________________________ By: Mark Verneil, Town Manager

Montgomery County, Virginia: ______________________________ By: Craig Meadows, County Administrator

Montgomery County Economic Development Authority: _______________________________ By: Brian Hamilton, Director

Midtown Blacksburg, LLC, On behalf of its member applicants, ______________________________ By:

Commonwealth of Virginia County of Montgomery