02-17-09 Agenda• CITY OF RICHFIELD, MINNESOTA
TUESDAY, FEBRUARY 17, 2009
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. Approval of minutes of (1) Special HRA Worksession of January 20, 2009 and (2)
Regular HRA Meeting of January 20, 2009
Notes:
2. HRA approval of agenda
3. Consent Calendar contains several separate items which are acted upon by the HRA
in one motion. Once the Consent Calendar has been approved, the individual items
and recommended actions have also been approved. No further HRA action 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 application to Hennepin
County Housing, Support Services and Transit Coordinated request for proposals
for redevelopment of 7316 Clinton Avenue and 6704 Pleasant Avenue S.R. No. 6
Notes:
4. Consideration of subordination request of HRA First Time Advantage loan at 6515
Logan Avenue
• Staff Report No. 7
• Notes:
5. Consideration of guidelines newly-created HRA funded Foreclosure Purchase
Incentive Program
Staff Report No. 8
Notes:
6. Executive Director report
7. 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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LJ
STAFF REPORT
3A
6
AGENDA ITEM #
REPORT #
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
FEBRUARY 17, 2009
REPORT PREPARED BY:
KIRSTEN PARTENHEIMER, HOUSING
SPECIALIST
NanrE, TITLE
•
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR
ITEM FOR HRA CONSIDERATION:
Consideration of a resolution for submittal of an application to the Hennepin County Housing,
Support Services and Transit Coordinated Request for Proposals for the redevelopment of
7316 Clinton Avenue and 6704 Pleasant Avenue.
I. RECOMMENDED ACTION:
By Motion: Adopt the attached resolution approving submittal to the
Hennepin County Housing,. Support Services and Transit Coordinated
Request for Proposals for the redevelopment of 7316 Clinton Avenue
and 6704 Pleasant Avenue.
•
II. BACKGROUND
The Richfield Housing and Redevelopment Authority (HRA) purchased 7316 Clinton
Avenue, a double lot and 6704 Pleasant Avenue, a single lot in the summer of 2008
for the purpose of redevelopment under the New Home Program. The New Home
Program provides new, single-family homeownership opportunities to households
making at or below 80% of the area median income (AMI).
A substandard house at 7316 Clinton Avenue was demolished at the end of 2008
and 6704 Pleasant Avenue is a vacant parcel. The HRA has proposed building a
single-family home at 6704 Pleasant Avenue. The HRA will subdivide 7316 Clinton
021709 HOME Funding Application
JOHN STARK, COMMUNITY DEVELOPMENT
Avenue and build two new single-family homes. One home is proposed to be a fully
accessible house and will be marketed to a household with a family member with a
physical disability.
The City will partner with the West Hennepin Affordable Housing Land Trust and the
Greater Metropolitan Housing Corporation to construct these new homes and
ensure long term affordability.
The Hennepin County Housing, Support Services and Transit Coordinated Request
for Proposals (CRFP) includes funding through the HOME Investment Partnerships
Program (HOME) and Affordable Housing Incentive Fund (AHIF) Program. The
HRA's application will be considered for both programs.
The Hennepin Housing Consortium, which represents all 45 suburban Hennepin
County communities, has approximately $2.0 million in HOME funds available.
HOME funds are federal funds that come from the U.S. Department of Housing and
Urban Development (HUD). The available HOME funding is comprised of the 2009
funding year (July 1, 2009 to June 30, 2010) estimated allocation. Hennepin
County administers the HOME Program on behalf of the Consortium.
The AHIF program is provided through the Hennepin County Housing and
Redevelopment Authority (HCHRA). Approximately $4 million is available in this
fund.
• The HRA's CRFP application requests funds to reduce the development gap to
make the homes affordable to households making 80% AMI or less.
The CRFP application is due to Hennepin County on February 26, 2009.
III. BASIS OF RECOMMENDATION
A. POLICY
• It is appropriate to seek outside funding wherever possible.
B. CRITICAL ISSUES
• Not submitting an application will cause the HRA to forgo a potential
funding source in 2009.
C. FINANCIAL
• A local match is not required.
• CRFP funding can help fill a development gap to make the homes
affordable.
. D. LEGAL
• N/A
• IV. ALTERNATIVE RECOMMENDATIONr;S~
• Do not adopt the resolution and direct staff to withhold the application.
V. ATTACHMENTS
• Resolution
Map of grant application area
Photos of grant application area
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
•
•
~A-I
RESOLUTION NO.
• RESOLUTION AFFIRMING AND RATIFYING HOUSING AND REDEVELOPMENT
AUTHORITY STAFF SUBMITTAL OF AN APPLICATION TO THE HENNEPIN COUNTY
HOUSING, SUPPORT SERVICES AND TRANSIT COORDINATED REQUEST FOR
PROPOSALS FOR THE REDEVELOPMENT OF 7316 CLINTON AVENUE AND 6704
PLEASANT AVENUE
WHEREAS, the Richfield Housing and Redevelopment Authority (the "HRA") is
located within Hennepin County and is therefore eligible to access the Hennepin County
Housing, Support Services and Transif Coordinated Request for Proposals (CRFP); and
WHEREAS, the Hennepin County Housing, Support Services and Transit CRFP
includes the HOME Investment Partnerships Program (HOME) and Affordable Housing
Incentive Fund (AHIF) Program.
WHEREAS, the HRA has the institutional, managerial and financial capability to
ensure adequate project administration; and
WHEREAS, the HRA certifies that it will comply with all applicable laws and
regulations as stated in the contract agreements; and
NOW, THEREFORE, BE IT RESOLVED, that the HRA supports the Hennepin
• County Housing, Support Services and Transit CRFP application submitted to Hennepin
County on February 26, 2009, for the redevelopment of 7316 Clinton Avenue and 6704
Pleasant Avenue.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 17th day of February, 2009.
Suzanne M. Sandahl, Chair
ATTEST:
Joan Helmberger, Secretary
•
021709 HOME Funding Application
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AGENDA ITEM # !+
REPORT # 7
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
FEBRUARY 17, 2009
REPORT PREPARED BY:
REPORT PRESENTER:
KIRSTEN PARTENHEIMER, HOUSING
SPECIALIST
NAME, TITLE
JOHN STARK, COMMUNITY DEVELOPMENT
NAME, TITLE
•
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration to approve a subordination request of a Housing and Redevelopment Authority
First Time Advanta a loan at 6515 Lo an Avenue.
I. RECOMMENDED ACTION:
By Motion: Approve subordination request of a Housing and
Redevelopment Authority First Time Advantage loan at 6515 Logan
Avenue.
II. BACKGROUND
Jared and Kelly Johnson of 6515 Logan Avenue have requested a subordination of
their First Time Advantage loan of $10,000, received in July 2007. At 88%, the
loan-to-value ratio exceeds the Housing and Redevelopment Authority's (HRA)
Subordination and Satisfaction Policy, and; therefore, is being brought to the HRA
for consideration.
The subordination request meets all other requirements under the HRA's policy.
The HRA's First Time Advantage loan is currently in third place behind two other
mortgages. The Johnsons would like to refinance the two superior mortgages into
one mortgage, resulting in a lower interest of 5.00% and a lower monthly payment.
By refinancing the Johnsons will save $219 a month. The First Time Advantage
021709 Johnson subordination request appeal
loan will move to second position if the request is approved. No equity will be taken
• out.
HRA staff has reviewed the application and recommends approval of the
subordination.
III. BASIS OF RECOMMENDATION
A. POLICY
• According to the HRA Subordination and Satisfaction Policy, "The total
debt secured by the property, including the HRA lien and all superior
mortgages, shall not exceed 80% of the documented market value of
the property."
• By subordinating the HRA's lien, the Johnsons can refinance their two
superior mortgages to a lower interest rate of 5.00% and lower their
monthly payments.
• The amount of debt superior to the HRA's lien will not increase.
B. CRITICAL ISSUES
• The loan-to-value ratio is 88%.
• Subordination request meets all other HRA guidelines.
• The HRA lien is currently in third position and will move to second
• position if the subordination request is approved.
• No additional equity will be taken out with this new mortgage.
• Taxes are current.
• Johnsons are refinancing to a lower fixed-rate mortgage (5.00%).
C. FINANCIAL
• Payment has been received for the subordination request.
• The subordination would not put the HRA into a less desirable
financial position.
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATION(S~
• Deny the subordination request.
V. ATTACHIVIENTS
• Request for Subordination Agreement.
• Letter from homeowner.
• Photograph of 6515 Logan Avenue.
• VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Jared and Kelly Johnson.
~-i
REQUEST FOR SUBORDINATION AGREEMENT
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD
•~
INSTRUCTIONS
/ Please review the HRA's subordination policy prior to submitting a request for subordination.
/ Please complete form and return by fax.
/ HRA Processing Fee $75.00.
/ Re uest will not be reviewed until all su ortin documents and fee has been received.
MORTGAGOR INFORMATION
Applicant (Mortgagor) Name: CEO r. a NsonJ
Pro a Address: (, S"!S` ,gyp Rol ~- ,Richfield, MN 55423
PROCESSING INFORMATION
Reason for subordination: ,~CGi./~N~~ Off' !/~-` fl'Io~TGit~'~
Closing Date: r ^~ d
_
Full Legal name of Mortgagee (new lender): ~ilf/,k'uSf" ,~/f /~~~
(this name will appear on Subordination Agreement}
Mortgagee's state of incorporation: ~i~T C~
N/A to federal credit unions; lender's location is not necessaril the State in which it is incor orated
DEBT INFORMATION PROPERTY VALUE INFORMATION
Amount of new mortgage loan $ t"` Fa~'(Xj _ Current property value $ v{~ J . L~U
HRA Lien $ /p~ ao ~ Appraisal conducted? Yes ~ N~o
All other remaining lien(s) $ If no, how value determined
Equity Line of Credit $ --
Total projected indebtedness $ ~vt
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ry
='i iTu?b..~~ ; ;":C~i„)~7•.~^,<:r~ ~~r"~~ ~ JJe~I ~•:~,: C..:%:~~'~~•,ri,"~ t,
LTV: ~ 7 ~7 % (A total LTV including HRA debt should be below 80 percent.)
DOCUMENT DISTRIBUTION INFORMATION
Send document to
: Broker or Direct Lender ^ Title Company ^ Pickup at City Hail
m/~
Company Name: g,Co~.`iT8'.~RI'~A16E rr~%,rucn~.~ ~,~cF ATTN: icN.is- ~
Address: !O iZiv~c_..~~rr ~ir1r.4- So-~rE- ~Z .f*r--T°' ~~/ ~SS1o~
Phone No: 65"7 YS 6voo Fax No: 6a1 559. DC~
DO;GUMENTS REQUIRED FOR COMPLETE APPLICATION _ -
,$'15 Application fee (Check payable to Richfield HRA or cash)
Typed letter
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Settlement statement indicatin estimated closin costs --~ l`rpoQ /pi ~tT" D aT Y
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To Whom It May Concern:
This letter is in reference to the request for subordination of our HRA Mortgage ui the
amount of $10,000. We are refinancuig our current 1St mortgage and 2"d mortgage into
one mortgage and we will be savuig $21.9.41/month after the close of this transaction.
There is no equity being taken out in the tralisactiou as this is only a change ui rate acid
term of the mortgage.
Please contact me directly with questions.
Sincerely f
~f ~%
Jared Joiuison
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AGENDA ITEM # rj
REPORT # R
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
FEBRUARY 17, 2009
REPORT PREPARED BY:
KAREN BARYON, COMMUNITY
DEVELOPMENT ASSISTANT DIRECTOR
NAME, TITLE
REPORT PRESENTER:
KAREN BARYON, COMMUNITY
DEVELOPMENT ASSISTANT DIRECTOR
NAME, TITLE
•
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTNE
'~ ITEM FOR HR.A CONSIDERATION:
Approval of guidelines for the newly created Foreclosure Purchase Incentive Program.
I. RECOMMENDED ACTION:
By Motion: Approve guidelines for the Housing and Redevelopment
Authority funded Foreclosure Purchase Incentive Pro ram.
II. BACKGROUND
Over the past two years, the City of Richfield has seen record numbers of
foreclosures. These foreclosed properties typically end up vacant for long periods
of time, suffering from deferred maintenance resulting in blight. These properties
become attractive nuisances to thieves and vandals and prove to be a detriment to
the surrounding neighborhood negatively impacting property values.
In an effort to return these vacant foreclosed properties to owner-occupied homes,
the Housing and Redevelopment Authority (HRA) approved $150,000 for the 2009
budget year to provide down-payment assistance or rehab assistance as an
incentive to get these homes re-occupied as .quickly as possible.
The City has also applied for, and will likely receive Federal Neighborhood
Stabilization Program (NSP) funds to assist in addressing foreclosed residential
021709 Foreclosure Purchase Incentive Program Guide-ines
properties. The NSP funds are targeted toward households with incomes at or
below 120% of the Area Median Income (AMI), as well as a number of other
restrictions. -
In an effort to complement the NSP funding and requirements, and. to attract
prospective homebuyers, staff is recommending approval of the attached
Foreclosure Purchase Incentive Program Guidelines for the use of the HRA's
Foreclosure Purchase Funds. _
III. BASIS OF RECOMMENDATION
A. POLICY
• It is the HRA's policy to ensure the housing stock is maintained to
facilitate stable neighborhoods and a solid tax-base.
• It is the HRA's policy to provide homeownership opportunities to .
households of a variety of income levels.
B. CRITICAL ISSUES
• The City has seen a record number of foreclosures over the past two
years.
• It is anticipated that the City will continue to see a large number of
foreclosures. over the next two years due to Adjustable Rate Mortgage
(ARM) resets and the economy.
• Foreclosed properties contribute to blighted neighborhoods and
negatively impact surrounding property values.
• Many foreclosed properties are plagued by deferred maintenance
and/or damage associated with the foreclosure.
• Due to the large number of homes available on the market and due to
the deferred maintenance/rehab issues associated with these
foreclosed houses, it is prudent to offer an incentive to households to
purchase foreclosed properties in the City of Richfield.
C. FINANCIAL
• - $150,000 has been budgeted by the HRA in 2009 for a foreclosure
program.
• Funds will be distributed in the form of a Deferred Loan, forgivable
after five years.
D. LEGAL
• The HRA Attorney has drafted the Foreclosure Purchase Incentive
Program Agreements.
ALTERNATIVE RECOMMENDATION~S~
• Approve Foreclosure Purchase Incentive Program Guidelines with changes
• Do not approve the Foreclosure Incentive Purchase Program Guidelines.
V. ATTACHMENTS
• HRA Mortgage Foreclosure Response Program Procedural Guidelines
• Draft Foreclosure Purchase Incentive Program Down-Payment Assistance
Loan Agreement
• Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement
VI. PRINCIl'AL PARTIES EXPECTED AT MEETING
~-I
Mortgage Foreclosure Response Program
Procedural Guidelines
Approved by HRA 9/17/07
This document has been developed as a guidance tool for program administration. This document
should not be interpreted as constituting any contractual agreement or liability by the City or HRA.
Statement of Purpose
The goal of the Richfield Mortgage Foreclosure Response Program is to consider the various
options when a property with a HRA mortgage interest enters foreclosure.
Program Objectives
• To protect the HRA's mortgage interest..
• To improve the housing stock for future homeowners.
• To prevent foreclosure and keep homeowners in their home whenever feasible.
Program Basics
1. After receiving a notice of foreclosure, staff contacts City Manager and HRA Chair.
2. Staff visits homeowner with information regarding foreclosure prevention.
3. Analysis on property, mortgage amount, foreclosure status, etc. is completed.
4. Decision is made to: purchase/rehab/sell, purchase/demolish/sell, or negotiate repayment of
• HRA lien.
Redemption/Purchase
1. Redemption should only be pursued when a comfortable margin exists between the potential
resale price and the estimated costs of redemption, rehabilitation, and sale.
Rehabilitation
1. The purchased homes will be rehabilitated to meet the Point of Sale requirements. This level
of rehabilitation will ensure a safe living environment for the future homeowner and conserve
HRA resources.
2. Staff will coordinate the rehabilitation, with assistance from non-profit organizations as needed.
Demolition
1. In some instances, the property in foreclosure may be a qualifying substandard dwelling that is
in a condition that it should be demolished as substandard and by removal becomes a vacant
lot for an affordable New Home or a Richfield Rediscovered home.
Sale
1. The rehabilitated homes, at a minimum, will be sold at a price to cover HRA costs. The HRA
will decided the level of sale on a case by case basis (i.e. market-rate, 80%AMI, 60%AMI,
etc.).
2. Staff will. market the home for sale and facilitate the sale. The use of non-profit organizations or
realtors may be used when needed. Legal counsel will be utilized during the resale process.
3. The HRA will consider an offer from former owner to purchase the home back at market value.
-~
"Short Sales"
1. It is not unusual for a mortgage company to approach the HRA with an offer to buy the HRA's
mortgage interest due to a "short sale". A short sale typically occurs under dire circumstances.
In such sales, the lender lets the borrower sell the house for less than the outstanding loan
amount, takes the proceeds and forgives any remaining overage. Banks are willing to do so
because they often lose less on these deals than they do in foreclosures. Short sales are pre-
foreclosure strategies that allow a homeowner to get out before foreclosure proceedings occur.
2. Staff will consider short sale offers and negotiate as high of repayment as possible. Action will
be taken quickly as to not to disrupt the short sale opportunity and cause the homeowner to
enter into foreclosure.
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DRAFT
1 /07/09
..
FORECLOSURE PURCHASE INCE\T1VE PROGRAM
DOWN-PAYMENT ASSISTANCE LOAN
AGREE~1 E\ T
,~~...
Between
~~
THE HOiTSING AND ilEl)E~'ELOPbI~~T A~ITHORITY
IN AND FOR ~E CITh OF RICHFIELD, MINNESOTA
°. and
~~ y...,.., at
This Instrument Drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
345290v1 JBD RC 125-1
~~ 1
AGREEMENT
THIS AGREEMENT, made and entered into as of this day of
z
200_, 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
(Buyer).
WITNESSETH:
WHEREAS, the City of Richfield (City) and the HRH hay e previously created and
established a Redevelopment Project (Project) and Tax Increment .Financing District (TIF
District) pursuant to the authority granted in Minnesota statutes, ~cctions 469.001 through
469.047 and Sections 469.174 through 469.179 (collecti~ elf, the Acts); alld
WHEREAS, pursuant to the Acts, the C i t~ and the HRA have prey i o u sly adopted a
redevelopment plan (Redevelopment Plan) and a r~~ increment financing plan ~ TIF Plan) to
finance all or a portion of the public development co;~ts of the Pc•oject; and
\.
WHEREAS, in order to achie~~~e objectives o~the Redevelopment Plan and TIF Plan
as hereinafter defined and particularly- t~~ rye specified land in the Project available for
development by private enterprise for an~ n acc~~rd~mce ~ti ith the~y~development Plan, the HRA
has determined to provide substantial aid rind ~issistance to finance public development costs in
S the Project• and . ~ ~`
.,~~~~~.
\,...
WHEREAS°~ ~t~le HRA his become co~~cerned that within the Project there is an
~~o
increasing number ~~f h~~mes whicFi~tia~~e been foreclosed and are standing vacant, and, in many
cases are not bein~~ a~le~luatel~- ~ccui•~~ or mai~hcd: and
~~. ~ ~\
"°~~\\
`~~ HC12EA~ under such circumstances, the properties themselves are subject to
detexioratic-n; and the w~tire neif7k~~rhood is subject to the impacts caused by such conditions;
and
WHEREAS, the HRH, in recognition of the need to provide decent, safe and sanitary
housing in the cot~~munit~ has established a deferred loan program which is designed to provide
assistance to individuals ~~hu are acquiring foreclosed properties within the Project, and in
furtherance of the goal s and objectives of the plan for the Project; and.
WHEREAS, the Buyer has proposed to purchase and occupy such a property which the
HRA has determined will promote and carry out the objectives of the Project, 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.
345290v1 JBDRC125-1
1
~'~
NOW, THEREFORE, in consideration of the mutual covenants and obligation of the
HRA and the Buyer, each parry does hereby represent, covenant and agree with the other as
follows:
ARTICLE I.
DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, the followin<~ Terms have the meaning
~...
given below unless the context clearly requires otherwise:
(a) Cam. The City of Richfield, Minnesota.
(b) Down Payment. The Buyer's equity contr~ution which i~ re~~uired by the lender
as a precondition to making the loan.
(c) Closing The date on which Buyer closes on the ~~rchase of the Property.
(d) Guidelines The guid \~nes adopted b}~~~~c HRA as such are applicable to -the
providing of down payment assistance. ~,
(e) Pro a .The real propert.~ lc~~all~~ dcscrit~cd as:
~~~~,
[Insert Leal]
~oo
Located on land havin<~ a street address of:
~~\
Insert AdiTress]
...
(f) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles,
fire or other casualty to tlle~lp tl~cts, litigation commenced by third parties which results in
delays ur acts of any federal, state~ur local government, except those contemplated by this
Agreement. l~ Mich are beyond..~~le control of the Buyer.
boo\~\
Section 1,2 Waifs. The following Exhibits are attached to and by reference made a
part of this Agreem ~~~
A.. Guidelines
B. The Note and Mortgage
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.
345290v1 JBD RC125-1
2
' ~,~
(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 L; \ DERTAHING
Section 2.1 By the Buver. The Buy el• makes the following r~prescntations and
undertakings:
(a) The Buyer has the legal. authority and l~t~\~r tc~ .enter into this Agreement and has
duly authorized the execution, delivery anal xformance o t h i s Agreement;
(b) The Buyer has the nec~ssar~ equity vital oT• ~~ill obtain commitments for
financing necessary for acquisition of the ierty \~~~~ ~ \
(c) The Buy et• is fawn i 1 i~r with ` guidelines as they relate to down payment
assistance, and agrees t«tollow and be bound by~them;
(f) Bu~'cr intends tc~ 3~eside at the Prc~pert- following Closing and to use the same as
Buyer's p~pal resi~l~nce. and i~ not aeq~uirin~ the Property for the purpose of resale or
speculate. ,\\. \
Section 2.2 By the 1-112.x. "I he HRA makes the following representations as the basis for
~~
the undo 1-tal~ng on its part Mere i n contained:
~~~~~~
(a) The HRA is a~°horized by law to enter into this Agreement and to carry out its
obligations hereunde~~; ar~l-
(b) The HP~~ will, in a timely manner, subject to all notification requirements, review
and act upon all submittals and applications of the Buyer.
ARTICLE III.
ACQUISITION OF PROPERTY; CONVEYANCE TO BUYER
Section 3.1 Purchase of Property by Buver. 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,
345290v1 JBD RC125-1
3
5- ~
the HRA will deliver to Buyer the Note described in Section 5.1. If no binding purchase
agreement is entered into within ~ days from the date of this Agreement, either the HRA or the
Buyer may .declare this Agreement null and void, and the parties will thereby be released from
any further obligation hereunder.
Section 3.3 Closing. Closing must take place on or before ,
200_, or such other date as may be agreed to by the Buyer and HRA 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 Down Payment funds provided to the Buyer at C 10~iug in the event that Buyer
defaults on any of its obligations hereunder or under the Note. Thy ~ 1~~rtgage and Note will be in
substantially the form shown on the attached Exhibit B.
ARTICLE IV.
[Blank]
ARTICLE ~".
DOWN PAYMENT ASSIST~~IVCE
Section 5.1 Issuance of the Note. .as a~nsideratic~n loi~~3uyer's obligations, and subject
to all of the conditions of this Agreement. the HI::~ a~~rces t~~ pr~o~idethe Buyer with a Down
Payment Assistance in the a ount of ~ 1 U.U(~U. Upon the Bu;~sr providing the HRA with
~.
evidence that Buyer has ent~o into a purchase a«recmen~ t~~T: the purchase of the Property, the
HR.A will deliver to B~i~cr~~a prol~lissory note in substantially the form of the Note contained in
.~
the attached Exhib~ B.Payment o~f~11~; Down }'a~ ment Assistance will be exclusively subject to
and in accordance ti ith the terms ~~f the Notc as such are contained in the Note or described in
this Agreement.
Section ~.2 . VUtc Terms. in addition to terms contained in the Note, the Note will be
subject to the following:
~~
1 a 1 Assuming tfic Buyer is in compliance with Buyers obligations, the Note will be
payable at Cl~~sing.
(b) Thy N~~te «ill be cancelled if the Closing does not occur by the last date provided
in Section 3.3.
(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.
345290v1 JBDRC125-1
4
S_, 8
(f) Repayment of the any Down Payment Assistance paid to Buyer under the
Note is required in the event that the Buyer fails to meet the time
requirements of Sections 3.3 and 3.4. The Note will be subject to
repayment if: (i) the Buyer does not continue to own and occupy the
property as its primary residence for a period of at least five years
following Closing; (ii) the Buyer fails to obtain homestead classification
for the Property as soon as possible following Closing; or (iii) Buyer fails
to continuously maintain the homestead classification for the Property for
five years following the Closing. Such repayment obligation will be
secured by a mortgage in substantially the form shown in Exhibit B which
will be delivered by Buyer to the HRA at Clo~in~. Unless the HRA agrees
otherwise in accordance with Section t~:.~. the Mortgage will be a first lien
on the Property.
(g) If the Buyer shall continue to observe all of the covenants an~i rcclnirements and
obligations imposed on Buyer under this Agreement and in the Nate for a period of five years
from the date of Closing, then the Buyer's obligation to repay the Down Payment . ~s~istance will
terminate and be of no further force and effect; and. than an instr~ went discharging the Mortgage
will thereupon be provided to Buyer for~ecording.
'\~~
• ~ AIZTIC'LE VI.
~ ~\\ ,..
FIN,~N ~iNG
... o~
Section 6.1 Financing: 1~~'itl _ dad s ~~~~he date of execution of this Agreement, the
Buyer sha ~~ ~ ~~o the 11R:~ ctiidence ot'~ ~onimitment for financing for the purchase of the
Prope . ~ ~~°ompilat~ce ~~ ith the provisions of Section 2.1(b) of this Agreement. The evidence
..~
must incl~ide an ackno~~le~i~~ment b~~ the proposed lender that it is aware of the terms of this
Agreement as they relate to the A'ot~~nd Mortgage. Such evidence will also be sufficient to
determine the amount of Ij~~ n Paynicnt that will be required to complete the purchase. If the
HRA finds ~~t the financir~, together with the Down Payment Assistance and other equity
~o
available to u~ e~• is adequate in amount to provide for the purchase of the Property, the HRA
shall notify the I3 of its approval.
If the HRA re~e~ls 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, if issued, cancel the Note, and both parties shall be released from any further
obligation or liability hereunder, or under the Note.
Section 6.2 Couv 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
345290v1 JBD RC125-1
5
~'
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 purchase of
the Property 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 ~~\TI) TRANSFER
Section 7.1 Representation as to Redevelopment. The Buy er represents and agrees
that its undertakings pursuant to the Agreement, are,.a~ot t:or speculatiotl in land holding. The
Buyer further recognizes. that, in view of the ilr~portance of the Development to the general
welfare of Richfield and the substantial financing? 4acid other public aids that ha~~e been made
available by the HRA for the purpose of making the Development possible, the qualification and
identity of the Buyer are of particular concern to the I 1 R A . T h ~ Buyer further recognizes that it is
because of such qualifications and ider>\~ty that the HRH is entering into this Agreement, and, in
so doing, is further willing to rely on~"the representations ~m~l undertakings of the Buyer for the
faithful performance of all undertakings and c~~~enants agreed b~~ the Buyer to be performed.
~~~ ..
Section 7.2 Prohibition Agail~st Tr~-nsfer- of PronertY and Assignment of
~~ ~ ~o~
Agreement. For the reas~s set out in Section 7~f this _~~re~ment, the Buyer represents and
agrees that prior to th~,~ssuance of the Certificate of Completion by the HRA:
(a) Except only by «a~~ of security r, and only for the purpose of obtaining
"O~oo~ • oo~ ~
financing necessar<~ to e~~able tl~e Buy er t~~ an~~ suc~ ~ ssor in interest to the Property, or any part
thereof, to perform its obli~~ations ~~tiith resp~et to the Development under this Agreement, and
any other purpose authorized b~ this Agreement, the Buyer, except as so authorized, has not
mad~~~~r created, and t~i~~t it ~~iII not make or create, or suffer to be made or created, any total or
partial Sale, assignment, cony c~ ance. or any trust in respect to this Agreement or the Property or
any part th~~eof or any interest therein, or any contract or agreement to do any of the same,
without the prior written appro~ al 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;
•
345290v1 JBD RC 125-1
6
~'
(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 tlir whole ~r substantially all of its
property, or approve a petition filed against the Buyer see1: i n g reorga n i z~~ tion or arrangement of
the Buyer under the federal bankruptcy laws, and such ~idjuaication, order or decree shall not be
vacated or set aside or stayed within 60 days from the ~lat~ of entry thereof; or
(e) If the Development is in default under anv Morl~~age and has nor entered into a
work-out agreement with the Mortgagee.
Section 8.2 Remedies on Default. Whenever a~~~ f;vent of Default occurs, the HRA
may, in addition to any other remedies or ri `~ h t 5
one or more of the following actions to Ilowir
provided in Section 9.5 of this Agreement:
(a) suspend its per ormal~~~ under this
Buyer, deemed reas~nai~~y adequate ~~~ the HRA
its performance under this Agreenlem:
~~~...
(bl cancel ur rescind this abreemerit;
t c) rincel or rescind the \~;
td) foreclose on the-Riortgage;
~~iven the I IR_~ under this Agreement, take any
~~~~
~~i~ttien notice °~~~ the HRA to the Buyer as
;agreement until it receives assurances from the
that the Buyer will cure its default and continue
(e) withhold the Certificate of Completion; or
\,
(f) take whatc~cr action at law or in equity may appear necessary or desirable to the HRA
to enforce performallc~ "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.
345290v1 JBD RC 125-1
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5-11
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. «'~~i~~er. In the event of the
occurrence of any Event of Default by either party, which F,~ ent oi~ Default is thereafter waived
by the other party, such. waiver shall be limited to the partirulcir Event ~~C nefault so waived and
shall not be deemed to waive any other concurrent, pre~i~~us or subsequent E~ ent of Default.
ARTICLE 1.1".
~~
ADDITIONAL PRO ~ ~ I ~ IO.1! S
Section 9.1
Not Individually Liable. No HRA
officer who is authorized to take part ~, any nla~ner in maki~~ this Agreement in his or her
official capacity shall voluntarily have a hers~~nal li ~~ ,~~~al inter~~t in this Agreement or benefit
financially there from. No member, official, or emplo~~~of the ~~RA shall be personally liable
to the Buyer, or any successor in ~~icrest, for any E~~~it of D~~ni1t by theHRA or for any amount
which may become dn~ to the Buy cr or successor or on any obligations under the terms of this
.~... -
Agreement.
Section 9.2 Non-Disef•imin~tion. The }~ro~~isions of Minnesota Statutes Section 181.59,
which relat~to ~i~-i1 ri<~hts and uon-discrimination, and any affirmative action program of the
City shall he considered .~ hart of this Agreement and binding on the Buyer as though fully set
forth herein. ~ il
Section 9.3 Notices ~md Demands. Except as otherwise expressly provided in this
Agreement,\~tice, demane~~r other communication under this Agreement by either party to the
~~ .....~
other shall be sufficiently ~i or delivered if it is sent by mail, postage prepared, return receipt
requested or deli~~ered per~~ lly:
(a) As to the°°~IRA:
Richfield HRA
Executive Director
6700 Portland Avenue South
Richfield, MN 55423
•
345290v1 JBD RC125-1
8
~-/2
(b) As to the Buyer:
•
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 Sectica~~~.3.
. ~o~
Section 9.4 Counterparts. This Agreement may be~~~multaneously executed in any
number of counterparts, all of which shall constitute one antis the game instrument.
IN WITNESS WHEREOF, the HRA has caused this Agreemei~f fig be duly executed in
its name and behalf and its seal to be hereunto d u l ` affixed and the l3 u. c r has caused this
Agreement to be duly executed as of the day and ti-ear tlrst above written.
~..
THE hl~Sl 1\ G AND REDEVELOPMENT
AUTHOxI~r~ IN AND FOR THE CITY OF
~~~~\~
RICHFIELD, MINNESOTA
\\~\
~\
~3~
I t~ C'ha i i'person '~°'°
~~o\
..... \
B~- ....
Itti E.x~~utive Director
.~
0
\\
Buyer
\~`
345290v1 JBD RC125-1
9
5- i3
STATE OF MINNESOTA )
. ) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
200 , by ,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
COUNTY OF
SS
.~.
The foregoing instrument was acknowledgecil,et'ore m~ this day of
200 , by . lh~. Executive Director of the Housing
and Redevelopment Authority in and tu~~ the City of Ric~fi~ld. Minnesota (HRA), a public body
corporate and politic under the laws of ~1 inns ~ t~~. on behal t~ ~~f tie HRA.
• \\\\\\\\\O~ Notary Plihl~c .. ..°'
\\
STATE OF MINK ~ 1 1
o~~~..
~~°
COUNTY t~F
Tht t~~regoing i`~~trum~nt ~~°acknowledged before me this day of
\\°_
•
Notary Public
345290v1 JBD RC125-1
10
-,~
•
EXHIBIT A
GUIDELINES
[To be attached prior to execution]
~~~\
\~~.
\~..~ ~~o
. o~ .~
~.......
•
JBD-236919v1
RC 125-240
11
~''~
EXHIBIT B
PROMISSORY NOTE
$10,000 , 20_
The Housing and Redevelopment Authority in and for the Cite of Richfield, Minnesota, a
public body corporate and politic (the "Maker"), for value rec~ei~ ed. hereby promises to pay to
(the "Holder") the principal ~~, i of I en thousand and No/100
Dollars ($10,000), with no interest as hereinafter provided, ~r~-any cow or currency which at the
time or times of payment is legal tender for the paymel~ t ~c private debts i t~ the United States of
America. The principal of this Note is payable as fol lo" s:
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"} al7d 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 shal~be due any{ pad-able the '~otc ~~i11 be payable at Closing. No
amount shall be due or pati~~~ pc ~~~~ to that date.
3. This..~~~ will be cancelled if the Closing does not occur by the last date provided
in Section 3.3 of the Contract. -~~~~~~~~~~°
~~ ~~ ..
4. ~ This \~~~tr is ~~i~~en i~ursuaslt to tLie Contract. All of the agreements, conditions,
covenants. i~rovisics. and stipulatir~ns and remedies contained in the Contract are hereby made a
part of this Note to the same c~tent and with the same force and effect as if they were fully set
forth herein. It is agreed that time is c~~the essence of this Note. If a default by the Maker or the
Holder ~~ccu~s under the Contract, thelthe Holder or Maker may at its right and option, exercise
any rights it may have under la~~' or at equity, under the Agreement, and under the Note.
5. The remedies cif the Maker or Holder as provided herein, and in the Contract, or
any other instrum~~~oo~.kall 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.
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
JBD-236919v 1
RC 125-240
12
~- (~O
only by an instrument in writing signed by the party 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 ~~btainin`~, a certification from the
ro osed assi nee transferee or led ee acknowled m end ~ reein to i~ taker's ri hts to cancel
P P g~ P g g~g~ ~ b g
the Note in accordance with the terms of the Note and the Contract.
8. IT IS HEREBY CERTIFIED ANT?~~FCITED that all conditions. acts, and things
~~ .
required to exist, happen, and be performed precedlt to or in~~~ ssuance of this 1\~~te do exist,
have happened, and have been performed in regular~O~d due lob as required by law.
9. Any payments. paid to J:3 t«~ r ander the No~,'~~ « i 1.1 be repaid to the HRA in the
event that the Buyer fails to meet the requircm~nts of the Cc~i~tract. Such repayment obligation
will be secured by a mortgage in substantial I~ the Iornl shu~~n in i~:~hibit B of the Contract which
will be executed and delivere b Buyer to°~~~~ I IIZ.~ at Closing?. C~~ess the HRA agrees
otherwise in accordance ~~ ice. , coon 6.3, the ~ Iort`r~~e will be ~i first lien on the Property.
~~.
IN WITNESS ~~-TTEREOF. the Mal:er has mused this Note to be duly executed as of the
da of , ''~) ~~\
y --
HOUSING .AND REII~E V E LO 1'~~i>~NT AUTHORITY IN AND
FOR T H E CITY OF RAC H F I E L lll~ 1'IINNESOTA
By: _ _ _
Execuri~~e Director
ATTEST:
Board Secretary
Dated:
JBD-236919v 1
RC125-240
13
5-i~
•
"~~
...\\\.
~..... ..
~.
E~`1BIT B (cont'd)
• \
P. O. Box 198
Kennedy & Graven ° ~ ~`
o \oo
- ~~~ ~RTGA~C:E
,...
This lniienture
~~\\\\
r~lade this ~ day of 200_, between
'° ~~ Mortgagor, and THE HOUSING AND
REDE'~~ `~PMENT A1~~~30RIT1 IN AND FOR THE CITY OF RICHFIELD,
MINNES ;~, a Minnesota rublic body corporate and politic under the laws of the State of
Minnesota,lVlort`~agee. \~~~~~~
...
Witnesseth: That the said~Vlortgagor, 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")
•
JBD-236919v1
RC 125-240
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5- ( 8
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 a;i a~gns, shall keep and perform
each and every one of its obligations to be performed by )Vk~rt~aa`~or under and pursuant to that
certain Contract for Private development dated as \~~of (the
"Contract"), made and entered into between Mortgagor ~r~ i ~~ortgagee, a id sh~lll keep and perform
all the covenants and agreements herein contained, thou this deed to be null and void, and to be
0
released at the Mortgagor's expense. This Mort`~a~~e secures a principal debt in the amount of
$10,000 payable by Mortgagor to Mortgagee tui ~ ~th~ terms ~~f'the Contract, and amendments
thereto, between Mortgagor and Mortgagee. ~ ~~...
And the Mortgagor, for itself, and its suc~;,~ssors and assigns, does hereby covenant and agree with
the Mortgagee, its successors and assigns. to perform its obli`<~t~ns as above specified, to pay all
taxes and assessments now due or that ma} hcrcali~r hecc>me liens a~~~inst said premises at least ten
(10) days before penalty attaches thereto; tc~ pa~~_ ~~~hen clue. b~~th p3~~Icipal and interest of all prior
liens or incumbrances, auto keep\~id prenliscs G~cc and clear ~1,all other liens or incumbrances;
to commit or permit ~ ~~ a to on said premrses ;and to keep them in good repair; to complete
forthwith any imprc~~ ~l~~~nts which may hereafter he under course of construction thereon, and to
~.~. ~~,
pay any other expen ~ ~ d attorn~~\~'ees incurred b~ said Mortgagee, its successors or assigns, by
reason of litigation wit\ali~ llu\\~~~ti~} loi\~~'mtect,~cin of the lien of this Mortgage.
BOO ~~
That Mortagor, dies tiuther ec~~~enant and agree that if any lien for labor, skill or material shall
be filed for record durin<< the lit-e of t~~s Mortgage, upon or against the premises hereby mortgaged,
the said 1\lortgagor will, within shirty (3Q) days after the date of its filing for record, either pay off
the said lien and secure its satisfaction-cif record, or will protect the Mortgagee against any loss or
damage growing out of its erorcement, by furnishing a bond for the same amount in the form and
~~~~
with the sureti ~ ~~~obe approti e°ir1 by the Mortgagee.
.:.off`
In case of failure w pa~~~kaid 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.
•
JBD-236919v1
RC 125-240
15
5~I~1
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 m 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 held the day and year first above
written.
STATE OF MINNESOTA
COUNTY OF HENNEPIN
~~~~~..
The foregoing ins~~~~~t ~~as ~lcknrn~leci~zd before ire this day of September, 2003,
b °\
Y
\oo~~`~ °\\~`
(Notary Stamp or Sell °°~~ Notary Public
.,,~~o
This Instrume ~ t ~-vas Draltcd h~~:
Kennedy & Gra~en_ Charter~~'
470 Pillsbury Centel
Minneapolis, MN 5540
(612) 337-9300
• JBD-236919v1
RC 125-240
16
5- ~.o
EXHIBIT A
LEGAL DESCRIPTION
[To be inserted before execution]
o~~..
..
•
~~ ~`
o ~~~~
ooo~~~~.
\\ .....
U
345290v1 JBDRC125-1
C-1
~-a~
•
FORECLOSURE PURCHASE INCEN~[~'E YR+OGRAM
REHABILITATION:UAN
AGREEMENT
~,......
Between
THE HOUSING AND ~tE I) E ~' E L (~' ~ I r ~ T :~~TTHORITY
IN AND FOR THE CITI' OF RICIIFIF,LI), MI ESOTA
• ..
\~~~
and
.... o
..
...o
\~ at
This Instrument Drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
ICI
DRAFT
1 /07/09
345293v1 JBDRC125-1
~-aa
AGREEMENT
THIS AGREEMENT, made and entered into as of this day of s
200_, 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
(Buyer).
WITNESSETH:
WHEREAS, the City of Richfield (City) and the HR,~ hay e previously created and
established a Redevelopment Project (Project) and Tax;,[ilcreinen-Finaneing District (TIF
District) pursuant to the authority granted in Minnesota° Seatutes,~~~crions 469.001 through
469.047 and Sections 469.174 through 469.179 (collec~~ elf, the Acts); ai~~}
WHEREAS, pursuant to the Acts, the ~'it~ and the HRA have pre~c~usly adopted a
redevelopment plan (Redevelopment Plan) and a taY ineremcni financing plan (CIF Plan) to
finance all or a portion of the public development cysts r7f the Project; and
WHEREAS, in order to achie~,e the~jectives of the Redevelopment Plan and TIF Plan
~~.
as hereinafter defined and paxticularle tc~ ii%ke specified lan~ in the Project available for
o~~~.
development by private enterprise for an2i.~n accc~rdancc ~~ ith the Redevelopment Plan, the HRA
has determined to provide s~lb~>~antial aid\rrul as1istance to tinance public development costs in
• the Project; and °~ °
WHEREAS, ~\\ the HRA l~~s become c~cerned that within the Project there is an
increasing number of hor~~es which~~ha~~e been t~~~~~~osed and are standing vacant, and, in many
cases are not being ~dzquatel~~ secured or niaiutaiuzd~ and
~~1~1<,I2~~~,~~ider such circumstances, the properties themselves are subject to
deterioration; and the enti~c nci~~~hb~~rhood is subject to the impacts caused by such conditions;
and
,:
~o
W~FI E R AS, the l I R ~ , in recognition of the need to provide decent, safe and sanitary
housing in thc~° unity has established a deferred loan program which is designed to provide
assistance to in ~~ al ~ ~~ h u axe acquiring and doing rehabilitation to foreclosed properties
~,_
within the Project, and in 1 urtherance of the goals and objectives of the plan for 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.
345293v1 JBD RC125-1
1
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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 I.
DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, the followi~,~z terms have the meaning
given below unless the context clearly requires otherwise:
(a) Cam. The City of Richfield, Minnesota.
(b) Rehabilitation Plans. Collectively, the puns, drawings anal related documents
related to the Improvements, which are listed on Exhibit D.
(d) Development. The Property and the Impro~, erl its to be constructed thereon
according to the Rehabilitation Plans approved by the HRA.
(f) Closing The date on:«~~ich Buyer closes on the Purchase of the Property.
(h) Improvements. Each and all of the site impro~em~nts to be constructed on the
Property by the Buyer, as specified in the Rehabilitation Plans approved by the HRA.
(i) Guidelines. The `~~lelines ~idopled by the HRA as such are applicable to the
providing of rehabilitation assistance.
\ \\\\~~
O _
(j) Mort~~<iLe a:nd l~olde~~il The terns "mortgage" shall include the mortgages
~..
referencedvi~~ article ~'I ~~f'this~":agreement and a~~y deed of trust or other instrument creating an
encumhral~e or lien upon the. Property or any part thereof, as security for a loan. The term
"holder" in reference tc~ a niortg:~_r~~includes any insurer or guarantor (other than the Buyer) of
ariy ohli~~ation or condition secured bps ~~ch mortgage or deed of trust.
0
(kj Pro e . The gal property legally described as:
[Insert Legal]
Located on land having a street address of:
,.(Insert Address]
(r) 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
345293v1 JBD RC125-1
2
~-a~
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. Guidelines
C. The-Note and Mortgage
D. Rehabilitation Plan
.~...
Section 1.3 Rules of Interpretation.
(a) This Agreement shall be interpreted in acc~~rdance with aJ~d governed by the laws
of the State of Minnesota.
(b) The words "herein" and "hereof rind ~~ords of si~~ilar import, witll~ut reference
~,,
to any particular section or subdivision refer to this .1`7r~~~l~nt as a whole rather than any
particular section or subdivision hereof.
(c) References herein to any particular ~gction or subdivision hereof are to the section
or subdivision of this Agreement as originally ~xccutcd.
• ~~
(d) Any titles ~~f the s~, ~ cral parts, articles and sccta~~ns of this Agreement are inserted
for convenience and reference oril~ ~tnd shall be disregarded in construing or interpreting any of
its provisions.
~...
.... .aR~'IC'LE lI.
. o ~~°
°° °'~~\~F PR E S ~NTATIONS AND UNDERTAKINGS
Section 2.1 B~ the 13u~ e~~. ~ The Buyer makes the following representations and
~~ ~ ~,...
undert ~' s:
....
(a) Tl~e Buyer has the legal authority and power to enter into this Agreement and has
duly authorized the e~ecution_ delivery and performance of this Agreement;
~~°O°
(b) The Bud cr 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
345293v1 JBD RC125-1
3
5-as
(e) The plans for the Improvements have been prepared by a qualified draftsperson or
architect, or other person acceptable to the HRA.
(f) Buyer intends to reside at the Property following the Closing and to use the same
as Buyer's principal residence; 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 HRA is authorized by law to enter into thi ~' ~1`~ rc ament 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 I3~~~ci~ and will cooperate Frith the efforts of
Buyer to secure the granting of any permit, license. or other approval requir«l to allow the
construction of the Improvements.
...ARTICLE 111.
~~~~~\
ACQUISITION OF PR(~CRTti-; CONVEti'ANCE TO BUYER
\\ ..
Section~3.1 Purchase of Pronc-•n~ b~ Bu~~er. 7'h~ L3u}er has, or will utilize its best
efforts to enter into a bii~din~~ a~~r~eme~nt to pui~cha~c the ~'r~>pcrty. Upon determination by the
• HRA that Buyer has enterca into a El.ding pua5e agreement for the purchase of the Property,
the HRA will deli ~ ~~.o Buyer the Note de~cri~ed in Section 5.1. If no binding purchase
agreement is entere~~~iio within __ davs front th °~iate of this Agreement, either the HRA or the
Buyer may declare this :~~~>recmcnt ntiLl af~d ~~~ici. a~ld the parties will thereby be released from
any further~~li~ation hereunder.
~o
°~ section 3.3 C~losina. Closing must take place on or before ,
200 , or such other date as nr~~ be agreed to by the Buyer and HRA in writing. At Closing,
the Bu3 er ,will provide the (11'~.A with a mortgage in recordable form (and pay for the cost of
recording): l lie mortgage ~~ 1 be a first lien on the Property and will act as security for
repayment of tul~~nf the Re~~> itation Loan advanced to the Buyer in the event that construction
~~
of the Improvements is ~~iot completed on or before the date specified in Section 4.3. The
Mortgage will be iri suhstantially the form of the mortgage shown on the attached Exhibit C.
ARTICLE IV.
CONSTRUCTION OF IMPROVEMENTS
Section 4.1. Construction of Improvements. The Buyer shall construct the
Improvements on the Property in accordance with the Rehabilitation Plans and shall maintain,
preserve and keep the Improvements in good repair and condition.
345293v1 JBD RC125-1
4
~ -a~
Section 4.2. Building Plans. No building permit will be issued by the City unless the
building plans are in conformity with the Rehabilitation Plans and all local, state and federal
regulations. The HRA shall, within 25 days of receipt of Rehabilitation Plans submitted in
application for a building permit, review such Rehabilitation Plans to determine whether the
foregoing requirements have been met. If the HRA determines such Rehabilitation 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 Rehabilitation 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 , ~O0 .All construction shall be
in conformity with the approved Rehabilitation Plans. Periodically d~iring construction the Buyer
shall make reports in such detail as may reasonably be eclu~sted b~ the HRA concerning the
actual progress of construction. If at any time prior to c\,- pletion of cunst111ction the HRA has
cause to believe that the Buyer will be unable to c~mpfete construction of the Improvements in
the time permitted by this Section 4.3, it may nc~tity 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 inadeduatc. 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 Comi~letion. Vromptl~~ after notification by the Buyer of
~~~~
completion of construction of the Impro~ements_ the HRH sh~~inspect the construction to
determine whether the Impro~~ements have bc~n co«~pleted in accol-aance with the Rehabilitation
Plans and the terms of this ~~`~r~~=~° nt, inclu~in~~ the date of the completion thereof. In the event
that the HRA is sated with construct~n, the HRA shall furnish the Buyer with a
• \
Certificate of Cor~l~~~t on in the f~ n attached` hereto as Exhibit A. Such certification by the
HRA shall be a conclusi~•e deterrl~inatian of satisfaction and termination of the agreements and
covenants in this .~~~~rce~l~ent~«ith react°~~to tht obligation of the Buyer to construct the
Improvements. Issui~ace of the Certificate of Completion shall also serve as a satisfaction of any
obligation of Buyer Mulder the Note and Mortgage.
~~....
1f the HRA shall refuse or fail to provide certification in accordance with the provisions
of this SccticZn 4.4, the HRH shall within 15 days of such notification provide the Buyer with a
written statement, indicatin~~ i~`adequate detail in what respects the Buyer has failed to complete
the Improvement~~in accordance with the provisions of this Agreement necessary, in the opinion
of the HRA, for thk ~3u~ er to take or perform in order to obtain such certification.
0
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.
REHABILITATION LOAN
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
345293v1 JBD RC125-1
5
~-a~
provide the Buyer with a Rehabilitation Loan in the amount of $10,000. 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 Rehabilitation Loan 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 Buyers obligations, the Note will be
payable in three installments. The first installment of $2,500 «ill h< due and payable at Closing,
the second installment of $2,500 will be due and payable not later then five days following the
date a building permit for construction of the Improvements is issued, and the final installment of
$5,000 on the date of the issuance of a Certificate of Completion showili~ full completion of all
of the Improvements.
(b) The Note will be cancelled if the Closing does not ~>ccur by the last date provided
in Section 3.3; or if construction of the Improvemetits~are not fully completed by the last date
provided in Section 4.3.
(c) The Note will not bear int~l•e~t.
(d) The Note ma~~ be canceled b~ the 1-[ R;1 it1 the <<~ent that the Buyer is in default of
any of its obligations undr~• t~„~'~~reement.
(e) The Note may not be assigned or pledged unless the proposed recipient certifies to
the HRA that it is av~ zii•c of and ac c ep t s to the conditions of the Note governing payment.
(f) ~~~~ ° ,~ , ote ~~~ill pr•o~ ids tur repay~nlcnt of the any Rehabilitation Loan payments
paid to ~~uS~e~ u~~~~ Notc in the went that the Buyer fails to meet the time requirements of
Sectic~~s ~.3 and 4.3. such repay meat obligation will be secured by a mortgage in substantially
the t~~~~nl shown in Exhibit C ~~~hich «i I1 be delivered by Buyer to the HRA at Closing. Unless
the HRH, a~>rees otherwise i~cc~>rdalic~; with Section 6.3, the Mortgage will be a first lien on the
Property. ~~ '
(g) ~t ~7ote ~ti il>n.aYso provide that if the Buyer continuesto observe all of the
covenants and requixeln~nts'and obligations imposed on Buyer under this Agreement, any other
agreements between the HRA and Buyer. with respect to the Property, and in the Note for a
period of five years from the date of Closing, then the Buyer's obligation to repay the
Rehabilitation Loan will be forgiven, terminate and be of no further force and effect; and an
instrument discharging the Mortgage will thereupon be provided to Buyer for recording.
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
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
345293v1 JBD RC125-1
6
5-a~
make payment to any contractor or materialman for work or materials actually furnished in
connection with the Improvements
• n 1 ndin institution or title com an is willin to serve in that ca aci
In the event that o e g p y g p ty,
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.
Whether payments are being made by the lender, title company or HRA, not more than
50% of any claim for payment from any contractor or materialman may he paid from the
Rehabilitation Loan. The balance of any such claim must be paid beto~~~ the Rehabilitation Loan
funds are used.
ARTICLE ~'L
,., FINANCING
~~~.... .
Section 6.1 Financing. Within day, cif the dKite of execution of this Agreement by
all the parties, the Buyer shall submit to file 1 IR~~ e~~~l~ncc of financing for the Improvements in
compliance with the provisi,~g~,~ of Section ~.l(b) of t}1is _a<<~~zem~nt. If the HRA finds that
theaamount of such fin~ncin~~ alon~, with the Rehabilitation I;oan is adequate in amount to
provide for the const thin of the Improvements. the HRA shall notify the Buyer of its approval.
\.. .....
If the HRA r~ is the evi ~l encc of financ ~ gas inadequate, the Buyer shall have 30 days
or such additional period o~~ time as the 13uver n~a~ reasonably require from the date of such
notification fb sub117it ~~ i~lence of tiualicing satisfactory to the HRA. If the Buyer fails to submit
such e~'idence or fails to use due diligence in pursuing financing,. the HRA may terminate this
~~~~~
Agre~cment and both parties shall be released from any further obligation or liability hereunder,
exce~ \or the HRA's remedies ptus~iant to Section 4.5 of this Agreement.
Section 6.2 Copy o~~tice of Default to Lender. Whenever the HRA shall deliver any
notice or dematl~o the 13u~ er with respect to any Event of Default by the Buyer in its
obligations or co~~OO~ ~~nts un~~r this Agreement, the HRA shall at the same time forward a copy of
~,~
such notice or dem~ ~ teach Holder of any Mortgage authorized by the Agreement at the last
address of such Holdae~ own 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
345293v1 JBD RC125-1
7
5 -a ~r
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
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 ._~ a i tlYful performance of all
undertakings and covenants agreed by the Buyer to be performed: \
Section 7.2 Prohibition Against Transfef~ of Properth and Assignment of
Agreement. For the reasons set out in Section 7.1 0~~ Agreement, the Buyer represents and
agrees that prior to the issuance of the Certificate ~f C'ompletion by the HR~a:
(a) Except only by way of security tor. and onl~~~or the purpose ~~f 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 Dc~ elopment under this Agreement, and
any other purpose authorized by thi~u~<<reement, the L3u~ eT~.~except as so authorized, has not
made or created, and that it will not make or create. or sui~i~r to be made or created, any total or
partial sale, assignment, conveyance, or an~~ trust in respect to this _~greement or the Property or
any -part thereof or any inter~~~t therein. or and eoniract or a~~~~ec>lient to do any of the same,
without the prior written appro~ al o['ihc HRA.
,... ARTICLE VIII.
E V E'~TS..~) F t) EFAULT
~....
o'
Section 8.] E~~ents of pefault Defined. The following shall be deemed Events of
Default under this A~°~emcnt and the term shall mean, whenever it is used in this Agreement,
unless the context otherwise. pro~~ides. any one ormore of the following events:
(a) T'ailure by the B'ryer to pay when due the payments required to be paid or secured
under any pro~~ision of this,.-~~rreement;
....
(b) Failure b~ the Buyer to observe and substantially perform any covenant,
condition, obligation o'~ 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;
i (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
345293v1 JBDRC125-1
g
5 -3 0
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
(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 nl~ 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 b~ the HRA to the Buyer as
provided in Section 9.5 of this Agreement:
(a) suspend its performance under this Agrecm~nt until it recei~ es 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 c~l'Completi~>n: cM
• (f) take wl~ever action at la~~ or in equil~ may appear necessary or desirable to the HRA
to enforce performance and obser~ arne of an~~ ob~~ation, agreement, or covenant of the Buyer
\\
under this Agreement; provided, ho~~ c~ er, that auy'c~ ercise by the HRA of its rights or remedies
hereunder shall~a~~gvs he subjeet t~, and limited ~~y, and shall not defeat, render invalid or limit
~,
in any ~~ a~~. ta) tie lien of anv ~ 1<~rtgage authorized by this Agreement and (b) any rights or
interest prcwided in this A`~rcement for the protection of the Holders of a Mortgage; and provided
furth~ ~ tl~t should any Ivi~~rt~~a~aee ~uceeed by foreclosure of the Mortgage or deed in lieu thereof
~~~.,~ ..
to the Bu~~~~s interest in t ~e Property, it shall, notwithstanding the foregoing, be obligated to
\~
perform the~bl\gations of t~uyer under this Agreement to the extent that the same have not
therefore been~p~rformed b~ the Buyer.
0
Section 8.3°~tio~Remedy Exclusive. No remedy herein conferred upon or reserved to the
HRA is intended to be~~xclusive 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.
345293v1 JBD RC125-1
9
~/
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.
ARTICLE IX.
ADDITIONAL PROVISIONS
Section 9.1 Conflict of Interests; Representatives Not I nd~dually Liable. No HRA
officer who is authorized to take part in any manner in maki n ~~ t his Agreement in his or her
.~~..
official capacity shall voluntarily have a personal financial~,lterest in this Agreement or benefit
financially there from. No member, official, or employee of the HFZ~~ shall be personally liable
to the Buyer, or any successor in interest, for any Event o t~ Default by the~~~2A or for any amount
which may become due to the Buyer or successor or on. any obligations ui~dcr the terms of this
Agreement.
Section 9.2 Non-Discrimination. The prop ision~ of 1\litinesota Statutes Section 181.59,
which relate to civil rights and non-discrimination, aaul any affirmative action program of the
City shall be considered a part of this ~~~~r~em.ent and binding on the Buyer as though fully set
forth herein.
Section 9.3 Notices,,.,.and Demands. L~ce~~t as othcrwis~ expressly provided in this
• ~,
Agreement, a notice, demaiicT i~r ether communication under this Agreement by either parry to the
other shall be sufficicn t l ~ , riven or d e 1 ivered i~ i t i $ sent by mail, postage prepared, return receipt
requested or delivered personally: ~~
(a) As to the H EZ_A
\~~\
~c c ~3 I I h.1
Executi~~e Director
0
6700 Port and .~~~cnue South
Richfield, M N ~ ~ 423
(b) :~s to the Bu~~er:
~.
nh.~+3an~rr~rraQiUit~+ m~rr~~* to ait~nr~=in]P rr~_..__ ..,. ~L_~ ~.._..__ __..__ ~___ .:___
~-3 Z
• 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 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
\~ Buffer
,.
~~
C
345293v1 JBDRC125-1
11
~ --33
STATE OF MINNESOTA )
SS
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
200 , by ,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 )
The foregoing instrument was acknowledged bet~~r~ me this day of
200 , b~~ _ the Executive Director of the Housing
and Redevelopment Authority in and fior the City of Rich[eld. Minnesota (HRA), a public body
~,, ~.
corporate and politic under the laws of~ti~wcsotti. on h~h~~Li ~~(~ the HRA.
_..~~~
Notary Public.
• \\
STATE OF MINNESO~I~:a 1
~ Sti
COUNTY.k~ 1
The foregoing strument ~~ ~zs acknowledged before me this day of
.......
BOO b.'
~~...
,...
~~
°~° \ Notary Public
,..
•
345293v1 JBD RC125-1
12
5-3~{
• 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
"Rehabilitation Loan Agreement", 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 appr~wed construction plans at
,legally described as and is
released and forever discharged from its obligations to ~unst~~uct u1'er Such above-referenced
Article.
DATED:
~I1F I}tit ~SIi~1G AND REDEVELOPMENT
AT T`I~FIOR.ITY IN AND FOR THE CITY
~~~~~ RIC 111=1 F. I . D
moo L3 ~ :
Its: ~~ ~....
~,,~~lai ~ersc~n
•
E`
Its: Executive Director
STATE OF MINItTESC)'l`~ 1 \\~~
COUNT ~' Ol' I~1/~: ~~~' I \' ~
Tha foregoing instrument ~~~as acknowledged before me this day of
~o~~~~~~
20_, ~~ ~° and
the Chairperson and Executi~ Director of the Housing and Redevelopment Authority in and for
the City of Rich~ield, a public body corporate and politic under the laws of the State of
Minnesota on be°~\ f tic puC7lic body corporate and politic.
\°
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
• 200 South Sixth Street
Minneapolis, MN 55402
345293v1 JBD RC125-1
A-1
5'.3 5~
• EXHIBIT B
GUIDELINES
[To be attached prior to execution]
~o
~~.
• . ~ ~,.
..,
JBD-236919v1
RC125-240
2
~~3 ~
• EXHIBIT C
PROMISSORY NOTE
REDEVELOPMENT CREDIT NOTE
$10,000 , 20_
The Housing and Redevelopment Authority in and for the ~~~ ~~f Richfield, Minnesota, a
public body corporate and politic (the "Maker"), for value reca`~~~d, hereby promises to pay to
(the "Holder") the principal sum of ~en thousand and No/100
~~...~,
Dollars ($10,000), with no interest as hereinafter provided, in any corn or currency which at the
time or times of payment is legal tender for the payment ~~f private debts in the United States of
America. The principal of this Note is payable as f~l low s:
1. The principal amount of the Nota is as providcci for in that certain agreement by
and between Maker and Holder entitled: R~hahiliiatiun Loan Agreement 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.
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2. The Note shall he due and payahle the '~otc ~~ i I1 be payable in three installments.
The first installment ofag?,~Oi) ~~a11 be duc anal pa~able~~t Closing, the second installment of
$2,500 will be due ar>~ payable not later than Ii~~c days following the date a building permit for
~~.
construction of the I~npruvements is issued, alld thz final installment of $5,000 on the date of the
issuance of a Certiticatc of Completion showin~~ l~~ll completion of all of the Improvements. No
amount Shall be due or pa~ablc prior t~~~aose date.
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` ~~~~~~- Tlus \ ote ~~-ill he cancelled if the Closing does not occur by the last date provided
in S~t~~n'3.3 of the Contioacr ol~ if construction of the Improvements are not fully completed by
~~ X00""'
the lases to provided in fiction -1. ~ of the Contract.
~~ ~~
4. This Note is gift en pursuant to the Contract. All of the agreements, conditions,
covenants, pro~\~ ns, and stipulations and remedies contained in the Contract. are hereby made a
part of this Not~~he same 'extent and with the same force and effect as if they were fully set
forth herein. It is a~ccd 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 Contract, 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.
JBD-236919v1
RC 125-240
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~-3 7
• 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 provisi~y~s.~~~~ _~ny disputes, controversies,
or claims arising out of this Note shall be heard in the state o r fede ~~ courts of Minnesota, and
all parties to this Note waive any objection to the jurisdiction of thes~co~.uts, whether based on
convenience or otherwise
7. Holder may not assign, transfer or plodge this Note withouk tl~~e prior written
consent of the Maker. Maker may condition .con~ci~t on c,htaining a certificati~gn from the
proposed assignee, transferee or pledgee acknowled~im~ a11C1 a~rccing to Maker's rights to cancel
the Note in accordance with the terms ~f the Note and the Contract.
8. IT IS HEREBY CERTI],LL-D ;~I~I~ R1~~CI I~LD th~it all conditions, acts, and things
required to exist, happen, and be perfoni~~d E~r~ced~nt to or in the issuance of this Note do exist,
have happened, and have been performed in rc~~ul~~r and ~c loan a~ required by law.
• ~ ~~°
9. Any Rcliabil~itation Loan paym , nts paid to Buyer under the Note will be repaid to
the HRA in the event that the Buyertai is to m ~ the requirements of the Contract. Such
repayment obligation ~~ ill be sectlr~d ht~ a mort~s~~c ~n substantially the form shown in Exhibit C
of the Contract which wil ~ be executed ~~~~d deli~crcd by Buyer to the HRA at Closing. Unless
the HRA a~~rcc~ aerwisc in aecor~l~uice with Secti~~n 6.3, the Mortgage will be a first lien on the
~~o
Property. .
°~~~...
I'~' ~+'ITNESS WH LSO F, the Maker has caused this Note to be duly executed as of the
a~lv of ~ . ~0
- - , \\
HOUSING AND N~E~"ELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
By:
Executive Director
ATTEST:
JBD-236919v1
RC 125-240
4
5-3~'
Board Secretary
Dated:
~~ ,
~,,
• ~~..
o.. .~~..
P. U. f3o~ 1.98
Kenned~~ ~ Crraven
MORTGAGE
This Indenture ~ ma~~e this day of 200_, between
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 Crrant, Bargain, Sell, and Convey unto the said Mortgagee, its successors and assigns,
JBD-236919v1
RC 125-240
5
5-3 ~
• 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. ,.'~l~d the said Mortgagor, for
itself, and its successors and assigns, does covenant with-the said~~lortgagee, its successors and
assigns, as follows: That it is lawfully. seized of said premises anc~shas 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 succesc~l~s and assi~iis, :hall quietly enjoy and
possess the same; and that the Mortgagor will Warrant and C)efend the title to the same against all
lawful claims not hereinbefore specifically excepted.
Provided, Nevertheless, That if said Mortgagor, its successors and assigns, shall k~ ~~~~und perform
each and every one of its obligations with resp~ ct to completion of eonstr~uetion of the
Improvements to be constructed by Mortgagor under and pursuant to that certain Rehabilitation
Loan Agreement dated as of ~ t he "Contract"), made and entered into
between Mortgagor and Mortgagee, and shall keep.-and pertcn•m all the covenants and agreements
herein contained, then this deed to be null and ~~uicL and to he released at the Mortgagor's expense.
This Mortgage secures a principal debt in the amount of $1(1,~~ payable by Mortgagor to
• °'\
Mortgagee under the teens of the Contract. and a~tiendtn~l~s thereto, between Mortgagor and
Mortgagee.
And the Mortgagor, for itself, and its snccess~rs and~assigns, does hereby covenant and agree with
the Mortgagee, its st~cccssors ~~t~~~ assi~7ns.'to pcrli~rm~its obligations as above specified, to pay all
taxes and assessments no~~~ due or that may h~xeafter become liens against said premises at least ten
(10) days bei=ore per~t~ attaches thereto; to pay, when due, both principal and interest of all prior
lien~~r incumbrances, anal to keep said premises free and clear of all other liens or incumbrances;
~~
to commit or permit no «rlste on ~~~id opremises and to keep them in good repair; to complete
~~
forthwith anti improvement~~~iich may hereafter be under course of construction thereon, and to
pay any other ~penses and attorneys' fees incurred by said Mortgagee, its successors or assigns, by
reason of litigd~ion with and thit~d party for the protection of the lien of this Mortgage.
That Mortgagor, c~~es ti~~~ther 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
JBD-236919v 1
RC 125-240
6
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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 a~~~rdanre with the statute, and out
of the money arising from such sail to retain all sums securc'~iercb~, with interest and all legal
costs and charges of such foreclosure and the maximum att r>rneys' ie ~~crmitted by law, which
costs, charges and fees the Mortgagor herein agrees to pad .
In Testimony Whereof, The said Mortgagor has hereunto set its hand the day anti ~~ear first above
written. ...
by
STATE OF MINNE SO~ I'.~
COUNTY OF HENN ~ PIN
'rhe fi~~regoir~ instrument ~~as acknowledged before me this day of September, 2003,
~~
~o
(Notan~ Stamp or Seal ~
This Instrument was Drafted by:
Kennedy & Graven, Chartered
470 Pillsbury Center
Minneapolis, MN 55402
(612) 337-9300
JBD-236919v1
RC125-240
Notary Public
7
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EXHIBIT A
LEGAL DESCRIPTION
[To be inserted before execution]
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345293v1 JBDRC125-1
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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 [3u~ er to Homeowner
•
~o~
~~~~~
345293v1 JBD RC125-1
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