07-18-05 agendaCITY OF RICHFIELD, MINNESOTA
MONDAY, JULY 18, 2005
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
6700 PORTLAND AVENUE
7 P.M.
AGENDA
Call to order
1. Approval of minutes of (1) Regular HRA Meeting of June 20, 2005 and (2) Special
HRA Meeting of June 28, 2005
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 contract with Julianne Schweitz to work with Livable
Communities Team beginning August 1, 2005 for 12 months S.R. No. 26
B. Consideration of approval of issuing Certificate of Completion to Twin Cities Habitat
for Humanity for 6805-12th Avenue S.R. No. 27
C. Consideration of approval of management agreement with ROI Properties for
managing certain HRA owned and leased properties S.R. No. 28
D. Consideration of approval of resolution modifying terms of HRA Resolution No. 821
regarding HRA $2,500,000 tax increment revenue note, Series 2001A S.R. No. 29
Notes:
4. Consideration of participation in Twin Cities Community Capital Fund at $50,000 level
and execution of Participation Agreement and Loan Fund Escrow Agreement
Staff Report No. 30
Notes:
5. Executive Director report
6. Claims and payroll
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must
be made at least 96 hours in advance to the City Clerk at 612-861-9738.
AGENDA ITEM #
REPORT #
J
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JULY 18, 2005
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
BRUCE PALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
BRUCE PALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
SIGNATURE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration regarding a motion to participate in the Twin Cities Community Capital Fund.
I. RECOMMENDED ACTION:
By Motion: Approve participation in the Twin Cities Community
Capital Fund at the $50,000 level and execution of the Participation
Agreement and Loan Fund Escrow Agreement by the Chair and
Executive Director.
II. BACKGROUND
The Twin Cities Community Capital Fund (Fund) is a Minnesota nonprofit
corporation. It provides "gap" financing to businesses. It may be used for real
estate development, purchase, renovation, leasehold improvements and working
capital for example. A bank making a loan to a Richfield business or development
could utilize this financing to close a gap in a loan. This financing is subordinate to
the primary loan provided by a bank and the equity into the transaction may be only
10%. This is not a below market interest rate financing program although the rate
may be up to 1 % less than market. The rate is fixed and the term may be up to 20
years depending on the collateral.
Additional information is available on their web site at TCCCF.org.
071805 Twin Cities Comm Cap Fund
III. BASIS OF RECOMMENDATION
1~. I~OLICY
• The gap financing program would be a tool to support the growth of
business in the community.
• These gap loans could assist existing businesses "start ups" and
redevelopment project financing.
B. CRITICAL ISSUES
• With the demise of the enterprise facilitation program in December of
2003 the Housing and Redevelopment Authority (HRA) is without a
program to support the development of business in the community.
• The administration of this program would require only a minimum of
direct support from staff on a sporadic basis. The staff of the Fund
does virtually all of the processing.
C. FINANCIAL
• The loans are pre-sold to the Community Reinvestment Fund a
nonprofit organization based in Minneapolis. Risk is reduced to a
minimal level by the pre-sale.
• Membership in the Fund is open to local government agencies,
community development corporations and other groups in the seven
county Metropolitan area. It is being developed with the sponsorship
of Hennepin County. (The Fund is modeled after a program that has
been operating in out state Minnesota for a few years.)
• There are three classes of membership with a member deposit
attached to each. The amount of the member deposit determines the
maximum amount of the loans, which may be made. There is not a
limit on the number of loans, but a limit on the amount of each loan.
The leveraging is one to ten.
Class A $200,000 (with a loan maximum of $2.,000,000 for
example)
Class B $100,000 to $199,000
Class C $50,000 to $99,000
• The member deposit is split between working capital (10%) and loan
fund (90%). To become operational, the Fund needs deposits of
$2,000,000. The goal is to raise this amount on or before October 1,
2005. Three years following the date of deposit, 90% of the funds
($45,000) can be withdrawn. These funds remain the property of the
HRA and return is guaranteed. The working capital portion of the
contribution of 10% ($5,000) will be repaid without interest assuming
the success of the fund.
• The member deposit is an interest free loan. It is the goal of the Fund
to return the deposit.
• Staff is recommending that the HRA join the Fund at the $50,000
level. The maximum loan amount would be set at $500,000. Funds
are available from the HRA. This expense has been incorporated into
the annual HRA budget, which is currently being prepared for
presentation to the HRA in August.
D. LEGAL
• Steve Bubul, Public Finance Law Attorney at Kennedy & Graven has
reviewed the membership disclosure statement and talked with the
President, Scott Martin. Steve has found the program acceptable.
The Fund is managed by a board. The current board is composed of
a representative of Hennepin County and staff from several
communities in the seven county areas. Wells Fargo Bank will be the
escrow agent.
• The membership disclosure statement is attached. It provides
additional details.
IV. ALTERNATIVE RECOMMENDATION~S~
• Delay consideration of Fund participation until a future date.
• Set the member deposit at a lower amount.
• Reject the participation proposal.
V. ATTACHMENTS
• Membership disclosure statement.
• Community membership list
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Scott Martin, President Twin Cities Community Capital Fund
'T'WIN CITIES COMMUNITY
CAPITAL FUND
Ecnrurmic Deaelopnrerrt l=iruzncinE
for Grou~irrg &usivresses
13911 Ridgedale Drive
Suite 260
Minnetonka, Minnesota 55305
MEMBERSHIP
DISCLOSURE STATEMENT
The Date of this Disclosure Statement is January 15, 2005
TABLE OF CONTENTS
TERMS OF THE OFFER OF MEMBERSHIP .............................................................................................................3
MEMBER QUALIFICATIONS; SUITABILITY STANDARDS ................................................................................4
INTRODUCTION .........................................................................................................................................................5
THE ESCROW AGENT ...................................:...........................................................................................................6
RISKS AND OTHER FACTORS .................................................................................................................................7
DEVELOPMENT LOANS ...........................................................................................................................................8
DESCRIPTION OF MEMBERSHIP INTERESTS ......................................................................................................8
PLAN OF DISTRIBUTION .................................................. ...................................................................................8
LEGAL MATTERS ......................................................................................................................................................8
ADDITIONAL INFORMATION AND DOCUMENTATION ....................................................................................8
APPENDIX A Participation Agreement
APPENDIX B Loan Fund Escrow Agreement
APPENDIX C Loan Financing and Credit Policies
APPENDIX D Community Impact Criteria
APPENDIX E Projections and Assumptions
APPENDIX F Articles of Incorporation
APPENDIX G Bylaws of Twin Cities Community Capital Fund
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Membership Interests Not Eligible For Resale
Membership interests offered hereunder will not be registered under any State or Federal law, and may not
be transferred, reoffered for sale or resold.
Requests to Participate/Acceptance of Members
An eligible organization will become a Member of TCCCF upon occurrence of all the following:
(a) the prospective member delivering to TCCCF the following:
(1) an executed signature page for the Participation Agreement in the form of Appendix
A, (the "Participation Agreement's which shall be deemed to be a `bequest to
participate";
(2) an executed signature page for the Escrow Agreement in the form ofAppendix B (the
"Loan Fund Escrow Agreement"); and
(3) a check in the amount of 90% of the Participation Amount made payable to "Wells
Fargo Bank, N.A., Escrow Agent" who will serve as the escrow agent ("Escrow
Agent's for the Program; and
(4) a check in the amount of 10% of the Participation Amount made payable to "Twin
Cities Community Capital Fund" as a loan to TCCCF for working capital.
(b) acceptance of the prospective member by TCCCF, as evidenced by the delivery to the Member of a
fully executed Participation Agreement signature page.
TCCCF reserves the right in its discretion (i) to approve any "request to participate" and (ii) to terminate
the offer hereunder at any time.
MEMBER QUALIFICATIONS; SUITABILITY STANDARDS
MEMBERSHIP WILL BE OPEN ONLY TO MUNICIPALITIES, COUNTIES, NONPROFIT AND FOR-
PROFIT ECONOMIC DEVELOPMENT ORGANIZATIONS, DEVELOPMENT-ORIENTED VENTURE
FUNDS, PUBLIC CHARTTY AND PRIVATE FOUNDATIONS involved in economic development activities
within the Minnesota counties of Anoka, Carver,- Dakota, Hennepin, Ramsey, Scott and Washington and other
public and private organizatkons with an interest in supporting the purposes of TCCCF, and who are sophisticated in
business and. financial matters, have the knowledge and experience to evaluate the merits and risks of membership,
have sufficient financial resources, and have no need for liquidity with respect to their membership participation
amount in TCCCF.
4
Eligible Members. Membership is open to municipalities, counties, nonprofit and for-profit economic
development organizations, development-oriented venture funds, public charity and private foundations involved in
economic development activities within the Minnesota counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott
and Washington, and other public and private organizations with an interest in supporting the purposes of TCCCF.
Participation Amount. Participating entities aze required to deposit, contribute, and/or loan a minimum of
between $50,000 and $200,000, in Working Capital and the Loan Fund Escrow collectively, as provided for in the
Participation Agreement.
Investment of Funds. All Member Funds will be held and administered by the Escrow Agent pursuant to
the Loan Fund Escrow Agreement. The Escrow Agent will invest all Member Funds in investments permitted to
government entities under Minnesota Statutes Chapter 118A. ("Permitted Investments")
A Member shall receive a refund of their unencumbered deposit balance in the Loan Fund upon 30 days advance
written notice to TCCCF and the Escrow Agent specifying the amount of refund that the Member wishes to receive.
This Notice may be given at any time after the third anniversary date of the first deposit to the Loan Fund made by
Member.
Working Capital. Member agrees and acknowledges that ten percent (10%) of the Participation Amount
shall be paid in the form of a zero interest loan or a grant made to TCCCF for use as working capital ("Working
Capital"). The Working Capital loan shall be repaid by TCCCF beginning no later than October 1, 2010, in four
equal annual installments. Earlier repayment of outstanding Working Capital loans shall be made at the discretion of
the TCCCF Board of Directors.
Additional Funding. Upon the Initial Closing, TCCCF shall have commitments for not less than
$200,000.00 in working capital from which to finance projected operating expenses over the next three years.
Although management believes that these cash flow reserves and cash flow from operations will be adequate to fund
operations for the next three years, such sources may be inadequate to cover such period. Consequently, TCCCF
may require additional working capital funding and if such funding is not available, TCCCF may be required to limit
or discontinue its operations.
Allocation of Investment Income to TCCCF. In consideration of the services provided by TCCCF under the
Program, Members are required to allocate the income earned on their share of the Loan Fund to TCCCF to help pay
expenses associated with administration of the Fund and provide general support for TCCCF's economic
development mission.
Governance. TCCCF will be governed by its Board of Directors. The Members of TCCCF have the
responsibility to elect six of nine directors of TCCCF and their approval shall be required prior to amendment or
abridgement of their right to elect directors. Members of TCCCF shall have no other rights with respect to
governance of TCCCF.
THE ESCROW AGENT
Wells Fargo Bank Minnesota, NA. (the "Escrow Agenf~ will serve as the Escrow Agent for TCCCF. The
Fund will pay all charges for the services of the Escrow Agent. TCCCF has reserved the right to remove the Escrow
Agent and to appoint a successor Escrow Agent. Member Funds are deposited, pursuant to the Loan Fund Escrow
Agreement, duectly into the Loan Fund that has been established at Wells Fargo Bank Minnesota, N.A. ("Loan
Fund Escrow"). Member Funds deposited in the Loan Fund remain assets of the Member. TCCCF will request
disbursements of Member Funds from the Escrow Agent only for the purpose of initially funding Development
Loans, and then only upon the conditions set forth in the Loan Fund Escrow Agreement.
6
DEVELOPMENT LOANS
Development Loans will be originated and underwritten as provided in the TCCCF Loan Credit and
Financing Policies set forth in Appendix C and in accordance with the Community Impact Criteria set forth in
Appendix D attached.
DESCRIPTION OF MEMBERSHIP INTERESTS
Terms of Membership
Each prospective member should carefully review the Participation Agreement (Appendix A) to determine
the exact terms of membership in the TCCCF.
Participation Agreement
This description of TCCCR membership is for summary purposes only. The Participation Agreement is
attached as Appendix A. Prospective Members should rely solely on the Participation Agreement and other
documents referred to herein to determine the terms and nature of their membership in the Program.
PLAN OF DISTRIBUTION
Membership in the Fund will be offered solely by Scott Martin, .President & CEO of TCCCF, who .will
receive no remuneration for securing Members on behalf of TCCCF. Each prospective Member will be required to
fund their membership level in cash at the time their Participation Agreement and Loan Fund Escrow Agreement is
signed.
LEGAL MATTERS
There are no proceedings threatened or pending against TCCCF. Rinke-Noonan, of St. Cloud, Minnesota,
serves as legal counsel to TCCCF.
ADDITIONAL INFORMATION AND DOCUMENTATION
Each prospective member is invited to ask questions of, and receive answers from, TCCCF and to obtain
such information concerning the terms and conditions of membership, to the extent TCCCF possesses the same or
can acquire it without unreasonable effort or expense, as such prospective member deems necessary to verify the
accuracy of the information referred to in the Disclosure Statement. Copies of information incorporated by reference
can be obtained from the offices of TCCCF at 13911 Ridgedale Drive, Suite 260, Minnetonka„ Minnesota 55305.
(telephone: 952-546-9049; a-mail: smartin~utcccforg)
Loans and $1,500,000 for projects that are eligible for New Markets- Tax Credits. A limited
number of projects may be eligible for loans of up to $2,000,000, subject to Loan Purchaser
approval. There is no limit on the number and aggregate amount of loans that can be made at the
request of a Member.
(b) TCCCF will work closely with Members, prospective borrowers, and other
lenders in analyzing and structuring financing transactions that will'best meet the needs of both
borrowers and other participating lenders. TCCCF will. be responsible for Development Loan
closings and negotiating the sale of Development Loans to the secondary market pursuant to a
written purchase agreement (the "Loan Purchase Agreement").
7. Credit Reserves; Loan Discounts.
(a) The originating Member of each Developmenrt Loan shall azrange for the funding of a
credit reserve in the .amount required by the Loan Purchaser and shall make said funds available to
TCCCF on or before the closing of the Development Loan ("Credit Reserve"). Members may allocate
funds that they have deposited in the Loan Fund Escrow Account to satisfy the Credit Reserve
requirement for individual Development Loans, or require that the borrower provide the reserve. A Credit
Reserve of between five and twenty percent (5-20%) of the principal amount of the Development Loan
will typically be required for a period of i2 to i8 months following the closing of the sale to the Loan
Purchaser. TCCCF will. hold and administer all Credit Reserves established in connection. with
Development Loans made under the Program. TCCCF will release such reserves to the party funding the
credit reserve, without interest, only as provided in the credit reserve deposit agreement or similaz
agreement with the Loan Purchaser.
(b) In the event the price offered by the Loan Purchaser is discounted from par value (face
amount of the loan}, the originating Member will be responsible for arranging funding of the difference
between the par value and the loan sale price, said funding to be supplied to TCCCF on or before the
closing of the Development Loan. In the event the Development Loan is sold at a premium, the
originating Member will receive, at closing, the Development Loan premium payment (the amount paid
by the Loan Purchaser in excess of the face amount of the loan).
(c) Except as set forth in this section, Members do not incur any expenses, costs, or
obligations with respect to Development Loans they originate under the Program. All fees and out-of-
pocket expenses in connection with the origination of a Development Loan shall be the responsibility of
the borrower.
The actual credit reserve requirement or any discount from paz value will be a condition of the
loan purchase commitment. The originating Member may decline to proceed with the Development Loan
without any obligation at any time prior to the formal written. approval of the Development Loan by
Member.
8. Loan Closing Procedures and Requirements. TCCCF shall comply with all procedures
for draws from, and reimbursement to, .the Loan Fund Escrow as set forth in the Loan Fund Escrow
Agreement, and further agrees as follows:
(a) Closing Agent. All loan closings shall be administered by a title company or
other closing agent (the "Closing Agent") selected by TCCCF.
(b) Loan Funding. No loan may be closed until TCCCF or the Escrow Agent holds
funds of the Loan Purchaser or other interim lender in an amount sufficient to purchase the
2
i 5. Benefit and Assi ment. This Agreement shall be binding upon the respective parties
and their successors and assigns. No assignment of this Agreement by Member shall be effective unless
(i) specifically approved in writing by TCCCF in its sole discretion, and (ii) the assignee has specifically
assumed all of Member's obligations under this Agreement and any related documents.
16. Notices to TCCCF and Member. All notices and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to the party when sent by
United States mail, delivered to the appropriate address by hand or by anationally-recognized overnight
courier service (costs pre-paid), or sent by facsimile or a-mail addresses and marked to the attention of the
person (by name or title) designated below or to such other address, facsimile number, a-mail address, or
person as the party may designate by notice to the other parties.
To: Twin Cities Community Capital Fund
Attn: Scott Martin
13911 Ridgedale Drive, Suite 260
Minnetonka, MN 55305
Fax: (952) 541-9684
smartinna,tcccfo~
To: Member at the address, facsimile number, or e-mail address shown on the
Participation Agreement Signature Page.
17. Appointment of Authorized Representative by Member. Member hereby appoints as its
authorized representative the person designated on the signature. page of this Agreement. Member may
change the Authorized Representative at any time upon notice to TCCCF as provided herein. TCCCF
may rely upon all directions given by the designated Authorized Representative.
18. Counterparts. This Agreement may be executed in counterparts, which, taken together,
shall constitute one original. The parties agree that this Agreement may be transmitted among themselves
by facsimile. The parties intend that the faxed signatwes constitute original signatures and faxed
agreements or counterparts containing the signatures (original or faxed) shall be binding on each of the
parties.
19. Applicable Law. This Agreement shall be governed by and construed in accordance with
Minnesota law.
20. Suitability and Risk. Member warrants that: (i) it has read the Member Disclosure
Statement; (ii) it understands and assumes the risks of membership in TCCCF; and (iii) it meets the
qualifications for membership.
TWIN CITIES COMNIUNTTY CAPITAL FUND
By
Its
Dated: , 2005
4
"Escrow Agreement Signature Page "means the signature page of this Agreement in the
form of Schedule 1 of this Agreement.
"Loan Fund Escrow" means the escrow account established pursuant to this Agreement.
"Loan Purchase Agreement" means the agreement between the Loan .Purchaser and
TCCCF for the purchase of a particular Development Loan.
"Loan Purchaser" means a secondary market purchaser of Development Loans made by
TCCCF.
"Loan Purchaser Funds" means monies placed in the Loan Fund Escrow by a Loan
Purchaser to fund the purchase of a Development Loan.
"Member Account" means the account maintained by TCCCF on behalf of each Member
to show the principal balance held in the Loan Fund Escrow for the benefit of each Member.
"Member Funds" means the funds deposited by Members in the Loan Fund Escrow
created by this Agreement.
"Member(s) " means those entities that have executed. a Participation Agreement and
which have deposited funds with Escrow Agent pursuant to this Agreement.
"Participation Agreement". means the Participation Agreement executed by .each
Member participating in the Program
"Permitted Investments" means investments permitted to government entities under
Minnesota Statutes Chapter 118A.
"TCCCF" means Twine Cities Community Capital Fund, a Minnesota nonprofit
corporation.
"Unencumbered Amount" means, with respect to any Member, the balance in its Member
Account, less any portion thereof that Member has designated as a Credit Reserve to support a
Development Loan originated by such Member.
3. Deposit of Member Funds and Establishment of Escrow Account..
(a) TCCCF shall deliver to Escrow Agent from time to time an Escrow
Agreement Signature Page which has been executed by a Member and by TCCCF,
together with Member's certified check, bank money order or other immediately
available funds. payable to Escrow Agent in the amount .set forth on the Escrow
Agreement .Signature Page. Escrow Agent, upon execution of the Escrow Agreement
Signature Page and deposit of the funds delivered in the Loan Fund Escrow, .shall be
deemed to have accepted the obligations of Escrow Agent with respect to such funds.
2
(~) TCCCF has received a commitment for the .sale of the
Development Loan to ("Loan Purchaser"), at a sale price
of $___ payable by wire transfer as of the same day Member Funds are
transferred pursuant to this request. In the event the principal amount of the
Development Loan exceeds the advance- requested by TCCCF pursuant to this
Agreement, such difference will be funded by the originating Member or from
other sources.
(iv) The Member Funds advanced to TCCCF will not be irrevocably
advanced by TCCCF to fund the Development Loan until TCCCF has confirmed
with Escrow Agent that Escrow Agent has received a wire transfer from Loan
Purchaser in an amount equal to the amount advanced by Escrow Agent to the
title company or closing agent with respect to such Development Loan pursuant to
5(b)(i) and (u) of this Agreement, and until (1) any discount from the face amount
of the' Development Loan (based upon the Loan Purchase Price) has been funded
and transferred to the Closing Agent, (2) any credit reserve required by the Loan
Purchaser has .been fully fiznded, and (3) all conditions for disbursement of the
Development Loan have been satisfied.
(c) Withdrawal of Member Funds. At any time after the third anniversary of
its first transfer to the Loan Fund Escrow, a Member may withdraw the Unencumbered
Amount of its Member Account upon 30 days' advance written notice to TCCCF and to
Escrow Agent specifying the amount the Member wishes to withdraw. If the requested
withdrawal would reduce the balance in the Member's.Account to less than $5,000, the
entire balance in its Member Account shall be returned to Member, without interest, and
its Member Account shall be deemed closed.
6. Distribution of Interest and Income Derived from Loan Fund Escrow. Deposits
made by Members into the Loan Fund Escrow are the property of the respective Members,
subject to the Escrow Agreement and the Participation Agreement. Each Member, pursuant to
the Participation Agreement, has assigned and appropriated to TCCCF all interest and income
earned upon their respective deposits in the Loan Fund Escrow and each Member hereby directs
Escrow Agent to distribute to TCCCF periodically (no less frequently than semi-annually) from
the Loan Fund Escrow all interest and income earned upon their respective deposits held in the
Loan Fund Escrow, net of fees and expenses of Escrow Agent. The assignment contained in the
Participation Agreement and the direction to Escrow Agent set forth in the previous sentence are
irrevocable until the Member Account no longer has a positive balance.
7. Investments Authorized.. Monies in the Loan Fund Escrow shall be invested only
in Permitted Investments pursuant to directions of TCCCF as agent of Members.
g• Escrow Agent as Depository Fees and Expenses.
(a) The Escrow Agent hereunder, pursuant to the instructions contained in this
Agreement, is a depository only and is not a party to or bound by any other agreement or
4
Member assigns its interest in the Member Funds which have .been deposited in the Loan
Fund Escrow and its obligations under this Agreement and the assignee assumes such
obligations;
(c) .directions to Escrow Agent with respect to the investment of monies held
in the Loan Fund Escrow within the limitations set forth in Section 7 of this Agreement;
(d) establishment and modification of terms of Escrow Agent compensation
and expense reimbursement as provided under this Agreement;
(e) assignment of the interest of Members under this Agreement and in the
Loan Fund Escrow to a successor Escrow Agent and release of Escrow Agent upon
assignment; and
(fl termination o f this Agreement.
12. Term and Termination. This Agreement shall be for an initial term that ends on
October 1, 2008, and will automatically renew for successive one year terms thereafter unless
earlier terminated. -This Agreement may be terminated by TCCCF by giving Escrow .Agent 90
days' advance written notice of termination and may be terminated by Escrow Agent by giving
TCCCF 90 days' advance written notice of termination. In the event a successor Escrow Agent
is not appointed by the effective date of termination the Member Funds shall be refunded to the
Members.
13. Benefit. This Agreement shall be binding upon the respective parties' successors
and assigns.
14. Effective Date. This Agreement shall become effective upon the execution of this
Agreement by Escrow Agent and TCCCF. This Agreement shall become effective as to each
Member upon the date the Member signs this Agreement.
15. Notices to Escrow Agent and TCCCF. All notices and other communications
required or permitted by this Agreement shall be in writing and shall be deemed given to a party
when sent by United States mail, delivered to the appropriate address by hand or by a nationally
recognized overnight courier service (costs .prepaid) or sent by facsimile or a-mail with
confirmation of transmission by the transmitting equipment to the following addresses, facsimile
numbers or a-mail addresses .and marked to the attention of the person (by name or title)
designated below or to such other address, facsimile number, a-mail address or person as a party
may designate by notice to the other parties:.
TO: Twin Cities Community Capital Fund
Attention: Scott Martin
13911 Ridgedale Drive, Suite 260
Minnetonka, MN 55305
Fax: (952) 541-9684
smartin(a~tcccfor~
6
Appendix C
Twin Cities Community Capital Fund
LOAN CRITERIA
FINANCING POLICIES CREDIT CRTI'ERIA
Loan Amonnts•
^ $50,000 minimum
^ $1,000,000 maximum for standard loans; $1,500,000 for
New Markets Tax Credit eligible loans; a limited number of
loans of up to $2,000,000 will be considered annually for
certain projects.
Eligible Proiects•
Equity or Cash Reguirements•
^ Loan applicants must demonstrate an acceptable level of
project equity, with a minimum of 10% equity provided by
the borrower. Subordinated debt within the same project
financing may be considered as additional equity, subject to
an irrtercreditor agreement. Al] other criteria will apply,
including subordinate debt, when calculating debt coverage.
^ Funded project must be within a member's area of
operations.
^ Borrower may be a for-profit business entity, non-profit
wrporation, or a cooperative business organization.
^ A financial institution must be a participant in the project
financing.
Allowable Use of Proceeds:
TCCCF financing assistance may include, but is not limited
to: fixed assets, including land and building purchase,
building construction, leasehold improvements and
renovations; acquisition, renovation or moving machinery
and equipment; and working capital loans secured by fixed
assets with fixed repayment schedules (not lines of credit).
Loans may not be used to refinance existing debt.
Inelisible Use of Proceeds:
^ Speculative real estate developments.
^ Purchase of equity positions in business enterprises.
Interest Rates•
^ Adjustable and fixed rate loans are available, with rates
determined by the TCCCF member originating the loan.
Loan Term LenQth•
The term of each loan will be determined on a case-by-case
basis, with the primary factor being the collateral offered.
Loans secured by real estate will generally not exceed 20
yeazs, and loans secured by machinery and equipment will
generally support a loan term of up to 10 yeazs, not to
exceed the depreciated life of the asset being financed The
TCCCF loan will typically coincide with the term of the
participating bank loan, including any balloon maturity
provisions.
Fees and Charges•
A 1.75% loan origination fee will be charged to all TCCCF
borrowers. This fee will be assessed only for approved
loans, but must be paid at or prior to loan closing.
A 0.5% loan underwriting fee shall be paid by the borrower
at loan closing.
Borrowers are responsible for paying all legal and other loan
closing costs incurred by TCCCF.
Collateral Reguirements•
^ Loan collateral coverage must be at least 90% of the TCCCF
loan amount on .appraised value of assets, less all senior
debt.
^ TCCCF will consider the following collateral positions: first
security interest, shared first security interest, subordinated
security interest and shazed subordinated security interest.
Debt to Worth•
TCCCF will consider financing projects that have a tangible
.net worth ratio on an actual and proforma basis of no greater
than 10 to 1 (10% project equity or greater). Each project
shall be analyzed on its own merits and its ability to service
both existing and new debt.
TCCCF borrowers (real estate holding companies excluded)
should have a tangible net worth of 5 to 1 or less, based
upon their most recent financial- statements and, on a
proforma basis, reflecting the new proposed debt
Personal Guarantees:
Personal guarantees will be required for all owners with
20% or greater ownership in closely held businesses.
Manaeement Experience & Company Performance•
^ The TCCCF will require that the project have capable,
skilled management through experience or expertise in the
applicant's industry, either through previous successful
business ownership or through appropriate managerial
support services. Borrowers having erratic or
undocumemed earnings, or borrowers having .new and
unproven management, will require more loan risk sharing
by the TCCCF member originating the loan.
Repayment Ability:
• .Applicants must demonstrate adequate historical cash flow
showing trends that support debt service wverage of at least
1.1 to 1. Proforma financial cash flows must also support
debt service coverage of at least one to one.
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Appendix F
ARTICLES OF INCORPORATION OF
TWIN CITIES COMMUNITY CAPITAL FUND
ARTICLE I
NAME
The name of the corporation shall be Twin Cities Community Capital Fund.
ARTICLE 11
REGISTERED OFFICE
The location. of the registered office of the corporation shall be 13911 Ridgedale Drive,
Suite 260, Minnetonka, Minnesota 55305.
ARTICLE 111
PURPOSE
This corporation is organized and shall at all times hereafter be operated exclusively for
charitable purposes under section 501(c)(3) of the Intemal Revenue Code. Within the foregoing
limitations, this corporation will combat community deterioration by promoting the development
of housing and business enterprises throughout Anoka County, Carver County, Dakota County,
Hennepin County, Ramsey County, Scott County, and Washington County in Minnesota.
The operations of the corporation are intended to provide financing and development services to
business and affordable housing enterprises, in order to foster economic development and job
opportunities, with an emphasis on those projects and enterprises owned, controlled and
operated by, and for the benefit of, those who live within the described area, or are committed to
hiring persons affected by poverty or by the .deterioration within the described area. The
corporation is also intended: (a) to be eligible for certification as a Community Development
Financial Institution under the criteria specified in 12 CFR Part 1805 of the federal regulations,
(b) to qualify as a Community-Based Development Organization under the criteria and
procedures specified in 24 CFR Part 570.204 of the federal regulations, and (c) to meet the
criteria specifiied in Section 45D of the Intemal Revenue Code as a Qual~ed Community
Development Entity. To the extent consistent with the foregoing, the corporation may pursue all
other lawful purposes available to the nonprofit corporations organized as such under the laws
of the State of Minnesota.
ARTICLE N
POWERS
This corporation is organized under and shall have the authority and general powers contained
in the Minnesota Nonprofit Corporation Act, Minnesota Statutes Chapter 317A, as it now exists
or may hereafter be amended.
have any rights of governance with respect to the corporation. Members are entitled to one vote
for each $1,000 contribution and/or loan to the corporation for working capital and one vote for
each $1,000 of deposit balance in the Loan Fund (fractions are disregarded).
The members of the corporation shall have no property rights in the assets of the corporation
and no earnings of the corporation shall inure to the benefit of or be distributable to the
members, except the members may be reasonably compensated for services performed for the
corporation.
The members of the corporation shall have the authority to elect directors to the extent set out in
.the Bylaws. The approval of such members shall be required prior to amendment or
abridgement of this right to elect certain directors, but the members of the corporation shall have
no other rights with respect to the governance of the corporation.
ARTICLE VIII
NO PERSONAL LIABILITY
The officers, directors and members of this corporation shall not be personally liable for the
acts, debts, liabilities or obligations of the .corporation or any enterprise or activity carved on or
sponsored by it.
ARTICLE IX
ACTION WITHOUT A MEETING
An action may be taken by written action signed by the number of directors that would be
required to take the same action at a meeting. of the board at which all directors were present.
The written action is effective when signed by the required number of directors, unless a
different effective time is provided in the written action. When written action is taken pursuant to
the authority of this Article, all directors must be notified immediately of its text and effective
date. Failure to provide the notice does not invalidate the written action. A director who does
not sign or consent to the written action is not liable for the action.
ARTICLE X
INCORPORATORS
The names and addresses of the incorporators are:
Scott A. Martin
13911 Ridgedale Drive, Suite 260
Minnetonka, Minnesota 55305
Lary Btackstad
417 North Fifth Street, Suite 320
Minneapolis, Minnesota 55401
Appendix G
BYLAWS OF
TWIN CITIES COMMUNITY CAPITAL FUND
ARTICLE 1.
OFFICES, CORPORATE SEAL
Section 1.01 Registered and Other Offices. The registered office of the corporation in
Minnesota shall be that set forth in the articles of incorporation or in the most recent amendment
of the articles of incorporation or statement of the board of directors filed with the Secretary of
State in Minnesota changing the registered office in the manner prescribed by law. The
corporation may have such other offices, within or without the State of Minnesota, as the board
of directors shall from time to time determine.
Section 1.02 Comorate Seal. The corporation shall have no corporate seal.
ARTICLE IL
MEMBERS
Section 2.01 Eligibility and Classes of Members. Each community development corporation,
individual, business organization, development-oriented venture fund, local governmental
agency, public charity or private foundation which is involved in economic development activity,
including the management of a Revolving Loan Fund ("RLF") operated within the area of
operations of the corporation, with an interest in supporting the purposes of the corporation,
may apply to become a member by contributing or loaning funds to the corporation for use by
the corporation as working capital and by depositing funds in a loan fund maintained in an
escrow account established pursuant to an escrow agreement by depositor, corporation and a
bank or other independent financial institution, which escrow agreement provides in part that (i)
title and ownership of the funds deposited in such loan fund shall remain in the name of the
depositor, (ii) .the income derived from the loan fund, net of expenses of the escrow agent shall
be paid to the corporation; (iii) loan fund principal may be advanced to corporation upon receipt
of directions as set forth in the Loan Fund Escrow Agreement; and (iv) deposit to the loan fund
shall be returned to the depositor upon notice of withdrawal by the depositor upon lapse of time
as set forth in the Loan Fund Escrow agreement.
The terms upon which the corporation may draw upon and receive an advance from the loan
fund are contained in the Loan Fund Escrow Agreement and in the Participation Agreement.
The terms for the use and repayment of funds loaned to the corporation by members for
working capital are contained in the Participation Agreement. Membership participation shall be
subject to approval by the board of directors of the corporation through the execution of a
written participation agreement. The Participation Agreement will also describe the procedure by
which the member shall identify the members' official representative and alternate entitled to
attend membership meetings and vote on behalf of the member. Upon execution of the
Participation Agreement and the Loan Fund Escrow Agreement, and -the transfer of funds to the
loan fund and to the corporation for working capital, the participating entity shall become a
member of the corporation.
To make certain that the management of the corporation is broadly representative of, and
responsive to, communities within the Twin Cities metropolitan area, all directors shall be
individuals employed or residing in Twin Cities metro area communities. The .corporation shall
make an effort to identify and recruit as directors individuals representing a broad cross section
of Twin Cities metro area. Particular emphasis shall be placed on identification and recruitment
of qualified board candidates who themselves are low- and moderate-income Minnesota
residents or who .work with organizations and enterprises serving low- and moderate-income
communities throughout the seven county. Twin .Cities metropolitan area, as described in
Section 2.02.
The initial board of directors shall be appointed by written action of the incorporators and shall
serve until the first annual meeting of the corporation.
At the first annual meeting of the corporation, two of the elective director positions shall be
designated as "Class A" director positions to be filled by the vote of the Class A members; two
of the elective director positions shall b~ designated as "Class B° director positions to be filled
by the vote of the Class B members; and, two of the elective director positions shall.. be
designated as "Class C" director .positions to be filled by the vote of the Class C members. At
each subsequent annual meeting of the corporation, if a Class A, Class B or Class C director
position is vacant or the term of the present occupant is expiring, the appropriate class of
members shall assemble to propose and consider nominees, who may but need not be
associated with members of the corporation, and to vote to fill each such designated director
position. The votes cast by members shall be weighted proportionally to the total contribution
and/or loan amount made to the corporation for working capital, plus the deposit made by such
member to the loan fund, as provided for in Section 2.01 of these Articles. Each .$1,000
contributed, loaned or deposited by the member (fractions thereof shall be disregarded) shall be
equal to 1 vote. The director candidate receiving the grea#est number of votes from each
respective class of members shall be deemed elected.
The remaining director positions, which have not been designated as Class A, Class B or Class
C director positions, shall be at-large positions filled by the affirmative vote of a majority of the
member-elected directors present at a meeting of the board.
Each of the directors shall hold office for a term of three (3) years, except that, of the first board
elected at an annual meeting under these bylaws, up to one-third of those elected shall hold
office for a term of two (2) years and up to one-third of those elected shall hold office for a term
of one (1). year. Election of additional directors or of replacements for directors whose terms are
expiring each year shall take place at the annual meeting of the board in such year, and each
director shall hold- office until a successor shall have been elected and shall qualify, or until the
earlier death, resignation or removal of such director.
Section 3.03 Board Meetings; Place and. Notice. Meetings of the board of .directors may be
held from time to time at such place that the board of directors may designate. A .conference
among directors by any ~ means of communication through which the directors may
simultaneously hear each other during the conference constitutes a meeting of the board of
directors, if the number of directors participating in the conference would be sufficient to
constitute a quorum at a meeting, and if the same notice is given of the conference as would be
required for a meeting. The. chair may call a board meeting by giving not less than five (5) nor
more than thirty (30) days notice to all directors of the date and time of the meeting. The notice
of a meeting need not state the purpose of the meeting. Notice shall be written and may be
given by mail or in person. If a meeting schedule is adopted by the board, or if the date of a
board meeting has been announced at a previous meeting, no notice is required.
3
Section 4.04 Secretary. The secretary of the corporation shall prepare minutes of each
meeting of the board, shall maintain records of and, to the extent necessary, certify all
proceedings of the board of directors of the corporation.
Section 4.05 Treasurer.. The treasurer shall act as chief financial officer of the corporation and
in such capacity shall keep accurate financial records for the corporation; endorse and deposit
all money, drafts, and checks in the name of and to the credit of the corporation in the banks
and depositories designated by the board of directors; disburse corporate funds and issue
checks and drafts in the name of the corporation; render to the- chair and the board of directors,
whenever requested, an account of all transactions and of the financial condition of the
corporation; and perform such other duties as may from time to time be prescribed by the board
of directors or chair. The treasurer need not personally pertorm the duties described herein, but
all such duties shall be performed under the supervision of the treasurer.
Section 4.06. Manager. The board of directors may choose to appoint a manager who shall 6e
the President and Chief Executive Officer of the corporation and shall exercise the functions and
duties customarily incident to the office. The manager shall have general active management of
the affairs and. business of the corporation, and shall report directly to the board of directors.
The manager shall be responsible for seeing that all orders and resolutions of the board of
directors are carried into effect. The manager shall serve as an ex officio member of all board
committees, without vote.
Section 4.07 Election and Term of Office. The- directors shall, no less frequently than at each
annual. meeting, elect a chair, a vice chair, a secretary and a treasurer and any other officers or
agents the board deems necessary. Such officers shall hold their offices until their successors
are elected and qualified, or until death, .resignation or removal as herein provided. A vacancy
in any office may be filled by the board for the unexpired portion of the term.
Section 4.08 Removal of Officer. An officer may be removed at any time, wi#h or without cause,
by the affim~ative vote of a majority of the directors present at a meeting of the board of
directors at which a quorum is present.
Section 4.09 Other Committees. The board of directors may establish other committees of one
or-.more persons having the authority of the board in the management of the business of the
corporation to the extent provided in the resolution establishing such committee. Committee
members need not be directors or officers. A majority of the members of a committee present
at a meeting constitutes a quorum for the transaction of business.
ARTICLE V.
ANNUAL MEETING
The annual meeting of the corporation shall be held within 120 days following the end of each
fiscal year. The offrcial representative of each member shall be notified of the time and place of
the annual meeting not less than 30 days prior to the meeting date. The election of directors
shall take place at each annual meeting, as provided in Section 3.02 of these Articles. In
addition, officers of the board and the chief executive officer shall present the annual audited
financial -report and a summary of the corporation's activities of the past fiscal year.
5
Twin Cities Community Capital Fund
C~t~IT.t~ F~~rr~
Benefits of Membership
Participation Levels
Membership. Updates
Organizational Structure
Membership Updates
Page 1 of 1
I~t'~f,~ f.:~xn-.~ck
The following communities and organizations are members of TCCCF:
Class A Members
Burnsville
Eagan
Minnetonka
Oakdale
Woodbury
Class B Members
Cottage Grove
Dakota County Capital Fund
Hastings
Norwood Young America
Rosemount
St. Paul Park
Shoreview
Class C Members
Belle Plaine
Brooklyn Park
Centerville
Cologne
Coon Rapids
Jordan
Maplewood
Newport
St. Louis Park
Waconia
[Home] [Loan Application] [About The Fund] [Membership] [FAQ] [Contact]
2
http://tcccf.org/membership_updates.cfm 7/7/2005
AGENDA ITEM # 3D
REPORT # 29
~~' STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JULY 18, 2005
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR
BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
NAME, TITLE
BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
ITEM FOR HRA CONSIDERATION:
Applying the debt service reserve of Urban Village Note as prepayment of the Note at Note
holder's re uest.
I. RECOMMENDED ACTION:
By Motion: Adopt a resolution modifying the terms of the Housing
and Redevelopment Authority Resolution No. 821 regarding the
Housing and Redevelopment Authority's $2,500,000 Tax Increment
Revenue Note, Series 2001 A.
II. BACKGROUND
As part of the Woodlake Centre project at 66th Street and Lyndale Avenue (also
known as Urban Village), the tax exempt Series 2001A Note was originally
issued to Marquette Capital Bank, N.A. (Marquette) (which. later merged with
Wells Fargo). At the time the Note was issued, Marquette required a debt
service reserve, which was approximately one year's debt service. This amount
was funded from proceeds of sale of the Note, and was held in a reserve fund
maintained by the Housing and Redevelopment Authority (HRA).
SJB-265245v1
RC125-182
/ NAME, TITLE
In January 2005, Wells Fargo assigned ownership of the Note to Marshall &
Ilsley Corporation ("M&I"). M&I has determined that the reserve is no longer
necessary, as the building is complete and tax increment revenues are more
than sufficient to pay principal and interest. Therefore, M&I has requested
release of -the balance in the reserve fund. The amount in the reserve has not
increased since the original issuance, as all interest earnings are applied toward
debt service payments.
The way the reserve is released is to apply the fund balance to prepay the Note,
in inverse order of principal installments. The net effect is to prepay the last year
of payments on the Note.
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA issued a $2,500,000 tax increment Note for the purposes
of funding public redevelopment costs related to the development
of Woodlake Centre.
B. CRITICAL ISSUES
• M&I has requested that the debt service reserve be released.
• The release of the reserve to M&I is contingent on M&I in writing,
acknowledging that the reserve balance is to be used to prepay the
note.
• August 1 is approaching, an appropriate time to be making the
release as other tax increment payments are also being made.
C. FINANCIAL .
• The reserve amount is $221,299.44.
• There are sufficient debt service reserves to make the requested
payment.
• Sid Inman has reviewed the request and determined the release
has no negative impact on the HRA.
D. LEGAL
• Legal counsel has prepared the resolution and been the primary
contact for arranging the release of the debt service reserve.
• Steve Bubul, HRA bond counsel., determined that the release of the
reserve must be applied to debt service.
IV. ALTERNATIVE RECOMMENDATION(S~
• The HRA could choose to not authorize the release at this time.
V. ATTACHMENTS
• Resolution
• Resolution No. 821
VI. PRINCIPAL PARTIES EXPECTED AT
MEETING
• N/A
HRA RESOLUTION NO.
RESOLUTION MODIFYING THE TERMS OF RESOLUTION N0.821
REGARDING THE AUTHORITY'S $2,500,000 TAX INCREMENT
REVENUE NOTE, SERIES 2001A.
BE IT RESOLVED BY the Housing and Redevelopment Authority in and for the
City of Richfield (the "Authority") as follows:
Section 1. Background..
1.01. The Authority and City of Richfield ("City") have heretofore approved the
establishment of the Urban Village Tax Increment Financing District (the "TIF District")
within the Richfield Redevelopment Project ("Project"), and have adopted a tax increment
financing plan for the purpose of financing certain improvements within the Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority issued its $2,500,000 Tax
Increment Revenue Note, Series 2001A (the "Note") for the purpose of financing certain
public redevelopment costs of the Project, pursuant to Resolution No. 821 (the "Note
Resolution"). The Note was originally issued to Marquette Capital Bank, N.A. and is
currently owned by Marshall & Ilsley Corporation (the "Owner").
1.02. Under the Note Resolution, the Note is secured in part by a Reserve
Fund, the balance of which is currently $221,299.44 (the "Reserve Fund Balance").
1.03. The Owner of the Note has requested that the Reserve Fund Balance be
paid to the Owner and applied to prepay, in part, the accrued interest and outstanding
principal balance of the Note.
1.04. To accommodate such release of the Reserve Fund Balance and partial
prepayment of the Note, the Authority has determined to modify the terms of the Note
Resolution as further described herein.
Section 2. Resolution Modified.
2.01. Section 4.01 of the Note Resolution is modified to add the following:
Notwithstanding anything to the contrary herein, from and after application of funds in
the Reserve Fund in accordance with Section 4.04 hereof (as modified by this
amending resolution), Available Tax Increment shall be applied to the following funds or
uses in the following order of priority:
First to the Debt Service Fund, with respect to Available Tax Increment received as
of any August 1 Payment Date, the amount, together with amounts then on deposit in the
Debt Service Fund, necessary to pay the principal and interest due on that August 1 and
SJB-265245v1
RC125-182
the next following February 1; and with respect to the Available Tax Increment received as
of any February 1 Payment Date, the amount together with amounts then on deposit in the
Debt Service Fund, necessary to pay the principal and .interest due on that February 1;
Second to the registrar for the Taxable Tax Increment Revenue Note, Series 2001 B
(the "Series 2001 B Note"), for deposit in the debt service fund established in the resolution
approving issuance of the Series 2001 B Note; and
Third to the Prepayment Fund.
2.02. Section 4.04. of the Note Resolution is modified to add the following:
Notwithstanding anything to the contrary herein, the outstanding balance in the Reserve
Fund shall be applied to prepay the Note, in part, upon Authority's receipt of, a written
consent to such prepayment signed by Owner, in a form reasonably acceptable to the
Authority, such prepayment to be applied first to accrued interest and second to
outstanding principal installments set forth in Schedule A attached to the Note, in
inverse order of installments. After such prepayment the Reserve Fund is deemed
terminated.
2.03. The Note Resolution remains in full force and effect and is not modified
except as expressly provided in this resolution.
Adopted by the Board of the Housing and Redevelopment Authority in and for the
City of Richfield this 18th day of July, 2005.
Thomas E. Harms, Chair
ATTEST:
Secretary
2
6
RESOLUTION NO. 821
RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS,
COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT
REVENUE NOTE, SERIES 2001A.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority in and for the City of Richfield as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority and City of Richfield ("City") have heretofore
approved the establishment of the Urban Village Tax Increment Financing District (the "TIF
District") within the Richfield Redevelopment Project ("Project"), and have adopted a tax
increment financing, plan for the .purpose of financing certain improvements within the
Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to
issue and sell its bonds for the purpose of financing a portion of the public development
costs of the Project. Such bonds are payable from all or any portion of revenues derived
from the TIF District and pledged to the payment of the bonds. The Authority hereby finds
and determines that it is in the best interests of the Authority that it issue and sell its
Increment Revenue Note, Series 2001A (the "Note") in a maximum principal amount of
$4,750,000 for the purpose of financing certain public costs of the Project.
1.02. Issuance, Sale, and Terms of the Note. The Authority hereby delegates to
the Executive Director the determination of the date on which the Note is to be delivered,
in accordance .with that certain Amended and Restated Contract for Private
Redevelopment between the Authority and Richfield State Agency, Inc. ("Redeveloper")
dated , 2001 (the "Agreement"). The Note shall be sold to Marquette Capital
Bank, N.A. (the "Owner") at a price of par. The Note shall be dated as of the date of
delivery thereof, shall bear interest at the rate of 5.6% per annum to the earlier of maturity
or prepayment, subject to adjustment as provided in the Note, .and shall be payable in
installments of principal on the dates ("Payment Dates") set forth in Schedule A attached
to the Note. The Note is not subject to prepayment or redemption before maturity except
as otherwise provided in Section 4 of this Resolution or as permitted under the terms of
the Agreement.
The Executive Director is authorized to approve the original principal amount of the
Note up to the maximum stated in Section 1.01, the principal amounts payable (the
"Scheduled Payments") on each Payment Date, and other changes to the terms of the
Note (excluding the rate of interest and terms of adjustment thereof), all to the extent
agreed by the Redeveloper and the Owner. Delivery of the executed Note will be
conclusive evidence that the Executive Director has approved any changes in the form of
the Note.
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Section 2. Form of Note. The Note shall be in substantially the following form,
with the blanks to be properly filled in and the principal amount and payment schedule
inserted as of the date of issue:
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
No. R-1
TAX INCREMENT REVENUE NOTE
SERIES 2001A
Date
of Original Issue
The Housing and Redevelopment Authority in and for the City of Richfield (the
"Authority"), hereby acknowledges itself to be indebted and, for value received,
promises to pay to the order of Marquette Capital Bank, N.A., its endorsees, successors
and assigns (the "Holder"), solely from the sources and to the extent and in the manner
hereinafter provided, the original principal amount of this Note, being $5,000,000 or
such lesser amount advanced herein under the Agreement hereinafter described,
together with interest on the principal balance of this Note outstanding from time to time
(the "Principal Balance") at the rate of interest hereinafter set forth. The principal of this
Note is payable in installments on the dates (the "Payment Dates") set forth on the
Payment Schedule attached as Schedule A hereto and in the amounts stated thereon
(the "Scheduled Payments"). Interest accruing on the Principal Balance from the date
of this Note, shall be paid on each August 1 and February 1, commencing August 1,
2001, to and including February 1, 2026 (the "Maturity Date"), when the entire Principal
Balance and all accrued and unpaid interest shall be due and payable.
The interest rate on this Note shall be 5.60% per annum from the date of original
issue to and including February 1, 2006. The interest rate shall be reset as of February
1, 2011, February 1, 2006, and February 1, 2021 (each a "Reset Date") to equal the
Moody's Municipal AAA Bond Curve for five-year obligations as most recently published
prior to each such Reset Date plus 150 basis points or, if such index is no longer
published, then a comparable index mutually agreed by the Authority and the Holder.
Any payments on this Note shall be applied first to accrued interest and then to
the Principal Balance.
Each payment on this Note is payable in any coin or currency 'of the United
States of America which on the date of such payment is legal tender for public and
4
private debts and shall be made by check
mailed to the Holder at its postal address
designated from time to time by the Holder.
or draft made payable to the Holder and
within the United States which shall be
The Note is a special and limited obligation and not a general obligation of the
Authority, which has been issued by the Authority to provide funds to defray certain
public redevelopment costs of a project pursuant to Minnesota Statutes, Sections
469.001 to 469.047 and is issued pursuant to resolution of the Authority approved May
21, 2001 ("Resolution") and Minnesota Statutes, Section 469.178.
THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD,
OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY,
THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION
THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE
OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE REVENUES PLEDGED
PURSUANT TO THE RESOLUTION.
The principal and interest due on any Payment Date are payable solely from and
only to the extent that the Authority shall have received as of such Payment Date
"Available Tax Increment" together with any other amounts pledged to the Debt Service
Fund under the Resolution, the terms of which are incorporated as if fully set forth
herein. For the purpose of this Note, "Available Tax Increment" means seventy-five
percent (75%) of the tax increment attributable to the portion of the Urban Village Tax
Increment Financing District ("TIF District") described in Schedule B that is received by
the Authority from Hennepin County as of any Payment Date and not previously applied
to any previous payment under this Note.
The Principal Balance of this Note shall be prepaid on each Reset Date, without
premium or penalty, from and to the extent of any amounts deposited in the Prepayment
Fund, as described in the Resolution. Any prepayments of principal shall be applied to
the last maturing installments of principal on Schedule A without affecting the amount or
timing of any remaining Scheduled Payment. This Note shall not otherwise be subject to
prepayment or redemption except to the extent provided otherwise in the Amended and
Restated Contract for Private Redevelopment between the Authority and Richfield State
Agency dated , 2001 (the "Agreement").
This Note shall not be payable from or constitute a charge upon any funds of the
Authority or the City of Richfield and the Authority shall not be subject to any liability
hereon or be deemed to have obligated itself to pay hereon from any funds except the
Available Tax Increments and other funds pledged to the payment of the Note under the
Resolution, and then only to the extent and in the manner specified in the Resolution.
The Holder shall never have or be deemed to have the right to compel any
exercise of any taxing power of the Authority or the City of Richfield or of any other
public body, and neither the Authority or the City of Richfield nor any director,
commissioner, council member, board member, officer, employee or agent of the
Authority or the City of Richfield; nor any person executing or registering this Note shall
be liable personally hereon by reason of the issuance or registration hereof or
otherwise.
This Note is issuable only as a fully registered note without coupons. As
provided in the Resolution, this Note shall be transferable upon the books of the
Authority kept for that purposes at the principal office of the Registrar, by the Owner
hereof in person or by such owner's attorney duly authorized in writing, upon surrender
of this Note together with a written instrument of transfer satisfactory to the Authority,
duly executed by the owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Authority with
respect to such transfer or exchange, there will be issued in the name of the transferee
a new Note of the same aggregate principal amount, bearing interest at the same rate
and maturing on the same dates. The Note shall be transferred or assigned only to an
"accredited investor" within the meaning of Regulation D of the Securities and Exchange
Commission and only upon execution. and delivery by the purchaser of an investment
letter substantially in the form described in the Resolution.
The Board of Commissioners has designated the Note as a "qualified tax exempt
obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986,
as amended (the Code) relating to disallowance of interest expense for financial
institutions and within the $10 million limit allowed by the Code for the calendar year of
issue.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and Caws of the State of Minnesota to be done, to exist, to
happen, and to be performed in order to make this Note a valid and binding limited
obligation of the Authority according to its terms, have been done, do exist, have
happened, and have been performed in due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield has caused this Note to be
executed with the manual signatures of its Chair and Executive Director, all as of the Date
of Original Issue specified above.
Housing and Redevelopment Authority in
and for the City of Richfield
Executive Director
Chair
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond
register of the City Finance Director, in the name of the person last listed below.
Date of
Registration Registered Owner
Manager
Marquette Capital Bank, N.A.
Date of Authentication:
Note Registrar's Authentication Certificate
Signature of
City Finance
This is one of the Notes described in the within mentioned Resolution.
Note Registrar
By
Authorized Signature
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten
note numbered R-1 in the denomination of the original principal amount of the Note.
The Note shall be issuable only in fully registered form. Principal of and interest on
the Note shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall
be payable by mail to the owner of record thereof as of the close of business on the
fifteenth day of the month preceding the Payment Date, whether or not such day is a
business day.
3.03. Registration. The Authority hereby appoints the City Finance Manager to
perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The
effect of registration and the rights and duties of the Authority and the Registrar with
respect thereto shall be as follows:.
(a) Register. The Registrar shall keep at its office a bond register in
which the Registrar shall provide for the registration of ownership of the Note and
the registration of transfers and exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly
endorsed by the registered owner thereof or accompanied by a written instrument
of transfer, in form reasonably satisfactory to the Registrar, duly executed by the
registered owner thereof or by an attorney duly authorized by the registered owner
in writing, the Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, a new Note of a like aggregate principal
amount and maturity, as requested by the transferor. Notwithstanding the
foregoing, the Note shall be transferred only to an "accredited investor" within the
meaning of Regulation D of the Securities and Exchange Commission and only
upon execution and delivery by the purchaser to the Registrar of an investment
letter substantially in the form of Schedule C hereto. The Registrar may close the
books for registration of any transfer after the fifteenth day of the month preceding
each Payment Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be
promptly cancelled by the Registrar and thereafter disposed of as directed by the
Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented tc
the Registrar for transfer, the Registrar may refuse to transfer the same until it is
satisfied that the endorsement on such Note or separate instrument of transfer is
legally authorized. The Registrar shall incur no liability for its refusal, in good faith,
to make transfers which it, in its judgment, deems improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat
the person in whose name the Note is at any time registered in the bond register as
the absolute owner of the Note, whether the Note shall be overdue or not, for the
purpose of receiving payment of, or on account of, the principal of and interest on
such Note and for all other purposes, and all such payments so made to any such
registered owner or upon the owner's order shall be valid and effectual to satisfy
and discharge the liability of the Authority upon such Note to the extent of the sum
or sums so paid.
(f) Taxes. Fees and Charges. For every transfer or exchange of the
Note, the Registrar may impose a charge upon the owner thereof sufficient to
reimburse the Registrar for any tax, fee, or other governmental charge required to
be paid with respect to such transfer or exchange.
s
(g) Mutilated, Lost,.. Stolen or Destroyed Note. In case any Note shall
become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new
Note of like amount, maturity dates and tenor in exchange and substitution for and
upon cancellation of such mutilated Note or in lieu of and in substitution for such
Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and
charges of the Registrar in connection therewith; and, in the case the Note lost,
stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that
such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon
furnishing to the Registrar of an appropriate bond or indemnity in form, substance,
and amount satisfactory to it, in which both the Authority and the Registrar shall be
named as obligees. The Note so surrendered to the Registrar shall be cancelled by
it and evidence of such cancellation shall be given to the Authority. If the mutilated,
lost, stolen, or destroyed Note has already matured or been called for redemption in
accordance with its terms, it shall not be necessary to issue a new Note prior to
payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of
the Executive Director of the Authority and shall be executed on behalf of the Authority by
the signatures of the Chair and the Executive Director, provided that said signatures may
be printed, engraved, or lithographed facsimiles thereof. In case any officer whose
signature, or a facsimile of whose signature, shall appear on the Note shall cease to be
such officer before the delivery of the Note, such signature or facsimile shall nevertheless
be valid and sufficient for all purposes, the same as if such offer had remained in office
until delivery. Notwithstanding such execution, the Note shall not be valid or obligatory for
any purpose or entitled to any security or benefit under this resolution unless and until a
certificate of authentication on such Note has been duly executed by the manual signature
of an authorized representative of the Registrar. The executed certificate of authentication
on each Note shall be conclusive evidence that it has been authenticated and delivered
under this resolution. When the Note has been so executed and authenticated, it shall be
delivered by the Executive Director to the purchaser thereof upon payment of the
purchase price, and the purchaser shall not be obligated to see to the application of the
purchase price.
Section 4. Security Provisions.
4.01. Creation of Funds; Priority of Payments. There are hereby created special
funds designated as the "Project Fund," the "Debt Service Fund," the "Reserve Fund," and
the "Prepayment Fund," to be held and administered by the Authority separate from other
funds or accounts of the Authority. The Authority hereby pledges Available Tax Increment
(as defined in the Note) to the following funds or uses in the following order of priority:
First to the Debt Service Fund, with respect to Available Tax Increment received as
of any August 1 Payment Date, the amount, together with amounts then on deposit in the
Debt Service Fund, necessary to pay the principal and interest due on that August 1 and
the next following February 1; and with respect to the Available Tax Increment received as
of any February 1 Payment Date, the amount together with amounts then on deposit in the
Debt Service Fund, necessary to pay the principal and interest due on that February 1;
Second to the Reserve Fund in the amount necessary to bring the balance therein
to the Reserve Requirement (hereinafter defined);
Third to the registrar for the Taxable Tax Increment Revenue Note, Series 2001 B
(the "Series 2001 B Note"), for deposit in the debt service fund established in the resolution
approving issuance of the Series 2001 B Note; and
Fourth to the Prepayment Fund.
4.02. Project Fund. The Authority appropriates to the Project Fund proceeds of
the Note, less the amount deposited in the Reserve Fund under Section 4.04. Moneys in
the Project Fund shall be used to pay costs of issuance of the Note and certain Public
Redevelopment Costs in accordance with the terms of the Agreement. Upon completion
and payment of all public costs financed with the proceeds of the Note deposited in the
Project Fund, any balance remaining in the Project Fund shall be credited and paid to the
Debt Service Fund hereinafter created. Interest earnings on amounts in the Project Fund
will be credited to the Project Fund.
4.03. Debt Service Fund. The Debt Service Fund together with all funds
deposited therein pursuant to this Resolution are hereby pledged to the payment of
principal of and interest on the Note and shall be used for no other purpose. To the extent
that on any Payment Date the Authority is unable to pay the full Scheduled Payment
and accrued interest due because of insufficient revenues on hand in the Debt Service
Fund after making the deposits required under Sections 4.01 and 4.04 hereof, such
deficiency shall be deferred and paid on the next Payment Date on which the Authority
has received Available Tax Increment (after making the deposit required under Section
4.01 second) in excess of the amount needed to pay the principal and interest due on
that Payment Date. Any Available Tax Increment remaining in the Debt Service Fund
shall be transferred to the Authority's account for the TIF District upon the payment of all
principal and interest to be paid with respect to the Note. Interest earnings on amounts in
the Debt Service Fund will be credited in the same manner as Available Tax Increment.
4.04. Reserve Fund. The Authority appropriates to the Reserve Fund proceeds of
the Note in an amount equal to the lesser of: (i) the maximum principal and interest due on
the Note in any succeeding one year period commencing on August 2 or (ii) 125% of the
average annual debt service payable on the Note in the succeeding one year periods
commencing on August 2 or (iii) ten percent of the proceeds of the Note (such lesser
amount being referred to as the "Reserve Requirement"). If on any Payment Date the
amount on deposit in the Debt Service Fund is insufficient to pay the principal and interest
due on such date, the Finance Manager shall transfer from the Reserve Fund to the Debt
Service Fund an amount equal to such deficiency. In the determining the balance on hand
in the Reserve Fund for purposes of this Section, investments shall be valued at their fair
market value as of the date of such valuation, which shall be at least annually. Interest
io
earnings on amounts in the Reserve Fund will be credited in the same manner as
Available Tax Increment. Amounts in the Reserve Fund shall be applied, together with
amounts in the Prepayment Fund and the Debt Service Fund, to the final Scheduled
Payment on the Note.
4.05. Prepayment Fund. There is hereby created a special fund designated as
the "Prepayment Fund" to be held and administered by the Authority. Amounts in the
prepayment fund will be applied on each Reset Date (as defined in the Note) to prepay in
part, without premium or penalty, the outstanding principal balance of the Note. Any such
prepayment will be applied to the last maturing installments of principal on Schedule A
attached to the Note without affecting the amount or timing of any remaining Scheduled
Payment. Interest earnings on amounts in the Prepayment Fund will be credited in the
same manner as Available Tax Increment.
4.06. Additional Obligations. While the Note is outstanding, the Authority shall not
pledge or permit the pledge of all or any portion of the Available Tax Increment to the
payment of principal of or interest on any obligations of the Authority or City other than the
Note except (i) the subordinate pledge of Available Tax Increment to the Series 2001 B
Note, and (ii) any pledge approved in writing by the Holder (as defined in the Note).
4.07. Covenants Regarding TIF District and Agreement. The Authority covenants
for the benefit of the Holder that while the Note is outstanding
(a) it will not take any action to remove all or any portion of the property described
in Schedule A attached to the Note from the TIF District or alter or impair the collection of
Available Tax Increment including without limitation any modification of the TIF District in
such a manner that would materially affect the amount or timing of receipt by the Authority
of Available Tax Increment, and
(b) it will enforce the Agreement to the extent. consistent with the covenants in
Section 6 hereof, except to the extent of any Redeveloper obligations that have no
material bearing on the collection of Available Tax Increment.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby
authorized and directed to prepare and furnish to the Owner of the Note certified copies of
all proceedings and records of the Authority, and such other affidavits, certificates, and
information as may be required to show the facts relating to the legality and marketability
of the Note as the same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified copies, certificates, and
affidavits, including any heretofore furnished, shall be deemed representations of the
Authority as to the facts recited therein.
Section 6. Tax Covenant.
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6.01. The Authority covenants and agrees with the holders from time to time of the
Note that it will not take or permit to be taken by any of its officers, employees or agents
any action which would cause the interest on the Note to become subject to taxation under
the Internal Revenue Code of 1986, as amended (the Code), and the Treasury
Regulations promulgated thereunder, in effect at the time of such actions, and that it will
take or cause its officers, employees or agents to take, all affirmative action within its
power that may be necessary to ensure that such interest will not become subject to
taxation under the Code and applicable Treasury Regulations, as presently existing or as
hereafter amended and made applicable to the Note.
6.02. The Authority will comply with requirements. necessary under the Code to
establish and maintain the exclusion from gross income of the interest on the Note under
Section 103 of the Code, including without limitation requirements relating to temporary
periods for investments, limitations on amounts invested at a yield greater than the yield
on the Note, and the rebate of excess investment earnings to the United States.
6.03. The Authority further covenants not to use the proceeds of the Note or to
cause or permit them or any of them to be used, or cause the Note to be paid or secured,
in such a manner as to cause the Note to be "private activity bonds" within the meaning of
Sections 103 and 141 through 150 of the Code.
6.04. In order to qualify the Note as a "qualified tax-exempt obligation" within the
meaning of Section 265(b)(3) of the Code, the Authority makes the following factual
statements and representations:
(a) the Note is not a "private activity bond" as defined in Section 141 of
the Code;
(b) the Authority hereby designates the Note as a "qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other
than any private activity bonds that are not qualified 501(c)(3) bonds) which will be
issued by the Authority (and all subordinate entities of the Authority) during
calendar year 2001 will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the Authority
during calendar year 2001 have been designated for purposes of Section 265(b)(3)
of the Code.
6.05. The Authority will use its best efforts to comply with any federal procedural
requirements which may apply in order to effectuate the designations made by this
section.
Section 7. Continuing Disclosure. The continuing disclosure requirements of Rule
15c2-12 promulgated by the Securities and Exchange Commission under the Securities
12
Exchange Act of 1934 (the "Rule") do not apply to the Notes, because the offering is
exempt from such requirements under Section 15c2-12(d)(1)(i). Consequently, the Issuer
will not enter into any undertaking to provide continuing disclosure of any kind with respect
to the Note.
Section 8. Effective Date. This resolution shall take effect and be in force from and
after its approval
Adopted by the Housing and
Richfield this 21st day of May, 2001.
Redevelopment thority in and for the City of
~~ ~
Thomas E. Harms, Chair
13 .
AGENDA ITEM # 3C
REPORT # 28
STAFF REPORT
r
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JULY 18, 2005
REPORT PREPARED BY:
REPORT PRESENTER:
KATIA MEDVETSKI,
REDEVELOPMENT SPECIALIST
NAME, TITLE
BRUCE PALMBORG,
COMMUNITY DEVELOPMENT DIRECTOR
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a Management Agreement with ROI Properties for managing certain Housing
and Redevelo ment Authorit owned and leased ro erties.
I. RECOMMENDED ACTION:
By Motion: Approve the attached ROI Properties Management
A reement.
II. BACKGROUND
• Currently, the Richfield Housing and Redevelopment Authority (HRA) owns two
properties that are leased out to tenants: 6758 Portland Avenue (single family
home) and 7214 Cedar Avenue (1,782 sq. ft. commercial building).
• On March 21, 2005, the HRA authorized the purchase of the Portland property from
the City of Richfield (City) while property re-use plans are pending. The sale
transaction between the City and HRA occurred on June 28, 2005.
• The property on Cedar Avenue was purchased in 1995 and has been leased out
since 1998. The property is being held by the HRA for future Cedar Avenue
corridor redevelopment.
• ROI Properties (ROI) has managed these properties for both the City and HRA.
Duties include identifying tenants for vacancies, rent collections and other traditional
property management duties.
071805_MgmtAgmtR01
• With the HRA as the new owner of the Portland property, it is now appropriate for
the HRA to enter into a new, updated Management Agreement (Agreement) with
ROI for both leased properties.
• The attached Agreement is ROI's standard agreement that has been updated for
the HRA's purposes by legal counsel. The Agreement will allow the HRA to subtract
or add properties to the Agreement as needed administratively.
• The management fee is 7% of collected rent plus $15 per month per unit. (Other
fees for special situations are listed in the Agreement.). The monthly rent for 6758
Portland is $1,100 and for 7214 Cedar Avenue is $600. (All utilities are paid by the
tenants).
• The new Agreement will enable ROI to continue its responsive management to the
H RA.
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA is suited to handle ownership and maintenance of properties
while property re-use plans are pending.
B. CRITICAL ISSUES
• Anew, updated Management Agreement is required to delineate the
rights and responsibilities of the HRA and ROI Properties for
properties owned and leased by the HRA.
C. FINANCIAL
• The rent collections adequately provide for the use of a professional
management company to undertake property lease management for
the HRA.
D. LEGAL
• Legal counsel has been working with ROI Properties and the HRA in
the preparation of a new, updated Management Agreement.
IV. ALTERNATIVE RECOMMENDATION(S~
• Delay or do not approve the ROI Properties Management Agreement;
provide staff with further direction.
V. ATTACHMENTS
• ROI Properties Management Agreement.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
ROI PROPERTIES MANAGEMENT AGREEMENT
_~RTIES IN CON~~:~OD~~~~OAI;ITHO~ HEREII~;Q~REINAF EAR CALLED
OWNER D IN AND ln~
"OWNER"), AND ROI PROPERTIES, INC. (HEREINAFTER CALLED "AGENT"),
AGREE AS FOLLOWS:
EXCLUSIVE 1. THE OWNER HEREBY EMPLOYS THE AGENT EXCLUSIVELY TO RENT,
AGENCY OPERATE AND MANAGE THE PROPERTY KNOWN AS:
SEE SCHEDULE OF PROPERTIES
RENEWAL UPON THE TERMS HEREINAFTER SET FORTH FOR THE MONTHLY
PERIODS BEGINNING ON THE 1sT DAY OF JULY, 2005 ,AND ENDING ON
THE LAST DAY OF AUGUST, 2005 ,AND THEREAFTER FOR MONTH TO MONTH
PERIODS. EITHER PARTY MAY TERMINATE THIS AGREEMENT BY WRITTEN
NOTICE GIVEN ON OR BEFORE THE FIRST DAY OF ANY MONTH...SIXTY (60)
DAYS PRIOR TO THE DATE OF TERMINATION. IN THE EVENT OWNER
VACATES REQUIRED SIXTY (60) DAY NOTICE PERIOD, THEREBY
FOREGOING ANY MANAGEMENT TRANSITION PERIOD, IT IS AGREED THAT
AGENT IS AUTHORIZED TO COLLECT ITS MANAGEMENT FEE FOR THE
ENTIRE NOTICE PERIOD, AND OWNER AGREES TO IMMEDIATELY PAY ALL
AMOUNTS DUE AGENT. AGENT AGREES TO REMIT, SUBJECT TO
UNCLEARED CHECKS, ALL OWNER FUNDS WITHIN 30 DAYS OF CONTRACT
TERMINATION.
RENTING OF 2. THE AGENT ACCEPTS THE EMPLOYMENT AND AGREES:
PREMISES (A) TO USE DILIGENCE IN THE MANAGEMENT OF THE PREMISES FOR
THE PERIOD AND UPON THE TERMS HEREIN PROVIDED, AND AGREES TO
FURNISH THE SERVICES OF HIS/ITS ORGANIZATION FOR THE RENTING,
LEASING, OPERATION AND MANAGING OF THE HEREIN NAMED PREMISES.
QUARTERLY (B) TO RENDER QUARTERLY STATEMENTS OF RECEIPTS, EXPENSES
STATEMENTS AND CHARGES AND TO REMIT TO OWNER RECEIPTS LESS
DISBURSEMENTS. IN THE EVENT THE DISBURSEMENTS SHALL BE IN
EXCESS OF THE RENTS COLLECTED BY THE AGENT, THE OWNER HEREBY
AGREES TO PAY SUCH EXCESS PROMPTLY (WITHIN 5 BUSINESS DAYS)
UPON REQUEST OF THE AGENT.
SEPARATE (C) TO DEPOSIT ALL MONIES COLLECTED FOR OWNER IN AN
OWNER OWNER'S ACCOUNT IN A FINANCIAL INSTITUTION CHARTERED TO
FUNDS ENGAGE IN THE BANKING OR TRUST BUSINESS, SEPARATE FROM AGENT'S
CORPORATE ACCOUNT. AGENT SHALL BE A COSIGNER ON OWNER
PROPERTY ACCOUNT. AGENT WILL NOT BE HELD LIABLE IN EVENT OF
BANKRUPTCY OR FAILURE OF SAID FINANCIAL INSTITUTION.
PAGE 2
ROI PROPERTIES MANAGEMENT AGREEMENT
SECURITY (D) TO PASS TENANT SECURITY AND PET DEPOSITS THROUGH
& PET OWNER ACCOUNT, AS A MATTER OF RECORD, INTO SEPARATE ACCOUNT
DEPOSITS FOR SECURITY AND PET DEPOSITS, IT BEING UNDERSTOOD THESE
DEPOSITS ARE NOT AVAILABLE FOR NORMAL OWNER OPERATING
EXPENSES. AGENT AGREES TO OPERATE SAID ACCOUNT IN SUCH A
MANNER AS TO PROVIDE FOR THE RETURN OF SECURITY AND PET
DEPOSITS, WITH OWNER TO PROVIDE PAYMENT OF INTEREST AS
REQUIRED BY MINNESOTA STATUTES. AGENT IS RESPONSIBLE FOR THE
MANAGEMENT OF TENANTS' SECURITY AND PET DEPOSITS, AND SHALL
BE OBLIGATED TO REMIT SAME IN A TIMELY MANNER BACK TO OWNER
ACCOUNT. EITHER TO REFUND TO VACATING TENANT (MINUS ANY
DEDUCTIONS FOR RENTS OWED AND/OR REPAIRS, UTILITIES, ETC.) OR TO
REMAIN IN OWNER ACCOUNT AS MONEY RETAINED FOR THE BENEFIT OF
THE OWNER.
BONDED (E) AGENT'S EMPLOYEES WHO HANDLE OR ARE RESPONSIBLE FOR
EMPLOYEES OWNER'S MONIES SHALL BE BONDED BY A FIDELITY BOND IN ADEQUATE
AMOUNT.
3ENT'S 3. THE OWNER HEREBY GIVES TO THE AGENT THE FOLLOWING
POWER OF AUTHORITY AND POWERS AND AGREES TO ASSUME THE EXPENSES IN
AUTHORITY CONNECTION HEREWITH:
(A) TO ADVERTISE THE AVAILABILITY FOR RENTAL OF THE HEREIN
DESCRIBED PREMISES OR ANY PART THEREOF, AND TO DISPLAY
"FOR RENT" SIGNS THEREON; TO SIGN, RENEW AND/OR CANCEL
LEASES FOR THE PREMISES OR ANY PART THEREOF, TO COLLECT
RENTS DUE OR TO BECOME DUE AND GIVE RECEIPTS
THEREFORE; TO TERMINATE TENANCIES AND TO SIGN AND
SERVE IN THE NAME OF THE OWNER SUCH NOTICES AS ARE
APPROPRIATE; TO INSTITUTE AND PROSECUTE ACTIONS TO
EVICT TENANTS AND TO RECOVER POSSESSION OF SAID
PREMISES; TO SUE FOR IN THE NAME OF THE OWNER AND
RECOVER RENTS AND OTHER SUMS DUE; AND WHEN EXPEDIENT
TO SETTLE, COMPROMISE, AND RELEASE SUCH ACTIONS OR
REINSTATE SUCH TENANCIES. ANY LEASE EXECUTED FOR THE
OWNER BY THE AGENT SHALL NOT EXCEED ONE YEAR UNLESS
OTHERWISE APPROVED BY OWNER.
REPAIRS (B) TO MAKE OR CAUSE TO BE MADE ALL INTERIOR AND EXTERIOR
REPAIRS AND MAINTENANCE, TO HIRE CONTRACTORS AND
PAGE 3
ROI PROPERTIES MANAGEMENT AGREEMENT
REPAIRS CONT'D SUPERVISE REPAIRS, ALTERATIONS, AND DECORATING ON THE SAID
PREMISES; TO PURCHASE SUPPLIES AND PAY ALL BILLS THEREFOR.
THE AGENT AGREES TO SECURE THE PRIOR APPROVAL OF THE
OWNER ON ALL EXPENDITURES IN EXCESS OF $ 300.00
FOR ANY ONE REPAIR ITEM. ROUTINE TURNOVER EXPENSES OF
PAINTING AND CARPET CLEANING ARE EXEMPT FROM THIS
MAXIMUM, IF IN THE OPINION OF THE AGENT, ARE NECESSARY TO
PROTECT PROPERTY FROM DAMAGE OR TO MAINTAIN SERVICES TO
THE TENANTS.
AGENT WILL INSPECT PROPERTY ON MOVE-IN AND MOVE-OUTS
AND ESTIMATE AND ASSESS APPROPRIATE MAINTENANCE AND
REPAIR COSTS AGAINST TENANTS. REPAIRS WILL BE CHARGED TO
OWNER, WITH BILL-BACK TO TENANT (IF TENANT-CAUSED).
VACATING TENANTS WHO OWE MONEY TO OWNER FOR REPAIRS
AND/OR RENTS WILL BE BILLED ACCORDINGLY, AND GIVEN THIRTY
(30) DAYS TO REMIT PAYMENT. IF TENANT PAYMENT IS NOT
FORTHCOMING, TENANT FILES WILL BE TURNED OVER TO
COLLECTION AGENCY.
EMPLOYEES (C) TO HIRE, DISCHARGE AND SUPERVISE ALL LABOR AND
EMPLOYEES REQUIRED FOR THE OPERATION AND MAINTENANCE
OF THE PREMISES; IT BEING AGREED THAT ALL EMPLOYEES SHALL
BE DEEMED EMPLOYEES OF THE AGENT.
SERVICE (D) TO MAKE CONTRACTS IN THE NAME OF THE OWNER FOR
ELECTRICITY, GAS, FUEL, WATER, GARBAGE PICKUP, BAD DEBT
COLLECTION, NSP ADVANTAGE, MINNEGASCO SERVICE PLUS, HELP
PLUS APPLIANCE PROTECTION AND OTHER SERVICES OR SUCH OF
THEM AS THE AGENT SHALL DEEM ADVISABLE.
SAVE 4. THE OWNER FURTHER AGREES:
HARMLESS (A) TO SAVE THE AGENT HARMLESS FROM ALL DAMAGE SUITS IN
J CONNECTION WITH THE MANAGEMENT OF THE HEREIN DESCRIBED
~,..k .~
~, PROPERTY AND FROM LIABILITY FROM INJURY SUFFERED BY ANY
PERSON WHOMSOEVER.A~T^ r " D n ~' "~-u--~~;z.'~; i~-=~5;
IEEE ] r 7r~ ,~y~ ~~~ ~yT~
TT7 ~T ~D LCT4TI`"~V° Y~'~°I T1L Z~ e?l~T~TiED""1 TL'n L~T/l' [T 1T T"~~rV~i-J.~C.7cE:~3 JrI~\LL t7i
1C~. /_1,35.77]TTTT~T_ A [~ T!1 T1Tf~T/'1T TT7T„~_L'/S~TT TLT TTTT C A 11 !T 1 ! A ~r,r~~
17V~'Yn~I a ~...i~ c~1,7 1 V 1 1\V7 L`~1-TI-1T'-
AN=H~'fl~T~I~~A - .THE
AGENT ALSO SHALL NOT BE LIABLE FOR ANY ERROR OF
JUDGEMENT OR FOR ANY MISTAKE OR FACT OF LAW, OR FOR
ANYTHING WHICH IT MAY DO OR REFRAIN FROM DOING
HEREINAFTER, EXCEPT IN CASES OF AGENT CONDUCT
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.
3
ROI PROPERTIES MANAGEMENT AGREEMENT PAGE 3
EMPLOYEES C) TO HIRE, DISCHARGE AND SUPERVISE ALL LABOR AND EMPLOYEES
REQUIRED FOR THE OPERATION AND MAINTENANCE OF THE
PREMISES; IT BEING AGREED THAT ALL EMPLOYEES SHALL BE
DEEMED EMPLOYEES OF THE AGENT.
SERVICE D) TO MAKE CONTRACTS FOR ELECTRICITY, GAS, FUEL, WATER,
CONTRACTS TELEPHONE, GARBAGE PICKUP, BAD DEBT COLLECTION, NSP
ADVANTAGE, MINNEGASCO SERVICE PLUS, HELP PLUS APPLIANCE
PROTECTION AND OTHER SERVICES OR SUCH OF THEM AS THE
AGENT SHALL DEEM ADVISABLE; THE OWNER TO ASSUME THE
OBLIGATION OF ANY CONTRACT SO ENTERED INTO AT THE
TERMINATION OF THIS AGREEMENT.
SAVE 4. THE OWNER FURTHER AGREES:
HARMLESS
A) TO SAVE THE AGENT HARMLESS FROM ALL DAMAGE SUITS IN
CONNECTION WITH THE MANAGEMENT OF THE HEREIN DESCRIBED
~ PROPERTY AND FROM LIABILITY FROM INJURY SUFFERED BY ANY
n
,y ~
''~~
~ 1n~__~t~n n v
PERSON WHOMSOEVER , ~~-- ~~-- ~ ~,~~ --AT -=°=HIS ° =--OWN EXPENSE
+
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TH~f'~Tmvzzn'Z~cn~i7= _ -. - _ . .
i
BE ._.se- wR~~Ta ~ - r~~ ~~~~~~~a~ ~~a ~~~~
-A~aD---T-O- ~'~~~' -~'~14~ E'~~'I'E'~3'I-~'HH-~=P~~~'HC'~- morn ^rvw"rv°~m . THE AGENT
ALSO SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT OR FOR
ANY MISTAKE OR FACT OF LAW, OR FOR ANYTHING WHICH IT MAY
DO GR REFRAIN FROM DOING HEREINAFTER, EXCEPT IN CASES OF
AGENT CONDUCT CONSTITUTING WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE.
MAKE PAYMENTS B) THE AGENT IS HEREBY AUTHORIZED TO PAY FOR LOANS, MORTGAGE
INDEBTEDNESS, PROPERTY TAXES, & SPECIAL ASSESSMENTS,
EPAIRS, UTILITIES, H.O.A. DUES, AND ALL OTHER EXPENSES.
~° ~~,~'E~FT-_I~'n.,~..(..1__.PLAC.~ €'I~~ ~-IAB~ omu~Trn nnTT nn nnnc+nrrnn
"- V~~'r~®(l~~a~ (l.`~~~'r~__~T.,AT~~C,T~T1D~T~T,T',/"~D~L'~ TTT~~'+,~,,,. AGENT IS HEREBY
DIRECTED TO ACCRUE AND PAY FOR THE SAME FROM THE OWNER'S
FUNDS, ON A FIRST IN, FIRST OUT BASIS.
MINIMUM C) OWNER AGREES TO PROVIDE MINIMUM ACCOUNT BALANCE IN THE
BALANCE AMOUNT OF ONE MONTH'S PROJECTED EXPENSES PER PROPERTY.
REQUIRED AGENT SHALL NOT BE LIABLE FOR ANY LATE FEES, PENALTIES
AND OTHER ADDITIONAL CHARGES RESULTING FROM INSUFFICIENT
OWNER FUNDS. FAILURE TO PROVIDE SAID FUNDS MAY BE CAUSE
FOR TERMINATION BY AGENT OF THIS AGREEMENT.
EME-1~GE~CY D) FA~~RE-"BY``OWNE.~Z, ~-Om,P.~$F~~2Mg-~~=~~E~'i~I~R1~~$.Y^.~~rRAG
t'N~~ s y
~'~~G~: ~iq ~ ~ ~~ ~y
_`'~.
ABOVE, SHALL NOT CONSTITUTE AN EMERGEN
`'~H3~., UNDERSTANDING, AGENT, AT IT
AUTHORI LEND OWNER SHORT T.
NECESSARY TO
LOAN PAYMENTS
RECEIPT BY AGF
ETWEEN
~T I ONS
'P"-OF OWNER FUNDING; '~
NO OBLIGATION TO MAKE
' . NOT , i4 ANDING
CRETION, IS
NDS IN THE AMOUNT
THE TIME HIS/HER
ARE DUE AND THE
' OR OTHER MONIES.
".H CY LOANS
`C~T~`T'
PAGE 4
ROI PROPERTIES MANAGEMENT AGREEMENT
MAKE PAYMENTS (B) THE AGENT IS HEREBY AUTHORIZED TO PAY FOR LOANS,
MORTGAGE INDEBTEDNESS, PROPERTY TAXES, AND SPECIAL
,:- _.
-~ ASSESSMENTS, REPAIIZS, UTILITIES, H.O.A. DUES, AND ALL OTHER
4 ~~~~ EXPENSES. "rrv`~Pd~4~~T A (ti'~JZ~++TT TT~7 CITT A_l1 l..T/~TT TTl
.AGENT
IS HEREBY DIRECTED TO ACCRUE AND PAY FOR THE SAME FROM
THE OWNER'S FUNDS, ON A FIRST IN, FIRST OUT BASIS.
MINIMUM (C) OWNER AGREES TO PROVIDE MINIMUM ACCOUNT BALANCE IN
BALANCE THE AMOUNT OF ONE MONTH'S PROJECTED EXPENSES PER
REQUIRED PROPERTY. AGENT SHALL NOT BE LIABLE FOR ANY LATE FEES,
PENALTIES AND OTHER ADDITIONAL CHARGES RESULTING FROM
INSUFFICIENT OWNER FUNDS. FAILURE TO PROVIDE SAID FUNDS
MAY BE CAUSE FOR TERMINATION BY AGENT OF THIS AGREEMENT.
EMERGENCY (' -F~I~~R~ BY~~~~,~;~~~gHRF{-~~5°R~QI~IIt•~I'~~
LOANS 4C, OVE, SHALL NOT CONSTITUTE AN EMERGENCY.
~.~ • ""`- ~~ , ~ NOTWI TANDING THIS UNDERSTANDING, AGENT, AT I
s
~
°'
~~~
,
~`
~.~
~~ k ~~~
DISCRETIO AUTHORIZED TO LEND OWNER SHORT RM FUNDS
~
I
~
~
~
-
.
`~
~ ° j IN THE AMOUN CESSARY TO TIDE OWNER OV BETWEEN THE
~ <~ TIME HIS/HER LOAN YMENTS AND OTHER IGATIONS ARE DUE
~~~
. AND THE RECEIPT BY A T OF OWNER DING, RENTS OR
~:.~-~ ' OTHER MONIES. AGENT IS U R N LIGATION TO MAKE SUCH
-L,L;.~~" ~`
~~y ~ EMERGENCY LOANS AND RESER THE RIGHT AND SOLE
v DISCRETION TO ADVANCE O R F SAS NECESSARY TO MEET
OWNER DEBT AND OPE G OBLIGATI S. FUNDS SO
ADVANCED, AS A CO ENINECE AND COURT TO OWNER, WILL
BE LEVIED A MO LY SERVICE CHARGE OF 1.5 P CENT, OR 18
PERCENT P ANNUM, ON THE OUTSTANDING BALA .OWNER
AGREES REPAY ALL AMOUNTS LOANED UPON DEMAN Y
AGE .THE SERVICE CHARGE WILL BE COLLECTED AT THE T
,r.T_l1A AT T[ti 7')T.`T) A TT\•
FEE SCHEDULE (E) TO PAY THE AGENT:
(1) FOR MANAGEMENT: 7% (SEVEN) PERCENT OF THE
COLLECTED RENT AND OTHER INCOME, PLUS $15.00 PER
MONTH PER UNIT.
(2) FOR LEASING: $295.00 LEASING FEES ARE NOT TO BE PAID
MORE THAN ONCE IN A NINE (9) MONTH PERIOD.
PAYMENT OF LEASING FEES ONCE IN A NINE (9) MONTH
PERIOD WILL NOT APPLY WHEN PROPERTIES ARE LISTED
FOR SALE. SINCE "FOR SALE" PROPERTY RESULTS IN
ROI PROPERTIES MANAGEMENT AGREEMENT
PAGE 5
FEE SCHEDULE HIGHER TURNOVER RATES, LEASING FEES WILL BE CHARGED
CONT'D TO OWNERS ACCOUNT EACH TIME A NEW RESIDENT MOVES
INTO A "FOR SALE" PROPERTY. IN THE EVENT OWNER
CANCELS THIS AGREEMENT IN THE .FIRST NINE (9) MONTHS
FOR ANY REASON, AGENT SHALL BE ENTITLED TO PAYMENT
OF 75% OF FIRST MONTH RENT LESS ANY MANAGEMENT FEE
ALREADY PAID BY THIS AGREEMENT.
(3) FOR MODERNIZATION: CONTRACTED AND BILLED
SEPARATELY.
(4) FOR SALE: SEVEN (7) PERCENT OF SALE PRICE WHEN SOLD
TO ROI-SECURED RENTER/OCCUPANT.
(5) FOR INSPECTION AND INITIAL SET-UP OF ACCOUNT:
(a) ON NEW CONSTRUCTION: $95.00 PER UNIT
(b) ON EXISTING PROPERTY: $75.00 FOR FIRST UNIT,
$55.00 FOR EACH ADDITIONAL UNIT.
(6) FOR MAINTENANCE:
(a) SITE MANAGER LABOR: $18.50/.5/HR, 1 HR. MIN.
(b) HANDYMAN LABOR: MARKET RATE
(c) AGENT AGREES TO ACT AS GENERAL CONTRACTOR
FOR THE OWNER IN LETTING OF ADDITIONAL
CONTRACTS AND ARRANGING OF REPAIRS AND/OR
MAINTENANCE AS DEEMED NECESSARY FOR A FEE
OF 15% OF THE GROSS COST OF THE PARTICULAR
REPAIR OR SPECIAL PROJECT.
LABOR RATES SUBJECT TO CHANGE WITHOUT NOTICE.
(7) FOR COURT ACTION AND APPEARANCE:
(a) FILING FEES: ACTUAL COST
(b) COURT APPEARANCE BY ROI LEASING STAFF:
$48.00/HOUR, PLUS INCIDENTAL EXPENSES.
(c) SHERIFF & OTHER COSTS: ACTUAL COST
(8) FOR COLLECTING LATE RENTS AND BAD CHECKS ROI
RETAINS ALL SERVICE CHARGES PAID BY RESIDENT LESS
ANY BANK SERVICE CHARGES INCURRED BY OWNER.
6
ROI PROPERTIES MANAGEMENT AGREEMENT
(F) OTHER ITEMS OF MUTUAL AGREEMENT:
PAGE 6
SEE ATTACHED ADDENDUM, PAGES 1 AND 2, PLUS SCHEDULE OF PROPERTIES
THIS AGREEMENT SHALL BE BINDING UPON THE SUCCESSORS AND ASSIGNS OF THE AGENT,
AND THE HEIRS, ADMINISTRATORS, EXECUTORS, SUCCESSORS AND ASSIGNS OF THE OWNER.
WHEREOF THE PARTIES HERETO HAVE AFFIXED OR CAUSED TO BE AFFIXED THEIR
RESPECTIVE SIGNATURES THIS DAY.
OWNER
SIGNED:
DATE
DATE
OWNER
HOME ADDRESS: PHONE:
CITY: e ~ STATE: ZIP:
d
sf ~ j .,,~
f Q'
pt ~4 ~ F
~a
P
~~ m ~~ 'i / a
.~
SIG ED: ~ 9 `" ,
~ ,~ . ~ 'fit. ~ --~---~ ---~...__ ~ ~ ~:= ~~ . z~~.yC w DAT ~ ~'~ - ~~,~`°
'`~. R I PROPS TIES, IN , 92 VENESS ROAD, BLOOMINGTON, MN 5438
. N`°°°°°~ ONE: 952.943.1416 FAX: 952.943.8617
THE OWNER, HOUSING AND REDEVELOPMENT AUTHORI`~AEREBY EMPLOYED ROI PROPERTIES,
AND FOR THE CITY OF RTCHFIELD
INC. , IN AN EXCLUSIVE AGENCY CONTRACT, TO RENT, OPERATE AND MANAGE THE
PROPERTY KNOWN AS:
ADDRESS: SEE SCHEDULE OF PROPERTIES ATTACHED
CITY:
MN ZIP CODE
7
ROI PROPERTIES MANAGEMENT AGREEMENT
POWER OF AUTHORITY
PAGE 7
HOUSING AND REDEVELOPI~NT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD ,OWNER OF CERTAIN REAL PROPERTY HAVING A STREET
ADDRESS OF : SEE SCHEDULE OF PROPERTIES , MN 55
AND BEING LOCATED IN THE COUNTY OF HENNEPIN
DOES HEREBY AUTHORIZE ROI PROPERTIES., INC., 9201 VENESS ROAD, BLOOMINGTON, MN
55438, AND ITS EMPLOYEE:
TO BE MY/OUR AGENT FOR THE PURPOSE OF COMMENCING, MAINTAINING, CONDUCTING OR
DEFENDING ANY ACTION IN ANY COURT IN THE STATE OF MINNESOTA TO RECOVER OR
RETAIN POSSESSION OF THE REAL PROPERTY DESCRIBED HEREIN ABOVE.
THIS AUTHORIZATION IS GRANTED FOR THE PURPOSE OF COMPLYING WITH MINN. STATUTE
SEC. 481.02, SUBD. 13; AND SHALL REMAIN IN FORCE UNTIL REVOKED IN WRITING BY THE
1DERSIGNED.
OWNER
SIGNED:
OWNER
HOME ADDRESS:
CITY:
DATE
DATE
PHONE
STATE ZIP
ROI PROPERTIES, INC., 9201 VENESS ROAD, BLOOMINGTON, MN 55438, 952.943.1416
Page 1 of 2
ADDENDUM TO ROI PROPERTIES MANAGEMENT AGREEMENT
DATED , 2005
BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
_ AND
ROI PROPERTIES, INC.
Notwithstanding anything to the contrary in the ROI Properties Management Agreement
dated , 2005 (the "Agreement") between the Housing and Redevelopment
Authority in and for the City of Richfield (the "HRA") and ROI Properties, Inc. (the "Agent"):
1. The Agent shall comply with all federal, state, and local laws, rules, and regulations
in its performance of the Agreement, including but not limited to applicable laws, rules, and
regulations providing for due process and equal opportunity in housing; provided, however, that
nothing in this Addendum shall be construed to create any right in any third party beyond any right
that third party would have in the absence of this Addendum.
2. Nothing in the Agreement or this Addendum shall be construed to waive any
limitation on liability to which the HRA, or its agents, officers, or employees would be entitled
under Minnesota Statutes, Chapter 466 or otherwise.
3. If the Agent is unable to contact the HRA after making reasonable efforts to do so,
and Agent reasonably determines that a threat to the health or safety of the residents or neighbors of
the Property exists because of a hazardous condition existing at the Property, the Agent may make
expenditures of not more than $2,500.00 to correct the hazardous condition without first receiving
approval from the HRA, provided that the Agent shall contact the HRA as soon as reasonably
possible after the Agent becomes aware of the hazardous condition. If the costs of correcting the
hazardous condition will exceed $2,500.00 and the Agent is unable to contact the HRA through
other means, the Agent shall immediately contact the City of Richfield police department which
shall be responsible for contacting an appropriate HRA official.
4. The parties may-amend the attached Schedule of Properties by adding properties to
or deleting properties from the schedule from time to time; provided, that the parties must mutually
agree upon the addition of any property; and provided, that the HRA may unilaterally delete any
property from the attached schedule so long as it complies with the 60-day notice provisions under
paragraph 1 of the preceding ROI Properties Management Agreement.
CAH-264068v1
RC 125-1 9
Page 2 of 2
This Addendum is made as of
__. __ _.
ROI PROPERTIES, INC.
-,~
`j Its President
~.,..-~
2005.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
By
Its Chairperson
By
Its Executive Director
CAH-264068v 1 1 ~
RC125-]
SCHEDULE OF PROPERTIES
FOR
ROI PROPERTIES MANAGEMENT AGREEMENT
BY AND BETWEEN ROI PROPERTIES, INC. AND
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
1. 6758 Portland
2. 7214 CEDAR AVENUE SOUTH
This schedule was last revised by the parties on
ROI PROPERTIES, INC.
r;
~;
~~' .
~*~ Its resident
`~
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
By
Its Executive Director
11
AGENDA ITEM # 3B
REPORT # 2 ]
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JULY 18, 2005
REPORT PREPARED BY:
KELLY BERG, HOUSING COORDINATOR
NAME, TITLE
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
BRUCE PALMBORG, COMMUNITY
DEVELOPMENT MANAGER
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Authorize the issuance of a Certificate of Completion to Twin Cities Habitat for Humanity for
6805 12th Avenue.
RECOMMENDED ACTION:
By Motion:. Authorize the Chair and Executive Director to execute the
Certificate of Completion to Twin Cities Habitat for Humanity for 6805
12th Avenue.
II. BACKGROUND
Habitat for Humanity (Habitat) has completed rehabilitation and sold the home at
6805 12th Avenue. A Certificate of Completion is needed as the requirements of
the Contract for Private Redevelopment have been met.
The home was remodeled by Habitat for Humanity and sold to an income qualifying
first time homebuyer. The original substandard house was functionally obsolete
with only 670-sq. ft. on the first floor and 280-sq. ft. on the second floor. The
Housing and Redevelopment Authority (HRA) purchased the property with
$115,000 in Community Development Block Grant (CDBG) funds and $35,000 from
Habitat for Humanity. The addition added approximately 500-sq. ft., adding three
bedrooms, a larger kitchen and bath to accommodate a family. Habitat provided
volunteer labor and materials to make the home purchase more affordable.
071805 6805 12th Avenue
NAME, TITLE
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA must authorize the issuance of a Certificate of Completion
under the terms of the Contract.
B. CRITICAL ISSUES
• Construction has been completed and the Inspections Division has
issued a Certificate of Occupancy.
• The issuance of a Certificate of Completion is required to release the
developer from the Contract for Private Development after
construction completion.
C. FINANCIAL
• The HRA purchased the property with $115,000 in Federal CDBG
funds and $35,000 from Habitat for Humanity. Donated labor and
materials kept the home affordable.
D. LEGAL
• The Certificate has been prepared in a recordable form to file with the
Hennepin County Title Office.
IV. ALTERNATIVE RECOMMENDATION(S~
• Do not issue a Certificate of Completion at this time.
V. ATTACHMENTS
• Sample Certificate of Completion
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Twin Cities Habitat for Humanity Inc. has
fully and completely complied with its obligations under Article IV of that document
entitled "Contract for Private Development", between the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota and Twin Cities Habitat for
Humanity, Inc. dated August 16, 2004, filed as Document No.
with respect to construction of the Improvements at 6805 12t" Avenue
South, legally described as All of the South seventy-two (72) feet of the North One
Hundred Forty-four (144) feet of Block Five (5) except the Eaast One Hundred Thirty-
three (133) feet thereof, Rich Fields Hennepin County Minn , in accordance with the
approved construction plans and is released and forever discharged from its obligations
to construct under such above-referenced Article.
Dated:
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
By
Its Executive Director
By
Its. Chairperson
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
2005 by Steven L. Devich. and Thomas E. Harms. the Executive
Director and Chairperson of the Housing and Redevelopment Authority in and for the
City of Richfield, a public body corporate and politic under the laws of the State of
Minnesota on behalf of the .public body corporate and politic.
Notary Public
This instrument was drafted by:
The Housing and Redevelopment Authority
in and for the City of Richfield
6700 Portland Avenue South
Richfield, MN 55423
AGENDA ITEM # 3A
REPORT # 2F)
r
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JULY 18, 2005
REPORT PREPARED BY:
BRUCE PALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
REPORT PRESENTER:
BRUCE PALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
DEPARTMENT DIRECTOR R
REVIEWED BY EXECUTIVE
ITEM FOR HRA CONSIDERATION:
.Consideration of a Livable Communities Team contract for 2005-2006.
I. RECOMMENDED ACTION:
By Motion: Approve the execution of a contract with Julianne
Schweitz to work with the Livable Communities Team beginning
August 1, 2005 for 12 months.
II. BACKGROUND
Juliann Schweitz has successfully worked with staff, apartment owners and
managers for several years. Anew need is arising in the community. The need is
related to the rental of single family homes. It appears to be a combination of
owners of rental property having little experience and knowledge of the operation of
rental property and residents of the rental property having little experience and
knowledge about same. A telephone survey of other suburban communities
indicate they are faced with similar situations and have yet to formulate an effective
strategy for dealing with the situation:
071805 Livable Communities
III. BASIS OF RECOMMENDATION
A. POLICY
• It is important that all forms of home ownership and all forms of
tenancy be successfully integrated into the community. This
integration is a hallmark of a viable community.
• The initiative which Julianne led with apartment owners and managers
demonstrated her ability to successfully perform.
B. CRITICAL ISSUES
• Rental property is an important part of the housing supply in Richfield.
A strategy for dealing with this emerging issue is needed.
• Richfield Single Family Partnership will help homeowners and renters
maintain healthy and safe standards.
C. FINANCIAL
• The contract would be fora 12-month period not to exceed $15,000.
This funding is accommodated in the budget for 2005-2006, which is
now being prepared for presentation to the Housing and
Redevelopment Authority (HRA) in August.
D. LEGAL
• The HRA standard form contract would be utilized.
IV. ALTERNATIVE RECOMMENDATION(S~
• Delay approval.
• Reject the proposal.
V. ATTACHMENTS
• N/A
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Juliann Schweitz