The URL can be used to link to this page

01-21-03 agenda_ CITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY TUESDAY, JANUARY 21, 2003 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order 1. Consideration of appointment of HRA officers for 2003 Staff Report No. 1 Notes: 2. Approval of minutes of Regular HRA Meeting of December 16, 2002 Notes: 3. HRA approval of agenda 4. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may request that an item be removed from the Consent Calendarand 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 Apartment Remodeling Program expenditure of $5,000 at 7544 Oliver Avenue S.R. No. 2 B. Consideration of approval of resolution authorizing purchase of 6945 Clinton Avenue for rehabilitation under New Home Program S.R. No. 3 C..Consideration of approval of resolutions designating official depositories of HRA for 2003, including collateral S.R. No. 4 D. Consideration of approval of resolution designating Richfield Sun-Current as official newspaper and Star Tribune as second official newspaper of HRA for 2003 S.R. No. 5 E. Consideration of approval of designating Steven L. Devich, Administrative Services Director, as Acting Executive Director of HRA for 2003 S.R. No. 6 Notes: 5. Consideration of Family Affordable Housing Program in cooperation with Metropolitan Council Staff Report No. 7 Notes: 6. Consideration of resolution approving Second Amendment and Restated Contract for Private Redevelopment between HRA and Gramercy Corporation and resolution declaring- official intent of HRA to reimburse certain expenditures from proceeds of bonds to be issued by HRA Staff Report No. 8 Notes: 7. Executive Director report 8. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities are .available upon request. `Requests must be made at least 96 hours in advance to the Administrative Services Director at 612-861-9702. AGENDA ITEM # 6 REPORT # $ J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY 21, 2003 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NAME, Tuts BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NAME, TClts SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a Second Amended and Restated Contract for Private Redevelopment between the Housing and Redevelopment Authority and Gramercy Corporation and the ado tion of an Official Reimbursement Resolution for the ro'ect. I. RECONIlVIENDED ACTION: By Motion: Approve the Second Amendment and Restated Contract for Private Redevelopment between the Housing and Redevelopment Authority and Gramercy Corporation, and adopt the attached resolution declaring the official intent of the Housing and Redevelopment Authority to reimburse certain expenditures from the proceeds of bonds to be issued by the Housing and Redevelopment Authority. II. BACKGROUND The Housing and Redevelopment Authority (HRA) entered into an Amended and Restated Contract for Private Redevelopment dated April 15, 2002 ("Original Contract") with Gramercy Corporation ("Redeveloper"). The Original Contract provides for development of various types of housing with related commercial space within the City Bella Tax Increment Financing District ("TIF District"). The HRA 0121 City Bella contract agreed to assist that development through issuance of tax increment revenue note ("TIF Note") in the maximum principal amount of $8,473,460. The Redeveloper has now requested that the Note be issued on atax-exempt basis, which requires certain amendments to the Original Contract. HRA Counsel has prepared a Second Amended and Restated Contract for Private Redevelopment (the "Amended Contract"), which includes these key features: • The TIF Note will be issued initially as a taxable pay-as-you-go note similar to the Original Contract. • When the Redeveloper has sufficiently completed the new development to provide a secure flow of tax increment revenues, the HRA will refinance the original TIF Note through issuance of atax-exempt TIF Note to Redeveloper's lender (or another purchaser arranged by Redeveloper). • Upon issuance of the tax-exempt TIF Note, covenants of the Redeveloper that create "private security" or "private payments" under federal tax law are removed. • The qualified costs to be reimbursed with proceeds of the TIF Note are revised and specified. Under the Original Contract, the TIF Note was to be issued as reimbursement for land acquisition costs; under the Amended Contract, proceeds of the TIF Note will be used to pay. for parking and site costs. The Amended Contract is consistent with the financial plan for City Bella as previously approved, and does not change the substance of the transaction in any other respect. As described in the Second Amended and Restated Contract for Private Redevelopment between the HRA and Gramercy Corporation, the HRA expects to issue atax-exempt tax increment revenue note_to reimburse the developer for certain costs incurred prior to issuance of the Note. To accomplish such reimbursement, the HRA is required.. under federal. tax law to declare such intent. The attached resolution has been prepared by bond- counsel in order to make the required declaration of reimbursement intent. With the Amended Contract and Reimbursement-Resolution in place, Gramercy could close on their financing for the project by February 15 as scheduled. The note referenced in the Contract would be used, in part, to secure the necessary capital and be converted to atax-exempt note at the appropriate time nearer the completion of construction. III. BASIS OF RECOMMENDATION A. POLICY • City Bella is being. developed based on a Contract between the HRA and Gramercy Corporation. • Contract amendments are required to facilitate securing financing. • It was previously forecast to the HRAthat atax-exempt note might be considered. The HRA has provided atax-exempt note in the past; for Urban Village and the Gramercy Park project. - B. CRITICAL ISSUES • The Contract changes are summarized here and the amended .Contract with changes is attached. Although the Contract changes are essential to secure project financing, they do not alter the scope or timing of the project as originally approved April 15, 2002. • The Reimbursement Resolution ensures that eligible public costs to be incurred are reimbursable using atax-exempt note to secure TIF payments upon completion of construction. C. FINANCIAL • Atax-exempt note improves the willingness of lenders to participate based on the pledges of security and anticipated favorable marketplace response. • The Developer has indicated that without the amendments, the project could not proceed. D. LEGAL • Contract modifications and the supporting resolution have been prepared by legal counsel. • The reimbursement resolution has been prepared by bond counsel. IV. ALTERNATNE RECOMMENDATION~S~ • The HRA can choose to modify the Contract further, to not consider an Amended Contract that meets lender requirements, and to not establish the projects public costs as reimbursable for the purposes of issuing atax- exempt note. V. ATTACHMENTS • Resolution approving the Second Amendment and Restated Contract • Resolution declaring the official Intent of the HRA to reimburse certain expenditures from the proceeds of bonds to be issued by the authority • Contract VI. PRINCIPAL PARTIES EXPECTED AT MEETING rcepresentatives or Gramercy c, John Dean, Kennedy & Graven HRA RESOLUTION NO. RESOLUTION APPROVING SECOND AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT WITH GRAMERCY CORPORATION WHEREAS, the City of Richfield and HRA have established the Richfield Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and intends to undertake- the necessary actions to establish within the Project Area the City Bella Redevelopment Tax Increment District ("TIF District") and to adopt a Tax Increment Financing Plan ("hereinafter defined as the "Tax Increment Plan") for the TIF District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the HRA deems it to be in the .public interest to facilitate and encourage redevelopment of the Project Area by a combination of public and private activity within- the Project Area and in accordance with any Tax Increment Plan to be adopted by the City, and WHEREAS, the HRA did, on or about April 15, 2002 approve and authorize the execution of a contract for private redevelopment with Gramercy Corporation (the "Amended and Restated Contract for Private Redevelopment") following a determination by the HRA that the development (the "Development") within such Project Area will- promote and carry out the objectives for which redevelopment is undertaken, will be in the vital best interests of the City, will promote the health, safety,.. morals, and welfare of its residents and will be in accord with the public purposes and provisions of the applicable state and local laws and requirements under which activities within the Project Area have been undertaken and are being assisted; and WHEREAS, the Redeveloper has made substantial progress with respect to the Project, and the parties are desirous that certain revisions be made to the Contract to _ address such issues as the need. to revise performance timelines, and- to more clearly address the form and nature of the tax increment note to be issued to .the Redeveloper; and WHEREAS, the HRA is willing to make the modifications all as reflected in the Second Amended and Restated Contract for Private Redevelopment (the "Second Amendment"). NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield as follows: 1. The Second Amendment is hereby approved, and the Chair and Executive Director are hereby authorized and directed to execute and deliver a copy of the same to Gramercy Corporation. 2. Once executed by .Gramercy, the Chair and Executive Director are directed to take all actions and do all things necessary to perform the HRA's obligations thereunder. Adopted by the Housing and- Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of January 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary HRA RESOLUTION NO. DECLARING THE OFFICIAL INTENT OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE AUTHORITY WHEREAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-2 (the "Reimbursement Regulations") roviding that proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements are met; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield (the "Authority"), or Gramercy Corporation under a contract with the Authority, expects to incur certain expenditures that may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of atax-exempt bond; WHEREAS, the Authority has determined to make this declaration of official intent "Declaration") to reimburse certain costs from proceeds of bonds in accordance with the eimbursement Regulations. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, AS FOLLOWS: 1. The Authority, in cooperation with the City, proposes to undertake the following projects (the Project ). City Bella Redevelopment Project - 2. The Authority reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum principal amount of $9,000,000. All reimbursed expenditures will be capital expenditures, costs. of issuance of the bonds,. or other exppenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations. 3. This- Declaration has been made not later than 60 days after .payment of any original expenditure to be sub'ect to a reimbursement allocation with respect to the .proceeds of bonds, except for the ~ollowing expenditures; (a) costs.. of issuance of bonds; (b) costs in an amount. not in excess of $100;000 or 5 percent of the proceeds of an issue;. or (c) preliminary expenditures" up to an amount not in excess of 20 percent of the ag regate issue pace of the issue or issues that finance or are reasonably expected. by the Au~hority to finance the project for which the preliminary expenditures were incurred. The term "preliminar~r expenditures" includes architectural, .engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition; site preparation, and similar costs incident to commencement of construction. 4. This .Declaration is an expression of the reasonable expectations of the Authority based on the facts and circumstances known to the Authonty as of the date hereof. The anticipated original expenditures for the Project and the pnc~ipaF amount of the bonds described in paragraph 2 are consistent with the. Authonty's and- the .budgetary and financial circumstances. `No sources other than proceeds of bonds `to be issued by the Authority are., or are reasonably expected to be, reserved; allocated on a Iong-term basis, or otherwise set-aside .pursuant to the Authority's or the City's budget or financial :policies to pay such Project expenditures. 5. This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. Approved b the Housing and Redevelopment Authority in and for the City of Richfield this 21st dyay of January 2003. omas arms, airperson ATTEST: ichael andah , ecretary First D~~+ with SJB and JBD chan~esl January 15.2003 ~ ~. O AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD AND GRAMERCY CORPORATION SIB-226220v1 RC125-209 TABLE OF CONTENTS ARTICLE I Definitions, Exhibits Rules of Interpretation Section 1.1. Definitions ...................................:.......................................................................2 Section 1.2. Exhibits ..............................................................................................................4 Section 1.3. Rules of Interpretation ....................................................................................... 4 ARTICLE II Representations Section 2.1. Representations by the Redeveloper ...........:...................................................... 5 Section 2.2. Representations by HRA .................................................................................... 6 ARTICLE II.S Concept Plan Section 2.5.1 Concept Plan-Approval ...................................................................................... 6 Section 2.5.2 Other Conditions .........................................................~ Sestie~ ~ c ~ n~wo,. n,.+;,..,~ ~ ARTICLE III Site Assembly Section 3.1 Statement of Intent .:............................................................................................... 8 Section 3.2. Acquisition ..:........................................................................................:................. 8 Section 3.3. Condemnation ........................................................................................................9 Section 3.4. Obligation of HRA to Commence and Continue Condemnation .......................... 9 Section 3.5. Conveyance of the Redevelopment Property ....................................................... 12 Section 3.6. Time of Acquisition and Conveyance .................................................................. 13 Section 3.7. Title ................:..................................................................................................... 13 Section 3.8. Soil Conditions .................................................................................................... 13 Section 3.9 Iase~risefIntentionally Omittedl ................................................................. 14 Section 3.10 Taxes and Special Assessments ........................................................................... 14 Section 3.11. Other Costs .......................................................................................................... 14 Section 3.12 Property Conveyed As Is ...........................................:........................................ 14 Section 3.13. Other Preconditions to Closing ............................................................................ 14 ARTICLE IV Construction of Minimum Improvements Section 4.1. Agreement to Construct ...............:.......................................................................15 Section 4.2. [Blank] ...........................................:.:..............................................:::..................15 Section 4.3. [Blank] .......................................................................................................:.....:...15 Section 4.4. Concept Plans ......................................................................................................15 Section 4.5. Commencement of Construction .........................................:..............................15 SJB-226220v1 RC125-209 1 Section 4.6. Construction Reports .:........................................................................................16 Section 4.7. Completion of Construction -Certificate of Completion ...................................16 ARTICLE V Insurance Section 5.1. Insurance ..............................................................................................................17 ARTICLE VI Taz Increment Section 6.1. Statement of Purpose ..........................................................................................17 Section 6.2. General Descrintion• Site Costs .............................1Z i;esHe~3 Section 6.3 . .....................................................................................Issuance of Notes ~ Z Section 6 4. Review of Level of Assistance ............................................................................17 ARTICLE VII Financing Section 7.1. 2 Section 7 Limitations Upon Encumbrance ..........:............................................................... Copy of Notice of Default to Lender ................................................................... 18 18 . . Section 7.3. Section 7.4. Section 7.5. Lender's Option to Cure Defaults .....................................................................:. I-IRA's Option to Cure Default ......................................:....................................: Subordination .....:......................................................................................:.:....... 18 19 19 ARTICLE VIII Prohibitions Against Assignment and Transfer Section 8.1. Representation as to Development .......................................................................19 Section 8.2. [Blank] ................................................................................................................19 Section 8.3. Prohibition Against Transfer of Property and Assignment of Agreement .................................................................................19 Section 8.4. Following Completion .......................................................................................:21 Section 8.5. Approvals ..................................................................................................:.........21 ARTICLE IX Events of Default, Termination 1 Section 9 Events of Default Defined ......................................... .................................:....... 21 . . Section 9.2. Remedies on Default ................................................... ............:............................ 21 3 Section 9 No Remedy Exclusive ................................................ .........................................22 . . 4 Section 9 No Additional Waiver Implied by One Waiver .......... .........................................22 . . Section 9 5 Excessive Land Acquisition Costs .............................. ......................................... 23 . . 6. Section 9 Effect of Termination ................................................. ......................................... 23 . Section 9.7. _. ._ . _ . Neeotiation ................................................................. ....................::................... 2 SJB-226220v1 11 RC125-209 3 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; HRA Representatives Not Individually Liable ........................................................................................... 23 Section 10.2. Nondiscrimination ............................................................................................... 23 Section 10.3. Provisions Not Merged With Deed ..................................................................... 23 Section 10.4. Notice of Status and Conformance ..................................................................... 23 Section 10.5. Compliance With Business Subsidy Nete ~ ..................................................... 24 Section 10.6. Redeveloper Deposit ............................................................................................ 24 Section 10.7. Demolition of Structure ...................................................................................... 24 Section 10.8. Notices and Demands .......................................................................................... 24 Section 10.9. Counterparts ........................................................................................................ 25 EXHIBIT A Limited Revenue Tax Increment Note EXHIBIT B Certificate of Completion EXHIBIT C Redevelopment Property Legal Description sie-u6uo~t RCt25-209 iii y AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this _ day of , ~2 x.443 is by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and GRAMERCY CORPORATION, a Minnesota corporation (the "Redeveloper"). WITNESSETH: WHEREAS, the City of Richfield and HRA have established the Richfield Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and ' `' ~` '' ~ have established. within the Project Area the City Bella Redevelopment Tax Increment District ("TIF District") and to-adept have adopted a Tax Increment Financing Plan ("hereinafter defined as the "Tax Increment Plan") for the TIF District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage redevelopment of the Project Area by a combination of public and private activity within the Project Area and in accordance with any Tax Increment Plan to be adopted by the City, and WHEREAS, the Redeveloper has proposed a development (hereinafter defined as the "Development") within such Project Area which the HRA believes will promote and carry out the objectives for which redevelopment is undertaken, will be in the vital best interests of the City, will promote the health, safety, morals, and welfaze of its residents and will be in accord with the public purposes and provisions of the applicable state and local laws and requirements under which activities within the Project Area have been undertaken and aze being assisted; and WHEREAS, the Redeveloper is willing to purchase property from the HRA within the Project Area such property being legally described in the attached Exhibit C (hereinafter defined as the "Redevelopment Property") and to develop the Redevelopment Property for and in accordance with this Agreement; and WHEREAS, subject to ~e-adept~se-e~€, and consistent with the Tax Increment Plan, .the HRA is willing to provide financial assistance in accordance with the provisions of this Agreement; WHEREAS, the HRA and Redeveloper entered into a Contract for Private Redevelopment as of January 16, 2001 ?s amended by an Amended and Restated (~'nntr ct for Private Redevelopment dated as of April 15 2002 (the "Orisinal Contract"1 relating to the TIF District; WHEREAS, the Redeveloper has made substantial progress with respect to the Project, but has determined a need to modify certain aspects of the financing for Project SJB-226220v2 RC125-209 5 the HRA is willing to accommodate the redeveloper's request for .such e~Eex~ie~ modifications as reflected in this Second Amended and. Restated Contract for Private Redevelopment. NOW, THEREFORE, in consideration of the .premises and mutual obligations of the parties contained herein, each of them does hereby represent, covenant and agree with the others as follows: ARTICLE I DEFINITIONS, EXHIBITS RULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Act, located at Minnesota Statutes, Chapter 469, as amended. "Agreement" means this ~4g~een}er~t Second Amended and Restated Contract for Private Redevelopment, as the same may be from time-to-time modified, amended, or supplemented. "Business Subsidy Act" means.Minnesota Statutes, sections 116J.993 through 116J.995. "Certificate of Completion" means the certification, in the form of the certificate contained in Exhibit B attached to and made a part of this Agreement, provided to the Redeveloper, pursuant to Section 4.7 of this Agreement. "City" means the City of Richfield. "Closing" means the date on which title to the portions of the Redevelopment Property acquired by the Redeveloper is transferred to the HRA, followed by the transfer of all of the Redevelopment Property from the HRA to Redeveloper. "Commencement of Construction" means excavation for the purpose of setting footings or foundation. "Completion of Construction" means the completion of construction of the Minimum Improvements except for tenant finish work. " lan" has the meaning provided in A_r~icle IL5 of th_e Original Contract "Construction Contract" means a contract or contracts which provides for completion of the Minimum Improvements. "County" means the County of Hennepin. SJB-226220v2 RC125 209 "Development" means the Minimum Improvements to be constructed on the Redevelopment Property. "Event of Default" means an action by the Redeveloper listed in Section 10.1 of this Agreement. "Minimum Improvements" means the improvements to be constructed by Redeveloper on the Redevelopment Property and related site work all as shown on the Concept Plan. The Minimum Improvements shall consist of three components: ~~ "Component One Minimum Improvements means the 117 unit cooperative housing development and related site improvements, together with not less than 6500 square feet of commercial retail space and related parking. "Component Two Minimum Improvements" means the 38 ~Z unit ~er~e~ cooperative housing, together with not less than 12,500 square feet of commercial retail space and related parking. "Component Three Minimum Improvements" means the townhome development, consisting of ~-41~ single family townhomes and related parking. Collectively, referred to as "Components". "Initial Note" means the Limited Revenue Tax Increment Note to be executed delivered in the form set forth on Exhibit A. "HRA Lands" means the parcels acquired by the HRA prior to this Agreement and described as such in Exhibit C "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes Sections 116D.01 et se ., as amended. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes Sections 116B.01 etet sea•, as amended. "National Environmental Policy Act" means the federal law located at 42 U.S.C. Section 4311 et se ., as amended. "Notes" means the Initial Note and the Refinancing N^*P~ a~ fi,rther riescrihed in Section "Original Contract" means the Amended a_nd Restated Contract between the HRA-and Redeveloper dated as of April 15. 2002." " "Project" means the redevelopment within the City Bella Redevelopment Tax Increment District, including the construction of the Minimum Improvements together with all of the S]B-226220v2 RC125-209 amenities reflected in the Concept Plan. "Redeveloper" means Gramercy Corporation, a Minnesota corporation, and also includes any other entity in which Gramercy Corporation is a general partner and/or has a controlling interest. "Redevelopment Property" means the real property described as such on Exhibit C of this Agreement. " financing Notes" has the meanine provided in Section 6.3 "Site Costs" means (11 landscaping. ~radine and similaz improvements to the evelopment Property that aze eligible for fnnaccine with Tax Increment under the Tax Increment Act: l21 the cost of pazkine facilities constructed within the TIF District serve the Minimum Improvements. and (31 costs of acquisition of portions of the Redevelopment Property i "Site Plan" mean the plans, elevations, drawings and narrative descriptions for the Minimum Improvements and related site work and a study showing impacts on site lines to Woodlake Nature Center from other residential property in the azea. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property which is remitted to the. Authority as Tax Increment pursuant to the Tax Increment Plan, after reduction (if any) of fiscal disparities' contributions which aze mandated by state law to be made with respect to any pazcel. "Tax Increment Act" means the statutes located at Minnesota Statutes Section 469.174 through 469.179, of the Economic Development Act. "Tax Increment Plan" means the tax increment financing plan to be adopted by the City in connection with the creation of the Tax Increment District and as such may be modified and amended from time to time. "Tax Official" means any City or county assessor; County auditor; City, County or State boazd of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "TIF District" means the Citv Bella Tax Increment Financing District. "Unavoidable Delays" means unexpected delays which aze the direct result of adverse weather conditions, shortages of materials, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other judicial action, direcfIy results in delays, or acts of any federal, state or local governmental unit other than those provided for under this Agreement or any other cause or force majeure beyond the control of Redeveloper which directly results in delays, provided, however, that adverse mazket conditions or tenant actions affecting the mazketability or profitability of the Minimum S]B-226220v2 RC125-209 8 Improvements, or the inability to secure financing of the Minimum Improvements shall not constitute Unavoidable Delays. Section 1.2. Exhibits. The following exhibits are attached to and made a part of this Agreement. A. Form of Limited Revenue Tax Increment Note " ("Initial Note" ; B. Certificate of Completion; C. Redevelopment Property Legal Description. Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota; (b) The words "herein" and "hereof' and words of similar importance, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particulaz section or subdivision hereof; (c) Any titles of the several parts, articles and sections of this Agreement aze inserted for convenience and reference only and shall be disregazded in construing or interpreting any of its provisions. ARTICLE II REPRESENTATIONS Section 2.1. Representations by the Redeveloper. (a) The Redeveloper. has the power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper action. (b) If the conditions precedent to construction occur, subject to the other terms of this Agreement, the Redeveloper has or will likely secure the financial capability to construct the Minimum Improvements. (c) If the conditions precedent to construction occur, subject to the other terms of this Agreement, the Redeveloper will construct the Minimum Improvements described in the Concept Plan in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations. (d) The Redeveloper will exercise all reasonably diligent efforts to obtain, in a timely manner, all required permits, licenses, and approvals and if all such approvals are obtained, and subject to Unavoidable Delays and the satisfaction of all preconditions set forth in this Agreement will meet in a timely manner, all lawful requirements of all .local, state, and federal laws and regulations which must be obtained or met before the Minimum Improvements may be constructed. _ _ _ _ _ (e) Redeveloper will comply in all material respects, with all applicable local, state and federal environment laws and regulations, will have obtained any and all necessary environmental reviews, licenses or clearances under, and will be in material compliance with the SJB-226220v2 RC125-209 1 applicable requirements of the National Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and the Critical Area Act of 1973 and any other applicable environmental law or regulation. Redeveloper has not received notice or communication from any local, state or federal official indicating that the activities of Redeveloper may be or will be in violation of any environmental law or regulation. Redeveloper is not awaze of any facts the existence of which would cause the Redeveloper to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act; (f) The Redeveloper acknowledges that it has relied exclusively upon its own analysis of the potential Tax Increment and/or Available Tax Increment to be generated by the Redevelopment Property and that neither the HRA nor its officers, agents or employees has made any representation or covenant, express or implied, as to the amount of Tax Increment, and/or Available Tax Increment that will be generated by the Redevelopment Property; or that such will be sufficient to make payments under the Notes. The Redeveloper further acknowledges that payments under the Nete Notes aze the sole source of payments from the HRA to the Redeveloper described in the Contract. The Redeveloper further acknowledges that the amount of Tax Increment and/or Available Tax Increment may be affected by a variety of factors, including without limitation legislative reductions in property class rates that could reduce the Captured Tax Capacity of the Redevelopment Property, thus reducing the Tax Increment collected by the Authority and the Available Tax Increment pledged to payments on the Notes. Section 2.2. Representations by HRA. The HRA makes the following representations as the basis for the undertakings herein contained. (a) The HRA has the power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement. (b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain all federal, state, and regional agency land use, environmental or other regulatory approvals which aze required of Redeveloper and necessary to implement the Development. (c) The Project Area, has been properly and legally established and is currently fully operative. i3pe~r-aA As of the date of this Agreement, the HRA~~1;-s~jee~-te-~ie has decertified portions of the Gramercy District in which the Redevelopment Property is located, and,. ~~~` *'~° °°°~+~^^ ^~ has created the City Bella Redevelopment Tax Increment District and tke-adeptiea-ef a Tax .Increment plan for the l~.~e~t-Is TIF District. As soon as practicable after the date of this Agreement. the HRA will file the request for certification of the TIF District ease > > .~ Hennepin Countv. (d) The HRA has no knowledge that any tax increment projections or similaz material furnished to the Redeveloper is untrue, but further makes no .representation concerning its accuracy. SJS-226220v2 RC125-209 (e) The HRA will provide Redeveloper with all reports, investigations and studies in the HRA's possession which have as their subject the Redevelopment Property. ARTICLE IL5 CONCEPT PLAN Section 2.5.1. Concept Plan-Approval. The ~~r.,--~-~ ----- ---------- - nnderstand that the Concept Plan has been approved by the HRA as described in Article ILS~f the Original Contract The psrties r level and form of economic assistance to be provided to the Redeveloper, w cn assisu~pce is fiirfher c~gGSrihec~ in Article VI of this Agreement. The level of economic assist?ce remains cl jPct to a further review as provided in Section 6 4 of this Agreement. ~~: ~~~~~ co^+~^*+ ~ S ~ Other Conditions The Redeveloper acknowledges Redeveloper remain ~"I""^* *^ all t~nn.iitinnc r~Pq riherl In Artlcl II O nglri Ori C an agreement between the HRA and Redeveloper entered i>~to under Article IL5 of the Ongm~ re erence SJB-226220v2 RC125-209 7 AT.. A..o D~,..4«...F; 'TL.o Dod o ol~, «_1..,~~~~oa *.. +1.o L iD A +L...4 ~ ,.4t,o •e .,f'., ,.1.1: S~61i-a~FE983~32t2~Sa ARTICLE III SITE ASSEMBLY Section 3.1. Statement of Intent. It is the intention of the parties that the tracts of land which comprise the Redevelopment Property are to be acquired through a combination of direct acquisitions by the Redeveloper and acquisitions by the HRA followed by conveyances to the Redeveloper. It is further the intention of the parties that, whenever possible, direct acquisition by the Redeveloper is preferred. It is further the understanding of the parties that in the acquisition of the Redevelopment Property and related activities the HRA's obligation shall only be to proceed in good faith and to utilize its best efforts. Section 3.2. Acquisition. The Redeveloper agrees to diligently pursue such acquisition activities. Providing all City approvals for Component One have been secured, a Commitment has been issued for an insured loan coverine Component One not later than t--I-S December 31, 2002, the Redeveloper will provide the HRA with the following information together with supporting material all of which shall be in writing and reasonably satisfactory to the HRA: (a) That it has taken reasonable steps to acquire all the Redevelopment Property (b) [Intentionally omitted.] srg-22622or2 RC125-209 ~~ (c) That financing, whether in the form of Equity, Financial Commitments or otherwise, necessary for the acquisition of the Redevelopment Property and for the construction of the Development is in the reasonable judgment of the Redeveloper likely to be available. (d) That Redeveloper, based upon preliminary environmental reviews and other inspections of the Property, is not aware of any conditions, environmental or otherwise, that would prevent Redeveloper from proceeding with the acquisition and development of the Property. (e) A list of the properties with respect to which purchase agreements or options to purchase have been executed. (f) A list of lands with respect to which such agreements or options have not been executed. (g) A request that the HRA undertake condemnation activities, and the parcels to which such activities relate, together with a deposit deemed adequate by the HRA to cover the fees and expenses of those retained by the HRA to provide legal, survey, appraisal, relocation and title services in connection with such acquisition. The request shall also include (i) an acknowledgment by the Redeveloper .that if the HRA does approve the request, the Redeveloper's obligations pursuant to Section 3.4 shall be applicable; and (ii) the form of written agreement and security, reasonably acceptable to the HRA in the nature of the agreement described in Section 3.4. The request shall also include a statement of whether it is necessary for the HRA to proceed in accordance with Minnesota Statutes, § 117.042... Failure: to .make this statement as a part of the initial request does not preclude the Redeveloper from subsequently making it. Section 3.3. Condemnation. If the Redeveloper supplies the items contained in pazagraphs (a)-(g) above, the HRA agrees that it will, in good faith, and following a review and verification of the same, and following delivery to it of an agreement applicable to the Property in the nature of the agreement described in Section 3.4. below, undertake the steps necessary to acquire fee simple title to the portions of the Property to which the. request relates, and. in accordance with Minnesota Statutes, § 117.042 to the extent requested. Section 3.4. Obligation of HRA to Convey the HRA Lands. Commence and Continue Condemnation. (a) The obligation of the HRA to convey the HRA Lands and to commence and continue condemnation, to make any .deposit, including a deposit made pursuant it Minnesota Statutes, section 117.042, and to obtain title to and possession of any of the parcels shall, unless waived in writing by the HRA, be specifically subject to the following, which unless otherwise agreed by the parties shall be completed by ~egtex3ber June 1, ~8A2 24Q~: 1. Redeveloper is not in default of any provisions of this Agreement and all amounts due and payable under this Agreement have been paid. 2. ~ Redeveloper has reviewedthe condition of title as such is to be acquired by the HRA and notified the I-iRA in writing that such condition of title is satisfactory. 3. The Redeveloper has provided the HRA with an undertaking in the form SJB-226220v2 RC125-209 t3 of a written agreement, and with security in the form of a letter of credit which will assure payment by the Redeveloper of . (i) any condemnation award in excess of the previously deposited sums; (ii) any relocation benefits which are not yet paid; Such undertaking and security is to remain in effect according to its terms, and in any event, until suitable and adequate substitute security is agreed to by the parties. 4. The Redeveloper has furnished the HRA with written notice, reasonably acceptable to the HRA, indicating that, based upon Redeveloper's own investigation it is satisfied in all respects with the nature and condition of the parcels and interests to be acquired by the HRA, and accepts the same AS IS and WHERE IS. 5. The HRA is satisfied that the Redeveloper has obtained, or will be obtaining, fee simple title to any portions of the Redevelopment Property (including the HRA Lands) which are not the subject of the condemnation. 6. Redeveloper has furnished the HRA with written evidence reasonably acceptable to the HRA that it has funds, whether in the nature of Equity or Financial Commitment or otherwise which are sufficient for construction of the Minimum Improvements. 7. Intentionally omitted. 8. Redeveloper has supplied the HRA with a signed written statement, reasonably satisfactory to the HRA, to the effect that, to the best of Redeveloper's knowledge, upon Closing, there will be no remaining matters which would affect the prompt commencement of construction of the Minimum Improvements -and the continuation of construction to completion. The statement must also acknowledge that the Redeveloper understands that the HRA is relying on the statement as a inducement to its activities hereunder. 9. Redeveloper has obtained all permissions and approvals required by .the city and other governmental authorities relating to such matters as, without limitation, disruption or closure of rights of -way, encroachment .above streets and alleys for construction activities, and use of public lands for storage of construction equipment and materials. It is understood that such permissions may be conditioned upon such terms as the approving authorities may in their discretion deem advisable. 10. Redeveloper has entered into indemnity and held harmless agreements with the City and HRA protecting those parties .from damage or third party claims relating to construction activities. 11. The HRA has reviewed and approved the Concept Plan. SJB-226220v2 RC 125-209 ~~ 12. The Redevelopment Property has been rezoned to a classification which allows the proposed activities. 13. The parties have reached agreement as to the nature and extent of the Redeveloper's participation in the Affordable Housing Program. The HRA may, in its sole judgment, but only with consent of the Redeveloper, commence and continue its activities under this section even though some or all of the conditions stated above have not been satisfied, or waived. In such event, the HRA will notify the Redeveloper of its election to proceed and shall also notify the Redeveloper of the dates by which some conditions must be satisfied. The HRA shall, upon becoming awaze of failure of any of the conditions stated above to occur within the time provided, and verifying the same with the Redeveloper, immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation shall be to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its acquisition activities, and to indemnify and save harmless the HRA and the City, their officers, agents and employees and to defend the -same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities, and the HRA's sole remedy shall be to obtain such reimbursement and indemnify from the Redeveloper. The HRA may utilize any security available to it in this Agreement as security for Redeveloper's obligations under this Paragraph, including, without limitation, security provided by Redeveloper under this Agreement. (b) During the pendency of such actions, the Redeveloper shall be required to promptly pay all expenses incurred by the HRA in connection with the prosecution thereof, such expenses include legal, survey, title, appraisal, relocation, process service, court costs and similar expenses. The HRA shall, not more often than the monthly during the pendency of the action, furnish the Redeveloper with a written itemized statement of all such expenditures. Such expenditures shall be deducted from the deposit provided for in Section 10.6.. (c) Not later than five days prior to any date on which the HRA is required to deposit any amount into court in order to obtain title and possession to portions of the Property or to make relocation benefit payments to persons entitled to such payments, Redeveloper shall deliver to the HRA funds payable to the HRA in the amount of any such deposit or payment. The HRA shall then have the right, and subject to the terms and conditions hereof, the obligation to use such funds to make such deposit or such payments. The HRA shall have no obligation to repay such funds received deposited or paid pursuant to this Agreement should the redevelopment covered by this Agreement not be completed for any reason. (d) Should the HRA terminate this Agreement for a failure of Redeveloper to satisfy any of the conditions in Section 3.4, or should the Redeveloper terminate this Agreement pursuant to Section 9.5, after the HRA has acquired title to and possession of any pazcel, the HRA shall have the unrestricted right to utilize ali or part of the same in any manner which it, in its sole discretion deems appropriate, including, without limitation, the sale of all or part of the same to others, all on terms and for amounts which the HRA in its exclusive judgment deems appropriate, subject to the terms of any Subordination Agreement entered into between the HRA SJB-226220v2 RC125-209 t5 and the Lender or Lenders. In the event that the HRA elects to sell all or part of such. property, the HRA agrees to reimburse the Redeveloper from, and only from the sale proceeds (if any), amounts expended by the Redeveloper in connection with acquisition of such parcels and paid to the HRA pursuant to this Agreement after first deducting from the sale price: 1. Amounts still owing the HRA under paragraphs (b) and (c) and the amount of any remaining obligations under this Agreement. 2. All expenditures incurred by the HRA in connection with such subsequent transaction which were intended to be paid through the sale price. The Redeveloper acknowledges that the HRA's obligation hereunder shall be enforceable against no other source then the sale proceeds,. if any, and does not constitute a lien or encumbrance on the property or any other HRA asset. This provision places no fiduciary obligation on the HRA to act in any manner which would preserve, protect, secure or enhance the property or the amount of reimbursement which the Redeveloper might receive. Nothing in this subparagraph (e) shall be deemed to preclude a sale by the HRA to the Redeveloper; and the application of the sale price to reduce the amount due the HRA under this subparagraph.. The Redeveloper shall not be entitled to any sale proceeds received from the HRA for the sale of the HRA Lands. (e) On the date of Closing, and as a further precondition to the HRA's obligations to deliver title, Redeveloper shall provide the. HRA with either a lien, in recordable form and recordable against the Redevelopment Property or a letter of credit (LC). The choice between lien or LC shall be at the sole .discretion of the Redeveloper, The instrument shall be in a form. acceptable to the HRA and in an amount deemed by the HRA in its reasonable judgment to be sufficient to cover each of the matters described in Section 3.4 above. The HRA agrees that it will, from time to time, hear and consider requests from the Redeveloper to release or modify the instrument, or, in the case of a liens to subordinate the same, and will do so if in its reasonable judgment such action will not impair the adequacy of the HRA's security. The HRA may condition the approval of any such requests upon the Redeveloper providing substitute security acceptable to the HRA. ~.~~~~~~` ,.i.,...;... Notwithstanding anything to the contrary here~n_ any lien or LC nrovided_ de this naragranh will be released upon issuance of t_he Refinancing un (f) Redeveloper Liability. Notwithstanding anything herein to the contrary, in the event the Redeveloper shall fail or refuse to perform its obligations under .this Agreement, then the HRA, upon written notice to the Redeveloper, may immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation shall be: i) to reimburse the HRA for the costs and expenses .incurred by the HRA in connection with its acquisition activities; ii) to indemnify and save harmless the HRA and the City and their officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities and the HRA's sole remedy shall be to obtain such reimbursement and indemnity from the Redeveloper. SJB-226220v2 RC125-209 ~~ (g) Copies of Pleadings, etc.. Copies of all correspondence, notices and pleadings relative to any condemnation proceeding shall be sent to the Redeveloper and Redeveloper's counsel as provided in Section 10.7. Section 3.5. Convevance of the Redevelopment Propertv. At the Closing, the Redeveloper will convey any portions of the Redevelopment Property owned by it to the HRA~ or a purchase price of $1.00. The HRA will then convey title to and possession of the Redevelopment Property to the Redeveloper or a purchase price of $1.00. All conveyances will be by quit claim deed. The conveyance of the Redevelopment Property to the Redeveloper, and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement. The conveyance to the Redeveloper will also reserve an easement in favor of the HRA for the construction and operation of a pedestrian skyway as shown in the Concept Plan. The conveyance of title to and the Redeveloper's use of the Redevelopment Property shall also be subject to building and zoning laws and ordinances and all other applicable local, state and federal laws and regulations. Section 3.6. Time of Acquisition and Conveyance. (a) Closing on the simultaneous sale and repurchase and purchase transactions contemplated herein shall occur not later than 30 days following the date on which the HRA has acquired title to all of the parcels acquired through condemnation provided that the Redeveloper is not in default of any obligation under this agreement and that all monies due the HRA hereunder have been paid, and provided. Further that all other conditions, events or actions which under this Agreement must occur prior to Closing have either occurred or been waived in writing by the .party in whose favor the requirement runs. The Redeveloper shall take possession of the Redevelopment Property the day of execution and delivery of the deed by the HRA. The HRA and the Redeveloper acknowledge, that unless so required by others, the deeds which are contemplated in this transaction need not be recorded. (b) Unless otherwise mutually agreed by the HRA and the Redeveloper, the execution and delivery of all deeds shall be made at the principal office of the HRA. Section 3.7. Title. (a) Prior to and as a condition to the HRA's obligation to acquire the portions of the Redevelopment Property not being condemned, the Redeveloper shall obtain and furnish to the HRA a commitment for the issuance of a policy of title insurance. The HRA shall have twenty (20) days from the date of its receipt of such commitment to review the state of title and to provide the Redeveloper with a list of written objections to such title. No objection may be made by the HRA to any defect or encumbrance on the title unless and to the extent that such defect or encumbrance would, if uncured, have the effect of precluding Redeveloper's construction of the Minimum Improvements. Upon receipt of the HRA's list of written objections, the Redeveloper shall proceed in good faith and with all due diligence to attempt to cure the objections made by the HRA. Within ten (10) days after the date that all such objections have been cured, to the reasonably satisfaction of the HRA, the HRA shall proceed with its acquisition and reconveyance of the Redevelopment Property. The HRA -shall have no obligation to take any action to clear defects in the title to the Redevelopment Property. (b) The HRA shall take no actions to encumber title to the Redevelopment Property SJB-226220v2 RC125-209 ~~ between the moment the HRA acquires to the moment on which the Authority's Deed is delivered to the Redeveloper, it being understood that such conveyances will occur simultaneously. Section 3.8. Soil Conditions. The Redeveloper acknowledges that the HRA makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the HRA, its governing body members, officers, and employees, from any third party claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevelopment Property; but only to the extent that such claims or actions are based upon the HRA's ownership of the Redevelopment Property required herein and for no other reason. In addition to the foregoing, the HRA agrees to diligently pursue efforts to secure third-party funding for the mitigation of any contamination or pollution found to exist on the Redevelopment Property. Otherwise, as between the HRA and the Redeveloper, the cost and responsibility to mitigate rests with the Redeveloper. To date, the HRA has received a commitment for approximately $92,000 from Hennepin County for mitigation which shall be applied directly to the mitigation of the Redevelopment Property, or remitted to the Redeveloper, in accordance with the Grant Agreement between the HRA and Hennepin County. Section 3.9. i ,,• +,, LTD ~ T ~„,,~ Q`, nn intentionally Omittedl ,w Section 3.10. Taxes and Special Assessments. Redeveloper shall pay all taxes and installments of special assessments due and payable subsequent to the execution of this Agreement and continuing until issuance of the Refinancing Notes Unon iss~iance of the Refinancing Notes Redeveloper's obligation under this Section termma es. obligation regarding taxes and special assessments is imposed solely by operation or date law. Redeveloper shall pay all installments of taxes and special assessments due and payable m the year of Closing. Installments of special assessments due and payable in future years shall be responsibility of Redeveloper subiect to the ^nat;ficat;nn described in the first sentence of this Section. Section 3.11. Other Costs. No cost, fee or other payment relating to any real estate transaction of any nature -shall be payable by the HRA to any person or entity; and except as otherwise set forth in this Agreement, the HRA's entire obligation in connection with the purchase and sale of the Redevelopment Property shall be payment of the purchase price and reconveyance of the Redevelopment Property as provided in this Agreement. SIB-226220v2 RC125-209 Section 3.12. Prope Conveyed As Is. Redeveloper acknowledges that the HRA shall have no obligation to perform any site work in connection with the proposed transaction or otherwise. The HRA's only obligation hereunder is to convey the Redevelopment Property to the Redeveloper in the condition in which it was obtained by the HRA. All site work, including, without limitation, grading, soil preparation and demolition of all structures and improvements shall be done by the Redeveloper at Redeveloper's cost. Section 3.13. Other Preconditions to Closing. Notwithstanding any provision in this agreement to the contrary, Closing shall not occur, and the HRA shall have no obligation to deliver the Initial Note until the Redeveloper has entered into agreements with the City and/or the HRA, (i) providing any licenses, permits, easements or other rights necessary for location the skyway on the portion of the Redevelopment Property shown in the Concept Plans; (ii) provide the necessary consents and waivers from the Redeveloper for the establishment of a maintenance district for the purpose of assessing the costs of maintaining the skyway, and to a district wide assessment to cover the cost of constructing the skyway; and (iii) providing for an interim off- street parking plan designed to accommodate parking requirements during construction of the Development as well as to provide for the parking requirements of Gramercy Park Cooperative during such period. ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Agreement to Construct. Subject to the acquisition of the Redevelopment Property, the Redeveloper agrees that it will construct the Minimum Improvements substantially in accordance with the approved Concept Plans; the construction and all construction activities shall be conducted in strict conformity with the ordinances, codes and regulations of the City and other governmental units having jurisdiction over such activities. Section 4.2. [blank]. Section 4.3. [blank]. Section 4.4. Concept Plan. ''''~° r°~°°~+ D'°~ °,,°" w° °»~,~.~~°'' "'' '°'' If the Redeveloper desires to make any material change in the Concept Plans, the Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept Plans, as modified by the proposed change, conform to the requirements of this section with respect to such previously approved Concept Plans, the HRA shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Concept Plans shall, in any event, be deemed approved by the HRA unless rejected, in whole or in part, by written notice by the HRA to the Redeveloper, setting forth in detail the reasons therefor within twenty (20) days after receipt of the notice of-such change. Final construction plans and specifications shall be reviewed by the City Building Official in connection with issuance of building permits. No building permit may be issued if SJB-226220v2 RC125-209 ~9 the final construction plans and specifications materially depart from the approved Concept Plans. Section 4.5. Commencement of Construction Commencement of Construction for the Components dates: $ Component One: Apri130, 2003. $ Component Two: Apri130, 2004. $ Component Three: Apri130, 2005. Subject to Unavoidable Delays, the shall occur on or before the following Section 4.6. Construction Reports. At the request of the HRA, the Redeveloper will provide the HRA with copies of the portions of any construction reports prepared by Redeveloper's azchitect and which show the status of construction. Section 4.7. Completion of Construction -Certificate of Completion. Construction of the Component One Minimum Improvements shall be completed not later than twenty (20) months after commencement of construction. Completion of the Component Two and Three Minimum Improvements shall be completed not later than one (1) yeaz after commencement of construction of the respective Components. Once .commenced, construction of the Minimum Improvements for any phase shall be diligently prosecuted to completion. Promptly after notification by the Redeveloper of completion of the Minimum Improvements for any Component, the HRA shall inspect the construction to determine whether such Minimum ..Improvements aze completed substantially in accordance with the terms of this Agreement. If the HRA is satisfied, and if the plat for the. Redevelopment Property has been recorded, it will .promptly furnish the Redeveloper with a Certificate of Completion for that Component. Such certification by the HRA shall, except as further provided in this Section 4.7, be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement, with respect to the obligations of the Redeveloper to construct the Minimum Improvements for the Component covered by the certification.- The certification provided for in this section shall be in recordable form. If the HRA shall refuse or fail to provide the Redeveloper a certification in accordance with the provisions of this Section 4.7, the HRA shall, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements for that Component in accordance with the provisions of this Agreement, has failed to record the plat for the Redevelopment Property or is otherwise in default, and what measures or acts it will be necessary, in the reasonable opinion of the HRA, for the Redeveloper to take or perform in order to obtain such certification.. The HRA may not impose as a condition for issuance of the certificate, any requirement which has previously been deemed satisfied either by actual approval or the passage of time. If the HRA fails to act on the Certificate of Completion, either by granting same or providing the written statement described above within 60 days following the date it is notified of completion of construction of a phase, all -objections shall be deemed waived and the certificate shall issue for such phase. srs-2262zoV2 RC125-209 2< ARTICLE V INSURANCE Section 5.1. Insurance. Prior to Closing, the Redeveloper shall provide evidence of insurance, covering property, casualty, workers compensation, fire, indemnity, general liability, employer's liability and such ,other coverage and in such amounts as the HRA shall reasonably require. ARTICLE VI TAX INCREMENT Section 6.1. Statement of Purpose. The parties acknowledge that the development which is proposed by the Redeveloper would not be feasible absent the assistance which is provided the Redeveloper in this Article VI. Section 6.2. a "~ ° `~°"`'~'"°`° "~ (~(~~A" + ~' + oiaf~rDccu°o i ciopci- i~i~av~ ^r ~-. t~Y' Er'1~ ~e~A1'ttt T't, LID A ~ 1,1' ' +~i~rv~ + ± ~' ••+~ +•• +1•° 0 Ses~ General Description• Site Costs The HRA will provide to the Redeveloper an amount of public assistance to pav for or to reimburse the Redeveloper for the Site Costs incurred by Redeveloper subiect to the limits described herein Available Tax Increment shall be used by the HRA to pav the Notes The term "Notes" shall mean the "Initial Note" and the "Refinancing Notes" as defined in Section 6 3 4e~+;on 6 3 Issuance of Notes The HRA will provide to the Redeveloper public assistance to pav for the Site Costs subiect to the following limitations• SJB-226220v2 RC125-209 21 „a~,at,tP e ntaty from t he Availab le T ax Increm ent The In itial Note will neither constitute Hive rise to a ge neral oblig ation or liabili ty or a char ge against the gene credit or axing Ho wer of the H RA or the Citv . n ~nltlal NO a unill itle ritCA Illes me ICUUGSI ~vI c:GiLlltuauvu vi ui~ 111' Li~ui~.~_rcI~SUSr (rn„„tom anrt modifies the Tax Increment Plan for the TIF District to the extent required by law The HRA will use its best efforts to file such request and approve such modification prior to the Closing Date. ~ HRA's Refinancing of Initial Notejinn Redeveloper's request. the HRA will refinance the outstanding Initial Note by issuing one or more tax-exempt tax increment revenue notes (the "Refinancing Notes") to one or more third parties. subiect to the tPrrnc and conditions contained herein The Refinancing Notes may be issued in one or more series or in series over time provided that no Refinancing Note will be issued later than 18 months after the later of (il the date the expenditures .for Site Costs allocated to the Refinancing Note were paid or (ii) the date the improvements financed by the Site Cost allocated to the Refinancing Note are placed in service but no later than 3 vears after the date of the first expenditure for such Site Costs Redeveloper and the HRA will reasonably and timely cooperate with the refinancing efforts. including providing requested information and attorney opinions and signing documents. Redeveloper shall e solely responsible for securing buver(sl for the Refinancing Notes. ,: ; ~ n i ancing Not R f th es While it is th Notes i i e intention of the HRA as of the date o 9 provide n a principal amount sufficient i for t Agreem he paym ent to s ent in fu e i sue e ll of the n,a nanc ng tstanding Initial - _ Note. the principal amount of each series of R efinanci ng Note s shall be c ontingent on a n umberof factors that could result n_the size of the R efinanci ng Notes b eing insufficient to roroduce net,proceeds to refinance all of th e outsta nding pr incipal int erest and related fees of the Initial Note. Considering the abov e intent ion the principal a mount of the Re financing Notes shall be determined after takin g into c onsidera tion the fol lowing factors: Prnie~tPd Available Tax Increment from the Minimum Improvements th1ough the year 2029 based on the actual estimated market value (as determined by t_he Hennepin County Assessor's Office) of the Redevelopment Property: and Market conditions at the time of refinancing (i.e.. interest rates. marketable term required coverage factors etc) and the costs of .issuing the Refinancing Notes• ~ Timing Notwithstanding the foregoing. the HRA shall have_the option to rlalw rafnanninrt nftt~P in;t;at Note temporarily or for as long as the following conditions exist: The HRA is prohibited from refinancing the Initial Note pursuant to changes in federal law enacted after the date of t_h~s Agreement• sJS-22622oV2 RC125-209 Z2 stan_tial adverse chances in the market con itions have that make it infeasible to refinance the Initial Note on a re onable b i rmed by a bond underwriter to the Redeveloper an_d HR_A_ in writing iii av is necessa_rv to ensure t_h_at either the HR_A or Citv will issu ess than $10.000.000 of "qualified exempt obligations" (as defined in Sectio )(3) of the Internal Revenue Code of 1986. amended) in he ve r o issuance of the Refinancing Notes. However. the provisions of this paragraph may not extend the latest dates for issuance of Refinancing Notes described in Section 6.3(bl. ~ edevel oper Re sponsibi lity Upon Refinancing. If. after taking into i eration t he fact ors liste d in Se ction 6 3(c) a HRA determine that the ne procee ds of a s eries of Refinan cing No tes will be insu_~cient to call all he outstanding Note or t hat the Refinanc ing Note s can not be i ued. the Redeveloper shall eith r• u pon issuanc e of the . Refinancing No tes. return the Initial_ Note to e H RA a long with an u nconditi on rele a fro m the Redeveloper an ny 'ne e ow ner of the Initial Note. w 'ch terminate th_e HR_A's obligation wi e un paid princip al of and accrued interes t on the. initial Note. (iil provide written assurances to the HRA. deemed acceptable to the RA that the Redeveloper will deliver to the HRA on or before 'the date o issuance of the Refinancing Notes an amount w ich. along with the net proceeds of the Refinancing Notes. will be sufficient to call the outstanding Initial Note -- - (the "Cash Requirement"): and deliver the Cash Requirement to he HRA. i 'mmediately available funds. no later than fifteen (15) day prior to the issuance the Refinancing Notes or. if the Refinancing Notes are not i ued. no later ha fifteen (151 days prior to the final ma city date of the Initial Note: or (iii) provide a written notice to the HRA that Redeveloper waive its right request issuance of the Refinancing Notes. in which event e I itial Note wil e prepaid but will remain in full force and effect e Redeveloper will take no action. and will not fail to take n action. he ect of which will be to cau a any Refinancing Note to be determined to be a "private activity bond" (as such term is defined in Section 141 of the Interns Revenue Code of 1986. as amended (the "Code") and in applicable Treasu_rv ations promulgated pursuant to applicable provi ions of he Code (he " egulations") ii a Redeveloper will take no action and will not fail to take SJB-226220v2 RC125-209 23 ~rtion~effeCt of which will be to cause the "private secu_ r~vment test" - i d fin d in ion o o n l or r Code and in applicable Rem„tar;nnc to be satisfied wittz respect to the t~cennancin~ Notes• iii The Redeveloper will take no action and will not fail to take an acti^„ *1'P effect of which will be to ca v Refinance N r , n ~ a ~Qbe an "arbitrage bond"(as su he term is defined in ~ecnon i4a oI i~C ~,~u~ a-lu in applicable Resulationsl. "" Redevelop r will take no action and will not fay to take an +~^„ +ha effect of which will be to ca»~e interest on anv e n n includabl° ~„ ~*'^ss income for federal income tax numoses. ~ Other Qualifications Notwithst°„~~„° anvth;no to the contras in this r • 1 11 L Agreement from and after the date of issuance e m right to enforce. and the Redeveloper shall have _^_o obhgation~ »nder. the mdemn~fication provisions stated in Sections 3 4(al 3 4(f) and 3 8 of this what the ~ a chap have received an op' t - ~he HRA to the ~, Rr^~~ ,nr~nmP of the holder thereof for p»rooses the Refinancing Notes to become mcluda~•~ . of federal lnrnmP taxation The requirement for such ~n optmon may oc waw~d ~• t; e re~~stered owner of a iverv ac~Pr+table to the HRA including at a minimum representations that the owners have consulted with le¢al c 1 r w v ~ L .7 •1. nr/~nr9,'1~'1 claims aeainst HRA related to or arising from enforcement ~~nons aescnvcu ~~, ~~•~ .,~..~r•~.,••. Section .4. Review of Level of Assistance. The HRA shall have the opportunity to review the economics of the project prior to the issuance of the €r~st Initial Note. The review will be governed by the provisions of this section. 1. When Made. The Redeveloper will notify the HRA at the point it has met the presale requirements of its lender on the Component One Minimum Improvements; or has presold at least 50% of the units, whichever is greater. 2. Review. The Redeveloper will supply the HRA's fiscal consultant with all information reasonably required to conduct the review, including the Redeveloper's calculation of Net Return as hereinafter defined. 3. Determination. If the HRA's fiscal consultant determines that the data reviewed indicates that the Net Return to Redeveloper, as a percentage of the total .construction and. project cost (the "Net Return") is projected to exceed fifteen percent, the amount of the Notes Initial Note_will be reduced so that the net return is reduced to fifteen percent. The total constructionand project cost used to compute the Net Return shall consist of all direct and indirect costs, construction period and other interest and real estate taxes, architectural, SJB-226220v2 RC125-209 engineering, marketing, advertising, public relations costs, professional fees, depreciation and amortization costs and office and employee related overhead (including benefits) reasonably allocated to the Development. £°~~T Section 6.5. Reimbursement for HRA Land. It is the understanding of the parties that fifteen percent of the tax increment generated by the Development will be used by the HRA as reimbursement for the HRA's costs in acquiring and holding the HRA Land. ARTICLE VII FINANCING Section 7.1. Limitations Upon Encumbrance. Prior to the issuance of a Certificate of Completion, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property or any part thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attached to the Redevelopment Property or any part thereof, except ,only for the purpose of obtaining funds to the extent necessary for purchasing or redeveloping the Redevelopment Property or funding construction of the Minimum Improvements. Section 7.2. Copy of Notice of Default to Lender. Prior to the issuance of a Certificate of Completion, whenever the HRA shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations under this Agreement, the HRA shall at the same time forward a copy of such notice or demand to each holder ("Holder") known to the HRA of any mortgage or other financing agreement authorized by this Agreement by sending such notice to last known address of the Holder as shown in the records of the HRA. Section 7.3. Lender's Option to Cure Defaults. After any Event of Default by .the Redeveloper referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the HRA are concerned) have the right for a period of ninety (90) days, at the Holder's option, to cure or remedy such Event of Default to the extent that it relates to the part of the Redevelopment Property covered by its financing and to add the cost thereof to the debt and the lien of its financing, provided, that if the breach or event of default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction or completion of the Minimum Improvements (beyond the extent necessary to conserve or protect such Improvements or construction already made) without first having expressly assumed the Redeveloper's obligations described in Section 4.5 hereof by written agreement reasonably satisfactory to the HRA to complete the Minimum Improvements or the part thereof to which the lien or title of such holder relates, provided fiu ttier, however, that the HRA will not unreasonably withhold its consent to any changes in the Minimum Improvements which are requested by the Holder if the requested changes do not alter the basic design of the Minimum Improvements. (It being understood that such consent shall in no way act to bind or influence the power of the City, in the exercise of its sJS•22622oV2 RC125-209 2s governmental authority not to approve any proposed changes or alterations to the Minimum Improvements. Any such Holder who shall perform the Redeveloper's obligations under Section 4.5 hereof, relating to the Redevelopment Property or applicable part thereof, shall be entitled, upon written request made to the HRA, to a certification by the HRA to such effect in the manner provided in Section 4.7 of this Agreement. Section 7.4. HRA's Option to Cure Default. Prior to the issuance of a Certificate of Completion, if the Redeveloper is in default under any financing authorized pursuant to Article VIII of this Agreement, the Holder, prior to exercising any of its remedies, shall notify the HRA in writing by sending it a copy of any notice of default sent to the Redeveloper. If, within thirty (30) days after receipt of said notice, the HRA cures the default, then the Holder shall pursue none of its remedies under the financing based upon the said default of the Redeveloper. Section 7.5 Subordination. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements by the Redeveloper, the HRA agrees to modify and to subordinate its right under this Agreement to the mortgage or other financing agreement held by the financial institution providing such funds, provided, however, that nothing in this Section 7.5 shall be deemed to require the HRA to agree to any modification or subordination of its rights which in its judgment would be contrary to its best interests, or to the prompt and timely construction of the Minimum Improvements; or which would fail to obligate any Holder to the provisions of Section 7.3. ARTICLE VIII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 8.1. Representation as to Development. The Redeveloper further recognizes that, in view of (a) the importance of the development of the Redevelopment Property to the general welfare of the community; and (b) the sub ftan~e fin ose oof makings h dlevelopm nt have been made available by the City and the HRA, pure possible; that the qualifications and identity of the Redeveloper are of particular concern to the community and the HRA. Any change as hereunder described with respect to the identity of the Redeveloper or the purchase of Redeveloper's interest by any other party or parties is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the Redeveloper further recognizes that it is .because, of such qualifications and identity that the HRA is entering into this Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of. all undertakings and covenants hereby then to be performed. Section 8.2. [Blank]. Section 8.3. Prohibition Against Transfer of Propertv and Assisnment of Agreement. For the foregoing reasons, the Redeveloper represents and agrees that pnor to the issuance of a Certificate of Completion for that-Phase each C s' (a) Except only by way of security .for, and. only for, the purpose of obtaining financing of the nature described in Section 7.1, the Redeveloper (except as so authorized) has not made or created, and that it will not make or create, or suffer to be made or created, any total SJB-226220v2 RC125-209 or partial sale, assignment, conveyance, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA, which approval will not be unreasonably withheld. (b) The HRA shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such action described in paragraph (a) above that: (i) any proposed transferee shall have the qualifications and financial responsibility, asreonably determined by the HRA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations to the extent that they relate to such part); (ii) any proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, shall for itself and its successors and assigns, and expressly for the benefit of the HRA, have expressly assumed all of the obligations of the Redeveloper under this Agreement and agreed to be subject to the terms of the Redevelopment Plan (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations, conditions, and . restrictions to the extent that they relate to such part); provided, that the fact that any transferee of, or any other successor in interest whatsoever the reason, shall have assumed such obligations or agreed, shall not (unless and only to the extent otherwise .specifically provided in this Agreement or agreed to in writing by the HRA) relieve or except such transferee or successor of or from such obligations, conditions, or restrictions, or deprive or limit the HRA or with respect to any rights or remedies or controls with respect to the Redevelopment Property or the construction of the Minimum Improvements; it being the intent of this, together with other provisions of this Agreement, that (to the fullest extent permitted by law and equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, of any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the HRA of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Redevelopment Property and the construction of the Minimum Improvements that the HRA would have had, had there been no such transfer or change; (iii) there shall be submitted to the HRA for review all instruments and other legal documents involved in effecting transfer, and if approved by the HRA its approval shall be indicated to the Redeveloper in writing. The HRA shall not unreasonably delay the taking of any action required of it under this paragraph. Notwithstanding the prohibitions against transfer contained in this section, .the Redeveloper shall have the right to transfer, (partial or full) ownership interests in the Redeveloper, this Agreement, or any Component of the Redevelopment Property to any entity or entities in which the Redeveloper or the shareholders of the Redeveloper (Michael W. Conlan and Roger W. Schnobrich) have at least a fifty percent (50%) interest. (c) In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA thereof shall be deemed to relieve the Redeveloper, or any other .- ~, party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, or from any of its obligations with respect thereto. The HRA may, however, in its reasonable discretion exercised in accordance with the standards and requirements of Section 8.3(b) relieve Redeveloper if such transferee or assignee is acceptable to SJB-226220v2 RC125 209 27 the HR.A. Section 8.4. Following Completion. Upon the issuance of the Certificate of Completion, the provisions of Sections 8.1, 8.3 and 8.5 shall be deemed to have no further force and effect; and the Redeveloper may transfer the Redevelopment Property and assign its interest under this Agreement at any time upon written notice to the HRA. Section 8.5. Approvals. Any approval required to be given by the HRA under this Article VIII of this Agreement may be denied only in the event that the HRA reasonably determines that the performance of the obligations of Redeveloper under this Agreement will be materially impaired by the action for which approval is sought. At the HRA's request, the Redeveloper shall provide to the HRA's attorney for privileged review on behalf of the HRA financial information as to any proposed general partners, or controlling stockholders of proposed assignees or transferees, and financial .information as to any such partnership or corporation. Failure to provide such information shall be an adequate basis for the denial of any requested approval; however, it shall not otherwise be construed as a default under this . Agreement. ARTICLE IX EVENTS OF DEFAULT; TERMINATION Section 9.1. Events of Default Defined. The following shall; after the Redeveloper has received notice of the same and has failed to cure in accordance with Section 9.2, be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper, to pay .when due any payments required to be paid under Article III of this Agreement. (b) Subject to Unavoidable Delay, failure by the Redeveloper to observe and substantially perform any material covenant, condition, obligation, or agreement on its part to be observed or performed hereunder. (c) If the Redeveloper is in default under any mortgage and fails to cure any such default within thirty (30) days after written demand. from the HRA to do so. (d) If the real estate taxes aze not paid when due, subject to Redeveloper's right to contest same in accordance with applicable law. (e) Failure to complete any .action by .any date or deadline set out in this Agreement. Section 9.2. Remedies on Default.- Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, but only after at least sixty (60) days notice to the Redeveloper and its failure to cure (unless a different cure period is provided with respect to specific defaults under this Agreement) or such longer cure period if reasonably required and the actions to cure SIB•226220v2 RC125-209 have been commenced within such 60-day period, find the Redeveloper in default (Default) and take any one or more of the following actions: (a) Suspend its performance under the Agreement until it receives assurances from the Redeveloper or mortgagee reasonably deemed adequate by the HRA, that the Redeveloper will cure the default and continue performance under this Agreement. (b) If Closing has not yet occurred, cancel pursuant to Minnesota Statutes Section 559.21, and rescind this Agreement, in which case the 60-day cure period shall commence with notice of cancellation. (c) Withhold the Certificate of Completion if the Event of Default relates to the failure of the Redeveloper to complete the Minimum Improvements as provided in this Agreement. (d) Subject to the limitations stated in Article III take whatever action at law or in . equity may appear necessary or desirable to the HRA to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the Redeveloper under this Agreement. Provided, however, that any exercise by the HRA, its successors or assigns, of its right or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b) any rights or interests provided in this Agreement for the protection of the .:Holder of .such. mortgages. Provided further, however, that should any Holder succeed by foreclosure of the .mortgage or deed in lieu thereof, to Redeveloper's interest in the Redevelopment Property, it shall, notwithstanding the foregoing provision, be obligated and, shall agree in writing to perform all of the obligations of the Redeveloper, set forth in this Agreement as to the Component or Components which the lender has fmanced. Said Holder shall have no obligations. pursuant to this Agreement other than as specifically set forth in the foregoing sentence. Section 9.3. No Remedv Exclusive. Except as provided in Article III, no remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or .now or hereafter .existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article X or by applicable law. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any obligation contained in this Agreement should be breached by either party and thereafter waived by the - other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.5. Excessive Land Acquisition Costs. If the costs and expenses payable by the SJB-226220v2 RC125-209 `~ Redeveloper to the HRA for the acquisition of the Redevelopment Property shall be excessive, to a degree that the project is rendered economically infeasible the Redeveloper may terminate this Agreement. Section 9.6. Fffect of Termination. Upon termination, each party shall be relieved of further obligations under this Agreement, except that the Redeveloper shall be obligated to reimburse the HRA for any amounts to which the Redeveloper was obligated as a result of activities pursuant to this Agreement om one tcand fornr any omponeHn for whi h construction the Redeveloper as to any completed p has commenced in accordance with the terms of this Agreement. Section 9.7. Negotiation. If the Redeveloper is making substantial progress with respect to the redevelopment project, and is unable to meet one or more of the above-referenced deadlines, the HRA and the Redeveloper shall negotiate in good faith for a reasonable period to extend the time in which necessary action(s) must be taken or occur, the lapse of which time would otherwise constitute a default under this Agreement. ARTICLE X ADDITIONAL PROVISIONS Section 10.1. Conflict of Interests• HRA Representatives Not Individually Liable. No member, official, or employee of the HRA shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the HRA shall be personally l~e1H tRA or for dany amount whi h may become interest, in the event of any default or breach by due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as though fully set forth herein. Section 10.3. Provisions Not Merged With Deed. .None of the provisions of this Agreement aze intended to be or shall be merged by reason ofany deed transferring any interest in any part of the Property and any such deed shall not be deemed to affect or impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the provisions of this Agreement shall be binding upon and inure to be benefit of the successors and assigns of the parties hereto. Section 10.4. Notice of Status and Conformance. The HRA agrees that from time to time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute, acknowledge and_ deliver, without chazge, to Redeveloper or to any person designated by Redeveloper, a statement in writing certifying, to the extent true, that .this Agreement is unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has not received any notice of default, that to the knowledge of the HRA no event of default exists hereunder (or if any such event of default does exist, specifying the same and stating that .the SJB-226220v2 RC125-209 same has been cured, if such be the case), that the HRA to its knowledge, has no claims against the Redeveloper hereunder, and any other information reasonably requested by the Redeveloper. It is the intention of this Section 10.4 to provide a mechanism for obtaining estoppel certificates which may be requested by from time to time by Redeveloper or Redeveloper's mortgagee. Section 10.5. Compliance With Business Subsidy Act. The HRA's obligation to make payments under this Agreement that constitute Business Subsidies under the Business Subsidy Act aze expressly contingent upon the conclusion of the procedures required by such law. Section 10.6. Redeveloper Deposit. The parties acknowledge that the Redeveloper has previously deposited $25,000 with the HRA. The purpose of the deposit is to reimburse the HRA for the money value of staff time and consultant costs incurred by it in connection with the preliminary activities leading up to, resulting in and including the prepazation of this Agreement and any modifications of the Gramercy Tax Increment District, and in the implementation of this Agreement and the Development. Any portions of the deposit which aze not needed for those purpose shall be returned to the Redeveloper within 15 days following the issuance of the Certificate of Completion; or the termination of this Agreement for failure to close. At any time that the unexpended amount of such deposit is $10,000 or less, the Redeveloper shall, upon 15 days written request to do so, provide such further deposit _as is required to return the unexpended amount to $25,000. It is understood that the deposited amount is not a limitation on the Redeveloper's obligation to reimburse for such costs, or to make other payments required under this Agreement. Section 10.7. Demolition of Structure. Redeveloper. shall .demolish and remove the structure located on the portion of the Redevelopment Property ..currently owned by it and generally known as the former Lyndale Hazdwaze Building. Such demolition and removal will be completed by not later than August 31, 2002 unless .the TIF District is .created after August 31, 2002, in which event the demolition and removal will be accomplished within two (2) weeks after the TIF District is created. Section 10.8. Notices and Demands. Except .as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally: As to the HRA: Housing and Redevelopment Authority 6700 Portland Avenue South Richfield, Minnesota 55423 Attention: Executive Director With Copy to: John Dean Kennedy & Graven 470 Pillsbury Center Minneapolis, MN 554302 SJB-226220v2 RC125-209 - - 3~ As to the Redeveloper: Gramercy Corporation 6601 Lyndale Avenue South Suite 110 Richfield, MN 55423 Attention: Michael W. Conlan, President With Copy to: Rolfe A. Worden Hinshaw &Culbertson Suite 3100 222 So. 9~` Street Minneapolis, MN 55402 or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other. Section 10.9. Counterparts. This Agreement may be simultaneously. executed in any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA Dated: , 2892 ~ By: Its: Chairperson Dated: ,2892 ~QQ~ BY~ Its: Executive Director GRAMERCY CORPORATION Dated: ,288'2 ?~~ By• Its: SJB-226220v2 RC125-209 STATE OF MINNESOTA COUNTY OF HENNEPIN ss.. The foregoing instrument was acknowledged before me this day of ~~ 2~, by and the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. Notary Public STATE OF MINNESOTA - COUNTY OF HENNEPIN ss.. The foregoing instrument was acknowledged before me this day of ~~ ~, by the ~ of Gramercy Corporation, a corporation under the laws of Minnesota, by and on behalf of said corporation. Notary Public . SJB-226220v2 RC125-209 ---- 33 EXHIBIT A EXAMPLE LIMITED REVENUE TAX INCREMENT NOTE. SERIES Interest Rate 8.5% Date of Original Issue 2/200_ They Housing and Redevelopment Authority in and for the City of Richfield (the "Authonty ), hereby acknowledges itself to be indebted and, for value received, promises to pay , to the order of Gramercy Corporation. (the "Owner"), to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $ (the "Principal t ether with interest thereon accrued from the Accrual at as Amount"), og def nod in the Contrar+ W1~ich is defined belowl, at the rate of interest of 8.5% per annum (the "Stated Rate"), on the dates (the "_'Payment Dates) set forth on the attached Schedule " Ac~crt~al Date shall be added to A. The unpaid interest accruing from the date-ems principal on a semi annual basis on each August 1 and Febnlary 1 until Febnlary 1, .?~Q~• Any payments on this Note shall be applied first to accrued interest and then to the Principal Amount in respect of which such payment is made. 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 private debts and shall be made by check or draft made payable to the Owner and mailed to .the Owner at it postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority to aid in financing a "project," as defined in Minnesota Statutes, § 469.174, of the Authority within and for the benefitl V the City Bella Tax Increment Financing District ("District"). N 's R f r 'v R v ~.,~,.,Pr rla+Pr~ ac of 2003 (thy `Contract"1,. THE NOTE IS NOT A DEBT OF THE AUTHORITYITHER ITHE A HO ITYDTHE THE STATE OF MINNESOTA (THE STATE ), AND NE CITY OF RICHFIELD, THE STATE NOR SHALLOTHE NOTE BE PAYABLE OUT~OF SHALL BE LIABLE ON THE NOTE, ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOVV.~~ JBD-212452v4 RC125-209 A-1 Each payment on this Note due on any ~Sked Payment Date is payable solely from and only to the extent that the Authority shall have received as of such wed Payment Date "Available Tax Increment=" For the purpose of this Note, "Available Tax Increment" means the met=eit Tax Increment (as defined in t_he Contractl received within the six-month period immediately preceding the ~^-~--~°~+ -'°*° avment Dat after first deducting therefrom an amount equal to 25% of the entire Est=ex~e~ Tax Increment received during such period with respect to the Property. FIAT p7.trn~••° ••~ u TAT + ~ i~D ~,~ +a~n 'ari-az 1, ~ +1. ,7 + .This Note shall terminate upon the earlier of (i) the date when the Owner has been fully reimbursed according to the terms hereof; et={~i}-FAbr •^--• ', to of i nce of the Refina_n ing Note s dec ribed in the Contract or (iii) F Marv 1 20 The Authority's obligation to make any payments under this Note may be suspended and the Authority shall have no obligation and incur no liability to make any payments hereunder immediately upon the occurrence of an "Event of Default" under the De~+elepxtex~ Contract subject to the notice and cure provisions therein, and limited only to defaults which relate to the . Redevelopment Propertv as defined in the C'nntrart Nntwithet~nit;nn antitllin~ to the contrary herein n0 naVment of principal nr intPraet .:.;il t,o .,, a + +L ~~ aaa w u1au~. ul lu lV ~ ~ ccrual Date n interest hall not accrue on the principal amo n of h' Note prior to he Accrual Date This Note shall not be payable from or constitute a chazge 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 then only to the extent and in the manner herein specified. The Owner 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, boazd 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 shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of the Redevelopment, but only with prior written notice thereof to the Authority. The Authority also agrees to consent to transfer or assignment upon being furnished securities investment letters and/or indemnities satisfactory to the Authority. The Owner may also, without prior notice to or consent of the Authority transfer or assign the Note or the right to receive payments under the Note to a wholly-owned subsidiary of the Owner. This Note may be prepaid in full at any time at the option of the Authority; but only with the consent of the Owner, and may also be prepaid at the request of the Owner, but in either JBD-212452v4 RC125-209 A-2 35 instance only if the Authority first determines that sufficient t~eFe~e~ Tax Increment is or will be generated to permit such prepayment weer lr~cc than the outstanditl~~'~"^'~al a"d accrued interest, and the parties agree upon the actual prepayment amount. This Note is issued pursuant to proper action of the Authority by Resolution and the Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority or the City of Richfield outstanding on the date hereof ando the Cdat of Richfield to exaeeed any constitutional not cause the indebtedness of the Authority Ty or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures o tithe Chairperson ands xtive Director of the Authority and has caused this Note to be date Chairperson Executive Director JBD-212452v4 RC125-209 A-3 JBD-212452v4 RC125-209 A-4 SCHEDULE A 3' [To be completed prior to execution of Note] EXHIBIT B CERTIFICATE OF COMPLETION The undersigned hereby certifies that GRAMERCY CORPORATION, a Minnesota corporation has fully and completely complied with its obligations under Article IV of that ~~ , 2002 between document entitled "Contract for Private Development, dated THE HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF RICHFIELD and GRANIERCY CORPORATION, with respect to construction of the Minimum Improvements located on the tract of land described in the attached Schedule A In accordance with the requirements of such document and is released and forever dischazged from its obligations to construction the Minimum Improvements under such above-referenced Article on the above- referenced tract. DATED: , 2002 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Chairperson sy Its Executive Director SJB-226220v1 B-1 RC 125-209 [Describe Lands covered by Certificate] SJB-226220v1 RC125-209 Redevelopment Property Legal Description. [Need to show HRA Lands] B-2 Schedule A 39 EXHIBIT C Redevelopment Property Legal Description. [Need to show HRA Lands) 1. Those parts of vacated Lake View Walk and Auto Lane as dedica~ nnesota, which Shores", according to the recorded plat thereof, Hennepin County, accrued by reason of said vacation to Lot 1, Block 1, GRAMERCY PARK RICHFIELD, according to the recorded plat thereof, said Hennepin County. 2. Lot 17, Block 3, "Fairwood Shores", according to the plataz of Titleseineand forusaid Minnesota on file or of record in the office of the Registr County, together with those parts of va f said vacat one and vacated Lake Shore Drive which accrued to said Lot 17 by reason o 3. Lots 1, 2 and 3, Block 2, "Fairwood Shores", according to the recoCirlelPlacerand Hennepin County, Minnesota, together with those parts of vacated vacated Graham Avenue, which accrued to said Lots 1, 2 and 3 by reason of .said vacation. 4. Lots 1 and 2, Block 3, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane and Graham Avenue which accrued to said Lots 1 and 2 by reason of said vacation. 5. Lot 16, Block 3, "Fairwood Shores", according to the plat thereof on file and of State of the Office of the Registraz o~ of vac ted Auto Lane whi h accruedeto said~Lot 16 by Minnesota, together with that p reason of said vacation. 6. Lot 18, Block 3, "Fairwood Shores", according to the recorded plat thereof, .Hennepin County, Minnesota, together with those parts of vacated Auto Lane, vacated Lake View Walk and vacated Lake Shore Drive which accrued to said Lot 18 by reason of said vacation. 7. Lots 3, 4 and 5, Block 3, Fairwood Shores according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane, vacated Lake View Walk, vacated Graham Avenue and vacated Circle Place, which accrued to said Lots 3, 4 and 5 by reason of said vacation. g, Lots 1 and 2, Block 1; Lots 11 to 17 inclusive, Block 1, Fairwood Shores, according to the plat thereof. on file or of record in the_Office of the Registraz of Titles in and for the County of Hennepin, State of Minnesota, together with Lots 3, 4 and 18; Lot 19, except that part of the North 5.0 feet thereof lying East of a li~ 3 O ~ SW ~ of thetNortheast the North line of said Lot from a point thereon distan sJB-22622ov1 C-1 RC125-209 corner of said Lot; and except that part of the Easterly 10.0 feet of said Lot lying Northeasterly of a line drawn Northwesterly at right angles to the Easterly line of said Lot from a point thereon distant 52.0 feet South of the Northeast corner thereof, Block 1, Fairwood Shores, according to the plat thereof on file or of record in the Office of the Registrar of Titles in and for said County, together with those parts of vacated Circle Place which accrued to said Lots 11, 12, 13 and 14 by reason of said vacations. 9. That part of vacated Auto Lane, as dedicated in the plat of "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, lying southeasterly of the southeasterly line of Lot 15, Block 3, said "Fairwood Shores", and its northeasterly extension, which accrued to Lots 6, 7 and 8, said Block 3, by reason of said vacation. 10. That part of Lake View Walk, as dedicated in the plat of " Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, which accrued to Lot 6, Block 3, said "Fairwood Shores", by reason of said vacation. 11. That part of vacated Graham Avenue and vacated Circle Place, as dedicated in the plat of "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, lying easterly of a line beginning at the most easterly corner of Lot 6, Block 3, said "Fairwood Shores", to the southwesterly corner of Lot 11, Block 1, said "Falrwood Shores" and its extensions northerly and southerly excepting that part previously vacated, described as follows: That part of Circle Place as platted in "Fairwood Shores".described as follows: Beginning at a point in the southerly line of Lot 14, .Block 1, "Fairwood Shores" therein distant 47 feet westerly from the southeast corner of said Lot 14; thence southerly, parallel with the easterly line of said Lot 14 and its southerly extension, a distance of 26 feet; thence westerly, parallel with the southerly line of said Lot 14 and its westerly extension, to the intersection with a line drawn from the most easterly corner of Lot 6, Block 3, to the southwesterly corner of Lot 11, Block 1,"Fairwood Shores"; thence northeasterly, along said line so drawn, to the southwesterly corner of said Lot 11; thence easterly, along the southerly line of Lots 11,12, 13 and 14, Block 1, "Fairwood Shores" to the point of beginning, which accrued to Lot 6, Block 3 and Lot 10, Block 1, said "Fairwood Shores", by reason of said vacation. 12. That part of vacated Circle Place as platted in "Fairwood Shores" according to the recorded plat thereof, Hennepin County, Minnesota, described as follows: Beginning at a point in the southerly line of Lot 14, Block 1, "Fairwood Shores" therein distant 47 feet westerly from the southeast corner of said Lot 14; thence southerly, parallel with the easterly line of said Lot 14 and its southerly extension, a distance of 26 feet; thence westerly, parallel with the southerly line of said Lot l4 and its westerly extension, to the intersection with a line drawn from the most easterly corner of Lot 6, Block 3, to the southwesterly corner of Lot 11, Block 1,"Falrwood Shores"; thence northeasterly, along said line so drawn, to the SJB-226220v1 RC125-209 C-2 ~~ southwesterly corner of said Lot 11; thence easterly, along the southerly line of Lots 11,12, 13 and 14, Block 1, "Fairwood Shores" to the point of beginning, which accrued to Lot 10, Block 1, said "Fairwood Shores", by reason of said vacation. NOTE: Numerical designations are for convenience only, and do not constitute an integral part of the legal descriptions. s1B-226220v1 C-3 RC 125-209 AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY 21, 2003 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ~ ~i'S, \ _ 1 ~ ~_r_~ ~, ~ ITEM FOR HRA CONSIDERATION: Consideration of a Family Affordable Housing Program in cooperation with the Metropolitan Council I. RECOMMENDED ACTION: By Motion: Recommend that the City Council support the implementation of the Metropolitan Council Family Affordable Housing Program. III. BACKGROUND ~ The Metropolitan Council is requesting to administer a scattered site housing rent assistance program in Richfield. The name of the program is "Family Affordable Housing Program (FAHP)". The program administrator (the Metropolitan Council) would acquire, remodel, maintain, rent, and manage up to ten single-family homes. (No HRA or City funds would be used for these activities.) To begin, a Cooperation Agreement between the City of Richfield and the Metropolitan Council must be approved for the following reasons: • The Richfield Housing and Redevelopment Authority (HRA) is the public entity that administers housing programs in Richfield. State statute allows only one entity except by agreement. 012103 Metropolitan • FAHP agrees to make a payment in lieu of taxes of ten percent of shelter rent instead of paying the full property tax. The payment in lieu would be distributed to all taxing jurisdictions- as other property tax payments are. In the past three years, two Richfield citizen committees: the Affordable Housing Task Force and the Vision- 2020 Housing and Neighborhood Group have. affirmed the desire for additional affordable housing that serves persons with incomes less than 50 percent of the metropolitan area median. If possible, "Holtman Units" (dedicated public housing monies from a desegregation court case in Minneapolis) were encouraged to be sought in Richfield as one of the housing program recommendations. The Metropolitan Council in the attached fact sheets, has prepared answers to many questions: • What cities are implementing the program? • How will units be managed? • What are the criteria for site and tenant selection? A program representative will be available to answer questions during the HRA meeting, III. BASIS OF RECOMMENDATION A. POLICY • The HRA is Richfield's housing authority and therefore, by statute, has a responsibility to evaluate whether the program- should be administered in Richfield... • .The HRA is a leader in providing affordable housing: the Section 8 program, single family and': multifamily rehabilitation programs, and affordable housing on scattered sites are examples ofi these. efforts. • Opportunities for additional cost effective programs are continually sought. • In :matters of housing programs and policies, the HRA provides advice and recommendations to the City Council • In 1979, the HRA facilitated a five unit privately owned scattered site single family rental :housing program that has proven successful and still exists today. B. CRITICAL ISSUES • No program comes without a cost. The federal government and Metropolitan Council .pay for the housing program administration and capital costs of acquisition/rehabilitation. However, the payment in lieu of taxes reduces the City's portion of property tax revenue received to approximately 55 percent of the expected amount. • Cities contacted by staff that have similar programs have reported success with the program houses blending into neighborhoods. FAHP evaluates potential tenants carefully. They are seeking tenants who will be good neighbors. Professional management has demonstrated quick and- efficient resolution of issues. According to the Hennepin County Assessor, approximately ten percent of Richfield's single family homes are rental (1,000 homes). C. FINANCIAL • The Metropolitan Council: and HUQ provide the resources to acquire, rehabilitate, and manage the properties. • Per property the estimated cost (loss) of the City portion of property tax revenue per year is $492. • For ten properties, the estimated cost (loss) of annual- property tax revenue is $4,920. The annual property tax distribution is: 42% to Hennepin County, 34% to City,. 17% to school, and' 7% to other jurisdictions. • Other taxing jurisdictions. (county; school, other) would collectively lose $954 per property or $9,549 for ten properties each year.: • .The annual amount was based. on, the 2002 property tax schedule and a home valued at $180,000 with anon-homestead property tax.. D. LEGAL Legal counsel has reviewed- the cooperative agreement for compliance with statute. _ Section 8 staff reviewed the tenant lease and found it to be well- written and strong on tenant obligations. IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA could choose to not make a recommendation or recommend against the program. V. ATTACHMENTS • Graph of estimated 2003 Richfield Tax Capacity Rates • Family Affordable Housing Program fact sheets Sample Cooperation Agreementand Resolution for consideration by City .Council VI. PRINCIPAL PARTIES EXPECTED AT MEETING Cecile Bedor, Metropolitan Council c~ H ~ ~~ o c~ o p~ ~~ +~.~ ~U Cd Cd ..„ c~ ~~ W ~,.~ c •~ ~ -- a~ ~~ ~~ O +~ o ~~ ~~ o ~ O ~ o A~ ~~ /~ Metropolitan Council ~~ Improve regional competitu~eness bt agiobai economy FAMILY AFFORDABLE HOUSING PROGRAM FACT SHEET What is the Family Affordable Housing Program? The Metropolitan Council's Family Affordable Housing Program (FAHP) is an affordable family rental housing program. This is one tool municipalities can utilize to help address the critical and escalating need for more affordable, work force housing units. Where will the FAHP be implemented? The Council is partnering with several municipalities throughout Ramsey, Anoka and Hennepin Counties. Each of the following Hennepin County cities have approved the purchase of up to 20 units: Minnetonka, Edina, Eden Prairie, Golden Valley, and Maple Grove. In Anoka County, Coon Rapids has agreed to 20; Blaine has agreed to 15. In Ramsey County, Roseville has agreed to 15; Shoreview and Plymouth have both agreed to 10. How many units will the Council acquire? The Council has committed to the goal of completing 150 units. What types of units will the Council acquire? The Council will focus its acquisition efforts on single family homes, town homes, and condominiums. (While the Council is focusing its efforts on these structure types, the Council may elect to buy residential shuctures containing up to eight units.) Unit sizes will range from two to five bedrooms. How will the FAHP be implemented? In order to avoid the unnecessary displacement of area residents, the Council will focus on the acquisition of residential properties for sale by their owner-occupants. The Council has engaged a real estate professional to assist in the identification of potential properties. The Council has established unit location criteria to serve as a guide to the Council's acquisition efforts. In addition, the Council will not buy properties in census tracks that are "impacted" by race or poverty. The Council has and will continue to meet with city staff. We want to coordinate our efforts to ensure, for example, that properties are not acquired within city-identified redevelopment zones. Who will own the FAHP units? ' Census tracks may not have a poverty population of 12.2% or more, nor may they have minority population greater that 28.68%. The Council will identify, and subsequently notify municipalities, of any ineligible census tracks. Family Affordable Housing Program Fact Sheet October 2002 Page 1 of 3 The Council will be responsible for and directly own all FAHP units. W/to wilt manage the FAHP units? The Council has retained Cedar Management, a professional property management firm, to provide day-to-day property management services. Additionally, Council staff will provide professional asset management to ensure all units are managed and maintained according to Council standards and are long-term community and neighborhood assets. What are the Council's property management standards?2 In addition to providing quality affordable rental housing, the Council wants to ensure that it's housing is a strong asset to communities. It is our goal that neighbors and other community members cannot ascertain by either the maintenance of the housing, nor by the behavior of residents, that the home is affordable rental housing. Rather, we will ensure that it is another spoke in the wheel of quality stable housing that helps provide a quality, stable community. We will be responsive and responsible to our residents and communities in ensuring that this goal is continually realized. Who will live in the FAHP Units? Up to 30% of all FAHP units in each municipality may be leased based upon local preferences. To that end the Council will notify fanulies on the waiting lists maintained by the Council for each respective city. These units are designated "Incentive Units". The Council opened and closed the FAHP waiting list on July 26, 2001 in order to develop an Incentive Units waiting list. Over 2,000 families made inquiries that day and over 1,100 have submitted formal pre- applications. Since the acquisition and operation of the FAHP units will be funded by federal funds made available under the Holtman consent decree, 70% of the units will be made available to Miruieapolis families whose rental units were demolished under the consent decree or otherwise are affected by the consent decree. What are the Council's resident selection criteria? It is the Council's goal to provide quality, stable, secure homes for families in the region. To that end, resident selection criteria will be applied (to both Incentive and Replacement units) that provides residents with ample opportunities to succeed and be stable, positive members of residential communities. Witt support services be provided to residents? The Council is in the process of examining various social service delivery options to determine the most cost-effective and impactful method of providing services if needed. Our ultimate goal is to help residents maintain their housing for as long as they desire, by ensuring resident access to community support services. 2 All housing will be operated and maintained according to the Council's Low Rent Public Housing Policies & Procedures. Family Affordable Housing Program Fact Sheet October 2002 Page 2 of 3 Will property taxes be paid on Council-owned property? State law exempts public housing units from all real and personal property taxes of cities, counties and the state. Rather, the Council is required to pay PILOT, Payment in Lieu of Taxes. Under State law, PILOT payments generally equal five percent of gross rents charged to a family. However, as provided for under federal law, Council PILOT payments for FAHP units will be 10% of gross rents charged to each family. Payments are made annually to the county in which the property is located. The county is then responsible for distributing that payment to the various taxing authorities. Why should cities participate in tl:e FAHP? Cities participating in FAHP will realize many benefits: - Quality improvements will be made to all properties purchased by the Council, thus improving the quality of the overall housing stock. - FAHP units will help obtain the affordable rental housing goals detailed in comprehensive plans. - At least thirty percent of all FAHP units will be leased to respective city residents. - Participation in FAHP may help cities gain additional points on transportation funding applications submitted to the Council for consideration. - Cities will be provided with long-term, quality, work-force housing for families. - City residents will not be displaced as the Council's goal is to only purchase vacant units or units for sale by their owner occupant. - FAHP units will be rental housing that is professionally managed, with resident screening that will help ensure residents have a successful rental experience. - The Council will work with city staff to ensure acquisition efforts do not interfere with redevelopment plans or opportunities. Family Affordable Housing Program Fact Sheet October 2002 Page 3 of 3 Metropolitan Council Improve regional competitiveness in a global economy Family Affordable Housing Program (FAHP) Unit Location Criteria Attachment A Units being acquired by the Metropolitan Council for the FAHP will adhere to the following location criteria as a general guide for development. These criteria are established to focus efforts of the Metropolitan Council staff and its agents in placing the FAHP units in participating communities within Anoka, Hennepin, and Ramsey counties. 1) All units created under the FAHP will be located outside of Minority and Poverty Concentrated Areas as prescribed in the Holtman Consent Decree, unless specifically agreed upon by all parties to the Consent Decree. 2) To the extent practicable, FAHP units will be located within '/4 mile of public transportation opportunities and/or in communities with local public transportation services. These opportunities may consist of bus stops or routes, local dial-a-ride programs, transit hubs, LRT stations, or other public transportation programs as may be provided by the local or regional jurisdiction. 3) To the extent practicable, FAHP units will be located near educational opportunities for children. These opportunities may include public or private elementary, middle or senior high schools, preschools; or other specialized learning centers that may benefit residents of the units. When possible, units should be .located within walking distance of educational facilities. 4) To the .extent practicable,: FAHP units will be .located within walking distance of daycare facilities, including commercial or licensed-home daycare providers. 5) To the extent practicable, FAHP units will be located in communities experiencing entry- level job growth and to the extent possible near employment opportunities for residents. 6) To the extent practicable, FAHP units will be located within'/Z mile of neighborhood services such as grocery or convenience stores. 7) To the extent practicable, FAHP units will be located within two miles of regional shopping and services, including grocery, banking, medical, dental, clothing and other services. 8) To the extent practicable; FAHP units will be located near social service centers and job training centers. 9) To the extent practicable, FAHP units will be located near recreational facilities such as parks, trail ways, bike paths, ball fields, tennis courts, community centers, playgrounds, ice rinks; etc. Metropolitan Council Improve regional competiti»eness in a global economy FAMILY AFFORDABLE HOUSING PROGRAM General Summary of Resident Selection Criteria Attachment B Goals The goals of the resident selection criteria detailed below are as follows: - provide quality, stable, secure homes for families in the region - provide an opportunity for families with low-incomes to enhance their positive rental history - ensure residents of Council-owned housing are stable, positive members of residential communities - ensure Council-owned property is an asset to all communities by operating such housing in a responsible and responsive manner. Criteria Generally, the history of an applicant's conduct must demonstrate capability of compliance with the terms of the Council's lease. A. Rental History Applicants must have the following to be considered for admission; - positive rental history of at least 12 consecutive months within the previous two years - history of timely, full payment of rents - history of cooperation with management and other residents - history of abiding by all other lease terms - history of no property damage B. Criminal History Applicants must have no history of the following, subject to the Council's Basis for Admission Denial: - criminal record ofdrug-related activity - criminal record related to physical violence to persons or destruction of property - criminal record that would adversely affect the health, safety or welfare of other residents and/or neighbors C. Income - At least 40% of families admitted during the Council's fiscal year must have incomes that do not exceed 30% of area median income. - The balance of residents admitted during the Council's fiscal year must have incomes that do not exceed 80% of median income. If the Council receives unfavorable information about an applicant, the Council will consider the time, nature, and extent of the applicant's conduct and factors that might indicate a reasonable probability of favorable future conduct or financial prospects. Background Checks In order to achieve the goals set out above, the Council will: - Confirm sources of income - Confirm rental history by contacting previous landlords and obtaining unlawful detainer reports - Order credit reports to identify other previous addresses and subsequently contacting other identified landlords, if any - Order criminal background checks to review criminal history of applicants and/or household members March 2002 Attachment B Metropolitan Council Improve regional competitiveness in a global economy FAMILY AFFORDABLE HOUSING PROGRAM Summary of Basis for Admission Denial A record of any of the following may be sufficient cause for the Council to deny admission: 1. Failure to pay rightful financial obligations, including rent and utilities. 2. Unpaid rent or other amounts owed to the Council or to another PHA in connection with Public Housing or Section 8 Programs. 3. Inability to comply with the Council's lease without supportive services from Council staff that would require an alteration in the fundamental nature of the Family Affordable Housing Program; 4. Disturbance of other residents, neighbors, or property management company staff; 5. History, or current violation, of the terms and conditions of any lease or occupancy .agreement. 6. Destruction of property, or living or housekeeping habits at prior residences that may adversely affect the health, safety or welfare of other residents or neighbors; 7. A history of, or current record of, criminal or other activity. involving physical violence to persons or property by the applicant or any member of the applicant's household, or a history of other criminal acts, conduct or behavior by the applicant or any member of the applicant's household which would adversely affect the health, safety or welfare of other residents, neighbors, Council employees, or property management agent employees; 8. A history of, or current record of, drug-related criminal activity by the applicant, any member of the applicant's household, or a guest or other person under the applicant's control. 9. A history of, or current conduct by a household member apparently caused by substance abuse of alcohol or drugs, that would be a violation of the terms of the dwelling lease, and an indication that such conduct is likely to continue and adversely affect the residential environment. 10. Any conviction for manufacturing or producing methamphetamine (speed) shall be cause for lifetime denial; 11. Lifetime registration under a state sex offender registration program shall be cause for a lifetime denial; 12. Any conviction for arson shall be cause for lifetime denial; FAMILY AFFORDABLE HOUSMG PROGRAM Page 1 of 2 Summary of Basis for Admission Denial March 2002 13. Fraud in connection with any Federal housing assistance program; 14. Eviction from housing or termination from residential programs (taking into account the date and circumstances); _ 15. Eviction from assisted housing within three years of the time the application is being processed for any drug related criminal activity; 16. Eviction from assisted housing within five years of the time the application is being processed for any drug related criminal activity involving the illegal manufacture, sale, distribution or possession with intent to manufacture, sell, distribute a controlled substance as defined in Section 102 of the Controlled Substances Act, 21 U.S.C. 802; 17. Any misrepresentation relevant to the application process; 18. Failure to cooperate with the Council or its management agent in completing the application process; 19. Failure to provide written accurate, current, objective and verifiable information regarding rental history, income, assets, family composition, childcare, drug or alcohol abuse, illegal drug use, or criminal activity; 20. Threatening, abusive or violent conduct towards a Council employee, management agent employee, other applicant, resident or neighbor. FAMILY AFFORDABLE HOUSING PROGRAM ~ a~~ ` ~, Summary of Basis for Admission Deniat March 2002 COOPERATION AGREEMENT Metropolitan Council Family Affordable Housing Program THIS COOPERATION AGREEMENT ("Agreement") is entered into by and between the Metropolitan Council (the "Metropolitan Council") and the City Richfield, State of Minnesota (the "Municipality"). WHEREAS, the Metropolitan Council is a public corporation and political subdivision of the State of Minnesota and is authorized by Minnesota Statutes section 473.195 to exercise the functions, rights, duties, privileges, immunities and limitations as are provided for housing and redevelopment authorities created for municipalities; and WHEREAS, pursuant to Minnesota Statutes section 473.195 the provisions of Minnesota Statutes sections 469.001 to 469.047 and of all other laws relating to housing and redevelopment authorities apply to the Metropolitan Council when the Metropolitan Council is functioning as an authority; and WHEREAS, in conjunction with the implementation of its Family Affordable Housing Program ("FAHP"), the .Metropolitan Council proposes to acquire within the corporate limits of the Municipality on a scattered-site basis a limited number of residential properties ("FAHP Units") and will focus its acquisition efforts on housing structures containing four units or less; and WHEREAS, the governing body of the Municipality has given its prior approval regarding the Metropolitan Council's proposed housing initiative pursuant to. Minnesota Statutes section 473.195, subdivision 1. WITNESSETH: In consideration of the mutual covenants in this Agreement, the Municipality and the Metropolitan Council agree as follows: 1. Whenever used in this Agreement: (a) The term "FAHP Units" shall mean up to ten (10) residential housing units, as defined in Title 42 United States Code section 1437a(b)(1), developed or acquired by the Metropolitan Council in connection with its Family Affordable Housing Program with financial assistance of the United States of America acting through the Secretary of Housing and Urban Development (the "Government") and located on a scattered-site basis within the corporate limits of the Municipality. (b) The term "Taxing Body" or "Taxing Bodies" shall mean the State of Minnesota and any and all political subdivisions or taxing units thereof in which FAHP Units are situated and which would have authority to assess or levy real or personal property taxes or to certify such taxes to a taxing body or public officer to be levied for its use and benefit with respect to the FAHP Units if the units were not exempt from taxation. (c) The term "Shelter Rent" shall mean the total rentals of a FAHP Unit charged to tenants during the preceding calendar year, excluding any charges for utilities and special Page 1 of 4 Pages services such as heat, water, electricity, gas, sewage disposal or garbage removal, and excluding all other income of the FAHP Unit. 2. The Metropolitan Council shall endeavor to: (a) Secure a contract or contracts with the Government for capital grants and annual contributions for the FAHP Units; and (b) Acquire or develop and administer the FAHP Units. 3. The Metropolitan Council and the Municipality agree: " (a) Pursuant to Minnesota Statutes section 469.040, and applicable federal laws and regulations, including Title 24 Code of Federal Regulations section 941.201(d), each FAHP Unit is exempt from all real and personal property taxes levied or imposed by any Taxing Body for so long as either: (i) the FAHP Unit is owned by a public body or governmental agency and is used for housing as defined in Title 42 United States Code section 1437a(b)(1); (ii) any contract between the Metropolitan Council and the Government in connection with the FAHP Unit remains in force and effect; or (iii) any bonds issued in connection with the FAHP Unit or any monies due to the Government in connection with .the FAHP Unit remain unpaid, whichever period is the longest (the "Exemption Period"). (b) During the Exemption Period, the Municipality, on behalf of all Taxing Bodies, agrees that it will not levy or impose any real or personal property taxes upon a FAHP Unit or upon the Metropolitan Council with respect to the FAHP Unit. (c) During the Exemption Period, the Metropolitan Council shall make, or cause to be made, payments in lieu of taxes ("Payments in Lieu of Taxes") in payment for the public services and facilities furnished from time to time without other cost or charge for or with respect to each FAHP Unit. Each Payment in Lieu of Taxes shall be made at the time when real property taxes on a FAHP Unit would be paid if the FAHP Unit were subject to taxation, and shall be in an amount equal to ten percent (10%) of the Shelter Rent charged with respect to the FAHP Unit during the preceding calendar year. A Payment in Lieu of Taxes for a FAHP Unit may not exceed the amount which would be payable in taxes if the FAHP Unit were not exempt from real or personal property taxes. (d) Pursuant to Minnesota Statutes section 469.040, subdivision 3, the County within which a FAHP Unit is located shall distribute the Payments in Lieu of Taxes among the Taxing Bodies in the proportion which the real property taxes which would have been paid to each Taxing Body for such year if the FAHP Unit were not exempt from taxation bears to the total real property taxes which would have been paid to all of the Taxing Bodies for such year if the FAHP Unit were not exempt from taxation; provided, however, that no payment for any year shall be made to any Taxing Body in excess of the amount of the real property taxes which would have been paid to such Taxing Body for such year if the FAHP Unit were not exempt from taxation. Page 2 of 4 Pages 4. During the Exemption Period, the Municipality, or other appropriate Taxing Body, without - cost or charge to the Metropolitan Council or the tenants of a FAHP Unit (other than the Payments in Lieu of Taxes) shall: (a) Furnish or cause to be furnished to the Metropolitan Council and the tenants of the FAHP Unit public services and facilities of the same character and to the same extent as are furnished from time to time without cost or charge to other dwellings and inhabitants in the Municipality; (b) Accept grants of easements necessary for the development of FAHP Units; and (c) Cooperate with the. Metropolitan Council by such other lawful action or ways as the Municipality or other Taxing Body and the Metropolitan Council may find necessary in connection with the development and administration of the FAHP Units. 5. In respect to the initial development of FAHP Units, the Municipality further agrees, on behalf of all Taxing Bodies, that within a reasonable time after .receipt of a written request from the Metropolitan Council: (a) When required by city ordinance, it will accept the dedication of all interior streets, roads, alleys and adjacent sidewalks within the area of FAHP Units, together with all storm and sanitary sewer mains in such dedicated areas, after the Metropolitan Council, at its own expense, has completed the grading, improvement, paving and installation thereof in accordance with specifications acceptable to the Municipality or other Taxing Body; (b) When required by city ordinance, it will accept necessary dedications of land for, and will grade, improve, pave and provide sidewalks for, all streets bounding FAHP Units or necessary to provide adequate access to the FAHP Units (in consideration for which the Metropolitan Council shall pay to the Municipality or other Taxing Body such amount as are or could be assessed against the FAHP Unit sites for such work if such sites were privately owned); and (c) It will provide, or cause to be provided, water mains, and storm and sanitary sewer mains, leading to FAHP Units and serving the streets bounding the .FAHP Units (in consideration for which the Metropolitan Council shall pay to the Municipality or other Taxing Body such amount as would be assessed against the FAHP Unit sites for such work if such sites were privately owned). 6. If by reason of the Municipality's or other Taxing Body's failure or refusal to furnish or cause to be furnished any public services or facilities which it has agreed to furnish or cause to be furnished to the Metropolitan Council or to the tenants of any FAHP Unit, the Metropolitan Council incurs any expense to obtain such services or facilities; then the Metropolitan Council may deduct the amount of such expense from any Payments in Lieu of Taxes due or to become due to the Municipality or other Taxing Body in respect to any FAHP Unit or any other housing units owned or operated by the Metropolitan Council. 7. No Cooperation Agreement previously entered into between the Municipality and the Metropolitan Council, if any, shall be construed to apply to any FAHP Units covered by this Agreement. Page 3 of 4 Pager 8. No member of the governing body or any other public official of the Municipality or other Taxing Body who exercises any responsibilities or functions with respect to the any FAHP Unit during her or his tenure or for one year thereafter shall have any interest, direct or indirect, in any FAHP Unit or any contracts in connection with any FAHP Unit. If any such governing body member or such other public official of a Taxing Body involuntarily acquires or had acquired prior to the beginning of her or his tenure any such interest, she or he shall immediately disclose such interest to the Metropolitan Council. 9. During the Exemption Period, this Agreement shall not be abrogated, changed or modified without the consent of the Government. The privileges and obligations of the Municipality and other Taxing Bodies shall remain in full force and effect with respect .to the FAHP Units so long as the beneficial title to the FAHP Units is held by the Metropolitan Council or by any other public body or governmental agency, including the Government, authorized by law to engage in the development or administration of housing as defined in Title 42 United States Code section 1437a(b)(1). If at any time the beneficial title to, or possession of, a FAHP Unit is held by such other public body or governmental agency, including the Government, the provisions of this Agreement shall inure to the benefit of and may be enforced by, such other pubic body or governmental agency, including the Government. 10. The obligations of the parties under this Agreement shall apply to each FAHP Unit. IN WITNESS WHEREOF the authorized representatives of the Municipality and the Metropolitan Council have respectively signed this Agreement. This Agreement is effective on the date when both parties' authorized representatives have signed this Agreement. CITY OF By Its Date and By Its Date METROPOLITAN COUNCIL By Lee Sheehy Regional Administrator Date This document drafted by: Office of the General Counsel Metropolitan Council Mears Park Centre 230 East Fifth Street Saint Paul, Minnesota 55101 (651) 602-1706 FAHPCOOPFORM 04/'13/01 Page 4 of 4 Pages• SAMPLE CITY RESOLUTION RESOLUTION NO. CITY OF RICHFIELD COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION APPROVING A COOPERATION AGREEMENT WITH THE METROPOLITAN COUNCIL FOR THE ACQUISITION AND OPERATION OF RESIDENTIAL PROPERTIES IN CONJUNCTION WITH THE METROPOLITAN COUNCIL'S FAMILY AFFORDABLE HOUSING PROGRAM AND AUTHORIZING THE MAYOR AND CITY ADMINISTRATOR TO EXECUTE THE COOPERATION AGREEMENT ON BEHALF OF THE CITY. WHEREAS, the Metropolitan Council is authorized by Minnesota Statutes section 473.195 to exercise the functions, rights, duties, privileges, immunities and limitations as are provided for housing and redevelopment authorities created for municipalities; and WHEREAS, in conjunction with the implementation of its Family Affordable Housing Program ("FAHP"), the Metropolitan Council proposes to acquire and administer residential properties ("FAHP Units") within the boundaries of the City, up to thirty percent of which units will be made available to eligible residents of the City; and WHEREAS, Minnesota Statutes section 473.195, subdivision 1 requires the Metropolitan Council to obtain the approval of the governing body of the City before the Metropolitan Council may - implement its proposed housing initiative within the boundaries of the City; and WHEREAS, federal law requires the Metropolitan Council to enter into a Cooperation Agreement with the City in connection with the proposed acquisition and operation of the FAHP Units. NOW THEREFORE, BE IT RESOLVED by the City Council that pursuant to Minnesota Statutes section 473.195 the City Council gives its prior approval to the Metropolitan Council's proposal to acquire and administer up to ten (10) FAHP Units. within the boundaries of the City; and BE IT FUTHER RESOLVED, by the City Council that the Mayor and the City Administrator are authorized to execute the Cooperation Agreement on behalf of the City. Adopted this _ day of , 2002. Mayor ATTEST: City Administrator (SEAL) FAHPCINRES 10/27/00 AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY 21, 2003 4E 6 REPORT PREPARED BY: CHERYL KRUMHOLZ, ADMIN. ASSISTANT NAME, TITLE REPORT PRESENTER: SAMANTHA ORDUNO, EXECUTIVE DIRECTOR c NAME, TITLE REVIEWED BY EXECUTIVE DIRECTOR: ~ //~~ r ~ ~~~ _ / ~ti ITEM FOR HRA CONSIDERATION: Consideration of designating Steven L. Devich, Administrative Services Director, as the Acting Executive Director of-the HRA for 2003. I. RECOMMENDED ACTION: By Motion: Designate Steven L. Devich, Administrative .Services Director, as the Actin. Executive Director of the HRA for 2003. II. BACKGROUND On January 2, 2003, the City Council appointed the Administrative Services Director to serve as the Acting City Manager in the absence of the City Manager. Since the City Manager also serves as the Executive Director of the HRA, it is recommended that the Administrative Services Director, Steven L. Devich, be designated by the HRA as the Acting Executive Director of the HRA to serve in that capacity during the absence of the Executive Director. III. BASIS OF RECOMMENDATION A. POLICY • Designation of an Acting Executive Director is a normal business action of the HRA similar to the designation of depositories and the official newspaper. 0121 actingexecdirector • The Administrative Services Director has been designated as the Acting Executive Director in the past. • The Administrative Services Director serves as the Acting City Manager, filling other similar responsibilities for the City Manager in the Manager's absence. B. CRITICAL ISSUES • It is necessary to designate a person to serve as the Acting Executive Director to ensure continuation of HRA operations during an absence of the Executive Director. C. FINANCIAL • N/A D. LEGAL • N/A/ IV. ALTERNATIVE RECOMMENDATION(S~ • Defer this designation to another HRA meeting. V. ATTACPIlVIENTS • None. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None. AGENDA ITEM # REPORT # J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY 21, 2003 4D REPORT PREPARED BY: DEBORAH GUIHER, DEPUTY CITY CLERK NAME, TITLE REPORT PRESENTER: DEPARTMENT DIlZECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ~/ GIBBS, CITY CLERK ITEM FOR HRA CONSIDERATION: Consideration of resolution designating an official newspaper for 2003. RECOMMENDED ACTION: By Motion:. Approve the .resolution designating for 2003-the Richfield Sun-Current as the official newspaper and the Minneapolis Star Tribune as the second official newspaper for the City of Richfield. II. BACKGROUND The Richfield Sun-Current, published by Minnesota Sun Publications, has been the City's official newspaper for many years. Attached is a copy of a letter from Minnesota Sun Publications requesting that they be designated the official newspaper for the City of Richfield for 2003. The 2003 advertising rate structure for legal notices is as follows: _ 1 Column width $14.30 per inch $7.15 per subsequent inch There are 11 lines per inch. The 2002 rate was the same as the rate proposed for 2003. 0121 Newspaper - For 2003, the Minneapolis Star Tribune should be considered as the second official newspaper to be used only in rare situations where more timely publication dates are required. The 2003. advertising rate structure-for legal notices in the Sunday and week day, metro and statewide, issues is $4.15 per line. The 2002 rate was $3.78 per line. III. BASIS OF RECOMMENDATION- A. POLICY • The Charter of the City of Richfield requires in Section 1.3.01 thereof -that the City Council annually designate an official newspaper for the City. • The Sun-Current has expressed an interest in continuing to serve as the official newspaper of the City. • The- Sun-Current has served well as the official paper for many years. • The Sun-Current is delivered to nearly all residences in the City. B. CRITICAL ISSUES • The designation must be made at the first meeting of the new year. C. FINANCIAL • The cost for the official publications is reasonable. D. LEGAL • A newspaper must be designated each year by the City for publication of all official and legal City business. IV. ALTERNATNE RECOMMENDATION(S~ • Not make a designation and request the City Clerk's office to check into using -another publication. V. ATTACFIlVIENTS • Resolution Letter from Minnesota Sun Publications Fax from Star Tribune VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None HRA RESOLUTION NO. RESOLUTION DESIGNATING AN OFFICIAL NEWSPAPER FOR 2003 WHEREAS, the Charter of the City of Richfield requires in Section 13.01 thereof that the City Council annually designate an official newspaper for the City. NOW, THEREFORE, BE IT RESOLVED that the Richfield Sun-Current is designated the official legal- newspaper for the Richfield Housing and Redevelopment Authority for 2003 for all publications required to be published therein. BE IT FURTHER.. RESOLVEQ that the Minneapolis Star Tribune is designated as the Richfield Housing and Redevelopment Authority's- secondary official newspaper for 2003. Adopted. by the Housing: and Redevelopment Authority in and for of the-City of Richfield, Minnesota this 21st day of January; 2003. ATTEST: Thomas E. Harms, Chair Michael Sandahl, Secretary ~~'~ newspapers December 13, 2002 City of Richfield City Council 6700 Portland Avenue Richfield, MN 55423-2599 Dear City Council Members: The Richfield Sun Current would like to be considered for designation as the legal newspaper for the City of Richfield for the year 2003. Ail published legal notices are posted on our website (www.mnsun.com) at no additional charge. This is an enhancement to the local news coverage already available on the Internet and will broad- en the readership of your legal notices. Qne of the main benefits of publishing. your legal notices with: the Sun Current is our home delivery. Sun Ne~,vspapcrs has become the primary source of community news in the suburbs. Your notices in our paper have the best chance of being.seen and read. We would like to continue working with you, therefore, we will not be making a rate change for the coming year. The rate structure for iegais effective January 1, 2003 will be: 1 column width: $14.30 per inch for first insertion $ 7.15 per inch for subsequent insertions There are 11 lines per inch Two notarized affidavits on each of your publications will be provided with no additional charge. The deadline for regular length notices is 2:00 pm the Wednesday prior to publication. E-mailing the legal notices is an efficient and accurate way of getting the notices to us. The e-mail address for the legal department is legals@mnsunpub.com. We still accept notices on disk, faxed or through the mail. If you require more information #o make your decision, please contact me or Meridel Hedblom, our Legal Representative, at 952-392-6801. Thank you for considering the Sun Current as the official newspaper for the City of Richfield in 2003. We appreciate the opportunity to serve the needs of your community. Sincerely, J~ Jeffrey Coolman Vice President of Sales and General fl"onager 10911 t'.1I.LEI" VrE«" Roan ®EnES PR.~IRIE ®~IL~`~~ESOT~ 553 ®952-829-0797 ®E~.z: 952-9~1-3588 425 Portland Avenue Minneapolis, Minnesota 55~ E313 0002 Star7F~ur~:~ December 11, 2002 The Legal Notice rate beg:n:ing January 1, 2003 will be $4.15 per line. Thank You.. C~.t~ ~,e``.E" Cheri Rongiien Supervisor Classified Call Cc rater Supervisor AGENDA ITEM # 4 C REPORT # 4 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY Z 1, 2003 REPORT PREPARED BY: CHRIS REGIS, FINANCE MANAGER NAME, TITLE REPORT PRESENTER: CHRIS~REGIS, FINANCE MANAGER DEPARTMENT DIRECTOR REVIEW: /~ / ~~~ ~ ~ ~~ 1 ~ r SIGNATURE ` ~' REVIEWED BY EXECUTIVE DIRECTOR: ~ ` ITEM FOR HRA CONSIDERATION: Consideration of resolutions designating official depositories for the Housing and Redevelo ment Authorit for 2003, includin the a royal of collateral. I. RECOMMENDED ACTION: By Motion: Adopt the. attached resolutions designating official depositories, with the understandEng that the HRA could not invest in any of the depositories beyond the evel of insurance coverage of the aledaed collateral. II. BACKGROUND N/A III. BASIS OF RECOMMENDATION A. POLICY • In accordance with Minnesota Statutes Section 118A.01 - 118A.06, the HRA of Richfield must designate financial institutions annually. The institutions must pledge the collateral over and above the amount of federal insurance, as public depositories. 0121 depositories M&I Marshall &Illsley Bank, pledging $1,800,000 of collateral, has fulfilled this requirement and should be considered as a depository for the HRA's vendor accounts and all savings deposits in excess of $100,000. The HRA must also designate annually, certain savings and loan associations and banks as official depositories for investment of certain HRA funds. With approval of these official depositories, the. HRA will be able to invest funds in these institutions, not exceeding the federal insurance of $100,000. Finally, a designation must be made for certain financial institutions as depositories for the: investment of HRA funds for 2003. These institutions, such as investment brokerage firms, offer government securities in the manner required by law. These financial institutions include M&I Marshall & Illsley Bank, Dain Rauscher, Wells Fargo Brokerage Services, .Morgan Stanley Dean Witter, Legg Mason, Morgan Keegan and N.A. Investment Services, Inc. B. CRITICAL ISSUES • N/A C. FINANCIAL • N/A D. LEGAL • The HRA is required by Minnesota Statute 118A.01 - 118A.06, to designate as a depository of funds, insured banks or thrift institutions. Any collateral so deposited is accompanied by an assignment pledged to the HRA in the amount specified. in the attached resolutions. IV. ALTERNATNE RECOMMENDATIONS} • The HRA could solicit other financial institutions for official depositories, but past relationships with the depositories recommended have proven satisfactory for the City. V. ATTACHMENTS • Resolution designating the M&I Marshall &Illsley Bank a depository of funds of the HRA of Richfield .for the year 2003 and approving collateral. • Resolution designating certain savings and loan associations and banks as depositories for the investment of .HRA funds in 2003. • Resolution designating certain financial institutions as depositories for the investment of HRA of Richfield funds in 2003. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None RESOLUTION NO. RESOLUTION DESIGNATING THE M&I MARSHALL & ILLSLEY BANK A DEPOSITORY OF-FUNDS OF THE HRA OF RICHFIELD FOR THE YEAR 2003 AND APPROVING COLLATERAL BE IT RESOLVED, by the Housing and- Redevelopment Authority of Richfield as follows: That, in accordance with Minnesota Statutes, Section 118A.01- 118A.06, M&I Marshall & Illsley Bank be, and hereby is designated a depository of the funds of the Housing and Redevelopment of Richfield, subject to modification and revocation at any time by said Housing and Redevelopment Authority, and subject to the following terms and conditions: The said depository shall not be required to give bonds or other securities for such deposits provided that the total sum thereof shall not at any time exceed in any depository the sums for which its deposits are insured under the Acts of Congress of the United States relating to insurance of bank: deposits; but that in case such. deposits in any such depository shall at any time exceed- such insured sum, said depository shall immediately furnish .bonds or other security for such excess according to law, approved by the Housing and Redevelopment Authority of Richfield. That said depository shall pay on demand all deposits therein; and shall pay all time deposits, at or after the end of the period for which the same shall be deposited, on demand. BE IT FURTHER RESOLVED, that there shall be maintained a general account in which shall be deposited all monies. The following officers or their facsimile signatures shall sign checks on this account; THOMAS E. HARMS, CHAIR SAMANTHA ORDUNO, .EXECUTIVE DIRECTOR BE IT FURTHER RESOLVED, that collateral in the amount of $1,800,000 in the form of a Bank Deposit Guaranty .Bond., deposited for safekeeping at the Kansas Bankers Surety Company, is hereby approved. Passed by the City Council of the City of Richfield, Minnesota this 21 st day of January, 2003. ATTEST: Thomas E. Harms, Chair Michael Sandahl, Secretary RESOLUTION NO. RESOLUTION DESIGNATING CERTAIN SAVING AND LOAN ASSOCIATIONS AND BANKS AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2003 BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield, Minnesota: WHEREAS, pursuant to Minnesota Statutes, Sections 118A.01 - 118A.06, municipal funds may be deposited in any Savings and Loan Association or Bank which has its deposits insured by the Federal Savings and Loan Insurance Corporation (FSLIC) or the Federal Deposit Insurance Corporation (FDIC); and WHEREAS, the amount of said deposits may not exceed the FSLIC/FDIC insurance covering such deposits which insurance amount is presently $100,000; and WHEREAS, the deposit of Housing and Redevelopment Authority funds in Savings and Loan Associations and Banks would provide greater flexibility in the Housing and Redevelopment Authority's investment program and maximize interest income thereon. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield, Minnesota, as follows: 1. It is hereby found and determined that it is in the best interest of the proper management of Housing and- Redevelopment Authority funds that certain Savings and Loan Association and-Banks be designated as additional depositories for Housing and Redevelopment Authority funds for 20Q3. 2. It is further found and determined that the purpose of such depository designation is to facilitate the proper and advantageous investments of Housing and Redevelopment Authority funds and that such designation is not exclusive nor does it preclude the deposit of any Housing and Redevelopment Authority funds in other officially designated depositories of the Housing and: Redevelopment Authority. 3. The Treasurer and- Finance Manager are hereby authorized to deposit Housing and Redevelopment Authority funds in various depositories up to the amount of $100,000, or such other amount as may be subsequently permitted- by law, such deposits to be in the form of demand accounts for Public Unit Savings- Certificates: purchased by the City, payable to the Housing and Redevelopment Authority of Richfield on the signatures of the Housing and Redevelopment Authority Treasurer or Finance Manager. Such deposits maybe made and .withdrawn from time to time by the Treasurer or Finance Manager as his best judgment and the interests of the Housing and Redevelopment Authority dictates. 4. The investment of funds and the reporting thereof pursuant to this resolution shall be conducted in accordance with established policies of the Housing and Redevelopment Authority .regarding the :investment of Housing and Redevelopment Authority funds. Adopted by the Housing and Redevelopment Authority of Richfield, Minnesota this 21st day of January, 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary RESOLUTION NO. RESOLUTION DESIGNATING CERTAIN FINANCIAL INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2003 WHEREAS, the Housing and Redevelopment Authority of Richfield has money which is available for investment; and WHEREAS, different financial institutions offer different rates of return on investments; and WHEREAS, the Housing and Redevelopment Authority of Richfield shall purchase U. S. Treasury Bills, U. S. Treasury Notes and other such government securities in the manner required by law from the institution offering the highest rate to the Housing and Redevelopment Authority of Richfield providing greater flexibility in the investment program and maximize interest income thereon. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield, Minnesota, in accordance with Minnesota Statutes, Sections 118A.01 - 118A.06, as follows: 1. It is hereby found and determined that it is in the. best interest of the proper management of Housing and Redevelopment Authority of Richfield: funds that certain financial institutions be designated as additional depositories for Housing and Redevelopment Authority of Richfield funds for 2003. 2. The following financial institutions designated as depositories for the Housing and Redevelopment Authority of Richfield funds: Dain Rauscher, Inca Morgan Stanley Dean Witter Wells Fargo Brokerage Services Morgan Keegan. N.A. Investment Services, .Inc. Legg Mason 3. The Treasurer and finance Manager are hereby authorized to deposit-the Housing and Redevelopment Authority of Richfield funds in any or all of the depositories herein designated. Such deposits may be made and withdrawn. from time to time by the Treasurer or Finance Manager's judgment and: as the interest of the Housing and Redevelopment Authority of Richfield dictates. 4. The investment of funds and the reporting thereof pursuant to this resolution shall be conducted in accordance with established policies regarding the investment of these funds. Adopted by the Housing and Redevelopment Authority of Richfield, Minnesota this 21st day of January, 2003. ATTEST: Thomas 'E. Harms, Chair Michael Sandahl, Secretary AGENDA ITEM # 4B REPORT # Z J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY 21, 2003 REPORT PREPARED BY: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATU2E REVIEWED BY EXECUTIVE DIRECTOR: ~ ~~~~ ~ ~ ITEM FOR HRA CONSIDERATION: Consideration of a resolution authorizing purchase of 6945 Clinton Avenue for a rehabilitation project under the New Home Program. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the purchase of real property located at 6945 Clinton Avenue for rehabilitation under the New Home Program. II. BACKGROUND The subject property is a 1,356 sq. ft. cape cod home that is in good structural condition, but requires many necessary code repairs, updates to finishes, and treatment of storm water issues and lead based paint. The owner of the property did not keep it up over time, and Environmental Health Division staff have made several visits. The owner, now moved into an assisted living facility, is also significantly behind in property tax payments. Given that the owner is unable to complete any repairs; and that property tax foreclosure would keep the property vacant even longer, the property is a good candidate for the Richfield Housing and Redevelopment Authority (HRA) to acquire for rehabilitation and sale to an income- qualified first-time buying family. The property was appraised at $115,000. 012103 6945 Clinton The HRA has redeveloped sites under the New Home Program with affordable housing for low income families for over 20 years. The U.S. Department of Housing and Urban Development (HUD). defines. low income for ownership housing. as at or below 80 percent of the median- income-for example. $48,950 annually for a family of three, per 2002 standards.. Homes developed under the New Home Program, whether remodeled or built new, are sold to buyers meeting that definition. Therefore, federal Community Development: Block Grant (CDBG) funds maybe used for the acquisition. The Hennepin Technical Center new and remodeled- - homes are examples. In order to fully utilize federal funding for acquisition, the City. must first purchase the property and subsequently transfer it to the HRA to rehabilitate and sell at the appropriate future time.. Af their January 28 2003 meeting, the City Council will consider a resolution authorizing purchase of the property and subsequent sale to the HRA. A public hearing and second reading of the transitory ordinance allowing conveyance to the HRA would be scheduled for February 11, 2003. The. City could acquire the property by the end of February pending title. work. Sale of the property to the H~RA could-occur by March 20::ifithe transitory ordinance is approved at the February 14 City Council -meeting. The HRA would. be responsible for any holding or maintenance costs incurred at the property after acquisition by the City; the New Home Program-has sufficienfi revenue for this:. Project for Pride in Living (PPL) a nonprofit builder/remodeler, is interested in partnering with-the HRA on this project. A contract with PPL will be brought before the HRA for consideration in February. III. BASIS OF RECOMMENDATION A. POLICY • The HRA can use CDBG funds for purposes of providing affordable housing to a low to moderate- income first-time buyers. To fully utilize federal dollars, the City must acquire the property and transfer the property to the HRA. The City willconsider the purchase on January 28, 2003. Staff is seeking an indication from. the HRA of their support for this project before. presentation to the -City Council. • The acquisition and disposition of the property are in conformance with the Comprehensive Plan. There is no change in land use. B. CRITICAL ISSJES • The -property is in need of repairs, is behind in property taxes, and is vacant. -Public Safety has sent violation notices to the property owner due o the property's long-standing neglect. • The property owner is interested in selling the property to the City/HRA rather than repairing and selling on their own. C. FINANCIAL • CDBG funds are available for the .acquisition of the property, which was appraised at $115,000. The rehabilitation can be covered by the proceeds of sale. Any funds generated that do not go towards the rehab would be returned to the New Home budget. D. LEGAL • The sale from the City to the HRA will require a City Council public hearing and second reading of a transitory ordinance scheduled for February 11, 2003. IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA can choose not to acquire the property. V. ATTACHMENTS • Resolution • Exterior pictures VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6945 CLINTON AVENUE FOR THE NEW HOME PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the New Home Program, said property being described as: Lot 9, Block 3, D.L. Tate's Addition; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area ~of operation; and WHEREAS, the property meets program requirements for acquisition; and WHEREAS, the HRA has negotiated a purchase price of $115,000 based on an independent appraisal; and WHEREAS, funds are available for acquisition. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: The purchase price for 6945 Clinton Avenue is approved at $115,000. 2. The Chairperson and Executive Director are authorized to execute a Purchase Agreement and other documents to allow purchase for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota on this 21st day of January 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary Attachment Al AGENDA ITEM # 4A REPORT # 2 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING .TANUARY 21, 2003 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~/~ 4~ REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of an Apartment Remodeling Program expenditure at 7544 Oliver Avenue. I. RECOMMENDED ACTION: By Motion: Authorize an Apartment Remodeling Program expenditure of $5,000 at 7544 Oliver Avenue. III. BACKGROUND ~ In 1997, the Housing and Redevelopment Authority (HRA) received $575,000 from the Metropolitan Council's Livable Communities grants to develop a pilot "Apartment Remodeling Program" patterned after the successful Richfield Rediscovered/Transformation Program. There were three elements: Deferred loans. $222,824 in HRA loans (from Metropolitan Council grant) leveraged $720,789 in improvements in 16 apartment buildings (159 apartment units) with nine different apartment owners. $75,695 in improvements to Hampton Place (now known as Village Green) at 78th Street near Chicago Avenue. $148,008 in improvements to 76th Street and Oliver/Penn apartments (including property acquisition, parking lot improvements that blend the 012103 7544 Oliver properties together, new housing units at 7544 Oliver Avenue and rehabilitation of existing housing). At 76th Street and Oliver Avenue was a northwest corner parcel (known as parcel #7) originally taken as part of 76th Street road widening improvements. The owner, Ray Meyer, developed afour-plex on the remainder parcel. During the Best Buy right of way improvements, a portion of the parcel was taken for more improvements. Simultaneously, the HRA was acquiring parcel #15 from Hennepin County and the City to convey to the adjoining property owner, Floyd Sjostrand, 7539 Penn Avenue as part of the Apartment Remodeling Program and to provide extra parking. The interests and claims to Ray Meyer have now been finalized during a district court condemnation process as he lost some of the extra parking he hoped to realize. The negotiated settlement requires that the HRA pay $5,000 from the Livable Communities Grant balance of $6,400 for costs of acquisition related to parcel #7. The $5,000 is required because of the agreed settlement. III. BASIS OF RECOMMENDATION A. POLICY The Apartment Remodeling Program has sufficient funds available for $5,000 in additional project acquisition costs. The District court is requiring the HRA to specifically act on the $5,000 - settlement amount. B. CRITICAL ISSUES A negotiated settlement has been arrived at and time is of the essence. C. FINANCIAL Funds are available. D. LEGAL • Legal Counsel played an integral part in the negotiated settlement. IV. ALTERNATIVE RECOMMENDATION(S~ Delay consideration of the settlement. However, the City .also has to consider settlement actions and it was desirous of the HRA to review actions first. V. ATTACHMENTS Site Plan VI. PRINCIPAL PARTIES EXPECTED AT MEETING N/A Z i ~ ~ \iJ ~.. V t O ~ I Z C W ~ = JC, ~ W C t C C C - L I ~( i ~~-- - ^1 ~ ~ l_ ` ^ v O~ ..~-- :;, ' - = ~. G C ~~ ~ ` ~O ~ J ~ W L N Q = Q ~ ~~ W W ~ ONi a C ~ - m e c ~ I ~; o NYC ~ ~ ~ L..~ s. ~ ~ ~ 1 -------'~---- ~ --i ~ !. I , ti i I I ~ , I ~I _ ~ I ~ I I I I W ~I --------' I U ~ -------- I ~ I .-~ I Q ~ I ~ I ~ .II ~~ ~ i~ ~ ~-' 1 IW a --------~ la a' I is I ~ I Z Z ' No ~ ~ i I ~^ O'~ ~ ~ 'n OO o~ j I /.~ I ~~^~ i f ~ ^e I NV i I I I I I I I I I I I ' I I I //'._~/ ~ ~~ x L. ( - H trJ `W N lD ti m 3 n :' i H W W N ~. ti m . ~ ~,3 -- ~ I O ~ I ~ i --.1 Q I I _J -I I I --- . ,_~ NB PENN AVE u~_ ~-0C v> O>~ UQ~ W ~ 2 W ~ a g s 6 ~fE e~_. Ee S~i ~~~ ~~~~a ~x: ~~= .~ $e's AGENDA ITEM # REPORT # ~- STAFF REPORT r HOUSING AND REDEVELOPMENT AUTHORITY MEETING JANUARY 21, 2003 1 REPORT PREPARED $Y: CHERYL KRUMHOLZ, ADMIN. ASSISTANT NAME, TITLE SAMANTHA ORDUNO, EXECUTNE REPORT PRESENTER: DIRECTOR NAME, TITLE REVIEWED BY EXECUTIVE DIRECTOR: ~ ~ ^ Pf_ ~~ ~ ~~~ ~ ITEM FOR HRA CONSIDERATION: Consideration of the election of officers for the Housing and Redevelopment Authority for 2003. I. RECOMMENDED ACTION: By Motion: Elect officers for the Richfield .Housing and Redevelo ment Authorit #or 2003. II. BACKGROUND ~ The bylaws of the Richfield Housing and Redevelopment provide that the HRA hold an annual meeting in January. The bylaws further provide that the Chair, Vice Chair and Secretary of the HRA be elected at this meeting. Officers for 2002 were: Thomas Harms, Chair Joan Helmberger, Vice Chair Mike Sandahl, Secretary III. BASIS OF RECOMMENDATION _~ A. POLICY The bylaws of the Richfield Housing and Redevelopment provide that the HRA hold an annual meeting in January. 0121 officers • The bylaws further provide that the Chair, Vice Chair and Secretary of the HRA be elected at this meeting. B. CRITICAL ISSUES • The bylaws of the Richfield Housing and Redevelopment require that an election of officers for the HRA be held at the annual meeting in January. C. FINANCIAL • N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Do not hold the election. However, this would be in contradiction of the HRA bylaws. V. ATTACHMENTS • None. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None.