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10-21-02 agendaCITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, OCTOBER 21, 2002 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order Approval of minutes of (1) Special Concurrent Meeting of HRA, City Council and Planning Commission of September 16, 2002; (2) Regular HRA Meeting of September 16, 2002; and (3) Special Concurrent Worksession of HRA, City Council and Planning Commission of September 16, 2002. 1. Opportunity for citizens to address the HRA on items not on the agenda Notes: 2. HRA approval of agenda 3. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved,. the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may request that an item be removed .from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items fisted on the Consent Calendar are recommended for approval. A. Consideration of approval of resolution authorizing the issuance of Certificates of Completion to KEY-LAND HOMES for 7241 Second Avenue and 6929 Queen Avenue, Spencer Dahl & Rachelle A. Reynolds for 6856 Park Avenue, Twin Cities Habitat for Humanity for 7039 Fifth Avenue, and Affordable Suburban Housing, Inc. for 6444 Clinton Avenue S.R. No. 36 B. Consideration of approval of resolution authorizing the use of fees for services provided under the Housing and Redevelopment Authority Programs S.R. No. 37 C. Consideration of approval of proposed adjustment of payment standard for the Section 8 rent assistance program S.R. No. 38 D. Consideration of approval of proposal for services with LHB Engineers and Architects for the planning and design of a new home at 6819 Oliver Avenue S.R. No. 39 E. Consideration of approval of resolution calling for a public hearing eliminating parcels from the Interchange West and Lyndale Gateway Tax Increment Financing District within the Richfield Redevelopment Project Area S.R. No. 40 F. Consideration of approval of resolution requesting the City Council to call a public hearing on the Modification fo the Redevelopment Plan for the Richfield Redevelopment Project Area and the establishment of the Lyndale Gateway West Tax Increment Financing District for December 10, 2002 S.R. No. 41 Notes: 4. Public hearing and consideration of resolution approving a Business Subsidy Agreement between the Housing and Redevelopment Authority and Gramercy Corporation for the City Bella project Staff Report No. 42 Notes: 5. Public hearing and consideration of resolution authorizing the sale of real property within City Bella: Lot 3, 4, 5, and 18, Block 3,, "Fairwood Shores", Hennepin County Staff .Report No. 43 Notes: 6. Consideration of appropriate uses for the Candlewood outlot site Staff Report No. 44 Notes: 7. Consideration of resolution authorizing the refunding of the $5,075,000 G.O. Taxable Tax Increment bonds, Series 1996, dated December 1, 1996, with the $2,495,000 Taxable G.O. Tax Increment Refunding Bonds, Series 20026 Staff Report No. 45 Notes: 8. Consideration of resolution authorizing the refunding of the $1,570,000 Taxable Variable Rate Demand G.O. bonds, Series 1999, dated. November 1, 1999, with the $1,065,000 Taxable G.O. Tax Increment Refunding bonds, Series 2002C Staff Report No. 46 Notes: 9. Executive Director report 10. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the Administrative Services Director at 612-861-9702. AGENDA ITEM # 8 REPORT # ~~ STAFF REPORT • r HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: CHRIS REGIS, FINANCE MANAGER NAME; TITLE REPORT PRESENTER: CHRIS REGIS, FINANCE MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~ , S/GNATUXE REVIEWED BY CITY MANAGER: ©` ITEM FOR COUNCIL CONSIDERATION: Adoption of a resolution authorizing $1,065,000 refunding bond sale of the $1,570,000 Taxable Variable Rate Demand G.O. Bonds, Series 1999, dated November 1, 1999.. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the refunding of the $1,570,000 Taxable Variable Rate Demand G.O. Bonds, Series 1999, Dated November 1, 1999,. with the $1,065,000 Taxable G.O. Tax- Increment Refunding Bonds, Series 200X. III. BACKGROUND In 1999, the City issued the $1,570,000 Taxable Variable Rate Demand G.O. Bonds, Series 1999, to fund the Richfield Rediscovered New Construction program. The goal of the program is to remove substandard and obsolete housing and develop new single family homes that have desirable features that are current in today's market. A second function of the bond issue was to provide funds for the Transformation Loan Program. This program provides zero interest loans for large, value-added remodeling projects to qualified City of Richfield residents. The loans are recorded as second mortgage liens against the property and are for 30-year terms. If the 10212002RefundingBonds1.065HRA property is sold prior to the expiration of the 30-year term, the loan amount is due and payable to the Richfield HRA. If the property is held for the entire 30-year term, then at the end of that term the loan is forgiven. The amount of planned funding for the program is $200,000. The bond's payment structure was such that interest is paid on the bonds based on a weekly variable rate, payable on the first business day of the month. Principal on the bonds was not scheduled to be paid until final maturity of the bonds in 2019. Consequently, with interest rates at historical lows, staff has requested Ehlers & Associates, Inc. to review this bond issue to determine if refunding and converting to a fixed rate and a conventional repayment schedule was feasible. III. BASIS OF RECOMMENDATION A. POLICY • N/A B. CRITICAL ISSUES • The sale of the refunding bonds at the same time as the $2,490,000 Taxable G.O. Tax Increment Refunding Bonds will allow efficiencies in the issuance. C. FINANCIAL • The Richfield Rediscovered II Program fund has approximately $750,000.00 of cash available to contribute towards the refunding of the bonds. • Staff is recommending a contribution of $550,000 towards the current refunding. This will provide $200,000 for the Transformation Loan Program. • The $200,000 will be the final funds provided for the program unless a new funding source can be found. There are presently about 40 households expressing interest in this program. • The lesser contribution will result in an additional $110,500 in interest cost over the life of the refunding issue. • On the basis of Ehlers & Associates, Inc. review, it appears that the current interest rate climate would make it feasible to refund the bond issue and convert to a fixed rate. The current structure of the bonds is based on monthly interest payments based on a weekly variable rate. Refunding the bonds at a fixed rate would allow the City to take advantage of the record low rates. Sources of principal and interest payments will be paid from the following: 0 15% of annual tax increment from Pre-1999 Richfield Rediscovered Tax Increment Districts. 0 90% of annual tax increment from the Post-1999 Richfield Rediscovered Tax Increment District. o If the two above sources are not sufficient for the annual debt service, Housing Trust funds will be used to satisfy any remaining annual debt service. • The maturity date of the new refunding issue will be 2017 as compared to 2019 for the current outstanding issue. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Make a $750,000 contribution to the bond refunding, and forgo funding the Transformation Loan Program. This will result in $110,500 less in interest costs as compared to the lesser contribution. • Disregard the current refunding option, continue to retire the bonded debt as presently scheduled, and forego the projected savings. V. ATTACHMENTS • Resolution Providing for the Sale of $1,065,000 Taxable G.O. Tax Increment Refunding Bonds, Series 200X. • Bond Sale Report attached to HRA Staff Report No. 45. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Sid Inman, Ehlers & Associates, Inc. HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF TAX INCREMENT PLEDGE AGREEMENTS WITH THE CITY OF RICHFIELD RELATING TO $2,495,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2002B AND $1,065,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2002C WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") has established the Richfield Redevelopment Project Area (the "Project Area"), and approved a RedevelopmentPlan (the "Project Plan") for the Project Area; and WHEREAS, the Project Area incorporates the Richfield Rediscovered Redevelopment Project Area and the ILN Redevelopment Project Area previously established by the HRA; .and WHEREAS, pursuant to authority conferred by Minnesota Statutes,. Section 469.178, and Minnesota Statutes, Chapter 475, the City has previously financed certain public redevelopment costs incurred by the HRA in the Project Area through the issuance of general obligation bonds of the City, specifically the $5,075,000 General Obligation Taxable Tax Increment Bonds, Series 1996 (the "Series 1996 Bonds") and the Taxable Variable Rate Demand General Obligation Bonds (Richfield Rediscovered Project) Series 1999 (the "Series 1999 Bonds"); and WHEREAS, pursuant to a Tax Increment Pledge Agreement between the City and HRA dated December 9, 1996 (the "Series 1996 Pledge Agreement"), the HRA pledged certain tax increments from certain tax increment financing districts in the Project Area to payment of principal and interest on the Series 1996 .Bonds; and pursuant to a Pledge Agreement dated November 1, 1999 (the "Series1999 Pledge Agreement"), the HRA pledged certain tax increments from certain tax increment financing districts in the Project Area to payment of principal and interest on the and the Series 1999 Bonds; and WHEREAS, the City and HRA have. proposed to refmance the Series 1996 Bonds by issuance of $2,495,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002B, and to refinance the Series 1999 Bonds by issuance of $1,065,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 200X, and hereinafter referred to collectively as the "Refunding Bonds"; and WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for the principal and interest on the Refunding Bonds; and SJB-222060v1 RC145-500 WHEREAS, the there has been presented to the HRA a form of Series 2002B Tax Increment Pledge Agreement between the HRA and the City and a form of Series 2002C Tax Increment Pledge Agreement between the HRA and the City, providing for the pledge of tax increments from specified tax increment districts to payment of principal and interest on the Refunding Bonds; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "Authority), as follows: 1. Upon awarding of the sale of the respective Refunding Bonds, the Chair and Secretary of the Authority are hereby authorized to execute and deliver the 2002B Tax Increment Pledge Agreement and the 2002C Tax Increment Pledge Agreement substantially in the forms on file with the City, providing for the pledge of tax increment for the payment of the principal of, premium, if any, and interest on, the Refunding Bonds. 2. This resolution shall be effective as of the date hereof. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this day of _ ,2002. Chair Attest: Secretary SJB-222060v1 RC145-500 TAX INCREMENT PLEDGE AGREEMENT SERIES 2002C by and between CITY OF RICHFIELD, MINNESOTA and THE HOUSINGAND REDEVELOPMENTAUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA THIS AGREEMENT is made and entered into on or as of the day of , 2002, by and between the City of Richfield, Minnesota (the "City"), and The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA"). WHEREAS, the HRA has established the Richfield Redevelopment Project Area (the "Project Area"), and approved a RedevelopmentPlan (the "Project Plan") for the Project Area, and WHEREAS, the Project Area incorporates. the Richfield Rediscovered Redevelopment Project Area and the ILN Redevelopment Project Area previously established by the HRA; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and Minnesota Statutes, Chapter 475, the City has previously financed certain public redevelopment costs incurred by the HRA in the Project Area through the issuance of general obligation bonds of the City, specifically the Taxable Variable Rate Demand General Obligation Bonds (Richfield RediscoveredProject) Series 1999 (the "Series 1999 Bonds"); and WHEREAS, pursuant to a Pledge Agreement between the City and HRA dated November 1, 1999 (the "Series 1999 Pledge- Agreement"), the HRA pledged certain tax increments from certain tax increment financing districts in the Project Area to payment of principal. and interest on the Series 1999 Bonds; and WHEREAS, the City and HRA have proposed to refmance the Series 1999 Bonds by issuance of $1,065,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002C (the "Refunding Bonds"); and WHEREAS, the HRA has agreed to pledge certain tax increments as further described herein to the City for the principal and interest on the Refunding Bonds maturing (or subject to mandatory sinking fund redemption, in the case of any term bonds) in the following. years and amounts and issued pursuant to Minnesota Statutes, Section 469.178: sJB-ZZZOSV~I RC 145-500 Year Amount Year Amount 2003 $ 95,000 2011 $ 70,000 2004 45,000 2012 75,000 2005 50,000 2013 75,000 2006 50,000 2014 80,000 2007 55,000 2015 90,000 2008 60,000 2016 95,000 2009 60,000 2017 100,000 2010 65,000 WHEREAS, pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, any agreement to pledge tax increment revenues must be made by written agreement by and between the HRA and the City and must be filed with the Taxpayer Services Division Manager of Hennepin County; NOW, THEREFORE, the City and the HRA mutually agree to the following: (1) The City will sell the Refunding Bonds. (2) The HRA hereby pledges to the payment of the principal_of and interest on the Refunding Bonds all Available Tax Increment (as hereafter defined) received by the HRA in an amount sufficient, to pay 105% of such principal and interest due on the Refunding Bonds from. time to time. The. term."Available Tax Increment" means (a) tax increments from the Richfield Rediscovered Project Area Tax Increment Financing District (the "RR TIF District"), and (b) the portion of tax increment revenues from the Grammercy, Urban Village, and Richfield Rediscovered Tax Increment Financing District Nos. A-1, B-1, A-2, B-2, A-3, B-3, A-4, B-4 and B-5 (the "Pooled Districts") that may be expended outside the boundaries of the Pooled Districts under Minnesota Statutes, Section 469.1763. (4) Not less than three (3) business days prior to each debt service payment date for the Refunding Bonds, there shall be transferred from the accounts for the RR TIF District and/or any Pooled District to the Debt Service Fund maintained by the City for the payment of the. Refunding Bonds, an amount which when taken together with amounts already on deposit in such Debt Service Fund, is equal to the principal of and interest on the Refunding Bonds to become due on the subject payment date. The Executive Director of the HRA may specify the district or districts from which payments will be made. Any Available Tax Increment in excess of 105% of the principal and interest due with respect to the Refunding Bonds on any payment date may be retained by the HRA in the respective accounts for the respective districts from which such tax increment is generated and applied to any public redevelopment costs of the Proj ect Area in accordance with law. (5) Without regard to anything in this Agreement to the contrary, Available Tax Increment shall be available to pay, on a parity basis, principal of and interest on both the Refunding Bonds and any other obligations issued by the City, HRA or any other public body to fmance public redevelopment costs paid or incurred by the HRA in the Project Area. The pledge of Available Tax Increment hereunder is subject to any prior pledges of such revenues to any outstanding contracts or obligations. (6) When the entire costs of the Project Area have been paid and all principal and interest on the Refunding Bonds and other obligations issued to finance the public redevelopment costs of the Project Area have been paid, and the City has been reimbursed from collections of tax increment from the relevant tax increment financing districts used to pay principal of and interest on the Refunding Bonds, then the HRA shall report such fact to the City Council of the City and the HRA shall submit a final statement of such payments. (7) An executed copy of this Agreement shall be filed with the Taxpayer Service Division Manager of County pursuant to the requirement contained in Minnesota Statutes, Section 469.178, Subdivision 2. (8) This Agreement supersedes in all respects the Series 1999 Pledge Agreement. IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly executed on their behalf and their seals to be hereunto affixed and such signatures and seals to be attested, as of the day and year first above written. ATTEST: City Manager CITY OF RICHFIELD, MINNESOTA By Mayor (SEAL) ATTEST: Secretary THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Chair (SEAL) STATE OF MINNESOTA COUNTY OF HENNEPIN TAXPAYER SERVICES DIVISION MANAGER'S CERTIFICATE I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a Tax Increment Pledge Agreement Series 2002C by and between the City of Richfield, Minnesota and the Richfield Housing and Redevelopment Authority dated 2002, relating to the City's $1,065,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 200X, has been filed in my office. WITNESS my hand and official seal this _ day of (SEAL) 2002. Taxpayer Services Division Manager's Hennepin County, Minnesota By Deputy AGENDA ITEM # 7 REPORT # !F5 ~~ STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: REPORT PRESENTER: CHRIS REGIS, FINANCE MANAGER NAME; TITLE CHRIS REGIS, FINANCE MANAGER TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ~'~ ITEM FOR COUNCIL CONSIDERATION: Adoption of a resolution authorizing $2,495,000 refunding bond sale of the $5,075,000 G.O. Taxable Tax Increment Bonds, Series 1996, dated December 1, 1996. I. RECOMMENDED ACTION: By Motion: Approve the- attached resolution authorizing the refunding of the $5,075,000 G.O. Taxable Tax Increment Bonds, Series 1996, dated December 1, 1996, with the $2,495,000 Taxable G.O. Tax Increment Refunding Bonds, Series 20026. II. BACKGROUND In 1996,. the City issued the $5,075,000 G.O. Taxable Tax Increment Bonds, Series 1996 for the purpose of financing various redevelopment and housing projects in the City. Tax increments from the Lyndale-Hub-Nicollet (LHN) and Interstate- Lyndale-Nicollet (ILN) supported debt service on these bonds. With the decertification of the LHN District, tax increments collected from the Interstate-Lyndale-Nicollet Tax Increment District will service the refunded debt. 10212002RefundingBonds2.4HRA With interest rates at historical lows, staff has requested Ehlers & Associates, Inc. to review this bond issue to determine if refunding was feasible at this time. Upon review of this bond issue, Ehlers & Associates, Inc. recommends undertaking a bond refunding to take advantage of the low interest rates. III. BASIS OF RECOMMENDATION A. POLICY • N/A B. CRITICAL ISSUES • The sale of the refunding bonds at the same time as the $1,065,000 Taxable G.O. Tax Increment Refunding Bonds will allow efficiencies in the issuance. C. FINANCIAL • On the basis of Ehlers & Associates, Inc. review, it appears that the current interest rate climate would make it feasible to refund the bond issue. • It is projected that at the current interest rates the refunding would save the City approximately $103,100 after fees are subtracted. • The True Interest Cost on the remaining principal of the current issue is approximately 6.8454%, while the True Interest Cost of the new refunding issue would be 5.4724%. • The principal and interest payments will be paid from tax increments collected from the ILN Tax Increment District. • The maturity date of the new refunding issue will be the same as the current outstanding issue. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION~S~ • Disregard the current refunding option, continue to retire the bonded debt as presently scheduled,. and forego the projected savings. V. ATTACFIlVIENTS • Resolution Providing for the Sale of $2,495,000 Taxable G.O. Tax Increment Refunding Bonds, Series 20026. • Bond Sale Report VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Sid Inman, Ehlers & Associates, Inc. BOND SALE REPORT $2,495,000* Taxable General Obligation Tax Increment Refunding Bonds, Series 20028 and $1,065,000* Taxable General Obligation Tax Increment Refunding Bonds, Series 2002C City of Richfield, Minnesota *(Amount Subject to Change on Sale Date} October 22, 2002 FREERS & ASSOCIATES I N C LEADERS IN PUBLIC FINANCE OVERVIEW This report describes the proposed plan for the City of Richfield, Minnesota (the "City") to issue $2,495,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002B (the "Series 2002BBonds") and $1,065,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002C (the "Series 2002C Bonds"),collectively referred as the "Obligations". This report has been prepared by Ehlers & Associates, Inc., in consultation with City Staffand bond counsel. This report deals with: • Purpose and components of the issues. • Structure. • Other considerations in issuing bonds. • Market conditions. • Issuing process. $2,495,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2002B PURPOSE The Series 2002B Bonds are being issued to refund the 1996 Bonds identified below pursuant to Minnesota Statutes, Chapters 469 and 475, to provide funds for the current refunding of the December 1, 2004 through December 1, 2012 maturities totaling $2,430,000 of the. City's outstanding $5,075,000 General Obligation Taxable Tax Increment Bonds, Series 1996 dated December 1, 1996 (the "Series 1996 G.O. Taxable Tax Increment Bonds"), as follows: Date of Maturities Principal Refunded Call Call Being Interest to be Issue Being Refunded Issue Date Price Refunded Rates Refunded $5,075,000 General 12/01/96 02/01/03 Par 2004 6.40% $ 200,000 Obligation Taxable 2005 6.50% 215,000 Tax Increment Bonds 2006 6.50% 230,000 Series 1996 2007 6.50% 245,000 2008 6.60% 265,000 2009 6.75% 285,000 2010 7.00% 305,000 2011 7.00% 330,000 2012 7.00% 355.000 Total $ 2,430,000 Page 1 The City will pay the scheduled principal amount of $185,000 and the interest payment of $87,758.75 due on February 1, 2003 for the Series 1996 G.O. Taxable Tax Increment Bonds. The proposed refunding requires a bond issue in the amount of $2,495,000. The projected debt service and flow of funds can be found in Exhibit 1 and the Sources and Uses are detailed in the attached Exhibit 2. STRUCTURE AND REPAYMENT The Series 2002B Bonds are general obligations of the City and as such aze secured by a pledge of the City's full faith, credit, and taxing powers. It is the intent of the City to pay principal and interest on the Series 2002B Bonds from tax increment revenues generated from the ILN Tax Increment District. Iftax increment revenues are insufficient to meet principal and interest on the Series 2002B Bonds, the City is required to levy ad valorem taxes without limit as to rate or amount on all taxable property in the City to make up the deficiency. The Series 2002B Bonds would be sold November 12, 2002 and be dated December 5, 2002. The first interest payment will be August 1, 2003, and semiannually thereafter. Principal will be due on February 1 in the years 2004 through 2012. We recommend that Series 2002B Bonds maturing February 1, 2011 and thereafter be subject to prepayment at the discretion of the City on February 1, 2010. Yage 2 X1,065,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2002C PURPQSE The Series 2002C Bonds are being issued to refund the City's outstanding variable rate bonds of 1999 identified below pursuant to Minnesota Statutes, Chapters 469 and 475, to provide funds for the current refunding of the November 1, 2019 maturity of $1,570,000 of the City's outstanding $1,570,000 Taxable Variable Rate Demand General Obligation Bonds (Richfield Rediscovered Project) Series 1999 dated date November 18,1999. It is the intent of the City to call these bonds on January 1, 2003. The proposed refunding requires a bond issue in the amomit of $1,065,000. The projected debt service and flow of funds can be found in Exhibit 3 and the Sources and Uses are detailed in the attached Exhibit 4. STRUCTURE AND REPAYMENT The Series 2002C Bonds are general obligations of the City and as such are secured by a pledge of the City's full faith, credit, and taxing powers. It is the intent of the City to pay principal and interest on the Bonds from tax increment revenues generated from the Richfield Rediscovered Tax Increment Financing Districts and the Housing Fund. If tax increment revenues are insufficient to meet principal and interest on the Series 2002C Bonds, the City is required to levy ad valorem taxes without limit as to rate or amount on all taxable property in the City to make up the deficiency. The Series 2002C Bonds would be sold November 12, 2002 and be dated December 5, 2002. The first interest payment will be February 1, 2003, and semiannually thereafter. Principal will be due on February 1 in the years 2003 through 2017. We recommend that Series 2002C Bonds maturing February 1, 2013 and thereafter be subject to prepayment at the discretion of the City on February 1, 2012. Page 3 PROVISIONS COMMON TO BOTH ISSUES Following is a summary of key factors in the fmance plan: • Both issues aze taxable obligations and, therefore, not subject to arbitrage rebate and reporting requirements and will not be designated as bank qualified. The issuance of the Bonds will not affect the City's annual limit on bank qualified bonds or bonds eligible for the smaller issuer exemption from arbitrage rebate These Bonds are taxable and, therefore, not exempt from State or Federal income taxes. Bidders on both issues may submit a bid which contains a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption. If the purchaser of the Bonds designates certain of the maturities as Term Bonds, subject to a mandatory call, the City will be responsible for providing a Notice of Call to holders of the Bonds at least 45 days prior to the call date. We can discuss with you the option of retaining a paying agent to provide the proper call notices to owners of the Bonds. Allowing potential purchasers the term bond option results in increased bidder interest in this issue and possible lower interest rates. • The Bonds will be global book entry with a bank designated as the paying agent. As "paperless"bonds, you will avoid the costs of bond printing and annual registrar charges. The Paying Agent will invoice you for the interest semiannually and on an annual basis for the principal coming due. You will be chazged only for paying agent/transfer agent services provided by the bank. • Moody's Investors Service will be asked to rate both issues. The City currently has an "Aa3" rating on its outstanding general obligation bonds. • New regulations of the Securities and Exchange Commission on the continuing disclosure of municipal securities apply to long-term securities with an aggregate principal amount of $1,000,000 or more. Because the aggregate amount of each issue is over $1,000,000 and the City has more than $10,000,000 in total municipal obligations outstanding, you will be obligated to comply with Full Continuing Disclosure requirements as required by pazagraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934. You will be required to provide certain financial information and operating data relating to the City annually and to provide notices of the occurrence of certain material events. The specific nature of the Undertaking, as well as the information to be contained in the notices of material events will be set forth in the Continuing Disclosure Certificate that you will enter into at the time of closing for this issue. Page 4 MARKET CONDITIONS The following graph shows the trends in the Bond Buyer's 20-Year G.O. Index (BBI) since 1993. Interest rates remain at near historic lows. 9 8.5 8 0 7.5 ~ c 7 v 6.5 L 6 a 5.5 is 5 4.5 I 4 TEN-YEAR BOND BUYER INDEX ~a~ - --_- ~ . - - ___ , ~ 93 94 95 96 97 98 99 00 01 02 I~ 1993-2002 L-- ®September 2002 Bond Buyer Index 4.78% Paga 5 ISSUING PROCESS Following is a tentative schedule for the steps in the issuing process. October 22, 2002 Week of October 28, 2002 City Council adopts resolutions calling for the sale of the Obligations Submit draft Official Statement and rating materials to Moody's Investors Service for credit rating aleck of October 28, 2002 Week of November 4, 2002 Week of November 4, 2002 November 12, 2002 December 5, 2002 (es~) Distrii~ute Official Statement Conference call with Moody's Investors Service Receive credit rating Bond sales Bond closings Your contacts at Ehlers & Associates will be: Financial Advisor: Sid Inman Financial Advisor: Rebecca Kurtz Analyst: Sandy Ludford Bond Sale Closing Coordinator: Connie Kuck Page 6 EXHIBIT 1 City of Richfield Proposed Current Refunding of $5, 075, 000 Taxable General Obligation Tax lncremenf Bonds, Series 92/9/1996 DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I FISCAL TOTAL 12/05!2002 - - _ _ 8/01/2003 - - 79,441.86 79,441.86 - 2/01i2004 210,000.00 3.200% 60,591.25 270,591.25 350,033.11 8/01/2004 - - 57,231.25 57,231.25 - 2/Ol/2005 235,000.00 3.950% 57,231.25 292,231.25 349,462.50 8101!2005 - - 52,590.00 52,590.00 - 2/Ol/2006 250,000.00 4.400% 52,590.00 302,590.00 355,180.00 8/01/2006 - - 47,090.00 47,090.00 - 2/0112007 260,000.00 4.600% 47,090.00 307,090.00 354,180.00 8/01 /2007 - - 41,110.00 41,110.00 - 2i01l2008 275,000.00 4.900% 41,!10.00 316,110.00 357,220.00 8/01/2008 - - 34,372.50 34,372.50 - 2/O7l2009 290,000.00 5.200% 34,372.50 324,372.50 358,745.1)0 8/01/2009 - - 26,832.50 26,832.50 - 2/01/2010 305,000.00 5.400% 26,832.50 331,832.50 358,665.00 8!01/2010 - - 18,597.50 18,597.50 - 2/Ol/2011 325,000.00 5.500% 18,597.50 343,597.50 362,195.00 8!01/2011 - - 9,660.00 9,660.00 - 2/01/2012 345,000.00 5.600% 9,660.00 354,660.00 364,320.00 Total 2,495,000.00 - .715,000.61 3,210,000.61 - YIELD STATISTICS Bond Year Dollars ................................................................................................................. $13,813.11 Average Life .......................................................................................................................... 5.536 Years Average Coupon ................................................................................................................... 5.1762460% Net Interest Cost (N!C) ..................................................................... ..................................... 5.4471842% True Interest Cost (T1C) .................................................................... .................................... 5.4723853% Bond Yield for Arbitrage Purposes .................................................... .................................... 5.1474064% Aft Inclusive Cost (AIC) ..................................................................... .................................... 5.7379468% IRS FORM 8038 Net Interest Cost ................................................................................................................... 5.1762460% Weighted Average Maturity ................................................................................................... 5.536 Years Ehlers & Associates File = RICHF/ELD.SF-0? xover of Ser 96 $5,075K GO Taxable Tax Jncr- SINGLE PURPOSE Public Finance 10/ 3/2002 4:29 PM EXHIBIT 2 City of Richfield Proposed Current Refunding of $5, 075, 000 Taxable General Obligation Tax Increment Bonds, Series 12/9/1996 SOURCES ~ USES Dated 12105!2002 Delivered 12/05/2002 SOURCES OF FUNDS Par Amount of Bonds ......................................................................... $2,495,000.00 TOTAL SOURCES ........................................................................:... $2,495,000.00 USES OF FUNDS Total Underwriter's Discount (1.500%) .............................................. 37,425.00 Costs of Issuance .............................................................................. 30,000.00 Deposit to Current Refunding Fund .................................................... 2,423,991.17 Rounding Amount .............................................................................. 3,583.83 TOTAL USES ...........:........................................................................ $2,495,000.00 Ehlers 8 Associates File = R/CHFIELD. SF-OJ xover of Ser 96 $5,075K GO Taxable Tax Incr- SINGLE PURP05E Public Finance 10/3/2002 4:29 PM EXHIBIT 3 City of Richfield $ 7, 065, 000 Taxable G.O. Tax Increment Refunding Bonds DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+1 FISCAL TOTAL 12/05!2002 _ _ 2/01/2003 95,000.00 3.900% 9,909.67 104,909.67 104 909 67 8/01/2003 - - 30,000.00 30,000.00 , . 2/01/2004 45,000.00 4.400% 30,000.00 75,000.00 105 000 00 8!01/2004 - - 29,010.00 29,010.00 , . - 2/D1/2005 50,000.00 4.900% 29,010.00 79,010.00 108 020 00 8/01/2005 - 27,785.00 27,785.00 , . - 2/Ol/2006 50,000.00 5.200% 27,785.00 77,785.00 105 570 00 8/01/2006 - - .26,485.00 26,485.00 , . 2/01/2007 55,000.00 5.600% 26,485.00 81,485.00 107 970 00 8/01/2007 - 24,945.00 24,945.00 , . 2/01/2008 60,000.00 5.600% 24,945.00 84,945.00 109 890 00 8!01/2008 - 23,265.00 23,265.00 , . - 2/01/2009 60,000.00 6.100% 23,265.00 83,265.00 106 530 00 8/01!2009 - 21,435.00 21,435.00 , . 2/01/2010 65,000.00 6.200% 21,435.00 86,435.00 107 870 00 8/01/2010 - - 19,420.00 19 420 00 , . - 2/01/2011 70,000.00 6.300% 19,420.00 , . 89,420.00 108 840 00 8/01/2011 - 17,215.00 77 215.00 , . 2!01!2012 75,000.00 6.400°10 17,215.00 , 92,215.00 109 430 00 8/01/2012 - - 14,815.00 14 815.00 , . 2/01/2013 75,000.00 6.600% 14,815.00 , 89,815.00 104 630 00 8/01/2013 - 12,340.00 12 340 00 , . 2/01/2014 80,000.00 6.600% 12,340.00 , . 92,340.00 104 680 00 8/01/2014 - 9,700.00 9 700.00 , . 2/01/2015 90,000.00 6.600% 9,700.00 , 99,700.00 109 400 00 8/01/2015 - 6,730.00 6,730.00 , . 2/01/2016 95,000.00 6.800% 6,730.00 101,730.00 108 460 00 8/O1/2016 - 3,500.00 3 500.00 , . 2/01/2017 100,000.00 7.000% 3,500.00 , 103,500.00 107,000.00 Total 1,065,000.00 - 543,199.67 1,608,199.67 _ YIELD STATISTICS Bond Year Dollars ............... ............. .. ....................................................................................... Average Life ........................ $8,375.67 .......................... ............................................................................ Average Coupon ...................... ... 7.864 Years . .......................................................... .......... ......................... 6.4854500% Net Interest Cost (NIC) .:................... . . ........ ............................................................................. True Interest Cost (TIC) .......................... 6.6888964% .............................................................. ................... and Yield for Arbitrage Purposes ............... . 6.7249699% ... . ............................................... ......................... Inclusive Cost (AIC) ........................ 6.4422776% .............................................................. ....... ................ o 7.1708212 /o IRS FORM $038 Net Interest Cost ............. ................................. ......... ................................................................ Weighted Average Maturity ............... . 6.4854500% . .............................................................. ......... ............... 7.864 Years Ehlers 8 Associates File =net i.6million.sf--Net $1065 for 15 years- SINGLE PURPOSE Public Finance 10/ 3/2002 4:32 PM EXHIBIT 4 City of Richfield $?, 065, 000 Taxable G.O. Tax Increment Refunding Bonds SOURCES Sr USES Dated 12/05/2002 Delivered 12/05/2002 SOURCES OF FUNDS Par Amount of Bonds ......................................................................... 51,065,000.00 Other contributions .................................................. .. 550,000.00 TOTAL SOURCES ............................................................................ 51,615,000.00 USES OF FUNDS Total Underwriter's Discount (1.600%) .............................................. 17,040.00 Costs of Issuance .............................................................................. 26,000.00 Deposit to Current Refunding Fund ......................... .. 1,570,000.00 ......................... Rounding Amount .............................................................................. 1,960.00 TOTAL USES .................................................................................... $1,615.000.00 triers & Associates File =net 1.6million.sf--Net $1065 for 15 years- SINGLE PURPOSE Pubtic Finance 10/3/2002 4:32 PM ~_r HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF TAX INCREMENT PLEDGE AGREEMENTS WITH THE CITY OF RICHFIELD RELATING TO $2,495,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2002B AND $1,065,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2002C WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") has established the Richfield Redevelopment Project Area (the "Project Area"), and approved a RedevelopmentPlan (the "Project Plan") for the Project Area; and WHEREAS, the Project Area incorporates the Richfield Rediscovered Redevelopment Proj ect Area and the ILN Redevelopment Proj ect Area previously established by the HRA; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178; and Minnesota Statutes, Chapter 475, the. City has previously financed certain public redevelopment costs incurred by the HRA in the Project Area through the issuance of general obligation bonds of the City, specifically the $5,075,000 General Obligation Taxable Tax Increment Bonds, Series 1996 (the "Series 1996 Bonds") and the Taxable Variable Rate Demand General Obligation Bonds (Richfield Rediscovered Project) Series 1999 (the "Series 1999 Bonds"); and WHEREAS, pursuant to a Tax Increment Pledge Agreement between the City and HRA dated December 9, 1996 (the "Series 1996 Pledge Agreement"), the HRA pledged certain tax increments from certain tax increment financing districts in the Project Area to payment of principal and interest on the Series 1996 Bonds; and pursuant to a Pledge Agreement dated November 1; 1999 (the "Series1999 Pledge Agreement"), the HRA pledged certain tax increments from certain. tax increment financing districts in the Proj ect Area to payment of principal and interest on the and the Series 1999 Bonds; and WHEREAS, the City and HRA have proposed to refmance the Series 1996 Bonds by issuance of $2,495,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002B, and to refinance the Series 1999 Bonds by issuance of $1,065,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 200X, and hereinafter referred to collectively as the "Refunding Bonds"; and WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for the principal and interest on the Refunding Bonds; and SJB-222060v1 RC 145-500 WHEREAS, the there has been presented to the HRA a form of Series 2002B Tax Increment Pledge Agreement between the HRA and the City and a form of Series 2002C Tax Increment Pledge Agreement between the HRA and the City, providing for the pledge of tax increments from specified tax increment districts to payment of principal and interest on the Refunding Bonds; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "Authority), as follows: 1. Upon awarding of the sale of the respective Refunding Bonds, the Chair and Secretary of the Authority are hereby authorized to execute and deliver the 2002B Tax Increment Pledge Agreement and the 2002C Tax Increment Pledge Agreement substantially in the forms on file with the City, providing for the pledge of tax increment for the payment of the principal of, premium, if any, and interest on, the Refunding Bonds. 2. This resolution shall be effective as of the date hereof. Adopted by the Housing and Redevelopment Authority in and .for the City of Richfield, Minnesota this day of , 2002. Chair Attest: Secretary SJB-222060v1 RC145-500 TAX INCREMENT PLEDGE AGREEMENT SERIES 2002B by and between CITY OF RICHFIELD, MINNESOTA and THE HOUSING AND REDEVELOPMENTAUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA THIS AGREEMENT is made and entered into on or as of the day of , 2002, by and between the City of Richfield, Minnesota (the "City"), and The Housing and RedevelopmentAuthority in and for the City of Richfield, Minnesota (the "HRA"). WHEREAS, the HRA has established the Richfield Redevelopment Project Area (the "Project Area"), and approved a RedevelopmentPlan (the "Project Plan") for the Proj ect Area, and WHEREAS, the Project Area incorporates the Richfield Rediscovered Redevelopment Proj ect Area and the ILN Redevelopment Proj ect Area previously established by the HRA; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and Minnesota Statutes, Chapter 475, the City has previously financed certain public redevelopment costs incurred by the HRA in the Project Area through the issuance of general obligation bonds of the City, specifically the $5,075,000 General Obligation Taxable Tax Increment Bonds, Series 1996 (the "Series 1996 Bonds"); and WHEREAS, pursuant to a Tax Increment Pledge Agreement between the City and HRA dated December 9, 1996 (the "Series 1996 Pledge Agreement"), the HRA pledged. certain tax increments from certain tax increment financing districts in the. Project Area to payment of principal and interest on the Series 1996 Bonds; and WHEREAS, the City and HRA have proposed to refinance the Series .1996 Bonds by issuance of $2,495,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002B (the "Refunding Bonds"); and WHEREAS, the HRA has agreed to pledge tax increments from the ILN Tax Increment Financing District (the "ILN TIF District") to the City for the principal and interest on the Refunding Bonds maturing (or subject to mandatory sinking fund redemption, in the case of any term bonds) in the following years and amounts and issued pursuant to Minnesota Statutes, Section 469.178: SJB-221570v1 RC145-500 Year Amount Year Amount 2004 $210,000 2009 $290,000 2005 235,000 2010 305,000 2006 250,000 2011 325,000 2007 260,000 2012 345,000 2008 275,000 WHEREAS, pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, any. agreement to pledge tax increment revenues must be made by written agreement by and between the HRA and the City and must be filed with the Taxpayer Services Division Manager of Hennepin County; NOW, THEREFORE, the City and the HRA mutually agree to the following: (1) The City will sell the Refunding Bonds. (2) The HRA hereby pledges to the payment of the principal of and interest on the Refunding Bonds tax increments received by the HRA from the ILN TIF District in an amount sufficient, to pay 105% of such principal.. and interest due on the Refunding Bonds from time to time. (4) Not less than three (3) business days prior to each debt service payment date for the Refunding Bonds, there shall be transferred from the accounts for the ILN TIF District to the Debt Service Fund maintained by the City for the payment of the Refunding Bonds, an amount which when taken together with amounts already on deposit in such Debt Service Fund, is equal to the principal of and interest on the Refunding Bonds to become due on the subject payment date. Any tax increments generated from the ILN TIF District in excess of 105% of the principal and interest due with respect to the Refunding Bonds on any payment date may be retained by the HRA in the tax increment account for the ILN TIF District and applied to any public redevelopmentcosts of the Project Area in accordance with law. (5) Without regard to anything in this Agreement to the contrary, tax increment generated by the ILN TIF District shall be available to pay, on a parity basis, principal of and interest on both the Refunding Bonds and any other obligations issued by the City, HRA or any other public body to finance public redevelopment costs paid or incurred by the HRA in the Project Area. The pledge of tax increment hereunder is subject to any prior pledges of such revenues to any outstanding contracts or obligations. s.rs-2a i s~o~i RC 145-500 (6) When the entire costs of the Project Area have been paid and all principal and interest on the Refunding Bonds and other obligations issued to finance the public redevelopment costs of the Project Area have been paid, and the City has been reimbursed from collections of tax increment from the ILN TIF District used to pay principal of and interest on the Refunding Bonds, then the HRA shall report such fact to the City Council of the City and the HRA shall submit a final statement of such payments. (7) An executed copy of this Agreement shall be filed with the Taxpayer Service Division Manager of County pursuant to the requirement contained in Minnesota Statutes, Section 469.178, Subdivision 2. (8) This Agreement supersedes in all respects the Series 1996 Pledge Agreement. IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly executed on their behalf and their seals to be hereunto affixed and such signatures and seals to be attested, as of the day and year first above written. SJB-221570v1 RC 145-500 ATTEST: City Manager (SEAL) CITY OF RICHFIELD, MINNESOTA By Mayor SJB-221570v1 RC 145-500 ATTEST: Secretary (SEAL) THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Chair SJB-221570v1 RC 145-500 STATE OF MINNESOTA COUNTY OF HENNEPIN CERTIFICATE I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a Tax Increment Pledge Agreement Series 2002B by and between the City of Richfield, Minnesota and the Richfield Housing and Redevelopment Authority dated 2002, relating to the City's $2,495,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2002B has been filed in my office. WITNESS my hand and official seal this _ day of ,2002. Taxpayer Services Division Manager's (SEAL) Hennepin County, Minnesota By Deputy TAXPAYER SERVICES DIVISION MANAGER'S SJB-221570v1 RC145-500 AGENDA ITEM # REPORT # 44 STAFF REPORT ~ HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: JOHN STARK, COMMUNITY DEVELOPMENT MANAGER Nance TITLE BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR r~ ; NAME, TITLE ITEM FOR HRA CONSIDERATION: Consideration of the appropriate uses for the Candlewood outlot site. I. RECOMMENDED ACTION: By Motion: Provide staff with an indication of appropriate uses for the Candlewood outlot site. III. BACKGROUND When the former Lampert Lumber site was redeveloped for use by the Candlewood Hotel, a 49,000 sq. ft. parcel remained with a pad fora 9,600 sq. ft. building. Subsequently Grubb & Ellis was retained as a real estate broker to market this remaining site, or "outlot", for restaurant use based on the direction provided by the HRA Commissioners. A restaurant at this location was desirable for a number of reasons, including: desire for additional quality restaurants in the community; conformance with area plans; interstate highway visibility, via a shared sign with Candlewood; and a seemingly unfulfilled area market for restaurants on I-494. From the beginning, however, there were some negative aspects of the site from a restaurant's perspective. Among the negatives are: a site that is visible, but not immediately accessible from the 1021 Candle interstate, heavy traffic at I-494 and Lyndale Avenue, a lack of retail/restaurant critical mass in the immediate vicinity, and lack of traffic volume on 77th Street. At the time the parcel was being marketed many national and local restaurants were seeking sites. The broker directly contacted many of these restaurants. However there were superior sites elsewhere. The real estate broker ceased active marketing after six months. At that time, staff believed that there would eventually be market demand for the site as a restaurant location. During the past two years, therefor, staff has mentioned the site to restaurant developers as the opportunity has arisen. In 2000, the City of Richfield and the Metropolitan Airports Commission collaborated on the removal of 26 businesses located on Cedar Avenue and 66th Street. At that time, many of the displaced businesses were having difficulties finding replacement locations. The HRA then approved the marketing of the site to those businesses that were being displaced in the area, provided that they met a number of use and design criteria. In the end, however, none of the displaced businesses proposed a relocation to the Candlewood outlot site. Since that time, a number of businesses have inquired about the redevelopment of the site. Among them have been; a bicycle retailer; a real estate office with additional office/retail space; casual sit-down restaurants; and a veterinarian. In each of these instances, staff has provided information on the site to the prospective developers with the caveat that the Housing and Redevelopment Authority's (HRA) priority for re-use would be a restaurant ,use or a Richfield business that is being displaced due to redevelopment. In the case of the bicycle retailer and the real estate office, however, neither of these criteria apply and staff has been reluctant to request a formal proposal from these entities because of the time and expense that would be required of the prospective developer only to find out that their proposed use is not desired on the site. However, in all instances but for the real estate office there were other business reasons which ended the interest of the potential users in the site. Staff is, therefore, seeking reassurance from the HRA that the desired use is a restaurant, or in special circumstances, a Richfield business that is being displaced due to redevelopment. As time passes the site will become more valuable and more desirable. The opening of the Best Buy campus, the redevelopment of the west side of Lyndale Avenue at 77th Street will have some impacts. The construction of the 77th Street tunnel under TH77 will increase traffic and the replacement of the Lyndale Avenue bridge will ease congestion. These right-of--way improvements are several years away (four or five is the current thinking), but should have a significant impact on value. The increased value will accrue to the owner of the parcel at the time they realized. The HRA has often waited for the appropriate developer with the appropriate development concept. Two relatively recent examples would be Meridian Crossings and Shops at Lyndale. Several years passed before the Meridian Crossings development was proposed for the Cloverleaf site. Eight years passed before the concept of Shops at Lyndale was proposed. During the intervening years many proposals for each site were reviewed and not selected. The site has not been appraised since 2000. The most recent appraisal sets the value at $393,000 ($8 sq. ft.). Staff has received a proposal for updating the appraisal, but is suggesting that the appraisal update be conducted after the Best Buy Campus has been occupied. Regardless of the ultimate developer of the site, the financial benefits to the HRA should be relatively constant. In addition to the sales proceeds on the site, there will be some tax increment (TIF) generated on site. The ILN district (in which the parcel is located) will be in effect until 2011, during which time a 9,600 sq. ft. mid- class building would generate $85,000 to $140,000 in net present value TIF proceeds. Both the land sale proceeds and the TIF proceeds could be used to construct public improvements or for other redevelopment projects in the community. III. BASIS OF RECOMMENDATION A. POLICY • The HRA owns the property known as the Candlewood Outlot Site. • HRA staff is seeking direction on the reuse of this site. B. CRITICAL ISSUES • Developers have proposed uses on this site that staff believes are inconsistent with earlier HRA directives. C. FINANCIAL • The HRA will benefit from the land sale proceeds and potential TIF proceeds on this site. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION~S~ • Direct staff to consider a broad range of development proposals for the site. V. ATTACHMENTS • HRA easement area • Candlewood easement area VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A EXHIBIT C HRA EASEMENT AREA ~. ..~.m~~. ~ ._._._ ~.:_. rs- C ~ ~.~ . • ar ~ 1 Y ~- u 78th STREET ~.e..,.~ .e. r1SLTE PLAN ~~ INTERSTATE ~IWY 4q4 I I I I I I I I I I ~~~~~~ txM~rs~ ~ o cAND~EWOOD EASEMENT AREA _ ~ -~-.---~ ~h--s~~E~T--wr-s~BeuNo-~-----~-~------- _~._._ J I I I I I I I I ~r •. w • I • t I • I 1 ~ • ~sMC wca~ ~~~ I I I I I I I I I~ 1 •:M} '~ ~:~ ~ •: 1 .~~ I •'~~ 1 r :R . 1 I 1 I 1 I ~• t ~ ..: 1 1 I ~ h.; cre~~8an C 1 ~ .~_ ~I 78th STREET ~.*.~ ~. • w~ w~aa~w w ~- U 1 ~ ' ' I 1 1 ~ 1 I f ~ 1 I ' 1 I ~ 1 I , 1 y Q 1 n ( ..I I ~ ~' 1 I ~ 1 I ~ ' 1 I 1 ~ I ' 1 I 1 ~ I , ~ ~ I ~ ~ 1 I w ' ~ I 1 ~ 1 I 1 ~ I ~~~~.~ 1 _ N ~S1TE PLAN INTERSTATE NWY qq,q AGENDA ITEM # 5 ~ REPORT # 43 ~- STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER N/1ME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~~/~ REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Public hearing and consideration of the attached resolution for the sale of real property within the City Bella project: Lot 3, 4, 5, and 18, Block 3 "Fairwood Shores",.Hennepin County. I. RECOMMENDED ACTION: By Motion: Conduct and close a public hearing and approve the attached resolution authorizing the sale of real property within City Bella: Lot 3, 4, 5, and 18, Block 3, "Fairwood Shores", Hennepin Countv. ~ II. BACKGROUND The April 15, 2002 Amended and Restated Contract for Private Redevelopment between the Housing and Redevelopment Authority (HRA) and Gramercy Corporation provides the basis for the acquisition and disposition of land within the City Bella project. The Contract contemplates the private acquisition of properties by Gramercy whenever possible. Under certain conditions, properties owned by the HRA within the project area also are transferred to Gramercy. Two parcels have been owned by the HRA since prior to the introduction of the City Bella project. 102102RealPropertyCityBella • 709 Graham Avenue (Lot 3, 4, 5, "Fairwood Shores") was acquired by the HRA when properties along Graham Avenue were purchased in the early 1980's to develop Lake Shore Drive Condominium. The property is planned to initially be used for construction staging and become part of the plaza at project completion. • 6639 Lakeshore Drive (Lot 18, "Fairwood Shores") was acquired as properties were purchased for the year 2000 Gramercy Park and VFW project. The property is planned to be used for the southern most part of the townhome villa portion of the development and the walkway to the Wood Lake Nature Center. To update the HRA, the developer has also provided a report on the acquisition of other property in the project area. To summarize: • Lyndale Hardware: purchased • Trestman Music: offer presented, week of October 14 • Checker Auto: offer presented, week of October 14 • Lynch residence: option agreement • Lake Shore Drive Condominium: agreement in principal, documents being prepared. III. BASIS OF RECOMMENDATION A. POLICY • The sale of land from the HRA to Gramercy is controlled by the April 15, 2002 Amended and Restated Contract for Private Redevelopment. • The authorization to sell the referenced property is still contingent on several contract conditions. By example, the completion of all project approvals such as the concept plan and business subsidy, site assembly by the developer and confirmation of interim and permanent financial commitments. • The Planning Commission has determined that the disposition of these lots for City Bella is consistent with the Comprehensive Plan. B. CRITICAL ISSUES • The transfer of HRA property is required for the developer to proceed with City Bella. • The developer has reported progress in assembly the remaining portions of the project area. C. FINANCIAL • In accordance with the Contract, a portion of the tax increment is dedicated to reimbursing the HRA for the cost of the land. _ D. LEGAL • A public hearing notice was published in the Sun-Current on Thursday, October 10, 2002. IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA could delay consideration of the transfer of the properties. V. ATTACHMENTS • Resolution Site map VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Mike Conlan, Gramercy Corporation HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROEPRTY WITHIN THE CITY BELLA PROJECT AREA AND IDENTIFIED AS: LOT 1, 2, 3, AND 18, "FAIRWOOD SHORES", HENNEPIN COUNTY WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield (HRA) has acquired Lot 3, 4, 5 and 18, Block 3, "Fairwood Shores", (also known as 709 Graham Avenue and 6639 Lake Shore Drive), and WHEREAS, the HRA has identified Gramercy Corporation as the buyer of the property; and WHEREAS, Gramercy Corporation has agreed to purchase the property from the HRA in accordance with the terms of the Amended and Restated Contract for Private Redevelopment by and between the HRA and Gramercy Corporation dated April 15, 2002; and WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the public hearing has been held after proper notice; and WHEREAS, the Planning Commission of the City of Richfield has made a determination that the disposition of the property for project purposes is consistent with the Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. A public hearing has been held on the sale of real property described above. 2. The sale of property to Gramercy Corporation, in accordance with the terms of the Amended and Restated Contract for Private Redevelopment by and between the HRA and Gramercy Corporation, is hereby approved. 3. The Chairperson and Executive Director are authorized to execute any and all documents and agreements necessary to implement this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 102102RealPropertyCityBella :1 \~bd~~y\ ) Ory`~~ i~ ~ )~~~. ~~ ~ r u~~ r~ ~ ~~ ~Bi AGENDA ITEM # REPORT # STAFF REPORT ~ HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 4 42 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING c4ir REDEVELOPMENT MANAGER NANtE; TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NA,uE, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ~ i~ \ s ~ ~ ITEM FOR HRA CONSIDERATION: Conduct and close a public hearing on a Business Subsidy Agreement between the Housing and Redevelopment Authority and Gramercy Corporation for the City Bella project. I. RECOMMENDED ACTION: By Motion: Authorize a resolution approving a Business Subsidy Agreement between the Housing and Redevelopment Authority in and for the City of Richfield and Gramercy Corporation. III. BACKGROUND In accordance with the Contract for Private Redevelopment between the HRA and Gramercy Corporation, modifications are proposed to the business subsidy agreement. The Contract planned fora "look back" as costs and revenues to the project might change. The business subsidy agreement was approved by the Housing and Redevelopment Authority (HRA) August 19, 2002. The modifications are due to increased costs for acquisition and plaza improvements. The following tables provide summaries of the August 19 and proposed subsidy. 1. The August 19 Business Subsidy Agreement between the HRA and Gramercy is summarized as follows: 1021 business sub Project Element Total Economic Assistance That Amount Considered a (type of assistance) Business Subsidy Tower (component one) Condominium (component two) $4,669,530 (TIF) $1,570,470 (TIF) $81,047 $370,394 TOTAL $6,240,000 (TIF) $451,441 2. The restated business subsidy agreement, for consideration on October 21 is summarized as follows: Project Element Total Economic Assistance That Amount Considered a (type of assistance) Business Subsidy Tower (component one) $7,531,360 (TIF) $130,718 Condominium (component $ 942,100 (TIF) $213,145 two) TOTAL $8,473,460 (TIF) $343,863 The guiding principles for these determinations is: • Assistance provided under the Contract for the housing related portions of the development are by State law not a business subsidy. • The total business subsidy assistance is based on the projected market values of the non-housing portions of the development as a share of the total projected market value. • The public purpose of the subsidy is to redevelop an area occupied by substandard and obsolete buildings, establish amixed-use residential and commercial development restoring vitality to a part of the downtown, and to increase tax base. • The subsidy is needed because of the eligible public costs, identified as "extraordinary expenses" in the attachments. This includes the cost of acquisition, structured parking, and plaza improvements. • Mr. Sid Inman of Ehlers, Inc. will explain the basis for the HRA to conclude that these project elements and proposed outcomes would not occur but-for the assistance. III. BASIS OF RECOMMENDATION A. POLICY • The business subsidy consideration by the HRA is required by the - Contract. • The Business Subsidy Agreement sets the level of assistance that will be treated as a business subsidy in accordance with state law. • The HRA has previously established business subsidy criteria. The agreement has been prepared to comply with the established criteria. • A public hearing is required prior to making the business subsidy determinations. • The City Council must also review the agreement. B. CRITICAL ISSUES • The Business Subsidy Agreement is the same as the one approved by the HRA in August except for the numbers. • The HRA consistently uses Tax Increment Financing (TIF) in a proper and prudent manner. • The public purpose and but-for findings have been clearly stated; the purpose related to redevelopment and not job creation. • Approximately 67 percent of the eligible costs will be TIF supported. (Previously 55 percent of the eligible costs were to be TIF supported.) • The increased $600,000 cost of acquisition is in response to the HRA's request of the developer to seek a negotiated sale if possible rather than the use of eminent domain. If necessary, the HRA may still have to consider this in accordance with the Contract. C. FINANCIAL • The proposed $8,473,460 TIF reimburses the developer over time for $12,703,990 of eligible public costs (67 percent). • An estimated $343,863 of the assistance, attributed to the commercial project elements is the business subsidy. This is a reduction of $107,578 in business subsidy to the developer. • Ehlers, Inc. has reviewed the developers financial information and prepared the recommendations. • A two percent inflation rate and a tax exempt note rate of 5.09 percent, both reasonable assumptions, were used to calculate the amount of TIF. This yields a developer return of 10.71 percent, well within the 15 percent allowed by the Contract. D. LEGAL • Legal counsel has prepared the Business Subsidy Agreement and supporting resolution. • t_egal counsel has reviewed and concurs with Ehlers' process for calculating the business subsidy amount. ,~, IV. ALTERNATIVE RECOMMENDATION~S~ • Modify the amount of business subsidy. • Do not support a business subsidy for the project. V. ATTACHMENTS • Proposed Resolution • Business Subsidy Agreement • But-For analysis prepared by Ehlers and Associates, Inc. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Mr. Michael Conlan, Gramercy • Mr. Sid Inman, Ehlers HRA RESOLUTION NO. RESOLUTION APPROVING A BUSINESS SUBSIDY AGREEMENT BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, AND GRAMERCY CORPORATION. BE IT RESOLVED By the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, (the "HRA") as follows: Section 1. Recitals. 1.01. On or about April 15, 2002, the HRA and Gramercy Corporation (the "Redeveloper") entered into that certain document entitled, Amended and Restated Contract for Private Redevelopment (the "Contract"). 1.02. Section 10.5 of the Contract called for the parties to enter into a separate Business Subsidy Agreement as required by the Business Subsidy Act, setting the level of assistance that is treated as a business subsidy under the Business Subsidy Act. 1.03. On or about August 19, 2002 the HRA approved a form of business subsidy agreement and directed that the agreement by forwarded to the City Council for consideration. 1.04. Since the date of HRA approval, the HRA has been presented with certain revisions to the business subsidy agreement, and asked to modify its approval to include the proposed modifications. 1.05. The HRA has on this date conducted a duly noticed public hearing regarding the modified business subsidy agreement at which all interested persons were give an opportunity to be heard. 1.06. The HRA has reviewed the proposed agreement, and finds that the execution thereof by the HRA and performance of the HRA's obligations thereunder are in the best interest of the City and its residents. Section 2. HRA Approval; Further Proceedings. 2.01. The HRA approves the Agreement. 2.02. The Executive Director and Chair are authorized to -take all steps and do all things necessary to carry into effect the provisions of this resolution and the Agreement. JBD-215993v1 RC125-209 2.03. The Executive Director is authorized to present the Agreement to the Richfield City Council for its consideration as required by the Business Subsidy Act. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21 st day of October, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary JBD-215993v1 RC125-209 DRAFT Not reviewed or approved by HRA or City Business Subsidy Agreement THIS AGREEMENT, made and entered into this 21st day of October, 2002 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 parties did, on or about April 15, 2002, enter into that certain document entitled, Amended and Restated Contract for Private Redevelopment (the "Contract"); and WHEREAS, Section 10.5 of the Contract called for the parties to enter into a separate Business Subsidy Agreement in accordance with Minnesota Statutes, sections 116J.993 through 116J.995 (the "Business Subsidy Act") setting the level of assistance that is treated as a business subsidy under the law; NOW THEREFORE, the parties hereto stipulate and agree as follows: Section 1.1. Definitions. Unless the context clearly suggests a contrary intention, the terms used in this Agreement shall have the meanings given them in the Contract. Section 1.2. Business Subsidy Agreement. (a) General Terms. The parties agree and represent to each other as follows: (1) The business subsidy provided to the Redeveloper consists of (i) a portion of the principal amount of the Note; and (ii), the estimated value of the HRA Lands, which the Authority will convey to the Redeveloper for $1.00 under Article III. The estimated market value of the HRA Lands is $ 450,000. Each payment on the Note represents a forgivable loan that is repayable by the Redeveloper in accordance with this Section. As of the date of this Agreement, the aggregate business subsidy (in present value terms) is estimated to be approximately $343,863. However, a substantial portion of the assistance under the Contract is intended to facilitate development of housing within the project, which assistance does not constitute a business subsidy under the Business Subsidy Act. The total assistance under the Contract for Component One is $7,531,360; and the total assistance for Component Two is $942,100. The parties agree and understand that the total business subsidy assistance has been determined, based on the projected market values of the non-housing portions of the development as a share of the total projected market value of the completed Minimum Improvements. Therefore, the business subsidy allocated to JBD-215993v1 RC 125-209 the commercial portion of Component One is $130,718, and the business subsidy allocated to the commercial portion of Component Two is $213,145. The actual amounts of the business subsidy are subject to modification in accordance with the provisions of Section 6.3 of the Contract. The Note is payable from a portion of the Tax Increments from the TIF District, a redevelopment tax increment financing district. (2) The public purposes of the subsidy are to redevelop an area occupied by substandard and obsolete buildings, establish a mixed use residential and commercial development that serves as the "city center" of the City, implement the City's land use goals identified in the comprehensive plan, and increase tax base. (3) The goals for the subsidy are: to secure completion of the Commercial portions of Components One and Two by the Redeveloper, in each case by the completion date for the Minimum Improvements under the Contract, and to ensure that such components are operated for at least five years as described in clause (6) below. (4) If the goals described in clause (3) are not met, the Redeveloper must make the payments to the Authority described in Section 6.4(c). (5) The subsidy is needed because the cost of land acquisition, demolition and site clearance, make development of the Minimum Improvements financially infeasible without public assistance, all as has been determined by the Authority and City upon approval of the TIF Plan. (6) The Redeveloper must continue or cause to be continued operation of the Commercial portions of Components One and Two for at least five years after the date of issuance of the final certificate of completion for such components. For the purpose of this Section, space in any component will be considered to be maintained in operation if it is leased, or available for lease, to any person or entity, or occupied by Redeveloper for use in its trade or business. After the five-year period the Redeveloper remains obligated to operate and maintain the Commercial portions of Components One and Two as required in the Contract, provided that the remedy described in Section 1.2 (c) will not apply. (7) The Redeveloper does not have a parent corporation. (8) The Redeveloper has not received, or expects to receive, financial assistance from any other "grantor" as defined in the Business Subsidy Act, in connection with the Redevelopment Property or the Minimum Improvements. (b) Job and Wage Goals. In accordance with Section 116J.994, subdivision 4, the Authority has determined after a public hearing that the creation or retention of jobs is not the goal of this redevelopment effort. Accordingly, the wage and job goals are set at zero. JBD-215993v1 RC125-209 (c) Remedies. If the Redeveloper fails to meet the goals described in Section 1.2 (a)(3), and subject to the notice and cure provisions of Article IX, the Redeveloper shall repay to the Authority upon written demand from the Authority (a) the portion of the aggregate business subsidy received the Redeveloper as of the date of default that is allocable to the Component, which is the source of the default, and (b) interest on the amounts in clause (a) at the rate set forth in the Business Subsidy Act, accrued from the date of issuance of the certificate of completion for the relevant component to the date of payment. If the space is timely completed but the Redeveloper fails to meet the five- yearoperation goal, the total subsidy amount allocable to such space will be further prorated by the portion of the five-year operation period elapsed as of the date of default. Nothing in this Section shall be construed to limit the Authority's remedies under Article IX in the event of a violation of any other provision of this Agreement, but the remedies set forth in this paragraph (c) are the exclusive remedies for failure to comply with the terms of this Section 1.2. In addition to the remedy described in this Section and any other remedy available to the Authority for failure to meet the goals stated in Section 1.2 (a)(3), the Redeveloper agrees and understands that it may not a receive a business subsidy from the Authority or any grantor (as defined in the Business Subsidy Act) for a period of five years from the date of the failure or until the Redeveloper satisfies its repayment obligation under this Section, whichever occurs first. (d) Reports. The Redeveloper must submit to the Authority a written report regarding business subsidy goals and results by no later than March 1 of each year, commencing March 1, 2003 and continuing until the later of (i) the date the goals stated Section 1.2 (a)(3) are met; (ii) 30 days after expiration of the five-year period described in Section 1.2 (a)(6); or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 1.2 (c). The report must comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to the Redeveloper regarding the required forms. If the Redeveloper fails to timely file any report required under this Section, the Authority will mail the Redeveloper a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the Authority a penalty of $100 for each subsequent day until the report is filed. Failure by the Authority to deliver a timely warning notice will not relieve the Redeveloper's obligation to pay a penalty within 14 days after receipt of a notice to pay. The maximum aggregate penalty payable under this Section is $1,000. (e) Allocation of liability. Notwithstanding anything to the contrary herein, the Redeveloper shall have no liability as to a non defaulting Component under this Section arising from failure to comply with any goals or covenants under this Section related to the defaulting Component Section 1.3. 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 JBD-215993v1 RC125-209 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 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. 9th 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 1.4. 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. Dated: , 2002 Dated: .2002 THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY RICHFIELD, MINNESOTA By: Its: Chairperson By: Its: Executive Director JBD-215993v1 RC125-209 GRAMERCY CORPORATION Dated: , 2002 By: Its: STATE OF MINNESOTA } COUNTY OF HENNEPIN ss.: The foregoing instrument was acknowledged before me this day of 2002, by and of The Housing and Redevelopment Authority in and foaltherCity of R chfieldive Director Minnesota. Notary Public STATE OF MINNESOTA } COUNTY OF HENNEPIN ss.. The foregoing instrument was acknowledged before me this day of 2002, by the laws of Minnesota, by and on behalf of said corporat onporation, a corporation under the Notary Public JBD-215993v1 RC 125-209 MEMORANDUM TO: Project Team List FROM: Sid Inman -Ehlers DATE: October 10, 2002 RE: City Bella BUT/FOR Update Following is a list of the status of our But/For analysis. 1. The developer has stated that the plaza expense is $1,100,000. The city staff has reviewed these costs and believes that they are "Over And Above" the normal cost of redevelopment therefore extraordinary expenses. That amount has increased by $758,460 for a total of $1,858,460. 2. Gramercy has submitted parking ramp costs for a 330-stall ramp totaling $6,460,000. Assuming a cost for surface parking is $1,000 per stall, the normal cost would be $330,000. Therefore the net amount of extraordinary cost is $6,130,000. 3. The developer has stated that the total amount they can spend for land is $20,000 a unit or $3,300,000. The estimated total acquisition cost is $7,415,530.therefore the net amount of extraordinary cost is $4,115,530. The estimated total acquisition costs is up $600, 000 for a total of $4, 715, 530. With the addition of these cost ($1,358,460), the total redevelopment costs are now $12,703,990. The developer was requesting $6,240,000 and is now requesting $8,473,460. As you are aware, Section 6.3 of the Amended and Restated Contract for Private Redevelopment requires us to review the developers Net Return and comment when they reach 50% presales. The developer is allowed to make up to 15% Net Return. We asked the developer to submit a document to review the impact on the Net Return and the result is a return of 10.71%. Please let me know if you have other questions or comments. From the desk of.• Sid Inman Development Consultant/Financial Advisor Ehlers and Associates, Inc. 3060 Centre Pointe Drive Roseville, MN 55113 (612) 697-8507 FAX.• (612) 697-8555 E-MAIL: sid@ehlers-inc. com Z ~ N ~ M M ~ ~' N O O <O % v f 0 0 + _ °D N ~ ~ ~ ~ 0 ~ c ~ ~ M n ~ C _ tii w ~ N ° ' ~ E Q ~ L V LL Z ~ O W ~ Z ° o c O c ° ° o O N W a r N^ A O O M A O r a. 2 M E N O w0 aU o° °o o° °o o° °o °o °o °o O to M O O 00 N O 3 O fV 0 GD (V OD O O .M- N OO M N N( ~ V O f O ~ , Vt0' ~ tt~ r CO ~ ~ M N Z W Z a ~ o 0 O V N N o 0 p ° 0 0 N N' 0 C ~~ r o ~ N ~ Q W LL p ° ~ n ° ° F- o o_ v ~ U O ~ .m v ~ v °° ~ _ a ~H Wg o~ Z~~ ~ H am p R W Q ~ m V V O o rn O N o N M r o ~ ~ Z ~ >. 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N •~ ~ ~ O Z ~O ~ Z W O o ~ ~~ _ O v W c o c aU J J N V) ~ H a N N ~ ~~ ~ p C N W ~ ~ ~~ O. ~~ ~ Z O fn C C) ~~ C ~ N d O ~~~ O W N W T X LL ~v~ ~a t0 J C ~ _ d ~ V~ ~ _ w N _ U ~ QUd N ~ J H O 3 t0 k ~ p U r iiUUZ~ ~ C7 F - V1 QI~~ H ~ C9V i~ ~ ~ N k N Q. M co L W 0 a 3 U U N E m C9 AGENDA ITEM ~ 3F REPORT # 41 ~~ STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: KATIA MEDVETSKI, REDEVELOPMENT SPECIALIST NAME; TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAMC TITLE DEPARTMENT DIRECTOR REVIEW: ~~ SIGNAT(1RE REVIEWED BY EXECUTIVE DIRECTOR: /~ ~~"~~~~ ~__.,,./~ ~ f,.~ ITEM FOR HRA CONSIDERATION: The Richfield Housing and Redevelopment Authority's request for the City Council to call a public hearing for the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and establishment of the Lyndale Gateway West Tax Increment Financing District, all related to the Cornerstone Proiect. I. RECOMMENDED ACTION: By Motion: Authorize the attached resolution requesting the City Council of the City of Richfield to call a public hearing on the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the establishment of the Lyndale Gateway West Tax Increment Financing District for December 10, 2002. III. BACKGROUND ~ The HRA and Cornerstone Group are parties to a redevelopment contract. The site is between Lyndale and Aldrich Avenues, 77th Street and 76th Streets. To facilitate the project, staff is recommending that the Richfield Housing and Redevelopment Authority (HRA) request the City Council to call a public hearing on the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the 102102 CaIITifLGW establishment of the Lyndale Gateway West Tax Increment Financing District and Plan. III. BASIS OF RECOMMENDATION A. POLICY • Public hearings are required for redevelopment project area plans and tax increment financing district plans and matters related thereto. B. CRITICAL ISSUES • Because of the loss of time since 1999 and -the need to maximize the available TIF from this area, it is desirable to establish a new tax increment district for the project. • This area has been within a redevelopment tax increment area since 1985 when the Interstate-Lyndale-Nicollet (ILN) was established. In 1999 it was dropped from the ILN when the Lyndale Gateway tax increment district was established. The public review process for the redevelopment project area and tax increment district associated with the Cornerstone project cannot proceed until a schedule is determined. C. FINANCIAL _ • N/A D. LEGAL • The proposed date-for the public hearing on the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and. the establishment of the Lyndale Gateway West Tax Increment Financing District and Plan is December 10, 2002. • The proposed public hearing date would. allow for necessary review. and actions by various boards, commissions, and taxing jurisdictions. • The resolution was prepared by Ehlers and Associates, Inc. and reviewed by legal counsel • The HRA will consider the modification and tax increment plan at its November meeting. IV. ALTERNATIVE RECOMMENDATION~S~ • The HRA could select another date for the public hearing. However, this date is proposed as an outcome of all other actions needed to process the establishment of the Lyndale Gateway West Tax Increment District. V. ATTACHMENTS • Resolution ` ~~ VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION REQUESTING THE CITY COUNCIL OF THE CITY OF RICHFIELD CALL FOR A PUBLIC HEARING ON THE MODIFICATION OF RICHFIELD REDEVELOPMENT PROJECT AREA AND THE ESTABLISHMENT OF THE LYNDALE GATEWAY WEST TAX INCREMENT FINANCING DISTRICT (A REDEVELOPMENT DISTRICT) BE IT RESOLVED, by the Board of Commissioners (the "Board") of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") as follows: WHEREAS, the City Council (the "Council") of the City of Richfield, Minnesota (the "City") established the Richfield Redevelopment Project Area pursuant to Minnesota Statutes, Sections 469.174 to 469.1799, inclusive, as amended, in an effort to encourage the development and redevelopment of certain designated areas within the City; and WHEREAS, the HRA is proposing the modification of Richfield Redevelopment Project Area and the establishment of the Lyndale Gateway West Tax Increment Financing District, pursuant to, and in accordance with, Minnesota Statutes, Sections 469.174 to 469.1799 and Sections 469.001 to 469.047, inclusive, as amended; NOW, THEREFORE BE IT RESOLVED by the Board as follows: 1. The HRA hereby requests that the Council call for a public hearing on December 10, 2002 to consider the proposed adoption of the Modification to the Redevelopment Plan for Richfield Redevelopment Project Area and the proposed adoption of the Tax Increment Financing Plan for the Lyndale Gateway West Tax Increment Financing District (collectively, the "Plans") and cause notice of said public hearing to be given as required by law. 2. The HRA directs the Executive Director to transmit copies of the Plans to the Planning Commission of the City and requests the Planning .Commission's written opinion indicating whether the proposed Plans are In accordance with the Comprehensive Plan of the City, prior to the date of the public hearing. 3. The Executive Director of the HRA is hereby directed to submit a copy of the Plans to the Council for its approval 4. The HRA directs the Executive Director to transmit the Plans to the county and the school district(s) in which Lyndale Gateway West Tax Increment Financing District is located not later than November 8, 2002.. 5. Staff and consultants are authorized and directed to take all steps necessary to prepare the Plan and related documents and to undertake other actions necessary to bring the Plan before the Council Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 102102 CaIITifLGW AGENDA ITEM # 3E REPORT # 40 STAFF REPORT r HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: KATIA MEDVETSKI, REDEVELOPMENT SPECIALIST NAME, TITLL' REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE ~~ ITEM FOR HRA CONSIDERATION: Call a public hearing for the removal of parcels in the Interchange West and Lyndale Gateway Tax Increment Financing District to create the Lyndale Gateway West Tax Increment Financing District. (Impacted parcels are only in Lyndale Gateway District.) I. RECOMMENDED ACTION: By Motion: Adopt a resolution calling for a public hearing eliminating parcels from the Interchange West and Lyndale Gateway Tax Increment Financing District within the Richfield Redevelopment Project Area. III. BACKGROUND On August 5, 2002, the Housing and Redevelopment Authority (HRA) approved the Contract for Private Redevelopment with Lyndale Gateway L.L.C. (aka The Cornerstone Group) for Phase III of the Lyndale Gateway redevelopment project. In order to establish the Lyndale Gateway West Tax Increment Financing (TIF) District for this project, certain parcels of land must be eliminated from the Interchange West and Lyndale Gateway Tax Increment Financing District . (Please note that this matter does not impact any parcels in the Interchange West District. It is only for parcels in that portion of the Lyndale Gateway District that will become part of the new Lyndale Gateway West TIF District.) Technically, the 102102_CaIILGparcels.doc Interchange West and Lyndale Gateway District are considered scattered site TIF districts, and thus, the combined name. It is proposed that the HRA call a public hearing on November 18, 2002 for this matter. This date is tied to an overall project processing schedule. III. BASIS OF RECOMMENDATION A. POLICY • The HRA effectuates the decertifcation of parcels, by resolution. • Pursuant to Minnesota Statutes, Section 469.175, Subd. 4., a public hearing is required since the current net tax capacity of some of the parcels to be eliminated from the Interchange West and Lyndale Gateway District equals or is less than the net tax capacity of the parcels in the Interchange West and Lyndale Gateway District's original net tax capacity. B. CRITICAL ISSUES • The Lyndale Gateway West TIF District can not be created without the removal of parcels from the previously established Interchange West and Lyndale Gateway TIF District. C. FINANCIAL • N/A D. LEGAL • The resolution calling for a public hearing on this matter was prepared by Ehlers and Associates, Inc. and approved by legal counsel. IV. ALTERNATIVE RECOMMENDATION~S~ • N/A V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A 102102_CaIILGparcels.doc HRA RESOLUTION NO. RESOLUTION CALLING FOR A PUBLIC HEARING ON THE ELIMINATION OF PARCELS FROM THE INTERCHANGE WEST AND LYNDALE GATEWAY TAX INCREMENT FINANCING DISTRICT WITHIN THE RICHFIELD REDEVELOPMENT PROJECT AREA IN THE CITY OF RICHFIELD BE IT RESOLVED, by the Board of Commissioners (the "Board") of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") as follows: WHEREAS, the City Council (the "Council") of the City of Richfield, Minnesota (the "City") established the Richfield Redevelopment Project Area pursuant to Minnesota Statutes, Sections 469.174 to 469.179, inclusive, as amended, in an effort to encourage the development and redevelopment of certain designated areas within the City; and WHEREAS, on June 14, 1999, the City created its Interchange West and Lyndale Gateway Tax Increment Financing ("Interchange West and Lyndale Gateway District") within its Richfield Redevelopment Project Area (the "Project"); and WHEREAS, the Interchange West and Lyndale Gateway District was modified on January 22, 2001; and WHEREAS, the HRA desires by this resolution to call for a public hearing on the elimination of some parcel numbers (the "parcels") within the Interchange West and Lyndale Gateway District thereby reducing the size of the Interchange West and Lyndale Gateway District; pursuant to, and in accordance with, Minnesota Statutes, Sections 469.174 to 469.1799 and Sections 469.001. to 469.047, inclusive, as amended; and WHEREAS, since the current net tax capacity of some of the parcels to be eliminated from the Interchange West and Lyndale Gateway District equals or is less than the net tax capacity of the parcels in the Interchange West and Lyndale Gateway District's original net tax capacity, the holding of a public hearing is required pursuant to Minnesota Statutes, Section 469.175, Subd. 4. NOW, THEREFORE BE IT RESOLVED by the Board as follows: 1. The HRA hereby calls for a public hearing on November 18, 2002 to consider the proposed elimination of parcels from the Interchange West and Lyndale Gateway District and cause notice of said public hearing to be given as required by law. 2. Staff and consultants are authorized and directed to take all steps necessary to prepare the related documents and to undertake other actions necessary to bring the elimination of the parcels from the Interchange West and Lyndale Gateway District and notify the County Auditor of the reduction in the geographic area of the Interchange West and Lyndale Gateway District caused by the elimination of the parcels. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary Consent AGENDA ITEM # 3D REPORT # 3 9 STAFF REPORT r HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, T/TLIi REPORT PRESENTER: BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~i!i/~ REVIEWED BY EXECUTIVE DIRECTOR: ~r ~ ITEM FOR HRA CONSIDERATION: Consideration of a proposal for services with LHB Engineers and Architects for the planning and design of a new home at 6819 Oliver Avenue. I. RECOMMENDED ACTION: By Motion: Authorize the Executive Director and Chair to execute an agreement with LHB Engineers and Architects for the planning and design of a new home at 6819 Oliver Avenue. II. BACKGROUND Neighborhood complaints led the Housing and Redevelopment Authority (HRA) to the property at 6819 Oliver Avenue South. Staff discovered an abandoned, deteriorated house with a pending bank foreclosure. The HRA acquired it in January. Due to the condition of the house, it was demolished this last spring. Staff proposes that the property be used to demonstrate new building technologies and accessibility strategies for life cycle housing. "Metal Fit" is a new framing system introduced to staff by LHB Engineers and Architects of Minneapolis (LHB). It allows for faster and more precise wood frame construction. Because of its simplicity, it should also help builders and remodelers find framers more easily in ahigh-demand market. LHB has taken this engineering technology from Japan, and has begun to utilize it here in the U.S. If built, the home 102102-681901iver on Oliver would be the third built in the U.S. The MN League of Cities sponsored a demonstration of this technology last week as part of our innovative housing construction presentation. The home on Oliver would also incorporate aspects of "visit-ability". While some homes are fully accessible, and some are not accessible at all, there are others in between that may be "visitable". A homeowner may not need an accessible house for themselves, but they may have relatives and friends that would like to visit, and would need to be able to get in the front door and use a main floor bathroom with proper space. Or a homeowner may want to plan for an elderly parent to move in who has some accessible needs. The new house on Oliver would demonstrate elements of visit-ability that can be incorporated in existing homes, as well as in new homes. The National Home Builders Association and the Minnesota Housing Finance Agency have both actively pursued opportunities for building, remodeling, and financing visitable homes. LHB could take their lead and apply practical solutions by design. Finally, the site is 50 ft. wide, which proves to be a challenge for building an attached garage without a dominate garage door appearance. The site has no alley access. The new house design would be developed to demonstrate minimizing the garage's appearance,,namely the blank space and prominence of the garage door: In addition to these objectives,. the house would be a good venue to demonstrate energy efficiency and healthy indoor. air quality.. Indoor air quality: is a concern for more and more people as the incidences of allergies, asthma and other respiratory ailments increase.. This. house could demonstrate ways to create a healthier indoor,. air atmosphere. LHB has worked. in the past with-the American Lung.-Association-to produce "Health Houses", designed using materials and: constructiontechniques to reduce or eliminate potential toxins and. pollutants: ; In September a "Health Hodse" built in Woodbury was-featured as part of the fa112002 Parade of Homes: Two education/marketing opportunities would be sought to coincide vvith the project. The home's features and technologies would be highlighted as a Parade of Homes entry. In addition, Home and Garden TV (a.k.a. "HG TV") has expressed interest to LHB for filming a new home construction using Metal Fit. Richfield .would again demonstrate its presence as a housing leader in being the first. metropolitan community to demonstrate this cutting edge technology. LHB would identify the potential technologies that could be included in the house and in its construction; conduct a workshop meeting to review those technologies and their costs/benefits; develop a conceptual house design including floor plans and elevations; and develop a preliminary project description and help communicate that to a selected builder. The cost for these services would be $7,500, plus no more than $750 for reimbursable expenses (copying, mileage, photography, etc.).. Staff estimates that if approved, design planning would begin immediately, and would be completed by January 2003. From -there a builder could be identified and a contract negotiated to be brought to the HRA for consideration by spring 2003. III. BASIS OF RECOMMENDATION A. POLICY • The HRA is a leader in housing innovation. In the 1980's Richfield demonstrated super-insulated homes. In the 1990's Richfield introduced Richfield Rediscovered and Transformation Homes. • The property provides a unique opportunity for an educational project for homeowners and builders, and the development of one new higher value home. • LHB Engineers and Architects has design and planning experience in single family home projects that incorporate technologies related to special construction techniques, visitablility, indoor air quality and energy efficiency. • The development of a single family home on the property is in conformance with the Comprehensive Plan. B. CRITICAL ISSUES • N/A C. FINANCIAL • Funds are available to undertake the activity with LHB Engineers and Architects from a 2002 land sale. • The revised- 2003 budget prepared during the spring of next year would include a strategy for funding the implementation of ideas contained in the study. D. LEGAL • LHB proposes a standard American institute of Architects agreement, the form of which has been reviewed by legal counsel and which has been utilized in the past. IV. ALTERNATIVE RECOMMENDATION~S~ • The HRA can choose not to approve the proposal with LHB V. ATTACHMENTS • Proposal from LHB (Attachment A) • Literature on the Metal Fit system (Attachment B) • Contract (Attachment C) VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative from LHB LHB Engineers & Architects 250 Third Avenue North, Suite 450 Minneapolis, MN 55401 612 338-2029 Fax 612 338-2088 www.LHBcorp.com July 11, 2002 (Revised August 29, 2002) Pam Bookhout, Rehabiliation Specialist City of Richfield, Community Development 6700 Portland Avenue Richfield, MN 55423-2599 CONSTRUCTION OF A NEW MARKET RATE HOME ATTACHMENT A Thank you for inviting LHB to respond to your need for services pertaining to the development of a new market rate home located at 6819 Oliver Avenue South in Richfield, Minnesota. You have indicated the desire to showcase this home in the Parade of Homes by incorporating cutting-edge technologies utilizing the Metal-Fit system along with healthy and energy-efficient measures. LHB has been instrumental in promoting the "healthy house" concept through our firm's commitment to designing innovative homes for enhanced performance. When we design houses, we pay particular. attention to details that will help to improve energy efficiency, resource efficiency and indoor air quality. Our partnership in the Richfield demonstration house presents many potential marketing and public relations opportunities, both in the community and the media. The opportunity with Metal-Fit is significant. The Metal-Fit system has attracted national attention from fifteen newspapers across the nation, including the Washington Post and the San Francisco Times. It has been featured in Popular Science and Builder magazines. We continue to receive product inquiries from consumers in all 50 states. HGTV's Dream Builders national TV program has directly expressed interest to us in featuring the Metal- Fit system in one of their segments. Additional marketing opportunities include partnering with other various organizations involved in the building industry, such as our previous demonstration home projects with the American Lung Association and Minnesota Power, so that we can better leverage our outreach. Like the intended goals of the Richfield home, these popular homes have successfully served as educational projects for consumers, designers and builders alike. Your expressed interest in education is essential to the project and we could help you plan a training program. With our past success in developing builder and consumer training programs, we would work with you to create and promote training opportunities that could be offered to the community and to builders on the healthy and energy efficient design principles. This also serves to create more traffic to the house, again raising the awareness on the issues of healthier, more durable. and .energy efficient housing for all. Duluth, MN Minneapolis, MN Proposal -City of Richfield Page 2 of 3 July 10, 2002 (Revised August 29,2002) Following is the Scope of Services: I. SCOPE OF SERVICES ^ Programming Workshop (half-full day) ^ Conceptual Design - Site Plan - Floor Plans - Exterior view - Preliminary project description ^ Work with pre-selected General Contractor to estimate costs II. POSSIBLE ADDITIONAL PHASES/SERVICES ^ Schematic Design ^ Design Development ^ Construction Documents ^ Construction Administration ^ .Energy Analysis ^ Educational Training Program III. FEES Fees for this project will be billed monthly based on the completed percentage of a lump sum of Seven Thousand Five Hundred Dollars ($7,500). Reimbursable expenses will be additional, refer to Exhibit B Reimbursable Rates Chart attached. Term and conditions are in accordance with the attached AIA agreement. IV. PROJECT TEAM At this stage of the project, I will assume the role as Project Principal. Attached for your review is a resume for James Brew and myself. Other staff members will be added to the project as it evolves to require additional services from LHB. We will not require any other subconsultants to do this work. V. SCHEDULE We have prepared our AIA Standard Form of Agreement Between Owner and Architect for your review and signature. Please sign the attached agreement, retain a copy for your file, and return the signed original to our Minneapolis office. Upon receipt, we are prepared to begin services in September 2002. We estimate this project to take 6-8 weeks to complete. Proposal -City of Richfield Page 3 of 3 July 10, 2002 (Revised August 29,2002) VI. CLOSING Additionally, we have enclosed information on LHB projects with special emphasis on the healthy-home and energy-efficient environment. The end product of this phase will be the tools you need to communicate the project's conceptual design and budget to the City of Richfield. Should you have any questions, please feel free to contact me at (612) 752-6923. LHB ENGINEERS & ARCHITECTS CK CARTER VICE PRESIDENT, MINNEAPOLIS OFFICE Attachments c: LHB proposal file F:\ADMINVv1ARKETING\RFPs\City of Richfield\OOOOOLT070902 Richfield Community Dev.doc ~. T O 0 D ~~n m i~ ^~' w N .~ • ~ ~~C~ 3c m ~ c ~ z -I C ~ D p C n p r C m C 3 0 ~ ~ ~ ° z ~ cnmm z-t ~' ~' m m O z n ~ o m ~ m cn ° ~ ° m = r ~ zmcm < r ~ ~ ~ N m 0 Z ; ~ ~ 3 ~D(1 m~zm zoom ~mz~ On =Om m?z ~~ m ccn m DO N Ti m ~ Q 0 3 C ~ D m ~ ~ p 0 ~ Z ~ z Z ~ c m m ~ m 0 cnz ~ z On m e n O r ~ D C 0 0 oc m ~ cnm ~ ~ ~z 0 r r~-m z~ mo ~~ ~m 0 mo c ~y m ~ ~ 0 r D D z N ~o r ~ • ~ '~'-1~D(n 0 mm ~ m Z D m~ D r~ `'~pvu~i ~r~~n NZ~C' mZ(AZ~ cn~o3y z~?~~0 z-n~m -~iD~cmnz 00~ cnzcn~0 Z~U1D O(A3DG1 Omm~ rD-m~~~ ~~p~ ~~°DC3p m~-~ r m r m ~ ~ m c ~mz~ ~D~m m v ~ 'r1 `1 O -~ D ~ z Dnfm" ~~m ~~ 0 '~ N ~- ~ ~ Z-c+z mm~ ~ ~N~ ~c3 ~1 ~ cn n mom ~m~ .... ~ o p a m p"!' ~0 N~z ~ r Dom D ~ r m~~ ~zcOn me ~D ~m m z r ~ ~m N~ m '`gin ~. ~~••-° ~' ~: + , - 1 pf m A D~Z'0 r O c~ ~~'0 m c~ ~ O~ W m m i n ~Om m~~ ~. r ~ z o ~ ~ 0 m ~ ? cn D Z ~ ~ ~ z z Dm ~+ m m~ ° m -n ° ~• D '~ 3 ~ z ~' 0 G ~~ !~^1~ D d m ~~ f,0 i~ O d g ZN~YIH~FIZZf1 ocumeni_ 727 - eeironu ormai Standard Form of Agreement Between Owner end Architect for Special Services 1888 Edition THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES: CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OA MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MAU£ BY USING AIA DOCUMENT D4o1. Recommended for use with ourreot editio ns of standard A[A AgleemeM foniu and docwaents. Copyright 1972,1979, 19118 by The American Institute of Architects, 1735 Now York Avenue. N.W. Washington D. C., xooo6-S~9z• Aeproduclion of the material herein legal D[OSeL4tlOn. of a~bstanttal ouotattoa of ris orovis t written nermissio- °Ci1'e A3A violates the cormiekt laws of the Uteited States and will ke suhiecc to AGitEEMENT made as of the 27 st day of tober is the year of 2002 BETWEEN theOwsler. (Nameand addms) Richfield Housing 8~ Redevelopment Authority 6700 Portland Avenue Richfield MN 55423-2599 and the Architect: (Naraeaudaddress) LHB Engineers ~ Architects 250 Third Avenue North Suite 450 MinneaDOlis MN 55401 Contact: Rick Carter For the following Project: (fncludedetailad description ofl'~ojec4location. addressand s~copeJ LHB Pn~ect TBD Services to be provided are- Praaramminca Workshop and Conceptual Duct rt. The Owner and the Architect agree asset Eorth below. OWNER-ARCHITECT AGREEMENT - 1988 EDITION - AtAO -WARNING: Unlicensed photocopying violates U.S. copyright taws and will subject the _ violator to legal prosecution. This document was etectronicalty produced with permission of the AIA and tan be reproduced in accordance with your license without violation until the date of expiration as noted bebw. expiration as noted below. user Document: OOOOOAG070902 CITY OF RICHFIELD.AIA - 10/16/2002. AIA License Number 1000839, which. expires on 2!28/2003. Electronic Formal 8727-1988 i ARTKLE 1 ARCHITECT'S SERVICES (Harrlist thoserervices tobeptovidedbytbeArchitect underthe Terrasand ConditionsofthaAgmment. Nateundereachservicelisted t6eraethodandraeansaf compensetior~ to be tesc+d ifapplicaGla arprovidcdinAttided) Scope of Services: 1)Programminta Workshop (half-full day) 2)Conceotual Des4n to include; Site Plan Floor Plans Frxterior view Preliminary oroiect description 3} Work with pre-selected General Contractor to estimate costs - ., .., OWNER-ARCHITECT AGREEMENT - 1988 EDITION - AlA®-WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject ihE violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced ;n accordance with your license without violation until the date of expiration as noted below. expiration as noted below. User Document: OOOOOAG070902 CITY OF RICHFIECO.AIA -10/16(1001. AtA License Number 1000839, which expires on 2/28/1003. • Electronic format 8727-1988 Z •rnrn~ f+ r)r {r (.r Tr ~ qnn? nr•n -rTn S'V .1 /17' On ](1 /()T //!T TERMS AND CONDITIONS OF AGREEMENT BETWEEN OWNER AND ARCHITECT ARTICLE 2 OWNER'S RESPONSIBILITIES 2.1 The Owner shall provide full information regarding requirements for the Pmject. The Owner shall furnish required information as expeditiously as necessary for the orderly progress of the Work, and the Architect shall be entitled to rely on the accurary and completeness thereof Z.2 The Owner shall designate a representative authorized to act on the Owner's behalf with respell to the Project The Owner or such authorized representative shall render decisions in a timely manner pertaining to documents submitted by the Architect in order to avoid unreasonable delay in the orderly and sequential progress of the Architect's services. ARTICLE 3 USE OF ARCHITECT'S DOCUMENTS 3.1 The documents prepared by the Architect for this Project are instruments of the Architect's service for use solely with respect to this Project and, unless othetwise.provided, the Architect shall be deemed the author of these documents and shall retain a!1 common law, statutory and ocher reserved rights, including the copyright. The Owner shall be permitted to retain copies, including re roducible copies, of the Architect's documents for the Owners information, reference and use •in connection with the Project. The Architect's documents shall not be used by the Owner or others on other projects, for additions to this Project or foz completion of this Project by others, unless the Architect is adjudged to be in default under this Agreement, except by agreement in writing and wish appropriate. compensation to the Architect. To the extent the Instruments of Service are modified._ suQplemented or otherwise altered by the Owner, Subsequent Design Professional. or any other party. the Owner agrees to ~ indemn' .defend and hold the Architect harmless for any claims, demands. damages or causes of action arising out of such modification, _ suoDlementation or alteration. ART{CLE 4 Unless the Darties mutually agree otherwise. the aarties shall endeavor to settle disputes by mediation in accordance with the Construction IndusW Mediation Rules of the American Arbitration Association currently in effect at the time of the dispute. A demand for mediation shall be filed. in writing, within a reasonable period ~of time after a claim. dispute or other matter in question has arisen. fn no event shall a demand for mediation be made after the date when the institution of legal or egul#abie proceedings. based uaort such a daim. disiwte or other matter in question. would have been barred by an applicable statute of limitation. 4.1 Claims, disputes or other matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof shall be subject to and decided by arbitration in accordance with the Construction Industry ' Arbitration. Rules of the American Atbittation Association currently in effect unless the patties mutually agree otherwise. 4.2 A demand for arbitration shall be made within a reasonable lime after the claim, dispute or other master in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be bared by the applicable statutes of limitations. 4.3 No arbitration arising out of or relating to this Agreement shall include, by consolidation, joinder or in any other manner, an additional person or entity not a party to this Agreement, except by written consent containing a specific reference to this Agreement signed by the Owner, Architect and any other person or entity sought to be jouted. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim. dispute or other waiter in question got described in the written consent or with a person or entity not named of described therein. The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by the parties to this Agreement shall be specifically enforceable let accordance with applicable law in any court having jurisdiction thereof. 4.4 The awazd rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. • ARTICLE 5 TERMINATION OR SUSPENSION 5.1 This Agreement may be terminatect by either party upon not less than seven days' written notice should the other party fail substantially to perform in accordance with the terms of this Agreement through no fault of the party initiating the termination. 5.2 If the Owner fails to make payment when due the Architect for services and expenses, the Architect may, upon ., - OWNER-ARCHITECT AGREEMENT - 1988 EDITION -AIA®-WARNING: Unlicensed photocopying vrolates U.S. copyright laws and will subject the violator to legal prosecution. This document was electronically produced witk permission of the AIA and can be reproduced in accordance with " your license without violation until the date of expiration as noted bebw. expiration as noted below. User Document: OOOOOAG07l>902 CITY Of RICHFIELD.AIA - 10/162001. AIA License Number 1000839, which expires on 2/28/2003. Electronic Fermat 8727-1988 3 900/b001a1 HU2id '8 9uH ti H 'I 8802 8££ ZT9 X~d OZ~80 ZO/9T/OT seven days written notice to the Owner, suspend performance of services under ibis Agreement Unles's payment in full is received by the Architect within seven days of the date of the notice, the suspension shall take effect without further notice. In the event of a suspension of services, the Architect shall have no liability to the Owner for delay or damage caused the Owner because of such suspension of services. 5.3 in the event of termination not the fauk of the Architect, the Architect shall be compensated for services perforated prior io termination, together with Reimbursable Expenses then due and all Termination Expenses as defined in Paragraph 5.4. 5.4 ~ Termination Facpenses shall be computed as a percentage.. of the compensation earned to the time of termination, as follows: .1 For services provided on the basis of a multiple of Direct Personnel Expense. zo percent of the total Direct Personnel Expense incurred to the time of termination; and .2 For services provided on the basis of a stipulated sum, ~to percent of the stipulated stun earned to the time of termination. ARTICLE 6 MISCELLANEOUS PROVISIONS 6.1 Unless otherwise provided, this Agreement shall be governed by the law of the principal place of business of the Architect. 6:2 Causes of action between the parties to iliis Agreement pertaining to acts or failures to act shall be deemed to have accrued and the applicable statute of limitations shall commence to tun not later than the dale payment is due the Architect pursuant to Paragraph 8.4. 6.3 The Owner and Architect, respectively, bind themselves, their partners, successors. assigns and legal representatives to the other party to this Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. Neither Owner nor Architect shall assign this Agreement without the written consent of the other. 6.4 'This Agreement represents the entire and integrated agreement between the Owner and Architect and supersedes 'all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only .by written instrument signed by both Owner and Architect. 6.5 Nothing contained is this Agreement shall create a contractual relationship with or a cause of action in favor off' a third party against either the Owner or Architect. 6.6 Unless otherwise provided in this Agreement, the Architect and Archited's consultants shall have no responsibility for the discovery, presence, handling, removal or disposal of or exposure of persons to hazardous materials in any form at the Project site, including but. not limited to asbestos, asbestos products, polychlorinated biphenyl (PCB) or ocher toxic substances. ARTICLE 7 PAYMENTS TO THE ARCHITECT 1.1 DIRECT PERSONNEL EXPENSE 7.1.1 Direct Personnel Expense is defined as the direct salazies of the Architect's personnel engaged on the Project and the portion of the cost of their mandatory and customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays, vacations, pensions, and similar contributions and benefits. 7.2 REIMBURSABLE EXPENSES ?.2.1 Reimbursable Expenses are in addition to the Architect's compensation and include expenses incurred by the Architect and Architect's employees and consultants in the interest of the Project for. .l expense of transportation and living expenses in connection with out-of--town travel authorized by the Owner, .2 long-distance communications; .3 fees paid for securing approval of authorities having jurisdiction over the Project; ` .4 reproductions; .5 postage and handling of documents; .6 expense of overtime work requiring higher than regular rates, if authorized by the Owner, J renderings and models requested by the Owner; .8 expense of additional coverage or limits, induding professional liability insurance, requested by the Owner in excess of that normally carried by the Architect and the Architect's consultants; and .9 Expense of computer-aided design and drafting equipment time when used in connection with the Project 7.3 PAYMENTS ON ACCOUNT OF THE ARCHITECT'S SERVICES 7.3.1. Payments on account of the Archited's services and for Reimbursable Expenses shall be made monthly upon OWNER-ARCHITECT AGREEMENT - 1988 EDITION - AtA®- WARtd1NG: Unlicensed photocopying violates U.S. Copyright laws and will subject the violator fo -legal prosecution. Tbis document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted bebw. expiration as noted below. User Document: 00000AG070902 CITY OF RlCtifIELD.AIA -10/16/2002. A[A tkense Number 1000839, which. expires on 2/2812003. Electronic Format B7Z7--1988 4 800/~OOU71 HU2R' '8 9\IH S H 't 8802 8££ ZT9 XV.3 TZ=80 ZO/9T/OT presentation of the Architect's statement of services rendered or as otherwise provided in this Agreement. 7.4.1 Records. of Reimbursabk Expenses and expenses pertaining to services performed on the basis of a multiple of 7.3.2 Aa initial payment as set forth in Pazagraph 8.t is the Dtred Personnel Expense shall be available to the Owner or the minimum payment under this Agreement. Owner's authorized representative at mutually convenient times. 7.4 ARCHITECT'S ACCOUNTING RECORDS ARTICLE 8 BA515 OF COMPENSATION The Owner shall compensate the Architect as follows: 8.1 AN INITIAL, PAYMENT OF Two Thousand-Five Hundred Dollars (s 2.500) shall be made upon execution of this Agreement and credited to the Owner's account at final payment. 8.2 COMPENSATION FOR THE ARCHITECT'S SERVICES, as described in Article r, Architect's Services, shall be computed as follows: (Insert basis oftomperrsstion,, Including stipulated sums mu/tipks orixtrent~ex acrd identify the services to which particular methods ofocmpensetion apply, if neressarY•J Fees for this protect well be billed morrthly bas don the completed percentage of a lump sum of Seven Thousand Five Hundred Dollars G67.500). Reimbursable expenses will be additional refer to Exhibit 8 Reimbursable Rates Chart tattached) -estimated to be 1090 of the fee 8.3 FOR REIMBIIRSABI.E EXPENSES, as described in Article 7, and any other items included in Article 9 as Reimbursable Expenses, a multiple of one and one4en h (1.10) times the expenses incurred by the Architect, the Architect's employees and consultants in the interest of the Project. 8.4 Payments aze due and payable the (30) days from the date of the Architect's invoice. Amounts unpaid si (60 ) days after the invoice date shall beat interest at the rate entered below, of in the absence thereof, at the legal rate prevailing from time to time ai the principal place of business. of the Architect. (IrlsrK rate afiaterr^st ~md upon. J Annual interest rate of eight percent (8 0%) or 0 67% per month (tlnuylaws and rmuurments wader the Federal7htth m Lending Acy similar state andlocal consumer<Tadi[ Laws and other~grlletiolts at the Ownar~ and Arshi(ect's principal glares of ess, the location ofthe Pmjrct and elsewherr may affect the wdlidityofthas provision. Sperilrc legal advice should be obtaiaed with trspect to dektionsormodiGcxiions, aad a/solegardiltg otherrequironentsserch as writtendisclasures or waivers.) 8.5 IF THE SCOPE of the Project or of the Architect's services is changed materially, the amounts of compensation shall be equitably adjusted. ARTICLE 9 OTHER CONDITIONS 9.1 LIMIT OF LIABt7.I'I'Y This Agreement entered into as of the day and year first written above. OWNER (SagnaruteJ RICHFIELD HOUSING 8 REDEVELOPMENT AUTHORITY (Print name ~ e lTECT i srgna[ureJ RICHARD A. CARTER VICE PRESIDENT MINNEAPOLIS (Plintednam OWNER-ARCHITECT AGREEMENT - 1988 EDITION -AIA®-WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted below. expiration as rested below. User Document: OOOOOAG07o902 -CITY OF RtCHFIELD.AIA - TO/f61Z00Z. AIA License Number 1000839, which~expires on Z/28/2003. Electronir_ Format 8727-1988 5 AGENDA ITEM # 3C REPORT # 38 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW REVIEWED BY EXECUTIVE DIRECTOR: LYNNETTE CHAMBERS, LEASED HOUSING SPECIALIAST NAME, TITLE BRUCE PALMBORG, COMMUNITY. DEVELOPMENT DIRECTOR NAME, TITLE SIGNATURE ITEM FOR HRA CONSIDERATION: Consideration of proposed adjustment of payment standard for the Section 8 rent assistance program. I. RECOMMENDED ACTION: By Motion: Approve the adjustment of payment standard for the Section 8 rent assistance program. III. BACKGROUND ~ The Section 8 program is administered in accordance with the Housing and Redevelopment Authority's (HRA) Administrative Plan. According to the plan and the Department of Housing and Urban Redevelopment (HUD) regulation, the voucher program provides financial assistance based on unit bedroom size. Clients pay a minimum of 30 percent of their income towards rent. On an annual basis HUD establishes a fair market rent (FMR). The allowable FMR is expressed as a specific percentile point within the rent distribution of standard-quality rental housing units. The current definition HUD uses is the 40th percentile rent; the dollar amount below which 40% of the standard-quality rental housing units are rented. The 40th percentile rent is drawn from the distribution of rents of all units occupied by recent movers (renter households who moved to their present residence with the past 15 months). 102102Section8-Payment Individual HRA's are allowed to select a payment standard within 90% to 110% of the FMR. The selection of the payment standard should assure that a sufficient supply of rental housing is available to program participants. The Richfield HRA conducts a rental survey on an annual basis to help in determining an appropriate payment standard. Currently, the survey results indicate that the Richfield HRA should adopt a payment standard that is 100% of the FMR established by HUD. In order to increase housing selections for families with a disabled person, the Richfield HRA has requested and received permission from HUD to increase the payment standard for those families to 120% of the area FMR. The new payment standards are reflected in the budget proposed by the Richfield HRA to HUD for the 2003 fiscal year. The attached table (Attachment A) clarifies the changes being proposed. The last adjustment made by the HRA was February, 2001. III. BASIS OF RECOMMENDATION A. POLICY • The HRA must approve increases in the payment standard for the Section 8 program. • Section 8 participants will be able to choose from a larger selection of affordable housing units and receive some immediate rent relief. • HUD provides sufficient federal assistance to cover these adjustments in the payment standards and has approved the increase. B. CRITICAL ISSUES • Without an increase in the payment standard many Section 8 participants will be unable to find housing and keep up with changing rents. C. FINANCIAL • An increase in the payment standard will decrease the rent burden for Section 8 participants. • HUD provides sufficient funding to cover the increase. D. LEGAL • The contract between the HRA and HUD provides for FMR adjustments in accordance with federal regulations. TERNATIVE uo not cnange the payment stand suggest an adjustment is needed. is time. However, HUD guidelines V. ATTACHMENTS m ons to voucher program. ~ VI. PRINCIPAL PARTIES EXPECTED AT MEETING ~ Attachment A PROPOSED MODIFICATIONS TO SECTION 8 VOUCHER PAYMENT STANDARDS PROPOSED INCREASE FOR JANUARY 1, 2003 Payment standard for Families with a CURRENT HRA .PROPOSED HRA Disabled Family UNIT SIZE PAYMENT STANDARD PAYMENT STANDARD Member 0 Bedroom $ 500 $ 554 $ 664 1 Bedroom $ 659 $ 713 $ 855 2 Bedroom $ 816 $ 912 $1,094 3 Bedroom $1,104 $1,233 $1,479 4 Bedroom $1,250 $1,397. $1,676 102102Section8-Payment AGENDA ITEM # 3B REPORT # ~ ] r STAFF REPORT ~ HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: PAM BOOKHOUT, REHABILITATION SPECIALIST NAn~, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~~~ .., REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR SIDERATION: The use of fees for services provided under the Housing and Redevelopment Authority housing programs. RECOMMENDED ACTION: By Motion: Authorize the attached resolution for the use of fees for services provided under the Housing and Redevelopment Authority rams. III. BACKGROUND ~ Annually, the Housing and Redevelopment Authority (HRA) provides 30-40 Rehabilitation Deferred Loans and Transformation Loans to Richfield residents. First-time buyers under the New Home Program who have purchased homes developed by the HRA and Hennepin Technical College also have HRA liens. As market interest rates for lending continue to remain low, many past loan recipients or homebuyers refinance their first mortgages. Each time this occurs, the HRA is asked to subordinate our zero-interest liens. Each request for subordination is carefully reviewed by staff to ensure that the property is not over encumbered, in order to keep the HRA's lien. secure. Information on the property's current appraised value, and on other filed liens is obtained to make the analysis. For homes purchased under the New Home Program, the owner's income must also be reviewed. Staff then prepares the agreement, obtains the required HRA signatures 102102HRAFees and then sends the document to the lender, broker or title company. Usually requests for the subordination agreement are received one to three days before closing, requiring an immediate response. The number of subordination agreements requested currently per month ranges from 8 to 15. Staff proposes that a fee of $50 for administrative staff time be charged to the applicant at the closing. On a related matter occasionally an applicant has a complicated title situation that requires title work or specially drafted documents. In those cases, the loan recipient would reimburse the HRA directly for costs incurred by a title company or legal counsel to create a title on which the HRA can successfully file its lien. III. BASIS OF RECOMMENDATION A. POLICY • It is reasonable to require a fee for services provided, especially with the numerous requests received for subordination agreements, and the quick turnaround expected. • The Rehabilitation Deferred Loan is funded with federal funds. The Department of Housing and Urban Development. has agreed that the proposed fees are reasonable. B. CRITICAL ISSUES • N/A C. FINANCIAL • A $50 fee for subordination agreements would be required. The revenue would. be used against program costs. • Homeowners would cover the costs to provide clear title and allow the HRA to file its liens either on their own or through reimbursing the HRA for actual costs incurred. D. LEGAL • A resolution is required to establish any HRA fees. IV. ALTERNATIVE RECOMMENDATION~S~ • Do not approve the use of fees. V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE USE OF FEES FOR SERVICES PROVIDED UNDER HOUSING AND REDEVELOPMENT AUTHORITY PROGRAMS WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) provides loans under various home improvement programs to allow for the maintenance and improvement of Richfield homes; and WHEREAS, the HRA provides junior mortgages for homes developed and sold to first-time buyers to make them affordable; and WHEREAS, the HRA must file its mortgage documents in order to secure the liens, and therefore must have evidence of proper title and ownership; and WHEREAS, if proper title and ownership need to be resolved through title updating or through legal services, the homeowners will be responsible for those fees; and WHEREAS, the HRA is requested to subordinate its liens whenever homeowners refinance or obtain a new mortgage on their home; and WHEREAS, the HRA is willing to provide such a service in cases where the HRA's lien is still secure, and the homeowner pays a $50.00 fee to cover administrative costs. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, homeowners shall be responsible for actual fees to provide proper title and ownership for HRA lien filing, and a fee of $50.00 shall be required whenever a request is received for a subordination of an HRA lien. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary AGENDA ITEM # 3A REPORT # 36 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 21, 2002 REPORT PREPARED BY: REPORT PRESENTER: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR DEPARTMENT DIRECTOR REVIEW: ca! NAME, TITLE REVIEWED BY EXECUTIVE DIRECTOR: ~~ ITEM FOR HRA CONSIDERATION: Consideration of a resolution authorizing the issuance of Certificates of Completion to KEY- LAND HOMES for 7241 Second Avenue and 6929 Queen Avenue, Spencer Dahl & Rachelle A. Reynolds for 6856 Park Avenue, Twin Cities Habitat for Humanity for 7039 Fifth Avenue, and Affordable Suburban Housing. Inc. for 6444 Clinton Avenue. I. RECOMMENDED ACTION: By Motion: Authorize the Chair and Executive Director to execute the Certificates of Com letion in accordance with the attached resolution. II. BACKGROUND Development agreements under the Richfield Rediscovered program provide for the issuance of a Certificate of Completion when residential construction is completed. (A sample certificate is attached.) The homes at 7241 Second, 6929 Queen and 6956 Park Avenues were built new under the Richfield Rediscovered program. All homes have been completed and sold to the end buyers. The home at 7039 Fifth Avenue was built for a low income family under the New Home Program, and will be sold by Habitat before the end of October. The home at 6444 Clinton Avenue had a rear addition constructed to create accessible space inside, plus other general improvements. This home was completed under the New Home program and sold 101201 Cert-Completion to an income qualified first-time buyer. Certificates of Occupancy have been issued by the Inspections Division for all properties. III. BASIS OF RECOIVIlVIENDATION A. POLICY • The Richfield Housing and Redevelopment Authority (HRA) must authorize the issuance of Certificates of Completion under terms of the contracts. B. CRITICAL ISSUES • Construction has been completed and the Inspections Division has issued Certificates of Occupancy. • The issuance of a Certificate of Completion is required to release the builders from the Contract for Private Development after construction completion. C. FINANCIAL • N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION~S~ • Do not issue Certificates of Completion at this time. V. ATTACHIVIENTS • HRA Resolution • Sample Certificate of Completion VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING ISSUANCE OF A CERTIFICATE OF COMPLETION FOR THE NEWLY CONSTRUCTED RESIDENTIAL PROPERTY AT 7241 SECOND AVENUE, 6929 QUEEN AVENUE, 6856 PARK AVENUE, 7039 FIFTH AVENUE, AND FOR THE REMODELING IMPROVEMENTS AT 6444 CLINTON AVENUE WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota entered into contract with KEY-LAND HOMES for 7241 Second Avenue and 6929 Queen Avenue, Spencer Dahl & Rachelle A. Reynolds for 6856 Park Avenue, Twin Cities Habitat for Humanity for 7039 Fifth Avenue, and Affordable Suburban Housing Inc. for 6444 Clinton Avenue; and WHEREAS, the homes located at each of the properties are completed. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, the Certificates of Completion for 7241 Second Avenue, 6929 Queen Avenue, 6856 Park Avenue, 7039 Fifth Avenue and 6444 Clinton Avenue can be issued. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 101201 Cert-Completion CERTIFICATE OF COMPLETION The undersigned hereby certifies that has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development", between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and dated , filed as Document No. with respect to the construction of the approved construction plans at legally described as and is released and forever discharged from its obligations to construct under such above- referenced Article. DATED: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY RICHFIELD, MN By Its Chairperson ey Its Executive Director STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 20 , by Thomas E. Harms and Samantha Orduno the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: The Housing and Redevelopment Authority in and for the City of F2ichfield 6700 Portland Avenue South Richfield, MN 55423 612-861-9760