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02-19-08 Agenda CITY OF RICHFIELD, MINNESOTA **************************************************************************************************** TUESDAY, FEBRUARY 19, 2008 SPECIAL CITY COUNCIUHOUSING AND REDEVELOPMENT AUTHORITY/PLANNING COMMISSION WORKSESSION RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE . 5:30 P.M. Call to order Roll call 5:30 p.m. - 6:30 p.m. 1. Discussion with Corridor Housing Initiative regarding draft Development Guidelines (Council Memo No. 33/HRA Memo No.5) Notes: 6:30 p.m. - 6:50 p.m. 2. Discussion with Project for Pride in Living regarding 72nd Street and Penn Avenue (Council Memo No. 34/HRA Memo No.6) Notes: Adjournment **************************************************************************************************** REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA Call to order Roll call 1. Recognition offormer Community Development Director Bruce Palmborg 2. Approval of minutes of (1) Special HRAlCity Council/Planning Commission Meeting of January 14, "2008 and (2)Regular HRA Meeting of January 14, 2008 3. HRA approval of agenda 4. 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 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 authorizing submission of application to Hennepin County for the Transit Oriented Development Grant for plaza improvements at northeast corner of 66th Street and Lyndale Avenue S.R. No. 13 . Notes: 5. Public hearing regarding resolution authorizing sale of 6744 Blaisdell Avenue to Habitat for Humanity, Inc. for development of single family home Staff Report No. 14 Notes: 6. Consideration of resolution extending preliminary agreement with TOLD Development Company for nine months or until November 17,2008 for exploring feasibility of redevelopment of 30-acre site in Cedar Avenue Corridor Staff Report No. 15 Notes: 7. Consideration of resolution extending preliminary agreement with United Banker's Bank, subject to United Banker's Bank acceptance, until April 22, 2008 for exploring feasibility redevelopment of 2.5-acre site in Cedar Avenue Corridor Staff Report No. 16 Notes: 8. Consideration of directing staff to continue working with Sherman & Associates or LaNel Financial Group on refining development proposal for Cedar Point Phase II area Staff Report No. 17 Notes: 9. Executive Director report 10. 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. AGENDA ITEM # 4A REpORT # 13 ..... STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 19, 2008 REpORT PREPARED By: CHRISTINE COSTELLO, COMMUNITY DEVELOPMENT SPECIALIST NAME, TITLE REpORT PRESENTER: JOHN STARK, INTERIM COMMUNITY DEVELOPMENT DIRECTOR INTERIM DEPARTMENT DIRECTOR REVIEW: NAME, TITLE REVIEWED BY EXECUTIVE DIRECTO ITEM FOR HRA CONSIDERATION: Consideration of a resolution for submittal of an application to Hennepin County for a Transit Oriented Development Grant for plaza improvements at the northeast corner of 66th Street and Lyndale Avenue. I. RECOMMENDED ACTION: By Motion: Adopt the attached resolution approving submittal to Hennepin County for the Transit Oriented Development Grant for plaza improvements at the northeast corner of 66th Street and Lyndale Avenue. I II. BACKGROUND I The Richfield Housing and Redevelopment Authority (HRA) has been the property owner for the plaza at the northeast corner of 66th Street and Lyndale Avenue for many years. The plaza was designed to commemorate the Country's Bicentennial and originally was to have a fountain in the center. Due to fund raising constraints a local Richfield artist designed a public art piece in lieu of the fountain. The sculpture, entitled "Family" was designed by Norman Holen a Richfield resident and artist. Fundraising for the sculpture was raised for half of the value of the sculpture and the HRA funded the remaining half. 021908-Hennepin County TOO Grant Application Since the plaza was completed and the "Family" sculpture installed, the plaza has remained fairly unchanged. The location of the plaza is located in the heart of the downtown area of Richfield and is rarely seen due to lack of lighting in the plaza and the mature tree growth that surrounds it. The location of the plaza is also in close proximity to two highly used bus shelters that serve many Richfield residents. Often the plaza is used as a cut through for access to the shelters. Therefore, improving the access and usability of the plaza would benefit the downtown area. In order to improve the plaza and access to the two bus shelters, the plaza improvements would improve not only the access to the surrounding transit, it would improve. the plaza, and be a nice improvement for Richfield's upcoming centennial. The grant would be used to apply for funding for pedestrian scale lighting, landscaping, bike racks, and incorporating a new public art piece into the plaza. A potential project for the public art piece would involve local school children in designing and painting tiles that would represent the link transportation plays for families in the community. The plaza improvements would incorporate the original intent of the existing sculpture in the plaza, "Family" and link how the plaza is currently being used by transit. I III. BASIS OF RECOMMENDATION I I A. POLICY I · It is appropriate to seek outside funding whenever possible. I B. CRITICAL ISSUES I · Not completing the application will not allow for any plaza improvements. I C. FINANCIAL I · A local match is not required to apply for Hennepin County's Transit Oriented Development Grant. I D. LEGAL I · The program guidelines for the grant require the HRA to pass a resolution in support of the application. .1 IV. ALTERNATIVE RECOMMENDATION(S) I · . Deny authorization and direct staff to withdraw the application. I V. ATTACHMENTS . Resolution · Map of grant application area I VI. PRINCIPAL PARTIES EXPECTED AT MEETING . N/A 4fi -I RESOLUTION NO. RESOLUTION AFFIRMING AND RATIFYING CITY'S STAFF SUBMITTAL OF AN APPLICATION TO THE HENNEPIN COUNTY TRANSIT ORIENTE-D DEVELOPMENT GRANT FOR PLAZA IMPROVEMENTS FOR THE NORTHEAST CORNER OF 66TH STREET AND L YNDALE AVENUE WHEREAS, the Richfield Hosing and Redevelopment Authority (the "HRA") is located within Hennepin County and is therefore eligible to access the Hennepin County Transit Oriented Development Grant Fund; and ~ WHEREAS, the City has the institutional, managerial and financial capability to ensure adequate project administration; and WHEREAS, the City certifies that it will comply with all applicable laws and regulations as stated in the contract agreements. NOW, THEREFORE, BE IT RESOLVED, that the City of Richfield, in accordance with Minnesota Statutes S 3838.7, Subd. 3., supports the Transit Oriented Development loan/grant application submitted to the Hennepin County Housing and Redevelopment Authority on February 19, 2008, for the northeast corner of 66th Street and Lyndale Avenue. Adopted by the City Council of the City of Richfield, Minnesota this 19th day of February 2008. Suzanne M. Sandahl, Chair ATTEST: Joan Heimberger, Secretary 021908-Hennepin County TOO Grant Application 4A- d... Plaza at the Northeast Corner of 66th Street and Lyndale Avenue N A AGENDA ITEM # 5 REpORT # 14 ~ STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 19, 2008 REpORT PREPARED By: JULIE URBAN, INTERIM HOUSING SPECIALIST NAME, TITLE REpORT PRESENTER: JOHN STARK, INTERIM COMMUNITY DEVELOPMENT DIRECTOR INTERIM DEPARTMENT DIRECTOR REVIEW: ~ REVIEWED BY EXECUTIVE DIRECTOR: _ ITEM FOR HRA CONSIDERATION: Public hearing regarding the sale of 6744 Blaisdell Avenue to Habitat for Humanity, Inc. for development of a single-family home. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: Adopt the attached resolution authorizing the sale of 6744 Blaisdell Avenue and approval of a contract with Habitat for Humanity, Inc. for development of a single-family home. I II. BACKGROUND I In October 2007 the Housing and Redevelopment Authority (HRA) purchased the substandard property at 6744 Blaisdell Avenue. It is proposed that the HRA sell the property to Twin Cities Habitat for Humanity, Inc. (HFH) to build a new single-family home under the New Home Program. Established in 1978, the New Home Program allows the HRA to purchase substandard property, demolish the existing home and sell the property to a nonprofit developer with plans to build a new affordable home. Forty-four new homes have been constructed under this program. The 1,663 sq. ft. three bedroom, two bath home will have a property value of approximately $180,000 upon completion. A copy of the proposed plan is attached. 0219086744 Blaisdell I III. BASIS OF RECOMMENDATION I I A. PQLICY I · The HRA has partnered with nonprofit developers to construct 44 affordable homes since 1978. · The HRA acquired the property to initiate an affordable housing opportunity. · HFH will sell the home to a qualified family whose income does not exceed 50 percent of the Twin Cities area median income and is a first time buyer. · The terms of the Development Agreement have been finalized and are in conformance with the program guidelines. I B. CRITICAL ISSUES I · Demolition of the existing home will occur in February or March. · HFH will begin construction in late summer and sell the home to a qualified buyer following completion of the home. . · Habitat will be provided approximately seven months to complete the project rather than the four months builders typically receive. The Habitat process of using volunteer labor and requiring extensive training and sweat equity from buyers leads to a longer progress. · HFH has the experience, capability, and financial security to develop the property and has previously constructed eight homes throughout the City. · The Development Agreement will be recorded against the property, which would be released by a Certificate of Completion upon construction completion. I C. FINANCIAL I · The sale price of the property from the HRA to HFH is $1. · The property was purchased for $125,000 with money from the Housing Fund. Staff is currently working through federal program . guidelines to have CDBG funds and Affordable Housing Incentive Funds (AHIF) reimburse the Housing Fund for a portion of the purchase. I D. LEGAL I · Notice of public hearing on the sale of the property was published February 7, 2008 in the Sun-Current. · This is a contract similar to ones used previously with HFH. . · The contract has been reviewed by legal counsel. I IV. ALTERNATIVE RECOMMENDATION(S) I · Do not proceed with the Development Agreement with HFH and direct staff to find another buyer. I V. . ATTACHMENTS . Resolution · Contract for Development · Conceptual Plan I. VI. PRINCIPAL PARTIES EXPECTED AT MEETING · Chad Dipman, Habitat for Humanity 5-1 HRA RESOLUTION NO. RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6744 BLAISDELL AVENUE TO HABITAT FOR HUMANITY, INC. IN ACCORDANCE . WITH A DEVELOPMENT AGREEMENT 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 New Home Program adopted by the HRA, said real property being described as follows: Address 6744 Blaisdell Avenue Legal Lot 3, Block 2 Oaklane Addition, Hennepin County, Minnesota WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a developer, Habitat for Humanity, Inc., has been identified as the purchaser of the described property and in accordance with a Development Agreement; 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: 1. Apublic hearing has been held and 6744 Blaisdell Avenue is authorized to be sold for one dollar to Habitat for Humanity, Inc. in accordance with a Development Agreement with the HRA. 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 Habitat for Humanity, Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of February, 2008. Suzanne M. Sandahl, Chair ATTEST; Joan Heimberger, Secretary 021908 6744 Blaisdell 5-;L CONTRACT FOR DEVELOPMENT Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and TWIN CITIES HABITAT FOR HUMANITY at 6744 BLAISDELL AVENUE SOUTH, RICHFIELD 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 5-3 CONTRACT FOR DEVELOPMENT THIS AGREEMENT, made and entered into as of this _ of ,2008, by and between the Housing and Redevelopment Authority in and for the City of Richfield, a body corporate and politic under the laws of the State of Minnesota, having its principal office at 6700 Portland Avenue, Richfield, Minnesota (HRA), and Twin Cities Habitat For Humanity, Inc. (TCHFH), a non-profit corporation under the laws of Minnesota, having its principal office at 3001 Fourth Street SE, Suite 710, Minneapolis, MN 55414 (Developer). WITNESSETH: WHEREAS, the HRA has purchased the property at 6744 Blaisdell Ave South, Richfield, legally described as Lot 3, Block 2, OAKLANE ADDITION, Hennepin County (the Property), for the purpose of providing affordable housing in the City; and WHEREAS, the Developer has proposed the Improvements, as hereinafter defined, for the Property which the HRA has determined will promote and carry out the objectives for which the Property was purchased; will assist in carrying out the objectives of the New Home Program; and will be in the vital best interests of the City, and the health, safety and welfare of its residents and in accord with the public purposes and provisions of the applicable state and local laws and requirements. NOW, THEREFORE, in consideration of the mutual covenants and obligations of the HRA and the Developer, each party does hereby represent, covenant and agree with the other as follows: ARTICLE I. DEFINITIONS. EXHIBITS. RULES OF INTERPRET A TION Section 1.1. Definitions. In this Agreement, the following terms have the meaning given below unless the context clearly requires otherwise: (a) City. The City of Richfield, Minnesota. (b) Construction Plans. Collectively, the plans, drawings and related documents related to the Improvements, which are listed on Exhibit A. (c) Developer. Twin Cities Habitat For Humanity (TCHFH). (d) Development. The Property and the Improvements to be constructed thereon according to the Construction Plans approved by the HRA. (e) HRA. The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. (f) Housine: and Redevelopment Authorities Act (HRA Act). Minnesota Statutes Sections 469.001 through 469.047. 1 5-'-/ (g) Improvements. Each and all of the structures and site improvements constructed or renovated on the Property by the Developer, as specified in the Construction Plans approved by the HRA. (h) Mortf.!:ae:e and Holder. The term "II.1ortgage" shall include the mortgages referenced in Article VI of this Agreement and any deed of trust or other instrument creating an encumbrance or lien upon the Property of any part thereof, as security for a loan. The term "holder" in reference to a mortgage includes any insurer or guarantor (other than the Developer) of any obligation or condition secured by such mortgage or deed of trust. (i) New Home Proe:ram. HRA program to encourage development of new housing opportunities for low to moderate income buyers. . (j) Qualified Buyer. A purchasing family (2 or more person household) whose income does not exceed 50% of the Twin Cities area median income, is a first time buyer, and is qualified to buy the Property for owner occupancy. Must also meet Affordable Housing Incentive Fund buyer requirements per Hennepin County. (k) Unavoidable Delavs. 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 Developer. Section 1.2 Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: A. List of Construction Plan Documents B. Form of Quit Claim Deed C. Form of Certificate of Completion 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. 2 5-5' ARTICLE II. REPRESENTATIONS AND UNDERTAKINGS Section 2.1 Bv the Developer. The Developer makes the following representations and warranties as the basis for undertakings on its part herein contained: (a) The Developer has the legal authority and power to enter into this Agreement, and has duly authorized the execution, delivery and performance of this Agreement; and the individual(s) who execute this Agreement on behalf of the Developer have the power and authority to bind the Developer; (b) The Developer has the necessary equity capital or will obtain commitments for financing necessary for construction of the Improvements; (c) The Developer will construct the Improvements in accordance with the terms of this Agreement, the Construction Plans, and all local, state and federal laws and regulations; (d) The Developer 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; and (e) architect. The plans for the Improvements have been prepared by a qualified draftsperson or Section 2.2 Bv the HRA. The BRA makes the following representations as the basis for the undertaking on its part herein contained: (a) The BRA is authorized by law to enter into this Agreement, to carry out its obligations hereunder, and the individuals who execute this Agreement on behalf of the BRA have the power and authority to bind the BRA; and (b) The BRA will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Developer and will cooperate with the efforts of Developer to secure the granting of any permit, license, or other approval required to allow the construction of the Improvements; provided, however, that nothing contained in this subparagraph 2.2(b) shall be construed to limit in any way the reasonable and legitimate exercise of the BRA's discretion considering any submittal or application. 3 5-(p ARTICLE III. ACQUISITION OF PROPERTY; CONVEYANCE TO DEVELOPER Section 3.1 Sale of Property to Developer. The HRA is the fee owner of the Property. The HRA agrees to sell the Property to the Developer and the Developer agrees to purchase the Property from the HRA according to the terms of this Agreement. The HRA agrees to convey the Property to the Developer by Quit Claim Deed in the general form of Exhibit B. The purchase price for the Property will be $1.00. Section 3.2 Title and Examination. The HRA will provide the Developer with an abstract of title or registered property abstract regarding the Property within 20 days of the date of execution of this Agreement. In the absence of an abstract of title or registered property abstract, the HRA will provide a title commitment and title insurance. The Developer shall have 10 days from the date of receipt of the abstract, registered property abstract or commitment for title insurance to make written objection to the condition of title. If the Developer fails to make timely objections in writing, all objections to title shall be deemed to be waived. The HRA shall have 30 days after receipt of Developer's written objections to clear title to the Property but the HRA shall have no obligation to clear title. If the HRA does not or cannot clear title to the Developer's satisfaction, the Developer may terminate this Agreement or proceed to closing. If the Developer proceeds to closing, all title objections will be deemed to be waived. The HRA shall pay at closing all costs incurred by the HRA in extending the. abstract of title or registered property abstract and correcting defects related thereto. At closing the HRA shall also pay the amount of the transfer tax (state deed tax and conservation fee) payable on the deed conveying the Property to the Developer and the amount of any transfer tax or recording fees for documents necessary to vest title in the HRA. Section 3.3. Demolition: Well Disclosure: Reimbursement of Costs. There is an existing well on the Property, and Developer acknowledges receipt of a Well Disclosure Statement. Prior to closing as provided in Section 3.4 below, the HRA will demolish the existing improvements on the Property (including removal of asbestos materials, if any), seal the existing well and regrade the Property to a condition that is suitable for the construction of the Improvements by Developer ("Site Preparation Work"). The HRA will use qualified contractors for the Site Preparation Work. All demolition, asbestos removal and well sealing will be completed in accordance with applicable state and federal regulations. The HRA will 'promptly provide Developer with copies of the contracts for the Site Preparation Work and, upon request, will furnish Developer with all records related to the performance of such contracts. At closing, the HRA will provide Developer with documentation of the total cost of the Site Preparation Work, and Developer agrees to reimburse the HRA at closing for the HRA's actual costs incurred for the Site Preparation Work not to exceed $15,000. Section 3.4 Closim!. Closing on the Property will take place on or before March 30, 2008, or such other date as may be agreed to by the parties in writing. At closing, the Developer will provide the HRA with the purchase price of the Property and the reimbursement required under Section 3.3 of this Agreement. If closing has not occurred by March 30, 2008, either party may terminate this Agreement. 4 5-7 Section 3.5. Taxes and Suecial Assessment. The HRA shall pay all real estate taxes due and payable in the years prior to closing, if any. Real estate taxes due and payable in the year of closing shall be prorated between the HRA and the Developer as of the date of closing. The HRA shall pay at or prior to closing the balanceof all special assessmens levied prior to closing. The HRA shall provide for payment of all special assessments pending as of the date of this Agreement by escrowing an amount equal to two times the estimated amount of special assessments. Develoepr shall assume special assessments that become pending after the date of this Agreement, except that HRA shall at all times be responsible to pay special assessments, if any, for delinquent water bills, removal of diseased trees, snow removal, or other current servies provided to the Property by the assessing authority prior to closing. For purposes of this section, a "pending" assessment is any assessment for which an improvement hearing has been held and the project has been ordered. Section 3.6 Soil Conditions and Hazardous Wastes. The Developer acknowledges that the HRA makes no representations or warranties as to the conditions of the soils on the Property, its fitness for construction of the Improvements or any other purpose for which the Developer may make use ofthe Property, or regarding the presence of hazardous wastes, pollution or contamination on the Property. The HRA will allow reasonable access to the Property for the Developer to conduct such tests regarding soil conditions and hazardous wastes as the Developer may desire. Permission to enter the Property to conduct such tests must be given in writing under the terms and conditions established by the HRA. Section 3.7. Trees. All healthy trees will be saved and protected by the Developer during construction, to the extent possible, except those that specifically interfere with the construction of the Improvements. Trees requested to be removed must be identified by type on the site plan provided by the Developer. Section 3.8. Sale to Oualified Buver: Covenant on Use. The Developer agrees to convey the Property and Improvements to a Qualified Buyer within 180 days of issuance of a Certificate of Occupancy or after that time as agreed upon by the parties. The Developer must obtain the HRA's prior approval of the terms and conditions of the purchase agreement with the Qualified Buyer, and the agreement terms and conditions must be consistent with a housing services agreement to be executed by the HRA and Qualified Buyer. This Agreement constitutes a covenant on the part of the Developer, its successors and assigns, to use the Property and Improvements for owner- occupied, single-family residential purposes as permitted by the City. ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS Section 4.1. Construction of Imurovements. The Developer shall construct the Improvements on the Property at the Developer's cost in accordance with the Construction Plans, and shall maintain, preserve and keep the Improvements in good repair and condition until sale of the Property to a Qualified Buyer. 5 5-<] Section 4.2. Buildin2 Plans. The Developer agrees that the City of Richfield building official may withhold issuance of a building permit for the Improvements unless the Construction Plans are in conformity with this Agreement, and all local, state and federal regulations. The HRA shall, within 25 days of receipt of Construction Plans submitted in application for a building permit, review such Construction Plans to determine whether the foregoing requirements have been met. If the HRA determines such Construction Plans to be deficient, it shall notify the Developer in writing stating the deficiencies and the steps necessary for correction. Issuance of the building permit by the City with the approval of the HRA shall be a conclusive determination that the Construction 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 12/31/09. All construction shall be in conformity with the approved Construction Plans. Periodically during construction the Developer shall make reports in such detail as may reasonably be requested by the BRA concerning the actual progress of construction. If at any time prior to completion of construction the HRA has cause to believe that the Developer will be unable to complete construction of the Improvements in the time permitted by this Section 4.3, it may notify the Developer and demand assurances from the Developer regarding the Developer's construction schedule. If such assurances are not forthcoming or are deemed by the HRA at its sole discretion to be inadequate, the HRA 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. Promptly after notification by the Developer of completion of con~truction 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, the HRA shall furnish the Developer with a Certificate of Completion in the form attached hereto as Exhibit C. Such certification by the HRA shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligation of the Developer to construct the Improvements. The certification provided for in this Section 4.4 shall be in recordable form. If the HRA 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 Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Improvements in accordance with the provisions of this Agreement necessary, in the opinion of the HRA, for the Developer 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, the Developer shall be liable to the HRA for the amount of the HRA's expenses as liquidated damages. As security for the obligations created in this Section 4.5 and in Section 3.2, this Agreement shall be recorded and survive closing. The security shall be retained by the HRA until the closing on the sale of the Property from the Developer to the Qualified Buyer. The provisions of this Section 4.5 shall not be construed to prejudice or limit any additional rights of the HRA under Article VIII of this Agreement. 6 /)-9 ARTICLE V. INSURANCE Section 5.1 Insurance. The Developer will provide and maintain or cause to be provided and maintained at all times during the process of constructing the Improvements and, from time to time at the request of the HRA, furnish the HRA with proof of payment of premiums on: (a) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to 100% of the insurable value of the Improvements at the date of completion, and with coverage available in non-reporting form on the so-called "all risk" form of policy; (b) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (c) Workers' compensation insurance, with statutory coverage. The policies of insurance required pursuant to clauses (a) and (b) above shall be in form and content satisfactory to the HRA and shall be placed with financially sound and reputable insurers licensed to transact business in Minnesota. The policy of insurance delivered pursuant to clause (a) . above shall contain an agreement ofthe insurer to give not less than thirty (30) days advance notice to the HRA in the event of cancellation of such policy or change affecting the coverage thereunder. ARTICLE VI. FINANCING Section 6.1 Financine:. Within 15 days of the date of execution of this Agreement, the Developer shall submit to the HRA evidence of financing for the Improvements in compliance with the provisions of Section 2.1 (b) of this Agreement. If the HRA finds that the financing is adequate in amount to provide for the construction of the Improvements, the HRA shall notify the Developer of its approval. If the HRA rejects the evidence of financing as inadequate, the Developer shall have 30 days or such additional period of time as the Developer may reasonably require from the date of such notification to submit evidence of financing satisfactory to the HRA. If the Developer 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 further obligation or liability hereunder, except for the HRA's remedies pursuant to Section 4.5 of this Agreement. Section 6.2 Limitation Upon Encumbrance of Property. Prior to the issuance of the Certificate of Completion, neither the Developer nor any successor in interest to the Property or any 7 5-10 part thereof shall engage in any financing or any other transaction creating any Mortgage or other encumbrance or lien upon the Property, whether by express agreement or operation of law, or suffer any encumbrance of lien to be made on or attached to the Property other than the liens or encumbrances attached for the purposes of obtaining funds to the extent necessary for making the Improvements without the prior written approval of the HRA. The HRA shall not approve any Mortgage which does not contain terms which conform to the terms of this Article VI and Section 8.2 of this Agreement. Section 6.3 Subordination. In order to facilitate obtaining financing for the construction of the Improvements by the Developer, the HRA shall agree to modify this Agreement in the manner and to the extent it deems reasonable, upon request by the financial institution and the Developer. ARTICLE VII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1 Representation as to Redevelopment. The Developer 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 Developer 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 Developer are of particular concern to the HRA. The Developer 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 Developer for the faithful performance of all undertakings and covenants agreed by the Developer to be performed. Section 7.2 Prohibition Ae:ainst Transfer of Property and Assie:nment of Ae:reement. F or the reasons set out in Section 7.1 of this Agreement, the Developer represents and agrees that, except for associating with other individuals or entities, prior to the issuance of the Certificate of Completion by the HRA: (a) Except only by way of security for, and only for the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to the Development under this Agreement, and any other purpose authorized by this Agreement, the Developer, except as so authorized, has not made or created, and that it 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; and (b) The HRA shall be entitled to reqUIre, except as otherwise provided in this Agreement, as conditions to any such approval under this Section 7.2 that: (i) Any proposed transferee shall have the qualifications and financial responsibility, as determined by the HRA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer or, in the event the transfer is of or relates to part of the Property, such obligations to the extent that 8 5-11 they relate to such part. (ii) Any proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, shall for itself and its successor and assigns, and specifically for the benefit of the HRA, have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to such obligations, restrictions and conditions or, in the event the transfer is of, or relates to part of the Property, such obligations, conditions, and restrictions to the extent that they relate to such part; provided, that the effect that any transferee of, or any other successor in interest whatsoever to, the Property or any part thereof, shall, for whatever reason, not have assumed such obligations or agree to do so, shall not, unless and only to the extent otherwise specifically provided in the Agreement or agreed to in writing by the HRA, relieve or except such transferee or successor from such obligations, conditions, or restrictions, or deprive or limit the HRA of or with respect to any rights or remedies or controls with respect to the Property of the construction of the Improvements; it being the intent of this Section 7.2, together with other provisions of this Agreement, that to the fullest extent permitted by law and equity and excepting only in the manner and to the extent specifically provided otherwise in the Agreement no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the HRA, or any rights or remedies. or controls provided in or resulting from this Agreement with respect to the Property and the construction of the Improvements that the HRA would have had, had there been no such transfer or change. (iii) There shall be submitted to the HRA for review all instruments and other legal documents involved in effecting transfers described herein, and if approved by the HRA, its approval shall be indicated to the Developer in writing. In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA thereof shall be deemed to relieve the Developer from any of its obligations with respect thereto. The sale of the Development to the Qualified Buyer shall not be deemed to be a transfer within the meaning of this Section 7.2. Section 7.3 Approvals. Any approval required to be given by the HRA under this Article VII may be denied only in the event that the HRA reasonably determines that the ability of the Developer to perform its obligations under this Agreement will be materially impaired by the action for which approval is sought. 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, anyone or more of the following events: (a) Failure by the Developer to pay when due the payments required to be paid or secured under any provision of this Agreement; (b) Failure by the Developer to complete the Improvements by 12/31/09 absent any Unavoidable Delay; 9 5-- Jd-. (c) Failure by the Developer 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; (d) Failure by the Developer to close with a Qualified Buyer within 180 days of completion or after that time as agreed upon by the parties. (e) If the Developer 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; (f) If the Developer, on a petition in bankruptcy filed against it, be adjudicated as bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of the Developer, a receiver of the Developer or of the whole or substantially all of its property, or approve a petition filed against the Developer seeking reorganization or arrangement of the Developer 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 (g) If the Development is in default under any Mortgage and has not entered into a work-out agreement with the Mortgagee. 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 anyone or more of the following actions following written notice by the HRA to the Developer as provided in Section 9.4 of this Agreement: (a) suspend its performance under this Agreement until it receives assurances from the Developer, deemed reasonably adequate by the HRA, that the Developer will cure its default and continue its performance under this Agreement; (b) cancel or rescind this Agreement; (c) withhold the Certificate of Completion; or (d) take whatever action at law or in equity may appear necessary or desirable to the HRA to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Developer 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 Mortgagee succeed by foreclosure of the Mortgage or deed in lieu thereof to the Developer's interest in the Property, it shall, notwithstanding the foregoing, be obligated to perform the following obligations of the Developer only to the extent that the same have not therefore been performed by the Developer: Sections 3.3 10 5--/3 through 3.7; Sections 4.1 through 4.5; Sections 5.1. Said Mortgagee, upon foreclosure or taking of a deed in lieu, shall have no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. Section 8.3 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 Developer 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 804 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 Developer, or any successor in interest, for any Event of Default by the HRA or for any amount which may become due to the Developer 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 Developer as though fully set forth herein. Section 9.3 Notice of Status and Conformance. At such time as all of the provisions of this Agreement have been fully performed by the Developer, the HRA, upon not less than ten days prior written notice by the Developer, agrees to execute, acknowledge and deliver, without charge to the Developer or to any person designated by the Developer, a statement in writing in recordable form certifying the extent to which this Agreement has been performed and the obligations hereunder satisfied. Section 9.4 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 11 5-14 other shall be sufficiently given or delivered if it is sent by mail, postage prepared, return receipt requested or delivered personally: (a) As to the HRA: Richfield HRA Executive Director 6700 Portland Avenue South Richfield, MN 55423 (b) As to the Developer: Twin Cities Habitat For Humanity (TCHFH) A TTN: Alan Raymond 3001 4th Street SE Minneapolis, MN 55414 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 9.4. Section 9.5 Provisions Not Men!ed With Deed. None of the provisions of this Agreement is intended to or shall be merged by reason of any deed transferring any interest in the Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.6. 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 HRA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly executed as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chairperson By Its Executive Director 12 5-15 ) ) SS ) STATE OF MINNESOTA COUNTY OF The foregoing instrument was acknowledged before me this day of , 2008, by Suzanne M. Sandahl, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public ) ) SS ) STATE OF MINNESOTA COUNTY OF The foregoing instrument was acknowledged before me this day of , 2008,' by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public 13 5-jto TWIN CITIES HABITAT FOR HUMANITY By: Its: STATE OF MINNESOTA ) ) SS ) COUNTY OF The foregoing instrument was acknowledged before me this day of , 20_, by , the of Twin Cities Habitat For Humanity, a corporation under the laws of Minnesota, on behalf of the corporation. Notary Public 14 5-/7 EXHIBIT A LIST OF CONSTRUCTION PLAN DOCUMENTS . Contract for Development, fully executed . Concept Plans . Site Plan 15 5-/?J EXHIBIT B FORM OF QUIT CLAIM DEED 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 Twin Cities Habitat for Humanity, a non-profit corporation under the laws of the State of Minnesota, Grantee, real property in Hennepin County, Minnesota, described as follows: Lot 3, Block 2, OAKLAND ADDITION, 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 , 200_, recorded , 200_, in the office of the Hennepin County Recorder as Document No. (if more space is needed, continue on back) together with all hereditaments and appurtenances. A well disclosure certificate accompanies this document. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY Of'RICHFIELD Affix Deed Tax Stamp Here By Its Chairperson By Its Executive Director 16 5-/9 STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing was acknowledged before me this _ day of , 200_, by Suzanne Sandahl, 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 , 200_, by Steven L. Devich, 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 RAK) Check here ifpart or all of the land is Registered (Torrens) 0 This instrument drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Tax Statements for the real property described in this instrument should be sent to (include. name and address of Grantee): Twin Cities Habitat for Humanity 3001 4th Street SE Minneapolis, MN 55414 17 6-~O EXHIBIT C FORM OF CERTIFICATE OF COMPLETION The undersigned hereby certifies that , has fully and completely complied with its obligations under Article IV of 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. with respect to the construction of the approved construction plans at , legally described as and is released and forever discharged from its obligations to construct under such above-referenced Article. DATED: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY RICHFIELD By Its Chairperson By Its Executive Director STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of 200___, by and the Chairperson and 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: Richfield Housing and Redevelopment Authority 6700 Portland Ave S Richfield, MN 55423 18 5-~1 I 2~'~O" FLOOR PLANS: I REAR STOOP BEDROOM Ifl BEDROOM 1f2 9'-2" x 10'-011 11'-3" x ':)'-0" DN UP Q I -\\) '" LOFT L1VINCiI ROOM 13'-&" x 1&'-2" DININCiI ROOM 11'-3" x -a'-4" FIRST FLOOR PLAN SECONO FLOOR PLAN TWIN CITIES HABITAT for HUMANITY 1ft TNlnCilio Habitat for Humanlty~ B~lIdlll9Cl)mmll/ljt) 3001 4TH ST. SE MINNEAPOLIS, MN 55414-3301 BASEMENT SQ. FT. = 946 MAIN FLOOR SQ. FT. = 946 SECOND FLOOR SQ FT. - 717 TOTAL FINISHED SQUARE FOOTAGE = 1663 SINGLE FAMILY DWELLING OFFICE: 612-331-4090 FAX: 612-331-1540 MODEL: 5TS4-1.5 AGENDA ITEM # 6 REpORT # 15 ...... STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 19, 2008 REpORT PREPARED By: CHRISTINE COSTELLO, COMMUNITY DEVELOPMENT SPECIALIST NAME, TITLE REpORT PRESENTER: JOHN STARK, INTERIM COMMUNITY DEVELOPMENT DIRECTOR INTERIM DEPARTMENT DIRECTOR REVIEW: NAME, TITLE ~ REVIEWED By EXECUTIVE DIRECTOR: ITEM FOR BRA CONSIDERATION: Consideration of a proposed extension to the Preliminary Development Agreement with TOLD Development Company for exploring the feasibility of redevelopment of a 30-acre area in the Cedar Avenue Corridor. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution, which extends the Preliminary Agreement with TOLD Development Company for nine months or until November 17, 2008. I II. BACKGROUND I On April 16, 2007 the Housing and Redevelopment Authority (HRA) authorized an Agreement with TOLD Development Company (TOLD) to study the development feasibility for the 30-acre area between 66th and 69th Streets and between 17th Avenue and TH 77. (The United Bankers' Bank (UBB) site is within the TOLD site.) On November 19, 2007 the HRA approved an extension to the original agreement which was set to expire on January 18, 2008. The second extension was granted by the HRA and is set to expire on February 20,2008. The current recommendation is to grant an additional extension for a nine month period. 021908 TOLD Preliminary Agreement Extension The reason for the nine month time period is to accomplish a number of goals. The time period will allow TOLD to determine the feasibility of their proposed plan and the staging necessary to accomplish redevelopment in the 3D-acre area. Also, the time period will allow TOLD to refine a concept site plan for their proposed redevelopment and to work with the HRA's legal counsel on drafting a Contract for Private Development. I III. BASIS OF RECOMMENDATION I I A. POLICY I . The redevelopment area south of Cedar is large and the process for developing is complex. Additional time is warranted to refine a development concept and draft a development agreement. . The area under consideration is included in the Cedar Avenue Corridor Redevelopment Concept Master Plan. .1 B. CRITICAL ISSUES I . TOLD representatives are agreeable to the extension. . The City Council will be requested to extend its commitment that the City will not encumber the property and to extend the Right-of-Entry Agreement at their February 26,2008 meeting. . TOLD will report on the status of their feasibility work at the February meeting and discuss their wish to continue their relationship with the HRA. I C. FINANCIAL I . The Agreement requires TOLD toreimburse the HRA for expenses including staff and consultants. I D. LEGAL I . HRA legal couns.el reviewed the proposed resolution. I IV. ALTERNATNE RECOMMENDATION(S) . Do not approve the extension. . Continue the consideration of the extension to a later meeting date. I V. ATTACHMENTS . Resolution . Map I VI. PRINCIPAL PARTIES EXPECTED AT MEETING I . Gary Dreher, TOLD Development Company '/0- ( HRA RESOLUTION NO. , EXTENDING THE PRELIMINARY AGREEMENT WITH TOLD DEVELOPMENT COMPANY WHEREAS, TOLD Development Company (TOLD) and the Richfield Housing and Redevelopment Authority (HRA) entered into a Preliminary Agreement (Agreement), April 16, 2007; and WHEREAS, the Agreement is set to expire February 20, 2008; and WHEREAS, in paragraph 4 of the Agreement provision is made for extension of the Agreement; and WHEREAS, TOLD and the HRA desire to extend the Agreement for an additional nine-months or until November 17, 2008; and WHEREAS, the purpose of the extension is for the parties to evaluate the status of activities, and report to the HRA at its February 2008 meeting regarding the appropriateness of any further extensions. NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority that the Agreement is hereby extended until November 17,2008. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of February, 2008. Suzanne M. Sandahl, Chair ATTEST: Joan Heimberger, Secretary Exhibit A 0-J- ~ II I I I I I r-77 II I I j I ~ I ~ 66th Street I-- '\~ I-- r--2- I-- I-- I: f--- i: f--- 67th Street f--- f--- f--- f--- I-- CI) CI) .. ;:, ;:, I C C I-- CI) CI) : ~ ~ c - f. .c ... ca - "C - co "" - CI) () - - 68th Street RQth Legend c:l i3~~ov2 1:\GIS\Community Development\Staft\Christine\Cedar Corridor\South of 66th Street\Prelim Agreemtn Exhibit A TOLD.mxd N A AGENDA ITEM # 7 REpORT # 16 ........ STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 19, 2008 REpORT PREPARED By: CHRISTINE COSTELLO, COMMUNITY DEVELOPMENT SPECIALIST NAME, TITLE REpORT PRESENTER: JOHN 8T ARK, INTERIM COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE REVIEWED By EXECUTIVE DIRECTOR: ~ INTERIM DEPARTMENT DIRECTOR REVIEW: ITEM FOR BRA CONSIDERATION: Consideration of a proposed extension to the Preliminary Development Agreement with United Banker's Bank for exploring the feasibility of redevelopment of a 2.5-acre area in the Cedar Avenue Corridor. 1. RECOMMENDED ACTION: By Motion: Approve the attached resolution, which extends the Preliminary Agreement with United Banker's Bank, subject to United Banker's Bank acceptance, until April 22,2008. I II. BACKGROUND I On April 16, 2007 the Housing and Redevelopment Authority (HRA) authorized an Preliminary Development Agreement (Agreement) with United Banker's Bank (UBB) to study the development feasibility for the 2.5-acre area south of the Decision One building. On November 19, 2007 the HRA approved an extension to the original Agreement, which was set to expire on January 18, 2008. The second extension was granted by the HRA and is set to expire on February 20,2008. The current recommendation is to grant an additional extension for approximately two months (until April 22, 2008) - subject to approval by representatives of UBB. 021908 UBB Revised UBB's real estate representative has recently bee"n unavailable to discuss the terms of extending the Preliminary Agreement, but in a brief conversation discussed the possibility of terminating the Agreement. HRA staff is requesting that the HRA take action to extend the Agreement until their April meeting (subject to UBB's approval) in order to better determine if UBB has concerns that the HRA would be able to address or if UBB desires to terminate the Agreement for reasons that are independent of any actions the HRA may be able to take. If, ultimately, either party does not wish to continue the contractual relationship pertaining to development on the site, they can begin the process of formally terminating the Agreement. I III. BASIS OF RECOMMENDATION I I A. POLICY I . The extension of the Agreement is being sought to determine UBB's desire to continue their consideration of the site for development. I B. CRITICAL ISSUES I . UBB representatives have been unavailable to have substantive discussion on the issue due to their schedules. . The City Council will be requested to extend its commitment that the City will not encumber the property at their February 26, 2008 meeting. I C. FINANCIAL I . Legal counsel would have to determine if any costs incurred after the Agreement's expiration on February 20, 2008 and the date that UBB accepts an extension (if ever) would be subject to the provisions of the Agreement. HRA staff, however, does not currently foresee the need for any substantial expenditures. I D. LEGAL I . HRA legal counsel was consulted in recommending this course of action. I IV. ALTERNATIVE RECOMMENDATION(S) I . Do notapprove the extension and take steps to formally terminate the Agreement. . Continue the consideration of the extension to a later meeting date. I V. ATTACHMENTS . Resolution . Map I VI. PRINCIPAL PARTIES EXPECTED AT MEETING . N/A r;~/ HRA RESOLUTION NO. EXTENDING THE PRELIMINARY AGREEMENT WITH UNITED BANKER'S BANK WHEREAS, United Banker's Bank (UBB) and the Richfield Housing and Redevelopment Authority (HRA) entered into a Preliminary Agreement (Agreement), April 16, 2007; and WHEREAS, the Agreement is set to expire February 20, 2008; and WHEREAS, in paragraph 4 of the Agreement provision is made for extension of the Agreement; and WHEREAS, the HRA desires to extend the Agreement until April 22, 2008, subject to approval by representatives of UBB. WHEREAS, the purpose of the extension is for the parties to evaluate the status of activities and determine if it is the desire of both parties to continue the Agreement further. NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority that the Agreement is hereby extended, subject to approval by representatives of UBB, until April 22, 2008. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of February, 2007. Suzanne M. Sandahl, Chair ATTEST: Joan Heimberger, Secretary ~ I I -1 I I I I I D .>~>>:>: Q . ~ . . . . . . . . . . . . . . . . . M~"-""'-"""""""'. ................... .::::::::::::::::::: Q . Q . D . D IH:H:::l~::~::~:: _ t:::::::::::::::::: r===:~::.;..; - I li~ili~J~~~: iverter RJad II~~~-\ - -'I I .....~ J \ w 11 ; I i will o L I N w-<rE o -l. D I D f-o-I i . I o 87.5 175 350 Feet s MEBB #558420v2 AGENDA ITEM # 8 REpORT # 17 ........ STAFF REpORT RICHFIELD REpORT PREPARED By: HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 19, 2008 KAREN BARTON, COMMUNITY DEVELOPMENT1iANAGER NAME, TITLE REpORT PRESENTER: JOHN STARK, INTERIM COMMUNITY DEVELOPMENT DIRECTOR REVIEWED By EXECUTIVE DIRECTO NAME, TITLE INTERIM DEPARTMENT DIRECTOR REVIEW: .R) ITEM FOR lIRA CONSIDERATION: Consideration of preliminary proposals for the Cedar Point Phase II area. 1. RECOMMENDED ACTION: By Motion: Direct staff to continue working with one of the following developers; Sherman & Associates or LaNel Financial Group on refining their development proposal for the Cedar Point Phase II area. I II. BACKGROuND I The Cedar Point Phase II area is located between 63rd and 65th Streets and between 16th and 17th Avenues (directly west of the Cedar Point retail development area). This area is in the low frequency noise impact area and has been identified by policymakers as a high priority for redevelopment. In the spring of 2007 staff circulated a "Request for Proposals" (RFP) for the Cedar Point Phase II area to the development community. After receiving no responses to that RFP, and on the advice of an architecture firm that has worked with the City and Housing and Redevelopment Authority (HRA) on a number of occasions, staff sought the input of the development firm of Sherman and Associates (Sherman). As stated in an HRA memorandum dated July 26, 2007 staff worked exclusively with Sherman for several months while they evaluated the feasibility of developing 021908 Cedar Point II the site. Sherman's preliminary study indicates that a residential development on this site would result in a significant financial"gap". Also, as stated in a November 19,2007 HRA memorandum, another development firm, LaNel Financial Group (LaNel) has indicated some interest in making a residential development proposal for the site as well. Both Sherman and LaNel/Susee have previously submitted their preliminary proposals (attached) for the HRA's consideration at its January 14, 2008 meeting. Sherman's proposal includes a conceptual site plan (page 7) showing 120 units of senior assisted living rental housing, 60 units of rental housing and 60 units of independent-living senior rental housing. Page 4 of the proposal provides a financial analysis of the proposal. This shows that Sherman would purchase the 15 houses on the east side of 16th Avenue and expect that the City or HRA would be responsible for purchasing the 14 houses on the west side of 17th Avenue and selling those portions not used for Parkway to the developer. At the current time, neither the City nor HRA have identified funding sources for purchasing these homes. The Sherman proposal also assumes the use of $1.3 million in TIF; this number is consistent with the preliminary TIF analysis that has been done by Ehlers. The LaNel/Susee proposal includes a conceptual site plan showing 130 units of independent-living senior rental housing, 60 units of senior assisted-living rental housing and 16 townhomes. The LaNel proposal also includes photographs of other similar projects they have completed in recent years. In discussions with staff, representatives of LaNel have stated their intention to purchase all 29 homes in the area as part of the project. Based on earlier site plans that were submitted, Ehlers estimated the available tax increment in net present amounts of $2.6 million for the LaNel proposal. The revisions to the site plans may result in changes to the increment generation, as would any future change in the site plans or assumptions on which the calculations are based. Since both proposals are very similar in nature, staff requested additional information from each of the developers to assist in differentiating the proposals to the greatest extent possible. Attached is a matrix incorporating information from both proposals, as well as copies of the supplemental information requested. At this point, either developer would have to spend further time and money in efforts to continue to refine their development. An indication from the HRA as to whether it finds either proposal to be more or less desirable than the other will help the developers determine if a further expenditure of time and money would be warranted. Based on the information submitted by both developers, it is apparent that each proposal has positives and negatives. However, given that the LaNellSusee proposal would fund the land acquisition themselves, and the Sherman proposal is requesting the City to front $4,000,000 for the land acquisition, staff is recommending that the HRA select LaNel to proceed with their development proposal. I III. BASIS OF RECOMMENDATION I I A. POLICY I . The Cedar Point Phase II area has been identified as an area in need of redevelopment due to the impacts of low-frequency noise associated with the Minneapolis/St. Paul International Airport. . Both developments include senior housing components; neither the HRA nor City Council has made a formal policy statement about the need or desirability of additional senior housing in the community. I B. CRITICAL ISSUES I . The majority of property owners in the Cedar point Phase II area have stated a desire to relocate from that area as soon as possible. . Given current market conditions and recent experiences of staff, for development to proceed at this time, senior housing is likely a necessary component. I C. FINANCIAL I . Both developers have agreed to reimburse the HRA for the cost of having Ehlers complete a preliminary TIF analysis. . The developers have not indicated whether they would be willing to reimburse the HRA for future costs which may be incurred (legal, etc.) without a formal arrangement with the HRA (Exclusive Rights Agreement or Contract for Private Development). . Sherman's proposal would require the City to front approximately $4,000,000 for land acquisition. I D. LEGAL . N/A I IV. ALTERNATIVE RECOMMENDATION(S) . N/A I V. ATTACHMENTS I . Conceptual site plans and preliminary sources and uses statement from Sherman. . Conceptual site plan and preliminary sources and uses statement from LaNel/Susee. . Copy of additional information requested from LaNel/Susee. . Copy of additional information requested from Sherman. . Proposal comparison matrix. I VI. PRINCIPAL PARTIES EXPECTED AT MEETING I . Representatives of Sherman and Associates. . Representatives of LaNel Financial Group/Susee. ATTACHMENT A ..,sherman ,~ ASS 0 C I ATE S PROJECT BACKGROUND Developer and General Partner Sherman Associates, Inc. Senior Assisted Living Operator Southview Senior Living Architect ESG Architects Proposed Development Cedar Point Phase II (The area between 63rd and 65th Streets and between 16th and 17th Avenues) Project Background Earlier this summer Sherman Associates began meeting with the City of Richfield regarding possible redevefopment of the area commonly referred to as the Cedar Point Phase II. Since that time we have looked at the feasibility of the site through potential development uses and levels . of density that would be needed to make the project successful. We feel we have put together a development plan that is feasible and a development team that has the experience to execute what will be a complex yet successful redevelopment project for the intended users and the City of Richfield. . Site and Surrounding Land Uses The site is currently occupied by single family homes. The surrounding land uses are as follows: o North: Taft Park o South: Retail and Single Family Residential o East: Cedar Point Phase I (Target & Home Depot) o West: Single Family Residential 2 DEVELOPMENT STRATEGY Sherman Associates is committed to working with the City of Richfield to redevelop Cedar Point Phase II according to a vision' that is compatible with the City's goals. The redevelopment will respect the aesthetic setting and architecture of the surrounding neighborhood. We are proposing to develop three distinct product types, consisting of 240 total units, as part of the redevelopment effort. Product Type r . 120 Units of Senior Assisted LivinS: We plan to partner Southview Senior Living (Lance Lemieux, CEO) in the development of a 120- unit senior assisted living facility. The building would occupy the northernmost part of the site between 64t" Street and Taft Park. This development' would include: c Market R.ate Independent Senior Living units o Assisted Care units o Memory Care units Product Type II - 60 Units of Affordable Family Rental Housing: On the southern portion of the southernmost parcel. Sherman proposes to build 60 units of affordable workforce housing utilizing 9% tax credits. The unit mix would consist of approximately 25% one-bedroom units, 50% two-bedroom units, and 25% three-bedroom units. Rents would be limited to 60% of AMI. At three and four stories, the apartment buildings can provide an excellent architectural match complimenting the surrounding neighborhood. The proposed product types and site plan would provide an excellent redevelopment USe while maintaining a quiet and residential aesthetic. Product Type III - 60 Units of Affordable Senior Rental Housing: Sherman Associates would develop 60 units of affordable senior rental housing utilizing tax exempt bond financing and 4% federal tax credits. This development would be composed of all one. and two-bedroom units and serve active seniors ages 55+. This building will be located on the North half of the southernmost parcel. closest to 64t" Street, thus creating a practical transition from the senior assisted care project to the family workforce housing project to the South. The senior housing component provides a variety of living arrangements for seniors with varying incomes and independence. The inclusion of family workforce housing provides a housing option for the employees of the senior housing facilities and those of the new area retail that is in close proximity to their places of employment. We have provided components that work together nicely. remain financially viable, and do not saturate the market with one specific housing type. 3 FINANCIAL ANALYSIS We have identified that the acquisition and redevelopment of the Cedar Point area will take substantial GAP funding from a variety of sources. tn addition to substantial new development costs approximately thirty (30) individual homes in the redevelopment area will have to be acquired. The City of Richfield has estimated that the average cost per home including soft costs, relocation, and demolition could approach or exceed $300,000. This presents potentially $9 million of acquisition costs before even taking into account the expense of building the new infrastructure. Previously the City has proposed acquiring the homes along the new boulevard and selling the residential land parcels back for fair market value. The City would also pay for demolition and new infrastructure of the new boulevard. Using this scenario, we have prepared a preliminary Sources and Uses statement which accounts for the acquisition of the land and development of the infrastructure only. Preliminary Sources and Uses Statement Cedar Point Phase II Housing Proposal Sherman Housing Development Source Amount Use Amount Tax Increment Pay-As-You-Go ~E::'~~~U';Og Laod 5"e---r~~~::: ~:~::~:o:::~~'(~) ... _I__u~'~~~': . ~;: ~:~:,~~:~::~~~~;O~ed,r~,~oo,ooo I ~~:~~~:~;tr~,u'e: _~-+_~,ooo,oo~ ~~~~------_._._------l,-- $900,OOq.~.__._______._._ ______. ____.1..____._ _'... .. ~OU~IIHe""ep;O c:~oty TOD ~ $846.645 i .._ u ________~------ 'I I .-------..0.-...-- 1 --.-r-------- .......----...-..---..--,-----.-------.-. Total I $6.550,000 I I $6,550,000 Financing Gap $0 (I) Assumed at avg: $300,000 per home. Home purchased by Sherman Associates (2) Assumed 15 homes x 120 sf x 60 sf x $1 Olsf . Payback to City of Richfield (3) Unverified estimate 4 PROJECT ARCHITECTURAL 5 Cedar Point... Phase U lit! 1I:;!!I!i (( n AH P 0111 r (: nMM(,W7; l. '~'I NHI \1 ZC'llfnQ; n. :0; in;}~'l' .,1 nii',' lo;~ ".:,j(k!rH.1I ;!.;.nill!J: PC 2. PI.lllIx"J r;;j'l'i:I.ll (')IIf,l(;ld.;1 Devd.ll'lIl('1I1 ;"\10:.' A LOIlO'jH ,:1l'""o,hl ,;' PI.m: ~";ill(ll(,;. F:il)uly H{;::.,i(I(~J'lh,)1 ';.:.mpi',Il"'h'Jiv" PI,m; [{<:'oliN}.}1 (:<)11111)0)1.;1.11 ofli.;/: f'\l e.): 2~H.3!,;2 S.(lU.'J{'~ F (~'( t'"t3 l\(;fe~. (\ H:/ .~. "1 r::; f; ~~n _,:O-~:O: ~ ~.~: 1.\[/;" 6 Q), 133~.lS H.lS9 ( tl-~'.;~.:' "...~~ ; , i~ ! "i i I I I I I ! '" ./-'~~ . oJ I ~-~~~:~~~ ~-::._.::;;--:----- '-"!"'"' -'-i>". ~'~~ --~ II 1\ '1 \\ ~ ~ i I L) f"'-'--- IwJ [} }-""'1 (-~ \.,-< ;-~.~_J t->-l .1-_1 I'" W, i~.J 'j',,-r"l . i ,-,:::+P [j Ll ,-, :. tJ t.. 00 Do t-=1 ' d ! , ! I t. " \ \ . \ -'.\ v ~ r:: '" p:; P- 1:1 g u ....;.- :'j ~~ .-., .~. L (" :::;>. ::2'> C, l/': 0:': ;:: CJ a.. w, <r c, i.!J .~" '" LLJ u. u. :::> DO LLJ "- 6 VI o z S ~ ::\ 00 o ~ l ~ III :> . :. 7 pp (\.i::'!)SC[)' PH (-'jCrT """FA 1''-'1 ~ I""-,........'~ Vi!.. ~: :,.........,.)L........:1 1 _.' ~. ~ DEVELOPER & GENERAL PARTNER: Sherman Associates, Inc. Sherman Associates. Inc. is an award-winning firm specializing in design. construction and financing of quality commercial and housing properties in California, Iowa, Minnesota, Missouri, and Wisconsin. Having earned a strong reputation for quality and follow-through, cities around the country have turned to Sherman Associates to pioneer redevelopment in their highest priority urban neighborhoods. In the process. Sherman Associates has become an industry leader in tax credit, affordable housing, and tax increment financing projects. Such new developments have been successful for the participating cities, investors. residents, and'businesses. Sherman Associates has developed approximately 600,000 square feet of commercial property and 6,000 multifamily, townhouse, and single-family homes. (Please see attached Developer Profile). 233 Park Avenue South. Suite 20 I Minneapolis, MN 55415 612-332-3000 I www.sherman-associates.com Key Contacts: George Sherman, President 612-332-3000 I gsherman@sherman-associates.com Ryan Sailer, Project Manager 612-332-3000 I rsailer@sherman-associates.com Mr. Sailer will be the lead contact point for the development team. ARCHITECT: Elness Swenson Graham Architects, Inc. Elness Swenson Graham is a national architectural firm that understands your challenges and translates those needs into quality design. ESG's foundation is based on a master plan and is built on a solid commitment to excellence. ' 500 Washington Avenue South, Suite 1080 Minneapolis. MN 55415 Phone: (612) 339-5508/ www.~sgarch.com Key Contacts: Jay Nelson. Vice President 612.373.4628/ jay.nelson@esgarch.com Sherman Associates and ESG Architects have a long history of collaborating in thedesign and development of affordable and market-rate housing. SENIOR HOUSING OPERATOR: Southview Senior living Southview Senior Living was created by our family to serve yours. We provide a home of comfort and security. A place to make new friends and entertain old friends. Southview Senior Living is a place for you to leave your worries behind. 8 Our family~owned and operated community has been caring for seniors since 1966. We understand the importance of family. At Southview Senior Living, we are committed to providing customer-driven services tailored to you. A licensed R.N. is available to assess each individual in order to provide a personal care service package that is right for you. If assistance is needed, our individualizeP service plans are designed to maintain your independence. We provide a wide range of customer-driven programs and events that encourage participation, laughter and lasting memories. Some features you'll find in our properties include: Special Features Other Features for an Additional Fee . Outdoor patio . Personal service plan . Sunroom . Heated underground parking . Library . Guest suite . Private family dining . Beauty/barbershop . Grandma's attic . Meal delivery . Public computer for Internet access . Housekeeping/laundry services . Community room ,~ . Fitness center . Car wash bay 9 ATTACHMENT B John Stark Assistant HRA Director City of Richfield 6700 Portland Ave. S Richfield, MN 55423 RE: 66th & Cedar January 3, 2008 Dear Mr. Stark: Pursuant to our discussion with Jan Sussee, enclosed please find the following: Aerial Images and Photographs of: · The Pines, Richfield, MN · The Oaks, Richfield, MN · The Arbors, White Bear Lake, MN Architectural Site Plan from Elness Swenson Grahan Architects, Inc. Sincerely, C~M.~ Caitlin M. Goff LaNel Financial 952-697-4681 caitlinl@,lanel.com Cc: Jan Sussee 4601 Excelsior Boulevard, Suite 601 . Minneapolis, Minnesota 55416 . 952-920-5338 . Fax 952-925-5640 Photograph of The Pines 1 Photograph of The Pines 2 Photograph of The Pines 3 Photograpb)of the Pines 4 Photograph of The Pines 5 Photograph of the ~ines 6 Photograph of The Pines 7 Photograph of THe Pines 8 Photograph of The Oaks 1 Photograph of The OAks 2 Photograph of The OAks 3 Photograph of The Oaks 4 Photograph of The Oaks 5 Phdtogr~~~ of The Oa~s 6 Photograph of the Arbors from the NE Corner Photograph of the Arbors from the NE Corner -------- Photograph of The Arbors Photograph of The Arbors Alternative veiw of the Arbors Photograph 1 Photograph 2-with view of the 'Villas' Photograph of the Arbors from the SW Corner ~ photograph of The Arbors AERIAL IMAGE OF THE PINES AND THE OAKS. AERIAL IMAGE OF THE PINES AND THE OAKS. AERIAL IMAGE OF THE ARBORS-1 AERIAL IMAGE OF THE ARBORS-2 ~ ~~ f (:) co " ;... t :-j ,'If ~~ -GI ZC ::J ,: ~~ ~::!2 o~ U:Q ....Ja:: <( I- Z LLJ C Vl LLJ ~ I- Z o c.. ~ <( Cl LLJ U ~t If] Ii I I'r 5\ ~~l 0,j? ~~t +- -I ~+ , Iff :wa It (::: ...... o o N ... GI ..Q E ~. ~ . N ~~ i 1:: 8 Q) - ..... CJ) o lI'l - ~ ~~ -II> z~ ::> .= :i~ :i:2 o~ uti ..J~ <( ~ Z LLJ o V') LLJ c::: J- Z o 0- c::: <( o LLJ U 5\ ~) ~~.i 01' Z.%~ S;} ~ ~ ~ r-.. 0 0 N ... ell ..c E ell U . ell 0 ~ N February 1, 2008 City of Richfield Attn: Karen Barton Community Development Manager 6700 Portland Avenue Richfield MN 55423-2599 RE: Cedar Point Phase II Proposal Dear Ms. Barton: In response to your January 22nd, 2008 requests as to the above proposal, please be advised as follows: 1- Attached is a Preliminary Sources and Uses of Funds segregated by each development activity, Assisted Living, Affordable Senior and Independent Senior and Townehome/Villas. Obviously these are estimates at this time and depending on development timing the estimates will change. 2- (a) This proposal includes an abundance of pedestrian spaces for resident experiences within the grounds of the development as well as easy access to the commercial and transportation gateways of Cedar Point Phase I. High quality construction materials and techniques will be used to assure that airport noise issues are minimized. (b) The exterior presentation of this proposal is welcoming and accessible with a variety of coordinated housing options, all reflecting maturity even in its new construction. Materials used in the construction will be low maintenance and high quality to assure years of neighborhood stability. (c) Public art is a major commitment of the Development Team. The team intends to designate $100,000 in public art to be incorporated on the site to encourage gathering places which are visible, creative and with enduring beauty. The Development Team has contacted Jack Becker of Forecast, the leading force in public art in the Twin Cities and Upper Midwest, to identify and apply for additional grant funding to increase the scope of the art at the site. The Development Team believes in public art and has a history of encouraging artists and installing art in Richfield. In fact, much of the public art in Richfield is located in Woodlake Center, Kirchbak Gardens, The Oaks on Pleasant, and City Bella on Richfield 4 City of Richfield 2/1/2008 Page 2 Lyndale and this Development Team is responsible for all of it. #3 The green, sustainable building/landscape components consist of (1) the small pond area centering the parking lot between the Assisted Living and Independent Living buildings, (2) the courtyard with a Gazebo on a lake on the westerly side of the independent living building, and (3) the pond to the north of the townhomes. The intent is to retain as many mature trees on the site as possible, particularly on the fringes, much as mature trees were preserved at The Oaks on Pleasant and The Pines. At the Oaks, the developers changed the shape of the building to save the oak tree along 66th street and they will work with the same vision at this project. There will also be extensive planting of new trees and landscaping around the entire two block area. The Development Team intends to consult with Michael Schroeder of LHB to achieve an exemplary site design as a proud gateway to east Richfield. The team envisions similar landscaping features as are prominent surrounding The Oaks on Pleasant and The Pines. Their intent is to give a mature feel to the new development. The Development Team also plans to incorporate the use of energy star appliances, water saving fixtures, energy star and Florissant electrical fixtures, and efficient gas furnaces in its efforts to promote "green" energy conservation measures at the development. #4 The housing types of assisted living, independent living and single story townhomes were selected to offer a variety of options from which new residents may choose, according to their needs. All housing types cater to the particular needs of seniors, their activity levels, social desires, and health requirements. Senior living was chosen because of the acceptability to surrounding neighborhoods and the minimization of the effects of airport noise. This will also open up single family homes for occupancy by younger families in other areas of the community as has occurred with The Oaks on Pleasant and The Pines. The variety of housing options will allow long term residents of Richfield to maintain their roots in Richfield. It is possible to envision a natural progression of residents of Richfield moving from their present home to the single story, low maintenance rental townhome, subsequently to the more sociable and structured environment of the independent living building and ultimately, when health concerns arise, to the assisted living for even more care and assistance. The connections to bus transportation and pedestrian access will allow the developers to market the properties to residents desiring to continue to be able to be part of the Richfield community. The Development Team also intends to incorporate a small amount of senior service-compatible commercial which will not compete with other businesses in the Cedar Point development. #5 Special features in the development include a commitment by City of Richfield 2/1/2008 Page 3 the Development Team to incorporate a large presence of public art, to preserve as many mature trees as possible, and to provide gathering places for residential interaction-both on the interiors and exteriors of the buildings. The team intends that this project be perceived as a long term part of the City. Further, the Development Team presents the site as a seamless transition between the heavy commercial and single family residential areas of Richfield. The enduring beauty and gathering places of The Oaks and The Pines will be a model for the neighborhood at Cedar Point. Quality signage and landscaping will be used to create an environment that will improve with age just as The Oaks on Pleasant and The Pines have improved. The development will leave a lasting and positive impression as the gateway to east Richfield. #6 This Development Team desires to purchase all 29 homes from the current residents. As to the timing for acquiring the 29 homes in the project area,the Development Team believes that this Spring, 2008, is the best time to purchase a home due to current market conditions-both for the current owners of the 29 homes and for the Development Team to get started quickly on the development. As soon as the Development Team receives a commitment and contracts from the City of Richfield, it intends to begin buying the homes under non-contingent purchases. Depending on market forces, we would hope to complete this process by the early summer of 2008 and commence construction immediately thereafter. #7 It is the intent of this Development Team to retain ownership and management of the three aspects of the property. Lang Nelson's primary business focus is management of assisted living facilities and this assisted living will be included in its portfolio. The independent living (a portion of which will be Section 42 low and moderate income housing) and the townhomes will be managed by Lang Nelson or Metes & Bounds Management Company, which, as noted above, both have a strong presence in the Richfield housing market. Each company is ideally suited to its respective management in that long term management is their core business. Further, they are active in Richfield now and will continue to be active through the future management of the properties. #8 Based upon the development timing, acquisition costs, construction and financing we have not finalized any request from the City at this time. Needless to say we would hope for and expect the city to assist us in any reasonable and economic manner which would meet the city's authority and economic goals towards the successful development of Cedar Pointe Phase II. #9- The Development Team consists of several individuals with a long history and commitment to the City of Richfield. City of Richfield 2/1/2008 Page 4 Steve Kirchner, who was raised in Richfield and was the former owner of Richfield Bank & Trust Co., was the driving force behind the development of the entire node at 66th and Lyndale, including construction of Woodlake Medical Center, Woodlake Centre (ramp, bank remodeling and leasing of the commercial areas, McDonalds, The Pines Assisted Living and The Oaks on Pleasant apartments). In each of these he teamed with Jan Susee to develop the entire area. Jan Susee, in addition to his work with Steve Kirchner as above, has been an attorney practicing in Richfield ~ince 1973, and business owner of Metes & Bounds Management Company, an apartment management company based in Richfield which manages over 4,000 rental units in the Upper Midwest. Three apartment properties which are presently managed in Richfield include Greenbrier Terrace, Eastfield, and The Oaks on Pleasant. Another apartment property, South Court, was located at what is now the Best Buy site. Mr. Susee took over development responsibilities of City Bella on Lyndale after Mike Conlan's death and presently is an owner of the commercial portion of that development. He has also dev~loped the condominium project known as City Bella Villas, which his company continue~ to manage. Francis Lang of Lang Nelson is a part owner (with Steve Kirchner and Jan Susee) of The Pines Assisted Living as well as President of the Managing Agent. Lang Nelson is known for its exemplary management of high-end assisted living properties. The Pines enjoys a reputation for quality, is very popular and continues to be very highly regarded by residents of Richfield. Lang Nelson also has developed and manages numerous other senior transition communities in the Twin Cities area, many of which will be used as models for the Cedar Point site. Gregory Bronk of LaNel Financial, has been involved with the development and management of The Pines and many other assisted living communities, senior housing and market rate properties. His specialty is developing the financial structure, both debt and equity. Together with the other Development Team members, he will help to arrange the financial package for the development. In addition to the above members, the Development Team intends to work with established architects, landscape architects, and contractors familiar to the City of Richfield. Subject to cost consideration and negotiations, the Development Team intends to use ESG, LHB and Frana Companies as partners in the development. Please refer to the attachment for ESG and the awards for excellence in Urban Design and Housing. City of Richfield 2/1/2008 Page 5 These individuals and businesses enjoy a long history in Richfield. They are committed to the businesses and residents of the City, with strong reputations for quality workmanship, high performance standards; and responsible ownership and maintenance of their properties. . #10-See LaNel Housing attached #11- Two of the members of this Development Team (Steve Kirchner and Jan Susee) are "Richfield People". They have long, proven, successful histories of business dealings and they share a commitment to the City of Richfield. Together with Francis Lang in The Pines, they have introduced a top-notch assisted living choice to the City's residents and they are ready to put their significant efforts to yet another outstanding concept for the City. Together the three have had a long-term (approximately 90 years of service in total) relationship with the City. In summary, this Development Team has been here for years, they are here now and they will remain in Richfield to witness the fruits of their efforts. 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(.4 VI. 1 August 1, 2007 For Immediate Release Contact: Jennifer Gilhoi, Communications Director Phone: 612-338-6763 Email: gilhoi@aia-mn,org Photo at right: Excelsior & Grand by Alec Johnson AlA Minnesota Announces Elness Swenson Graham Architects, Inc. as Recipients of the 2007 Firm Award Minneapolis, Minnesota -The American Institute of Architects Minnesota is pleased to recognize Elness Swenson Graham Architects, Inc. (ESG Architects) with its prestigious Firm Award for 2007. Given biennially, the award is presented to firms that have contributed to the advancement of the profession in the areas of technology, service and design. ESG Architects, established in 1973, was selected for this award based on the tremendous impact they have had on the Twin Cities and the region in the area of urban design, residential and mixed-use housing. The firm is unparalleled in this area and has made a significant contribution to the commuAities in which they have worked. They have shown design leadership in their considerable work with developers, clearly ascending in the past ten years to their current stature. "The founders of ESG have endeavored to create a supportive culture of design collaboration, design excellence, and opportunity for many staff to excel. Weare especially committed to revitalizing cities and creating more livable communities. We are also actively involved in saving landmark buildings on the National Register by converting them to economically sustainable new uses," commented firm principal, Mark G. Swenson, AlA. The Firm Award Selection Committee noted that ESG's broad range of work in several building sectors is neatly and skillfully woven into the fabric of neighborhoods, achieving environmentally sound and pedestrian-friendly buildings and public spaces. Their presence is multifaceted, including urban design and mixed-use exemplified in the adaptive reuse of the Sears complex and Excelsior & Grand, and the ground up community created in St. Louis Park; as well as dormitories, lofts and senior housing. The AlA Minnesota Firm Award recognizes these contributions and the individuals that made them possible. Individuals in the firm have given time, energy and expertise to the community through teaching, lecturing and volunteering. Swenson, as the 2006 AlA Minnesota President, served his one- year term focused on architects as leaders in sustainable design, defining the architect of the future and encouraging firms to strongly support interns on their path to become registered architects. Most recently firm principal David L. Graham, AlA, has been prominently involved in community design charrettes in Minneapolis geared to reweave the urban fabric. He.confirmed the importance of commitment to community and service stating, "The firm's design practice is based on key urban and architectural design principles which have evolved from our experience in practice, research, teaching and lecturing. These principles explore the relationship between architecture, urban design and city AlA Minnesota 275 Market Street, Suite 54 Minneapolis, Minnesota 55405 612-338-6763 www.aia-mn.org building theory, with application through urban residential and mixed-use architecture." Graham also. conveyed a founding principal of their practice and role in city development adding, "We believe that the AlA and architecture as a practice should expand its leadership role within real estate development to enhance the form and fabric of our cities." ESG Architects will be honored at the AlA Minnesota Awards Celebration on November 30,2007, at International Market Square, Minnesota, Minneapolis. The American Institute of Architects Minnesota, founded in 1892, is dedicated to strengthening our communities, improving our built environment, and providing exceptional design. For more information on the organization and Minnesota architectural firms, reference our web site at www.aia-mn.org and pick up a copy of Architecture Minnesota, the award-winning architectural magazine of the Midwest. AlA Minnesota 275 Market Street, Suite 54 Minneapolis, Minnesota 55405 612-338-6763 www.aia-mn.org laNel Financial/lang-Nelson Associates Senior Housing Summary All of the LaNel communities are located within the greater Minneapolis/St. Paul area and represent well constructed, fully developed properties in strategic, established neighborhoods. Lang Nelson Associates is one of the largest and most experienced providers of seniors housing in the Twin Cities area. Currently, LaNel owns and operates market rate apartments, senior apartments and senior living communities within the Metropolitan Minneapolis marketplace representing almost 3,000 units. LaNel has been at the forefront of Minnesota seniors housing management since 1990 and has over 40 years of multifamily property management experience. Lang-Nelson is regarded as a leader in Minneapolis residential property management and is well versed in acquisition, development and disposition. Lang-Nelson has implemented its mission statement at each of its communities: .....to go above and beyond our customer's expectations. We are dedicated to providing quality living environments that enhance our residents' lives... II MADAC'S ,". '. Our residents live with the Most Awarded Provider of Rental Housing in Minnesota! With 40 years of experience in providing the finest in apartment home living, Lang Nelson takes its tradition of excellence to the MADACS awards competition every year. The results are impressive - most awarded company in the state of Minnesota since the beginning of the competition in 1995! This year's MADACS Awards competition included 267 nominations. Judging of the nominations spanned a two-month period. MADACS judgments entail thorough evaluations with objective criteria and measurements - reading written answers to specific questions, examining data, interviewing personnel, and making on-site visits. Lang Nelson offers a wide variety of choices in award-winning housing. Options vary through an array of locations, amenities, conveniences and services. At a Lang Nelson Community you will find exciting and comfortable lifestyles designed to cater to your needs and interests. They all bring out the best-combining small town neighborhood spirit, an umbrella of services and, attention to detail. Lang Nelson's exceptional choices for housing lifestyles are complimented by an outstanding list of amenities and services. Together, they comprise our Umbrella of Services. . Scheduled Transportation . Planned Social Activities and Events . Fitness Classes and Water Aerobics . Free Party Planning . Free Copy, Fax, and Notary Services . Banking . Registered Staff Dietitian . 24-Hour Home Health Service . Computer Labs . Chapel . Free Grocery Shopping Service . 24-Hour Maintenance . Movie Theatre . Free Wellness Clinics . Fireside Parlor . Billiards . Laundry Facilities . Travel Services . Library . Swimming Pools . Beauty/Barber Salon . Fine Dining (Ida Marie Restaurants) . Ice Cream Parlor . Weekly Housekeeping . Convenience Store . Continuum of Care . Emergency On-Call Pendants . Various Social Activities . Water Exercise . Yoga . Seated Pilates . TaiChi . Line Dancing . "500" . Bingo . Bridge . Blackjack . Pokeno . Board Games . Prayer Meeting . Bible Study . Devotion . Non-denominational Church Service . Coffee, Cookies and Conversation . Art and Crafts . Men's Social Hours . Lady's Tea Party . Drop in Lunch . Entertainment . Blood Pressure Clinic . Resident Council . Birthday Party . Wine and Cheese Party . Ice Cream in the Community Room . Sing-a-Iing . Bell Choir . Pet Therapy . Nutrition talk with Nutritionist Meals at our Lang-Nelson communities are special. Come for the Food...Stay for the Friendship. Taste the nutritious and delicious food. Feel the warmth of gracious hospitality. That's the Ida Marie experience. Lang-Nelson's Ida Marie Restaurants bring you the wonderful tradition of tasty food and cheerful cordiality created by Ida and Marie. We're proud to continue their legacy. Whether it's warm banana bread to start off your morning...a bowl of homemade wild rice soup for lunch...fresh-baked ginger snap cookies at mid-day to keep you going...or a pot roast dinner followed by scrumptious strawberry shortcake for dessert...the Ida Marie Restaurant can satisfy your wishes throughout the day! You'll find an atmosphere where friendship and congeniality flourish! Our talented chef teams prepare nutritious, home-cooked meals from scratch. A Registered and Licensed Dietitian oversees menu preparation to assure healthy food and to meet any special dietary requirements our residents may have. Additionally, the on-staff Dietitian provides individual consultation on special needs as well as nutritional education for all community residents. And when you dine at the Ida Marie, you'll definitely notice the friendly smiles on the faces of the servers! In addition to great food, cordial surroundings and expert nutritional services, the Ida Marie Restaurants offer catering services and planning for special events. Large or small, your birthday, anniversary or other party will be a huge success with help from the Ida Marie staff. The Ida Marie Restaurants, which are located in our Assisted Living communities, can cater special events on the premises and, in select restaurants, at other locations. Where Body and Soul are nourished The legacy created by Ida and Marie focuses on good food and friendship. We are enhancing this legacy in our Ida Marie Restaurants, and our goal is to provide our guests with delicious food that is nutritious, too. Our chefs understand the importance people place on healthy food as well as the beneficial effects a healthy diet has on life and longevity. Serving tasty food that is nutritious is the best way we can show our guests that we really care about them The Ida and Marie tradition of friendship and pleasant surroundings is equally important to us. At Ida Marie we are fostering an atmosphere of friendship and cordiality not only for the immediate dining experience, but also because of the well-recognized value of social interaction among seniors. Simply stated, people who are socially active live longer! These goals shape everything we do at the Ida Marie Restaurant: good food, good friendship, good feeling...where body and soul are nourished. It's all at Ida Marie. Just for you! Care Suite Our Care suites consists of private bed rooms or private suites to accommodate seniors who require 24- hour supportive services and who choose to no longer live in their private apartment home. Residents receive individualized attention and service delivered by the onsite home care staff dedicated to the needs of the designated area. Residents share the home setting such as a living room, parlor, library, kitchen, and dining room. This environment promotes socialization and enhances quality of life while maintaining their dignity as well as continuity of care. Services include: -24-hour program care providers -All-Inclusive program - assistance with activities of daily living (bathing, dressing, oral hygiene) -Housekeeping services -Personal laundry service -Medication management -Nutritious, well-balanced meals planned by our dietician -Mealtime Assistance -Ongoing monitoring and management of health care needs by on-site home care staff -Specially designed activities and social programs -Redirection as needed Live With Us, Ride Our Bus Ever get tired of driving? Maybe even decided not to drive anymore? Getting around these days can be difficult without a car, but not at a Lang-Nelson community? We offer professional transportation services to all Lang-Nelson residents. That's right. Door-to-door transportation to shopping, church, medical appointments, social events and any other special destinations you wish to travel to. Expertly coordinated and staffed with professional drivers, Lang-Nelson Senior Transportation enables residents to get around easily and on time. Our service includes personalized concierge van service as well as specially and regularly scheduled bus service. In addition to special events, our fleet of busses makes regular trips to Target, Cub, Wal-Mart, Churches and afternoon drives to scenic areas. Those are just a few. Enjoying a complementary ride to your destination is yet another outstanding advantage under Lang-Nelson's Umbrella of Services. We put real meaning into "Leave the driving to us." ~ c ....... ~ .~ ..... l... ;::; a -"" ~ ;:..~ l... a s:: ~_~ ~ 9 ,- ~ ~ S ~~ ~ C ~ (,,) .... :;:: '" ~ ..... !:: ... c w.; ::: .~ ~ ~ ~ ti ,~ ~::::: ~ ~ ~ ~~ ~ :;:: -:::;; :;:: ~ ~ -~ ~ \:) 0- -... s::: (,,)';:.. :,. !::: ',...,. 0 Q C ~ ;.;" '- . ~ ~ ~ -:: ~ c ;:: E ..... ~ ~ ~ (,,) !::: ,... '-' ~ .... ~ -- ~ ~ '" '" 5 g '" .c ...., " ..<: ~ ... :: 00 E 1::00 '" if, ~ '" o.r-... '" '!) 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E ..:.l 0 ~tj~J ~ 4f. ~ g ~ <<ev;:g=B f'JE;Z~(~ ~ *:;~ gJ t ~ Ji ::, ~ .:: 2 g~ s == 0". < '_ 2 b1J = 'S: :s "0 ~ .. ~ eo: U o C'l 'E~ ~ ~ Z; ~ e: 11 t: ,~:E a .~ C ~'C'. ~\ = ..,: .~ ~,E 5: E W >.C( E e g ~g ~ ~..Vj :2 ~. e- "52~C6~ ~",C!I~" ,il ~ ,J ..r::: ;~"Xg~ ~tf)V~rnU '=~~3B-5 "ii] :--S"=';:,"d tjcrJs;335l! ~ o~ g ;:!I : -g ~ ,~ ~ ~ ~ ~ E ~ ~"-: ;... t'J ~ ~ .~ ] ~:~ 1: ~ ;/l ':; ;=!J U E fr ~ C :~ ; 1;:: '0 ~ V:l ,...J oc; !~ t t': +00> 'TJ :.9 ~ ~ .g :E = .... 0 .:. C ;> .;:~~~~~~ ::1~~~-g~~ ~~"t:j<~_;a) ~ ~ e .;ci.~ ~ ~o CREEKSIDE GABLES Creekside Gables is a fabulous Active Adult Community in the heart of Brooklyn park's new Village Creek district. Village Creek is a terrific revitalization area offering everything that makes a neighborhood desirable<shops, parks, and nature walks just steps from your door! Every apartment home has a screened in porch and full access to the newly added Clubhouse, which is prefect for your own private get together. You'll like our modern fitness center, too. Each home also has plenty of closet space, with the two bedroom apartment homes having a bath and a half. All homes have full access to Lang Nelson's Umbrella of Services. Spacious Apartment Homes If you have ever thought about maintenance-free living with plenty of space, Creekside Gables is the answer. Our two bedroom or one-bedroom and den floor plans give you all the space you desire. With large, walk-in closets, second bath in the master suite, and huge living room, these apartment homes are perfect for people who like convenience and space! EARLE BROWN TERRACE Seniors wishing to maintain an independent lifestyle with the security of supportive services now have an outstanding choice. Earle Brown Terrace is here for seniors who want to live in a lively community AND enjoy the peace of mind that professional support offers. We call it Catered Living for the totally independent or the perfect alternative to assisted living! Catered Living at Earle Brown Terrace enables seniors to support their independence with only the services they need and want. They can choose from a wide variety of support options including home health services, thus avoiding the expensive cost of all-day care associated with assisted living. Equally important, Catered Living enables a "continuum of care" that minimizes the chance that you will ever have to move again. We also cater to Elderly Waiver and CADI program. Catered Living at Earle Brown Terrace also provides many amenities and services that are included in the rent but are usually not even available in senior independent living or cost extra in senior assisted living. Look over our long list of amenities. You111 find Earle Brown Terrace a wise choice that gives you excellent value! MERIDIAN MANOR Meridian Manor represents the finest in senior and assisted living by blending the comfort and independence of apartment home living with an ideal selection of services to meet your changing needs. Live in the gracious lakeside community of Wayzata, Minnesota, and be assured that your needs will be met today and in the future. Since 1995 Meridian Manor has been home to many seniors seeking the benefits of customized services such as the onsite Ida Marie Restaurant, Home Care Agency with 24-hour professional nursing staff, and comprehensive social an recreational activity program with scheduled transportation and outings. Whether it is the full-menu of concierge services or the above and beyond service standards, residents will experience all that makes Meridian Manor unique. Shape your future by choosing Meridian Manor, a community designed to bring the best in lifestyles and services today and tomorrow with warm hospitality and quiet elegance. The minute you walk through the front door of Meridian Manor you'll see senior and assisted living at its finest. You'll enter warm, gracious surroundings designed to make you feel at home and, most importantly, like a part of a community. We designed Meridian Manor with features to make your living experience everything you'd wish. Amenities -Apartment Homes (ranging from studios and one bedrooms to two bedrooms and custom homes). -Beauty/Barber Salon -Central Lobbies -Chapel THE ARBORS Gracious Rental Living in White Bear Lake Imagine a Carefree Lifestyle-You1ve dreamed about leaving your cares behind. Coming and going whenever you wish. Indulging in your favorite hobbies and pastimes. Making friends in a vibrant community. You want exceptional features that make your home convenient and comfortable. You1re looking for carefree living in an elegant setting. Welcome to The Arbors of White Bear...gracious apartment home living in historic White Bear Lake. At The Arbors of White Bear you111 enjoy out-in-the-country character with in-city convenience. We1re located close to a myriad of recreational opportunities as well as a growing and restored downtown area that features a mix of charming, old-fashioned shops and up-to-date professional services. Apartment Homes and Town-Style Villas Distinctive APARTMENT HOMES at The Arbors of White Bear feature beautiful natural millwork, fully equipped kitchens, carpeting and window treatments, and a host of amenities. Several unique floor plans are available which include bay windows, balconies, and screen porches. The Arbors at White Bear TOWN-STYLE VILLAS come in spacious one or two bedroom layouts with a variety of distinctive characteristics. All homes feature fireplaces, bay windows, balconies/patios, and center island kitchens. THE HEATHERS CAMPUS The Heathers spacious campus is located next to Bassett Creek Park in the heart of Crystal, MN. Your "back yard" is an expansive nature preserve with inviting walking paths and great views! Close to shopping, entertainment and freeway access, the campus is home to the Heathers Estates, Independent Living and the Heathers Manor, Assisted living. The Heathers Estates is an Independent Living community that offers an array of on-site services and amenities. One and two bedroom apartment homes surround a beautiful courtyard with picnic area, gas grills, and flower garden. Each apartment home features central heat and air as well as an oversized private balcony or screened-in porch. Additionally, each home has plenty of closet space, a tile bath and updated appliances. The built-in advantages of the Heathers Estates deliver a fun, comfortable and secure lifestyle. H~3th~I'S :M3001' The Heathers Manor is an Assisted Living community that combines independent living with supportive services. Persons who need assistance with daily activities will find a warm community in which their health, dignity and peace of mind are our highest priorities. People who need assistance as they grow older still wish to live according to their own high standards. They value their independence and relish their privacy as well as insist upon retaining their individuality. Respect for these values forms the core of our philosophy. Residents at the Heathers Manor enjoy the comforts and privacy of a well-designed apartment home while benefiting from personalized services such as 24-hour professional health care, housekeeping, transportation and a comprehensive social and recreational program. In addition, the Heathers Manor features the Ida Marie Restaurant, where hospitality is outstanding and the food is superb. Along with the Ida Marie is our own nutritionist, who oversees menu and dietary preparations. The Heathers Manor also offers CareSuite. a specialized program for persons who require 24 hour supervision or medical care. Personalized attention from trained staff focuses on the well being of residents while fostering independence, socialization and family involvement. THE PINES The Pines provides a safe, caring and supportive environment with an outstanding restaurant and access to on-site health care services. The Pines is a beautiful site nestled into the heart of Richfield. Around the corner from picturesque Wood Lake, The Pines is situated in a residential neighborhood less than a block from the hub of activity. This cozy retreat is the perfect home for those who are ready to let go of worries and take hold of their best versions of life. The Pines provides a caring and supportive environment for seniors with an outstanding restaurant, managers on site 7 days-a-week, and 24-hour home care staffing on site. The Pines is designed to support residents and their families. Staff is attuned to the changing needs and interests of residents and makes a point to share that information with families on a daily basis if needed or at regularly scheduled Family Service Conferences. The Pines staff strives to help each resident achieve maximum independence, yet provide assistance for a confident lifestyle. The Ida Marie Restaurant is on site and a special place for wonderful food as well as a venue of vibrant social activity. Family events prepared by the restaurant offer a beautiful option for easy entertaining in the residents' new home at The Pines. Life enrichment programs and activities are designed to accommodate the varied interests and abilities of those who live at The Pines as well as providing enjoyable options for families. By having an independent Home Health Care Agency on site, The Pines is able to provide professional caregivers on site 24-hours a day. Individual plans are designed to accommodate the specific needs of each resident to support health and dignity. Not all people who live at the Pines need health care services. The Rivers The Rivers Independent Living The Rivers Independent Living is a fun and lively community that offers gracious apartment home living for active seniors. Choose from several floor plans with great kitchens, individually controlled heat and air and a host of conveniences. You'll find an apartment home that is perfect for the lifestyle you've wished for! In addition, you'll enjoy a wide variety of social events as well as free transportation to many destinations including activities and shopping. At The Rivers Estates, you can leave all of your cares and worries behind. The Rivers Assisted Living The Rivers Assisted Living offers Assisted Living to persons who need assistance with daily activities. Our assisted living approach provides the ideal solution for seniors who need some help with personal needs while focusing on wellness to keep them as independent as possible and by providing a tailored assistance plan. Residents in our assisted living apartments are able to live by themselves with services provided by trained health care providers such as escorts to meals and activities, bathing, dressing, laundry, housekeeping, and assistance with medications. Assisted living is not an alternative to a nursing home, but an intermediate level of long-term care appropriate for many seniors. Upon admission to Assisted Living the resident, family and health care providers determine a service plan. This personalized service plan is then updated regularly to assure that the resident receives the appropriate care as his or her condition changes. Residents enjoy all the advantages and benefits of apartment home living while receiving the support they need to enjoy an enriched lifestyle. The Rivers Assisted Living also offers CareSuite, a specialized program for persons who require 24-hour supervision or medical care. Personalized attention from trained staff focuses on the well-being of residents while fostering independence, socialization and family involvement. WATERFORD CAMPUS Waterford is the perfect place to choose a lifestyle that meets your needs and wishes. The Waterford campus brings you a park like setting next to a wildlife refuge and three housing options filled with wonderful lifestyle choices for a wide range of needs and circumstances: The Waterford Estates is a Senior Independent Living community for persons 55+ who want the convenience and value of apartment home living in a beautiful and safe setting. The Waterford Manor is an Assisted Living community that offers independence and security for persons who need assistance with daily activities. The Waterford Townhomes offer excellent choices for maintenance free living for seniors and active adults. The Waterford communities are nestled on a campus with superb landscaping and wonderful views. Just steps from your door are meandering, flowered walking paths. Each housing option is magnificently designed to reflect the warmth and personality of those who make it their home '\ J;t ~~S~~WT~P February 6, 2008 MS. KAREN BARTON COMMUNITY DEVELOPMENT MANAGER CITY OF RICHFIELD 6700 Portland Avenue South Richfield, MN 55423 RE: CEDAR POINT PHASE II - HOUSING REDEVELOPMENT Dear Ms. Barton: We are writing to respond to your letter of January 22, 2008 which requested additional information on the above mentioned project. Our response to your questions is attached. We are excited about our efforts with the City of Richfield to redevelop Cedar Point - Phase II. Our tentative developer designation by the City in 2007 resulted in positive funding responses from Hennepin County and Minnesota Housing"Finance Agency. We remain hopeful the City will review our qualifications and response favorably and continue to work with our firm. We also encourage, and will arrange for the City Council to tour any of our Twin Cities award-winning housing developments. Please call me if you have any questions or to formalize a tour. Sincerely, SHERMAN ASSOCIATES, INC. /L"i ~ George E. Sherman 233 Park Avenue South, Suite 20 I , Minneapolis, MN 55415 Tel: 612-332-3000 Fax: 612-332-8119 . www.sherman-associates.com t:5:t Sherman Associates is an Equal Opportunity Employer 2. BLENDING PUBLIC SPACES As urban infill experts, Sherman Associates works very hard to create successful urban environments. We work with only the best architecture firms to create long-term aesthetic and functional value for the surrounding community. These are core values to the company and are evidenced in all of our projects. Please see the enclosed photos of two representative recent projects: . Grand Market Place in Burnsville, MN . Brownstones of River Run in Minneapolis, MN Additional photos of projects are in the Developer Profile, attached. In these projects, you can see our dedication to: a) Pedestrian-scaled spaces and experiences Today's urban design requires careful attention to the streetscape and the way the pedestrian experiences the development. Our developments use modest setbacks so that the structures approach the street and sidewalk in a way that makes the passing pedestrian comfortable. We make heavy use of street parking and avoid vast parking expanses that separate the buildings from the pedestria ns. For the Cedar Point project, we will design walkways to the park, to the nearby retail amenities, and bikeways into the City. b) Prominent, attractive, and publicly accessible, privately developed exterior spaces. Attractive landscaping is critical to our design. We incorporate trees along the street as well as shrubs and flowers along the walking paths. We believe that modern developments need to be warm and inviting to residents and the community. That requires beautiful landscaping and enduring curb appeal. Airport noise is a critical concern at the Cedar Point project. Therefore we will invest in outstanding indoor community spaces to provide gathering areas that are peaceful and enjoyable. c) Incorporation of art into the design of the buildings and the site Both Grand Market Place and the Brownstones at River Run incorporate public art into their designs. Grand Market Place uses sculpture to create several points of interest in the exterior landscape. At River Run, we worked closely with the community to solicit proposals from prominent artists. In the lower left corner of the photo, you see large granite pieces which are the first parts of an art fence. The art fence will include sculpted iron rails when completed. At Midtown Exchange in the former Sears building in Minneapolis, we commissioned approximately $2 million of indoor art installations specifically for the building. We feel this greatly enhances the indoor experience at this exciting mixed use project and is a critical ingredient in its interior design. d) Integration of pedestrian and bicycle movement into the site As part of our site planning and landscape design, we carefully analyze the ways that people can commute to and through the development. We have found that our most successful developments are designed to interconnect with the surrounding amenities. The Cedar Point project offers a great opportunity to emphasize connections to nearby retail amenities through bicycle and pedestrian connectivity. e) Long-term value in the buildings and landscapes Sherman Associates builds and operates its rental projects for the long term. Therefore we become vested members in the community and as such, have self-interest in lasting design with a positive aesthetic. We long ago learned that when we invest in the property's curb appeal and ongoing maintenance, we have enthusiastic tenants and achieve long-term value. We use high quality, durable materials for our construction, emphasizing stone, brick, and concrete. 3. GREEN FEATURES Sherman Associates makes great efforts to incorporate "green" and sustainable practices in its developments. We start with the building envelope and mechanical systems, making sure that we have an efficient design and high-quality heating and cooling systems. This lowers our ongoing operating costs and increases comfort for our residents. Next, we design to manage stormwater runoff on site. We use a combination of engineering systems and landscaping to reduce the quantity and improve the quality of runoff. Many of our developments handle all of their stormwater on site and do not divert to the storm sewer except in major rain events. Lastly we look to materials that are sustainably sourced and produced. We have LEED Accredited Professionals on staff and work with architects with a strong LEED background. This allows us to incorporate LEED practices into our developments as appropriate. 4. HOUSING TYPE The choice of housing type is influenced by the site location, City of Richfield's demographics and general development economics. The most influential site location factors are: · . Airport (airport noise) · Adjoining Park · Adjoining Retail The demographic factors influenced in the project include: · The large senior population in the City of Richfield and South Minneapolis · The underserved work force housing of the airport and Mall of America Airport Noise Impact We have chosen housing types that can incorporate interior space to mitigate the airport noise. The buildings will all have indoor community rooms and meeting rooms to facilitate social gatherings. The airport commission does not look favorably upon housing that requires separate entrances such as townhomes. Therefore our product type fits well given the proximity. Lastly the design and materials for the roof and windows can mitigate noise. Adioininq Park and Retail The adjoining park and retail also provide amenities for families and seniors. The success of the Target store shows that the community recognizes the value of proximity to retail. The park will be a great amenity for families. Airport I Mall of America The tremendous employment base and proximity of the airport and Mall of America also supports workforce housing. Demoqraphics Richfield and South Minneapolis have a substantial senior population. Market studies continue to show a need for additional housing to serve this market. The employment and demographic base of the airport and Mall of America and now the adjoining Target store, creates a need for work force housing. The proximity to these work places also eliminates or reduces transportation costs for families. Economics The type of housing is also supported by the economics of the marketplace. · Senior assisted units can support higher land costs and construction costs. This is predominately because of the increased services provided at the facilities which seniors are willing to pay for. · Senior rental projects have financial tools to support the higher development costs. In addition, the senior rentals have not seen the fall off experienced in the senior For Sale or general For Sale markets. · Work force housing continues to have the strong financial support of the State of Minnesota and Hennepin County. The State MHFA continues to target substantial dollars to work force housing. · The Met Council and Hennepin County both support a mix of housing types. By incorporating both work force housing and senior housing, the projects will more likely attract and win financial support from these agencies. Measurement of Success The careful choice of housing type, availability of financing, strong demographics and "great design and property management" are the best ingredients for successful housing development. Sherman Associates, Inc. has the experience and staff to bring all these components to the table. 5. SPECIAL FEATURES Sherman Associates prides itself on award-winning housing. The housing development focuses around the design and special features incorporated in both the physical facility and in management. Senior Assisted Features: Nursing Care Food and meal service (commercial kitchen) Health care Social meetings and activities Physical activity rooms and equipment Library Computer room Technology Large community rooms and lobbies Guest rooms Senior Market Rate Features: Community dining I meal, service Community Room Social meetings and activities center Large 1 and 2 bedroom apartments with private dining room Exercise room Library Work Force Housing Features: Large 2 and 3 bedroom units Laundry in units Community rooms - indoor play area for teens Computer learning center General Features: Durable, long lasting construction materials Energy efficient appliances, furnaces, fixtures Green design and building Quality, award winning design Exterior and interior artwork 6. PROCESS FOR PROPERTY ACQUISITION Sherman Associates has extensiv~ experience in the acquisition of urban redevelopment parcels. These acquisitions are not easy. We specifically have completed the following land assembly projects: Falcon Heights Town Square 3 commercial parcels 15 commercial tenant relocations 2 new build-to-suit relocations (restaurants) Burnsville Heart of the City 5 commercial parcels 5 commercial tenant relocations Village of Little Can~da 4 commercial residential parcels 7 commercial relocations City Homes on Park 12 residential acquisition! relocations Gray's lake and Gray's landing - Des Moines, Iowa 10 commercial parcels acquired (150 acres) 5 commercial tenant relocations Process and Timinq Sherman Associates will assign a staff person and a relocation benefit firm to meet with individual homeowners. Due to the housing market, we believe most homeowners will be receptive to selling their homes. As part of the process we will explain the project and timing. We would obtain appraisals on the homes from third party appraisers and encourage the homeowners to obtain appraisals from realtors or third party appraisers as well. This is often adequate to reach a negotiation price. If the homeowner's appraisal is significantly different, we will offer to pay for a third party neutral appraisal. Our experience has shown that this is often adequate to conclude negotiations. The timing ofthe acquisitions should be completed in six months. Fundinq We assume that some $7 million dollars in funds will be needed to close on the housing. Additional funds will be needed for demolition and infrastructure. It is important to have the funds available at the anticipated closing dates. While other funding sources may be available at the end of 2008 - start of 2009, the City and developer will have to facilitate the funding of the acquisitions. 7. OWNERSHIP AND MANAGEMENT Sherman Associates owns and manages our properties for the long-term. We have continually owned properties for 30 years and manage everything we own. We anticipate that Sherman Associates will own and manage this property for the indefinite future (at least 20 years). 8. CITY OF RICHFIELD FUNDING It will be necessary to have funding available to proceed with the home acquisition closings. The land assembly proforma anticipates the land acquisition costs will be about $7,000,000 (29 x $235,000). It is proposed that the City have its $4,000,000 in funds- available for acquisition of the parcels and the developer will furnish the anticipated $3,000,000 in developer land contributions. The funds may be disbursed pro-rata and by parcels being acquired. 9. EXPERIENCE Sherman Associates works as a team on development projects. We have in-house legal, paralegal, financial and construction staff members. The overall team leader will be George E. Sherman. Please review the attached Developer Profile for staff bios on additional team members. 10. LIST OF SIMILAR PROJECTS Sherman Associates has successfully completed an extensive list of urban redevelopment projects. Please see attached Developer Profile: Special Projects to Review: Senior - Falcon Heights Town Square (Falcon Heights, MN) - Lyons Court (St. Paul, MN) . - The Lodge at Little Canada (Little Canada, MN) - The Shores (Shoreview, MN) - Blaine Town Square (Blaine, MN) Mixed Use - Grande Market Square (Burnsville, MN) - Wacouta Commons (St. Paul, MN) - Falcon Heights Town Square (Falcon Heights, MN) - Midtown Exchange (Minneapolis, MN) Work Force - Central Avenue Lofts (Minneapolis, MN) - Midtown Exchange (Minneapolis, MN) - Guardian Angels (Hastings, MN) 11. ADDITIONAL INFORMATION We have attached our company's resume ("Developer Profile") which includes a detailed list of completed projects, selected project profiles, awards, staff bios, and references. We feel it is particularly helpful to call our references and colleagues at other cities. We accomplish what we commit to and deliver long-term quality housing. CEDAR POINT - PHASE I DEVELOPMENT PROFORMA LAND ASSEMBLY USE OF FUNDS Development Costs Site Acquisition Acquisition of homes 29 @ $235,000 Demolition 29 @ $40,000 Legal, Survey, Title, Environmental 29 @ $15,000 Contingency 29@ $10,000 TOTAL ACQUISITION COST $8,700,000 Infrastructure Additional street improvements Sidewalk / pedestrian connection Lighting, artwork $1.000,000 TOTAL USE OF FUNDS SOURCE OF FUNDS . Developer Land Contribution Senior assisted - 120 units x $15, OOO/unit Senior rental - 60 units x $5,OOO/unit Work force - 60 units x $15,000/unit $1,800,000 300,000 900.000 TOTAL DEVELOPER LAND CONTRIBUTION . TIF (see Ehler calculations) . City Acquisition - Right-of-way 15 homes @ $300,000 $4,500,000 ( 200,000) . GAP FUNDS Met Council Hennepin County DOT 750,000 500.000 TOTAL SOURCE OF FUNDS $9,700.000 $3,000,000 $1,150,000 4,300,000 $1.250.000 $9.700.000 CEDAR POINT - PHASE II DEVELOPMENT PROFORMA SENIOR HOUSING - ASSISTED - 120 UNITS USE OF FUNDS Land Construction - $125,000/unit x 120 Soft costs -15% TOTAL USE OF FUNDS $1,800,000 15,000,000 2.520.000 $19.320.000 SOURCE OF FUNDS First Mortgage - 120 units x $125,000 Tax credit I equity TOTAL SOURCE OF FUNDS $15,000,000 4.320.000 $19.320.000 CEDAR POINT - PHASE II .c DEVELOPMENT PROFORMA SENIOR HOUSING - RENTAL - 60 UNITS USE OF FUNDS Land Construction - $135,000/unit Soft costs - 15% $300,000 8,100,000 1,350,000 $9.750.000 TOTAL USE OF FUNDS SOURCE OF FUNDS First Mortgage - 4 % bonds Tax credit - 4% bonds Hennepin County Additional developer equity $5,100,000 2,350,000 500,000 1,800,000 $9.750.000 TOTAL SOURCE OF FUNDS CEDAR POINT - PHASE II DEVELOPMENT PROFORMA WORK FORCE - 60 UNITS USE OF FUNDS Land Construction - $145,000/unit x 60 Soft costs - 18% TOTAL USE OF FUNDS $900,000 8,700,000 1,800,000 $11.400.000 SOURCE OF FUNDS First Mortgage - $40,000 X 60 units Tax credit MHFA funds Hennepin County funds TOTAL SOURCE OF FUNDS $2,400,000 7,000,000 1,500,000 500,000 $11.400.000 ~ ~\1S~~WT~P CONTENTS DEVELOPER PROFILE SELECTED EXPERIENCE COMPLETED PROJECTS COMPANY BIOGRAPHIES PRESS REFERENCES CONTACT INFORMATION 2 3 10 13 18 29 30 ~ ~~E6~WT~P DEVELOPER PROFILE I November 2007 I DEVELOPER PROFILE Sherman Associates Sherman Associates, Inc. is an award-winning firm specializing in design, construction and financing of quality commercial and housing properties in California, Iowa, Minnesota, Missouri,and Wisconsin. Having earned a strong reputation for quality and follow-through, cities around the country have turned to Sherman Associates to pioneer redevelopment in their highest priority urban neighborhoods. In the process, Sherman Associates has become an industry leader in tax credit, affordable housing, and tax increment financing projects. Such developments have been successful for the participating cities, investors, residents, and businesses. Sherman Associates has developed approximately 600,000 square feet of commercial property and 6,000 multifamily, townhouse, and single-family homes. Selected Awards 2007 Affordable Housing Finance Magazine: Best Historic Rehabilitation: Midtown Exchange and The Chicago Lofts 2006 National Trust/HUD Secretary's Award for Excellence in Historic Preservation: Midtown Exchange and The Chicago Lofts 2006 Project of the Year: Adaptive Reuse by Multifamily Executive Magazine: Midtown Exchange and The Chicago Lofts 2005 Best in American Living by Professional Builder Magazine: Midtown Exchange and The Chicago Lofts 2005 Trillium Award by Builders Association of the Twin Cities: Midtown Exchange and The Chicago Lofts 2004 Best in Real Estate: Best Overall by Minneapolis / St. Paul Business Journal: Midtown Exchange and The Chicago Lofts 2003 Best in Real Estate by Minneapolis/St. Paul Business Journal: Falcon Heights Town Square 2002 Best in Real Estate by Minneapolis/St. Paul Business Journal: Burnsville Heart of the City 200 I Best in Real Estate by Minneapolis/St. Paul Business Journal: Wacouta Commons Jil ~~s~~WT<=1~ DEVELOPER PROFILE i No"mbe, 20071 2 SELECTED EXPERIENCE Sherman Associates' experience also includes construction of new retail, office, hotel, and office ware- house buildings. With over 25 years of development and construction experience, Sherman Associates is able to offer a diverse range of services in the commercial, single-family, and multifamily markets. They A. .. encompass: Development Services · Design-Build Services · Financial Analysis/Feasibility Federal, State and Local Housing Programs · Property Management Services · Construction · Site Analysis · Marketing Programs/Feasibility Equity and Debt Funding Sherman Associates has established an impressive and prolific track record. Its current pipeline consists of $200 million to $250 million a year in new developments, both commercial and residential. A few key projects are profiled here to illustrate the quality, complexity, and variety of the firm's experience: · Assembling financing from a variety of public and private sources · Creating strong public-private partnerships · Catalyzing neighborhood renaissance · Completing mixed-use and mixed-income projects · Ensuring thoughtful design and quality construction · Creating tangible community impact Selected Experience: · Midtown Exchange Apartments and The Chicago Lofts in Minneapolis, Minnesota · Greysolon Plaza, Sheraton Duluth Hotel and 311 Superior in Duluth, Minnesota · Syndicate Trust Building in St. Louis, Missouri · Vine Street Lofts and Water Street Brownstones in Des Moines, Iowa Wacouta Commons in Saint Paul, Minnesota Burnsville Heart of the City in Burnsville, Minnesota Jit ~~S~~WT~P DEVELOPER PROFILE I No"mb" 20071 3 SELECTED EXPERIENCE Midtown Exchange Apartments and The Chicago Lofts Minneapolis, MN In 2004, a collaboration between housing developer Sherman Associates and commercial developer Ryan Companies transformed the mammoth 1.2 million-square-foot historic Sears, Roebuck building in South Minneapolis into a mixed-use masterpiece featuring 88 loft and penthouse condo units, 219 rental units (including affordable units), the headquarters of Allina Health Systems and a global food market. The food market features small businesses started by local entrepreneurs. · Historic Rehabilitation and Mixed-Use Conversion Development · 41 market-rate apartments · 178 affordable apartments · 88 condominiums Project Value: $77 Million Financing: 4% L1H Tax Credits, Federal Historic Tax Credits, US Bank first mortgage (Housing Revenue Bonds), Minnesota Housing Finance Agency, City of Minneapolis, Hennepin County,Tax Increment, Metropolitan Council Role: Developer, General Partner, Property Manager Completed: December 2005 Selected Awards: · 2007 Affordable Housing Finance Magazine: Best Historic Rehabilitation 2006 National TrustlHUD Secretary's Award for Excellence In Historic Preservation · 2006 Project of the Year: Adaptive Reuse by Multifamily Executive Magazine · 2005 Best in American Living by Professional Builder Magazine 2005 Trillium Award b y Builders Association of the Twin Cities 2004 Best in Real Estate: Best Overall by Minneapolis I St. Paul Business Journal Ji! ~~s~~f~\~~ 4 SELECTED EXPERIENCE Greysolon Plaza, Sheraton Duluth Hotel and 311 Superior Duluth, Minnesota In 2006, Sherman Associates acquired and rehabilitated the historic Greysolon Plaza ~uilding in down- town Duluth, Minnesota. Built in 1910 as the Hotel Duluth, Greysolon Plaza's guests have included sev- eral former US Presidents. The building was converted to affordable senior housing in the 1990's. As part of the redevel?pment plan, Sherman Associates will preserve the affordable housing. Across the street, Sherman Associates is building a new building that will include a Sheraton hotel con- nected the historic ballroom of the Greysolon Plaza by skyway. Five floors of luxury condominiums are being constructed on top of the six-story hotel. The renovation and construction of the two buildings are part of a multi-project redevelopment of the historic "Old Downtown" area of Duluth. Historic acquisition and rehabilitation . 150 affordable senior apartments 155-room hotel 33 condominiums Project Value: $55 Million Financing: Federal Historic Tax Credits, 4% L1H Tax Credits, Minnesota Housing Finance Agency Soft Debt, Section 8, New Market Tax Credits, Tax Increment Financing . . Role: Developer, General Partner, Owner Completed: Summer 2007 ~ ~1tS~~WT~{l DEVElOPER PROfiLE i No,.mbe, 2007/ 5 - SELECTED EXPERIENCE Syndicate Trust Building St Louis, Missouri The Syndicate Trust Building is a prominent historic property located at 10th and Olive Streets in the heart of downtown St. Louis. Built in 1907, the 16-story building is comprised of approximately 450,000 square feet and originally was used for office and retail space. The building is listed in the National Register of Historic Places because of its notable architecture. Retail will return to the Syndicate Trust Building with top-rate national and local retailers located in the street level space. Loft condominiums, located on floors 9 through 16, and rental apartments located on floors 4 through 8 will provide residents with the convenience, features and amenities associated with urban living. · 20,000 square feet retail - Ground Floor · 28 affordable apartments - Floors 4-5 · 42 market-rate apartments - Floors 6-8 · 102 condominiums - Floors 9-17 · Project Value: $81 Million . Financing: City of St. Louis, 4% L1H Tax Credits, New Markets Tax Credits, Federal Historic Tax Credits, Missouri State Historic Tax Credits, Missouri State L1H Tax Credits, Brownfield Redevelopment Grant Role: Developer, General Partner Completed: In Progress If!l~ 11 i~~ It* .#, lPfi1!! ,If :d.~ ,.. ~~s~~n\~~ DEVELOPER PROFILE I N""emb" 20071 6 SELECTED EXPERIENCE Vine Street Lofts and Water Street Brownstones Des Moines, Iowa Completed in 2004, Vine Street Lofts and its sister condominium project, Water Street Brownstones, were the first significant new construction residential project in Des Moines in over 20 years. Located on a prime site overlooking the Des Moines River, the parcel had been a surface parking lot for decades. Selected through a competitive request for proposal project, Sherman Associates and partner Lander Urban Development introduced a model that was untried in Des Moines-high end home-owner- . ship opportunities, market-rate rental units and affordable rental units on the same block sharing the same underground parking system. The completed project is a resounding success and is considered the project thatjumpstarted the downtown housing market. . 65 market-rate apartments 44 affordable apartments 32 condominiums . . Project Value: $15 Million Financing: HUD, Fannie Mae, City of Des Moines, Polk County HousingTrust Fund, Neighborhood Finance Corporation, Tax Credit, Tax Abatement . Role: Developer, General Partner, Property Manager Completed: September 2004 Ji1 ~~S~~WT~{l . DEVELOPER PROFILE I No_b" 20071 7 SELECTED EXPERIENCE Waco uta Commons Saint Paul, Minnesota Multiphase redevelopment of blighted industrial space and surface parking lots including mixed-income rental and ownership housing along with ground floor rental space revitalizing the northeast quadrant of downtown Saint Paul. Development Components: · Retail Space I Approximately 14,000 sq ft · Dakota on the Park I 38 Units · Essex on the Park I 38 Units · Sibley Park Apartments I 113 Units · Sibley Court Apartments I 121 Units · 9th Street Lofts 149 Units · Printer's Row 148 Units Project Value: $96.2 million Role: Developer, General Partner, Property Manager Selected Awards: · 200 I Best in Real Estate by Minneapolis I St. Paul Business Journal JiI. ~I:\~~li~NH1 8 DEVELOPER PROFILE I November 2007 SELECTED -EXPERIENCE Burnsville Heart of the City Burnsville, Minnesota In 1999, the City of Burnsville adopted the 54-acre "Heart of the City" framework to create a mixed- use, pedestrian-friendly downtown area and developers implemented the vision over several years. Sherman Associates led the way with Grande Market Place and Grande Market Square, a comprehensive mixed-use and mixed-income town square center. · 113 affordable apartments · 45,000 square feet retail and commercial space · Project Value: $37 Million Financing: HUD, Minnesota Housing Finance Agency, City of Burnsville, Family Housing Fund, Dakota County, Tax Increment, 4% L1H Tax Credits Role: Developer, General Partner, Property Manager Completed: 2004 Selected Awards: · 2002 Best in Real Estate by Minneapolis I St. Paul Business Journal JiJ ~~S~~WT~f1 DEVElOPER PROFILE I N<Wemoo, 2007/ 9 COMPLETED PROJECTS Jl ~~s~~n\~p ... . . (3 c: ::I . . 0 (,) CD ... ." <<I . ... I/) . . . . . . . . . .. .. . .. .. .'. .,. . . .. . . u.. j:: (,) I- J: (,) t; ?ft.'#, eft. c1!. *' ?ft. '#- =0)""""""""",,,,",,,,",,,," ..J .......... '. . . .. . . . . . ... ?ftrJi!. ",,"(l) '#~ (l)",," cf!. "#. rJi!. . '#. ~ '#. . '#. '#," rft. . 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"5 co co co "C ,. "C C .~ C .~ .~ 0.., ~ coafco ~ 0 ~ 0 0 . _c_c> , 0.> 0.0. - ~ =co=ttlttl"5"5ttlttl ttlttl en~ttl:5i;;Ui;;U~cottl~~:5~Q) ~~.~a..~c~c~~a..a..c~~cc _ ft,~ -~~~-~ c~-cc ~~~~-~~~.......~~m~~...-m~.-.- Clen;>CDCJ')ClCD::iCD..:JClenCl)~ClCl~:i: - ca '(3 ~ CD E E o u ttl "C Ol ~ m~~tI) ~~~~co tI) e~~C~~~~ttl(,)U Ol ~ft,~ Zl'llI.aottl'U o-ffico~ .. C ~~ ~~E~~~cnu~E~!~ ~roj~ o......wE~~m~m~~5m= a~o~ m~~oen c~_~ u~~ eno-~- . "5'-uc.~~~~1ii ~m enuc eClI-~:=!~CO~~~i~tI) i~~~ ~cS~Omm~-~Cl>ttl~~>COc ottlOI-"Ceo~"Ccaa..~~coa..~i _ (,) ~ ~ ~ ;;; ....' Q) "C 0 '~. >. - 'u ~ ~ ~. ~..;:; c ~'.~ c OlC ~ a. ~ en a.. a. 1ii 'l::: "0 ~cC-Dtco~ttl~Q)-Q)t")~c$E ~. >.~~~co~=~~~a~t").~ttlttl(1l en, en ;> co ~ C> C> > C> I- Cl en I- N Cl U I U - c ~ E a. o ~ > ~ Cl c co E ~ ~ ~ en I ~ ~ "C C co ~ .. DEVELOPER PROFILE I No~mbe' 20071 12 COMPANY BIOGRAPHIES George Sherman I President and Principal Developer George Sherman has been involved in multi-family and single-family housing for 25 years. He has been the principal involved in the development of over 5,000 multi-family rental units and he has developed over 1,000 for sale housing units for a total development value in excess of $1 billion dollars. Presently, Mr. Sherman is the President and Principal Developer of Sherman Associates, Inc. Mr. Sherman is a grad- uate of the University of Minnesota where he earned a BS in Biochemistry in 1976 and completed MBA studies in 1977. Susan Fauver I General Counsel As General Counsel for Sherman Associates, Susan Fauver focuses on real estate development with an emphasis on affordable housing finance, including low -income housing tax credit transactions. Ms. Fauver is currently a Minnesota State Chair of the American Bar Association's Forum on Affordable Housing and Community Development Law. Ms. Fauver's experience includes practicing in the United States Senate Office of the Legislative Counsel, where she worked closely with the Senate Finance Committee. Most recently she was a partner at Faegre & Benson LLP in Minneapolis. She received her law degree from Northwestern University School of Law in 1988. Paula Beck I Associate General Counsel Paula Beck joined the legal team at Sherman Associates in 2004, where she focuses on residential real estate development and affordable housing issues. Her previous experience includes five years as an Assistant Attorney General representing the Minnesota Housing Finance Agency in all aspects of afford- able housing finance. Ms. Beck has also studied and written about housing law and policy, including an article in the Harvard Civil Rights-Civil Liberties Law Review entitled "Fighting Section 8 Discrimination: The Fair Housing Act's New Frontier". She received a BA from Swarthmore College in 1990 and her law degree from Harvard Law School in 1995. Loren Brueggemann I Vice President of Development Loren Brueggemann has 30 years of development and construction management experience. He has worked in multiple states developing multi-family and single family housing. In addition, his background includes the development of commercial (office, retail and industrial), hospitals and military housing and government work. The total development value of such work is in excess of $400 million dollars. Mr. Brueggemann holds a Bachelor of Science Degree in Architectural Engineering and Building Construction Technology from the Milwaukee School of Engineering and a Masters Degree in Business Administration from the University of Minnesota Carlson School of Management. ~ ~~s~~BNHl DEVELOPER PROFILE I No~mbe' 20071 13 COMPANY BIOGRAPHIES Richard Kiemen I Vice President of Sherman Associates and Vice President of Craftsman Construction Rich Kiemen joined Sherman Associates in March 2005. He has over 25 years of experience in general contracting/project management. Mr. Kiemen has been involved with multi-family projects, residential, public and private construction projects throughout the Midwest area. He received a Bachelors degree in Architectural Engineering from Milwaukee School of Engineering. He holds a residential contractor's license in the state of "Minnesota. Brian Gorecki /Vice President Brian Gorecki. joined Sherman Associates in August 2004. He brings 12 years of residential development experience in the area of affordable housing. He previously worked as a community organizer and housing specialist for a Minneapolis community. development corporation. Prior to joining Sherman Associates, he was the Director of Real Estate Development for Artspace Projects, a national non-profit developer of live/work space for artists. Mr. Gorecki studied at the University of Minnesota with a concentration in history and political science. Brad Goering / Sales and Marketing Manager Brad Goering joined Sherman Associates in May 2006 to manage the firm's residential sales and market- ing component. Mr. Goering's previous experience includes over 20 years of sales/marketing and division management to three of Minnesota's largest residential real estate development companies. In addition to a MN Real Estate license and numerous industry designations, Mr. Goering graduated from a 4-year build- ing trade's apprenticeship program in 1984. Rob Kost / Commercial Leasing Manager / Commercial Project Manager Throughout his 22 year career in commercial real estate, Rob Kost has leased and/or sold more than 3.0 million square feet of office, medical and retail space and has been involved in a variety of consulting, property management and corporate real estate services assignments. Prior to joining Sherman Associates, Mr. Kost was with United Properties for 10 years and Frauenshuh Companies for 10 years. He has served on numerous committees and boards - both business and civic related. Mr. Kost is cur- rentlya board member of the CClM Minnesota-Dakotas Chapter and the St. Joseph's School of Music. Mr. Kost earned a BA in Business Administration from St. John's University. He is a licensed broker in MinnesotalWisconsin and is a Certified Commercial Investment Member (CClM). Kristen Ives / Senior Commercial Property Manager Kristen Ives joined Sherman Associates in June 2006. She has II years of commercial property manage- ment and leasing experience. Ms. Ives earned her Bachelor of Science degree in Real Estate from St. Cloud State University in 1995. Ms. Ives is a licensed salesperson in the state of Minnesota, a Certified Commercial Investment Member(CCIM) and a Certified Property Manager (CPM). ~ ~~s~~PN~P DEVELOPER PROFILE I N~~be, 20071 14 COMPANY BIOGRAPHI-ES Staci Ford / Realtor, Commercial Property Manager Staci Ford, a property management professional, worked as the Senior Lease Administrator for Video Update prior to joining Sherman Associates. Ms. Ford's previous expertise includes positions as a Residential Real Estate Agent for three years and in commercial insurance, specializing in marketing non- profit directors and officer's liability, fiduciary liability, workers compensation, retrospective workers compensation plans and excess liability. Jackie Nickolaus / Project Manager Jackie Nickolaus joined Sherman Associates in July 2005. She brings 10 years of experience in the area of downtown redevelopment, including long-term planning and project implementation. Prior to joining Sh~rman Associates, she was an economic development coordinator for the City of Des Moines. Ms. Nickolaus earned a Bachelor of Arts Degree from the University of Iowa and a Master of Arts from Humphrey Institute of Public Affairs, University of Minnesota. Ryan Sailer / Project Manager Ryan Sailer joined Sherman Associates in January 2006. Prior to joining Sherman Associates, he served as the Real Estate Manager for a large national general contractor/developer based in the Twin Cities. He brings with him experience in project finance, site acquisition, site development, and project manage- ment. Mr. Sailer has a Bachelor of Science degree from the University of Minnesota's Carlson. School of Management. Chuck Burdick / Associate Project Manager Chuck Burdick joined Sherman Associates in April 2006. He brings experience in residential develop- ment and historic renovations from his prior work with Monument Realty in Washington, D.C. and Empire Properties in Raleigh, NC. Mr. Burdick holds an MBA with concentrations in Real Estate and Sustainable Enterprise from the University of North Carolina and a BA from Macalester College. He is a LEED Accredited Professional (LEED AP) and an active member of the Urban Land Institute. Bjorn Strommen / Assistant Project Manager Bjorn Strommen joined Sherman Associates in March 2007. He brings experience from US Bank where he worked as an analyst in the Corporate Banking group. Mr. Strommen holds an MBA with concen- trations in Finance and Economics from the University of St. Thomas and a BA from Gustavus Adolphus College. He is a member of the Urban Land Institute where he is actively involved in the Young . Leaders Group. Jil ~~sE6~H\C1P DEVELOPER PROFILE I No_b" 20071 15 COMPANY BIOGRAPHIES - Marilyn Soltis / Paralegal Marilyn Soltis joined Sherman Associates in April 2005. She graduated from the Minnesota Paralegal InstitlJte in November 200 I. Since graduation, her work has focused on residential real estate. Lisa Merk / Paralegal Joining Sherman Associates in June 2006, Lisa Merk brings with her 18 years of commercial, asset-based leasing and lending experience. Ms. Merk's previous work history includes Vice President of Administration for Allegiance Financial" Group, Inc. in St. Paul, MN and Portfolio Manager for the Technology Group of Cargill Leasing Corporation in Minnetonka, MN. Wanda Jensen / Executive Assistant / Office Administrator / HR Coordinator Wanda Jensen has been with Sherman Associates since 1989. She is Mr. Sherman's Executive Assistant and is also the Coordinator of Human Resources and Office Management. Ms. Jensen earned an Associate Degree from Wisconsin Indianhead Technical Institute - Rice Lake, Wisconsin, in 1984. Suzan Myslicki / Receptionist/Administrative Assistant Suzan Myslicki joined Sherman Associates in May 2004. She brings with her over 20 years of reception experience. Ms. Myslicki works closely with our legal staff and project managers to organize documents and keep things in order. Larry Kelly / Controller Larry Kelly has over 20 years experience in real estate development and property management. Prior to joining Sherman Associates, he was the Controller for John. B. Goodman Limited Partnership, a develop- er of senior housing projects. Mr. Kelly earned a double major in Accounting and Economics from the University of Toronto and is a member:- of the Canadian Institute of Certified General Accountants. Wendy Knauff / Development Accountant Wendy Knauff brings over 25 years of accounting experience to her position as Development Accountant which she began in August 2007. For the five years prior to joining Sherman Associates, Ms. Knauff was the assistant controller at one of Minnesota's largest residential builders and developers. Ms. Knauff studied accounting at Hennepin Technical School and the University of Minnesota. Larry Mitchell/Vice President of Property Management Larry Mitchell has 26 years in all aspects of property management experience, both commercial and res- idential. He has received numerous awards, including recognition from the U.S. Department of Housing and Urban Development, and has been recognized as a .Ieader of quality affordable housing in the Twin Cities metro area. Mr. Mitchell holds a Minnesota Real Estate Agent Sales License and a Minnesota State Teaching License. He is a former St. Louis Park city council member and a graduate of the University of Florida. J;1. ~\1s~~nvHl DEVELOPER PROFILE I N<Wembe, 20071 16 COMPANY BIOGRAPHIES Debra Godtland I Director of Residential Property Management Debra Godtland has worked in the property management industry since 1979 and has been employed with Sherman Associates since 1993. She is a Certified Occupancy Manager in Section 8 and Section 42 housing. Additionally, Ms. Godtland has held the designation of Registered Apartment Manager Dean through the National Association of Home Builders and has a Minnesota Real Estate Agent Sales License. Ji1. ~~s~~n\~p 17 PRESS Recent articles that highlight Sherman Associates' accomplishments. · Gilyard, Burl. "A Quiet Approach:' Finance and Commerce, May 25,2006. · Amundsen, Lucie B. "Sears tower returns to life:' Minneapolis Star Tribune, March II, 2006. · Gilyard, Burl. "Minneapolis-Based Sherman Associates lands contract in St. Louis:' Finance and Commerce,April 14,2005. Blanchette,Aimee "Developer of former Sears building wins award:' Minneapolis Star Tribune, November 18, 2006. ~ ~~s~~~1\~P DEVELOPER PROFILE J N<>""mb" 20071 18 A quiet approach By Burl Gilyard, F&C Real Estate Writer May 25, 2006 Thousands of people drive by the headquarters of Sherman Associate every day without even knowing it. That's just fine with George Sherman, president of the Minneapolis-based multi-family housing developer and owner. Even as he has built his company into large player in local development circles and beyond, Sherman prefers to stay behind the scenes, below the radar. You won't see Sherman rubbing elbows or slapping back at local real estate trade association meetings. That's not his style. Sherman figures that his track record is his calling card. "Do a good job, let your product speak for itself and let your reputation speak for itself," Sherman said in a recent inteNiew in his office. Sherman says Sherman Associates develops $250 million to $300 million in projects every year, including 400 to 500 units of for-sale housing and 400 to 500 rental units. Sherman Associates owns 5,000 apartment units in the upper Midwest; Sherman developed approximately half of those units. The firm employs 130 people, including 20 who work in development. Sherman, 52, is the sole owner of the company. Sherman's track record is increasingly prolific. His firm has"no shortage of work in the pipeline, with 25 projects in various stages of development. "We do everything from affordable housing to million-dollar, for-sale condos," Sherman said. "Our projects are all different. None of them are cookie-cutter." Locally, the list includes the Zenith condominium project near the new Guthrie Theater, which will combine 150 to 160 condo units with a new150-room hotel. Near Uptown, Sherman has plans to redevelop a portion of the Bennett Lumber site for 150 to 170 condo units. In New Brighton, Sherman will build 200 condos and executive townhomes as part of The Landings at Long Lake in New Brighton, where Sherman is the co-developer with the Rottlund Co. The planned Central Avenue Lofts at 24th Street and Central Avenue in northeast Minneapolis will combine a new U.S. Bank branch and other commercial space with 70 apartments, both market- . rate and affordable units. At the former Sears site in south Minneapolis - now known as Midtown Exchange - Sherman Associates recently completed 221 apartments and 88 condominium units as part of the mixed-use project ''That's been a tremendously successful project for everyone involved," Sherman said. A formal grand opening for the project is scheduled for Saturday, June 3. In recent years, Sherman has branched beyond the Twin Cities. The firm has current development projects in Milwaukee, St Louis, Kansas City, Des Moines, Duluth, La Crosse, Wis., and Palm Springs, Calit In St Louis, the firm has partnered with a St Louis firm on the $85 million redevelopment of the historic Syndicate Trust Building into 175 units of for-sale condos and rental apartments. In Duluth, Sherman Associates is developing 311 Superior, which combines a 147-room Sheraton hotel with 33 luxury condominium units. In Kansas City, Sherman is part of a development team that will redevelop a 12-block area, adding nearly 1,200 housing units. Not bad for a guy with a biochemistry degree from the University of Minnesota. Sherman worked as a biochemist for a few years after college, until he heeded the advice of a college friend to pursue real estate. At first blush, there would appear to be no natural connection between the discipline of biochemistry and the intricacies of the real estate business, but Sherman notes that both require attention to numbers and detail. "Real estate, at least in my world, is a lot of numerical, financial analysis. Biochemistry includes a strong understanding of mathematics," said Sherman, adding that both fields also require an ability to track numerous elements simultaneously. "In biochemistry you may have 1 0 or 20 things going on at once. I think you have to be able to keep track of numerous components at one time." Sherman believes that one of his firm's fortes is its knack for working through complex financial deals that involve myriad sources of public and private financing. He cites the Sears project and the St. Louis redevelopment as two examples. lilt involves very, very complicated tax credit and tax increment financing. I think it's one of the things that sets us apart," Sherman said. "Every development company has to have some sort of a niche. You do what you can do." Sherman began his real estate career quietly. In 1978, he bought a 14-unit apartment building at 27th Street and Humboldt Avenue South near Uptown in south Minneapolis. A year and a half later, Sherman converted the building into condos. lilt was kind of the heyday of the first condominium rush in the Twin Cities, II Sherman recalled. "Back then, condominiums were selling for $35,000 to $40,000. Back in those days, I was doing the work myself." The units sold, and Sherman found himself with a new career. "We were always involved in urban development," Sherman said, recalling his earliest work in the Lake of the Isles area and on the north side of Minneapolis. Since he first got into the business, Sherman says that construction costs have tripled. "We could actually build a town home in the '80s for $70,000 and make a little bit of money," Sherman said. Throughout the 1980s, Sherman and partner Nick Boosalis ran the firm Sherman-Boosalis. They parted ways and Sherman launched Sherman Associates in 1991. "I think we wanted to go in different directions," Sherman said. "Partnerships are not the easiest things. You either have to agree on everything or nothing." In the apartment business, Sherman hasn't sold a building since the mid-1980s, taking a long-term view of the market. He sees the rental market rebounding after several years in the doldrums. But even in recent years, Sherman kept up the pace of developing about 500 rental units annually. lilt tends to be counter-cyclical to the for-sale market," Sherman said. lilt's improving." Through a joint venture with Minneapolis-based Lander Group - Lander Sherman Urban Development - Sherman has developed the Midtown Lofts in Minneapolis and more than 450 units in various projects such as Printer's Row in the emerging Wacouta Commons area of St. Paul. "I think it's kind of winding down, II Sherman said of the joint venture. lilt's always been on a case-by-case basis. II Michael Lander, president of the Lander Group, says the joint venture has been a good fit. "Itls gone great, itls a tremendous partnership," Lander said. "I think that the market is changing here. We are separate companies. As we made a plan at Lander Group about where we're going, I do imagine we'll be doing a lot less things with them." Lander says Sherman has a knack for the financial intricacies of complex deals. 'His forte is in the nexus of public-private development. He's willing to go into development situations that require public sUpport," Lander said. "He's taught multiple cities how to do this stuff and use the various tools. He goes where others will not." Sherman's aforementioned headquarters? The firm is based on the second floor of the building best known as home to The Old Spaghetti Factory restaurant at 233 Park Ave. S. The building sits within blocks of the new Guthrie Theater and an explosion of new condominium development, including his firm's own Zenith project. Sherman bought the 55,000-square-foot building, which dates to 1906, in 2001 for $1.95 million and later bought the adjacent parking lot. lilt was a very classic building, and our staff very much wanted to be downtown," Sherman said. Sherman praises his staff as talented and hard-working. "Thisis not a golfing crowd," Sherman said. Sherman Associates owns more than 500,000 square feet of commercial buildings. "It's less than 10 percent of our business," said Sherman, but he predicts doing more commercial property in the future. "I think we're getting more experience with it, and it is fitting into more of our mixed-use projects. Our portfolio is growing. More and more cities are asking us to do commercial as part of our development;" Sherman said. As the condo market shifts and slows qown, Sherman has some advice for would-be developers. "Don't go out there thinking you can sell anything," Sherman said. "Number one is go with location in today's adjusted market." "I think there's going to be a number of projects that don't happen. There needs to be and will ~e a slowdown,1I Sherman said. rmdstorn-s.homep.lans.m~=::=t:~ ~ andmoreatstartribwte.com/homes. STARTRIBONE.COM/HOMES. SATURDAY, MARCH 11, 2006. SECTION H After $189 million and a decade of work, the massive Minneapolis redevelopment called the Midtown Exchange is ready for residents. This 2,200-square-foot condominiwn on the 17th tloo1 of the ChiClgo IDfts sold for $925,000_ It bas panoramic views of the city and windows 34 feet tllll.lt once held the Sealswatertank. Sears tovverreturns to life Story by LUCIE B.AMUNDSEN -Spteial to the SurTribune PhotOS byGLEN SfUBBE. gstubbe@swtrilnme.com The lobby of the Midtown Exchange building offers a contrast from the visually and audibly loud intersection w~ it staDds at the inter- section ofE. Lake Street and Chicago Avenue $. inMinneapolis. The space is at ODl.-e true to its 1928 art deco gran-- deur and a perfect host to its more m.odem functions. On the left is the new Allina Hospitals and Clinicshead- quartetS that brings nearly l.000 employees to work in the Phillips neighborhood each day. To the right are el- evarors to serve the hundreds of residents who have be- gunmovinginto the bullding's new condominiums and rental apartments. MidtoWDExdlangeis the !o"8'""...utedreh1carnationof the weant 50.... Roebuck and Co. facility. AIll! while the project's new slogan. "Meet 13 in Midtown." may not be nnnbling off the lips ofhipstcrs yet, it has brought a new sense of energy to this south Minneapolis neighborhood. "It is such a tremendous success and is the largest contiguous redevelopment ever accomplished" in the United States, Minneapolis City CouncUMember Gary Schiff said. He said the original plans called for redevel. oping the massive building in stages, the way other Sears buildio.gs around the nationhave been redeveloped. But with a commitment from Allina to locate its headquar- ters in the building and a positive respouse from the community, the developer, the Ryan Companies, was able to tackle the $189 million project all at once. The Midtown Exchange is in the heart of the Phillips neighborhood. whichhas been in the throes ofa $2S mil- lion Lake Street renewal project since mid-20OS and is next to the Midtown Greenway. Redevelopment of the 1.2 mlllion-square-foot struc- ture had many false starts after tbe.retailerpul1ed out of its u.-acre campus in 1994. The imposing art deco-style bulldiDg,listedon the National Trostfor Historical Pres- ervation,had heen a white elephant for more thana de- cade while the city and neighborhood groups struggled tofmd anew usefor the building, which towers over the Phillips and Powderhornncighborhoods. The project gained momentum after Allin.'l made a commitment to move its headquarters to the project, wbichalso includes a newSheratonhotel and360mixed- income condominiums. townhouses and rental aparr. ments. The Midtown Global Market, an indoor public market that's expected to become a Midwestem version of Seattle's Pike's Place Market, will have more than SO year-round vendors on the mainleve1 of the orlginalSears building. whichbouses the residential portion of the proj- ect, now caUed the Chicago Lofts. Later phases will in- clude newtownhouses and more commercialspace. Midtown continues: The project has made home values soar ina neighborhood with l'OncentIated poverty. H13 . MORE PHOTOS: GotostartribWle.comJhom~ ~;: THE MIDTOWN EXCHANGE PROJECT HAS UNlTS FOR SALE AND UNITS FOR RENT ROUSINC FOR SALE .,loftcondos;avaasepnce: $240,OOO:42one-bedIoom.43 two-bedIoornand three loWer units with an mrerage of 1,200 square feet. Amenities: parking ramp with tunnel access. stainless steel appliances,gr.mite coWltertops.lO- to 12-foot ceWngs.l.Jackliglltingand sliding doors. 51toWDhomK to be completed this faDaaoss the stteetfrom the Sears b~g. Prices will range from $89,500 to $259,900,including washer and dryer,private underground parking, maple trim and biIchdoors ROUSIN G FOR RENT 223 apartment units; 129 one-bedroom,88 two-bedroom.andsixeffidency. Rents from $65010 $1,075 a month; 60 percent of the units ale income-based affordable housing. Amenities: walk-in closets. vaulted ceilings. carpetand adishwasber MEET SOME NEW RESIDENTS OF THE MIDTOWN EXCHANGE'S ClUCAGO LOFTS Steve WaJ:ren, 5S,NWA flight attendant I left adassicthree-bedroom.plus bungalow stuffed with fumitme.l had a big estate sale and sold every stick of antiques I had. n was a huge change. surpris- ingly, the liYing room is bigger here,and the kitchen is light-yemscooler, so everything is a trade-off.I'!l miss my fireplace. but not my garden and fiDweIS;l want to see what else there is doto with my spare time. nae locationisexcelleJlt, with the proximity to the )Midtown) Greenwayand12 blocl<stotheligllt-mil tmnSitstation. To get to wotk,l take the bus outside my front door. pick up the nain and lip to the airport. That's huge. Residents contittues:High security standards. H14. BUYING H3 . SELLING liS . BUILDJNG Flu . RENTING Fl8 . REALESTATETRANSACnONS Hi/) . KENNETHHARNEY Hi:! II I'l 8- G' ~ 1 : ., I !: ~ ; SATURDAY, MARCH 11,2006' STAR TRIBUNE. H13 Sears tower returns as a place to work and live ~ MIDTOWN FROM HI The project is in the heart of a community that has one of the highest concentrations of poverty and new Americans in Minneapolis. While the Midtown Exchange has dearly been a boon for the neigh- borhood, rising property values in the area have created challenges for many of those who are being priced out of the housing market or are fac- ing rising property-tax bills. "The only downside:' Schiff said, "is (that] the area has come back so quickly it has given whiplash to the residents who have stuck it out." Organizers of the project want- ed low-income people who alre<ldy live in the neighborhood to have an opportunity to live in the building, so the project includes condomini- ums and apartments for people who must meet income guidelines. "I'm pleased we were able to put more affordable housing into the Midtown Exchange Project than a typical city project - an entire 10 percent more." Schiff said. Those converted living spac- es have industrial loft sensibilities including oversized windows. taIl ceilings and exposed concrete col- umns that reflect the building's past. "I'm convinced this is the best con- version in the city," Coldwell Bank- er Burnet sales. agent Linda Mes- senger said. "People come into the building and really respond to the historic proportions and the ameni- ties like the 360-degree view party room [at the top of the tower J:' She said more than half the units have been sold. Barb Duthler, another Coldwell Banker Burnet sales agent who is marketing the project, said that buyers include a mix of business executivesJ1rst-time home buyers and even suburban and rural Min- nesotans who have come to live in this former retail landmark. "It's a range of people and they've already starting to form community among themselves," she said, .. RESIDENTS FROM HI I embrace the mixed-incomel mixed-use model. other cities have done it with great success and it is al. ways a gamble. The security standards are so high here, and with Allina's involvement and what the city has invested, they are :oot going to let this go belly up. They won't settle for any- thing less tlUIn success. Bill Heisley, 56, pastor, Mount Olive Lutheran church at 31st Street and Chicago Avenue The way I found out. since my parish is two blocks away, was the sign for Chicago Loft sales trailer. I was prepared to be very skeptical. I walked in and the floor plans were really wonderful. They had a kitchen display in the trailer with standard granite countertop finishes available. I thought, "Maybe I shouldthink about this." This is the first time in my life that I've lived in the place I've really . wanted. Heretofore, it had been:"lIUs is what I can afford." I've really con. nected with the 12-foot ceilings, indus- trial concrete, and columns that actu- ally hold up the building. It's a feeling of spaciousness and a different sort of light. I had lats of trees before and I was worried about being 12 stories above the trees instead of one below there, but it's flooded with light I feel I'm on the cutting edge of something- Dr. Crystal SclUosse, 42,sw:geon with Allina Hospital I had}ust started at Abbott and was living in Stillwater. I wanted some place to stay overnight if someone was sick, looking at it as a place to crash. Then I started to contemplate walk- ing two blocks to work vs. two to three hours of windshield time every day. H14 - STAR TRIBUNE- SATURDAY. MARCH 11.2006 G!l.t'IS'l1-'ll81'8't~"..mbllJ\c,<O'" The Rev. WUIi_lleisley TlIQ'led i.ntoa l,290,squ:t!'e-(ootcondomlni'\un at the Chi<::a&o tofts on Pee 31.1'Ie waIlcs to work. What it came down to: I loved my house in the country, but there is a trade-off of how I wanted to spend my time. Now 1 have two extra hoUls and I'm less stressed, knowing I don't have that long drive ahead of me. I'm planning on taking piano lessons and going back to yoga class, which I had dropped from my schedule. I just feel excited to be part of that change - the positive effects on the community and the whole city. I'm a bit of evangelist. I'm excited to have the market downstairs and have ac- cess to ethnic fresh food. I'm not sure if I'll ever need my car, and that's great for the environment. When I would drive into Minneapolis, I'd see that brown [smog) line hanging over the city. I'm not going to contribute to that as much as I did before. An.dzew williams, 3D, security guard., Mid.town Exchange I work security right here at the building and there was a posting on a bulletin board during the construction. It's the best deal, price-wiSe. I pay $620 [rent] for a one-bedroom plus a den. You don't find that in Minneapolis too much anymore. It's a nicer space than what I had by the VA hospital and it's SSS cheaper because it's based on a percentage of income. And I have a seventh.floor view ofthe whole metro. My ma was worried because of the history of the area, but once she came to see it she has different opinion. It's so much better than it was 10 years ago. And now I corne straight down the elevator and I'm at work. I don't have to deal with the cold and snow. It's real convenient. Bruce Brawn, 46, c:lliector of tedmol- ogy. CGS Publishing I'm from Chicago and need to be in Minneapolis one or two weeks a month for work. The reason we carne to see the Chicago Lofts was the whole Sears connection. With mytrave1,] can land. take the light rail, a short bus ride and I'm here. It's been really interesting. My boss said that he wouldn't go in that area, but it's J:l.othing like what I've experi- enced in Chicago. Based on this devel- opment.l can see the whole area up- graded. uplifted. I see how LalI:e street has changed even since I signed to buy it just a year ago. r. sherman ,. ASSOCIATES 4. 14.05 Finance and Commerce MINNEAPOLIS-BASED SHERMAN ASSOCIATES LANDS CONTRACT IN S1 LOUIS By Burl Gilyard Minneapolis-based Sherman Associates is singing a new Jun~: "Meet Me in St. Louis." Last week, the St. Louis Development Corp. tapped Sherman Associates and a St. Louis firm to redevelop the historic Syndicate Trust Building in downtown St. Louis. The deal signals the continued growth of residential developer Sherman Associates beyond fts Twin Cfties home to new mar- kets in the Midwest. "We've been looking at kind of a structured expansion in the Midwest to take advantage of the experience we have in urban redevelopment," said Brian Gorecki, project manager wfth Sherman Associates. The firm is also busy with projects in Milwaukee and Des Moines, and pursuing projects in Kansas City. The 16-story Syndicate Trust Building dates to 1907 and is listed on the National Register of Historic Places. The Sherman team is planning 175 unfts of housing - 91 condos and 84 apartments - plus 21,500 square feet of retail space. The $69 mil- lion project is expected to take 18 months to complete. Sherman is partnered with St. Louis-based LoftWorks LLC on the deal. Gorecki said Sherman is the lead partner on the project. Gorecki credfts the long-standing relationship between principal George Sherman and his bankers wfth helping to bring the project to Sherman's attention. "Our partner on the lending side, U.s. Bank, strongly encouraged us to come down and take a look at the Syndicate Trust Building when they heard ft was going to go out for an RFP [request for. proposals]," said Gorecki. The Sherman team beat out two competing proposals. Gorecki said that as soon as the decision was announced, his firm began receiving calls from people eager to live in the rehabbed building. "It's always nice to get a call from the marketplace," said Gorecki. Gorecki said there are some parallels between the Syndicate Trust Building and the Midtown Exchange project, the former Sears store in south Minneapolis where Sherman is developing housing. "It's not the same, but the Sears project that we're doing the housing in is very, very similar;" he said. "The type of financing that we're going to put together for this is very, very similar." Gorecki said both historic and housing tax credits will be key to the project financing. Details have yet to be worked out, but Gorecki estimates that his team will negotiate a tax increment financing (TIF) package on the project worth about $9 million. "St. Louis is probably three to five years behind Minneapolis and St. Paul in fts downtown redevelopment. It's moving very, very quickly. This project is timed qufte nicely." he said. 'We're just extremely excited. They had three good proposals in front of them," Gorecki added. "We're looking forward to the next I 8 months." 223 Park Avenue South, Suite 20 I, Minneapolis, MN 55415 Tel: 612-332-3000 Fax: 612-332-8/19 V. wwvv.sherman-associates.com t:5:r Bl" $TAlt TRIBUNt . SATURDAY. NOVtMUR 18.2006 huilding-,--~~",-,,-,~~~~:- 'aUILDEIl IlOTES Developer of former Sears building wins award ~..\IMEEItLAI~CI= h~;II'\\;}ol'(~I'.t;"$l:trtlihua~.('O\.' Minn.apolis-~ devolop- ..r Shennan AssociateS ",eenlly re- ...eived an ..."ro'd (or \Ii Cl1ieagc Lofts and MidtoMl exc:hangr project at 1..:01,,: Street and Chicago Avenue S- In Mwn.""pobs. The pr"jec:t, t...hich tr.InSlOnntd the f('rtrlc.< SC.1S buildin&intocontemj>>- rOU)' loj\,; ,uld rent.'Il.p6tlments. plus . ll\Olrkclplal.'" with dMCt\S of <tmlle vendoIS, .,..s n.'l1'llcd ProiCCl of tile y~ for Ad.pti"", Reuse by Multi- bmily E>occutillt"maj;OZlJlc, 'Ille d....elopmcnl was honored for ill\\ovative arehiliCCture. floor' p~u. efficiencr. sWlabillry to the tu- gl~ JlI.'lI'!tet, ere:>ti\'C Il.St of materi. .Is, inlcrlor deSLIlJI,I""d."".piJlg. cre- ath", (manein!; SOIUriollS and .bUily to work wilh SO"C"'llIent and com- munity oIlici:lh. Ryan CDmpattiCl; \)$. builder of I/le Midrown Exchange, .Iso "'=1- lyl'CCeived tile N.tiona'"lmsl/lfous- ing and Urban O.velopmcnt Seereo ury"s AwanI for EJrrel\en~ in ais.or- ie l'resef\,.tion. "'Jlle rehabilitation of Minneap- olis' Se<lr.c building is . great exam- ple of how histone presel"/;llion and communtly revllaliZRnon Co b:1lld in band; ~ Riel1ard Mae.. presidenl of Ihe Nalion:tl Trusl lor Histone Pres- erv3UOn. "MidlO\YnE:cchangeh:os givcl\n.... G(~ not only 10 lhis hislone ShuclUn:. bllt ~ 10 a corDrmsnity llJ.~t ...ashe- pnninr, (0 lose hoi'''-. he said. ~Ilar.IlGreenbull~ lD>d.cIesIgn~ Minl'l':$ob Green Co'Q1Ol\llutic!; 1$ h.olding a daylong series lI{ 1:01lIBlll' nilY design lol'\llll.' aod workshol>S to lea~h developers. builJerJ. archi. Iects, policymalt.e", and I'wIders hOlll 10 plan and huUd l\collhy. s\l$l2i....ble an.! alfordablcccmn,unitic... "!"he regtSlr:ati()n tl.."C, which ill' dude.< .1\ meals .nd re{~menl5, is S95. For more information go to CrecnCommuniticsOnline ors/ MiDnesol3. Dates. and \oealto~ Moncby in Brainerd, Tuesday in Mankaro. ND'I. 2.ll in Gand IUp;ds. M Plats taldngreso:rvatiD:ns TI';lI!~re~S ODe more C.ampU5 eondo project in lhe Twin Cllics. M FlalJ. at 2850 Uoil.'Cisll'\' AIl.SE.. Miililtal!' olis, iSlaklng ~...,ons. Thi: s)St.t projCCt of the UFbu 011 Uni1f,,;;ri1Y A~. witt have 146 condos Withlllloor plans. Pri=Slart41 Sl~. The develoPd'S ill'ese.cldng fiM/. approval from .the dry. CcinSU'llr, lion could sun iJl Dectm~r ud b. complc:tltd byAi..gust. Builders~_ ~...d.1>eOple'$~A__ The BuiidCl$: A$SClClatioao/: Ih. 1"'in Citic& ~yaonlll>l1d!<l t:e- cipienlS o{ theitZ006 Bennie A,1r.ll<is. The .wards re<ognae elll:CUenre in neighborhood deotsn and co... snurli"n. Proj.....s are judf!lCd on acsthelicappeaL 1:md plan, retention o( naturol (e:lNJ'C'<. amenilie. 5"CI1 as parksand rrnils. neighborhood StnlC' rures such "" m:tllroxes ""d si!lJ1'lSo. and traftic floW' wtUUn md to eacb ne;,hborhood. )udgEos are ~hosen {rom roembt<o. orl~ d"""lopmenl rommuniry. IlenUlOdalllm"llllllmalMaNlleh- bcoI1Dod: S"1I\'er I..,](e ViIkIlP: in 51. Asl- tbony;SiNu Lalce Homes I u.c. Best new IIeIghlxnhood (tulr1b), Victor Gard<:n:l in H\lSO: Contractor l'rollL"W Devdopers Co. Best now ~ (sotllb), Credit RiWl1~niIOry in Credir Rill" or: UIln:ll1 Dev.,lopm..-n1 Co. Best s1np.faml.!y home ~ bo:xhood: IfIlL< of Ttoy in Itudson. Wis.; 'n'oy D..velopmenl Co'l'- The l'eorl~'. Cboice A,,,,,,,d.o wc:'" erraled to gaul!" public I'<:2ction In Parade orHonl.cs 00= .lite willJ\ers: $25l.~286,OOO 2562 Coldw.ll.r Closslng,Mayer, TromP'! Homes S31O,OQO.S!S'!l,ooo 210 Mwrfidd 'l"r.lll.Hudsotl. W1<., Maln street Budders Il.C $1&5,-'$448.- 6789l.:Lkevlew Chell!. Albertville: Net- ?bot.. by,"", mm. Sherman twoci:Lleswon.n.waJd fartrnns!oIrningthe fDrmer Soars bwIdmginlo u.eO\l.cago LofIs :rn<iMliltDWJl Ex- change project in MInneapolis. tum Consb'udl&)n fnc. S45S,IlOO-'SOO,DOD 317 MeadoW Ridge Court.lllYer FaII>. Wis.. Divine CUslom Homesl..LC 5sn._-5~,QOO )39 Pr>llJ'l. ~S.8aypon.AlcOOlnder &Associ.les $5'12.-"610.000 16&41 oyn.rnte'D,. LaIcavlJl..Amor,- can Claosir HOrnl:. u.c $6~.~'726,1lOO .151 C-"'slVl.wDI_~en.t.ocy 1hGS.. Hornet $8ss..~$J.:w.;.OOO 47 W.ound Ay. Ton)c.a Bay: Vogue ICf HomesIm:.. Sl,4OO,OOO-$1.S80,OOO 9161Slry "",e, Eden Pramo,On the L<vcllnc. il.600,OOIH2,1llIl,OOO 8Il2.0 Ibdge Court,Maple Grove: SmudclerCUstom Budde",lne Aimee BJancJl~e." M1.Q}..lUJ. REFERENCES CHUCK LUTZ Deputy Director City of Minneapolis Community Planning and Economic Development 105 Fifth Avenue South #200 Minneapolis, Minnesota 55401 (6 12) 673-5196 ALLEN CARLSON City of St. Paul Planning and Economic Development 25 West Fourth Street St. Paul, Minnesota 55 102 (65 I) 266-6565 RICHARD CLARK City Manager City of Des Moines 400 Robert D. Ray Drive Des Moines, IA 50309 (515) 283-4141 ROBERT ODMAN Minnesota Housing Financing Agency 400 Sibley Street #300 St. Paul, Minnesota 55 10 I (651) 296-9821 fa ~~s<6~PNHl HOWARD GOLDMAN U.S. Department of Housing & Urban Development 920 Second Avenue, Suite 1300 Minneapolis, MN 55402 (612) 370-305 I x4262 SUSAN GEHRZ Mayor City of Falcon Heights 2077 W. Larpenteur Falcon Heights, MN 551 13 (651) 641-1229 KEN DAYTON MMA Financial 2 I 77 Youngman Avenue St. Paul, MN 55 I 16 (651) 603-5056 KYLE HENSON US Bank 60 I Second Avenue South Minneapolis, Minnesota 55402 (6 12) 303-3685 MARK JOHNSON M & I Bank 651 Nicollet Mall Minneapolis, Minnesota 55402 (612) 798-3883 JIM WEICHERT Deloitte & Touche, LLP 4300 NorwestTower Minneapolis, Minnesota 55402 (612) 397-4010 ANGELA CHRISTY Faegre & Benson, LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402 (612) 336-3261 DEVELOPE" PROFILE I No,",mb" 20071 29 CONTACT INFORMATION MAILING ADDRESS: Sherman Associates, Inc. 233 Park Avenue South, Suite 20 I Minneapolis, MN 55415 MAIN PHONE: 612-332-3000 FAX: 612-332-8119 WEB: www.sherman-associates.com ... sherman '.ASSOCIATES DEVELOPER PROFILE I No~be, 20071 3 0 Project location: CEDAR POINT PHASE II Proposal Comparison Matrix area bounded by 63rd Street to the North, 65th Street to the South, 16th Avenue to the West, and 17th Avenue to the East , NOTE: All responses below were taken from the respective developer proposals and supplemental information LaNel Sherman & Associates Project Description Development of 206 units Development of 240 units consisting of three product consisting of three product types: senior assisted types: assisted-living rental, living, senior independent affordable family rental, and living, and single-story. affordable senior rental town homes housing. Number/type of units . 130 units independent . 120 units market-rate senior living rental senior assisted-living . 60 units senior assisted- rental living rental housing . 60 units of affordable . 16 rental single-story family rental housing town homes . 60 units of affordable independent-living senior rental housing Market Analysis/Reasoning Senior living was chosen . The housing type selected because of the acceptability is best suited to mitigate to surrounding airport noise by limiting the neighborhoods and the number of exterior minimization of the effects entrances. There is also a of airport noise. large senior population in Additionally, the different Richfield and South Mpls types of housing will allow and studies show a need seniors who currently live in for additional housing to Richfield but would like to serve this market. The or need to move out of their proximity of the location to current homes, to find the adjoining Target and alternative housing within the Mall of America creates the city. a need for work force housing. And the Met Council and Hennepin County both support a mix of housing types and will likely attract financial support from these agencies. Preliminary Sources/Uses See Attached See Attached Req. City to Front Monies? No request at this time. Yes. The developer will However LaNel does need the city to contribute expect the city to assist in $4,000,000 up front any reasonable economic towards the land manner which meet the acquisition. city's economic goals towards a successful development. Process & Timing for LaNel proposes to start the Anticipate completion within property/land acquisition acquisition process in the 6 months. Sherman & Assc spring of 2008. The will assign a staff member developer would work with to discuss relocation the homeowners to benefits and negotiate purchase their properties in sales. ~ timely fashion and estimates completing the acquisitions by early summer 2008. Construction would commence immediately after the final aCQuisition. Does the project meet the components outlined in Yes Yes Blending Public Spaces and Private Development booklet? Yes/No If yes, which components? . Pedestrian-scaled . Will design walkways to spaces: the proposal the park, to the nearby includes an abundance retail amenities, and of pedestrian spaces for bikeways into the City resident experience . Will incorporate trees within the grounds of the along the street as well development. as flowers and shrubs . Attractive privately along walking paths developed exterior . Due to the airport noise, spaces: the proposal the developer will invest states that the exterior in outstanding indoor will be welcoming and community spaces to accessible with a variety provide gathering areas of coordinated housing that are peaceful and options, reflecting enjoyable maturity even as new . Recognize the value construction. Materials and importance of will be low-maintenance incorporating public art and high-quality. both outdoors and . Incorporation of Art into indoors the buildings and site: . Will make efforts to The proposal states that interconnect with public art is a major surrounding amenities commitment of the through bicycle and development team. pedestrian trails They intend to . Will use high quality, designate $100,000 in ,durable materials for public art to be construction, incorporated on the site emphasizing the use of to encourage gathering stone, brick and places which are visible, concrete creative, and endurinQ. Does the project contain "green" and/or sustainable Yes Yes building components? If yes, which components? . Preserve as many . Energy efficient building mature trees on the site envelope as possible . Energy efficient heating . Planting of new trees and cooling . Stormwater . Stormwater management management . Incorporation of Energy . Will incorporate LEED Star@) appliances, water practices into the saving plumbing development as fixtures, fluorescent appropriate lighting, efficient gas furnaces Special features Special Features include: Senior Assisted Features incorporated into the . Commitment to include: development incorporate a large . Nursing Care presence of public art . Food & Meal Service . Preservation of as many . Health Care mature trees as possible . Social activities . Gathering places for . Physical activity residential interaction - rooms/equipment both interior and exterior . Library . Create a seamless . Computer room transition between the . Technology heavy commercial area . Large Community and the single-family rooms and lobbies residential area . Guest Rooms . Quality signage and landscaping that will Senior Market Rate improve with age Features include: . Community dining/meal service . Community Room . Social activities center . Large 1 & 2 bedrrom apts . Exercise room . Library Work Force Housing Features include: . Large 2 & 3 bedroom units . Laundry in units . Community rooms - indoor play area for teens . Computer learning center General Features include: . Durable, long lasting construction materials .. Energy efficient appliances, furnaces, fixtures . Green design and building . Quality, award winning design . Exterior and interior artwork Developer team experience The team consists of: . Team leader: George . Steve Kirchner, former E. Sherman Richfield Bank & Trust . In-house staff including Co. owner legal, paralegal, . Jan Susee, attorney and financial and owner of Metes & construction staff Bounds Management members. Company, currently . See attached Developer managing Greenbrier Profile for team member Terrace, Eastfield, The bios Oaks, and City Bella, for which he is also the developer of and part- owner . Francis Lang of Lang Nelson. Part owner of The Pines assisted living facility. Lang Nelson also has developed and manages numerous other senior transition communities in the Twin Cities area. . Gregory Bronk of LaNel Financial, has been involved in the development and management of The Pines and many other assisted living communities, senior housing and market rate properties, and will be responsible for arranging the financial package for the development. . The development team intends to work with a number of established architects, landscape architects, and contractors familiar to the City of Richfield. The development team " intends to use ESG, LHB and Frana companies as partners in the development project. Other projects completed See attached for complete See attached Developer by Developer list Profile for complete list . The Pines . Falcon Hts Town . The Rivers Manor Square . Meridian Manor . The Shores . Cedarwood Apts . Grande Market Square . Emerald pointe . Midtown Exchange . Earle Browne Terrace Will the developer manage the property after completion? How long? It is the intent of the Development Team to retain ownership and management of the three as ects of the ro ert . Yes. The developer anticipates owning and managing the property for at least 20 years.