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121712completeagenda
CITY OF RICHFIELD, MINNESOTA MONDAY, DECEMBER 17, 2012 RICHFIELD MUNICIPAL CENTER 6700 PORTLAND AVENUE REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS 7:00 P.M. AGENDA Call to order Roll call 1. Approval of minutes of Regular HRA Meeting of November 19, 2012 2. HRA approval of agenda 3. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action on these items is necessary. However, any HRA Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of resolution decertifying Interstate-Lyndale-Nicollet (ILN) Tax Increment Financing District S.R. No. 52 B. Consideration of approval of transfer of assets to close out funds that are part of Interstate-Lyndale-Nicollet Tax Increment District S.R. No. 53 C. Consideration of approval of resolution authorizing internal loan of up to $675,000 to fund deficit in Interstate-Lyndale-Nicollet Redevelopment Project Fund S.R. No. 54 D. Consideration of approval of annual Consultant Services Agreement with Greater Metropolitan Housing Corporation for 2013 S.R. No. 55 Notes: 4. Consideration of request for subordination of HRA Foreclosure Purchase Incentive Program loan at 7625 Emerson Avenue Staff Report No. 56 Notes: 5. Public hearing regarding resolution authorizing sale of 6825 Grand Avenue to Brandt Anderson Homes and authorizing contract for private development with Brandt Anderson Homes for construction of single family home under Richfield Rediscovered Program Staff Report No. 57 Notes: 6. HRA discussion items Notes: 7. Executive Director Report Notes: 8. Claims and Payroll Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. HOUSING AND REDEVELOPMENT e� AUTHORITY MEETING MINUTES gec41tee Richfield, Minnesota Regular Meeting November 19, 2012 CALL TO ORDER The meeting was called to order by Acting Chair Quam at 7:00 p.m. OATH OF OFFICE TO HRA COMMISSIONER DORIS RUBENSTEIN City Clerk Gibbs administered the oath of office to HRA Commissioner Doris Rubenstein. ROLL CALL HRA Members Steven J. Quam, Acting Chair; Doris Rubenstein; David Gepner; Present: and Debbie Goettel HRA Members Sue Sandahl, Chair Absent: Staff Present: Steven L. Devich, Executive Director; John Stark, Community Development Director; and Nancy Gibbs, City Clerk. Item #1 APPROVAL OF MINUTES OF (1) REGULAR HRA MEETING OF OCTOBER 15, 2012 AND (2) SPECIAL HRA/CITY COUNCIL/PLANNING COMMISSION MEETING OF NOVEMBER 1, 2012. M/Rubenstein, S/Gepner to approve the minutes of(1) Regular HRA Meeting of October 15, 2012 and (2) Special HRA/City Council/Planning Commission Meeting of November 1, 2012. Motion carried 4-0. Item #2 HRA APPROVAL OF AGENDA M/Gepner, S/Rubenstein to approve the agenda. Motion carried 4-0. HRA Meeting -2- November 19,2012 Item #3 CONSENT CALENDAR A. Consideration of approval of resolution authorizing purchase of real property at 6400-17th Avenue for future redevelopment S.R. No. 48 HRA RESOLUTION NO. 1134 RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6400 17TH AVENUE This resolution appears as HRA Resolution No. 1134. B. Consideration of approval of resolution authorizing purchase of real property at 7600 Pillsbury Avenue for future redevelopment S.R. No. 49 HRA RESOLUTION NO. 1135 RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 7600 PILLSBURY AVENUE This resolution appears as HRA Resolution No. 1135. M/Gepner, S/Rubenstein to approve the Consent Calendar. Motion carried 4-0. Item #4 CONSIDERATION OF PROPOSED SETTLEMENT MADE BY OWNER OF 6320 15TH AVENUE OF HRA NEW HOME MORTGAGE S.R. NO. 50 Community Development Director Stark presented Staff Report No. 50. M/Goettel, S/Rubenstein to approve proposed settlement made by owner of 6320 15th Avenue of HRA New Home Mortgage. Motion carried 4-0. Item #5 CONSIDERATION OF PROFESSIONAL SERVICES CONTRACT WITH STANTEC RELATED TO HOUSING VISION PROCESS S.R. NO. 51 Community Development Director Stark presented Staff Report No. 51. John Shardlow of Stantec provided a summary of their proposal and was available for questions. Commissioner Goettel stated she is pleased with the choice of Stantec. She also stated that she would like a futurist involved in the process and would send Community Development Director Stark some names. Commission Goettel asked staff to contact local churches to get some participation on the task force. HRA Meeting -3- November 19,2012 M/Goettel, S/Quam to approve the professional services contract with Stantec related to Housing Vision Process. Motion carried 4-0. Item #6 HRA DISCUSSION ITEMS • RESCHEDULE MONDAY, JANUARY 21 REGULAR HRA MEETING DUE TO MARTIN LUTHER KING, JR. HOLIDAY AND CONFLICT WITH TUESDAY, JANUARY 22 REGULAR CITY COUNCIL MEETING • RESCHEDULE MONDAY, FEBRUARY 18 REGULAR HRA MEETING DUE TO PRESIDENTS' DAY HOLIDAY Executive Director Devich discussed rescheduling the January and February Regular HRA Meetings. He suggested Wednesday, January 23 and Tuesday, February 19 and said staff would follow-up with the commissioners. Item #7 EXECUTIVE DIRECTOR REPORT Executive Director Devich reported on recent meeting with MAC. Item #8 CLAIMS AND PAYROLL M/Rubenstein, S/Gepner that the following claims and payrolls be approved: US BANK 11/19/2012 Section 8 Checks: 122600-122734 $ 158,473.28 HRA Checks: 31599-31623 $ 88,545.80 TOTAL $ 247,019.08 Motion carried 4-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 7:33 p.m. Date Approved: December 17, 2012 Steven J. Quam Acting Chair Nancy Gibbs Steven L. Devich City Clerk Executive Director AGENDA ITEM#: 3A REPORT#: 52 MAIIII STAFF REPORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING DECEMBER 17, 2012 REPORT PREPARED BY: MYRT LINK, COMMUNITY DEVELOPMENT ACCOUNTANT NAME,TITLE REPORT PRESENTER: JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR NAME,TITLE DEPARTMENT DIRECTOR REVIEW: "Jr SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: , ! ITEM FOR HRA CONSIDERATION: Consideration of a resolution to decertify the Interstate-Lyndale-Nicollet Tax Increment Financing District. I. RECOMMENDED ACTION: By Motion: Adopt the attached resolution to decertify the Interstate- Lyndale-Nicollet Tax Increment Financing District. II. BACKGROUND On October 21, 1985, the Richfield Housing and Redevelopment Authority (HRA) established the Interstate-Lyndale-Nicollet (ILN) Tax Increment Financing District. The City Council took similar action on November 12, 1985. The first tax increment payment was received from Hennepin County in December 1987 and due to the Statutory maximum duration of the district, it must be decertified on December 31, 2012. The ILN District has proven to be a successful redevelopment project area of the City. At the time of decertification, the developments in the ILN District have increased the City's tax capacity by 1,822,233. The District includes the following developments: 12172012 ILN Decertification • Hampton Inn • Shops of Lyndale • Meridian Crossings • Candlewood Hotel III. BASIS OF RECOMMENDATION A. POLICY • It is the Housing and Redevelopment Authority's (HRA) policy to adopt a resolution when decertifying a Tax Increment Financing District. B. CRITICAL TIMING ISSUES • The Statutory maximum of the District has been reached and must be decertified as of December 31, 2012. C. FINANCIAL • All Bond debt service has been paid. • Final Pay-Go-Note payments will be made on February 1, 2013. • It is estimated that the taxing jurisdictions will share an increase of approximately $1.6 million dollars in revenue beginning in 2013. • Currently Richfield receives $174,000 in tax revenue from this District. After decertification the tax revenue from this area will increase by approximately $709,000. D. LEGAL • The Statutory maximum duration of the District has been reached and it must be decertified as of December 31, 2012. If the HRA does not take action, the County will automatically decertify the District as of December 31, 2012. IV. ALTERNATIVE RECOMMENDATION(S) • N/A V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None RESOLUTION NO. RESOLUTION APPROVING THE DECERTIFICATION OF THE INTERSTATE-LYNDALE-NICOLLET TAX INCREMENT FINANCING DISTRICT OF THE CITY OF RICHFIELD WHEREAS, on October 21, 1985, the Interstate-Lyndale-Nicollet Tax Increment Financing District (the "ILN District") was created within the Richfield Redevelopment Project Area (the "Project"); and WHEREAS, as of the date hereof all bonds and obligations to which tax increment from the ILN District have been pledged have been paid in full or defeased and all other costs of the Project have been paid; and WHEREAS, The Housing and Redevelopment Authority of the City of Richfield desires by this Resolution to cause the decertification of the ILN District after which all property taxes generated by property within the district will be distributed in the same manner as all other property taxes. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority of the City of Richfield, Minnesota that the ILN District should be deemed decertified as of December 31, 2012, and that the Housing and Redevelopment Authority's staff is authorized and directed to transmit a copy of this resolution to the County Auditor of Hennepin County with a request that the auditor decertify the ILN District as a tax increment district and to remit no tax increment from the ILN District to the City of Richfield after December 31, 2012. Adopted by the Housing and Redevelopment Authority of the City of Richfield, Minnesota this 17th day of December 2012. Suzanne M. Sandahl, Chair ATTEST: Doris Rubenstein, Secretary AGENDA ITEM#: 3B REPORT#: 53 =IAA STAFF REPORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING DECEMBER 17, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAME,TITLE REPORT PRESENTER: CHRIS REGIS,FINANCE MANAGER / ANAME,TITLE REVIEWED BY DEPARTMENT Qt DIRECTOR: UQ �f// j 7 SIGNA REVIEWED BY HRA EXECUTIVE / / DIRECTOR: ITEM FOR COUNCIL CONSIDERATION: Consideration of transfer of assets to close out funds that are part of the Interstate-Lyndale- Nicollet Tax Increment District. I. RECOMMENDED ACTION: By Motion: Approve the transfer of assets to close out funds that are part of the Interstate-Lyndale-Nicollet Tax Increment District. II. BACKGROUND The Interstate-Lyndale-Nicollet (ILN) Tax Increment Financing (TIF) District is a commercial redevelopment project established in 1987 that comprises the Shops at Lyndale and the Merdian Crossings redevelopments located at 1-494 and Lyndale Avenue. The ILN TIF District is required to be decertified by December 31, 2012 and all properties within the district will be placed on the tax rolls at full value. As part of the process to decertify the ILN TIF district it is necessary to close some funds and to transfer assets of other funds. In both instances, these funds were established as part of the ILN TIF District. The funds to be closed out as of December 31, 2012 are two City debt service funds, G.O. Tax Increment Bonds, 121712 ILN Fund Closeout HRA Series 2000A and G.O. Refunding Bonds; Series 2002B. In addition to the closing of the two debt service funds, the following HRA funds will be involved in the transfer of assets as part of the decertification of the ILN TIF District; Bonds of 1996, Development Opportunities, and ILN Tax Increment Fund. III. BASIS OF RECOMMENDATION A. POLICY • The City's and HRA's financial policies do not directly address the closing out of City or HRA Funds. • The City's auditors have recommended that non-budgeted transfers between funds be approved by the City Council or HRA board. B. CRITICAL ISSUES • The ILN TIF District is required to be decertified by December 31, 2012. C. FINANCIAL • The following table reflects the funds to close and the corresponding transfers. Fund Transfer Balance Funding Recipient Amount ILN Tax Increment $ 343,160 G.O. Ref. Bonds 2002B $ 337,673 Bonds of 1996 173,975 G.O. Tax Incr. Bonds 2000A 179,462 Development Opportunities 107,014 Bonds of 1996 107,014 Bonds of 1996 107,014 Development Opportunities 107,014 Development Opportunities 107,014 ILN Tax Increment 107,014 D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATIONS) • None. V. ATTACHMENTS • None. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A AGENDA ITEM#: 3C REPORT#: 54 =AA STAFF REPORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING DECEMBER 17, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAME,TITLE REPORT PRESENTER: CHRIS REGIS,FINANCE MANAGER NAME,TITLE REVIEWED BY DEPARTMENT DIRECTOR: A �� SIGNA REVIEWED BY URA EXECUTIVE DIRECTOR: � 4 ._, vt ITEM FOR COUNCIL CONSIDERATION: ° Consideration of the attached resolution authorizing an Internal Loan up to the amount of $675,000 to fund a deficit in the Interstate-Lyndale-Nicollet (ILN) Redevelopment Project Fund. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing an Internal Loan up to $675,000 to fund a deficit in the Interstate-Lyndale-Nicollet (ILN) Redevelopment Project Fund. II. BACKGROUND The Interstate-Lyndale-Nicollet (ILN) Tax Increment Financing (TIF) District is a commercial redevelopment project established in 1987 that comprises the Shops at Lyndale, Meridian Crossings, former Hampton Inn, and the Candlewood Hotel redevelopments located at 1-494 and Lyndale Avenue. The ILN TIF District is required to be decertified by December 31, 2012 and all properties within the district will be placed on the tax rolls at full value. Even though the district will be decertified at the end of 2012, there will still be activity in the district in 2013 which will require tax increment reporting to the Office of the State Auditor for Minnesota (OSA). At the present time the ILN 121712 ILN Internal Loan Redevelopment Project Fund has a deficit cash balance as a result of the purchase of a piece of property within the district. For the purposes of the OSA tax increment reporting, a cash deficit within the district is not permissible. The property in question is located at 301 W. 77th Street (commonly known as the Candlewood Outlot). As a result of HRA action taken earlier this year, the property in the process of being sold to LaMettry Collision. The sale of the property is not expected to close until early spring of 2013; thus requiring the proposed internal loan. The internal loan will be repaid from the proceeds of the sale. III. BASIS OF RECOMMENDATION A. POLICY • The Housing & Redevelopment Authority has the authority to approve an interfund loan under Minnesota State Statute Section 469.178, Subd. 7. B. CRITICAL ISSUES • The ILN TIF District is required to be decertified by December 31, 2012. • For OSA reporting purposes it is not permissible to report a deficit cash balance within a tax increment district. C. FINANCIAL • There is a current deficit in the ILN Redevelopment Project Fund. • Funding to eliminate the cash deficit will come from the HRA Development Fund. • The loan will be repaid from proceeds from the sale of the property. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATIONS) • None. V. ATTACHMENTS • Resolution authorizing an Internal Loan. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A 3c — a RESOLUTION NO. AUTHORIZING AN INTERNAL LOAN UP TO $675,000 FOR FUNDING A DEFICIT IN THE INTERSTATE-LYNDALE-NICOLLET REDEVELOPMENT PROJECT FUND WHEREAS, the Interstate-Lyndale-Nicollet Tax Increment Financing Plan allows the Housing and Redevelopment board to make interfund loans by resolution, and WHEREAS, the Interstate-Lyndale-Nicollet Redevelopment Project Fund has a deficit balance and a deficit balance within a tax increment district is not permissible for Office of the State Auditor Tax Increment reporting, and WHEREAS, the funding of the deficit will be from an internal loan from the HRA's Development Fund, and WHEREAS, the repayment of the internal loan will be provided through the future sale of ILN property, and NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority of the City of Richfield, Minnesota as follows: 1. The Executive Director is authorized to execute an internal loan from the HRA's Development Fund to the HRA's ILN Redevelopment Project Fund to fund the existing deficit in that fund. 2. The term of the loan will be one (1) years in the amount up to $675,000 at 0% interest. Adopted by the Housing and Redevelopment Authority of the City of Richfield, Minnesota this 17th day of December, 2012. Suzanne M. Sandahl, Chair ATTEST: Doris Rubenstein, Secretary AGENDA ITEM#: 3D REPORT#: 55 STAFF REPORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING DECEMBER 17, 2012 REPORT PREPARED BY: KAREN BARTON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME,TITLE REPORT PRESENTER: KAREN BARTON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME,TITLE DEPARTMENT DIRECTOR REVIEW: Aiio, Alt SIGNAT REVIEWED BY EXECUTIVE DIRECTOR: A � A . ITEM FOR HRA CONSIDERATION: Consideration of annual Consultant Services Agreement with the Greater Metropolitan Housing Corporation for 2013. I. RECOMMENDED ACTION: By Motion: Authorize the attached Consultant Services Agreement with the Greater Metropolitan Housing Corporation for 2013. II. BACKGROUND The Greater Metropolitan Housing Corporation (GMHC) specializes in a variety of housing programs, services and financing options for homeowners. The partnership with the Richfield Housing and Redevelopment Authority (HRA) began in 2004 and provides GMHC's services to residents at no cost. Through November 2012 GMHC provided 851 services to 579 Richfield residents through its Southside HousingResource Center (HRC) (see Attachment 1). In addition, 16 Minnesota Housing Finance Agency rehabilitation loans were processed through the HRC. Services offered include, but are not limited to: • Home buyer information, loan services (including Minnesota Housing Finance Agency loans), construction consultations, energy assistance, 12172012 GMHC Services Contract -2013 mortgage foreclosure prevention, home improvement information, and assistance with rental and emergency housing issues. In 2011, GMHC coordinated a grant proposal to Minnesota Housing on behalf of Richfield, Brooklyn Center and Crystal for an interest-rate write-down program. Funds were awarded and beginning in 2012, GMHC originated 25 home rehabilitation loans at three percent interest to income-qualified households in Richfield. The HRA has also successfully partnered with GMHC for the construction of affordable houses built under the New Home Program, the purchase and rehabilitation of properties through the Neighborhood Stabilization Program, and facilitation of the acquisition of HUD homes. III. BASIS OF RECOMMENDATION A. POLICY • A partnership between the HRA and GMHC ensures the availability of comprehensive rehabilitation resources and financing resources to Richfield residents. It also serves to accomplish the two housing goals and several housing policies identified in the 2008 Comprehensive Plan: o Goal: Maintain and enhance Richfield's image as a community with strong, desirable and livable neighborhoods. • Support the rehabilitation and upgrading of the existing housing stock. • Encourage the creation of"move-up" housing through new construction and home remodeling. • Support ongoing maintenance and upkeep of residential properties. o Goal: Ensure sufficient diversity in the housing stock to provide for a range of household sizes, income levels and needs. • Encourage improvements to the housing stock to better serve families with children and seniors. • Promote the development, management, and maintenance of affordable housing in the City through assistance programs; alternative funding sources; and the creation of partnerships whose mission is to promote low to moderate income housing. B. CRITICAL TIMING ISSUES • GMHC offers Richfield homeowners comprehensive home improvement support and a variety of programs in a cost-effective manner. • GMHC offers their packages of programs and services in 16 metro area communities. By partnering with GMHC for these services, Richfield will remain competitive in the metro area. C. FINANCIAL • The cost of services for 2013 is $7,000; unchanged since 2009. • Funds are allocated for these services in the 2013 HRA budget. D. LEGAL • The Agreement has been reviewed by legal counsel IV. ALTERNATIVE RECOMMENDATION(S) • The HRA can choose to direct staff to modify the scope of services or modify the amount with GMHC. • The HRA can choose to not approve the Agreement. V. ATTACHMENTS • Copy of the Consultant Services Agreement • 2012 Year-end Report VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A 3D- 1 CONSULTANT SERVICES AGREEMENT THIS IS AN AGREEMENT entered into the day of , 20 , by and between the Richfield Housing and Redevelopment Authority, ("HRA"), and GREATER METROPOLITAN HOUSING CORPORATION, a Minnesota non-profit corporation ("Consultant"). RECITALS A. The Consultant has a division called The Housing Resource Center ("HRC"). GMHC has agreed to provide certain Services through HRC (as defined below) in connection with the HRA's housing program. B. The HRA desires to hire the Consultant to render this technical, professional, and marketing assistance in connection with housing programs in the HRA for the term as set forth in this Agreement. C. Consultant is willing to provide such services on the terms and conditions set forth herein. In consideration of the foregoing recitals and following terms, conditions and mutual promises contained herein,the parties agree as follows: 1. Scope of Services. The Consultant shall provide services as follows (the "Services"): a. Administer the following home improvement programs for residents of the City of Richfield (the "City"): MHFA Fix Up Fund, Community Fix Up Fund and the MHFA Rental Rehab Program(collectively the MHFA programs): 1. Providing information to residents and property owners about the programs, upon request; 2. Assist the HRA in marketing the programs; 3. Receipt of applications from residents; 4. Processing applications; 5. Closing loans to qualified applicants in accordance with the applicable program; 6. Overseeing the draw process for the funds, including, as necessary, reviewing draws, reviewing the progress of the work and collecting lien waivers and certificates of occupancy. Consultant may, for this purpose, rely on third-party representations and certifications. 7. Provide monthly reports about the number of loans closed and the balance in each loan program. fb.us.3166730.04 1 3� - � b. Assist City residents considering rehabilitation, including property visits, meet with homeowners and potential contractors, suggest alternatives for rehabilitation to homeowners, educate homeowners on the construction bid process, assist homeowners to evaluate bids and work completed and construction progress. c. Provide HRC housing information to City residents, including information on emergency assistance, housing rehabilitation, first time homebuyers and limited rental information; d. Assist the HRA in developing programs to purchase and rehabilitate homes; e. Coordinate these services out of Consultant's Minneapolis office; and f. Have Consultant's staff visit residences as determined necessary by Consultant. 2. Term. This Agreement shall be in full force and effect from January 1, 2013 and shall continue through December 31, 2013, unless otherwise terminated as set forth below. 3. Compensation. For services provided under this Agreement,the HRA shall pay to the Consultant Seven Thousand Dollars ($7,000.00)within thirty (30) days after execution of this Agreement. Pursuant to paragraphs lb through 1 f. The Consultant shall receive compensation for administering the MHFA Programs directly from the Minnesota Housing Finance Agency and not from the HRA. Pursuant to paragraph la. 4. Termination. Notwithstanding any other provision hereof to the contrary, this Agreement may be terminated as follows: a. The parties, by mutual written agreement, may terminate this Agreement at any time in which case the parties shall agree to the amount of fees payable to Consultant. b. HRA may terminate this Agreement upon the breach by Consultant of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by Consultant of a written notice from HRA, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that Consultant cannot reasonably cure same in the thirty (30) day period, Consultant shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by Consultant of such written notice. In the event of termination by HRA hereunder, Consultant shall be entitled to fees due to the date the notice of breach is sent by the HRA. c. If Consultant or HRA (as applicable) (i) files a voluntary petition in bankruptcy (ii) files a voluntary petition for reorganization under any bankruptcy law, statute or regulation or other similar statute or regulation, (iii) is adjudicated a bankrupt, (iv) makes an assignment for the benefit of creditors or applies for or consents to fb.us.3166730.04 2 3D-3 the appointment of a receiver or trustee as part of or in conjunction with a "creditor plan" with respect to any substantial part of its assets, or(v) a receiver or trustee is appointed, or an attachment or execution levied with respect to any substantial part of its assets, and said appointment is not vacated, or the attachment or execution not released, within sixty (60) days, then this Agreement shall, effective as of such date, without notice or further action by either party, immediately terminate. d. Consultant may terminate this Agreement upon the breach by HRA of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by HRA of a written notice from Consultant, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that HRA cannot reasonably cure same in the thirty (30) day period, HRA shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by HRA of such written notice. In the event of termination by Consultant hereunder. Consultant shall be entitled to retain the entire fee under this Agreement. 5. Insurance. a. During the term of this Agreement, the Consultant shall obtain and maintain workers compensation, comprehensive general liability, and automobile liability insurance. Comprehensive general liability insurance shall have an aggregate limit of Two Million Dollars ($2,000,000.00). b. Upon request by the HRA, the Consultant shall provide a certificate or certificates of insurance relating to the insurance required. Such insurance secured by the Contractor shall be issued by insurance companies licensed in Minnesota. The insurance specified may be in a policy or policies of insurance, primary or excess. c. Such insurance shall be in force on the date of execution of an Agreement and shall remain continuously in force for the duration of the Agreement. 6. Indemnification. a. Notwithstanding anything to the contrary in this Agreement, the HRA, its officers, agents, and employees shall not be liable or responsible in any manner to the Consultant, the Consultant's successors or assigns, the Consultant's subcontractors, or to any other person or persons for any third party claim, demand, damage, or cause of action of any kind, nature, or character, including intentional acts, arising out of or by reason of the performance of this Agreement by Consultant. The Consultant, and the Consultant's successors or assigns, agree to protect, defend and save the HRA, and its officers, agents, and employees, harmless from all third party claims, demands, damages, and causes of action, to the extent caused by the negligence or wrongful acts of Consultant, and the costs, disbursements, and ib.us.3166730.04 3 3D-L expenses of defending the same, including but not limited to, attorneys fees, consulting services, and other technical, administrative or professional assistance. b. Nothing in this Agreement shall constitute a waiver or limitation of any immunity or limitation of any immunity or limitation on liability to which the HRA is entitled under Minnesota Statutes, Chapter 466, or otherwise. 7. Assignment. This Agreement shall not be assigned, sublet, or transferred, in whole or in part without the prior written approval of the HRA. 8. Conflict of Interest. The Consultant shall use best efforts to meet all professional obligations to avoid conflicts of interest and appearances of impropriety in representation of the HRA. In the event of a conflict, the Consultant, with the prior written consent of the HRA, shall arrange for suitable alternative services. 9. Compliance with Laws. The Consultant shall comply with all applicable Federal, State, and local laws, rules, ordinances, and regulations at all times and in the performance of the services pursuant to this Agreement. 10. Notices. Any notices permitted or required by this Agreement shall be deemed given when personally delivered or upon deposit in the United States mail, postage fully prepaid, certified, return receipt requested, addressed to: Consultant: Greater Metropolitan Housing Corporation 15 South 5th Street, Suite 710 Minneapolis, MN 55402 ATTN: Suzanne Snyder HRA: Richfield Housing and Redevelopment Authority 6700 Portland Avenue Richfield, MN 55423 Or such other address as either party may provide to the other by notice given in accordance with this provision. 11. Entire Agreement. This Agreement, any attached exhibits and any addenda or amendments signed by the parties shall constitute the entire agreement between the HRA and the Consultant, and supersedes any other written or oral agreements between the HRA and the Consultant. This Agreement can only be modified in writing signed by the HRA and the Consultant. 12. Third Party Rights. The parties to this Agreement do not intend to confer on any third party any rights under this Agreement. 13. Counterparts. This Agreement may be signed in one or more counterparts but all of which taken together shall constitute one instrument. fb.us.3166730.04 4 3D- 14. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 15. Agreement Not Exclusive. The HRA retains the right to hire other housing program consultants, in the HRA's sole discretion. 16. Data Practices Act Compliance. Data provided to the Consultant or created by the Consultant under this Agreement shall be administered in accordance with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, as amended. [Signature Page Follows] fb.us.3166730.04 5 IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by their duly authorized officials,this Agreement on the respective dates indicated below. HRA: RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY By: Its: Chairperson Date: , 20_ CONSULTANT: GREATER METROPOLITAN HOUSING CORPORATION By: Its: President Date: , 20_. fb.us.3166730.04 6 The Greater Metropolitan Housing Corporation HousingResource Center - Southside Richfield Summary Status Report Monthly Tracking Report - November 2012 Previous 2012 TOTAL TO Counseling Related Activities Year Totals Jan '12 Feb'12 Mar`12 Apr'12 May'12 Jun '12 July'12 Aug '12 S ept'12 Oct'12 Nov'12 Dec'12 TOTAL DATE Home Buyer Information 10 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Refinance/Satisfactions/Subordination 2 0 0 0 0 0 0 0 0 0 0 0 0 0 2 Construction Consultations (5) 195 0 2 2 2 3 5 5 7 4 4 3 0 37 232 Energy Assistance (1) 5 0 0 0 0 0 0 0 0 0 0 0 0 0 5 Mortgage Foreclosure Prevention 13 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Home Improvement Information (2) 338 4 1 10 9 5 5 5 5 8 0 0 0 52 390 Rental/Emergency Housing Issues (3) 14 0 0 0 0 0 0 0 0 0 0 0 0 0 14 Other 7 0 0 0 0 1 0 0 0 1 0 0 0 2 9 MHFA Loan Products Loan Applications Mailed 143 0 1 6 2 3 1 3 1 0 0 4 0 21 164 Loan Applications Rec'd 24 0 0 0 3 5 1 3 0 1 1 1 0 15 39 Loans Closed 13 0 0 0 0 0 5 1 3 0 2 1 0 12 25 TOTAL SERVICE PROVIDED 747 4 4 12 11 9 10 17 16 14 7 0 0 104 851 s TOTAL. CLIENTS SERVED 498 12 2 14 12 9 11 9 6 6 0 0 0 81 579 NOTE: These numbers reflect the number of CLIENTS serviced. In many instances a client will receive more than one service. (1) ENERGY ASSISTANCE DENOTES REFERRALS TO SOCIAL SERVICE AGENCIES THAT PROVIDE MONETARY ASSISTANCE FOR ENERGY EXPENSES. (2)HOME IMPROVEMENTS INCLUDES REFERRALS TO MHFA,CPED, PRIVATE LENDERS OR OTHERS FOR FINANCIAL INFORMATION ON HOME (3)RENTAL/EMERGENCY HOUSING ISSUES IS A NEW CATEGORY AND WAS COMBINED WITH OTHER IN PREVIOUS YEARS. (4)THIS CATEGORY INCLUDES ALL LOAN ADMINISTERED THROUGH THE HOUSING RESOURCE CENTERS INCLUDING MHFA PRODUCTS (5)CONSTRUCTION CONSULTATION INCLUDE HOME VISITS AND TELEPHONE CONSULTATIONS ON RELATED MATTERS South HRC Northwest HRC Northeast HRC Quarterly Report-June 1 to August 31,1999 Quarterly Report-June 1 to August 31,1999 Quarterly Report-June 1 to August 31,1999 ICounseana related Activities ICounsellnp related Activities iCounsellna related Activlties Home Buyers Mortgage Home Buyers Mortgage Home Buyers Mortgage Refinance/CDs Refinance/CDs Refinance/CDs HomeOwnership Training HomeOwnership Training HomeOwnership Training Construction Consult Construction Consult Construction Consult Energy Assistance Energy Assistance Energy Assistance Mortgage Forclosure Mortgage Forclosure Mortgage Forclosure Other Other Other INRP Related alet hies ItP Related Acffiritls4 UIRP Related Activities NRP Loans/Grants Applications NRP Loans/Grants Applications NRP Loans/Grants Applications Loans/Grants Closed Loans/Grants Closed Loans/Grants Closed MHFA Related Activities MHFA Related Activities MHFA Related Activities Loans/Grants Applications Loans/Grants Applications Loans/Grants Applications Loans/Grants Closed Loans/Grants Closed Loans/Grants Closed Met.Council Aotivites - - Met.Council Activites Met.Council Activitea 73 1 AGENDA ITEM#: 4 REPORT#: 56 =All STAFF REPORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING DECEMBER 17, 2012 REPORT PREPARED BY: JULIE URBAN/KATE AITCHISON, HOUSING SPECIALIST NAME,TITLE REPORT PRESENTER: KAREN BARTON, COMMUNITY DEVELOPME T ASSISTANT DIRECTOR NAME,TITLE DEPARTMENT DIRECTOR REVIEW: 13 , VII r is i AP° if REVIEWED BY EXECUTIVE DIRECTOR: ro ■ . /` ITEM FOR HRA CONSIDERATION: Consideration of a request for a subordination of a Housing and Redevelopment Authority Foreclosure Purchase Incentive Program loan at 7625 Emerson Avenue. I. RECOMMENDED ACTION: By Motion: Approve or deny the request for a subordination of a Housing and Redevelopment Authority Foreclosure Purchase Incentive Program loan at 7625 Emerson Avenue. II. BACKGROUND Daniel Helgemoe (Homeowner) of 7625 Emerson Avenue received a zero-interest $15,000 Foreclosure Purchase Incentive Program loan from the Housing and Redevelopment Authority (HRA) on August 3, 2011. Mr. Helgemoe is seeking to refinance his first mortgage and is requesting a subordination of the HRA lien. Mr. Helgemoe is proposing to consolidate additional debt into the new mortgage, which is not allowed under the HRA's subordination policy. As a result, the request was denied by staff. Mr. Helgemoe is appealing the denial and has asked that his request be brought to the HRA for consideration. In 2011 when Mr. Helgemoe was applying for initial financing, his debt-to-income ratio was too high to independently secure a mortgage. His parents agreed to co- 12172012 Helgemoe (7625 Emerson) subordination appeal.doc sign the mortgage; however, Mr. Helgemoe has been solely responsible for the payments. Mr. Helgemoe's primary goal in refinancing is to remove his parents from their obligation on his primary mortgage. Since his original loan, his financial situation has improved allowing him to have a better debt-to-income ratio; however, the lender is requiring that he consolidate his student loan debt of approximately $55,000 in order to qualify for the mortgage. Additionally, by refinancing his mortgage the Homeowner will reduce his monthly debt obligations by 30 percent per month. Mr. Helgemoe has made significant improvements to the property including a new roof, furnace, and air conditioning unit, along with an additional 1,000 square feet of finished space in the basement. As a result, the equity in his home has increased $68,000, from an initial appraised value of$207,000 (to $275,000). The amount of equity removed in the refinancing of the primary mortgage will be less than the overall increase in equity of the home due to renovations and repairs. The Loan-to- Value (LTV) ratio of the new mortgage will be 69 percent, a 4% increase from the original LTV of 65 percent. The HRA's lien is a 5-year, forgivable, zero-interest loan that is currently in second position behind a 15-year fixed-interest primary mortgage with a balance of $113,190. The superior mortgage will be paid off through the refinance, and the HRA's lien will be in second position behind the new, 30-year fixed-interest primary mortgage of approximately $174,500. III. BASIS OF RECOMMENDATION A. POLICY According to the HRA Subordination and Satisfaction Policy, the HRA will subordinate its mortgage interest if the following conditions are met: • The total debt secured by the property, including the HRA lien and all superior mortgages, shall not exceed 80 percent of the documented market value of the property. A staff-authorized administrative appeal of the Policy can be granted if the loan-to-value ratio does not exceed 85 percent or if the amount of superior debt does not increase more than the value of existing superior debt plus closing costs. • The overall value of superior debt must not be increased by more than 50 percent. • Closing costs do not exceed three percent. • Payment terms are within the financial means of the borrower. • Equity being removed must be no more than $5,000 or must be for qualified home improvements. • Property taxes must be current. • No more than one subordination has been granted to the loan within the past five years. B. CRITICAL ISSUES • The combined loan-to-value ratio is 69 percent. • The proposed 30-year, fixed-interest first mortgage of$174,500 will pay off the existing mortgage and student loan debts of approximately $55,000. • The interest rate of the Homeowner's primary mortgage will decrease from 4% on"his current mortgage (with 14 years remaining), to 3.375% in the proposed 30-year, fixed rate mortgage. • The amount of debt in front of the HRA lien increases 54 percent from $113,900 to $174,500. • The current appraised value is $275,000. • The HRA is currently in second position behind a 15-year, fixed- interest primary mortgage with a balance of$113,900. • The HRA's lien will be forgiven in August, 2016. C. FINANCIAL • The application fee has been received for the appeal request. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S) • Approve the subordination request. • Deny the subordination request. V. ATTACHMENTS • Subordination & Satisfaction Policy • Copy of letter to staff dated 10/25/12 • Appeal Letter, dated 11/26/12 VI. PRINCIPAL PARTIES EXPECTED AT MEETING • • Daniel Helgemoe, Homeowner 4- 1 RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY SUBORDINATION & SATISFACTION POLICY EFFECTIVE JULY 2012 Subordinations Richfield Housing and Redevelopment Authority (HRA) loan recipients requesting subordination of the interest of the HRA in real property must submit a Subordination Request Form, the required supporting documentation, and a processing fee. Forms are available on the City of Richfield website (http://www. cityofrichfield.org/) or by calling the Community Development Department at 612-861-9760. Requests will not be considered until all documents and the processing fee have been received. Required Documents The following information must be submitted with the Subordination Request Form: 1. A typed letter dated and signed by the mortgagor, stating the reason for the requested subordination and the use of any equity being removed as part of the loan transaction. 2. A copy of the current appraisal (dated within six months of application)or other evidence of market value of the property that is acceptable to the HRA. 3. A copy of current title work(must indicate all debt against the property). 4. Explanation of remaining debts or liens with supporting documentation (i.e. most recent mortgage bill). 5. Estimated closing costs/settlement statement, where applicable. 6. A copy of the mortgagor's loan application. 7. Additional documentation may be required. Evaluation Criteria The Richfield HRA will subordinate its mortgage interest if all of the following conditions are met, to the extent that they are applicable: 1. Closing costs are reasonable. Generally this shall mean that the sum of all discount points, origination fees, and lender ancillary fees generally shall not exceed 3% of the new first mortgage amount. 2. If the HRA believes that the payment terms of the refinance are within the financial means of the borrower. 3. The total debt secured by the property, including the HRA lien and all superior mortgages, does not exceed 80% of the documented market value of the property. 4. Any equity being removed beyond the cost of the loan transaction will be used to improve the property. A typed letter, dated and signed by the applicant, must be submitted stating the use of any equity being removed. 5. The overall value of superior debt must not be increased by more than 50%. Exceptions may be granted by the HRA in cases where superior debts are found to be unusually low with sufficient equity protection. 6. If no more than one subordination request has been approved by the HRA in the past five years. 4 - a 7. Property taxes, if not escrowed by the superior mortgage holder, must be current. The HRA will not subordinate to reverse mortgages. In most cases, interest-only loans or loans with interest- only options, revolving lines of credits or debt consolidation will not be allowed unless the HRA determines that an acceptable reason warrants this type of loan. The HRA may approve other subordination requests not meeting the conditions above on a case-by-case basis that are clearly in the best interests of the HRA, where the security of the HRA loan remains acceptable, and denial of the request will cause or contribute to a documented hardship on the part of the borrower. As a condition of approval, the HRA may require the Borrower to receive financial counseling. While many courses are available at no charge, the Borrower is responsible for any costs associated with the counseling. The course must be approved by the HRA. Fees The fee for a subordination request is established by the HRA. If the subordination request is denied, the fee will be returned with a letter explaining the reason(s)for denial. An additional fee is required for an appeal to the HRA and is non-refundable. Processing Subordination requests will be processed by HRA staff, who will submit the request with a recommendation for action, to the Executive Director. The Executive Director may request review and final decision by the HRA. Requests for subordination should be submitted 30 days prior to the date the agreement to subordinate is needed. Exceptions may be made on a case-by-case basis. Appeal Process In cases where a subordination request does not meet the Policy, the Executive Director may grant an administrative appeal under the following circumstances: • Loan-to-value (LTV) ratio is greater than 80%, but no greater than 85%; or • Equity being removed for anything other than property improvements does not exceed $5000; or • The amount of financing superior to the HRA lien does not increase more than the cost of settlement charges related to the refinancing. If an application is denied, the applicant may request an appeal in writing. Appeals will be submitted by staff to the HRA at the next regularly scheduled meeting, provided the request is made at least 10 days prior to that meeting. The HRA meets on the third Monday of each month. Satisfactions When a loan made by the HRA is paid in full, a document satisfying the lien will be prepared by the HRA and delivered to the borrower for recording. The borrower is responsible for the cost of recording the satisfaction. October 25, 2012 Housing and Redevelopment Authority Richfield Municipal Center 6700 Portland Avenue Richfield, MN 55423 Subordination Request Ms. Aitchison: I would like to thank you for your response to my email inquiry to Julie earlier this month regarding my proposed refinancing of my mortgage and subordination of the HRA's lien against my property. However, I would like to clarify some of the details regarding my proposed refinance in order to correct, what I perceive from your email to be, a misperception you may be under regarding the motivations and goals of this transaction. As per your email, I have reviewed the Subordination& Satisfaction Policy regarding the HRA's position on these types of requests. Particularly, I have reviewed the evaluation criteria set forth therein in order to better understand the position the HRA is likely to take with respect to my request, and explain why the unique circumstances of my situation cannot be placed within the specific criteria set forth by the HRA's policy. I understand that the HRA provides an appeal process, in the event an initial subordination request is denied, in which it may grant approval notwithstanding that a request fails to meet one or more of the enumerated criteria. Although I have yet to submit an initial application (let alone find myself in the shadow of an appeal), I would like to provide an explanation as to why my request should be granted so as to confirm (i) whether an appeal will be necessary, or (ii) if my request has little to no chance of success, even on appeal. As the refinance process is a long and costly endeavor, I do not wish to expend the time and financial resources in pursuing this process if there is little to no chance that the HRA will grant my request. After reviewing the seven evaluation criteria set forth in the HRA's Subordination Policy, it has become evident to me that the only criteria which my request would fail to meet is that regarding the use of removed equity. With respect to the remaining criteria: (i) the closing costs of my refinance will be within the typical costs of such transaction, (ii) the new mortgage will reduce my required monthly expenses by over 30%, (iii) I will continue to hold in excess of thirty percent equity, including the HRA's loan, in the property, (iv) the principal amount of my new mortgage will not be increased by more than 50% of my current mortgage, (v) I have made no prior subordination requests, and(vi) my property taxes are paid and current. As indicated in my email to Julie Urban, the equity that will be removed from my property will be utilized to satisfy my current private and federal student loans. Although I recognize and understand the HRA's general prohibition on the use of removed equity for such purpose, I don't believe the underlying motivations supporting such criteria are applicable to my circumstances. Primarily, I believe the facts of my situation are unique in the sense that the consolidation of my student loans into my new mortgage is not the primary goal of this transaction. In reality, this is 4 -1-1 a mandatory perquisite established by my lender. In fact, the idea of consolidating these loans into my new mortgage was suggested by my lender. In order to better explain my request, I would like to provide you with some background details and context surrounding my original receipt of FPIP money when I originally purchased the property in 2011. At the time of my purchase, I was not in a financial position to qualify for a mortgage as my debt-to-income ratio was below the threshold requirements of obtaining any mortgage loan. Although my monthly income, and the financial contributions I received from my roommates, was more than adequate to cover the costs of the mortgage, my disparately high level of student loan debt precluded my ability to purchase the property on my own. As a result, I was only able to obtain a mortgage to purchase the property by having my parents become co- mortgagors and co-owners on the deed. In the fifteen months since my original mortgage was issued, my parents have made no payments with respect to the mortgage or the ordinary operating and utility expenses relating to the property. My parents provided me with the opportunity to purchase a home of my own, while bearing the financial burden of co-liability on its mortgage. Moreover, in that same fifteen month span, my financial position has improved significantly. In fact, this improvement has put me in a position where I can qualify for a mortgage without the need for co-mortgagors. As such, the underlying purposes of my refinance transaction are two-fold. First, and primarily, it is and has been my ultimate intent to remove my parents from co-liability on my mortgage. Second, it was my hope that my refinance transaction could put me in a financial position where I would reduce (and, ideally, eliminate) my dependence upon the financial contributions of my roommates to afford my mortgage payment. After meeting with several loan officers at different lending institutions, it was determined that both of my goals were possible to achieve. However, according to these lenders, the only way in which my new mortgage could be granted was if my existing student loans were consolidated into it. Although I do not deny the obvious benefits I will obtain through this process, this result has never been among my criteria for seeking to refinance, nor would I discontinue my efforts to obtain a refinance if I could obtain a mortgage without the inclusion of my student loans. As such, I would hope that the HRA would recognize that I am not attempting to acquire this undeniable financial benefit by pillaging the equity of my property. It is merely a necessary pre-requisite imposed by my lender in order to achieve my underlying purposes in seeking this refinance transaction. Put another way, it represents nothing more than a means-to-an-end. The HRA should grant my subordination request, notwithstanding its failure to meet one of the seven evaluation criteria set forth in the Subordination Policy, because it would be in the best interest of the HRA and denial of my request would impose an unnecessary burden upon myself and my parents (the borrowers of the HRA loan). From an equity perspective, as briefly mentioned above, the security position held by the HRA if my request were granted would be effectively unchanged relative to the security position the HRA was in at the time my HRA loan was granted. At the time I purchased this property, I obtained a $15,000 FPIP forgivable loan together with a $120,000 mortgage on my property, which was appraised at $207,000 at the time. This equated to a loan-to-value ratio of approximately 65%. If the HRA were to grant my request to subordinate to my new mortgage of$170,000, when compared to the appraised value of my property as of last week($275,000), the loan-to-value ratio would be approximately 67%. Although technically a decrease of 2%equity, the benefit to the HRA would come in the form of a reduced possibility that I will default on my mortgage or be forced to sell my property due to my inability to meet my mortgage obligations. As discussed above, my new monthly debt service obligations would be reduced by over 30%. Moreover, this reduced debt burden would permit me more available income to use for other purposes, including improvements to the property. In addition to being in the best interests of the HRA, a denial of my request would impose an undue and unnecessary burden upon myself and my parents (as co-mortgagors). As has been repeatedly stated in this letter, one of the effects and primary purposes of this proposed refinance is to reduce my monthly debt service obligations. I have met with several loan officers and undergone a preliminary underwriting process, and have been pre-approved for my proposed refinance. Barring any issues arising during the underwriting process, the only obstacle remaining to my achieving this refinance, and my goal of reducing my debt payments, is the HRA's approval of my subordination request. A denial of my request would effectively deny me this refinance and the ability to make my debt more affordable. Further, a denial of my request would impose an undue and unwarranted burden upon my parents (as co-mortgagors). As set forth above, in addition to my goal of reducing my monthly debt payments, my overall primary purpose for seeking this refinance was to remove my parents from liability of my mortgage. Although I was not in a financial position to acquire a mortgage without their assistance at the time I purchased the property, I now have the opportunity to free them from the burden of potential liability as well as give them back the credit they have pledged for the benefit of my loan. In fact, my parents are currently seeking to purchase another piece of real property for which they could otherwise easily obtain a mortgage but for their inclusion in my current mortgage. If the HRA were to deny my subordination request, it would unnecessarily operate to inhibit (if not prevent) my parents from purchasing any other real property within the foreseeable future. I do not present this explanation to you in the hopes of eliciting any special treatment in your consideration of my request, nor seeking for you to operate outside of your official mandate under HRA policy. My purpose is to elicit feedback from you regarding the probability of success of my request, either at the administrative or appeals level, to ensure that I do not needlessly expend time and resources pursing a fruitless endeavor. As such, I would greatly appreciate your opinion regarding the relative need for an appeal in this process and the likelihood of success of my request. Please feel free to contact me via email (dan!a,;gasket.ty) or phone (507-254-5734) if you have any questions or would like to discuss this matter. I've attached the recent appraisal of my home in case that information is of use to you. Thank you, Dan Helgenioe November 26, 2012 Housing and Redevelopment Authority Richfield Municipal Center 6700 Portland Avenue Richfield, MN 55423 RE: Subordination Request Dear HRA: In accordance with the Richfield Housing and Redevelopment Authority Subordination & Satisfaction Policy, please allow this letter to explain my requested subordination and the use of equity being removed as part of my loan transaction. As was set forth in greater detail in my email letter to the HRA Administration, dated October 25, 2012 (a copy of which is attached), the reasons underlying my subordination request are two- fold. My primary reason is to gratefully return to my parents the credit which they had pledged for my benefit when they co-signed on my mortgage. Second, it is my hope to refinance my current 15-year mortgage to a new, lower-rate 30-year mortgage to reduce my monthly debt burden. During this endeavor, my lending officer informed me that my existing student loan burden would prohibit my refinance unless it was incorporated into the mortgage. However, this refinance transaction would appear to deviate from the "Evaluation Criteria" set forth in the HRA Subordination Policy, in that the direct use of the equity being removed as part of this refinance transaction is not for improvement of my property. This apparent noncompliance with the Subordination Policy is only technical and illusory. I believe my subordination request fully complies with the spirit and letter of the Evaluation Criteria; it is merely the timing of events in this matter that create the illusion of noncompliance. Indeed, I cannot imagine that the HRA would offer much resistance had the timing of events in this situation been reversed. As stated in my October 25 letter, my parents and I purchased my property in the summer of 2011. By the end of 2011, we had undertaken several improvements and repairs to the property, including a new roof, furnace, central air conditioning and the addition of over 1000 square feet of finished space in the basement of my home. As a result of these efforts, the appraised value of my home increased from $207,000 at the time of purchase to $275,000 as of October 13, 2012 (appraisals attached). The equity being removed as part of my refinance transaction totals less than both (1) the amount of capital invested into the repairs and improvements to my property over that past 18 months, and (2) the $68,000 of increased equity resulting from such improvements and repairs. Had my subordination request been made prior to undertaking my repairs and improvements, with the equity being removed directly used to fund such renovations, this matter would have been approved at the administrative level with no need for the current appeal. The fact that I chose not to deal with the administrative and substantive difficulties presented by a refinance based upon an "intent to improve" and, instead, chose to directly fund the improvements and seek reimbursement after-the-fact should have no bearing on the acceptability of my request. A decision to the contrary would operate as a punitive measure based solely upon my decision to improve my home rather than pay off my other debts. Simply stated, the equity being removed as part of my refinance is merely "reimbursing" me for the expenses already incurred in completing the repairs and improvements to my property. Although I have already determined for what purpose I will utilize this removed equity, the fact remains that, even after my proposed refinance, more dollars of equity now exist in my property as compared to when the HRA approved my FPIP transaction. Because a greater amount of money than the equity being removed was spent in improvements to my property within the past 18 months, my subordination request complies with the underlying purposes of the Evaluation Criteria, and should be approved. For the reasons set forth above and in my October 25 letter, I respectfully request the HRA to approve my subordination request. Please feel free to contact me with any questions or to discuss this matter. Thank you, Daniel Helgemoe AGENDA ITEM#: 5 REPORT#: 57 -All STAFF REPORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING DECEMBER 17, 2012 REPORT PREPARED BY: KATE AITCHISON/JULIE URBAN,HOUSING SPECIALISTS NAME,TITLE REPORT PRESENTER: KAREN BARTON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR ihhhi„ NAME,TITLE DEPARTMENT DIRECTOR REVIEW: ,� SIGNA O,Air --7--, i REVIEWED BY EXECUTIVE DIRECTOR: ��I,' �'" /Air_ _A4 .A ITEM FOR HRA CONSIDERATION: Public hearing and consideration of a resolution authorizing the sale of 6825 Grand Avenue to Brand) Anderson Homes, and consideration of a Contract for Private Development with Brandi Anderson Homes for the construction of a single family home under the Richfield Rediscovered Program. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: 1. Approve a resolution authorizing the sale of 6825 Grand Avenue to Brandi Anderson Homes; and 2. Authorize execution of a Contract for Private Development with Brandi Anderson Homes for the development of a _single family home under the Richfield Rediscovered Program. II. BACKGROUND The Housing and Redevelopment Authority (HRA) purchased 6825 Grand Avenue in the fall of 2009 and demolished the existing sub-standard house in the spring of 2010. Brandi Anderson (Builder) has submitted an application to purchase the lot and construct a new home under the Richfield Rediscovered Program. The Builder has a Purchase Agreement with a Buyer to purchase the home upon completion. 12172012 RR Contract 6825 Grand (Brandi Anderson) • The new two-story home will have 1,633 finished square feet, three bedrooms, two and a half baths and an attached, two-stall garage. The home will have an estimated end-value of$228,000. The Richfield Rediscovered program allows for a builder to receive a $5,000 credit in the event that the house is certified through LEED, Minnesota Green Star or Minnesota Green Communities. Brandi Anderson is intending to construct the home to Minnesota Green Path certification standards. This certification program is a new program provided by the Builders Association of the Twin Cities (BATC) with standards similar to those of the three certification programs mentioned in the Richfield Rediscovered guidelines. The Green Path certification focuses on the energy efficiency of a home, indoor air quality, water conservation and resource management. Once the certification is obtained, the $5,000 credit would be issued to Brandt Anderson. Construction is expected to begin in January and will be completed in the spring of 2013. III. BASIS OF RECOMMENDATION A. POLICY • The proposed project meets the objectives of the Richfield Rediscovered Program: o Provides new, higher valued housing. o Alleviates a shortage of housing choice for families. o Facilitates the HRA's "Market Rate Initiatives" by providing a three-bedroom, owner-occupied house designed for a family. • The project meets the Housing Design and Site Development Criteria, as defined in the Richfield Rediscovered Guidelines. • The existing mature boulevard tree will be preserved. A tree protection plan will be required to protect the health of the tree during construction. New trees will be required in compliance with the City's Zoning Ordinance standards for new single family homes. B. CRITICAL TIMING ISSUES • Closing on the lot will occur once a building permit is ready to be issued and is required to occur no later than February 15, 2013. • Per the Contract for Private Development, construction must be completed by June 15, 2013. C. FINANCIAL • The appraised value of the lot is $48,000. • The HRA acquired the foreclosed property in 2009 for $101,119 and razed the existing house. • Under the terms of the Contract the purchase price of$48,000 will be due at closing. • Under the terms of the Contract the Builder will submit a $10,000 cash escrow to be held until construction is completed as provided in the Contract. • The Builder will receive a $5,000 credit if certification is obtained through Minnesota Green Path. • The Builder has submitted evidence of construction financing as well as the financing of the end-buyer. D. LEGAL • The HRA Attorney prepared the Contract for Private Redevelopment. • Notice of the public hearing was published in the Sun Current on December 6, 2012 and a mailed notice was sent to adjacent neighbors, as a courtesy. IV. ALTERNATIVE RECOMMENDATION(S) • Do not execute the Contract for Private Development. • Amend the Contract for Private Development and direct staff to work with the Builder to revise the proposal. V. ATTACHMENTS • Resolution • Photo of 6825 Grand Avenue lot • Contract for Private Development • Building Plans/Elevations VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Brian Helvick, Brandt Anderson Homes 5- HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6825 GRAND AVENUE TO BRANDL ANDERSON HOMES, INC. WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Richfield Rediscovered Program adopted by the HRA, said real property being described as: Address: 6826 Grand Avenue Legal: Lot 15, Block 1, Wooddale, Hennepin County, Minnesota WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the purchasers of the described property have been identified as Brandt Anderson Homes, Inc., and WHEREAS, a Contract for Private Development has been prepared, and the sale price of 6825 Grand Avenue is $48,000.00 with performance security in the amount of $10,000; and WHEREAS, a public hearing has been held after proper public notice. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota: 1. A public hearing has been held and 6825 Grand Avenue is authorized to be sold for$48,000.00 to Brandt Anderson Homes, Inc.; and 2. The Chairperson and Executive Director are authorized to execute a Contract for Private Development and other agreements as required to effectuate the sale to the Builder. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of December, 2012. Suzanne M. Sandahl, Chair ATTEST: Doris Rubenstein, Secretary 9-a Photo of 6825 Grand Avenue South • ` p- , 00 6i/ 1 CONTRACT FOR PRIVATE DEVELOPMENT Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and Brandi Anderson Homes, Inc. for property located at 6825 Grand Avenue South This Instrument Drafted by: The Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue South Richfield, Minnesota 55423 Telephone: (612) 861-9760 401253v6 CBR RC 125-65 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into as of this day of Z 20 , by and between the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, having its principal office at 6700 Portland Avenue, Richfield, Minnesota (HRA) and Brandl Anderson Homes, Inc. (Builder). WITNESSETH: WHEREAS, the City of Richfield (City) and the HRA have previously created and established a Redevelopment Project (Project) pursuant to the authority granted in Minnesota Statutes, Sections 469.001 through 469.047 (collectively, the Act); and WHEREAS, pursuant to the Act, the City and the HRA have previously adopted a redevelopment plan for the Project(Redevelopment Plan); and WHEREAS, in order to achieve the objectives of the Redevelopment Plan and particularly to make specified land in the Project available for development by private enterprise for and in accordance with the Redevelopment Plan, the HRA has determined to provide substantial aid and assistance to finance development costs in the Project; and WHEREAS, the Builder has proposed a development as hereinafter defined within the Project which the HRA has determined will promote and carry out the objectives for which the Project has been undertaken, will assist in carrying out the obligations of the Redevelopment Plan, will be in the vital best interests of the City and the health, safety and welfare of its residents and is in accord with the public purposes and provisions of the applicable state and local laws and requirements under which development in the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the mutual covenants and obligation of the HRA and the Builder, each party does hereby represent, covenant and agree with the other as follows: ARTICLE I. DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement, the following terms have the meaning given below unless the context clearly requires otherwise: Building Plans. Detailed plans for the Improvements to be constructed on the Property, as required by the local building official for issuance of a building permit. 401253v6 CBR RC125-65 1 Construction Plans. The construction plans approved by the HRA pursuant to Section 4.1 of this Agreement. The Construction Plans include a schedule for construction of the Improvements, preliminary plans and schematics of the Improvements to be constructed, and a landscaping plan. Development. The Property and the Improvements to be constructed thereon according to the Construction Plans approved by the HRA. Event of Default. Event of Default has the meaning given such term in Section 8.1. Guidelines. The Richfield Rediscovered Program Guidelines Lot Sale Program, revised November 15, 2010 and attached as Exhibit B to this Agreement. Homeowner. The individuals purchasing the Property from Builder and who will be living in the home following purchase. hnprovements. Each and all of the structures and site improvements constructed on the Property by the Builder, as specified in the Construction Plans to be approved by the HRA. Minimum Market Value. $228,000 which is the minimum market value for the land and Improvements as confirmed by the Hennepin County Assessor. Mortgage. A mortgage obtained by the Builder from a third party lender in accordance with Section 7.2 of this Agreement. Property. The real property legally described as: Lot 15,Block 1, Wooddale,Hennepin County,Minnesota Located on land having a street address of: 6825 Grand Avenue South Unavoidable Delays. Delays which are the direct result of strikes, labor troubles, fire or other casualty to the Improvements, litigation commenced by third parties which results in delays or acts of any federal, state or local government, except those contemplated by this Agreement, which are beyond the control of the Builder. Section 1.2. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: A. Form of Certificate of Completion B. Program Guidelines—Lot Sale Program C. Form of Quit Claim Deed 401253v6 CI3R RC125-65 2 D. Well Disclosure Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota. (b) The words "herein" and "hereof' and words of similar import, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof. (c) References herein to any particular section or subdivision hereof are to the section or subdivision of this Agreement as originally executed. (d) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. ARTICLE II. REPRESENTATIONS AND UNDERTAKINGS Section 2.1. By the Builder. The Builder makes the following representations and undertakings: (a) The Builder has the legal authority and power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement; (b) The Builder has the necessary equity capital or has obtained commitments for financing necessary for construction of the Improvements; (c) The Builder will construct the Improvements in accordance with the terms of this Agreement and all local, state and federal laws and regulations; (d) The Builder will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, the requirements of all local, state and federal laws and regulations which must be obtained or met before the Improvements may be constructed; (e) The plans for the Improvements have been prepared by a qualified draftsperson or architect; and (f) The Builder has read and understands the Guidelines and agrees to be bound by them. 401253v6 CBR RC 125-65 3 Section 2.2. By the HRA. The HRA makes the following representations as the basis for the undertaking on its part herein contained: (a) The HRA is authorized by law to enter into this Agreement and to carry out its obligations hereunder; and (b) The HRA will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Builder and will cooperate with the efforts of the Builder to secure the granting of any permit, license, or other approval required to allow the construction of the Improvements. ARTICLE III. ACQUISITION OF PROPERTY; CONVEYANCE TO BUILDER Section 3.1. Purchase of Property by Builder. The HRA agrees to sell the Property to Builder and the Builder agrees to purchase the Property from the HRA in an "as-is" condition. The sale of the Property is contingent upon the Builder providing the IIRA with evidence satisfactory to the IIRA that Builder has entered into a binding legal commitment, in the form of a Purchase Agreement for the resale of the Property to a Homeowner following completion of the Improvements. The IIRA agrees to convey the Property to the Builder by Quit Claim Deed in the general form of Exhibit C. The HRH's deed to the Builder will contain the right of reverter required in Section 8.3. The purchase price for the Property, payable at Closing, will be $48,000 ("Purchase Price"). Section 3.2. Title and Examination. As soon as reasonably possible after execution of this Contract for Private Development by both parties, (a) HRA shall surrender any abstract of title and a copy of any owner's title insurance policy for the property, if in HRA's possession or control, to Builder or to Builder's designated title service provider; and (b) Builder shall obtain the title evidence determined necessary or desirable by Builder or Builder's lender, including but not limited to title searches, title examinations, abstracting, a title insurance commitment or an attorney's title opinion, at Builder's selection and cost, and provide a copy to the HRA. The Builder shall have 20 days from the date it receives such title evidence to raise any objections to title it may have. Objections not made within such time will be deemed waived. The HRA shall have 90 days from the date of such objection to effect a cure; provided, however, that the HRA shall have no obligation to cure any objections, and may inform Builder of such. The Builder may then elect to close notwithstanding the uncured objections or declare this Agreement null and void, and the parties will thereby be released from any further obligation hereunder. 401253v6 CBR RC 125-65 4 Section 3.3. Taxes and Special Assessments. Real estate taxes and installments of special assessments will be prorated between the HRA and Builder as of the date of closing. Section 3.4. Soil Conditions and Hazardous Wastes. The Builder acknowledges that the I-IRA makes no representations or warranties as to the conditions of the soils on the Property, its fitness for the construction of improvements or any other purpose for which the Builder may use the Property, or regarding the presence of hazardous wastes on the Property. The HRA will allow reasonable access to the Property for the Builder to conduct such tests regarding soils conditions and hazardous wastes as the Buyer may desire. Permission to enter the Property to conduct such tests must be given in writing under reasonable terms and conditions established by the HRA. Section 3.5. Site Clearance. The HRA will be responsible for clearance of all buildings as required to prepare the Property for development. All other site preparation is the responsibility of Builder. Builder will comply with all of the provisions of the Guidelines relating to tree protection,preservation and replacement. Section 3.6. Other Preconditions to Closing. Closing may not take place until the HRA is satisfied that the Project is in all respects in full compliance with the provisions of the Guidelines contained in Exhibit B. It is anticipated that the Builder will involve the Homeowner in the various activities required under the Guidelines so that the Homeowner will have an opportunity to contribute suggestions concerning development of the Property. Section 3.7. Closing. Closing must take place on or before February 15, 2012, or such other date as may be agreed to by the Builder and HRA in writing. At Closing, the Builder will provide the HRA with a a cash deposit for the escrow account established pursuant to Section 5.1, in addition to the Purchase Price. Section 3.8. Closing Costs. The Builder will pay: (a)the closing fees charged by its title insurance company or other closing agent, if any, utilized to close the transaction for Builder; (b)title services chosen by Builder pursuant to Section 3.2 above, including the premium for title insurance policy, if any,and(c) the recording fees for the Contract for Private Development and the deed transferring title to the Builder. HRA will pay all other fees normally paid by sellers, including (a) any transfer taxes, and (b) fees and charges related to the filing of any instrument required to make title marketable. Each party shall pay its own attorney fees. Section 3.9. Sewer and Water. HRA warrants that city water is available at the lot line and city sewer is available at the curb. Section 3.10. ISTS Disclosure. HRA is not aware of any individual sewage treatment system on the property. Buyer is responsible for all costs of removing any individual sewage treatment system that may be discovered on the Property. Section 3.11. Well Disclosure. HRA's knowledge of wells on the Property is disclosed in Exhibit D. 40125306 CBR RC125-65 5 ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS Section 4.1. Construction of Improvements. The Builder shall construct the Improvements on the Property in accordance with the Guidelines and the Construction Plans, shall cause the Improvements to meet or exceed the Minimum Market Value specified in Section 1.1, and shall maintain, preserve and keep the Improvements in good repair and condition. The Builder shall provide his or her proposed construction plans to the HRA for review; if the proposed construction plans are in conformity with this Agreement and the Guidelines, the HRA will approve the Construction Plans following review and comment by the Homeowner. Section 4.2. Construction Plans. No building permit will be issued by the City unless the Building Plans are in conformity with the Guidelines, the Construction Plans, the Builder's Minimum Market Value, other requirements contained in this Agreement, and all local, state and federal regulations. The Builder shall provide the HRA with a set of Building Plans to be used in connection with any application for a building permit. The HRA shall, within 25 days of receipt of the Building Plans review the same to determine whether the foregoing requirements have been met. If the HRA determines such Building Plans to be deficient, it shall notify the Builder in writing stating the deficiencies and the steps necessary for correction. Issuance of the building permit by the City shall be a conclusive determination that the Building Plans have been approved and shall satisfy the provisions of this Section 4.2. Section 4.3. Schedule of Construction. Subject to Unavoidable Delays, construction of the Improvements shall be completed prior to June 15, 2012. All construction shall be in conformity with the approved Construction Plans and the Guidelines. Periodically during construction the Builder shall make reports in such detail as may reasonably be requested by the HRA concerning the actual progress of construction. If at any time prior to completion of construction the HRA has cause to believe that the Builder will be unable to complete construction of the Improvements in the time permitted by this Section 4.3, it may notify the Builder and demand assurances from the Builder regarding the Builder's construction schedule. If such assurances are not forthcoming or are deemed by the HRA at its sole discretion to be inadequate, the IIRA may declare an Event of Default and may avail itself of any of the remedies specified in Section 8.2 of this Agreement. Section 4.4. Certificate of Completion. After notification by the Builder of completion of construction of the Improvements, the HRA shall inspect the construction to determine whether the Improvements have been completed in accordance with the Construction Plans and the terms of this Agreement, including the date of the completion thereof. In the event that the HRA is satisfied with the construction, and upon closing on the sale of the Property to the Homeowner, the HRA shall furnish the Builder with a Certificate of Completion in the form attached hereto as Exhibit A. Such certification by the IIRA shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement. Issuance of the Certificate of Completion shall also serve as a satisfaction of any obligation of Builder 401253v6 C132 RC 125-65 6 secured by the the escrow account established under Section 5.1, and the cash in the escrow account will be released to the Builder. At the time a Certificate of Completion is issued, the HRA will also provide Builder with a $5,000 cash rebate if Builder has obtained Green Community Concepts certification through LEED for Homes, Minnesota GreenStar, Minnesota Green Communities or Minnesota Green Path. If the LIRA shall refuse or fail to provide certification in accordance with the provisions of this Section 4.4, the HRA shall within 15 days of such notification provide the Builder with a written statement, indicating in adequate detail in what respects the Builder has failed to complete the Improvements in accordance with the provisions of this Agreement necessary, in the opinion of the HRA, for the Builder to take or perform in order to obtain such certification. Section 4.5. Failure to Construct. In the event that construction of the Improvements is not completed as provided in Section 4.3 of this Agreement, an Event of Default shall be deemed to have occurred, and the HRA may proceed with its remedies under Section 8.2. ARTICLE V. REDEVELOPMENT ASSISTANCE Section 5.1. Establishment of Cash Escrow. Builder acknowledges that although it is purchasing the Property at its fair market value as raw land, the I-IRA has incurred significant costs in acquiring and preparing the Property for development by Builder. At Closing, Builder will deliver to the HRA $10,000 to be placed in a non-interest bearing escrow account pursuant to the Escrow Agreement, dated as of the date hereof, between Builder and HRA. The obligation to pay the $10,000 to the HRA will be forgiven, and the cash in the escrow account will be returned to Builder if: (i) the Builder receives a Certificate of Completion; and (ii) the Builder is not otherwise in default of any of its obligations hereunder. If such have not occurred, an Event of Default shall be deemed to have occurred and the HRA may exercise its remedies under Section 8.2. ARTICLE VI. FINANCING Section 6.1. Financing. IIRA acknowledges that Builder has submitted evidence of financing for the Improvements in compliance with the provisions of Section 2.1(b) of this Agreement. Builder must notify HRA immediately of any changes to or withdrawal of the approved financing, HRA shall have 10 days to approve or disapprove changes in financing. If the HRA rejects a change in the approved financing or if the approved financing is withdrawn, the Builder shall have 30 days or such additional period of time as the Builder may reasonably require from the date of the HRA's notification to submit evidence of financing satisfactory to the HRA. If the Builder fails to submit such evidence or fails to use due diligence in pursuing financing, the HRA may terminate this Agreement and both parties shall be released from any 401253v6 CBR RC125 65 7 further obligation or liability hereunder. Closing shall not take place until Builder has provided HRA with acceptable evidence of financing for construction of the Improvements. Section 6.2. Copy of Notice of Default to Lender. Whenever the HRA shall deliver any notice or demand to the Builder with respect to any Event of Default by the Builder in its obligations or covenants under this Agreement, the HRA shall at the same time forward a copy of such notice or demand to each holder of any Mortgage authorized by the Agreement at the last address of such holder shown in the records of the HRA. Section 6.3. Subordination. In order to facilitate obtaining financing for the construction of the Improvements by the Builder, the HRA may, in its sole and exclusive discretion, agree to modify this Agreement in the manner and to the extent the HRA deems reasonable,upon request by the financial institution and the Builder. ARTICLE VII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1. Representation as to Redevelopment. The Builder represents and agrees that its undertakings pursuant to the Agreement, are for the purpose of development of the Property and not for speculation in land holding. The Builder further recognizes that, in view of the importance of the Development to the general welfare of Richfield and the substantial financing and other public aids that have been made available by the HRA for the purpose of making the Development possible, the qualification and identity of the Builder are of particular concern to the HRA. The Builder further recognizes that it is because of such qualifications and identity that the HRA is entering into this Agreement, and, in so doing, is further willing to rely on the representations and undertakings of the Builder for the faithful performance of all undertakings and covenants agreed by the Builder to be performed. Section 7.2. Prohibition Against Transfer of Property and Assignment of Agreement. For the reasons set out in Section 7.1 of this Agreement, the Builder represents and agrees as follows: (a) Except as specifically allowed by this section, Builder has not made or created, and, prior to the issuance of the Certificate of Completion, Builder will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust in respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA. (b) This provision shall not be deemed as preventing the Builder from entering into a Purchase Agreement for the sale of the Property to a Homeowner. (c) This provision does not prohibit conveyances that are only by way of security for, and only for the purpose of obtaining financing necessary to enable the Builder or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to the 401253v6 CBR RC125-65 8 5 - Id Development under this Agreement, and any other purpose authorized by this Agreement. Any Mortgage obtained by the Builder must be disclosed to the HRA, and must be subordinate to this Agreement. The Builder must provide the HRA with an address for the holder of the Mortgage for purposes of providing notices as may be required by this Agreement. ARTICLE VIII. EVENTS OF DEFAULT Section 8.1. Events of Default Defined. The following shall be deemed Events of Default under this Agreement and the term shall mean, whenever it is used in this Agreement, unless the context otherwise provides, any one or more of the following events: (a) Failure by the Builder to pay when due the payments required to be paid or secured under any provision of this Agreement; (b) Failure by the Builder to observe and substantially perform any covenant, • condition, obligation or agreement on its part to be observed or performed hereunder, including the time for such performance; (c) If the Builder shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the Property; (d) If the Builder, on a petition in bankruptcy filed against it, be adjudicated as bankrupt, or a court of competent jurisdiction shall enter an order or decree appointing, without the consent of the Builder, a receiver of the Builder or of the whole or substantially all of its property, or approve a petition filed against the Builder seeking reorganization or arrangement of the Builder under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or stayed within 60 days from the date of entry thereof; or (e) If the Development is in default under any Mortgage and has not entered into a work-out agreement with the holder of the Mortgage. Section 8.2. Remedies on Default. Whenever any Event of Default occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, take any one or more of the following actions following written notice by the HRA to the Builder as provided in Section 9.3 of this Agreement: (a) Suspend its performance under this Agreement until it receives assurances from the Builder, deemed reasonably adequate by the HRA, that the Builder will cure its default and continue its performance under this Agreement; (b) Cancel or rescind this Agreement; 401253v6 CBR RC125-65 9 (c) Exercise its right under Section 8.3; (d) Withdraw all funds in the escrow account established in Section 5.1; (e) Withhold the Certificate of Completion; or (f) Take whatever action at law or in equity may appear necessary or desirable to the HRA to enforce performance and observance of any obligation, agreement, or covenant of the Builder under this Agreement; provided, however, that any exercise by the HRA of its rights or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any Mortgage authorized by this Agreement and (b) any rights or interest provided in this Agreement for the protection of the holders of a Mortgage; and provided further that should any holder of a Mortgage succeed by foreclosure of the Mortgage or deed in lieu thereof to the Builder's interest in the Property, it shall, notwithstanding the foregoing, be obligated to perform the obligations of the Builder under this Agreement to the extent that the same have not therefore been performed by the Builder. Section 8.3. Revesting Interest in HRA Upon Happening of Event of Default Subsequent to Conveyance of Property to Builder. In the event that subsequent to the closing or the sale of the Property to the Builder and prior to the issuance of the Certificate of Completion: (a) The Builder fails to begin construction of the Improvements in conformity with this Agreement, and such failure is not due to Unavoidable Delays; (b) The Builder, after commencement of the construction of the Improvements, defaults in or violates obligations with respect to the construction of the Improvements, including the nature and the date for the completion thereof, or abandons or substantially suspends construction work, and such act or actions is not due to Unavoidable Delays; (c) The Builder or successor in interest fails to pay real estate taxes or assessments on the Property or any part thereof when due, or places thereon any encumbrance or lien unauthorized by this Agreement, or suffers any levy or attachment to be made, or any supplier's or mechanic's lien, or any other unauthorized encumbrance or lien to attach; (d) There is, in violation of Article VII of this Agreement, any transfer of the Property or any part thereof; or (e) The Builder fails to comply with any of its covenants under this Agreement, then the HRA shall have the right upon 30 days' written notice to Builder and the Builder's failure to cure within such 30 days period, to re-enter and take possession of the Property and to terminate and revest in the HRA the interest of the Builder in the Property; provided, however, that such revestiture of title shall be subject to the lien of any prior encumbrance permitted under 401253v6 CBR RC125-65 10 this Agreement, or any right of a Homeowner pursuant to a valid Purchase Agreement authorized by this Agreement. Section 8.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Builder to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.5. No Additional Waiver Implied by One Waiver. In the event of the occurrence of any Event of Default by either party, which Event of Default is thereafter waived by the other party, such waiver shall be limited to the particular Event of Default so waived and shall not be deemed to waive any other concurrent, previous or subsequent Event of Default. ARTICLE IX. ADDITIONAL PROVISIONS Section 9.1. Conflict of Interests; Representatives Not Individually Liable. No HRA officer who is authorized to take part in any manner in making this Agreement in his or her official capacity shall voluntarily have a personal financial interest in this Agreement or benefit financially there from. No member, official, or employee of the HRA shall be personally liable to the Builder, or any successor in interest, for any Event of Default by the HRA or for any amount which may become due to the Builder or successor or on any obligations under the terms of this Agreement. Section 9.2. Non-Discrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and non-discrimination, and any affirmative action program of the City shall be considered a part of this Agreement and binding on the Builder as though fully set forth herein. Section 9.3. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is sent by mail, postage prepared, return receipt requested or delivered personally: 401253v6 CBR RCI25-65 11 5-15' (a) As to the HRA: Richfield HRA Executive Director 6700 Portland Avenue South Richfield, MN 55423 (b) As to the Builder: Brian Helvick Brandt Anderson Homes, Inc. 4555 Erin Drive Eagan, MN 55122 or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section 9.3. Section 9.4. Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written. [signature pages follow] 401253v6 CBR RC125-65 12 Signature Page for HRA THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chairperson By Its Executive Director STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 20 , by , the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the authority. Notary Public STATE OF MINNESOTA ) ) SS COUNTY OF_ ) The foregoing instrument was acknowledged before me this day of , 20 , by , the Executive Director of the Ilousing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the authority. Notary Public 40125306 CI3R RC125-65 13 Signature Page for Builder Builder (--1-c-0,.64..) ti By �,�� i. Its A,(,", STATE OF MINNESOTA ) ) SS COUNTY OF, G0C:.x1-V∎ ) The foregoing instrument was acknowledged •before me this 1 day of 7.0e. bL 1t t'- , 20 ( , by cji.t ,Y v'ly , the M(Lvvccot t 4 of I r-a icft Ay c(-e r,Suv i f t i' E:. , a under the laws of 1wKt -v, , on behalf of the Notary Putfli I >v%�-=:rr Peggy L. Cowart °� NOTARY PUBLIC I ,, WARt:c State of Minnesota •r.a•� My Commission Expires 1.31-2015 I 401253v6 CBR RC 125-65 14 EXHIBIT A FORM OF CERTIFICATE OF COMPLETION The undersigned hereby certifies that , has fully and completely complied with its obligations under that document entitled "Contract for Private Development", between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and dated filed as Document No. _ (the "Contract") with respect to the construction of the approved construction plans at , legally described as and is released and forever discharged from its obligations under such Contract. DATED: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY RICHFIELD By: Its: Executive Director STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 20 , by _ the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: Kennedy& Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 A-1 40125306 CBR RC125-65 J ✓I� EXHIBIT B PROGRAM GUIDELINES-LOT SALE PROGRAM RICHFIELD REDISCOVERED PROGRAM GUIDELINES LOT SALE PROGRAM REVISED: NOVEMBER 15, 2010 40125306 CBR RC 125-65 B-1 Sa1) PROGRAM OBJECTIVES DEFINITIONS PROGRAM BASICS APPLICATION REQUIREMENTS ADDITIONAL REQUIREMENTS HOUSE DESIGN AND SITE DEVELOPMENT REQUIREMENTS New House Standards Site Standards Construction Requirements General Standards Green Community Concepts CITY REVIEW PROCEDURE LOT SALE TO BUILDER/BUYER PROGRAM MARKETING DATA PRIVACY B-2 401253v6 CBR RC 125-65 This document has been developed as a guidance tool for program administration. It should not be interpreted as constituting any contractual agreement or liability by the City or Housing and Redevelopment Authority (HRA). The HRA may modify or divert from the guidelines where it deems appropriate. I. Program Objectives 1. To remove substandard, functionally obsolete housing on scattered sites throughout the City and replace with new, higher-valued housing. 2. To eliminate the blighting influence of substandard housing, thus improving residential neighborhoods. 3. To alleviate the shortage of housing choices for families. 4. To facilitate the construction of larger three- to four-bedroom, owner-occupied homes designed for families. 5. To facilitate the construction of multi-unit, owner-occupied homes designed to expand family opportunities or to serve elderly residents. These objectives will be achieved through the sale of lots by the Housing and Redevelopment Authority to Builder/Buyer teams for the development of newly constructed homes. II. Definitions Applicant: An individual who submits an application for a Richfield Rediscovered lot. The Applicant may be a Builder or the end Buyer. If the Applicant is a Builder, an end Buyer should be identified. If the Applicant is the Buyer, the Applicant must submit a signed contract between the Builder and the Buyer to build a home on the lot identified in the application. Buyer. An individual(s)who will build, own and occupy a new housing unit in Richfield. The Buyer will occupy the property and not offer it for rent. The Buyer may not also function as the Builder on a Richfield Rediscovered project. The Buyer and Builder must be unrelated separate legal entities. A speculative project by a Buyer may be considered if all other program requirements can be met. However, neither the Buyer, the Buyer's Builder or Builder's subcontractors, or the Builder's realty agents may occupy or purchase the property. Buyers, unless licensed in the trade specified, may not put any sweat equity into the construction of the foundation, wall/roof framing, shingling, exterior work, electrical/plumbing/HVAC systems or interior carpentry. Builder. Contractor who has signed a contract with the Buyer to build a home on the lot identified in the application. Contract for Private Development: A contract between the HRA and the Builder or Buyer that establishes the conditions under which the lot will be sold and the proposed house will be developed. Green Community Concepts Plan: A written plan indicating how the proposed development will incorporate green building features and concepts. Priority will be given to projects that incorporate green building features. HRA: Housing and Redevelopment Authority in and for the City of Richfield. Lot List: A listing of available lots for sale. Information regarding the lot location, size and sale price is provided. I3-3 4012530 CBR RC125-65 {II. Program Basics 1. HRA publishes a list of available vacant lots for purchase including sale price and development criteria. 2. Builder/Buyer team proposes a plan for a lot consistent with development criteria and program requirements and makes an offer to purchase. 3. HRA approves lot sale. 4. Lot is sold to Builder or Buyer. 5. Builder constructs new home. 6. Projects must be completed within one year of HRA approval of the project. IV. Application Requirements The following must be submitted for application to the program: 1. $525 application fee An application fee must be paid at the time of application. This fee is non-refundable and is not part of the lot price. 2. Application Form 3. Construction Plans The layout of all levels, including basement and unfinished space, must be provided. 4. Elevations Elevations of all four sides of the house, including view of garage shall be provided. Colored renderings may also be required. 5. Site plan The site plan shall indicate the location of the new house, walkways and garage. 6. Landscaping plan A landscaping plan must indicate the location and type of trees, shrubbery, flowers and landscaping materials (e.g. rocks, mulch)and any existing trees to be preserved. 7. Detail of construction materials to be used on the project. 8. Green Community Concepts Plan The plan should indicate what Green Community Concepts will be incorporated into the project. 9. Construction timeline Construction must be completed with one year of the purchase of the property. 10. Signed contract with Builder 11. Purchase agreement If the Builder plans to purchase the lot, the application must include a valid purchase agreement between the Buyer and the Builder for the lot to be developed. 12. Financial capability statement A statement from a financial institution indicating willingness to provide sufficient construction capital to complete the project must be provided. B-4 401253v6 CBR RC125-65 5�a3 13. Builder References a. Five previous customers b. Three major suppliers, one being the construction supplier c. Building inspectors from two cities where the Builder has constructed new housing within the past three years 14. Proof of Builder's Comprehensive General Liability with Property Damage Protection. 15. Proof of sufficient worker's compensation insurance coverage by the Builder. 16. Written warranty program To be provided to the Buyer, which guarantees at a minimum, warranted repairs as required by Minnesota State Statute. V. Additional Program Requirements 1. The Applicant is expected to meet with an architectural/design consultant prior to submitting an application. A two-hour consultation is available through the HRA at a cost of$25 to the applicant. See the City's website (www.cityofrichfield.orq) for more information. This requirement may be waived if the applicant is using an architect for the project. 2. The site will be sold to the Builder or Buyer at the fair market value as appears on the Lot List. The HRA will not accept offers for less than the established sale price. 3. A Contract for Private Development is signed by the HRA and the Builder or the Buyer. The Contract is a standard form which includes conditions for acquisition and development of the property. The Contract will also establish a minimum required end-value for the property based on construction estimates provided by the applicant. The Builder or Buyer will be expected to agree to the terms of the Contract before the application can be scheduled on the HRA agenda. 4. All lots will have a required minimum end value that will be established in the Contract for Private Redevelopment. 5. The lot can be sold to either the Builder or the Buyer. If the lot is sold to the Builder, the Builder will pay cash for the lot at closing and submit a Letter of Credit or cash escrow for$10,000. The Letter of Credit must be from a financial institution incorporated in the Twin Cities metropolitan area. The cash escrow will be held in a non-interest bearing account. The Letter of Credit or cash escrow will be released once the construction and landscape work are completed and a final Certificate of Occupancy is issued. 6. If the lot is sold to the Builder and the Builder fails to complete construction as approved by the HRA, the Letter of Credit or cash escrow may be drawn upon by the HRA. In addition, the Contract for Private Development will contain a reverter provision, which will enable the HRA to reclaim ownership of the property in the event of a default in the Contract. In the event that the Builder fails to complete construction, the HRA may exercise its rights under the reverter provision, as well as draw upon the Letter of Credit or cash escrow. 7. If the lot is sold to the Buyer, the Buyer will pay cash for the lot at closing and a$10,000 mortgage in favor of the HRA will be filed on the property. The mortgage will be in first position. The HRA may consider subordinating its interest in appropriate cases. 8. If the lot is sold to the Buyer and the Buyer fails to complete construction as approved by the HRA, the HRA may exercise its rights provided in the mortgage. B-5 • 401253v6 CBR RC 125-65 VI. House Design and Site Development Requirements The development of all sites shall meet the development criteria listed below, as reviewed and approved by the HRA. To maximize the development of a given lot, the HRA reserves the right to explore all development options without obligating the HRA to support any specific proposal, idea or solicitation. Housing design is a critical element of the program. Siding materials, exterior facade presentation, roof, window, siding and building line variability, finished landscape, interior space function and use are all important issues of design to the HRA. The design requirements were created to ensure that the homes built on the HRA-sold lots blend in with the surrounding neighborhood and respond to the specific concerns of the HRA. All new houses built under the Richfield Rediscovered Program must meet the requirements of the City's Zoning Code and additional criteria, as listed in this document. A. New House Standards 1. New dwelling must be owner-occupied. 2. Three finished bedrooms are required. 3. Two finished bathrooms are required. 4. Two-car garage is required. 5. A full basement is required, unless the selected design results in a split-level or a garden-level type of basement. In the case of an "accessible" house, a basement may be omitted if it would otherwise prohibit accessible design elements. B. Site Standards 1. After construction, the site must be fully landscaped, including plantings around the foundation. The entire grounds shall be landscaped and be aesthetically pleasing in all seasons. Land forms and plant materials shall be used to define the site and blend neatly with adjoining properties. Specific lot line blending requirements may be required, as appropriate, for specific sites. At a minimum, the applicant must meet the "Landscaping and Screening Requirements" in the City's Zoning Code under Section 544.03, Subd. 4, General landscaping requirements and Subd. 5, Residential sites. The code is available on the City's website: http://www.ci.richfield.mn.us To the greatest extent possible, existing trees should be preserved. Any trees removed must be replaced (they do not have to be the same species or in the same location) and should be labeled on the required landscape plan. 2. Utility meters shall be screened from street view and locations must be specified on plans. 3. Site drainage should be accommodated on the site so that water is directed away from the new home and the neighboring properties. Neighboring properties must not be disturbed by the creation of drainage swales. Specific storm water management requirements may be required, as appropriate, including the addition of gutters or on-site management for specific sites. Construction and the finished structure must not have a detrimental impact on storm water drainage patterns in the neighborhood. 4. All air conditioning units must be located in the rear yard of the house, or as approved by the HRA. B-6 401253v6 CBR RC125-65 5-aS C. Construction Requirements 1. Existing trees identified on the landscape plan as being preserved, must be protected during construction. A tree wrap with board reinforcements shall be used on trees directly adjacent to active grading and construction areas. Damaged or destroyed trees must be replaced. 2. The construction site, neighboring properties and adjacent public streets shall be kept free of construction debris at all times. 3. No construction workers, construction equipment or construction material shall encroach upon neighboring properties. 4. The property shall have a new sanitary service line installed to the City sanitary sewer main consisting of schedule 40 PVC or equivalent. If there is an existing 6" sewer stub at the property line, it must be lined with 4" schedule 40 PVC or equivalent to the City's sanitary main, and it must include a"donut"at the end with cement. The line must be televised after installation to ensure the following: 1. There are no obstructions in the line. 2. The PVC liner is not protruding into the City's sanitary sewer main line. D. General Standards 1. The value of the new home must meet or exceed the minimum value specified in the Contract for Private Redevelopment. 2. All homes in the Richfield Rediscovered Program must be stick-built or high-quality modular, new construction. 3. Exterior materials (siding, soffit, doors and windows) should be low-maintenance and durable. Brick, aluminum, vinyl and fiber cement siding are preferred. Natural cedar lap is acceptable if properly stained or painted. Hardboard panels or hardboard lap siding are prohibited. Roof valleys must have metal valleys and not be woven. 4. Unit height and mass of the new house shall be compatible with the scale of the surrounding homes in the neighborhood. 5. Plans must present a balanced and pleasing distribution of wall, door and window areas from all views. 6. The dominance of the garage door must be minimized through placement, architectural detail, door design and utilization and design of windows. Garages, where the garage door faces the street, shall not be located closer to the front lot line than the foremost facade of the principal building facing the front property line. Garage sidewalls that face the street should appear to contain habitable space. This can be accomplished by incorporating windows and other design elements into the garage wall that are in character with the remainder of the dwelling. For lots that have alley access, the garage should be oriented to access the alley. 7. All Construction Plans must have been prepared in consultation with an architect or qualified draftsperson. All requirements by the Building Inspections Division must be met. 8. All Richfield Rediscovered houses must meet or exceed Minnesota Energy Code requirements. B-7 401253v6 CBR RC 125-65 9. All new homes shall be built to provide high quality sound insulation. Recommendations for sound insulation measures may be provided on a site-by-site basis. All construction must conform to current sound attenuation building standards for properties located in 65-69 and 70-74 DNL zones. 9. If a variance is required to construct the proposed development, the HRA may, at its sole discretion, choose to reject the application. 10. If the HRA accepts an application that needs a variance(s), sale of the property will be contingent upon the applicant obtaining the necessary variance(s). The Applicant is responsible for applying for the variance(s) at its own expense. The HRA, as owner of the property, will, however, cooperate with the application. E. Green Community Concepts Priority will be given to projects incorporating the green community concepts listed below. Any concepts the applicant would like considered during the application process should be explained in a written plan submitted with the application. A $5,000 rebate will be provided to the Applicant for projects that obtain certification through LEED for Homes, Minnesota GreenStar or Minnesota Green Communities. 1. Protect and conserve water and soil. To reduce water consumption, consider the use of water- conserving appliances, fixtures, and landscaping. Steps should be taken to minimize the loss of soil and sediment during construction and occupancy to reduce storm-water sediment and air pollution. 2. Minimize energy consumption. Reduce energy consumption by taking advantage of natural heating, cooling and day lighting, and by using energy-efficient appliances, equipment and lighting. 3. Enhance indoor environmental quality. Use non-toxic materials, ventilation and exhaust systems, and moisture control products and systems. 4. Use environmentally-preferable materials and resources. Use locally-produced, salvaged and/or manufactured materials, products with recycled content or from renewable sources, recyclable or reusable materials, and low-VOC-emitting materials. 5. Reduce waste. Reduce and manage wastes generated during the construction process and operation of buildings. If demolition occurs, sort and recycle leftover materials and debris. VII. City Review Procedure 1. Applicant reviews proposed project with HRA staff before plans are finalized. 2. Applicant submits application, plans, and application fee at least 45 days prior to the HRA meeting. 3. An application is considered to be received when delivered personally to HRA staff in a pre- arranged meeting. Following this meeting and upon receipt of the application fee, the lot will be considered reserved and no additional applications will be accepted for the proposed lot while the application is under review. B-8 401253v6 CBR RC125-65 5-a1 4. If an application is determined to be incomplete, the applicant will have 30 days to submit a complete application. If a complete application is not received within 30 days, the application will be rejected and the lot will be made available for new applications. 5. HRA staff review application to ensure conformance with House Design and Site Development Requirements. 6. HRA staff may reject or accept an application at its sole discretion. 7. The Builder or Buyer executes a Contract for Private Redevelopment. 8. An application is determined to be complete and the Contract executed at least three weeks prior to the HRA meeting. 9. HRA staff publishes a legal notice of the public hearing and prepares a report and recommendation for the HRA. 10. HRA reviews application, conducts a public hearing, and takes action at the HRA meeting. 11. If approved, the Contract for Private Redevelopment is executed by the HRA. VIII. Lot Sale to Builder or Buyer 1. Upon approval of the application by the HRA, a closing will be scheduled between the HRA and the Builder or Buyer. 2. The HRA will prepare all statements, affidavits, documents, and general release forms required for closing. 3. The Builder applies for a building permit prior to closing. The Builder is responsible for acquiring the necessary building permits with the City of Richfield Building Inspections Division. If changes to the plans are required by the Inspections Division, the applicant must notify HRA staff. 4. The Applicant provides evidence to HRA staff that all requirements to proceed with construction, as determined in the Contract for Private Redevelopment, have been met. 5. The HRA conveys the property to the Builder or Buyer by Quit Claim Deed. The site will be sold to the Builder or Buyer at the fair market value as appears on the Lot List. 6. At closing with the Builder, the Builder provides a Letter of Credit or cash escrow for $10,000 to the HRA. 7. At closing with the Buyer, the Buyer signs a mortgage and promissory note for$10,000 in favor of the HRA. 8. Upon completion of the project and closing on the sale of the Property to the Homeowner, the Letter of Credit or cash escrow is released to the Builder or the Buyer's mortgage is released. A Certificate of Completion is executed by the HRA, releasing the obligations of the Contract for Private Redevelopment. • B-9 401253v6 CBR RC125-65 IX. Program Marketing Richfield Rediscovered program marketing is entirely at the discretion of the HRA. It may include the following: 1. Buyer Solicitation. The HRA may market the program to potential Buyers through promotional articles, direct mail, the Internet, or other methods as deemed appropriate. Buyers may be any financially capable individual or household, including first-time buyers, move-up buyers or empty- nesters. 2. Public Promotion. a. The HRA will periodically provide information about the program through articles in city publications, on the City's web site, on the Community Cable channel, or via press releases to promote community awareness. b. A public open house may be held to provide an opportunity for residents and other interested parties to collectively view the finished homes. The Parade of Homes Fall Showcase and Spring Preview may also accomplish this. A program information package will be mailed to all interested participants. The information packet may include the following: 1. Lot List 2. Richfield Rediscovered Lot Sale Procedural Guidelines 3. Application Form 4. Sample Contract for Private Redevelopment X. Data Privacy All information secured through the program is subject to the Data Privacy Act. B-10 40125306 C131212(7125-65 EXHIBIT C QUIT CLAIM DEED STATE DEED TAX DUE HEREON: $ Date: FOR VALUABLE CONSIDERATION, Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, Grantor, hereby conveys and quit claims to , a under the laws of the State of , Grantee, real property in Hennepin County, Minnesota, described as follows: , according to the map or plat thereof on file or of record in the office of the Hennepin County Recorder. This deed is subject to that certain Contract for Private Development between Grantor and Grantee, dated , 20_ (the "Contract"), recorded , 20 , in the office of the Hennepin County Recorder/Registrar of Titles as Document No. . The Contract provides that the Grantee's rights and interest in the real property described above are subject to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to termination of the Grantor's right to re-enter and revest upon issuance of a Certificate of Completion as defined in the Agreement. (if more space is needed, continue on back) together with all hereditaments and appurtenances. DThe Seller certifies that the seller does not know of any wells on the described real property. ❑A well disclosure certificate accompanies this document. ❑I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD Affix Deed Tax Stamp Here By Its Chairperson By Its Executive Director C-1 401253v6 CBR RC 125-65 Y-3° STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing was acknowledged before me this day of , 20 , by , the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of Minnesota, on behalf of the corporation, Grantor. NOTARIAL STAMP OR SEAL(OR OTHER TITLE OR RAK) SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing was acknowledged before me this day of , 20 , by , the Executive Director, of Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the corporation, Grantor. SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT NOTARIAL STAMP OR SEAL(OR OTHER TITLE OR RAE) Check here if part or all of the land is Registered(Torrens)❑ Tax Statements for the real property described in this instrument should be sent to (include name and address of Grantee): This instrument drafted by: Kennedy& Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 C-2 40125306 CBR RC125-65 55/ EXHIBIT D WELL DISCLOSURE ❑ The Seller certifies that the seller does not know of any wells on the described real property. ❑ A well disclosure certificate accompanies this document. X The status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. D-1 401253v6 CI3R RC125-65 12 =- - - = = i BRANDL — _ - ANDERSON b t I ASPHALT_ 12 1 I I SHINGLES 6� I ! LB:5 , ! _ A SURE SIGN• t 2 — _ i - — _ f- 1 = - OF QUALITY f 12 = _ - 12 SHINGLES -- ._- VINYL LAP SIDING - — 4555 SERE 110RIVE ' _ 12 PITCH— __ — r_— - _ __ _ I2 _ 12 I FAX 952898-0132 - —VINYL LAP SIDING - EAGAN,MN 65122 S52-895-0230 _- =VINYL LAP SIDING--- _ - - -- -- ---- - ------ --_ _.____. VINYL LAP SIDING V V _. _ - ®®®0®00®.- p -- ._._—___— ___— - —_. ----__ _---_ _ ----- ®®®0000® - —_.— - _-- -_ _._ —. .l. t RIGHT ELEVATION REAR ELEVATION LEFT ELEVATION U1 N Q SCALE:I/8'•1'-0` SCALE:1/8"•I'-0' SCALE:I/8"•I'-0` U o = r o O cs. } A- B= - gLLU VO Nct I-- ■ 0 --- - - 6:12 PITCH — __ __ ___ _ r ._.::. —- DRAWN BY: A.Wheeler PLAN DATE: _ 11/19/12 ___ REVISIONS: --__- ________ _ ---ASPHALT Di DATE GOB _--_—__ —._ .______ ____ _..— —.-°°--°-----6HINGLES- -- - _______ ---b:I2 PITCH-_—_ , 2 . - C �� - -s_-_ __f"'___ CONCRETE S Imo/ ___ --4:12--PITCH _ _ _ _ TE TOOP OR PORCH TO HAVE 4-i/� -- - v� — -�--w. 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X' / A SURE SIGN ■ \ \ \ \ OF QUALITY 77 SIMPSON ST-1014 TYPICAL— ON GARAGE NARROW LALLS 4555 SPIN DRIVE ELITE 120 EAGAN,MN 55122 8'x 48°CONC.WALL P14:952-898-0230 ON' "x 8'FOOT'.NG FAX:952-898-0232 6 GARAGE ABOVE (UNEXCAVATED) 0 o `° ID PRODUCT DESCRIPTION R.O.SIZE NOTES NINES COUNT W' 0'-2836 I:l;rrewslLIrde&U Eart1,sise\White\Cass-ent 2'-8'x 3'-6° Egeee Well R I k=- -I NOTE: O Q EGRESS WINDOW WELL NOTE:NEADERS TO BE(2)2X'O l to UNLESS OTHERWISE NOTED V N w z 0 NOTE:WINDOW HEADERS e 6'-8" O Z E0 UNLESS OTHERWISE NOTED Q N W Q 3 US wm4 �L —8°x 48°CONC.WALL 3'-0" 3-0 _ Q U ON 16"x 8°FOOTING / 13 SEE 4 z = Q STEP A/c 0 d U J —.0"x loo'CONC.WALL FK-) Vt PI M ON 20"x 8°FOOTING I A --I' \ 4 STEP ,#. fi ___==== r c, in F v \ ,' °U 4 e� q '; I �8"x 100'-CONC.WALL - fi a I 0 ,�1 SUMP PUMP - i ". JI ON 16'x 8'FOOTING NOTE:WHOLE 140J55 FAN i CENTRAL VOLUME AR RETURN ' : DIGITAL SETBACK THERMOSTAT ;' - .' r-� BASEMENT A a _ m Y . 3 'i 5.�,_i--1 /J ____ _ UNFINISHED a i� 4°CONC.SLAB OVER 2X6 FEARING WALL ` POLY VAPOR BARRIER X,,y ON IS°x 8'FOOTING F. , - DRAWN BY: .9 a:__ A.Wheeler y.z -f. --'-; `_,5, ; ; PLAN DATE: m� _F-- _ _ aaa---...ccc Mee es, • 11/19/12• 1 ' �-?-r - -•_c ac c ry REVISIONS: '1-- 3i '' cRC=eEan QDATe CO' CROP eE»^^ --� E'___aF? ! I CRC?9E4,1 30'TRE4TE FCbT 50'x30'x'C‘cTG T-5' I 4'-1 I/4' 9'-2 3/4' 9-O' / / .Y / / e x CO'CCNC,WALL 9 BASEMENT o■ O ON IS'x 8°FOOTING BASEMENT — UNFlN154ED "- UNFINISHED 4"CONC..SLAB OVER o.6 4°CONC.SLAB OVER POLY VAPOR BARRIER PO-Y VAPOR BARRIER fFu a 8'x 100'CON.".,WALL— --'s ON'6"x 8"FOOT:'NG \ \ U ■ \ \ \ \ ? w R r a z 0 {.{. c -aea-©rE4,r,.xe a APPROVED: ' y \ 4_--q 4114,..—.8'x 48'CC,. \ ;- 3 4' -�' PObi FCO'v59 Z �, —f 9'44' BASEMENT / FOUNDATION PLAN �/ / 20-0, 18,O' SCALE:1/4"•I'-0' Ij) / Q / 38'-0' Q V PLAN:/ ... 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OP QUALITY-� HEADER',22 r-Pa'.E_ IP _ O' r LCCAT'ON CF ELECTRIC METER ID PRODUCT 4555 ERIN DRIVE -1 ODESCRIPTION R.O.SIZE GRILLE HINGE COUNT Al A 3068 UP Wirdcw Daora\Excx-o.'Front Dcors\WIr_(ow 3'-2 3r8'x 6'-IC 1,2' L 1 SLI'E 120 4,I B 3065 Front 2-SL Doors\Exte•lor\Front Dcors\,6- EAGAV,MN 55122 NI Parsi\2$!dsl,ghls 5'-5 I'2"x 6'-10 a` —— L r 1 PH:AN,MN 02JJ C 2863 Garage House Dccra\Extsrlor\Ssrvixe Doors 2-10 3/8"x 6'-10 /2' R 1 FAX:952-898-0232 ~ D !6010 OH Doors\GUage\paset\Lnlm,:.lated I6'-3"x l'-I' CH 1 -� -—- - t - -—-—-—-—-- H 2468 Do ors\Inte•lcr"Prer(r(shsd�F;ush\Maple 2-6"x 6'-II" R I I V K 2669 Docre\Inte=lor\Prerirished\Flush\Maple 2-8"x 6'-11' R I 1111 M Blrold 4069 Dcre\lrne•!or\Prsrlrlahed\Flush\Mapls 4'-I Vim'x 6'-10` LR I- O N 5068 Doors\Irte•ICr\p-erlrlshsd\Frerch\Maple 5'-2 x 6'-10" LR I O rel p W2 5-12-3052 4 Lirdows\LlndsaU ENrt,fse\Whets\Siro!e1x,ng 6'-0'x 5'-2' G"da DD I BI 4 r 0 W3 5L-TOSO(1=4-1/2-1/4)Girdoxs\Lirdaay Ex•tnilas\Un'ts\$Ildsr 1-0'x 5'-0" 6•'ds XOX 1 I Zr m 9 I W4 PW1-2020 WlydxLS\-Irda Eartrwlas\1Lhite\Ixsd 2-O"x 2'-0' N 3 GARAGE Ul W5 SL-3030 Wirdo,:e`.Ltrdsay Ea^:nulae\Un'ts\511dsr 3-C'x 3'-O" OX I f-- '-Lv l.N;WISHED I m 4'CONC.6-AB WE P31-4020 Wirdcys\LlydeaU EKfnnfex\Whets\Fixed 4'-0-x'<'-O° N 3 0 () I uI N Q \ NOTE:HEADERS TO BE(2)2X10 U Fl ul z 0 • • UNLESS OTHERWISE NOTED Z 0 n r 0 DRYWALL s FIRETARE UI Z Q WA_ G L5 AND CEILING'S NOTE:WINDOW HEADERS s 6.8' Q ›-PER'RC SECTION R309.2 UNLESS OTHERW'SE NOTED Ill (0 Q UU]V 3 6'-Y' / / / 4'-4" 6'-0" 1-0' Q 0 1. W5 / tQ* Q U -3 ro If .- Q( IY (Q 4 / _-__l �--°��\ N 1- \ \ VI -\ `DW. i l --_ t�o(� 0. \ Gr+a �' UI .-I J0} V\ B L-tiEEE ETEE:m . 11i A Y DN , n :t s�<�;c:r>=csa: `* `_-_-- �y 15R / pINETT 0 m s_. -��' in p } ,}j MUD / LAUty - 8'CEILING sI� CEC RANGE ' Y____ __ �. VINYL FLOOR N U' M,CRO•r/ro I Q 8'CEILING --- V NYL FLOOR Z p WIRE SHELF , h O/ 4'-o" , �' I !BATH 3"! } j r 4 1f' w x N KITCHEN 1 _ VINYL 2 ��//„ C' �/ \ O - VINYL FLOOR DRAWN BT: 3 �) _ a tt rc x' I ti v — -� A.Wheels, PEL.B.\C c, N &�: r� 4-0 $: P-AN DATE: 'TM' '-'t 'r f, ❑' 11/19/12 un VINYL F..00R ell rat Q ___ CARPET ) __.� v • 1 O GAP /, 1` REVISIONS: Fv _BOes_RO r m \ I1\DATE CO' j ® 2,21Y 45 2,,Y ze,, ' H ::,,,N:7. --1 J ZENE_vE5 in u 3§::: u FAMILY ROOM d STUDY / ° 805411/6 \� '''11 FOYER r � Q' 8'GEILING CARPET EQUAL 5-0" EQUAL \ \ 3 F CARPET 8'CEILING W GAF.FREF.d_E 7` }' 4 A' �. NI O VINYL FLOOR N FRA`tE T.54 H AAA P_ °f "` FIREPLACE ELEVATION C' \ ` ®. - ® SCALE:I/4"=f-O" O m !1—! in L \ 3 O °n I I U \, - _ © �—I�!-■ 1=1 I=1 \ \ z O .� W2 W3 .1.- -'° ^miii N J 1141,- ®�11� o v v APPROVED: LW BE4"fl;T Vd'.EL \ \ N 6-2' 3-2" 9-0' FIRST FLOOR PLAN - / / / / / / Q SCALE,1/4'_''-C' 20'-0' 18'0' w A' PLAN: CUSTOM Z SCALE: Q AS NOTED in PR NT DATE: Decs+'cer 0',2012 (N O PAGE © 4-0 BRANDL ANDERSON H O M E S Mil A SURE SIGN 20'-0' OF QUALITY / / ID PRODUCT DESCRIPTION R.O.SITE NOTES HINGE COUNT Y 5-0 — 4555 ERIN DRIVE / i / G 2455 D_\Inte•■C-\Prerin'ehed\Fueh\Maole 2=6'x 6-I L 2 • SUITE 110 W6 W' H -[468 Docs\Ilnterlcr\Prerin:shed\FWsh\Meple 2'-6'x 6-'1` R 2 EAGAN,MN 55122 '' P-:552-855-0230 II __ __1)------- -- \ I 1665 DocraVnter(cr\PrerWshed\Hush\Made 1-8"x 6-'.'' L I FAX:952-898-0232 2665 Dous\Interlo•\Pre°In'shed\FWeh\Maple 2'-8'x 6'-II' R 3 ! L. Birold 3065 Docre\Interlor\Pre°In:shed\FWSh\Maole 3-�'I/4'x 6-'0' L I M IOOd 4055 Doc\Inter■cr\Prelni shed\FWsh\Maole 4'- 1/4'x 5-10" LR I 9 B '� \ ■ US 9-6.3052 0 Wlr Axs\Lindeay Es th,vlse\ri to\Slry'eh,iry 3-O'x 5'-2' Grtde D 2 MT BEDROOM * 3 Q �y Y L6 5:5040 Wlncieus\LIndsay Earthu`se\White\S':ide• 5'-0'x 4'-O" OX 2 - 5'CE LING - ;BEDROOM N 2 61 5-;-3052 G-.T. Windo4n\Llndsa E5Ghylse\W�to\Slr5&.4 5 3'-O'x 5'-2' Grids D I n Terve•ed eJ CARPET N 8'CE LING N CARPET e)--' W5 FUJI-2020 WInd !.:e\Ltndsay Ea•tny!se\aN' \Fixed 2'-0"x 2'-0" Tenee-ed N 2 S WE PU71-4020 Wlrcici.:s\LIrdeey Ea-V-Wee\Un'te\Fixed 4'-0'x 2-0" N 3 z I- -w-1 1 n -4 m Ul tD0 Q 3.-10" 3-6° 6_o b U N 1U Q . S NOTE:HEADERS TO B=_(2)2X'0 z O UNLESS OTHERWISE NOTED IU 0 z 0 -+-4/ L Q ! NOTE:WINDOW-FADERS a 6'-8" t() en > J W_e rte -=./\O I—� UNLESS OTHERWISE NOTED W m a 1 u `� WIRE SHELF :,:ii @/ M V 0 WIRE SHELF �' lX (K Q▪ r in /e�[�V\r HALL - - I___ , IA v O 0 III 4 134T1-1 4 M 00 VINYL V M --SIRE SHELF u - Ba--Ba. a, aI x o °Js -��a i ` l CARPET I ■ . :I/ WIC II CARPET = DRAWN BY: A-Wheeler, heeler `r to - PLAN DATE: 3 U IV19/12 _WIRE 3-ELF OI n REVISIONS: x to, &DATE 00' iPOC_ c) NI jn BL',BA,' ' ®�` a MASTER !BEDROOM 3 _�J -� 8'CEILING F3ATH, CARPS' VINYL _ r 9 a O SECOND FLOOR PLAN in 0 O W5 IW5 Z 5,10' i 4,2' to / 20'-O' 111 0 APPROVED: z 0 U) CV 1l1 0 z .4 PLAN: J CUSTOM 4 Q SCALE. AS NOTED gi PR NT DATE: Decen6er 07,2012 N O PAGE 15 PlZNEERengineering CIVIL ENGINEERS LAND PLANNERS LAND SURVEYORS LANDSCAPE ARCHITECTS 2422 Enterprise Drive,Mendota Heights,MN 55120, Phone:(651)681 1914 Fax:(651)681 9488-Pioneereng.com Certificate of Survey for: BRANDL ANDERSON HOMES ADDRESS:6825 GRAND AVENUE SOUTH, RICHFIELD, MINNESOTA BUYER: GRAY MODEL:CUSTOM K,, I 8 t8'floor 30 I EXISTING HOUSE _I t I I v 846.8 846.5 I - ----- 31.6 ---- x x X 846.3 f846.3 123.00 GARAGE I 36.31 846.5 44.00 aa6.4 (946.1 845.9 845.7 X 846.0 846.3 I, (946.7)'<-E] )< (] - --f� ..I RAF CI X845.8 x 7 X 0' cS Xa845,4 X 45.5 O ® O i (1•5%)� i 0 X 845.8 UJ co. 846.0 -i/ 44.00 4 M ° 4 W W K. ., ^ E Q K. v W OX o //a/ ✓ // Q / rJ v o> N 0 d r rZ W .// / /O d o.o Q a ® v /// !nW m !!// , 845.4 -® /-y. ` Q Q' X 846.4 X 84F.� /D_ O' /`x 846.0 20.00 ,Y, 845.3 - ® � ,� ® In -< 32.4 -�-- 03 0,=O .4'/ -�� - 42.6 --� ®�_J: i c0 .. o Z 1 3 o ,r °mr°.a_J.Nliik e I Ce 00 v B, 0 /r a I 'tY 846.2 ,24.00/ / 0 - 8p I �e 846.7 OA I 0 ,' X 846.9 I (1.6%) x I X 845.9 X 845.7 CD X 845.8 Q l 845.4 ° 846.31 36.53 946.9) 44.00 (946.3) I 1 ° -<.---- -- 32.9 846.8 848.33 849.08 846.7 X 846.0 X 845.3 tob 1st floor X 846.4 ° 846.2 EXISTING 123.00 HOU ER AREA61 1392 SF HOUSE DRIVEWAY AREA =682 SF -I A I°t' BENCH MARK: I 30 I I TOP NUT HYDRANT GRAND AVE. & 69TH ST. W. ELEV.=847.47 NOTE: ADD FOUNDATION LEDGE AS REQUIRED NOTE: GRADING PLAN BY LAST DATED WAS USED WE HEREBY CERTIFY TO BRANDL ANDERSON THAT THIS IS A TRUE AND CORRECT REPRESENTATION OF A TO DETERMINE THE PROPOSED ELEVATIONS SHOWN ON THIS CERTIFICATE. SURVEY OF THE BOUNDARIES OF: NOTE: PROPOSED BUILDING DIMENSIONS SHOWN ARE FOR HORIZONTAL HOUSE ELEVATIONS :(PROPOSED)/ASBUILT LOCATION OF STRUCTURES ON THE LOT ONLY. CONTACT BUILDER PRIOR TO CONSTRUCTION FOR APPROVED CONSTRUCTION PLANS. LOWEST FLOOR ELEVATION . (940.2) / LOT 15, BLOCK 1 , WOODDALE ADDITION NOTE: NO SPECIFIC SOILS INVESTIGATION HAS BEEN PERFORMED ON THIS LOT TOP OF FOUNDATION ELEV. (948.2) / HENNEPIN COUNTY, MINNESOTA BY THE SURVEYOR. THE SUITABILITY OF SOILS TO SUPPORT THE SPECIFIC 947.6 HOUSE PROPOSED IS NOT THE RESPONSIBILITY OF THE SURVEYOR. GARAGE SLAB ELEV. © DOOR : (947.6) _ / IT DOES NOT PURPORT TO SHOW IMPROVEMENTS OR ENCROACHMENTS, EXCEPT AS SHOWN, AS SURVEYED BY ME OR NOTE: THIS CERTIFICATE DOES NOT PURPORT TO SHOW EASEMENTS OTHER UNDER MY DIRECT SUPERVISION THIS 27TH DAY OF NOVEMBER, 2012. THAN THOSE SHOWN ON THE RECORDED PLAT, REVISED: NOTE: X 000.00 DENOTES EXISTING ELEVATION 2 SIGNED: 11/ 12 TOPO LOT / PIONEE ENGINEERING, P.A. NOTE: CONTRACTOR MUST VERIFY DRIVEWAY DESIGN. SCALE 1 INCH = 20 FEET _ / NOTE: BEARINGS SHOWN ARE BASED ON AN ASSUMED DATUM ( 000.00 ) DENOTES PROPOSED ELEVATION DENOTES DRAINAGE FLOW DIRECTION -- - BY: .• "/ ---II DENOTES SPIKE 74961 112324000 KKS/KTH - Peter J. H•wkinson License No. 42299