09-15-08 AgendaCITY OF RICHFIELD, MINNESOTA
• MONDAY, SEPTEMBER 15, 2008
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL COUNCIL CHAMBERS
_ 6700 PORTLAND AVENUE
7:00 P.M.
AGENDA
Callao order
Roll call
1. Approval of minutes of (1) Regular HRA Meeting of August 18, 2008 and (2) Special
HRA Meeting. of August 25, 2008
2. HRA approval of agenda
Notes:
• 3. Consideration of contract for private redevelopment between HRA and Jeremy and
Teri Larson for redevelopment of 6955 Knox Avenue under Richfield Rediscovered
Program and request for subordination agreement
Staff Report No. 41
Notes:
4. Update regarding Cedar Point II
Notes:
5. Public hearing regarding HRA's annual Public Housing Authority Plan for Section 8
Housing Assistance Program
Staff Report No. 42
Notes:
• 6. Consideration of information regarding Proposed 2009 HRA budget revisions
Staff Report No. 43
Notes:
7. Executive Director report
8. Claims and payroll
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must
be made at least 96 hours in advance to the City Clerk at 612-861-9738.
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HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
August 18, 2008
CALL TO ORDER
The meeting was called to order by Chair Sandahl at 7:00 p.m.
.]
ROLL CALL
HRA Members
Present: Sue Sandahl Chair; Martin Kirsch; Joan Helmberger; Doris Rubenstein;
and David Gepner.
Staff Present: Steven L. Devich, Executive Director; John Stark, Interim Community
Development Director/HRA Manager; Chris Regis, Finance Manager;
Karen. Barton, Community Development Manager; Christine Costello,
Community Development Coordinator; and Cheryl Krumholz, Recording
Secretary.
Item #1 HRA APPROVAL OF MINUTES
M/Kirsch, S/Gepner to approve the minutes of the (1) Regular HRA Meeting of July 21,
2008.
Motion carried 5-0.
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Item #2 HRA APPROVAL OF AGENDA
Chair Sandahl removed Item #5 from the agenda.
M/Gepner, S/Rubenstein to approve the agenda as amended.
Motion carried 5-0.
HRA Meeting -2- August 18, 2008
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Item #3 PRESENTATION FROM RICHFIELD RESIDENT JACK SWAN REGARDING HUB
SHOPPING CENTER S.R. NO. 35
Jack Swan, 6409 2nd Avenue, made a presentation, "A Piazza for Richfield", related to the
HUB at 66th Street and Nicollet Avenue.
Item #4 CONSENT CALENDAR
A. Consideration of approval of resolution accepting Urban Land Institute Housing Initiative
Grant, authorizing matching funds of $5,000 and executing contract S.R. No. 36
HRA RESOLUTION NO. 1038
RESOLUTION ACCEPTING URBAN LAND INSTITUTE HOUSING
INITIATIVE GRANT AND AUTHORIZING MATCHING FUNDING
This resolution appears as HRA Resolution No. 1038.
M/Helmberger, S/Sandahl to approve the Consent Calendar.
• Motion carried 5-0.
Item #5 CONSIDERATION OF DENYING RENT-TO-OWN MANAGEMENT PROPOSAL BY
THIRD WAY NETWORK FOR PROPERTY AT 7422 FOURTH AVENUE S.R. NO. 37
This item was removed from the agenda.
Item #6 CONSIDERATION OF ACCEPTING PENN CORRIDOR MASTER REVITALIZATION
.PLAN S.R. NO. 38
Community Development Manager Barton presented Staff Report No. 38.
Bruce Chamberlain, Hoisington Koegler Group, provided an update on the revitalization
study, ,including project purpose, guiding principles, draft design guidelines, land use guidance, and
key components.
Commissioner Helmberger asked about the comments received from the public.
Mr. Chamberlain responded there are overwhelmingly positive comments to "get moving".
HRA Meeting -3- August 18, 2008
• Commissioner Rubenstein expressed her concern regarding options for partners with
revitalization because the same developer appears to do projects that are not particularly friendly
to retaining small businesses. She suggested national chains be kept to a minimum.
Mr. Chamberlain explained those comments have been echoed throughout the process and
that is the reason the Penn Avenue project is a revitalization not redevelopment area. He added
the financing tools typically used for redevelopment may be used to address rent increase costs.
M/Gepner, S/Helmberger to approve acceptance of Penn Corridor Master Revitalization
Plan.
Motion carried 5-0.
Item #7 UPDATE REGARDING TOLD CEDAR CORRIDOR REDEVELOPMENT
Community Development Coordinator Costello stated this is the second update from TOLD
Development Company.
Trent Mayberry, TOLD Development Company, provided an update on the feasibility of the
project for the southwest quadrant of 66th Street and Cedar Avenue despite significant challenges
including site specific issues, Minnesota's economy, the commercial real estate market, and the
• upside down capital marketing (financing).
Mr. Mayberry discussed a staged or phased approach to development with the more
accessible sites, probably the north portion first. The next step is finalizing a development
agreement.
Commissioner Rubenstein asked about potential uses.
Mr. Mayberry responded that users could include free-standing retailers, build to suit or a
potential hoteh
Community Development Coordinator Costello added that neighborhood-oriented
businesses would be emphasized.
Interim Community Development Director Stark discussed the phasing approach for
development of this area, giving the developer what is needed but also giving the City and
residents security.
Mr. Mayberry stated no specific timeline has been established.
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Interim Community Development Director Stark explained that the exclusive rights
agreement expires in .November 2008.
Item #8 UPDATE REGARDING CEDAR POINT II
Interim Community Development-Director Stark stated the last update to the HRA was in
June and the conceptual deal points to addressing financing gaps were approved by the City
HRA Meeting -4- August 18, 2008
Council. The structure of those deal points but not the amounts have been modified. The
developer has secured preliminary cost estimates from the builder, with higher than projected costs
resulting in an increased financing gap. Now staff and the developer are working to find financial
solutions and hope to make a recommendation at a future meeting.
Greg Bronk, Susee/Lang Nelson representative, expressed their disappointment in the
higher cost estimates and unexpected challenging development market. He added the developer
believes the project can still be accomplished but there is no timeline yet.
Executive Director Devich stated he hoped the residents understand that the City is trying
to put together a project that works and is acceptable to the HRA and the developer to address the
financial gap.
Item #9 CONSIDERATION OF RESOLUTION APPROVING 2009 PROPOSED HRA
BUDGET AND TAX LEVY AND 2008 REVISED HRA BUDGET S.R. NO. 39
Interim Community Development Director Stark presented Staff Report No. 39; including
Community Development 2008 accomplishments and key goals for 2009, and the levy history.
Commissioner Rubenstein asked about the ability to have public comment.
• Executive Director Devich explained, though not statutorily required, the HRA, at their
discretion, could request their own budget hearing in November.
Finance Manager Regis stated. the levy must be certified to Hennepin County by September
15. The levy can be reduced after that date but not increased.
Commissioner Kirsch asked about the tax impact on residents.
Finance Manager Regis explained the staff recommended 3% increase ($14,250) over last
year's budget is approximately $0.10 per month tax impact and meets the minimum budgef needs.
If the HRA approves the maximum levy ($107,000), it is approximately $0.87 per month tax impact.
Chair Sandahl asked where the additional funds, if approved, would be used.
Interim Community Development Director Stark explained they would be used primarily in
housing programs, including Transformation Loans, New Home, Richfield Rediscovered, and
marketing.
M/Kirsch, S/Gepner that the following HRA resolution be amended to adopt the maximum
levy that is allowed under law and direct staff to provide a report at the next HRA Meeting on the
proposed use of the additional funds:
HRA RESOLUTION NO. 1039
• RESOLUTION APPROVING PROPOSED 2009 HOUSING AND
REDEVELOPMENT AUTHORITY BUDGET AND CERTIFYING THE
2009 TAX LEVY
Motion carried 5-0. This resolution appears as HRA Resolution No. 1039.
HRA RESOLUTION NO. 1040
RESOLUTION AUTHORIZING REVISION OF THE 2008 BUDGET OF
THE HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD
Motion carried 5-0. This resolution appears as HRA Resolution No. 1040.
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HRA Meeting
-5-
August 18, 2008
M/Kirsch, S/Sandahl that the following resolution be adopted and be made part of these
minutes:
Item #10 EXECUTIVE DIRECTOR;REPORT
Executive Director Devich reported on a recent discussion with a Richfield resident
interested in the Transformation Loan Program and the possible need to consider reevaluating that
program's funding guidelines.
Item #11 CLAIMS AND PAYROLL
M/Helmberger, S/Gepner that the following claims and payrolls be approved:
U.S. Bank 07-21-2008
Section 8 Checks: 114275 -115741
HRA Checks: 30325 - 30346
TOTAL
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:30 p.m.
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Date Approved:
Cheryl Krumholz
Recording Secretary
$ 173,757.76
$ 172, 880.19
$ 346, 637.95
Suzanne M. Sandahl
Chair
Steven L. Devich
Executive Director
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HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Special Meeting
August 25, 2008
CALL TO ORDER
The meeting was called to order by Chair Sandahl at 7:36 a.m.
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ROLL CALL
HRA Members
Present:
HRA Members
Absent:
Staff Present:
Item #1 HRA APPROVAL OF AGENDA
Sue Sandahl Chair; Joan Helmberger; Doris Rubenstein; and David
Gepner.
Martin Kirsch.
John Stark, Acting Executive Director; and Nancy Gibbs, City Clerk.
M/Gepner, S/Helmberger to approve the agenda.
Motion carried 4-0.
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Item #2 .APPROVE APPEAL OF A SUBORDINATION REQUESTS FOR THE HOUSING
AND REDEVELOPMENT AUTHORITY'S TRANSFORMATION LOAN AT 7300
LOGAN AVENUE S.R. N0.40
Acting Executive Director Stark presented Staff Report No. 40.
M/Sandahl, S/Rubenstein to approve the appeal of a subordination reauest for the Housing
and Redevelopment Authority's Transformation Loan at 7300 Logan Avenue.
HRA Special Meeting -2-
• Motion carried 4-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:43 a.m.
Date Approved:
Nancy Gibbs
City Clerk
L~
August 25, 2008
Suzanne M. Sandahl
Chair
John Stark
Acting Executive Director
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AGENDA ITEM # ~
REPORT # (~ ~
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
SEPTEMBER 15, 2008
REPORT PREPARED BY:
REPORT PRESENTER:
INTERIM DEPARTMENT DIRECTOR
REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
KIIZSTEN PARTENHEIMER, HOUSING
SPECIALIST
NAME, TITLE
KAREN BARYON, COMMUNITY
DEVELOPMENT MANAGER
NAME, TITLE
ITEM FOR HRA CONSIDERATION:
Consideration of a Contract for Private Redevelopment between the Housing and
Redevelopment Authority and Jeremy and Teri Larson for the redevelopment of 6955 Knox
Avenue under the Richfield Rediscovered Program and consideration of a subordination
request.
I. RECOMMENDED ACTION:
By Motion:
• Approve and authorize execution of a Contract for Private
Redevelopment between the Housing and Redevelopment
.Authority and Jeremy and Teri Larson for the redevelopment of
6955 Knox Avenue.
• Approve subordination of mortgage.
II. BACKGROUND
The purpose of the Richfield Rediscovered Program is to remove substandard and
functionally obsolete housing, develop new single-family ownership opportunities
and incorporate desirable features that are current in the market.
Jeremy and Teri Larson have submitted an application for the redevelopment of
6955 Knox Avenue under the Richfield Rediscovered Program. They will acquire
091508 RR Contract Larson 6955 Knox Ave
and demolish the house, which was built in 1931. The new two-story home will have
2,200 square feet, four finished bedrooms, two and a half bathrooms and an
• attached, two-stall garage.
The property has a 2008 assessed value (For Taxes Payable 2009) of $191,000.
On July 21, 2008 the Housing and Redevelopment Authority (HRA) approved an
exception to the Richfield Rediscovered Guidelines to allow _Mr. Larson to act as his
own general contractor for the project due to his extensive experience as a
construction project manager.
Under the terms of the Contract for Private Redevelopment, a lien is put on the
property until the house is completed. The Contract requires the HRA's lien to be in
first position. According to "Section 6.3 Subordination" of the Contract, the HRA can
agree to modify the Mortgage upon request by the financial institution and the
Buyer. The Larsons and M&I Bank are requesting the HRA subordinate its lien.
The Larsons are in agreement with the terms of the Contract for Private
Redevelopment and have signed it.
Staff has reviewed the Larson's Richfield Rediscovered application and
recommends approval of the Contract for Private Redevelopment and the
subordination request. _
• III. BASIS OF RECOMMENDATION
A. POLICY
• HRA staff has received a completed application and $500 application
fee.
• The proposed project meets the objectives of the Richfield
Rediscovered Program as follows:
o Removes substandard, functionally obsolete housing and
eliminates its blighting influence.
o Provides new, higher valued housing.
o Alleviates shortage of housing choice for families.
o Facilitates the HRA's "Market Rate Initiatives" by providing a
. three -four bedroom, owner-occupied house designed for a
family..
• The project meets the Housing Design and Site Development Criteria,
as defined in Exhibit B of the Contract for Private Redevelopment.
• Brian Ringham conducted an "Evaluation of Substandardness" on the
property and considers the house no longer fit for occupancy.
• Section 5.2 Note Terms (f) of the Contract for Private Development
reads: "Unless the HRA agrees otherwise in accordance with Section
6.3, the Mortgage will be a first lien on the Property."
• • Section 6.3 Subordination of the Contract for Private Development
reads: "In` order to facilitate obtaining financing for the construction of
the .Improvements by the Buyer, the HRA shall agree to modify this
Agreement, the Note or the Mortgage in the manner=and to the extent
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the HRA deems reasonable, upon. request. by the financial institution
and the Buyer."
B. CRITICAL ISSiJES
• The small house has limited market appeal 'and can be demolished to
accommodate a home that better meets the needs of a growing
family. ~
• Prospective Richfield Rediscovered participants bear a significant cost
,in acquisition and demolition of an inner-ring suburb lot. The $70,000
Redevelopment Credit helps~fill the financing gap.
• The HRA is being asked to subordinate its mortgage with the Buyer to
second position until such time the lien is forgiven. The lien will be
removed from the property once a Certificate of Completion has been
issued. Per the Contract for Private Development, the house must be
completed within one year.
C. FINANCIAL
• This project is eligible fora $,70,000 Redevelopment Credit subject to
the terms of the Contract for Private Redevelopment.
• Under the terms of the Contract, three installments would be made:
o $25,000 would be due and payable at closing.
o $25,000 would be due and payable following the issuance of a
building permit for construction.
o $20,000 would be due on the date of the issuance of a
Certificate of Completion.
• The Larson's project would be the third of four projects budgeted for
2008.
D. LEGAL
• The_Larsons are in agreement with the terms of the Contract and have
signed it.
IV. ALTERNATIVE RECOMMENDATION(S)
• Approve the Contract for Private-Development and deny the
subordination request.
• Approve the Contract to allow for one payment of the $70,000
Redevelopment Credit at the date of the issuance of the Certificate of
Completion and deny the subordination request.
• Amend the Contract for Private Redevelopment and direct staff to
work with property owners to revise their proposal
~ V. ATTACHMENTS ~
• Contract for Private
•
• Building Plans
• Site Plan/Landscape Plan
• Elevations
• Letters from the Larsons and M&I
• Subordination request form
~ VI. PRINCIPAL PARTIES EXPECTED AT MEETING ~
• Jeremy and I en Larson
Bank requesting asubordination.
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CONTRACT FOR PRIVATE DEVELOPMENT
Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
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and
JEREMY D. CARSON AND TERI A. CARSON
at
6955 KNOX AVENUE SOUTH, RICHFIELD, MINNESOTA
This Instrument Drafted by:
City of Richfield
6700 Portland Avenue S.
Richfield, Minnesota 55423
Telephone: 612-861-9760
3, I
CONTRACT FOR PRIVATE DEVELOPMENT
THIS AGREEMENT, made and entered into as of this day of September 2008,.
by and between the Housing and Redevelopment Authority in and for the City of Richfield, a
public body corporate and politic under the laws of the State of Minnesota, having its principal
office at 6700 Portland Avenue, Richfield, Minnesota (HRA), and Jeremy D. Larson and Teri A.
Larson (Buyer).
WITNESSETH:
WHEREAS, the City of Richfield (City) and the HRA have previously created and
established a Redevelopment .Project (Project) and Tax Increment Financing District (TIF
District) pursuant to the authority granted in Minnesota Statutes, Sections 469.001 through
469.047 and Sections 469.174 through 469.179 (collectively, the Acts); and
WHEREAS, pursuant. to the Acts, the City and the HRA have previously adopted a
redevelopment plan (Redevelopment Plan) and a tax increment financing plan (TIF Plan) to
finance all or a portion of the public development costs of the Project; and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan and TIF Plan
as hereinafter defined and particularly to make specified land in the Project available for
development by private enterprise for and in accordance with the Redevelopment Plan, the HRA
has determined to provide substantial aid and assistance to finance public development costs in
the Project; and
WHEREAS, the Buyer has proposed a development as hereinafter defined within the
Project which the HRA has determined will promote and carry out the objectives for which the
Project has been undertaken, will assist in carrying out the obligations of the Redevelopment
Plan and TIF Plan, will be in the vital best interests of the City and the health, safety and welfare
of its residents and is in accord with the public purposes and provisions of the applicable state
and local laws and requirements under which development in the Project has been undertaken
and is being assisted.
NOW, THEREFORE, in consideration of the mutual covenants and obligation of the
HRA and the Buyer, each party does hereby represent, covenant and agree with the other as
follows:
ARTICLE L.
DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, the following terms have the meaning
given below unless the context clearly requires otherwise:
(a) Cam. The City of Richfield, Minnesota.
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(b) Construction Plans. Collectively, the plans, drawings and related documents
• related to the Improvements, which are listed on Exhibit D.
(c) Buyer. Jeremy D. Larson and Teri A. Larson, husband and wife.
(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) Closing The date on which Buyer closes on the Purchase of the Property.
(g) Housing and Redevelopment Authorities Act (HRA Act). Minnesota Statutes
Sections 469.001 through 469.047.
(h) Improvements. Each and all of the structures and site improvements constructed
on the Property by the Buyer, as specified in the Construction Plans approved by the HRA.
() Minimum Market Value. $191,000, which is the minimum market value for the
land and Improvements as confirmed by the Hennepin County Assessor.
(j) Mort~a~e and Holder. The term "mortgage" 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 or any part thereof, as security for a loan. The term
"holder" in reference to a mortgage includes any insurer or guarantor (other than the Buyer) of
any obligation or condition secured by such mortgage or deed of trust.
(k) Pro er .The real property legally described as:
LOT Ol'1, BLOCK 015, TINGDALE BROS, LINCOLN HILLS 2ND ADDITION
Located on land having a street address of:
6955 KNOX AVENUE SOUTH
(1) Redevelopment Praiect (Project). The Redevelopment Project established by
the HRA pursuant to Minnesota Statutes Sections 469.001 through 469.047 and described in the
Redevelopment Plan.
(m) Redevelopment Project Plan (Redevelopment Plan). The plans for
implementation of the Project adopted by the HRA pursuant to Minnesota Statutes Sections
469.001 through 469.047.
• (n) Tax Increment Financing Act (TIF Act). Minnesota Statutes Sections 469.174
through 469.179.
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(o) Tax Increment Financing District (TIF District). The TIF District previously
created. by the HRA pursuant to Minnesota Statutes Sections 469.174 through 469.179 and
described in the TIF Plan adopted therefor.
(p) Tax Increment Financing Plan (TIF Plan). The plan for development of the
TIF District previously adopted by the HRA pursuant to Minnesota Statutes, Sections 469.174
through 469.179.
(q) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles,
fire or other casualty to the Improvements, litigation commenced by third parties which results in
delays, or acts of any federal, state or local government, except those contemplated by this
Agreement, which are beyond the control of the Buyer.
Section 1.2 Exhibits. The following Exhibits are attached to and by reference made a
part of this Agreement:
A. Form of Certificate of Completion
B. Housing Design and Site Development Criteria
C. The Note and Mortgage
D. List of Construction Plan Documents
Section 1.3 Rules of Interpretation.
• (a) This Agreement shall be .interpreted in accordance with and governed by the laws
of the State of Minnesota.
(b) The words "herein" and "hereof' and words of similar import, without reference
to any particular section or subdivision refer to this Agreement as a whole rather than any
particular section or subdivision hereof.
(c) References herein to any particular section or subdivision hereof are to the section
or subdivision of this Agreement as originally executed.
(d) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or interpreting any of
its provisions.
ARTICLE II.
REPRESENTATIONS AND UNDERTAHINGS
Section 2.1 By the Buyer. The Buyer makes the following representations and
undertakings:
• (a) The Buyer has the legal authority and power to enter into this Agreement and has
duly authorized the execution, delivery and performance of this Agreement;
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(b) The Buyer has the necessary equity capital or will obtain commitments for
financing necessary for construction of the Improvements;
(c) The Buyer will construct. the Improvements in accordance with the terms of this
Agreement and all local, state and federal laws and regulations;
(d) The Buyer 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) The plans for the Improvements have been prepared by a qualified draftsperson or
architect.
(f) Buyer intends to reside at the Property following completion of construction; and
is not acquiring the Property for the purpose of resale or speculation.
Section 2.2 By the HRA. The HRA makes the following representations as the basis for
the undertaking on its part herein contained:
(a) The H1ZA is authorized by law to enter into this Agreement and to carry out its
obligations hereunder; and
(b) The HRA will, in a timely manner, subject to all notification requirements, review
• and act upon all submittals and applications of the Buyer and will cooperate with the efforts of
Buyer to secure the granting of any permit, license, or other approval required to allow the
construction of the Improvements.
ARTICLE III.
ACQUISITION OF PROPERTY; CONVEYANCE TO BUYER
Section 3.1 Purchase of Property by Buyer. The Buyer has, or will utilize its best
efforts to enter into a binding agreement to purchase the Property. Upon determination by the
HRA that Buyer has entered into a .binding purchase agreement for the purchase of the Property,
the HRA will deliver to Buyer the Note described in Section 5.1.
Section 3.2 Closing. Closing must take place on or before October 16, 2008, or such
other date as may be agreed to by the Buyer and HR.A in writing. At Closing, the Buyer will
provide. the HRA with a mortgage in recordable form (and pay for the cost of recording). The
mortgage will be a first lien on the Property and will act as security for repayment of any of the
redevelopment credit advanced to the Buyer in the event that construction of the Improvements is
not completed on or before the date specified in Section 4.3. The Mortgage will be in
substantially the form of the mortgage shown on the attached Exhibit C.
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ARTICLE IV.
CONSTRUCTION OF IMPROVEMENTS
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Section 4.1. Construction of Improvements. The Buyer shall construct the
Improvements on the Property in accordance with the Construction Plans, shall meet or exceed
the Minimum Market Value specified in Section l.l, and shall maintain, preserve and keep the
Improvements in good repair and condition.
Section 4.2. Building Plans. No building permit will be issued by the City unless the
building plans are in conformity with the Construction Plans, with the Buyer's Minimum Market
Value, this Agreement, including the Housing Design and Site Development Criteria contained
in Exhibit B, 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 Buyer in writing stating the
deficiencies and the steps necessary for correction. Issuance of the building permit by the City
shall be a conclusive determination that the 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 September 16, 2009. All construction shall be in
conformity with the approved Construction Plans. Periodically during construction the Buyer
shall make reports in such detail as may reasonably be requested by the HRA. concerning the
actual progress of construction. If at any time prior to completion of construction the HRA has
cause to believe that the Buyer will be unable to complete construction of the Improvements in
• the time permitted by this Section 4.3, it may notify the Buyer and demand assurances from the
Buyer regarding the Buyer'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 specific in Section 8.2 of this Agreement.
Section 4.4 Certificate of Completion. Promptly after notification by the Buyer of
completion of construction of the Improvements, the HRA shall inspect the construction to
determine whether the Improvements have been completed in accordance with the Construction
Plans and the terms of this Agreement, including the date of the completion thereof. In the event
that the HR.A is satisfied with the construction, the HRA shall furnish the Buyer with a
Certificate of Completion in the form attached hereto as Exhibit A. 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 Buyer to construct the
Improvements. Issunce of the Certificate of Completion shall also serve as a satisfaction of any
obligation of Buyer under the Note and Mortgage.
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 Buyer with a
written statement, indicating in adequate detail in what respects the Buyer has failed to complete
the Improvements in accordance with the provisions of this Agreement necessary, in the opinion
of the HRA, for the Buyer to take or perform in order to obtain such certification.
•
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Section 4.5 Failure to Construct. In the event that construction of the Improvements is
not completed as provided in Section 4.3 of this Agreement, an Event of Default shall be deemed
to have occurred, and the HRA may proceed with its Remedies on Default under this Agreement.
ARTICLE V.
REDEVELOPMENT CREDIT
Section 5.1 Issuance of the Note. As consideration for Buyer's covenant to construct
the Improvements, and subject to all of the conditions of this Agreement, the HRA agrees to
provide the Buyer with a Redevelopment Credit in the amount of $70,000. Upon the Buyer
providing .the HRA with evidence that Buyer has entered into a purchase agreement for the
purchase of the Property, the HRA will deliver to Buyer a promissory note in substantially the
form of the attached Exhibit C. Payment of the Redevelopment Credit will be exclusively
subject to and in accordance with the terms of the Note as such are contained in the Note or
described in this Agreement.
Section 5.2 Note Terms. The terms of the Note will include the following:
(a) Assuming the Buyer is in compliance with Buyer's obligations, the Note will be
payable in three installments. The first installment of $25,000 will be due and payable at
Closing, the second installment of $25,000 will be due and payable not later than five days
.following the date a building permit for construction of the Improvements is issued, and the final
installment of $20,000 on the date of the issuance of a Certificate of Completion showing full
completion of all of the Improvements including landscaping.
(b) The Note will be cancelled if the Closing does not occur by the last date provided
in Section 3.2; or if construction of the Improvements are not fully completed by the last date
provided in Section 4.3.
(c) -The Note will not bear interest.
(d) The Note may be canceled by the HRA in the event that the Buyer is in default of
any of its obligations under this Agreement.
(e) The Note may not be assigned or pledged unless the proposed recipient certifies to
the HRA that it is aware of and accepts to the conditions of the Note governing payment.
(f) The Note will provide for repayment of the any Development Credit payments
paid to Buyer under the Note in the event that the Buyer fails to meet the time requirements of
Sections 3.2 and 4.3. Such repayment obligation will be secured by a mortgage in substantially
the form shown in Exhibit C which will be delivered by Buyer to the HRA at Closing. Unless
the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the
Property.
• Section 5.3 Payments Under the Note. On the date payments are due under the Note,
the HRA will make such payments by delivering the amount due to either the lending institution
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providing financing for construction of the Improvements, or the title company servicing the
• construction loan. Such lending institution or title company may then use the delivered funds to
make payment to any contractor or materialman for work or materials actually furnished in
connection with the Improvements.
In the event that no lending institution or title company is willing to serve in that capacity,
the HRA shall disburse the payments, when due, in any manner which in its reasonable judgment
will assure that the funds will be expended for construction of the Improvements.
ARTICLE VI.
FINANCING
Section 6.1 Financing. Within 15 days of the date of execution of this Agreement, the
Buyer 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 Buyer of its approval.
If the HRA rejects the evidence of financing as inadequate, the Buyer shall have 30 days
or such additional period of time as the Buyer may reasonably require from the date of such
notification to submit evidence of financing satisfactory to the HRA. If the Buyer 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 Copy of Notice of Default to Lender. Whenever the HRA shall deliver any
notice or demand to the Buyer with respect to any Event of Default by the Buyer in its
obligations or covenants under this Agreement, the HRA shall at the same time forward a copy of
such notice or demand to each Holder of any Mortgage authorized by the Agreement at the last
address of such Holder shown in the'records of the HRA.
Section 6.3 Subordination. In order to facilitate obtaining financing for the
construction of the Improvements by the Buyer, the HRA shall agree to modify this Agreement,
the Note or the Mortgage in the manner and to the extent the HRA deems reasonable, upon
request by the financial institution and the Buyer.
ARTICLE VII.
PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER
Section 7.1 Representation as to Redevelopment. The Buyer 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 Buyer 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
7
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making the Development possible, the qualification and identity of the Buyer are of particular
concern to the HRA. The Buyer 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 Buyer for the faithful performance of all
undertakings and covenants agreed by the Buyer to be performed.
Section 7.2 Prohibition Against Transfer of Property and Assignment of
Agreement. For the reasons set out in Section 7.1 of this Agreement, the Buyer represents and
agrees that 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 Buyer 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 Buyer, 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.
ARTICLE VIII.
EVENTS OF DEFAULT
• Section 8.1 Events of Default Defined. The following shall be deemed Events of
Default under this Agreement and the term shall mean, whenever it is used in this Agreement,
unless the context otherwise provides, any one or more of the following events:
(a) Failure by the Buyer to pay when due the payments required to be paid or secured
under any provision of this Agreement;
(b) Failure by the Buyer to observe and substantially perform any covenant,
condition, obligation or agreement on its part to be observed or performed hereunder, including
the time for such performance;
(c) If the Buyer shall admit in writing its inability to pay its debts generally as they
become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of
its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any
substantial part of the Property;
(d) If the Buyer, 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 Buyer, a receiver of the Buyer or of the whole or substantially all of its
property, or approve a petition filed against the Buyer seeking reorganization or arrangement of
the Buyer 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
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(e) 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 any
one or more of the following actions following written notice by the HRA to the Buyer as
provided in Section 9.5 of this Agreement:
(a) suspend its performance under this Agreement until it receives assurances from the
Buyer, deemed reasonably adequate by the HRA, that the Buyer will cure its default and continue
its performance under this Agreement;
(b) cancel or rescind this Agreement;
(c) cancel or rescind the Note;
(d) foreclose on the Mortgage;
(e) withhold the Certificate of Completion; or
(f) take whatever action at law or in equity may appear necessary or desirable to the HRA
to enforce performance and observance of any obligation, agreement, or covenant of the Buyer
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 Buyer's interest in the Property, it shall, notwithstanding the foregoing, be obligated to
perform the obligations of the Buyer under this Agreement to the extent that the same have not
therefore been performed by the Buyer.
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 Buyer
to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such
notice as may be required in this Article VIII.
Section 8.4 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.
•
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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 Buyer, or any successor in interest, for any Event of Default by the HRA or for any amount
which may become due to the Buyer 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 Buyer as though fully set
forth herein.
Section 9.3 Notices and ..Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under-this Agreement by either parry to the
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 5542.3
(b) As to the Buyer:
Jeremy and Teri Larson
7034 Knox Ave. South
Richfield, MN 55423
or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section 9.3.
Section 9.4 Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, all of which shall constitute one and the same instrument.
LJ
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• IN WITNESS WHEREOF, the HR.A has caused this Agreement to be duly executed in
its name and behalf and its seal to be hereunto duly affixed and the Buyer 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
Buyers,
L~
r 1
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STATE OF MINNESOTA )
• ) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
September, 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
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this day of
September, 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
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged. before me this day of
September, 2008, by Jeremy D. Larson and Teri A. Larson, husband and wife.
Notary Public
n
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EXHIBIT A
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 1N AND FOR THE CITY
RICHFIELD
By:
Its: Chairperson
• By.
Its:
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
Executive Director
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:
City of Richfield
6700 Portland Avenue S.
Richfield, Minnesota 55423
Telephone: 612-861-9760
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EXHIBIT B
HOUSING DESIGN AND SITE DEVELOPMENT CRITERIA
Siding materials, exterior facade presentation, roof, window, siding and building line variability,
finished landscape, interior space function and use are all important considerations.
The development of all sites shall meet the development objectives listed below. The guidelines
were created to ensure that the homes built on the identified lots blend in with the surrounding
neighborhood and respond to specific concerns of the HRA.
1. General:
a. The home shall be single-family, owner occupied.
b. The value of the new home must meet or exceed the value specified for the
Development in the Contract for Private Development.
2. Site Standards:
a. The entire grounds shall be finish landscaped to be aesthetically pleasing in all
seasons. Land forms and plant materials shall be used to define the site and neatly blend with
• adjoining property.
b. Utility meters shall be screened from street view.
c. Site drainage shall be accommodated on the site so that water is directed away
from the new home and the neighboring properties. Neighboring properties should not be
disturbed to create drainage swales. Construction and the finished structure must improve or not
have a detrimental impact on storm water drainage patterns in the neighborhood.
d. Existing trees shall be preserved as much as possible. Care should be taken to
preserve existing .root systems. A tree wrap with board reinforcement shall be used on trees
directly'adjacent to active grading and construction areas.
e. The construction site, neighboring property and adjacent public street and
sidewalk shall be kept free of construction debris at all times.
f. Air conditioning units must be located in the rear yard of the house.
g. Egress .window area well foundations must meet side setback requirements (a
minimum of 5' from the property line), or be located in the rear yard of the house.
•
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h. Under no circumstance during the construction period shall construction workers,
• construction equipment or construction materials enter, disturb, or damage neighboring
properties. The HRA will solely determine whether a violation has. occurred. A penalty of $50
per day will be assessed and drawn from the Letter of Credit after written notice of violation and
a ten (10) day period for correction has been provided the Builder. Alternately, the Buyer may
enter into a written agreement with the affected adjacent property owner(s) during this ten (10)
day period. The agreement must describe the details of correction and repair which the builder
will make at a specified alternate date during construction completion. The Buyer will be
responsible for the cost of corrections and repairs determined necessary by the affected adjacent
parties. Where- disputes occur, the Buyer agrees to participate in mediation services to facilitate
problem resolution.
3. Building Standards:
a. A minimum of three completed bedrooms is required.
b. A minimum of one full completed bath and aroughed-in 3/4 bath is required.
A two car garage, attached or detached, must be provided on the site.
d. Exterior materials (siding, soffit, doors and windows) should be low maintenance.
Aluminum and vinyl are preferred. Natural cedar lap is acceptable if properly stained or painted.
Hardboard panels or hardboard lap siding are not acceptable.
• e. Unit height and mass of the new home must be compatible with the scale of the
surrounding neighborhood.
f. All building plans must have been prepared in consultation with an architect or
qualified draftsperson. All requirements by the Building Inspections Division must be met by the
Buyer.
g. A full basement shall be provided in the house unless the selected design results
in a split level type of construction.
' h. House design is a critical element of the program. The HRA design review will
include: The house building lines, window and door placement, and orientation to street for
present a balanced and pleasing view from all sides. Windows that are double hung in style or
appearance with muntins (window pane grids) are preferred, especially on the street-facing
elevations: Garage door dominance in design must be minimized.
i. All construction must conform to current sound attenuation building standards .for
properties located in 65-69 and 70-74 Ldn zones.
•
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• EXHIBIT C
PROMISSORY NOTE
REDEVELOPMENT CREDIT NOTE
$70,000 , 2008
The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a
public body corporate and politic (the "Maker"), for value received, hereby promises to pay to
Jeremy D. Larson and Teri A. Larson. (the "Holder") the principal sum of seventy thousand and
No/100 Dollars ($70,000), with no interest as hereinafter provided, in any coin or currency which
at the time or times of payment is legal tender for the payment of private debts in the United
States of America. The .principal of this Note is payable as follows:
1. The principal amount of the Note is as provided for in that certain agreement by
and between Maker and Holder entitled: Contract for Private Development dated
(the "Contract") and shall bear no interest. Terms
contained in this Note shall have the meanings given them in the Contract unless a different
meaning is clearly indicated.
• 2. The Note shall be due and payable the Note will be payable in three installments.
The first installment of $25,000 will be due and payable at Closing, the second installment of
$25,000 will be due and payable not later than five days following the date a building permit for
construction of the Improvements is issued, and the final installment of $20,000 on the date of
the issuance of a Certificate of Completion showing full completion of all of the Improvements
including landscaping. No amount shall be due or payable prior to those dates.
3. This Note will be cancelled if the Closing does not occur by the last date provided
in Section 3.2 of the Contract; or if construction of the Improvements are not fully completed by
the last date provided in Section 4.3 of the Contract.
4. This Note is given pursuant to the Contract. All of the agreements, conditions,
covenants, provisions, and stipulations and remedies contained in the Contract are hereby made a
part of this Note to the same extent and with the same force and effect as if they were fully set
forth herein. It is agreed that time is of the essence of this Note. If a default by the Maker or the
Holder occurs under the Contract, then the Holder or Maker may at its right and option, exercise
any rights it may have under law or at equity, under the Agreement, and under the Note.
5. The remedies of the Maker or Holder as provided herein, and in the Contract, or
any other instrument, shall be cumulative and concurrent and may be pursued singly,
successively, or together, and, at the sole discretion of the Maker or Holder, may be exercised as
• often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall
in no event be construed as a waiver or release thereof.
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• The Maker or Holder shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the
Maker or Holder and then only to the extent specifically set forth in the writing. A waiver with
reference to one event shall not be construed as continuing or as a bar to or waiver of any right or
remedy as to a subsequent event. This Note may not be amended, modified, or changed except
only by an instrument in writing signed by the parry against whom enforcement of any such
amendment, modifications, or change is sought.
6. This Note shall be governed by and construed in accordance with the laws of the
state of Minnesota without regard to its conflict of laws provisions. Any disputes, controversies,
or claims arising out of this Note shall be heard in the state or federal courts of Minnesota, and
all parties to this Note waive any objection to the jurisdiction of these courts, whether based on
convenience or otherwise
7. Holder may not assign, transfer or pledge this Note without the prior written
consent of the Maker. Maker may condition consent on obtaining a certification from the
proposed assignee, transferee or pledgee acknowledging and agreeing to Maker's rights to cancel
the Note in accordance with the terms of the Note and the Contract.
8. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things
required to exist, happen, and be performed precedent to or in the issuance of this Note do exist,
• have happened, and have been performed in regular and due form as required by law.
9. Any Development Credit payments paid to Buyer under the Note will be repaid to
the HRA in the event that the Buyer fails to meet the time requirements of Sections 3.2 and 4.3 of
the Contract. Such repayment obligation will be secured by a mortgage in substantially the form
shown in Exhibit C of the Contract which will be executed and delivered by Buyer to the HRA at
Closing. Unless the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be
a first lien on the Property.
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of
the day of , 2008
•
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• THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By
Its Chairperson
By
Its Executive Director
Buyers
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN)
• The foregoing instrument was acknowledged before me this day of
September, 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
STATE OF MINNESOTA )
SS
COUNTY OF HENEPIN )
The foregoing instrument was acknowledged before me this day of
September, 2008, by Steven L. Devich, the Executive Director of the Housing and
Redevelopment Authority in and fora the City of Richfield, Minnesota (HRA), a public body
corporate and politic under the laws of Minnesota, on behalf of the HRA.
Notary Public
•
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• STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
September,. 2008, by Jerem~D. Larson and Teri A. Larson, husband and wife.
Notary Public
C:
•
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• MORTGAGE
This Indenture made this day of September, 2008, between Jeremy D. Larson and Teri
A. Larson, Mortgagor, and THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate
and politic under the laws of the State of Minnesota, Mortgagee.
Witnesseth: That the said Mortgagor, in consideration of the sum of One ($1.00) Dollar and other
good, valuable and sufficient consideration, the receipt whereof is hereby acknowledged, does
hereby Grant, Bargain, Sell, and Convey unto the said Mortgagee, its successors and assigns,
Forever, all the tracts or parcels of land lying and being in the County of Hennepin and State of
Minnesota, described as follows, to-wit:
The separate tracts and parcels of land described in the attached Exhibit A. (The
"Property")
To Have and to Hold the Same, Together with the hereditaments and appurtenances thereto
belonging to the said Mortgagee, its successors and assigns, forever. And the said Mortgagor, for
itself, and its successors and assigns, does covenant with the said Mortgagee, its successors and
assigns, as follows: That it is lawfully seized of said premises and has good right to sell and convey
the same; that the same are free from all incumbrances, save and except reservations, restrictions
• and easements of record; that the Mortgagee, its successors and assigns, shall quietly enjoy and
possess the same; and that the. Mortgagor will Warrant and Defend the title to the same against all
lawful claims not hereinbefore specifically excepted.
Provided, Nevertheless, That if said Mortgagor, its successors and assigns, shall keep and perform
each and every one of its obligations with respect to completion of construction of the
Improvements to be constructed by Mortgagor under and pursuant to that certain Contract for
Private'development dated as of (the "Contract"), made and entered
into between Mortgagor and Mortgagee, and shall keep and perform all the covenants and
agreements herein contained, then this deed to be null and void, and to be released at the
Mortgagor's expense. This Mortgage secures a principal debt in the amount of $70,000 payable by
Mortgagor to Mortgagee under the terms of the Contract, and amendments thereto, between
Mortgagor and Mortgagee.
And the Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree with
the Mortgagee, its successors and assigns, to perform its obligations as above specified, to pay all
taxes and assessments now due or that may hereafter become liens against said premises at least ten
(10) days before penalty attaches thereto; to pay, when due, both principal and interest of all prior
liens or incumbrances, and to keep said premises free and clear of all other liens or incumbrances;
to commit or permit no waste on said premises and to keep them in good repair; to complete
forthwith any improvements which may hereafter be under course of construction thereon, and to
pay any other expenses and attorneys' fees incurred by said Mortgagee, its successors or assigns, by
• reason of litigation with any third party for the protection of the lien of this Mortgage.
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•. That Mortgagor, does further covenant and agree that if any lien for labor, skill or material shall
be filed for record during the life of this Mortgage, upon or against the premises hereby mortgaged,
the said Mortgagor will, within thirty (30) days after the date of its filing for record, either pay off
the said lien and secure its satisfaction of record, or will protect the Mortgagee against any loss or
damage growing out of its enforcement, by furnishing a bond for the same amount in the form and
with the sureties to be approved by the Mortgagee.
In case of failure to pay said taxes and assessments, prior liens or incumbrances, expenses and
attorneys' fees as above specified, or to insure said buildings and deliver the policies as aforesaid,
the Mortgagee, its successors or assigns, may pay such taxes, assessments, prior liens, expenses and
attorneys' fees and interest thereon, or effect such insurance, and the sums so paid shall bear interest
at the highest rate permitted by law from the date of such payment, shall be impressed as an
additional .lien upon said premises, and be immediately due and payable from the Mortgagor, its
successors or assigns, to said Mortgagee, it successors or assigns, and this Mortgage shall from date
thereof secure the repayment of such advance with interest.
In case of default in any of the foregoing covenants, the Mortgagor confers upon the Mortgagee the
option of declaring a default and hereby authorizes and empowers said Mortgagee, its successors
and assigns, to foreclose this Mortgage by judicial proceedings or to sell said premises at public
auction and convey the same to the purchaser in fee simple in accordance with the statute, and out
of the money arising from such sail to retain all sums secured hereby, with interest and all legal
• costs and charges of such foreclosure and the maximum attorneys'. fee permitted by law, which
costs, charges and fees the Mortgagor herein agrees to pay.
In Testimony Whereof, The said Mortgagor has hereunto set its hand the day and year first above
written.
Jeremy D. Larson
Teri A. Larson
3>~~.
• STATE OF MINNESOTA
COUNTY OF HENNEPIN
The foregoing instrument was acknowledged before me this day of September, 2008,
by Jeremy D. Larson and Teri A. Larson, husband and wife.
Notary Public
City of Richfield
6700 Portland Avenue S.
Richfield, Minnesota 55423
Telephone: 612-861-9760
•
•
9
• EXHIBIT A
LEGAL DESCRIPTION
LOT O1 1, BLOCK 015, TINGDALE BROS, LINCOLN HILLS 2ND ADDITION
C.
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EXHIBIT D
LIST OF CONSTRUCTION PLAN DOCUMENTS
• Contract for Private Development, fully executed
• Building Plans, approved by the HRA for design considerations and approved by the
Building Official for construction considerations
• Approved Site Plan
• Landscape Plan
• Purchase Agreement for sale of Property from Buyer to Homeowner
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Page 1 of 1
3ati
Kirsten Partenheimer
From: Jeremy Larson [Jeremy.Larson@dukerealty.com]
Sent: Monday, September 08, 2008 2:01 PM
To: Kirsten Partenheimer
Cc: Peter.Lindquist@micorp.com
Subject: RE: requesting a subordination
Dear Ms. Partenheimer,
Let this be our notice that my wife Teri and I request a subordination of the City's lien rights to our
mortgage lender, M&I Bank. The terms of our financing with M&I require that they hold the first lien right
to the property. If this subordination request is not approved we will be unable to secure financing and
would not be able to move forward with the redevelopment at 6955 Knox.
Thank you.
Sincerely, Jeremy Larson
From: Kirsten Partenheimer[mailto:KPartenheimer@cityofrichfield.org]
Sent: Monday, September 08, 2008 1:31 PM
To: Jeremy Larson
Subject: requesting a subordination
. Dear Mr. Larson:
To include a subordination request at Monday's HRA meeting, we will need a letter from you requesting the
subordination and the reasons one is needed, as well as from M&I Bank. The bank's letter should also include
the mortgage amount, the terms of the mortgage and the projected property value.
I've attached our standard subordination request form. Please update any information as needed.
Sincerely,
Kirsten Partenheimer
Housing Specialist
City of Richfield
Community Development
6700 Portland Avenue S.
Richfield, MN 55423
Phone: 612-861-9778
Fax: 612-861-8974
kpartenheimer@cityofrichfield.org
Please consider the environment before printing this email
~J
9/8/2008
09/09/2008!13:08 FAXu 612 798 3239 M & I BANK 002/003
C¢J 041/001
IC & I BANK
09/09/Z008 12:10 FAg 612 798 3239 ,
3,3~
•
i
MORTGAGE
September 9, 2 )08
parten] eimer
City of Richfie .d
Dear K.irste0.
We are reques t ing the City of Richfield to subordinate their $70,040 ~ ~ ~ first lien
construction li ~ ~n for 3e~Y i~°m- Our °O°~`let~on loans req~
position.
ximately $268,000 and $33,500. We are anticipating
• pm construct i. >n loans will be apP'r° sisal has not yet been
and app~~ 'slue of approximately $310,000, however the apP
ordered.
S' ~
c
Peter Lindgt i; t
District Mar a~;er
MBtI Bapk
6625 Lyada ~e Avenue South
gichfield, b [T 55423
Direct 612 X93-3235
Cell 65191-5381
Peter.! a 1 lls :@~~rp•com
09/09/200813:08 FAX 612 798 3239 M & I BANK 003/003
~~~~
REQUEST FOR SUBORDINATION AGREEMENT
• HOUSING AND REC EVELOPMENT AUTHORITY (HRA} IN AND FOR THE CITY OF RICHFIELD
INSTRU~CTiONS
/ Please review the F IRA's subordination policy prior to submitting a request for subordination.
/ Please complete farm and return by fax (612-8fi1-8974).
/ HRA Processing F~ ie - $75.00.
/ Re uest will not bE reviewed until all su ortin documents and fee have been received.
' ~ ~ ~unearr;sGOR fNFORMATION.
Applicant (Mortgagor) !~ ame: Jeremy D. Larson and Teri Ann Larson
Prapertv Address: 7034 Knox Avenue S., Richfield, MN 55423
'~~ PROCESSING INFORMATION
Reason for subordinatic m: The Larsons are urchasin and redevelo in a ro ert under the Richfield
Rediscovered-Pro ram The terms of their financin re uire M8~1's mort a e to be in first asition.
Closing Date: On or bei ore 10/15/08
Full Legal name of Mortgagee (new lender): M&I Marshall and Ilsley Bank, a Wisconsin Corporation
(This name will appear on Subordination Agreement}
Mortgagee's state of in~:orporation: Wisconsin
I NIA to federal credit unions; lender's location is not necessaril the State in which it is incor rated
•DEBT'l' VFORMATION PROPERTY YALUE~ INFORMATION
Amount of new mortga ~e loan 268.000 Projected property value: 3$ 35,00
HRA Redevelopment t:redit 70 000 Appraisal conducted? ^ Yes X No
All other remaining lien(s) 0$3500 if no, how value determined? Future appraisal
Equity Line of Credit ~
Total projected indebtedness 3$ 04 000
E ui bein removed': 0
LTV: 80190 % (A total LTV including HRA debt should be below 80 percent.)
DOCtJ°MENT DISTRIBUTION fNFORtMATION
Send document to: ~ Broker or Dlrect Lender ^ Title Company ^ Pickup at City Hail
Company Name: M&I Bank ATTN: Peter Lindquist
Address: 6625 LYndal~~ Avenue S. Richfield MN 55423
Phone No: 612-798-3;35 Fax No: , , ~ .. ~ ~~ ~ _
. ^ $75 Application fee (Check payable to Richfield HRA)
^ Typed letter, dated and signed by mortgagor, stating the reason for the requested subordination and the
use of any equity beir g removed as part of the iaan transaction
^ Copy of current title: work (must indicate all debt against property)
^ Settlement stateme •nt indicating estimated closing costs
^ Current a raisal
.-._....~.e~.raun~ ~cuir~tC~~hnrrlinatinn S~ PaVO~S~~0IT11S~~0$.c1UbR6QU@StFOfR1.C~OC
AGENDA ITEM # rj
REPORT # !+2
~~ STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
SEPTEMBER 15, 2008
REPORT PREPARED BY:
REPORT PRESENTER:
LYNNETTE CHAMBERS, LEASED HOUSING
SPECIALIST
NAME, TITLE
JOHN STARK, INTERIM COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
C.
INTERIM DEPARTMENT DIR
REVIEW:
REVIEWED BY EXECUTNE
ITEM FOR HRA CONSIDERATION:
Conduct a public hearing to consider the approval of the Richfield Housing and
Redevelopment Authority's annual Public Housin Authori Plan.
I. RECOMMENDED ACTION:
Conduct and close the public hearing and by motion: Approve the
Housing and Redevelopment Authority's annual Public Housing
Authority Plan for the Section 8 Housing Assistance Program and
authorize the Chair and Executive Director to execute program
documents.
•
II. BACKGROUND
The Quality Housing and Work Responsibility Act of 1998 (QHWRA) was created by
Congress. QHWRA requires the Housing and Redevelopment Authority (HRA), as a
Public Housing Agency (PHA), to have afive-year plan and an annual plan. The five-
year PHA Plan describes the housing mission of the Agency and the Agency's long-
range goals and objectives for achieving its mission over the subsequent five years.
The annual PHA Plan provides details about the Agency's immediate operations,
program participants, and programs and services and the Agency's strategy for
addressing the needs of the community in the upcoming fiscal year. Staff has
developed a PHA Plan in proper form and content.
091508 Section 8 PHA Plan
In addition, QHWRA requires the HRA to maintain a "Resident Advisory Board" to
make comments about the PHA Plan. The Resident Advisory Board, made up of
program tenants that volunteer to provide feedback, had no additional comments to
• the PHA Plan.
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA must formally adopt the PHA Plan following a public hearing.
• The Department of Housing and Urban Development (HUD) requires the
HRA Chair and Executive Director to execute documents.
• HUD has designated Richfield as a high performer; signaling a high level of
performance.
• The public hearing notice of 45 days has not generated any comments or
concerns.
B. CRITICAL ISSUES
• Failure to approve the PHA Plan will result in receiving anon-compliance
status with HUD. "Non-compliance" violates the contracts that the HRA has
with HUD and results in a loss of administrative and rent assistance funds.
C. FINANCIAL
• The HRA has four contracts for administrative and rent assistance funds with
. HUD.
• Annually, the HRA receives approximately $1,198,276 for rental assistance
payments and $158,856 for administrative payments. A current PHA Plan is a
requirement of these contracts.
D. LEGAL
• The Housing Assistance Program (HAP) contracts that the HRA has with HUD
have been previously reviewed and approved by legal counsel.
• Proper notice was published on July 30, 2008 in the Sun Current of the
availability to review the PHA Plan and of the public hearing to be held
concerning PHA Plan approval. The publication schedule is in compliance with
HUD regulations.
IV. ALTERNATIVE RECOMMENDATION(S~
• Do not approve the PHA Plan at this time. (The HRA would not be in compliance
with HUD).
V. ATTACHMENTS
• Summary Update (Attachment A)
• VI. PRINCIl'AL PARTIES EXPECTED AT MEETING
• N/A
5'
Attachment A
Summary Update
Richfield HRA Annual Plan, Year 2009
September 15, 2008
The annual Pubic Housing Agency Plan (PHA Plan) is a 17-page document. Known as
HUD Form #50075-SA, this PHA Plan provides a standard way for all PHA Plans and
the Richfield Housing and Redevelopment Authority (HRA) to report that the PHA Plan
complies with all federal regulations.
To summarize:
^ The mission of the HRA is the same as HUD's: to promote adequate and affordable
housing, economic opportunity and a suitable living environment free from
discrimination.
^ The HRA goals are to:
• - Secure more rental vouchers when available.
- Acquire and/or build affordable housing.
- Improve program administration (Richfield is already a high performer).
- Increase program participation by landlords.
- Promote client self-sufficiency.
- Ensure equal opportunity and fair housing standards are achieved.
The PHA Plan document ends with:
a drug-free certification form;
a certificate that no payments have been made to influence federal transactions;
and
a three page certification form that the HRA does and will comply with all applicable
federal regulations as listed on the certification and signed by the HRA Chair.
The annual PHA Plan in its entirety is always available to the HRA and the public. The
PHA Plan is available for review in the Community Development Department.
•
AGENDA ITEM # 6
REPORT # 3
~~- STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
SEPTEMBER 15, 2008
REPORT PREPARED BY:
JOHN STARK, INTERIM COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
REPORT PRESENTER:
STEVE DEVICH, HRA EXECUTIVE
DIRECTOR
NAME, TITLE
INTERIM DEPARTMENT DIRECTOR
REVIEW:
S/GNATURE
•
REVIEWED BY EXECUTIVE
ITEM FOR HRA CONSIDERATION:
Information regarding Proposed 2009 Housing and Redevelopment Authority Budget revisions.
I. RECOMMENDED ACTION:
By Motion: No action necessary; individual programs and projects
wil! be considered by the Housing and Redevelopment Authority as
reauired.
II. BACKGROUND
On August 18, 2008 the Housing and Redevelopment Authority (HRA) unanimously
approved the proposed budget that was prepared.and presented by staff. In that
proposed budget, the increase to the levy was proposed to be $488,925.00. This
amount represented a 3% increase over the 2008 adopted HRA Levy. Staff
determined .that this was the bare minimum of levy proceeds that were necessary to
maintain HRA projects and programs.
At the August meeting the HRA unanimously voted to adopt the maximum amount
of levy in order to provide additional funding for the community's housing needs.
Based on the taxing formula determined through Minnesota State Statutes,
however, the HRA is legally eligible to levy up to $596,361'. This amount is
approximately $107,000 more than the minimum amount sought in the budget.
091508 HRA Budget
Staff is proposing that the additional levy revenue be used to fund the following:
• $75,000 for augmentation of existing housing programs (such as
Transformation Home loans and Richfield Rediscovered) or funding of new
programs (such as rental housing maintenance funding or funds to help
seniors successfully ready their homes for sale). The precise use of these
funds would be based on the outcome of the Housing Program Evaluation
being done by Bennett Consulting and would be brought back to the HRA for
further approval
• $1'7,500 for consultant and materials costs associated with creating a
Housing Program Marketing Plan and implementation of that plan.
• $7,500 fora one-year paid intern to track foreclosures and to assist in
creating and implementing foreclosure prevention programs.
• $7,000 for Landlord and Tenant Education programs .(including the
production of a,landlord guidebook, continued funding of Richfield Apartment.
Managers Association, cleaning classes with supplies. for housing assistance
recipients and tenant education programming).
III. BASIS OF RECOMMENDATION
!~. POLICY
• HRA staff presented a budget that sought minimal funding to meet the
housing and redevelopment needs of the community.
• The HRA identified aneed/desire to devote additional resources to its
housing programs at a time when housing problems are becoming
• more prevalent.
• There is the ability to levy for additional funds (approximately
$107,000) to meet these needs.
B. CRITICAL ISSUES
• The HRA approved a budget on August 18, 2008 that reflected the
.maximum amount of available HRA levy.
C. FINANCIAL.
• The levy sought by the HRA is consistent with prescribed levy limits
D. LEGAL
• N/A
ALTERNATIVE RECOMMENDATION(S~
• Direct staff to make different project and programming recommendations that
could be fulfilled under the maximum permitted levy.
• Decrease the levy amount to the minimal levy impact ($488,000) as
presented as part of the August 18,.2008 budget presentation..
~ V. ATTACHMENTS ~
VL PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A