01-18-00 agendaCITY OF RICHFIELD
TUESDAY, JANUARY 18, 2000
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
7 P.M. _.
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF SPECIAL HRA MEETING OF NOVEMBER 22, 1999
1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE
AGENDA
2. ELECTION OF HRA OFFICERS FOR 2000
HRA LETTER NO. 1
3. HRA APPROVAL OF AGENDA
4. CONSENT CALENDAR CONTAINS SEVERAL SEPARATE ITEMS WHICH ARE
ACTED UPON BY THE HRA IN ONE MOTION. ONCE THE CONSENT
CALENDAR HAS BEEN APPROVED, THE INDIVIDUAL ITEMS AND
RECOMMENDED ACTIONS HAVE ALSO BEEN APPROVED. NO FURTHER
HRA ACTION IS NECESSARY. HOWEVER, ANY HRA COMMISSIONERS MAY
REQUEST THAT AN ITEM BE REMOVED FROM THE CONSENT CALENDAR
AND PLACED ON THE REGULAR AGENDA FOR HRA DISCUSSION AND
ACTION. ALL ITEMS LISTED ON THE CONSENT CALENDAR ARE
RECOMMENDED FOR APPROVAL.
A. CONSIDERATION OF APPROVAL OF DESIGNATION OF STEVEN L. DEVICH
AS HRA ACTING EXECUTIVE DIRECTOR FOR 2000 DURING ABSENCES OF
EXECUTIVE DIRECTOR ORDUNO HRA L. 2
B. CONSIDERATION OF APPROVAL OF DESIGNATION OF RICHFIELD SUN
CURRENT AS HRA OFFICIAL NEWSPAPER FOR 2000 HRA L. 3
C. CONSIDERATION OF APPROVAL OF RESOLUTIONS DESIGNATING HRA
OFFICIAL DEPOSITORIES FOR 2000, INCLUDING APPROVAL OF
COLLATERAL HRA L. 4
D. CONSIDERATION OF APPROVAL OF MODIFICATION TO SOUTH HENNEPIN
HUMAN SERVICE PLANNING AGENCY CONTRACT TO INCLUDE PAYMENT
OF ADDITIONAL $1500 HRA L. 5
E. CONSIDERATION OF APPROVAL OF RESOLUTION RATIFYING PAST
ACTIONS TAKEN BY RICHFIELD CITY COUNCIL RELATING TO TAX
INCREMENT FUND ACCOUNTS HRA L. 6
F. CONSIDERATION OF APPROVAL OF RESOLUTION AUTHORIZING $300,000
REDUCTION IN IRREVOCABLE STANDBY LETTER OF CREDIT DATED
OCTOBER 13, 1999 FOR ACCOUNT OF CSM INVESTORS, INC.; SHOPS AT
LYNDALE, PHASE II HRA L. 7
G. CONSIDERATION OF APPROVAL OF CONTINUATION OF COMMUNITY
APARTMENT PROGRAM FOR 2000 HRA L. 8
5. CONSIDERATION OF "CITY BELLA" DEVELOPMENT CONCEPT AND
AGREEMENT WITH GRAMERCY CORPORATION FOR EXCLUSIVE
COOPERATION WITH. HRA IN EXPLORING FEASIBILITY OF REDEVELOPING
SOUTHWEST QUADRANT OF LYNDALE AVENUE AND 66TH STREET;
GRAMERCY REDEVELOPMENT PROJECT AREA
HRA LETTER NO. 9
6. CONSIDERATION OF REPORT AND RECOMMENDATIONS OF AFFORDABLE
HOUSING REPLACEMENT POLICY ADVISORY COMMITTEE; MITIGATIVE
AREA
HRA LETTER NO. 10
7. CONSIDERATION OF CONTRACT FOR PRIVATE REDEVELOPMENT WITH
CSM INVESTORS II FOR REDEVELOPMENT OF WEST SIDE OF LYNDALE
AVENUE AND EAST SIDE OF ALDRICH AVENUE WITHIN LYNDALE GATEWAY
REDEVELOPMENT AREA
HRA LETTER NO. 11
8. CONSIDERATION OF CONTRACT FOR PRIVATE REDEVELOPMENT WITH
MINNSTAR BUILDERS FOR REDEVELOPMENT OF EAST SIDE OF GARFIELD
AVENUE WITHIN LYNDALE GATEWAY REDEVELOPMENT AREA
HRA LETTER NO. 12
9. CONSIDERATION OF SECOND SUPPLEMENT TO CONTRACT FOR PRIVATE
REDEVELOPMENT WITH RICHFIELD SENIOR HOUSING, INC. FOR
REDEVELOPMENT OF PORTION OF LYNDALE GATEWAY AREA
HRA LETTER NO. 13
10. CONSIDERATION OF EXTENSION OF AGREEMENT WITH RYAN COMPANIES,
US, INC. TO PROVIDE PLANNING AND DEVELOPMENT ASSISTANCE IN PENN
AND 66TH STREET AREA
HRA LETTER NO. 14
11. CONSIDERATION OF MARKETING CANDLEWOOD RESTAURANT PARCEL TO
CEDAR AVENUE BRIDGE PROJECT BUSINESS RELOCATEES
HRA LETTER NO. 15
12. EXECUTIVE DIRECTOR REPORT
13. 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.
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 15
Agenda January 18, 2000
Issue Statement:
Consideration of marketing the Candlewood restaurant parcel to Cedar Avenue bridge
project business relocatees.
Background:
When land was being assembled for the Candlewood Hotel, a restaurant parcel was
created. In the spring of 1998, restaurant users were seeking sites in the I-494 corridor,
and initially, there was preliminary interest in the site that faded. Listing the property
with two different brokers was not successful either, for at least one broker made
several dozen direct contacts with potential users.
Basically, other potential sites in the corridor are more attractive and the Candlewood
site lacks sufficient visibility. As the other more attractive sites are developed, this site
will become more viable and the completion of 77th Street will increase traffic volumes;
however, to project a specific time when it may become more marketable as a
restaurant parcel would be problematic.
The Richfield Housing and Redevelopment Authority (HRA) may wish to consider
making the parcel available to certain businesses in the Cedar Avenue corridor that will
be displaced due to the Cedar Avenue bridge project. (While there too may be
business displacement from the west side of Lyndale in Lyndale Gateway and the
Interchange West area, displacement from. the Cedar Avenue corridor is a virtual
certainty at this time.) Currently, though, there are some restrictions on the site and
there would be a need for some standards to assure quality development.
Agreement between HRA and Candlewood
The agreement between the two parties was signed by the Richfield HRA on July 6,
1998. The agreement includes cross easements for driveway, parking areas, walkways
and sidewalks, which include all of the cross-hatched or dot pattern areas in the two
attached easement drawings. These are the areas on the attached site plan that are
not designated for buildings or landscaping.
The agreement defines a building pad of about 9,600 sq. ft. This would accommodate
a 9,600 sq. ft. single story building or a 19,200 sq. ft. two story building. Based on the
parking requirements in the zoning code, a 19,200 sq. ft. building would use all but
seven parking spaces shown on the site plan for the HRA parcel. Additional building
area can only be obtained by modifying the cross-easement agreements. Both
Candlewood and the real estate trust that recently purchased the property would need
to agree to the changes.
Even though the diagram labels the building pad as a "Future Restaurant," there does
not appear to be any language limiting the use of the site to a restaurant; therefore,
other uses could be sought. Legal counsel agrees with this conclusion. Candlewood
has also indicated that they are nat opposed to other uses as long as they are
compatible. However, Candlewood does not have the authority to veto other uses.
Land Sale Value
The site assembly process had several components. The City had owned the former
Lampert Lumber site for some time. The HRA purchased a railroad parcel. Then the
HRA sold some of the railroad parcel to the City and the City sold a portion of the
Lampert site to the HRA. The 49,125 sq. ft. of land area had a net cost to the HRA of
about $10.40 per sq. ft. ($510,900) for the restaurant parcel. A recent appraisal by an
experienced appraiser indicates the value of the property to be $8 per sq. ft. ($393,000).
Thus, if the HRA were to sell the parcel for $8 per sq. ft., it would be providing a write
down of $2.40 per sq. ft. on a cleared ready-to-build site.
Priorities for Reuse of the Candlewood Restaurant Site
The future use of the site should be guided by principles and evaluation criteria. Any
future use should be:
• .Compatible with the Candlewood Hotel;
• A retail, office, or service use;
• Able to accommodate the shared parking requirements with the hotel;
• Compatible with the high quality design and aesthetic appeal established by the
77th Street noisewall and Candlewood Hotel. (The design should be compatible,
but not necessarily the same as the Candlewood.) No canopies with
underlighting will be allowed;
• Landscaped and designed to exceed City standards. Use of masonry in the
exterior design is preferred;
• Designed so that there are no rooftop, freestanding signs or billboards.
Additional sign information may be placed on the existing freestanding signs
shared with Candlewood; and
• Not less than 9,000 sq. ft. in size.
In addition, preference for reuse of the site should be given to those uses that:
• Are relocated from Trunk Highway 77 (TH 77) and 66th Street interchange
expansion project;
• Accommodate .more than one business from the TH 77 and 66th Street project;
• Have a high taxable value;
• Have high employment; and
• Can document that a high proportion of their business is from Richfield residents
or businesses.
Uses that are automobile service, sales or storage related would be prohibited from
locating on this site. Uses in operation for 24 hours a day would not be considered
compatible.
Selection Process for New Uses
The following process would be followed to select the new use:
1. Advertise the availability of this property to those businesses to be displaced by the
Cedar Avenue bridge project. Interested parties would submit a concept plan
showing site utilization and building elevations. The development team members
must be identified, and the team must include aMinnesota-licensed architect. The
developer must demonstrate their financial ability to develop the site by submitting a
letter from a lender who would provide the project financing.
2. The submittal must include a cashier's check for $5,000 which would be applied
toward the cost of the site. The property has been appraised and it is estimated that
its reuse value is $8 per sq. ft. The minimum acceptable payment for the sale would
be $393,000.
3. Complete proposals would be evaluated, based on how well they meet the criteria
set forth above.
4. All prospective uses that meet the minimum payment requirement will be presented
to the HRA along with a staff recommendation for the preferred user. Staff would
present the results of all evaluated proposals to the HRA.
5. The HRA will make the final selection and the property would be sold to the use
selected by the HRA. A contract would then be drafted for the parties to sign.
6. The unsuccessful proposers would have their $5,000 checks returned to them.
Timin
With HRA approval, staff will immediately prepare a letter advertising the availability of
this property with all the conditions contained in this report. The letter should be sent by
January 21. Businesses would be given until 4:30 p.m. on Friday, March 3 to submit
proposals to the Community Development office. The HRA would then choose the
developer of the site at their March 20 meeting.
Recommended Motion:
Authorize staff to implement the solicitation and selection process with the businesses
to be displaced by the 66th Street and TH 77 bridge project.
Basis of Recommendation:
1. There has been little interest in the site for a restaurant.
2. This is one of the few sites in the City that could be used for the relocation of
Richfield businesses.
3. There are no agreements with Candlewood which prevent this agreement.
Alternative Recommendation:
1. Continue to seek a restaurant for the site.
2. Market the site to a broader list of potential users.
Discussion/Decision Mode:
To be of potential use to Cedar Avenue businesses the process needs to begin. The
goal is to have the businesses relocated from Cedar Avenue by year's end.
Respectfully submitted,
tha Orduno
Executive Director
SO:ds
Attachments
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ATTAC H M ENT A HRA EASEMENT AREA
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 14 /
Agenda January 18, 2000
Issue Statement:
Consideration of extension of the agreement with the Ryan Companies US, Inc. to
provide planning and development assistance in the Penn and 66th Street Area.
Back round:
The is committed to improving the appearance and functioning of the Penn
Avenue and 66th Street (PASSS) area. In May 1998, the Ryan Companies US, Inc.
entered into an agreement with the HRA and City of Richfield to provide assistance in
formulating a redevelopment plan for the area. The essence of the a reement was that
neither the HRA nor the City would provide Tax Increment Financing ~TIF) assistance or
condemnation to a third party within the defined study area. The contract was extended
once, a year ago to December 31, 1999. Ryan is seeking an extension through June
30, 2000.
However, it is proposed that the attached agreement be modified such that the HRA is
not precluded from working with other developers with proposals consistent with the
overall concept plan being formulated. Should a developer have a feasible proposal,
the HRA would notify Ryan that the site for the proposed development was being
deleted from this agreement. (The developer would be required to pay a prorated
portion of the cost of formulating the overall concept plan.)
Ryan has been .pursuing their responsibilities. Literally dozens and dozens of potential
scernios have been evaluated and Ryan's marketing staff has conversed with potential
users. However, none of the office warehouse, office showroom and office concepts
have yet passed preliminary feasibility. In November, a new concept was identified
which consisted of mixed use, commercial on the ground floor, and residential uses on
the upper levels. Preliminary informational interviews have been held with people
familiar with mixed use. The mixed use market has an interest in this area. Time is
needed to explore this concept further and to complete the concept plan based on this
.new element.
Recommended Motion:
Authorize the Executive Director and Chair to execute the attached agreement, which
would expire June 30, 2000.
Basis of Recommendation:
1. It is only recently that a potentially viable use has been identified.
2. Additional time is needed to complete a concept plan which would reflect the mixed
use potential.
3. The "exclusive" nature of the agreement has been modified to make it possible to
work with other developers should they have viable concepts.
Alternative Recommendation:
1. Discontinue t e agreement with Ryan.
2. Propose modifications to the agreement.
Discussion/Decision Mode:
With HRA action on January 18, the agreement will be on the City agenda January 24,
2000.
Respe Ily submitted,
~~-~Q
a rduno
Executive Director
SO:cak
AGREEMENT
THIS AGREEMENT is made and entered into this day of , 2000,
by and between the City of Richfield, Minnesota a Minnesota municipal corporation
("city") and the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota a Minnesota public body corporate and politic ("HRA") (City and HRA
hereinafter collectively referred to as "First Parties") and Ryan Companies US, Inc., a
Minnesota corporation (hereinafter "Ryan").
RECITALS
First: Ryan is interested in pursuing the redevelopment of that certain area identified on
Appendix A (hereinafter the "Redevelopment Area");
Second: Ryan is proposing redevelopment within the Redevelopment Area which may
include office, restaurant, limited retail, office showroom and residential uses
(hereinafter the "Redevelopment");
Third: The First Parties .wish to cooperate with Ryan's efforts with Redevelopment and
are willing to proceed as described in this Agreement;
Fourth:. The parties acknowledge that Ryan will expend substantial time and effort, and
incur substantial expense in pursuing the Redevelopment;
Fifth: Ryan is willing. to undertake the above described activities with the reasonable
assurance from the First Parties that they will support and cooperate with Ryan in its
Redevelopment efforts;
Sixth: The First Parties and Ryan have executed this Agreement to document their
understanding with respect to the proposed Redevelopment.
AGREEMENTS
NOW THEREFORE, in consideration of the premises and mutual obligation of the
parties contained herein, each of them does hereby represent, covenant and agree with
the other as follows:
1. Statement of Intent.
It is the intention of the parties that Ryan will proceed with the development activities
necessary to permit Redevelopment in a manner, and on terms and conditions,
which are mutually acceptable to Ryan and First Parties. The parties acknowledge
that in order for Redevelopment to be constructed, Ryan may at some point need
financial and/or site assembly assistance from the First Parties. This Agreement
does not, however, constitute either approval of such financial or site assembly
assistance, nor does it obligate the First Parties to provide such assistance.
2. Undertaking by Redeveloper.
Ryan intends to undertake and pursue certain activities with respect to the
Redevelopment generally as outlined herein and within the terms of this agreement.
Ryan's activities will include the following: site planning feasibility, the development
of plans for the Redevelopment, application for necessary government approvals,
and such other activities as would be customary and necessary to permit the
Redevelopment.
3. First Parties' Undertaking and Agreement.
The First Parties agree to cooperate with Ryan in Ryan's undertakings, and
specifically agree that during the term of this Agreement the First Parties will not (i)
provide or enter into an agreement for provision of financial assistance to any third
party in connection with any proposed development within the Redevelopment Area,
or (ii) except as may be necessary in connection with the provision of public
improvements, condemn or agree to proceed with the condemnation of any property
within the Redevelopment Area to assist or facilitate development within such area
by any third party except the HRA is not precluded from working with developers
with proposals consistent with the overall concept plan being formulated. Should a
developer have a feasible proposal the HRA shall notify Ryan that the site for the
proposed development was being deleted from this agreement. (The developer
would be required to pay a prorated portion of the cost of formulating the overall
concept plan.)
4. Term.
The term of this Agreement shall be for a period of six months or June 30, 2000,
provided that, either party may terminate this Agreement as to all or any portion of
the Redevelopment Area upon thirty (30) days written notice to the other, in the
event that:. (a) the First Parties determines, in good faith, that Ryan is not diligently
pursuing the Redevelopment, or (b) Ryan determines, in good faith, that the
Redevelopment is not feasible. The First Parties may also terminate the Agreement
for failure of Ryan to meet its obligations under paragraphs 5D or 5E. Ryan will
provide the First Parties with written reports at least quarterly regarding the status of
its activities hereunder.
Any such notice shall be deemed delivered if either actually delivered, or if faxed and
mailed to the parties at the following addresses:
Ryan Companies US, Inc.
Attn: Kent Carlson
~, 700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Phone: 612/336-1200
Fax:. 612/337-5552
Richfield Housing and Redevelopment Authority
Attn: Executive Director
6700 Portland Avenue South
Richfield, MN 55423
Phone: (612) 861-9760
Fax: (612) 861-8974
5. Miscellaneous.
A. This Agreement constitutes the entire agreement between the parties relative to
the proposed Redevelopment. Unless specifically described herein, no
obligation shall be inferred or construed.
B. As expansion of the foregoing, Ryan understands that further and separate
action, for which no obligation is created hereunder, will be required before the
First Parties are obligated to take various actions with respect to the
Redevelopment. Those actions may include, without limitation:
a. establishment of Project Area and Tax Increment District;
b. agreements to provide tax increment or other financial assistance to the
Redevelopment;
c. zoning and subdivision approvals;
d. acquisition of land within the Redevelopment Area by either voluntary
purchase or condemnation (or both); and
e. construction of public improvements to serve the Redevelopment
C. Ryan further understands that many of the actions which the First Parties may be
called upon to take require the reasonable discretion and in some instances the
legislative judgement of the First Parties, such actions may be made only
following established procedures; and the First Parties may not, by agreement,
agree in advance to any specific decision in such matters.
D. Ryan hereby indemnifies, holds harmless and agrees to defend, the First Parties,
their officers, agents and ernpioyees from any claim or cause of action of
whatever nature occasioned by or arising out of this Agreement or the First
Parties performance thereunder.
E. Ryan agrees that it will pay all reasonable costs and expenses incurred by the
First Parties relating to the preparation of this Agreement and all actions taken by
the First Parties in furtherance of their obligations hereunder. Such payment
shall be made to the First Parties not later than 30 days following each request
for payment accompanied with detail necessary to support such request. Such
payment shall be made to the HRA in the following manner: 1) a $4,000
payment upon signing of the agreement and 2) additional increments of $4,000
as needed to maintain a working balance in the account.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the date
and year first above written.
CITY OF RICHFIELD
By:
By
Its:
Its:
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
By: _
Its:
gy: _
Its:
RYAN COMPANIES US, INC.
By: _
Its:
By:
Its:
APPENDIX A
PASSS AREA ®OUNDARY
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 13
Agenda January 18, 2000
Issue Statement:
Consideration of the Second Supplement to the Contract for Private Redevelopment
with Richfield Senior Housing, Inc. for the redevelopment of a portion of the Lyndale
Gateway area.
Background:
At the October 18 meeting, the Richfield Housing and Redevelopment Authority (HRA)
approved a Contract for Private Redevelopment (Contract) with Richfield Senior
Housing, Inc. (RSH). This Contract related to RSH's development of a senior apartment
building and attached offices on the east side of Lyndale Avenue between 76th and
77th Streets. A first supplement to this Contract was approved by the HRA on
November 15, 1999. This supplement related primarily to the construction and funding
of public improvements associated with the development.
The proposed Second Supplement to the Contract for Private Redevelopment was
drafted to address the sale of two-City owned properties which are to be partially built
upon by RSH. ~ The two-City owned properties are located at 7644 Garfield Avenue and
7645 Lyndale Avenue; these properties are identified on the map attached as Exhibit B.
The property at 7644 Garfield Avenue was purchased by the City from the HRA for a
nominal fee (believed to be $1.00) in 1987. The HRA had originally purchased this
property using bond proceeds from 1985. The City purchased this lot in order to
accommodate a screenwall, landscaping buffer, and loop street on Garfield Avenue and
77th Street. The screenwall and landscaped buffer were eventually removed and
replaced with new elements when 77th Street was widened within the last several
years. This lot is approximately 9,000 sq. ft. in size. The majority of the property will be
dedicated back to the City as 77th Street right-of--way when RSH replats the property.
The lot currently measures 125 feet deep by 72 feet wide; RSH will be building on the
northern 30 feet of the property and dedicating the southern 42 feet as right-of-way.
The property located at 7645 Lyndale Avenue was originally acquired by the City in
1993 by eminent domain for the 77th Street Right-of--Way Expansion Project (77th
Street Project). After site clearance for this project, the remnant parcel was paved and
landscaped. Since then, a portion of the parcel has been leased to Fred. Ryan, an
adjacent property owner, for seven parking spaces. The lease with Fred Ryan will be
terminated as a part of the sale process. This parcel is approximately 19,000 sq. ft. in
size. Approximately 43 percnet of the property will be dedicated back to the City as
77th Street right-of-way, The lot currently measures 125 feet deep by 150 feet wide;
RSH will be building on the northern 105 feet of the property and dedicating the
southern 45 feet as right-of--way.
The Supplement establishes the timing and amount of payment by RSH to the City for
the properties. The intent is to fully compensate the City for the actual value of the
.properties; either by the developer or by the HRA. The supplement sets the amount of
direct payment by RSH to the City at $37,100. However, the actual value of the
.properties will be determined within the next month. Although the fair market value of
the property will likely exceed $37,100, this is the amount which is feasible under RSH's
budget.
As a related matter, legal counsel will draft a collateral agreement between the HRA
and the City of Richfield. The purpose of this agreement is to establish a payment
method to compensate the City for the balance of the actual value of the properties.
-Under the terms of this agreement, the HRA would reimburse the difference between
the fair market value of the properties and the $37,100 to be paid by RSH. This
reimbursement would be funded with a pledge of any remaining tax increment
generated by the RSH development after all earlier commitment of tax increment funds
are fulfilled. It is currently estimated that the fair market value of the property may be
approximately $100,000 greater than the amount to be paid by RSH.
The Second Supplement. also contains some minor revisions to the original contract.
Among these revisions are:
• The completion date of the environmental review process to be changed from
January 12, 2000 to February 15, 2000.
• The development would not be considered in "default" for six months after the date
for completion of construction activities; this will allow for the completion of design
detail of the building after the primary construction is complete.
Recommended Motion:
Adopt a motion approving the attached Second Supplement to the Contract for Private
Redevelopment.
Basis of Recommendation:
1. The HRA approved the associated Contract for Private Redevelopment on October
18, 1999.
2. RSH will be building upon portions of City owned properties and will be dedicating
the undeveloped .portions of the properties to the City of Richfield for 77th Street
rig ht-of-way.
3. RSH has provided evidence that paying a greater amount for these. properties may
negatively affect the economic feasibility of the project.
4. The development may generate tax increment beyond the amount which has been
committed for site assembly and other activities. This additional tax increment
could be used to reimburse the City for the difference between the actual value of
the property and the amount to be paid by RSH.
Alternative Recommendation:
1. Do not approve the Second Supplement.
2. Approve the Second Supplement with modifications.
Discussion/Decision Mode:
Approval of this Second Supplement will help assure that the project remains on .the
attached schedule (Exhibit C).
Respectfully submitted,
C~~~-~.
%~!~,
tha Orduno
Executive Director
SO:cak
ATTACHMENT A
SECOND SUPPLEMENT
TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made and entered into this 18"' day of January, 2000, 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
RICHFIELD SENIOR HOUSING, INC., a Minnesota nonprofit corporation (the "Redeveloper").
WITNESSETH
WI~REAS, on October 18, 1999 the parties entered into the certain document entitled
"Contract for Private Redevelopment" ("Contract") providing for the redevelopment of a tract of
land by the Redeveloper, which project is commonly referred to as the "Lyndale Gateway
Project", and providing for assistance by the HRA to the Redeveloper, all as is more fully set out
in the Contract; and
WHEREAS, the HRA and the Redeveloper subsequently entered into the certain document
entitled Supplement to Contract for Private Redevelopment (the "Supplement") whereby the parties
set out their understanding, agreement and responsibility of the parties with respect to the
construction of certain public improvements and payment for the cost of said improvements in
connection with the Lyndale Gateway Project; and
WHEREAS, the Contract and the Supplement remain in full force and effect; and
WHEREAS, as a part of the Lyndale Gateway Project, the HRA has agreed to cause the
City of Richfield ("City") to convey to the Redeveloper certain real property owned by the City
and legally described as follows:
Lots 8, 9 and 10, Block 7, Sunset Terrace, according to the recorded plat thereof,
Hennepin County, Minnesota
(the "City Property"); and
~~
WHEREAS, the City's charter provides for sale of City land by ordinance; and
WHEREAS, the procedure for sale of City Property by ordinance is such that the City
cannot convey Lots 9 and 10 of the Property to the Redeveloper prior to February 17, 2000, and
the City may not be in a position to convey Lot 8 of the City Property to the Redeveloper until
approximately March 22, 2000 (the "Conveyance Dates"); and
WHEREAS, the Redeveloper requires access to the City Property before the Conveyance
Date(s) to commence construction of the Lyndale Gateway Project, and the Redeveloper has
requested certain assurances from the City that the City will convey the City Property to the
Redeveloper upon compliance with the provisions of the City's charter; and
WHEREAS, the parties hereto desire to memorialize their understandings and agreements
with respect to the conveyance of the City Property; and
WHEREAS, the parties also desire to amend the Contract to reflect certain other
agreements and revisions with respect to the terms thereof.
NOW THEREFORE, in consideration of the premises and mutual obligations of the
parties contained herein, each does hereby represent, covenant and agree with the other as follows:
1. Conveyance of City Proper The HRA agrees that it will convey good and
marketable fee simple title to the City Property to the Redeveloper in accordance with the
provisions of the City Charter.
2. Actions to be taken by City. The HRA will cause the City to take, at the earliest
date(s) possible, any and all steps necessary to obtain the authority to convey the City Property to
the Redeveloper, including, without limitation, introduction of the proposal for sale at the City's
January, 2000, council meeting, passage of the requisite fourteen day period, adoption of the
ordinance, and passage of the 30-day publication period. The HRA will further cause the Ciry to
take any and all steps necessary to timely respond to a sufficient referendum petition should the
same become necessary.
3. Access for Improvements. The HRA shall further cause the City to enter into an
access agreement with the Redeveloper, which shall be in substantially the form attached hereto as
Exhibit A (the "Access Agreement"). The Access Agreement shall provide that, prior to the date
of conveyance by the City to the Redeveloper, the Redeveloper, its agents, employees, and invitees
may enter onto the Property for the purposes of demolition, inspecting the Property (including
without limitation soil tests and environmental testing), excavating, soil preparation and
construction of the "Minimum Improvements", as defined in the Contract.
4. Indemnity. The HRA shall indemnify and hold the Redeveloper harmless from and
against any and all claims, damages, liabilities and expenses (including reasonable attorneys' fees
and expenses) resulting from the City's failure or refusal to convey the City Property to the
Redeveloper as provided herein.
C7
2
5. Amendment of Section 2.5.1. Section 2.5.1 of the Contract is hereby amended
such that the date "January 12, 2000" in the last paragraph thereof is deleted and replaced with the
date "February 10, 2000" .
6. Amendment of Section 10. l.b. Section 10. l.b. of the Contract is hereby amended
such that the following clause is inserted at the end thereof:
"; provided, however, that in the event Redeveloper fails to complete the
Minimum Improvements on or before the date specified in Section 4.5, such
failure shall not be considered an Event of Default unless the same
continues for a period of six (6) months. "
7. Amendment of Section 11.9. Section 11.9 of the Contract is hereby deleted in its
entirety and replaced with the following:
"Section 11.9. On the date that title to the City Property is transferred to
the Redeveloper, the Redeveloper will enter into an agreement providing
that it will pay the city $37,000 as Redeveloper's full purchase price for the
City Property. Timing of payment will be based on the following events:
1. If the acquisition cost of the Redevelopment Property is less
than $3,000,000, and the difference ("Difference") between the actual
acquisition cost and $3,000,000 is less than the purchase price of the City
Property, the Difference will be payable at the closing, and the balance to
equal said purchase price will be payable within two years following the
date of this Agreement.
2. If the acquisition cost of the Redevelopment Property is
more than $3,000,000, the entire purchase price for the City Property will
be payable not later than two years following the date of this Agreement.
The Redeveloper's parent corporation shall guarantee payment of any
amounts due under this Section 11.9 and not paid at closing. "
8. New Section to Article IX. Article IX of the Contract is hereby amended
by adding thereto the following new Section 11.10:
Section 11.10. Modifications to Assessment Agreement. The HRA
agrees that from time to time upon the request of the Redeveloper it will
modify the Assessment agreement by dividing it into separate agreements as
may be necessary to accommodate the sale or transfer of portions of the
property. The Minimum Market value contained in the Assessment
agreement will be allocated in the separate agreements as the parties
determine.
9. Amendment of Exhibit B. Exhibit B to the Contract (the Limited Revenue Tax
Increment Note) is hereby amended such that the principal amount thereof is increased to
3
$4,155,944.00, and that the amounts of the "Scheduled Payments" thereunder are adjusted to the
amounts set forth on Exhibit B attached hereto.
10. Contract To Remain In Effect. The provisions of this Agreement supercede any
inconsistent provisions in the Contract or the Supplement. Unless the provisions of this Agreement
specifically conflict with the provisions of the Contract or the Supplement, the Contract and
Supplement remain in full force and effect and are unaltered by this Agreement.
11. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and
year first above written.
THE HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF RICHFIELD,
MINNESOTA
By:
Printed Name:
Title:
By:
Printed Name:
Title:
STATE OF MINNESOTA )
ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of , 2000, by
and the
and of The Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic.
Notary Public
•
4
RICHFIELD SENIOR HOUSING, INC.,
a Minnesota nonprofit corporation
By:
Kristi Olson
Its President
STATE OF MINNESOTA )
ss.
COUNTY OF 1
The foregoing instrument was acknowledged before me this day of , 2000, by
Kristi Olson, the President of Richfield Senior Housing, Inc., a Minnesota nonprofit corporation, on
behalf of the corporation.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
MESSERLI & KRAMER P.A. (PWA)
1800 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402
(612) 672-3600
•
5
EX)FIIBIT A
SECOND SUPPLEMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT
ACCESS AGREEMENT
THIS ACCESS AGREEMENT ("Agreement") made this 18th day of January, 2000, by and
between THE CITY OF RICHFIELD, MINNESOTA, a Minnesota body corporate and politic, of
6700 Portland Avenue South, Richfield, Minnesota 55423 ("City") and RICHFIELD SENIOR
HOUSING, INC., a Minnesota nonprofit corporation, of 1900 West County Road E-2, Arden Hills,
Minnesota 55112 ("Redeveloper").
WHEREAS, Redeveloper and The Housing and Redevelopment Authority in and for the City
of Richfield (the "HRA") are parties to that certain Contract For Private Redevelopment dated
October 18, 1999, Supplement to Contract for Private Redevelopment dated November 15, 1999,
and Second Supplement to Contract for Private Redevelopment dated October 18, 1999 (hereinafter
collectively referred to as the "Contract"). The Contract provides, among other things, that the HRA
will convey certain real property (the "Redevelopment Property") to the Redeveloper for purposes of
developing approximately 130 units of senior apartments, 30 assisted living units and 38,000 square
feet of office space (collectively, the "Minimum Improvements"); and
WHEREAS, City is the fee owner of certain real property contained within the
Redevelopment Property and located in the City of Richfield, County of Hennepin, Minnesota, as
more particularly described on the attached Exhibit A ("Ciry Property"); and
WHEREAS, pursuant to the Contract, the HRA has agreed to cause the City to convey the
City Property to the Redeveloper in accordance with the City's Ciry Charter; and
WHEREAS, due to certain procedural requirements with which the City must comply, the
conveyance of Lots 9 and 10 of the Ciry Property may not occur until March 11, 2000, and the City
may not be in a position to convey Lot 8 of the City Property until approximately -April 15, 2000 (the
"Conveyance Date(s)"); and
WHEREAS, Redeveloper desires to commence construction of the Minimum Improvements
on the Redevelopment Property, including the City Property, prior to the Conveyance Date(s); and
WHEREAS, the Ciry has agreed that, subject to the terms and conditions of this Agreement,
the Redeveloper may enter upon the Ciry Property prior to the Conveyance Date(s) for the purposes
of conducting certain inspections including without limitation, environmental testing and soil testing
(the "Inspections"), site preparation work including without limitation demolition of existing
improvements, if any, tree removal and excavation ("Site Preparation Work"), and construction of
the Minimum Improvements ("Construction"); and
WHEREAS, the parties hereto desire to memorialize their understandings and agreements
with respect to Redeveloper's access to the City Property prior to the Conveyance Date(s).
6
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and the mutual covenants and agreements set forth herein, the parties
agree as follows:
Section 1. Access. Redeveloper, its agents and contractors, are hereby granted the right of
access to enter upon the City Property to conduct the Inspections, to perform the Site Preparation
Work and to begin the Construction on or about the City Property.
Section 2. Compliance with Law. Inspections, Site Preparation Work and Construction on
the City Property shall be completed in accordance with applicable local and state laws or
ordinances.
Section 3. Permits, Notification, Governmental Approvals. Redeveloper shall obtain, at its
expense, all required permits or governmental approvals, if any, prior to the conducting of the
Inspections, the Site Preparation Work or the Construction as provided in Section 1. City shall
cooperate with Redeveloper and assist Redeveloper in obtaining such permits or approvals.
Section 4 Indemnification; Non-LiabilitX. Except as provided herein, Redeveloper shall
indemnify and hold harmless City from and against any and all claims, damages, liabilities and
expenses (including reasonable attorneys' fees) for personal injury or property damage resulting from
or relating to the Inspections, the Site Preparation Work and/or the Construction accruing prior to the
Conveyance Date(s), including, without limitation, claims, damages, liabilities and expenses resulting
from, caused or occasioned by, in whole or in part, the negligence or willful misconduct of
Redeveloper, its agents, employees or invitees. Notwithstanding the foregoing, the City shall be
liable to Redeveloper for all losses, damages, costs or expenses incurred or suffered by Redeveloper
with respect to the Site Preparation Work and Construction in the event the City Property is not
ultimately conveyed by the City to the Redeveloper.
Section 5. Insurance. Redeveloper will obtain and maintain property damage, casualty,
public liability, and workers' compensation insurance policies insuring itself and its contractors in
such amounts and coverages as required by the HRA pursuant to the Contract, will name City as an
additional insured under such policies, and will supply copies of certificates of such insurance to City
prior to entry onto the City Property.
Section 6. Costs and Expenses. Mechanic's Liens. Redeveloper shall provide to City, prior
to commencement of any Site Preparation Work or Construction on the City Property, the name and
address of any third party contracted to perform any Site Preparation Work or Construction on the
City Property. Redeveloper shall promptly pay or shall cause to be paid any and all costs and
expenses associated with the Site Preparation Work and Construction, and will not permit any lien or
liens for labor and/or materials ("Mechanic's Lien") of any other type to be filed against the City
Property as a result of any of the work referred to in Section 1 of this Agreement.
Section 7. Entire Agreement. This writing constitutes the final expression of the parties'
agreement and it is a complete and exclusive statement of the terms and conditions of that Agreement
with respect to the subject matter set forth in this Agreement.
•
7
Section 8. Modifications. This Agreement may only be amended by a subsequent written
agreement executed by authorized representatives of all parties to this Agreement.
Section 9. State Law. This Agreement shall be governed by the internal laws of the State of
Minnesota.
Section 10. Waiver. Any waiver by any party of any provision or condition of this
Agreement shall not be construed or deemed a waiver of any other provision or condition of this
Agreement, nor a waiver of a subsequent breach of the same provision or condition.
Section 11. Notices. All written notices, demands, writings, supplements, or other
documents which are required or permitted by the terms of this Agreement to be given to any party
shall be deposited in the regular first class United States mail at any Unites States Post Office or any
branch United States Post Office, postage prepaid, addressed to the parties at the addresses
hereinafter set forth and shall be effective the day following their deposit:
City:
With a copy to: John B. Dean, Esq.
Kennedy & Graven, Chartered
470 Pillsbury Center
200 South Sixth Street
Minneapolis, MN 55402
Redeveloper: Richfield Senior Housing, Inc.
1900 West County Road E-2
Arden Hills, Minnesota 55112
ATTN: Kristi Olson, President
With a copy to: Paul W. Anderson, Esq.
Messerli & Kramer P.A.
1800 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402
Section 12. Counterparts. This Agreement may be executed in any number of counterparts,
any one of which shall be deemed to be an original, but all of which shall constitute but one and the
same instrument.
Section 13. Headings. Section headings used in this Agreement are for convenience only
and shall not affect the construction of this Agreement.
•
The City of Richfield
6700 Portland Avenue South
Richfield, Minnesota 55423
ATTN:
Section 14. Expiration. This Agreement shall expire on the last of the Conveyance Date(s).
8
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year
first above written.
r:
OWNER:
THE CITY OF RICHFIELD,
MINNESOTA, a Minnesota
public body corporate and politic
By:
Printed Name:
Title:
By:
Printed Name:
Title:
REDEVELOPER:
RICHFIELD SENIOR HOUSING, INC.,
a Minnesota nonprofit corporation
By:
Kristi Olson
President
9
EXHIBIT A
ACCESS AGREEMENT BY AND BETWEEN THE CITY OF RICHFIELD, MINNESOTA
AND RICHFIELD SENIOR HOUSING, INC.
Legal Description
Lots 8, 9 and 10, Block 7, Sunset Terrace, according to the recorded plat thereof, Hennepin County,
Minnesota
•
10
EXI-IIBIT B
SECOND SUPPLEMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT
Scheduled Payments Under Limited Revenue Tax Increment Note
•
Scheduled Payment Date Scheduled Payment
08/01/02 $ 190,200,51
02/01/03 $ 190,200.51
08/01/03 $ 188,746.55
02/01/04 $ 188,746.55
08/01/04 $ 188,746.55
02/01/05 $ 188,746.55
08/01/05 $ 188,746.55
02/01/06 $ 188,746.55
08/01/06 $ 196,913.87
02/01/07 $ 196,913.87
08/01/07 $ 196,913.87
02/01/08 $ 196,913.87
08/01/08 $ 196,913.87
02/01/09 $ 196,913.87
08/01/09 $ 196,913.87
02/01/10 $ 196,913.87
08/01/10 $ 205,398.16
02/01/11 $ 205,398.16
OS/O1/11 $ 205,398.16
02/01/12 $ 205,398.16
08/01/12 $ 205,398.16
02/01/13 $ 205,398.16
08/01/13 $ 205,398.16
02/01/14 $ 205.,398.16
08/01/14 $ 214,211.73
430232_2
Scheduled Payment Date Scheduled Payment
02/01/15 $ 214,211.73
08/01/15 $ 214,211.73
02/01/16 $ 214;211.73
08/01/16 $ 214,211.73
02/01/17 $ 214,211.73
08/01/17 $ 214,211.73
02/01/18 $ 214,211.73
08/01/18 $ 223,387.35
02/01/19 $ 223,387.35
08/01/19 $ 223,387.35
02/01/20 $ 223,387.35
08/01/20 $ 223,387.35
02/01/21 $ 223,387.35
08/01/21 $ 223,387.35
02/01/22 $ 223,387.35
08/01/22 $ 232,878.31
02/01 /23 $ 232, 878.31
08/01 /23 $ 232, 878.31
02/01/24 $ 232,878.31
08/01/24 $ 232,878.31
02/01/25 $ 232,878.31
08/01 /25 $ 232, 878.31
02/01/26 $ 232,878.31
08/01/26 $ 242,758.38
02/01/27 $ 242,755.78
11
Exhibit B: Location of City Owned Lots
•
a
a
Q
a
a
-- -- i_ -----~'--~~-- _ -- -_- - ,-- ------------ ------------
-----,---------------------~.._-------------- 76~' Street ---------------------,-----
EXHIBIT C
Lyndale Gateway Tentative Project Schedule
Phase 1 (East Side of Lyndale Avenue / Wesf Side of Garfield. Avenue)
Mainstreet Senior Village Apartments and Attached Office Space
Activity Date Com lete
HRA A royal of Redevelo ment Contract Jan. 19, .1999 X
Establishment of TIF District June 14, 1999 X
Commitment from Develo er June 16, 1999 X
Purchase Offers Made on Pro erties Jul 30, 1999 X
Plannin Commission A royal of Rezonin Au . 24, 1999 X
Planning Commission A royal of Final Plan Aug. 24, 1999 X
HRA Final Ap royal of Public Funding Sept. 13, 1999 X
HRA A royal of Modified Conce t Plan Se t. 13, 1999 X
Cit Council Final A royal of Rezonin Se t. 13, 1999 X
Cit Council A royal of Final Plan CUP/FDP Se t. 13, 1999 X
HRA A royal of New Contract with Richfield Senior Housin Oct. 18, 1999 X
Re uest for Condemnation on Pro erties Without Ne otiated Deal Oct. 18, 1999 X
Notice of Relocation Benefits to Tenants Oct. 19, 1999 X
Contin encies are Removed From Purchase Offers Nov. 17, 1999 X
Residential Tenants Must Vacate Jan. 17, 2000
Closin s of Residential Pro ert Sales Jan. 17, 2000
Sale of Richfield Senior Housin 's Bonds Feb. 12, 2000
Commercial Tenants Must Vacate Feb. 15, 2000
Closin s of Commercial Pro ert Sales Feb. 15, 2000
8
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 12
Agenda January 18, 2000
Issue Statement:
Consideration of a Contract for Private Redevelopment with Minnstar Builders for the
redevelopment of the east side of Garfield Avenue within the Lyndale Gateway
Redevelopment Area.
Background:
On January 19, 1999, the Richfield Housing and Redevelopment Authority (HRA)
accepted the terms and provisions of a Contract for Private Redevelopment (Contract)
with CSM Properties, Inc. (CSM) for the redevelopment of the entire Lyndale Gateway
area. Since that time, however, there have been several changes to the structure of the
redevelopment process. The developers and staff have concluded that these changes
are significant enough to warrant the drafting of new contracts to more accurately define
the redevelopment process to occur in this project..
The most significant change is that the project is to be completed by three different
entities, each having their own schedules and particular needs. A separate contract
with Richfield Senior Housing, Inc. (RSH) was approved by the HRA on October 18,
1999. This contract was specifically for the senior apartment and adjoining office
development planned for the east side of Lyndale Avenue and west side of Garfield
Avenue.
Minnstar Builders, a subsidiary of Ron Clark Construction, has proposed the
development of 40 condominium units on the east side of Garfield Avenue. This
proposal was first made in March 1999 as a means of providing a buffer between the
senior apartment/office development and the adjacent neighborhood. Since that time,
the HRA has accepted the concept plan for the condominium development and the
Planning Commission and City Council have approved the Final Development Plan and
Conditional Use Permit. These approvals came after a great deal of community and
neighborhood input into the design of the condominium development.
The contract with Minnstar, which is being submitted for your consideration, is similar to
the contract that has been executed with RSH. One of the primary differences relates
to the manner of providing public funding. The RSH development is to be funded solely
by the tax increment generated by the development, while the condominiums planned
by Minnstar would be using Candlewood bond proceeds as well. The type and amount
of public funding were approved by the HRA on September 13, 1999 as part of the "but-
for" .analysis. Some of the funding which was identified in that analysis have shifted
from one component of the development to another, and different inflationary rates have
been applied to the tax increment. According to the attached memos (Attachment C)
from the HRA's financial consultant, Sid Inman, the changes do not warrant an
amendment to the "but-for" analysis or any other HRA action. A second memo from Mr.
Inman (Attachment D) illustrates that the total amount of funding for each component of
the project has not exceeded the maximum amount of public assistance set forth in the
approved Tax Increment Financing (TIF) Plan documents.
Another difference in the contracts being proposed and the one which had been
approved by the HRA in January include the elimination of many of the "preconditions"
for redevelopment which have since been completed. Among the completed
preconditions are: the concept plan, interior circulation plans, and the form and
adoption of the tax increment financing plan.
Recommended Motion:
Adopt a motion to approve the Cont
Builders for the redevelopment of th
Gateway Redevelopment Area.
Basis of Recommendation:
1. The HRA accepted the terms co
with CSM Properties, Inc. for the
2. On September 13, 1999, the HR
redevelopment within Lyndale G
3. On October 18, 1999, the .HRA
apartment and adjoining office p
development has received all C
the Minnstar condominium deve
4. The HRA is considering a Contr
commercial portion of the develo
development also cannot procee
5. The HRA has approved a Conce
condominium development on t
6. In addition to .approval of the Co
the development including the a
7. The condominium development
Conditional Use Permit and Fina
Alternative Recommendation:
1. Approve the contract with added
2. Do not approve the proposed co
3. Delay action until a later HRA m
Discussion/Decision Mode:
.Legal staff and the potential develop
documents and answer any questio
Respectfully submitted,
Sa a Orduno
Executive Director
ract for Private Redevelopment with Minnstar
e east side of Garfield Avenue within the Lyndale
ntained in a Contract for Private Redevelopment
Lyndale Gateway Area on January 19, 1999.
A approved the financial assistance for the
ateway.
approved a separate contract for the senior
ortion of the Lyndale Gateway development. This
ity and HRA approvals, but cannot proceed without
lopment.
act for Private Redevelopment with CSM for the
pment on the west side of Lyndale Avenue. This
d without the Minnstar condominium development.
pt Plan for the development which includes a
he east side of Garfield Avenue.
ncept Plan, the HRA has approved many aspects of
mount and type of public financing.
has received City Council approval for its
I Development Plan.
stipulations or modifications.
ntract.
eeting.
er will be present at the meeting to review the
ns.
SO:cak
• Draft 5 -January 12, 2000
CONTRACT
FOR
PRIVATE REDEVELOPMENT
BY AND BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY
• IN AND FOR THE CITY OF RICHFIELD
AND
MINNSTAR BUILDERS, INC.
,1999
This document was drafted by:
Holmes & Associates, Ltd.
Two Carlson Parkway, Suite 155
Minneapolis, MN 55447
612-249-0888 (Telephone)
. 612-249-0777 (Facsimile)
TABLE OF CONTENTS
Page
Preamble ..................................................................................................................................1
ARTICLE I
Definitions; Exhibits; Rules of Interpretation
Section 1.1. Definitions ................................................................................................................2
Section 1.2. Exhibits ...................................................................................................................5
Section 1.3. Rules of Interpretation ............................................................................................6
ARTICLE II
Representations
Section 2.1. Representations by the Redeveloper .......................................................................7
Section 2.2. Representations by HRA .........................................................................................7
ARTICLE III
Closing and Public Assistance
Section 3.1 Purchase Agreements ...............................................................................................9
Section 3.2 Condemnation ................ ..........................................................................................9
Section 3.3 Public Assistance ........... ..........................................................................................9
Section 3.4 Issuance of Note ............. ..........................................................................................9
Section 3.5 Reduction of Note .......... ..........................................................................................9
Section 3.6 Conveyance to the HRA ..........................................................................................9
Section 3.7 Survival .......................... ........................................................................................10
ARTICLE IV
Preconditions; Commencement of Construction; Assessment Agreement
Section 4.1. Preconditions to Commencement of Construction ................................................11
Section 4.2. Commencement of Construction ...........................................................................12
Section 4.3. Assessment Agreement ..........................................................................................12
ARTICLE V
Construction of Minimum Imarovements
Section 5.1. Agreement to Construct ...................................................13
......................................
C:'+iVN(.)tUtiti(1::Yi€'Yt~'vV\?.1Pft.1JOc.~ ~ rv~izic'rr,aari>ri+..~,C~.xrrrrin~n a~!~,i nn~+r:n~u '~";~C'~=nn~~.'e:~.v.-~ 1 I CoN
RICHFIELD HRA/MINNSTAR BUILDERS, INC.
•
Section 5.2. Demolition .............................................................................................................13
Section 5.3. Soil Correction; Contamination ...........................................:.................................13
Section 5.4. Concept Plans ........................................................................................................13
Section 5.5. Commencement and Completion of Construction :...............................:...............13
Section 5.6. Construction Reports .........: ..................................................................................14
Section 5.7. Certificate of Completion .....................................................................................14
ARTICLE VI
Public Improvements
Section 6.1. Defined ...................................................................................................................15
Section 6.2. Plan Review ..: ........................................................................................................15
Section 6.3. Payment ..................................................................................................................15
ARTICLE VII
Insurance
Section 7.1. Insurance .................................................................................................................16
ARTICLE VIII
Release and Indemnification Covenants
Section 8.1. Release and Indemnification Covenants ................................................................17
ARTICLE IX
FinancinE
Section 9.1. Limitations Upon Encumbrance ..........................................................:................. 18
Section 9.2. Copy of Notice of Default to Lender .................................................................... 18
Section 9.3. Lender's Option to Cure Defaults .......................................................................... 18
Section 9.4. HRA's Option to Cure Default .............................................................................. 19
Section 9.5. Subordination ........................................................................................................ 19
ARTICLE X
Prohibitions Against Assignment and Transfer
•
Section 10.1. Representation as to Development ........................................................................20
Section 10.2. Prohibition Against Transfer of Property and Assignment of Agreement ...........20
Section 10.3. Information as to Stockholders or Partners .........................:..................................21
Section 10.4. Approvals ...............................................................................................................22
r:.'.'1'~~l'VI}tJl~'+...~.E~.1(~_11C'~`~$"i:-ili II.()C)~.6.: •.~'•~n~r~n~x;c-rr;aRrv::..~'~~c•t,an ei nnr~r~,~u~•r i r. ~~~nn",c ~nirt~~.u 3z •~zn..~ 11 I CoI1
RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE XI
Events of Default
~ecticn 11.1. Defined ..................................................................................................................23
Section 11.2. Remedies ................................................................................................................23
Section 11.3. No Remedy Exclusive .........................................:...................... ........................23
Section 11.5. No Additional Waiver Implied by One Waiver ....................................................23
ARTICLE XII
Additional Provisions
Section 12.1. Conflict of Interests; HRA Representatives Not Individually Liable ....................24
Section 12.2. Nondiscrimination ..............:.:..:.....:........:.:::....... ....................................................24
Section 12.3. Provisions Not Merged With Deed .................... ....................................................24
Section 12.4. Notice of Status and Conformance .................... ....................................................24
Section 12.5. Notices and Demands ........................................ ....................................................24
Section 12.6. Counterparts ....................................................... ....................................................25
Section 12.7. Relocation .......................................................... ....................................................25
Section 12.8 Law Governing .................................................. ....................................................25
Section 12.9 Severability .............:.......................................... ....................................................25
Section 12.10. Complete Agreement ......................................... ....................................................25
y ....................................................
Section 12.11. Authorit ........ ....................................................25
TESTIMONIUM ........................................................................ ....................................................26
SIGNATURES AND ACKNOWLEDGMENTS ...................... ....................................................26
EXHIBIT A Redevelopment Property Legal Description
EXHIBIT B Form of Limited Revenue Tax Increment Note
EXHIBIT C Form of Certificate of Completion
EXHIBIT D Form of Assessment Agreement
EXHIBIT E Form of Subordination Agreement
EXHIBIT F RSH Property Legal Description
C ty~i1~Ot hiti`~T F_~.l ~~il ti;v4 ~ %i i~' ILi~C1C~r,~~-k+t~ v ~~~ ~I~-~1r +i~~ c'r a ~nr ~ i> n~~n ~ ~> ,~^nn.. _ ~ e2s> ,Y 111 ~ ~'oN
RICHFIELD HRA/MINNSTAR BUILDERS, INC.
CONTRACT FOR
~, PRIVATE REDEVELOPMENT
THIS AGREEMENT, made and entered into as of the day of ,
2000, 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 MINNSTAR BUILDERS, INC., a Minnesota corporation (the "Redeveloper").
WITNESSETH:
WHEREAS, the City of Richfield and HRA have established the Lyndale Gateway
Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes,
§ § 469.001 to 469.047 (the "HRA Act"), and in accordance with the provisions of this
Agreement has established within the Project Area, and in accordance with Minnesota Statutes,
§§ 469.174 to 469.178 (the "Finance Act"), the Lyndale Gateway Redevelopment Tax Increment
District (the. "District") and adopted a Tax Increment Financing Plan (the "Tax Increment Plan")
for the District to facilitate the financing of public development and redevelopment costs in the
Project Area; and.
WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage
redevelopment of the Project Area by a combination of public and private activity within the
Project Area and in accordance with the Tax Increment Plan to be adopted by the City; and
WHEREAS, the Redeveloper has a proposed development (the "Development") within a
portion of such Project Area that the HRA believes will promote and carry out the objectives for
which redevelopment is undertaken, will be in the vital best interests of the City, will promote
the health, safety, morals, and welfare of its residents and will be in accord with the public
purposes and provisions of the applicable state and local laws and requirements under which
activities within the Project Area have been undertaken and are being assisted; and
WHEREAS, the Redeveloper is willing to purchase property within the Project Area,
such property being legally described in the attached Exhibit A (the "Redevelopment Property")
and to develop the Redevelopment Property for and in accordance with this Agreement; and
WHEREAS, consistent with the Tax Increment Plan, the HRA is willing to provide
financial assistance in accordance with the provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual obligations of the
parties contained herein, each of them does hereby represent, covenant and agree with the others
as follows:
•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE I
Definitions, Exhibits, Rules of Interpretation
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Agreement Date" means , 2000.
"Assessed Market Value" means the market value of real property as determined by the
City Assessor of the City in accordance with and as defined in Minnesota Statutes, Chapter 273
as amended from time to time, or as finally adjusted by the City Assessor, board of equalization
or any judicial proceeding.
"Assessment Agreement" means the agreement between the Authority and the
Redeveloper and certified by the City assessor, attached hereto as Exhibit D, establishing a
minimum Assessed Market Value of for each individual Housing Unit comprising the Minimum
Improvements.
"Available Tax Increment" means: (i) 89.75% of the Tax Increment that is generated by
the Redevelopment Property during the six-month period preceding any payment date under the
Note; and (ii) excess tax increment from the RSH Property accumulated as a result of deductions
therefrom pursuant to Section 7.2 of the RSH Redevelopment Agreement (after the payment or
reimbursement of any shortfall on up to $1,580,000 of City general obligation bonds, the
proceeds of which were used, in part, to acquire the Redevelopment Property (the "Bonds") and
the funding of a reserve for the Bonds in an amount equal to one years' service).
"Carrying Costs" means interest charges, loan origination fees, and other costs and fees
paid or incurred by the Redeveloper in connection with the Construction Financing.
"Certificate of Completion" or "Certificates of Completion" means the certification(s), in
the form of the certificate contained in Exhibit C attached to and made a part of this Agreement,
provided to the Redeveloper, pursuant to Section 5.7 of this Agreement.
"City" means the City of Richfield, Minnesota.
"Closing" means the acquisition by the Redeveloper of good and marketable title to all of
the parcels of land that comprise the Redevelopment Property.
"Closing Contingencies" has the meaning ascribed to it in Section 3.1 of this Agreement.
"Closing Date" means the date upon which the Closing occurs.
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"Commencement of Construction" means the commencement of demolition, site
preparation, excavation or other work upon the Redevelopment Property by the Redeveloper or
its agents.
"Commercial Redeveloper" means CSM Investors II, Inc.
"Commercial Redevelopment Agreement" means a redevelopment agreement between
the HRA and the Commercial Redeveloper.
"Concept Plans" mean the plans, drawings and narrative descriptions for the Minimum
Improvements .that have been approved by the HRA as of-the Agreement-Date pursuant to
Section 5.4 of this Agreement.
"Construction Financing" means the loan obtained by the Redeveloper from a Lender, the
proceeds of which are used, or intended for use, to pay the costs of constructing the Minimum
Improvements from Commencement of Construction to Unit Sales.
"County" means the County of Hennepin, Minnesota.
"Development" means the Minimum Improvements to be constructed upon the
Redevelopment Property.
"District" means the Lyndale Gateway redevelopment Tax Increment District
"Earnest Money Payments" means the non-refundable earnest money paid by the
Redeveloper pursuant to the Purchase Agreements in the aggregate amount of up to $11,000.00.
"Event of Default" means an action by the Redeveloper listed in Article XI of this
Agreement.
"Finance Act" means Minnesota Statutes, § § 469.174 to 469.179, as amended.
"HRA" means the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota and its officers, agents, staff and representatives.
"HRA Act" means Minnesota Statutes, § § 469.001 to 469.047, as amended..
"Housing Unit" means the individual living units comprising the Minimum
Improvements.
"Lender" means a provider of Construction Financing.
"Minimum Improvements" means forty (40) Housing Units to be constructed by the.
Redeveloper on the Redevelopment Property, together with all amenities and ancillary facilities
and improvements as described on the Concept Plan.
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"Minnesota Environmental Policy Act" means the statutes located at Minnesota
Statutes, § 116D.01 et seq., as amended.
"Minnesota Environmental Rights Act" .means the statutes located at Minnesota
Statutes, § 116B.01 et seq., as amended.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Section
4311 et seq., as amended.
"Note" means the Limited Revenue Tax Increment Note in the initial principal amount of
One Hundred Thousand Dollars ($100,000.00); to be executed and delivered pursuant to Section
3.4 hereof in the form set forth on Exhibit B.
"Parties" means the HRA and the Redeveloper.
"Phase I" means the construction of that part of the Minimum Improvements equaling the
first twenty (20) Townhome Units.
"Phase I Assessment Date" means January 2, 2001.
"Phase II" means the construction of that part of the Minimum Improvements equaling
the final twenty (20) Townhome Units.
"Phase II Assessment Date" means January 2, 2002.
"Project Area" means the Lyndale Gateway Redevelopment Project Area.
"Public Assistance" means the sum of One Million Eighty Six Thousand Two Hundred
Dollars ($1,086,200), comprised of a $986,200 cash component and the Note in the principal
amount of $100,000, both of which to be delivered by the HRA at Closing pursuant to Sections
3.3 and 3.4.
"Public Improvements" means the improvements to Garfield Avenue described in Section
6.1 hereof.
"Purchase Agreements" means those agreements between the Redeveloper and current
owners of each parcel of the Redevelopment Property by which the Redeveloper is entitled to
acquire title to all. of the Redevelopment Property on the Closing Date.
"RSH" means Richfield Senior Housing, Inc.
"RSH Development Agreement" means the Contract for Private Redevelopment between
the HRA and RSH, which agreement shall provide for the construction of approximately 130
senior apartments, 30 assisted living units, and approximately 38,000 square feet of office space
upon the RSH Property.
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"RSH Property" means the property located immediately to the west of the
Redevelopment Property, the legal description of which is set forth in Exhibit F attached hereto.
"Redeveloper" means Minnstar Builders, Inc., a Minnesota corporation.
"Redevelopment Property" means the real property described as such on Exhibit A of this
Agreement.
"State" means the State of Minnesota.
"Site Costs" means the sum of (i) the aggregate purchase price paid by the Redeveloper
for the acquisition of the Redevelopment Property, including commissions, closing costs, and
fees associated therewith and (ii) demolition costs associated with the construction of the
Minimum Improvements.
"Subordination Agreement" means an agreement between the HRA and a Lender by
which the HRA subordinates certain of its rights hereunder to the rights of the Lender.
"Tax Increment" means that portion of the real property taxes which is paid with respect
to the Redevelopment Property and which is remitted to the Authority as Tax Increment pursuant
to the Tax Increment Plan, after reduction (if any) of fiscal .disparities' contributions which are
mandated by state law to be made with respect to any parcel.
"Tax Increment Plan" means the tax increment financing plan adopted by the City in
connection with the creation of the District and as such may be modified and amended from time
to time.
"Tax Official" means any City or county assessor; County auditor; City, County or State
board of equalization, the commissioner of revenue of the State, or any State or federal district
court, the tax court of the State, or the State Supreme Court.
"Unavoidable Delays" means unexpected delays which are the direct result of: (i) adverse
weather conditions, (ii) shortages of materials, (iii) strikes, other labor troubles, (iv) fire or other
casualty to the Minimum Improvements, (v) litigation commenced by third parties which, by
injunction or other judicial action, directly results in delays, (vi) acts of any federal, state or local
governmental unit other than those provided for under this Agreement, (vii) approved changes to
the Concept Plans that result in delays or (viii) any other cause or force majeure beyond the
control of Redeveloper which directly results in delays, provided, however, that adverse market
conditions affecting the marketability or profitability of the Minimum Improvements, or the
inability to secure financing of the Minimum Improvements shall not constitute Unavoidable
Delays.
"Unit Sale" means the sale by the Redeveloper to bona fide good faith purchasers of
individual Housing Units within the Development.
Section 1.2. Exhibits. The following exhibits are attached to and made a part of this
Agreement.
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A. Redevelopment Property Legal Description;
B. Form of Limited Revenue Tax Increment Note;
C. Form of Certificate of Completion;
D. Form of Assessment Agreement;
E. Form of Subordination Agreement;
F. RSH Property Legal Description
Section 1.3. Rules of Interpretation.
(a) This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Minnesota;
(b) The words "herein" and "hereof' and words of similar importance, without
reference to any particular section or subdivision refer to this Agreement as a
whole rather than any particular section or subdivision hereof;
(c) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or
interpreting any of its provisions.
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE II
Representations
Section 2.1. Representations by the Redeveloper.
(a) The Redeveloper has the power to enter into this Agreement and has duly
authorized the execution, delivery, and performance of this Agreement by proper
action.
(b) If the conditions precedent to Closing set forth herein :occur, the Redeveloper
reasonably believes that it has the capability to obtain necessary equity and a
financial commitment necessary for construction of the Minimum Improvements.
(c) If the conditions precedent to Closing set forth herein occur, the Redeveloper will
construct the Minimum Improvements described in the Concept Plans in
accordance with the terms of this Agreement, the Redevelopment Plan and all
local, state and federal laws and regulations.
(d) .The Redeveloper will exercise all reasonable efforts to obtain, in a timely manner,
all required permits, licenses, and approvals and will meet in a timely manner, all
lawful requirements of all local, state, and federal laws and regulations which
must be obtained or met before the improvements may be constructed.
(e) Redeveloper will comply in all material respects, with all applicable local, state
and federal environment laws and regulations, will have obtained any and all
necessary environmental reviews, licenses or clearances under, and will be in
material compliance with the applicable requirements of the National
Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and
the Critical Area Act of 1973 and any other applicable environmental law or
regulation. Redeveloper has not received notice or communication from any
local, state or federal official indicating that the activities of Redeveloper may be
or will be in violation of any environmental law or regulation. Redeveloper is not
aware of any facts the existence of which would cause the Redeveloper to be in
violation of any local; state or federal environmental law, regulation or review
procedure or which would give any person a valid claim under the Minnesota
Environmental Rights Act.
(f) The Redeveloper has obtained valid and binding purchase agreements for all of
the Redevelopment Property.
Section 2.2. Representations by HRA. The HRA makes the following representations as
the basis for the undertakings herein contained.
(a) The HRA is authorized by law to enter into this Agreement and to carry out their
obligations hereunder.
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. (b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain
all federal, state, and regional agency land use, environmental or other regulatory
approvals necessary to implement the Project.
(c) The Project Area, the District and the Tax Increment Plan have been duly adopted
and validly exist in accordance with applicable law.
(d) The HRA has the financial capacity, based upon current interest rate assumptions,
to provide the Public Assistance to the Redeveloper as provided in this
Agreement.
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• ARTICLE III
Closing and Public Assistance
Section 3.1. Closing Contin eg~ n~cies. The Redeveloper shall not be obligated to proceed
to Closing unless, on or before February 25, 2000, the HRA and the Redeveloper certify to each
other in writing that the following "Closing Contingencies" have been satisfied or waived:
(a) An agreement between the Redeveloper and the Commercial Redeveloper,
consented to by the HRA, shall be entered into which establishes security, in the
form of a guaranty, for Redeveloper's obligation to pay property taxes upon the
Redevelopment Property or any portion thereof through completion of each
Housing Unit.
(b) The Redeveloper shall have secured Construction Financing in an amount
sufficient to pay the costs of constructing the Minimum Improvements and upon
the terms reasonably acceptable to the Redeveloper.
(c) The RSH Development Agreement shall have been executed, construction
financing adequate for the construction of approximately 130 units of senior
apartments, 30 assisted living units, and approximately 38,000 square feet of
office space upon the RSH Property shall be secured or irrevocably committed in
• writing, and title to the RSH. Property shall have been obtained by the HRA or
RSH.
If the HRA and the Redeveloper have not delivered such written certification to each
other on or before February 25, 2000, then: (i) the Redeveloper shall not be obligated to proceed
to Closing; (ii) the HRA shall immediately reimburse the Redeveloper in an amount equal to the
Earnest Money Payments; and (iii) this Agreement shall terminate. If such certification is
delivered by the HRA and the Redeveloper on or before February 25, 2000, the Redeveloper
shall be obligated to schedule the Closing by no later than 2000 and,
notwithstanding any contrary terms herein or Event of Default hereunder, the HRA shall be
irrevocably obligated to deliver the Public Assistance at Closing in accordance with Sections 3.3
and 3.4 below. The Redeveloper shall be required to provide the HRA at least ten (10) days
advance written notice of any Closing Date finally determined pursuant to this Section 3.1. -The
HRA and the Redeveloper agree not to unreasonably withhold or delay their certification of the
Closing Contingencies as provided in this Section 3.1.
Section 3.2. Condemnation. The Redeveloper shall use its best efforts to acquire every
parcel of the Redevelopment Property and/or correct any conditions rendering title to any parcel
unmarketable. To the extent the Redeveloper is unable to so acquire and/or correct such
conditions after reasonable and diligent efforts, the HRA shall, upon written request of the
Redeveloper, utilize its powers of eminent domain to acquire such parcel(s) and/or correct such
condition(s) of title. As a precondition to the HRA's obligation to utilize its powers of eminent
domain, the specific rights and obligations of the Redeveloper and the HRA in connection with
any such condemnation proceeding shall be agreed to in writing prior to February 25, 2000. If
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• the parties are unable to reach such agreement, the HRA's obligation to utilize its powers of
eminent domain shall terminate. Any delay caused by a condemnation proceeding initiated
pursuant to this Section 3.2 shall be considered an "Unavoidable Delay" for the purposes of this
Agreement.
Section 3.3. Cash Component. Subject to Section 3.1 above, the HRA shall contribute at
Closing the entire cash component of the Public Assistance ($986,200.00) towards the payment
of the Site Costs. In the event the Site Costs equal an amount less than $1,206,200, the $986,200
cash component shall be reduced by an amount equal to such reduction. The HRA's obligation
to contribute the cash Component of the Public Assistance at Closing, shall be conditioned upon
the Redeveloper providing the following written certification to the HRA at Closing:
Minnstar Builders, Inc. ("Minnstar") hereby ,certifies to the Richfield
Housing and Redevelopment Authority ("HRA") that Minnstar is prepared
to commence construction of the "Minimum Improvements" in accordance
with that certain Contract for Private Redevelopment between Minnstar and
the HRA dated , 2000 (the "Contract") and that there
are no matters known to the Redeveloper as of the date of this certification
that would prevent or delay commencement and completion of construction
within the time provided in the Contract.
Section 3.4. Issuance of Note. Subject to Section 3.1 above, the HRA shall, at Closing,
execute and deliver to the Redeveloper the Note as reimbursement for a portion of the Site Costs.
The Note shall be-paid in a maximum of _semi-annual installments, with interest thereon at a
rate of 8.0% per annum, on each February 1st and August 1st ("Payment Dates") commencing
upon the second August 1St following the Phase I Assessment Date and concluding no later than
February 1, 20_, all in accordance with the .payment schedule attached to the Note. Interest
shall begin to accrue upon the Note on the Closing Date. Such payments shall be made from
Available Tax Increment as defined herein and from no other source. Concurrent with delivery
of the Note, the HRA shall deliver to the Redeveloper an opinion of counsel opining that the
Project Area, the District and this Agreement meet the requirements of and are in compliance
with the HRA Act and the Finance Act. The HRA's obligation to execute and deliver the Note at
Closing shall be conditioned upon the Redeveloper providing to the HRA the written
certification set forth in Section 3.3 above.
Section 3.5. Reduction of Note. In the event the Redeveloper closes the sale of all the
Housing Units comprising the Minimum Improvements prior to the Phase II Assessment Date,
the Redeveloper shall provide to the HRA, within twenty (20) days after closing the last sale,
written certification of the Carrying Costs it has incurred. If the Carrying Costs certified by the
Redeveloper are less than $195,000, the principal amount of the Note shall be reduced by the
amount such Carrying Costs are less than $195,000 and the remaining payments due under the
Note shall be adjusted to reflect such reduction in principal.
•
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Section 3.7. Survival. The provisions of this Article III shall survive any Event of
Default hereunder or any termination of this Agreement pursuant to its terms.
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ARTICLE IV
Commencement of Construction; Assessment Agreement
Section 4.1. Commencement of Construction.. Subject to Section 3.1 above and
Unavoidable Delays, Commencement of Construction shall occur within thirty (30) days after
the Closing Date.
Section 4.2. Assessment Agreement. At Closing, the Redeveloper shall execute and
deliver to the HRA an Assessment Agreement in the form attached hereto as Exhibit D, which
Assessment Agreement shall establish a minimum Assessed Market Value as of the Phase I
Assessment Date and the Phase II Assessment Date for each Housing Unit to be constructed
pursuant to each respective phase. The Redeveloper understands and agrees that the minimum
Assessed Market Values established in the Assessment Agreement shall be binding upon Phase I
on the Phase I Assessment Date and Phase II on the Phase II Assessment Date, notwithstanding
any failure by the Redeveloper to complete Phase I or Phase II of the Minimum Improvements
by such dates. The Assessment Agreement shall terminate and no longer be binding with respect
to each Housing Unit upon the related Unit Sale.
•
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ARTICLE V
Construction of Minimum Improvements
Section 5.1. A;reement to Construct. Subject to the terms and conditions of this
Agreement, the Redeveloper agrees that it will construct the Minimum Improvements in
accordance with the approved Concept Plans.
Section 5.2. Demolition. The Redeveloper shall raze and remove all structures on the
Redevelopment Property, including any abandoned, City utilities.
Section 5.3. Soil Correction; Contamination. As between the Parties and the City, the
Redeveloper shall have the sole responsibility and bear the cost necessary to make any necessary
soil correction or to remedy or otherwise respond to the existence of any contamination or
pollution in, on or under the Redevelopment Property. Neither the HRA nor the City has made
any representations concerning the nature of soils, the suitability of such soils for the Minimum
Improvements, the existence of contaminants or pollutants, or the cost of correcting any
unsuitable soil conditions, contamination or pollution..
Section 5.4. Concept Plans. The HRA has reviewed and approved the Concept Plans and
the anticipated dates for commencement and completion of construction of the Minimum
Improvements. If the Redeveloper desires to make any material change in the Concept Plans
after the Agreement Date, the Redeveloper shall submit the proposed change to the HRA for its
approval. If the Concept Plans, as modified by the proposed change, conform to the general
requirements of this Agreement and the previously approved Concept Plans, the HRA shall
approve the proposed change and notify the Redeveloper in writing of its approval. Such change
in the Concept Plans shall, in any event, be deemed approved by the HRA unless rejected, in
whole or in part, by written notice by the HRA to the Redeveloper, setting forth in detail the
reasons therefor. Such rejection shall be made within twenty (20) days after receipt of the notice
of such change. Final construction plans and specifications shall be reviewed by the City
Building Official in connection with issuance of building permits. No building permit may be
issued if the final construction plans and specifications materially depart from the approved
Concept Plans.
Section 5.5. Commencement and Completion of Construction. Subject to the terms and
conditions of this Agreement, the Redeveloper shall commence construction of the Minimum
Improvements in accordance with Section 4.1 above and shall complete construction thereof on
or before January 1, 2003. Notwithstanding any provisions to the contrary contained herein, the
HRA's sole remedy for failure to complete construction of the Minimum Improvements in
accordance herewith shall be the suspension or termination of the Note. The Redeveloper shall
not be considered in breach of, or default in its obligations with respect to the commencement
and completion of construction of the Minimum Improvements, if the occurrence of an
Unavoidable Delays requires extension of the time or times for performance. of the Redeveloper
with respect to construction of the Minimum Improvements provided, that the Redeveloper shall,
within fifteen (15) days after the beginning of any such Unavoidable Delay, have notified the
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HRA thereof in writing, and of the cause or causes thereof, and further provided that the excused
delay in performance may not exceed the duration of the Unavoidable Delay.
Notwithstanding anything to the contrary herein, if the Redeveloper fails to complete
construction of the Minimum Improvements, or any phase thereof in accordance with this
Agreement, then the completion date .for the Minimum Improvements may be extended in
accordance with the rights of the Commercial Redeveloper as set forth in the Commercial
Redevelopment Agreement.
Section 5.6. Construction Reports. During construction of the Minimum Improvements,
the Redeveloper shall make reports at such times and in such. detail as may be reasonably
requested by the HRA concerning the progress of construction.
Section 5.7. Certificate of Completion. Promptly after notification by the Redeveloper
of completion of a Housing Unit, the HRA shall inspect the construction thereof to determine
whether the Housing Unit is substantially completed in accordance with the terms of this
Agreement. A Housing Unit shall be considered substantially completed in accordance with the
terms of this Agreement upon the issuance of a Certificate of Occupancy by the City with respect
thereto. If the Housing Unit is substantially completed pursuant to this Section 5.7, the HRA
shall execute and deliver to the Redeveloper a Certificate of Completion in the form attached
hereto as Exhibit C, which certification shall be recordable with the County recorders office
and/or registrar of titles. Such certification by the HRA shall be a conclusive determination of
satisfaction and termination of the agreements and covenants in this Agreement as to that
Housing Unit.
If the HRA shall refuse or fail to provide the Redeveloper a certification in accordance
with the provisions of this Section 5.7, the HRA shall, within ten (10) days after written request
by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate
detail in what respects the Redeveloper has failed to complete the Housing Unit in accordance
with the provisions of this Agreement and what measures or acts will be necessary, in the
reasonable opinion of the HRA, for the Redeveloper to take or perform in order to obtain such
certification.
•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE VI
PubLc Improvements
Section 6.1. Public .Improvements. With respect to the construction of Public
Improvements, the HRA and the Redeveloper agrees as follows:
(a) The HRA shall remove, or cause to be removed, the existing Garfield Avenue
street improvements (including the street surface above and below grade, all
curbs, and all landscape improvements) and reconstruct such roadway
improvements and traffic control devices in such a manner as to properly service
the developments contemplated by this Agreement, the Commercial
Redevelopment Agreement, and the RSH Development Agreement.
(b) The Redeveloper shall be responsible for (i) one-half of the cost of removal of the
existing curbs and roadway surface (grade and sub-grade) and (ii) the entire cost
of constructing the new curb and landscape improvements (as shown on the
landscape plan approved by the HRA and the Redeveloper) on the east side of
Garfield Avenue..
(c) The HRA shall be responsible for all of the remaining costs associated with the
Public Improvements, except as .otherwise provided in the RSH Development
Agreement.
Section 6.2. Plan Review. The Redeveloper shall have 10 days to review and comment
on the proposed plans and specifications and engineer's cost estimates for the construction of the
Public Improvements prior to bid.
Section 6.3. Payment. All payments due from the Redeveloper under this Article VI
shall be due not later than thirty (30) days after it has received a written invoice from the HRA.
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE VII
Insurance
Section 7.1. Insurance. The Redeveloper agrees that during construction of the
Minimum Improvements it .will keep and maintain in full force and effect insurance policies
insuring the Minimum Improvements against casualty loss in an amount at least equal to the
greater of: (i) their replacement value, or (ii) the amount of any mortgage indebtedness.
•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE VIII
Release and Indemnification Covenants
Section 8.1. Release and Indemnification Covenants.
(a) The Redeveloper releases from and covenants and agrees that the HRA and the
City and the governing body members, officers, agents, servants and employees
thereof shall not be liable for and agrees to indemnify and hold harmless the HRA
and the City and the governing body members, officers, agents, servants and
employees thereof against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Minimum
Improvements.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of
the following named parties, the Redeveloper agrees to protect and defend the
HRA and the City and the governing body members, officers, agents, servants and
employees thereof, now or forever, and further agrees to hold the aforesaid
harmless from any claim, demand, suit, action or other proceeding whatsoever by
any person or entity whatsoever arising from the actions of the Redeveloper, its
officers, agents or employees with respect to the acquisition, construction,
installation, ownership, and operation of the Minimum Improvements.
(c) Except where arising from the negligent act or omission of the following named
parties, the HRA and the City and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the
persons or property of the Redeveloper or its officers, agents, servants or
employees or any other person who may be about the Redevelopment Property or
Minimum Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the HRA
contained herein shall be deemed to be the covenants, stipulations, promises,
agreements and obligations of the HRA and not of any governing body member,
officer, agent, servant or employee of the HRA in the individual capacity thereof.
•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
• ARTICLE IX
Financing
Section 9.1. Limitations Unon Encumbrance. Except for Construction Financing and
except as to Housing Units to which the Redeveloper is entitled to a Certificate of Completion
pursuant to Section 5.7 of this Agreement, neither the Redeveloper nor any successor in interest
to the Redevelopment Property or any part thereof. shall engage in any financing or any other
transaction creating any mortgage or other encumbrance or lien upon the Redevelopment
Property or any part thereof, whether by express agreement or operation of law, or suffer any
encumbrance or lien to be made on or attached to the Redevelopment Property or any part
thereof.
Section 9.2. Copy of Notice of Default to Lender. Prior to the issuance of a Certificate
of Completion, whenever the HRA shall deliver. any notice or demand to the Redeveloper with
respect to any breach or default by the Redeveloper in its obligations under this Agreement, the
HRA shall at the same time forward a copy of such notice or demand to each Lender ("Lender")
known to the HRA by sending such notice to last known address of the Lender as shown in the
records of the HRA.
Section 9.3. Lender's Option to Cure Defaults.
(a) After any breach or .event of default referred to in Section 11.1 hereof, each
Lender shall (insofar as the rights of the HRA are concerned) have the right for a
period of ninety (90) days, at the Lender's option, to cure or remedy such breach
or event default to the extent that it relates to the part of the Redevelopment
Property covered by its financing and to add the cost thereof to the debt and the
lien of its financing, provided, that if the breach or event of default is with respect
to construction of the Minimum Improvements, nothing contained in this Section
9.3 or any other section of this Agreement shall be deemed to permit or authorize
such Lender, either before or after foreclosure or action in lieu thereof, to
undertake or continue the construction or completion of the Minimum
Improvements. (beyond the extent necessary to conserve or protect such Minimum
Improvements or construction already made) without first having expressly
assumed the Redeveloper's obligations by written agreement reasonably
satisfactory to the HRA to complete the Minimum Improvements or the part
thereof to which the lien or title of such Lender relates, provided further, however,
that the HRA will not unreasonably withhold its consent to any changes in the
Minimum Improvements which are requested by the Lender if the requested
changes do not alter the basic design of the Minimum Improvements or result iri a
significant decrease in value below the amounts estimated by the parties in the
Assessment Agreement. (It being understood that such consent shall in no way
act to bind or influence the power of the City, in the exercise of its general
governmental authority, not to approve any proposed changes or alterations to the
• Minimum Improvements.) Any such Lender who shall perform the Redeveloper's
obligations under Section this Section 9.3 shall be entitled, upon written request
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
made to the HRA, to a certification by the- HRA to such effect in the manner
provided in Section 5.7 of this Agreement.
(b) Any right of the Commercial Redeveloper to complete the Minimum
Improvements pursuant to the Commercial Redevelopment Agreement shall be
subordinate to the rights of the Lender hereunder and as contained in the
Subordination Agreement.
Section 9.4. HRA's Option to Cure Default. Prior to the HRA's obligation to issue a
Certificate of Completion, if the Redeveloper is in default under any Construction Financing
authorized pursuant to Article VIII of this Agreement,. the Lender, prior. to exercising any of its
remedies, shall notify the HRA in writing by sending it a copy of any notice of default sent to the
Redeveloper. If, within thirty (30) days after receipt of said notice, the HRA cures the default,
then the Lender shall pursue none of its remedies under the financing based upon the said default
of the Redeveloper.
Section 9.5. Subordination. In order to facilitate the obtaining of construction or
permanent financing for the Minimum Improvements by the Redeveloper, the HRA consents to
the assignment of this Agreement (to'the extent applicable to such financing) and the Note and to
subordinate its, rights under this Agreement to the mortgage securing any such construction or
permanent financing subject and pursuant to the terms and conditions of the Subordination
Agreement attached hereto as Exhibit E. The HRA agrees to promptly enter into a Subordination
Agreement in the form attached, following Redeveloper's written request.
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE X
Prohibitions Against Assignment and Transfer
Section 10.1. Representation as to Development. The Redeveloper represents and agrees
that its undertakings pursuant to the Agreement are, and will be used, for the purpose of
development of the Redevelopment Property and not for speculation in land holding. The
Redeveloper further recognizes that, in view of (a) the importance of the development of the
Redevelopment Property to the general welfare of the community; and (b) the substantial
financing and other public aids that have been made available by the City and the HRA, for the
purpose of making such development possible; that -the qualifications and identify of the
Redeveloper are of particular concern to the community and the HRA. The Redeveloper further
recognizes that it is because, of such qualifications and identify that the HRA is entering into this
Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the
obligations of the Redeveloper for the faithful performance of all undertakings and covenants
hereby then to be performed. Any significant change with respect to the identity of the
Redeveloper or the purchase of Redeveloper's interest by any other party or parties is for
practical purposes a transfer or disposition of the property then owned by the Redeveloper.
Section 10.2. Prohibition Against Transfer of Property and Assignment of Agreement.
For the reasons set forth in Section 10.1 above, the Redeveloper represents and agrees that:
(a) Except only by way. of security for, and only for, the purpose of obtaining
Construction Financing ,and any other purpose authorized by the Agreement,
prior to the completion of construction of the Minimum Improvements the
Redeveloper (except as so authorized) has not made or created, and that it will not
make or create, or suffer to be made or created, any total or partial sale,
assignment, conveyance, or any trust or power, or transfer in any other mode or
form of or with respect to the Agreement or the Redevelopment Property or any
part thereof or any interest therein, or any contract or agreement to do any of the
same, without the prior written approval of the HRA.
(b) The HRA shall be entitled to require, except as otherwise provided in the
Agreement, as conditions to any such transfer that: (i) any proposed transferee
shall have the qualifications and financial responsibility, as reasonably determined
by the HRA, necessary and adequate to fulfill the obligations undertaken in the
Agreement by the Redeveloper (or, in the event the transfer is of or relates to part
of the Redevelopment Property, such obligations to the extent that they relate to
such part); (ii) any proposed transferee, by instrument in writing satisfactory to
the HRA and in form recordable among the land records, shall for itself and its
successors and assigns, and expressly for the benefit of the HRA, have expressly
assumed all of the obligations of the Redeveloper under the Agreement (or, in the
event the transfer is of or relates to part of the Redevelopment Property, such.
obligations„ conditions, and restrictions to the extent that they relate to such part);
. provided, that the fact that any transferee of, or any other successor in interest
whatsoever the reason, shall have assumed such obligations or agreed, shall not
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RICHFIELD HRA/MINNSTAR BUII.DERS, INC.
(unless and only to the extent otherwise specifically provided in the Agreement or
agreed to in writing by the HRA) .relieve or except such transferee or successor of
or from such .obligations, conditions, or restrictions, or deprive or limit the HRA
or with respect to any rights or remedies or controls with respect to the
Redevelopment Property or the construction of the Minimum Improvements; it
being the intent of this, together with other provisions of the Agreement, that (to
the fullest extent permitted by law and equity and excepting only in the manner
and to the extent specifically provided otherwise. in the Agreement) no transfer of,
or change with respect to, ownership in the Redevelopment Property or any part
thereof, of any interest therein, however consummated or occurring, and whether
voluntary or involuntary, shall operate, legally or practically, to deprive or limit
the HRA of or with respect to any rights or remedies or controls provided in or
resulting from the Agreement with respect to the Redevelopment Property and the
construction of the Minimum Improvements that the HRA would have had, had
there been no such transfer or change; (iii) there shall be submitted to the HRA
for review all instruments and other legal documents involved in effecting
transfer, and if approved by the HRA its approval shall be indicated to the
Redeveloper in writing, which approval shall not be unreasonably withheld or
delayed.
(c) Notwithstanding the .prohibitions against transfer contained in this Section 10.2 ,
the Redeveloper shall have the right to transfer ownership of Housing Units to
individual townhome owners upon being entitled to a Certificate of Completion
thereto.
(d) In the absence of specific written agreement by the HRA to the contrary, no such
transfer or approval by the HRA thereof shall be deemed to relieve the
Redeveloper, or any other party bound in any way by the Agreement or otherwise
with respect to the construction of the Minimum Improvements, or from any of its
obligations with respect thereto. The HRA may, however, in its reasonable
discretion relieve Redeveloper if it presents a transferee or assignee acceptable to
the HRA.
Section 10.3. Information as to Stockholders or Partners. In order to assist in the
effectuation of the purposes of this Article X of this Agreement, the Redeveloper agrees that
prior to the HRA's obligation to issue a final Certificate of Completion, , (a) the Redeveloper will
promptly notify the HRA of any and all changes whatsoever in the ownership of stock or
partnership interests, legal or beneficial which in the aggregate exceed ten percent (10%) of the
issued stock or partnership interests in Redeveloper, or of any other act or transaction involving
or resulting in any change in the ownership or stock or partnership interests of such Redeveloper
or in the relative distribution thereof, which in the aggregate exceeds ten percent (10%) of the
issued stock or partnership interests of Redeveloper, and (b) Redeveloper shall, at such time or
times as the HRA may reasonably request, furnish the HRA with a complete statement,
subscribed and sworn to by the President, general partner, or other executive officer of
Redeveloper, setting forth all of the stockholders or partners of Redeveloper and the extent of
their- respective holdings, and in the event any other parties have a beneficial interest in such
stock or partnership interest, their names and the extent of such interest, all as determined or
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
indicated by the records of Redeveloper, by specific inquiry made by any such officer, of all
parties who on the basis of such records own ten percent (10%) or more of the stock or
partnership interest of Redeveloper, and by such other knowledge or information as such officer
shall have.
Section 10.4. AbDrovals. Any .approval required to be given by the HRA under this
Article X may be denied only in the event that the HRA reasonably determines that the
performance of the obligations of Redeveloper under this Agreement will be materially impaired
by the action for which approval is sought.
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•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE XI
Events of Default
Section 11.1. Defined. The term "Event of Default" shall mean any failure by any party
to observe or perform any covenant, condition, obligation or agreement on its part to be observed
or performed under this Agreement.
Section 11.2. Remedies. Except as otherwise expressly provided herein, whenever any
Event of Default occurs, the non-defaulting party may exercise the following remedies after
providing thirty (30) days written notice to the defaulting party of the Event of Default, but only
if the Event of Default has not been cured within said thirty days or, if the Event of Default is by
its nature incurable within thirty days, the defaulting party does not provide assurances
reasonably satisfactory to the non-defaulting party that the Event of Default will be cured as soon
as reasonably possible:
(a) Suspend its performance under this Agreement or the Note;.
(b) Cancel, rescind or terminate this Agreement or the Note; or
(c) Take whatever other action permitted by law, including legal, equitable or
administrative action, which may appear necessary or desirable to collect any
payments due under this Agreement, or to enforce performance and observance of
any obligation, agreement, or covenant under this Agreement.
Section 11.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to
the HRA or Redeveloper is intended to be exclusive of any other available remedy or remedies.
Each and every such remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any remedy or power accruing upon any Event of Default shall
impair any such remedy or power or shall be construed to be a waiver thereof. Any such remedy
and power may be exercised from time to time and as often as may be deemed expedient. In
order to entitle either party to exercise any remedy reserved to it, it shall not be necessary to give
notice, other than such notice as may be required in this Article XI.
Section 11.4. No Additional Waiver Implied by One Waiver. In the event any Event of
Default is waived by the non-defaulting party, such waiver shall be limited to the particular
Event of Default so waived and shall not be deemed to waive any other concurrent, previous or
subsequent Event of Default hereunder.
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
ARTICLE XII
Additional Provisions
Section 12.1. Conflict of Interests• HRA R~resentatives Not Individually Liable. No
member, official, or employee of the HRA shall have any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official or employee participate in any decision
relating to the Agreement which affects his personal interests or the interests of any corporation,
partnership, or association in which he is, directly or indirectly, interested. No member, official,
or employee of the HRA shall be personally liable to the Redeveloper, or any successor in
interest, in the event of any default or breach by the HRA or for any amount which may become
due to the Redeveloper or successor or on any obligations under the terms of the Agreement.
Section 12.2. Nondiscrimination. The provisions of Minnesota Statutes, § 181.59, which
relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as
though fully set forth herein.
Section 12.3. Provisions Not Merged With Deed. None of the provisions of this
Agreement are intended to be or shall be merged by reason of any deed transferring any interest
in any part of the Redevelopment Property and any such deed shall not be deemed to affect or
impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the
provisions of this Agreement shall be binding upon the successors and assigns of the parties
hereto.
Section 12.4. Notice of Status and Conformance. The HRA agrees that from time to
time, upon not less .than ten (10) days' prior written notice by Redeveloper, to execute,
acknowledge and deliver, without charge, to Redeveloper or to any person designated by
Redeveloper, a .statement in writing certifying, to the extent true, that this Agreement is
unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has
not received any notice of default, that to the knowledge of the HRA has not received any notice
of default, that to the knowledge of the HRA no event of default exists hereunder (or if any such
event of default does exist, specifying the same and stating that the same has been cured, if such
be the case), that the HRA to its knowledge, has no claims against the Redeveloper hereunder,
and any other information reasonably requested by the Redeveloper. It is the intention of this
Section 12.4 to provide a mechanism for obtaining estoppel certificates which may be requested
by Redeveloper's mortgagee.
Section 12.5. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either parry to
the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally:
•
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RICHFIELD HRA/NIINNSTAR BUILDERS, INC.
As to the HRA: Housing and Redevelopment Authority
in and for the City of Richfield
6700 Portland Avenue South
Richfield, MN 55423
Attention: Executive Director
As to the Redeveloper: Minnstar Builders, Inc.
7500 West 78th Street
Edina, MN 55439
Attention: Ron Clark
or at such other address with respect to either such party as that parry -may, from time to
time, designate in writing and forward to the other.
Section 12.6. Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, all of which shall constitute one and the same instrument.
Section 12.7. Relocation. The Parties acknowledge that each of the Purchase
Agreements provides for a purchase price that includes relocation benefits, if any, and that each
seller thereunder has waived any and all rights to further relocation benefits.
Section 12.8. Law Governing. This Agreement will be governed and construed in
accordance with the laws of Minnesota.
Section 12.9. Severability. If any provision of this Agreement is declared invalid, illegal
or otherwise unenforceable, that provision shall be deemed to have been severed from this
Agreement and the remainder of this Agreement shall otherwise remain in full force and effect.
Section 12.10. Complete Agreement. This Agreement is the complete agreement
between the parties hereto with respect to the matters addressed herein and shall, as of the
Agreement Date supersede all prior agreements related thereto, both oral and written.
Section 12.11. Authority. Each of the undersigned parties warrants that it has full
authority to exercise this Agreement, and each individual signing this Agreement on behalf of a
corporation hereby warrants that he or she has full authority to sign on behalf of the corporation
that he or she represents and to bind such corporation thereby.
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day
• and year first above written.
By:
STATE OF MINNESOTA )
ss
COUNTY OF )
HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF
RICHFIELD, MINNESOTA
Its Chairperson
By:
Its Executive Director
The foregoing instrument was acknowledged before me this day of ,
by and the Chairperson and Executive
Director, respectively, of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic, on behalf of such public body.
Notary Public
•
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RICHFIELD HRA/MINNSTAR BUII.DERS, INC.
MINNSTAR BUILDERS, INC.
By:
Its
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
1999, by ,the of Minnstar Builders, Inc., a
Minnesota corporation, on behalf of the corporation.
Notary Public
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
EXHIBIT A
Description of Redevelopment Property
Legal Description:
The Redevelopment Property consists of the following tracts of land:
•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
EXHIBIT B
Form of Limited Revenue Tax Increment Note
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
No. R-1 $100,000.00
LIMITED REVENUE TAX INCREMENT NOTE
SERIES
Date of
Interest Rate Original Issue
The Housing and Redevelopment Authority in and for the City of Richfield (the
"Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay
to the order of Minnstar Builders, Inc. (the "Owner"), to the extent and in the manner hereinafter
provided, the original principal amount of this Note, being $100,000.00 (the "Principal
Amount"), together with interest thereon accrued from the date of this Note, at the rate of interest
of % .per annum (the "Stated Rate"), in the amount and on the dates (the "Scheduled
Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and in the
amounts stated thereon (the "Scheduled Payments"). Unpaid interest accruing from the date of
this Note, shall be-added to principal on a semi annual basis on each August 1 and February 1
until February 1,
Any payments on this Note shall be applied first to accrued interest and then to the
Principal Amount in respect of which such payment is made.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at it postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
which has been issued by the Authority to aid in financing a "project," as defined in Minnesota
Statutes, § 469.174, of the Authority within and for the benefit of the Tax Increment
Financing District ("District").
•
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RICHFIELD HItA/MINNSTAR BUILDERS, INC.
THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR
THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE
CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF
SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF
ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE .TAX INCREMENT, AS
DEFINED BELOW.
Each Scheduled Payment on this Note due on any Scheduled Payment Date is payable
solely from and only to the extent that the Authority shall have received as of such Scheduled
Payment Date "Available Tax Increment" as that term is defined in Section 1.1 of that certain
Contract for Private Redevelopment between the Authority and the Owner dated
2000 (the "Redevelopment Contract"). For purposes of this Note, a
"Payment Date" shall mean each of the Scheduled Payment Dates set forth on Schedule A
attached hereto. To the extent that on any Payment Date the Authority is unable to make a full
Scheduled Payment due to insufficient Available Tax Increment (which insufficiency is not due
to a failure of the Owner to pay full real estate taxes payable on the Redevelopment Property),
such deficiency shall be deferred and paid, with interest at the Stated Rate along with future
Scheduled Payments, but only to the. extent of Available Tax Increment. This Note shall
terminate upon the earlier of (i) the date when the Owner has been fully reimbursed according to
the terms hereof; or (ii) February 1,
The Authority's obligation to make any payments under this Note may be suspended and
the Authority shall have no obligation and incur no liability to make any payments hereunder
immediately upon the occurrence of an "Event of Default" under the Redevelopment Contract
subject to the notice and cure provisions of Section 11.2 thereof, and limited only to defaults
which relate to the Redevelopment Property.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or
be deemed to have obligated itself to pay hereon from any funds except the Available Tax
Increments, and then only to the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or the City of Richfield or of any other public body, and neither
the Authority or the City of Richfield nor any director, commissioner, council member, board
member, officer, employee or agent of the Authority or the City of Richfield, nor any person
executing or registering this Note shall be liable personally hereon by reason of the issuance or
registration hereof or otherwise.
This Note shall not be transferable or assignable, in whole or in part, by the Owner
without the prior written consent of the Authority; provided that the Owner may pledge the
payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of
the Redevelopment, but only with prior written notice thereof to the Authority.
The Owner may also, without prior notice to or consent of the Authority transfer or
assign the Note or the right to receive payments under the Note to a wholly-owned subsidiary of
the Owner.
CA4VN13tttt'R=1'E.V'I'tYlt'yVST'~'t2. 11.1.3{){,( ~ ~ c re-~ ~ ~ c, .x~ r. ~~~ ~ •i~nr n .r r c t*1c t B-2 ~ CON
RICHFIELD HRA/MIIdNSTAR BUILDERS, INC.
'~ This Note may be prepaid in full at any time at the option of the Authority; and may also
be prepaid at the request of the Owner, but in either instance only if the Authority first
determines that sufficient tax increment is or will be generated to permit such prepayment, and
the parties agree upon the actual prepayment amount.
This Note is issued pursuant to proper action of the Authority by Resolution and the
Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference.
IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed -precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Authority or the City of
Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does
not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional
or statutory limitation. thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this
Note to be executed by the manual signatures of the Chairperson and the Executive Director of
the Authority and has caused this Note to be dated , 199_.
Chairperson
Executive Director
C.i11-1'~'.~kh?~,~(`,t~,f 1.i'tiN5"~^~ZEt.iJL>.~~ ~~~ ~ c x:~2 .ax_.<.,'~'E'#d~ ~4 ~~~E`I 9^ i~~`~`-~ ~ y<~ ~; ~r:,r~~~~ B~3 ~ CON
RICHFIELD HRA/MINNSTAR BUILDERS, INC.
•
•
SCHEDULE A
SCHEDULED
PAYMENT DATES
(First payment shall be on the
second August IS` following
the Phase I Assessment Date
as defined in the Agreement.)
Payment Schedule
SCHEDULED SCHEDULED
PAYMENTS PAYMENT DATES
SCHEDULED
PAYMENTS
C.~x~[iJf3tt~xti~i'('!l~biEtiivS~r<<alt_E)C?( `,..I^x3r-r`7t'13~ f "c~ rrnE ~ ~~~rrn ~ n cn<rr~ } enr~ B-4 ~ CON
RICHFIELD HRA/MII INSTAR BUILDERS, INC.
EXHIBIT C
Form of Certificate of Completion
The undersigned hereby certifies that Minnstar Builders, Inc., a Minnesota corporation,
has fully and completely complied with its obligations under that certain document entitled
"Contract for Private Redevelopment," dated , 2000, between the HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, a public
body corporate and politic and MINNSTAR BUILDERS, INC., a Minnesota corporation (the
"Contract") with respect to construction of -the. "Housing Unit" located upon the tract of land
described in the attached Exhibit A in accordance with the requirements of the Contract and is
released and forever discharged from its obligations under the Contract with respect to the
Housing Unit and the property described in Exhibit A attached hereto.
DATED:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD
n
U
By.
Its Chairperson
By
•
Its Executive Director
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RICHFIELD HRA/MINNSTAR BUII,DERS, INC.
• EXHIBIT D
Form of Assessment Agreement
ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the day of , 2000, and
between the Housing and Redevelopment Authority in and for the City of Richfield, a public
body, corporate and politic (the "Authority") and Minnstar Builders, Inc., a Minnesota
corporation (the "Redeveloper").
WITNESSETH, that
WHEREAS, on or before the date hereof the Authority and Redeveloper- have entered
into a Contract for Private Redevelopment dated , 2000 (the "Redevelopment
Contract"), pursuant to which the Authority is to facilitate development of certain property in the
City of Richfield hereinafter referred to as the "Property" and legally described in Exhibit A
hereto; and
WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to
construct certain "Minimum Improvements" upon the Property comprising of forty (40)
"Housing Units" (as such terms are defined in Section 1.1 of the Redevelopment Contract) as
depicted upon the map attached hereto as Exhibit B; and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market value
.for each Housing Unit pursuant to Minnesota Statutes, § 469.177, Subdivision 8; and
WHEREAS, the Authority and the Assessor for Hennepin County (the "Assessor") have
reviewed the preliminary plans and specifications for the Minimum Improvements and have
inspected such improvements;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. The minimum market value which shall be assessed for each of the first twenty
(20) Housing Units to be constructed upon the Property, for ad valorem tax purposes, shall be as
follows as of January 2, 2001:
Minimum
Value
Minimum
Value
Unit # 1 $ Unit # 11 $
Unit #2 $ Unit # 12 $
Unit #3 $ Unit #13 $
Unit #4 $ Unit # 14 $
Unit #5 $ Unit # 15 $
iT ['M~/`
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
Unit #6
Unit #7 $
$ Unit # 16
Unit # 17 $
$
Unit #8 $ Umt #18 $
Unit #9 $ Unit.#19 $
Unit # 10 $ Unit #20 $
2. The minimum market value which shall be assessed for each of the remaining
twenty (20) Housing Units to be constructed upon the Property, for ad valorem tax purposes,
shall be as follows as of January 2, 2002:
Minimum Minimum
Value Value
Unit #21 $ Unit #31 $
Unit #22 $ Unit #32 $
Unit #23 $ Unit #33 $
Unit #24 $ Unit #34 $
Unit #25 $ Unit #35 $
Unit #26 $ Unit #36 $
Unit #27 $ Unit #37 $
Unit #28 $ Unit #38 $
Unit #29 $ Unit #39 $
Unit #30 $ Unit #40 $
3. The minimum market values herein established for each Housing Unit shall be of
no further force and. effe ct and this Agreement shall terminate with respect to each such Housing
Unit upon a "Unit Sale" (as defined in the Redevelopment Contract) with respect to the Housing
Unit.
4. This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
5. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Redevelopment Contract between the Authority
and the Redeveloper.
6. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
7. Each of the parties has authority to enter into this Agreement and to take all
actions required of it, and has taken all actions necessary to authorize the execution and delivery
of this Agreement.
8. In the event any provision of this Agreement shall be held invalid and
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other. provision hereof.
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
CON
9. The parties hereto agree that they will, from time to time, execute, .acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements,
amendments and modifications hereto, and such further instruments as may reasonably be
required for correcting any inadequate, or incorrect, or amended description of the Property or a
Housing Unit, or for carrying out the expressed intention of this Agreement, including, without
limitation, any further instruments required to delete from the description of the Property such
part or parts as may be included within a separate assessment agreement.
10. Except as provided in Section 9 of this Agreement, this Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
11. This Agreement may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
12. This Agreement shall be governed by and construed in accordance with the laws
of the State of Minnesota.
•
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RICIiFIELD HRA/MINNSTAR BUILDERS, INC.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA
By:
Its Chairperson
By:
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
Its Executive Director
The foregoing instrument was acknowledged before me this day of ,
2000, by and the Chairperson and
Executive Director, respectively, of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a public body corporate and politic, on behalf of such public body.
Notary Public
•
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RICHFIELD HItA/MINNSTAR BUILDERS, INC.
By:
STATE OF MINNESOTA )
ss.
COUNTY OF )
MINNSTAR BUILDERS, INC.
Its:
The foregoing instrument was acknowledged before me this
2000, by ,the
Minnesota corporation, on behalf of such corporation.
Notary Public
day of ,
of Minnstar Builders, Inc., a
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RICFIFIELD HRA/MINNSTAR BUILDERS, INC.
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the values assigned to the
land and improvements are reasonable.
County Assessor for the County of
Hennepin
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this -day of _
2000 by ,the County Assessor of the County of Hennepin.
Notary Public
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
EXHIBIT A of ASSESSMENT AGREEMENT
Legal Description of Property
•
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
• EXHIBIT E
Form of Subordmahon Agreement
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this
day of 2000, between ("Lender"), whose address is at
and the HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic
("HRA"), whose address is 6700 Portland Ave. South, Richfield, Minnesota 55423.
RECITALS
A. , a Minnesota corporation ("Developer"), is the
owner of certain real property situated in Hennepin County, Minnesota and legally described in
Exhibit A attached hereto and incorporated herein (the "Property").
B. Lender has made a mortgage loan to Developer in the original principal amount of
$ (the "Loan"). The Loan is the evidenced and secured by the following documents:
(i) a certain promissory note (the "Note") made by Developer dated
1999, in the amount of $ ;and
(ii) a certain mortgage, security agreement and fixture financing statement
(the "Mortgage") made by Developer dated , 1999, filed , 1999,
as Hennepin County Recorder/Registrar of Titles Doc. No. encumbering the
Property; and
(iii) a certain assignment of leases and rents (the "Assignment") made by
Developer dated 1999, filed 1999, as Hennepin County
Recorder/Registrar of Titles Doc. No. encumbering the Property.
The Note, the Mortgage, .the Assignment, and all other documents and instruments
evidencing, securing and executed in connection- with the Loan, are hereinafter collectively
referred to as the "Loan Documents."
C. HRA is the owner and holder of certain rights under:
(i) a certain unrecorded Contract for Private Redevelopment (the "Contract")
by and between Developer and HRA dated ,1999;
(ii) a certain Assessment Agreement dated 1999, filed
1999, as Hennepin County Recorder Doc. No. encumbering
the Property (the "Assessment Agreement"); and
(iii) a certain Limited Revenue Tax Increment Note in the original principal
• amount of $ (the "TIF Note").
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C.'~briU[?U~~ti 3f:L I l,!'v;~tii t., It.i C(..~ K
RICHFIELD HRA/MINNSTAR BUILDERS, INC.
NOW, THEREFORE, in consideration of the foregoing and as an inducement to Lender
to make the Loan, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto represent, warrant and agree as follows:
1. Consent. The HRA acknowledges that the Lender is making the Loan to the
Developer and consents to the same. The HRA also consents to and approves the assignment of
the Contract and TIF Note by the Developer to the Lender as collateral for the Loan; provided,
however, that this consent shall not deprive the HRA of or otherwise limit any of the HRA's
rights or remedies under the Contract and TIF Note and shall not relieve the Developer of any of
its obligations under the Contract and TIF Note; provided further, however, the limitations to the
HRA's consent contained in this Paragraph 1 axe subject to the provisions of Paragraph 2 below.
2. Subordination. The HRA hereby agrees that the rights of the HRA with respect to
~ ~ under the Contract are and shall .remain subordinate and subject to
liens, rights and security interests created by the Loan Documents and to any and all
amendments, modifications, extensions, replacements or renewals of the Loan Documents;
provided, however, that nothing herein shall be construed as subordinating the requirement
contained in the Contract or the Deed that the Property be used in accordance with the provisions
of Section 3.3(c) of the Contract, or as subordinating the Assessment Agreement or the HRA's
rights under the TIF Note to suspend payments and to allocate Available Tax Increment (as
defined therein) in accordance with the TIF Note.
3. Notice to HRA. Lender agrees to use commercially reasonable efforts to notify
• HRA of the occurrence of any Event of Default given to Developer under the Loan Documents,
in accordance with Section of the Contract. The Lender shall not be bound by the other
requirements in Section of the Contract.
4. Statutory Exception. Nothing in this Agreement shall alter, remove or affect
Lender's obligation under Minnesota Statutes, § 469.029 to use the Property in conformance with
the Concept Plan, as defined in the Contract.
5. No Assumption. The HRA acknowledges that the Lender is not a party to the
Contract and by executing this Agreement does not become a party to the Contract, and
specifically does not assume and shall not be bound by any obligations of the Developer to the
HRA under the Contract, and that the Lender shall incur no obligations whatsoever to the HRA
except as expressly provided herein.
6. Notice from HRA. So long as the Contract remains in effect, the HRA agrees to
give to the Lender copies of notices of any Event of Default given to Developer under the
Contract.
7. Governing Law. This Agreement is made in and shall be construed in accordance
with the laws of the State of Minnesota.
8. Successors. This Agreement and each and every covenant, agreement and other
provision hereof shall be binding upon and inure to the benefit of the parties hereto and their
. respective successors and assigns, including any person who acquires title to the Property
through the Lender of a foreclosure of the Mortgage.
E~Ll,-1\1.>?t\,y-. ~a z.?v i'. \~~ti:v4 aEZ~l i,?.}l~C_ ~ o- ... nna ~ 'c ~.+~ n u~ »~rirronn:-,. rzn~~c~na ~c rnr> >r r~>n+•` V-2 I CoN
RICHFIELD HRA/MINNSTARBUII.,DERS, INC.
9. Severability. The. unenforceability or invalidity of any provision hereof shall not
render any other provision or provisions herein contained unenforceable or invalid.
10. Notice. Any notices and other communications permitted or required by the
provisions of this Agreement shall be in writing and shall be deemed to have been properly given
or served by depositing the same with the United States Postal Service, or any official successor
thereto, designated as registered or certified mail, return receipt requested, bearing adequate
postage, or delivery by reputable. private carrier and addresses as set forth above.
11. Transfer of Title to Lender. The HRA agrees that in the event the Lender, a
transferee of Lender, or a purchaser at foreclosure sale, -acquires -title to -the Property pursuant to
a foreclosure, or a deed in lieu thereof, the Lender, transferee, or purchaser shall not be bound by
the terms and conditions of the Contract except as expressly herein provided. Further the HRA
agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale
acquires title to the Property pursuant to a foreclosure sale or a deed in lieu thereof, then the
Lender, transferee, or purchaser shall be entitled to all rights conferred upon the Developer under
the Contract, provided that no condition of default exists and remains uncured beyond applicable
cure periods in the obligations of the Developer under the Contract.
12. Estoppel. The HRA hereby represents and warrants to Lender, for the purpose of
inducing Lender to make advances to Developer under the Loan Documents that:
(a) No default or event of default by Developer exists under. the terms of the
Contract, the Deed, or the Assessment Agreement on the date hereof;
(b) ~ The Contract has not been amended or modified in any respect, nor has any
material provision thereof been waived by either the HRA or the Developer, and
the Contract is in full force and effect;
(c) Such other reasonable certifications as the Lender may request.
13. Amendments. The HRA hereby represents and warrants to Lender for the
purpose of inducing Lender to make advances to Developer under the Loan Documents that
HRA will not agree to any amendment or modification to the Contract, the Deed, the Assessment
Agreement, or any TIF Note issued under the Contract which in any way affects the Property
without the Lender's written consent.
•
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RICHFIELD HRA/MINNSTAR BUII.DERS, INC.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day
and year first written above.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND .FOR THE CITY
OF RICHFIELD
By:
Approved as to form:
Its
STATE OF MINNESOTA )
)ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
by and the Chairperson and Executive
Director, respectively, of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic, on behalf of such public body.
Notary Public
LL;~1nJ l'.~~4S1i ~. ~ I'l'(F •. V, C'~;~:JI . '. it.1„_,_~C ~ t.,, ..'_' "y. ~.c : ~r> ni-r~.n ~~~~~rn nn ,r~nr~< +. ~i ? ~ ,nf~ V-Y ~ CON
RICHFIELD HRA/MINNSTAR BUILDERS, INC.
EXHIBIT F
RSH Property Legal Description
•
i
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RICHFIELD HRA/MINNSTAR BUILDERS, INC.
Attachment B
Minnstar Condominiums (East Side of Garfield Avenue)
Tentative Schedule
Activity Date Complete
HRA Approval of Redevelopment Contract Jan. 19, 1999 X
Establishment of TIF District June 14, 1999 X
Commitment from Developer June 16, 1999 X
Planning Commission Approval of Rezoning Aug. 24, 1999 X
HRA Final Approval of Public Funding Sept. 13, 1999 X
HRA Approval of Modified Concept Plan Sept. 13, 1999 X
City Council Final Approval of Rezoning Sept. 13, 1999 X
Purchase Offers Made on Properties Sept. 17, 1999 X
Planning Commission Approval of Final Plan Oct. 26, 1999 X
City Council Approval of Final Plan (CUP/FDP) Nov. 8, 1999 X
HRA Approval of New Contract with Minnstar Builders Jan. 18, 2000
Sale of Richfield Senior Housing's Bonds* Feb. 12, 2000
Request for Condemnation on Properties Without Negotiated Deal Feb. 22, 2000
Contingencies are Removed. From Purchase Offers Feb. 28, 2000
Closings of Property Sales Apr. 28, 2000
*The RSH project cannot occur without these bond proceeds and the Minnstar condominiums
will not be built unless the RSH project occurs.
ATTACHMENT C
'~ FREERS
ASSOCIATES INC MEMORANDUM
TO: John Stark -City of Richfield
John Uean -Kennedy and Graven
FROM: Sid Inman -Ehlers & Associates
DATE: January 12, 2000
RE: South Lyndale Project - But/For Update
You ask us to comment on the impact that the increase class rate would have on the "But/For" test for the
TCCH project. Please be aware that the change will have no impact on the test. The amount on income
after debt that the TCCH project receives is capped at 1.25°k of debt service. Therefo~~e any increase in
income from any source that exceeds that coverage amount goes back to the city for distribution as per the
development agreement
Please review these and if you have any questions, please fc~r:l free to call me at (65'!) 697-8507.
from the desk of
Std Inman
lhnancicN Advisor
Ehlers ~ Associates. Inc.
3060 Centre Point Drive
Roseville. lii21T 55113
Phone: (651) 697-8507
Fax: (66IJ 697-8555
N:Wlma~otulakhf"KkN.YN'11F~C.AP•MEMO• I l .wpd
ATTACHMENT D
~ EHLERS
b ASSOCIATES ~Nt; ~i E M O R A N D U M
TO: John Stark - City of Richfield
John Dcan - Kcnncdy and Graven
FROM: Sid Inman -Ehlers & Associates
DATE: January 1.2, 2000
RE: South Lyndalc Project -Tax Increment Plan Budget Review
You ask me to conunent on the impact the change in class rates on the TCCH project has on the tax
increment plan budgets. As you recall the purposed incentives are as follows;
L TCCH's total assistance is $4,217,439.
2. CSM's total assistance is $1,925,000:
3. Ron Clark's total assistance is $1,086,300:
4. The city's estimated bond proceed amount is $1,565,000 comes from the candiewood
district.
5. Cities cash amount is $106,300 comes from other sources.
6. This leaves a net amount of tax increment from the Lyndale South District of $5,557,439.
You will note that the total budget for the direct assistance is $9,000.000. Please review these and if you have
any questions, please feel ftre to call me at (651) 697-8507.
fr+vm the desk of:
Std Inman
Flinanciat Advisor
,Ehlers Bt Astoci4tes. IiIC.
8060 Oentre Point Drive
Rosevttle. >Il?IT 66113
Phone: (651) 697,8507
Fax: (6SI) 697.8555
r
N:VMinnsgtU2itNMIdU.YIYTIFIGAP-MFJNO-!2. Wpd
HOUSING AND REDEVELOPMENT AUTHORITY
• HRA Letter No. 11
Agenda January 18, 2000
Issue Statement:
Consideration of a Contract for Private Redevelopment with CSM Investors II for the
redevelopment of the west side of Lyndale Avenue and east side of Aldrich Avenue
within the Lyndale Gateway Redevelopment Area.
Background:
On January 19, 1999, the Richfield Housing and Redevelopment Authority (HRA)
accepted the terms and provisions of a Contractfor Private Redevelopment-(Contract)
with CSM Investors II (CSM) for the redevelopment of the entire Lyndale Gateway area.
This Contract provided for the establishment of "elements" of the development. These
elements were to be separate phases and types of development but to have a common
recipient of public funding. These elements were later identified as a condominium
development on the east side of Garfield Avenue, a senior apartment complex with
adjoining offices on the east side of Lyndale Avenue, and retail development on the
west side of Lyndale Avenue.
Since the original Contract was approved with CSM, however, there have been several
changes to the structure of the redevelopment process. The developers and staff have
concluded that these changes are significant enough to warrant the drafting of new
contracts to more accurately define the redevelopment process to occur in this project.
The most significant change is that the project is to be completed by three different
entities, each having their own schedules and particular needs. A separate contract
. with Richfield Senior Housing, Inc. (RSH) was approved by the HRA on October 18,
1999. This contract was specifically for the senior apartment and adjoining office
development planned for the east side of Lyndale Avenue and west side of Garfield
.Avenue. At the January 18, 2000 meeting, the HRA is also considering the approval of
a separate contract with Minnstar Builders for their condominium development planned
for the east side of Garfield Avenue.
CSM is proposing a 15,100 sq. ft. "stand alone" drug store and a second building, which
is approximately 30,000 sq. ft. and will include six commercial spaces. The HRA
accepted the concept plan for the CSM commercial development on June 21, 1999.
The Planning Commission is considering the approval of the Final Development Plan
and Conditional Use Permit on January 25, 2000; with City Council consideration of final
approval scheduled for February 14, 2000.
The contract with CSM, which is being submitted for your consideration, is similar to the
contract which has been executed with Richfield Senior Housing (RSH). One of the
primary differences relates to the manner of providing public funding. The RSH
development is to be funded solely by the tax increment generated by the development,
while the commercial development planned by CSM would also be using tax increment
plus up to $100,000 in funds from the HRA's development account. The development
account funds would be repaid from excess tax increment, which may be generated by
the development. The type and amount of public funding were approved by the HRA on
September 13, 1999 as part of the "but-for" analysis. Some of the funding which was
identified in that analysis have shifted from one component of the development to
another, and different inflationary rates have been applied to the tax increment.
i According to the attached .memo (Exhibit B) from the HRA's financial consultant, Sid
Inman, the changes do not warrant an amendment to the "but-for" analysis or any other
HRA action. A second memo from Mr. Inman (Exhibit C) illustrates that the total
amount of funding for each component of the project has not exceeded the maximum
amount of public assistance set forth in the approved Tax Increment Financing (TIF)
Plan documents.
Another difference in the contracts being proposed and the one which had been
approved by the HRA in January include the elimination of many of the "preconditions"
for redevelopment which have since been completed. Among the completed
preconditions are: the. concept plan, interior circulation plans, and the form and adoption
of the tax increment financing plan.
Recommended Motion:
Adopt a motion to approve the Contract for Private Redevelopment with CSM Investors
II for the redevelopment of the west side of Lyndale Avenue and the east side of Aldrich
Avenue within the Lyndale Gateway Redevelopment Area.
Basis of Recommendation:
1. The HRA accepted the terms contained in a Contract for Private Redevelopment
with CSM for the Lyndale Gateway Area on January 19, 1999.
r
2. On June 21, 1999, the HRA approved a Concept Plan for the development which
.includes commercial development by CSM on the west side of Lyndale Avenue and
the east side of Aldrich Avenue.
3. On October 18, 1999, the HRA approved a separate contract for the senior
apartment and adjoining office portion of the Lyndale Gateway development.
4. In addition to approval of the Concept Plan, the HRA has approved many aspects of
the development including the amount and type of public financing.
Alternative Recommendation:
1. Approve the contract with added stipulations or modifications.
2. Do not approve the proposed contract.
3. Delay action until a later HRA meeting.
Discussion/Decision Mode:
Legal counsel, the developer and staff will be present at the meeting to review the
documents and answer any questions.
Respectful submitted,
_- .i-~`~
Saman O duno
utive Director
SO:cak
•
•
DRAFT 1/14/00
CONTRACT
FOR
PRIVATE REDEVELOPMENT
BY AND BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
AND
CSM INVESTORS II, INC.
2000
•
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•
TABLE OF CONTENTS
Page
Preamble ..................................................................................................................................1
ARTICLE I
Definitions; Exhibits; Rules of Interpretation
Section 1.1. Definitions .....................................................................:..........................................2
Section 1.2. Exhibits .......: ...........................................................................................................5
Section 1.3. Rules of Interpretation ............................................................................................5
ARTICLE II
Representations
•
Section 2.1. Representations by the Redeveloper .......................................................................7
Section 2.2. Representations by HRA .........................................................................................7
ARTICLE III
Closing and Public Assistance
Section 3.1 Purchase Agreements ............................................................................................:..9
Section 3.2 Condemnation ........................................................................................................10
Section 3.3 Cash Contribution ..................................................................................................10
Section 3.4 Issuance of Note ..........................:.:........................................................................10
Section 3.5 Survival ..................................................................................................................10
ARTICLE IV
Commencement of Construction; Assessment Agreement
Section 4.1. Commencement of Construction ...........................................................................11
Section 4.2. Assessment Agreement ..........................................................................................1 l
ARTICLE V
Construction of Minimum Improvements
•
Section 5.1. Agreement to Construct .........................................................................................12
Section 5.2. Demolition .............................................................................................................12
Section 5.3. Soil Correction; Contamination .............................................................................12
Section 5.4. Concept Plans ........................................................................................................12
Section 5.5. Commencement and Completion of Construction ................................................12
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Section 5.6. Construction Reports ............................................................................................13
Section 5.7. Certificate of Completion .....................................................................................
ARTICLE VI
Public Improvements
Section 6.1. Defined ..........................................................................:........................................14
Section 6.2. Plan Review ...........................................................................................................14
Section 6.3. Payment ..................................................................................................................14
ARTICLE VII
Insurance
Section 7.1. Insurance ................................................................................................................15
ARTICLE VIII
Release and Indemnification Covenants
•
Section 8.1. Release and Indemnification Covenants ................................................................16
ARTICLE IX
Financing
Section 9.1. Limitations Upon Encumbrance ..............:.............................................................17
Section 9.2. Copy of Notice of Default to Lender ....................................................................17
Section 9.3. Lender's Option to Cure Defaults ..........................................................................17
Section 9.4. HRA's Option to Cure Default ..............................................................................17
Section 9.5. Subordination ........................................................................................................18
ARTICLE X
Prohibitions Against Assignment and Transfer
Section 10.1. Representation as to Development ........................................................................19
Section 10.2. Prohibition Against Transfer of Property and Assignment of Agreement ...........19
Section 10.3. Information as to Stockholders or Partners ............................................................20
Section 10.4. Approvals ...............................................................................................................21
ARTICLE XI
Events of Default
. ..................
Section 11.1. Defined .......................................... ......................................................22
Section 11.2. Remedies ................................................................................................................22
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Section 11.3. No Remedy Exclusive ............................................................................................22
Section 11.5. No Additional Waiver Implied by One Waiver ....................................................22
ARTICLE XII
Additional Provisions
Section 12.1. Conflicts of Interest; HRA Representatives Not Individually Liable ....................23
Section 12.2. Nondiscrimination ................................................................................................. .23
Section 12.3. Provisions Not Merged With Deed ........:......................................::...:.....:............ .23
Section 12.4. Notice of Status and Conformance .......................................................:............... .23
Section 12.5. Notices and Demands .........................................:...........:.........::.:.................:...... .23
Section 12.6. Counterparts .............................................................:............................................ .24
Section 12.7. Relocation ............................................................................................................. .24
Section 12.8 Law Governing .......................::.............::.:..::....:.................................................. .24
Section 12.9 Severability .......................:.....................:............................................................. .24
Section 12.10. Complete Agreement ....:...............................:........................................:.........:.... .24
Section 12.11. Authority ................................................................................................:.............. .24
TESTIMONIUM ............................:...............................................................................................25
SIGNATURES AND ACKNOWLEDGMENTS............: .............................................................25
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
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Description of Redevelopment Property
Form of Limited Revenue Tax Increment Note
Form of Certificate of Completion.
Form of Assessment Agreement
Form of Subordination Agreement
iii
CONTRACT FOR
PRIVATE REDEVELOPMENT
THIS AGREEMENT, made and entered into this day of , 2000,
by and between the HOUSING AND REDEVELOPMENT AUTHORITY 1N AND FOR THE
CITY OF RICHFIELD, Minnesota, a Minnesota public body corporate and politic (the "HRA"),
and CSM INVESTORS II, INC., a Minnesota corporation (the "Redeveloper").
WITNESSETH:
WHEREAS, the City of Richfield and. HRA have established the Lyndale Gateway
Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes,
§§ 469.001 to 469.047 (the "HRA Act"), and in accordance with the provisions of this
Agreement has established within the Project Area, and in accordance with Minnesota Statutes,
§§ 469.174 to 469.178 (the "Finance Act"), the Lyndale Gateway Redevelopment Tax Increment
District (the "District") and adopted a Tax Increment Financing Plan (the "Tax Increment Plan")
for the District to facilitate the financing of public development and redevelopment costs in the
Project Area; and
WHEREAS, the HRA deems it to be in the .public interest to facilitate and encourage
redevelopment of the Project Area by a combination of public and private activity within the
Project Area and in accordance with the Tax Increment Plan to be adopted by the City; and
WHEREAS, the Redeveloper has a proposed development (the "Development") within a
portion of such Project Area that the HRA believes will promote and carry out the objectives for
which redevelopment is undertaken, will be in the vital best interests of the City, will promote
the health, safety, morals, and welfare of its residents and will be in accord with the public
purposes and provisions of the applicable state and local laws and requirements under which
activities within the Project Area have been undertaken and are being assisted; and
WHEREAS, the Redeveloper is willing to purchase property within the Project Area,
such property being legally described in the attached Exhibit A (the "Redevelopment Property")
and to develop the Redevelopment Property for and in accordance with this Agreement; and
WHEREAS, consistent with the Tax Increment Plan, the HRA is willing to provide
financial assistance in accordance with the provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual obligations of the
parties contained herein, each of them does hereby represent, covenant and agree with the others
as follows:
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ARTICLE I
Definitions, Exhibits, Rules of Interpretation
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Agreement" means this Agreement, as the same. may be from time to time modified,
amended, or supplemented.
"Assessed Market Value" means the market value of real property as determined by the
City Assessor of the City in accordance with and as defined in Minnesota Statutes, Chapter 273
as amended from time to time, or as finally adjusted by the City Assessor, board of equalization
or any judicial proceeding.
"Assessment Agreement" means the agreement between the Authority and the
Redeveloper and certified by the City assessor, attached hereto as Exhibit D, establishing a
minimum Assessed Market Value of for the Minimum Improvements.
"Available Tax Increment" means: (i) 90% of the Tax Increment that is generated by the
Redevelopment Property during the six-month .period preceding any payment date under the
Note; (ii) 82.87% of the Tax Increment that is generated by the Minnstar Property during the 6-
month period preceding any payment date under the Note; and (iii) excess tax increment from
the RSH Property accumulated as a result of deductions therefrom pursuant to Section 7.2 of the
RSH Redevelopment Agreement (after the payment or reimbursement of any shortfall on up to
$1,565,000 of City general obligation bonds, the proceeds of which were used, in part, to acquire
the Redevelopment Property (the "Bonds") and the funding of a reserve for the Bonds in an
amount equal to one year's service).
"Carrying Costs" means interest charges, loan origination fees, and other costs and fees
paid or incurred by the Redeveloper in connection with the Construction Financing.
"Certificate of Completion" or "Certificates of Completion" means the certification(s), in
the form of the certificate contained in Exhibit C attached to and made a part of this Agreement,
provided to the Redeveloper, pursuant to Section 5.7 of this Agreement.
"City" means the City of Richfield, Minnesota.
"Closing" means the acquisition of good and marketable title to all of the parcels of land
comprising the Redevelopment Property by the Redeveloper.
"Closing Contingencies" has the meaning ascribed to it in Section 3.1 of this Agreement.
"Closing Date" means the date(s) upon which the Closing occurs.
•
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"Commencement of Construction" means the commencement of demolition, site
preparation, excavation or other work upon the Redevelopment Property by the Redeveloper or
its agents.
"Concept Plans" mean the plans, drawings and narrative descriptions for the Minimum
Improvements that have been approved by the HRA as of the Agreement Date pursuant to
Section 5.4 of this Agreement.
"Construction Financing" means the loan obtained by the Redeveloper from a Lender, the
proceeds of which are used, or intended for use, to pay the costs of constructing the Minimum
Improvements from Commencement of Construction to placement of permanent financing.
"County" means the County of Hennepin, Minnesota.
"Development" means the Minimum Improvements to be constructed upon the
Redevelopment Property.
"District" means the Lyndale Gateway redevelopment Tax Increment District
"Event of Default" means an action by the Redeveloper listed in Article XI of this
Agreement.
"Finance Act" means Minnesota Statutes, §§ 469.174 to 469.179, as amended.
"HRA" means the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota and its officers, agents, staff and representatives.
"HRA Act" means Minnesota Statutes, § § 469.001 to 469.047, as amended.
"Lender" means a provider of Construction Financing or Permanent Financing.
"Minimum Improvements" means two commercial buildings containing approximately
45,309 square feet of retail/service space to be constructed by the Redeveloper on the
Redevelopment Property, together with all amenities and ancillary facilities and improvements as
described on the Concept Plan.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota
Statutes, § 116D.01 et seq., as amended.
"Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes,
§ 116B.01 et seq., as amended.
"Minnstar" means Minnstar Builders, Inc., a Minnesota corporation.
"Minnstar Development Agreement means the contract for private redevelopment by and
between Minnstar and the HRA dated , 2000.
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"Minnstar Financing" means funds, that in addition to Minnstar's equity will be sufficient
for the acquisition of the Minnstar Property and the construction of the Minimum Improvements
as described in the Minnstar Development Agreement.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Section
4311 et seq., as amended.
"Note" means the Limited Revenue Tax Increment Note in the initial principal amount of
One Million Two Hundred Forty Thousand Dollars ($1,240,000) to be executed and delivered
pursuant to Section 3.4 hereof in the form set forth on Exhibit B.
"Parties" means the HRA and the Redeveloper.
"Permanent Financing" means project financing that replaces construction financing on a
long-term basis.
"Preconditions Deadline" has the meaning ascribed to it in Section 4.1 of this Agreement.
"Project Area" means the Lyndale Gateway Redevelopment Project Area.
"Public Assistance" means the sum of One Million Nine Hundred Twenty-five Thousand
Dollars ($1,925,000), consisting of a $685,000 cash contribution and the Note in the principal
amount of $1,240,000, both of which to be delivered by the HRA pursuant to Sections 3.3 and
3.4 for the acquisition of the Redevelopment Property by the Redeveloper.
"Public Improvements" means those improvements described in Section 6.1 hereof.
"Purchase Agreements" means those agreements between the Redeveloper and current
owners of each parcel of the Redevelopment Property by which the Redeveloper is entitled and
obligated to acquire title to all of the Redevelopment Property on the Closing Date.
"Redeveloper" means CSM Investors II, Inc., a Minnesota corporation.
"Redevelopment Property" means the real property described as such on Exhibit A of this
Agreement.
"State" means-the State of Minnesota.
"Subordination Agreement" means an agreement between the HRA and a Lender by
which the HRA subordinates certain of its rights hereunder to the rights of the Lender.
"RSH" means Richfield Senior Housing, Inc., a Minnesota nonprofit corporation.
"RSH Development Agreement" means the Contract for Private Redevelopment between
the HRA and Richfield Senior Housing, Inc., which agreement shall provide for the construction
of approximately 130 senior apartments, 30 assisted living units, and approximately 38,000
square feet of office space upon the RSH Property.
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• "RSH Property" means the property located .immediately to the east of the
Redevelopment Property, the legal description of which is set forth in Exhibit F attached hereto.
"Tax Increment" means that portion of the real property taxes which is paid with respect
to the Redevelopment Property and which is remitted to the Authority as Tax Increment pursuant
to the Tax Increment Plan, after reduction (if any) of fiscal disparities' contributions which are
mandated by state law to be made with respect to any parcel.
"Tax Increment Plan" means the tax increment financing plan adopted by the City in
connection with the creation of the District and as such may be modified and amended from time
to time.
"Tax Official" means any City or county assessor; County auditor; City, County or State
board of equalization, the commissioner of revenue of the State, or any State or federal district
court, the tax court of the State, or the State Supreme Court.
"Unavoidable Delays" means unexpected delays which are the direct result of: (i) adverse
weather conditions, (ii) shortages of materials, (iii) strikes, other labor troubles, (iv) fire or other
casualty to the Minimum Improvements, (v) litigation commenced by third parties which, by
injunction or other judicial action, directly results in delays, (vi) acts of any federal, state or local
governmental unit other than those provided for under this Agreement,. (vii) approved changes to
the Concept Plans that result in delays or (viii) any other cause or force majeure beyond the
control of Redeveloper which directly results in delays, provided, however, that adverse market
. conditions affecting the marketability or profitability of the Minimum Improvements, or the
inability to secure financing of the Minimum Improvements shall not constitute Unavoidable
Delays.
Section 1.2. Exhibits. The following exhibits are attached to and made a part of this
Agreement.
A. Redevelopment Property Legal Description;
B. Limited Revenue Tax Increment Note;
C. Certificate of Completion;
D. Assessment Agreement;
E. Subordination Agreement;
F. RSH Property Legal Description
G. Minnstar Property Legal Description
H. Public Improvement Plan
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Section 1.3. Rules of Interpretation.
(a) This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Minnesota;
(b) The words "herein" and "hereof' and words of similar importance, without
reference to any particular section or subdivision refer to this Agreement as a
whole rather than any particular section or subdivision hereof;
(c) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded -in construing or
interpreting any of its provisions.
•
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ARTICLE II
Representations
Section 2.1. Representations by the Redeveloper.
(a) The Redeveloper has the power to enter into this Agreement and has duly
authorized the execution, delivery, and performance of this Agreement by proper
action.
(b) If the conditions precedent to Closing occur, the Redeveloper reasonably believes
that it has the capability to obtain necessary equity and a financial commitment
necessary for construction of the Minimum Improvements.
(c) If the conditions precedent to Closing occur, the Redeveloper will construct the
Minimum Improvements described in the Concept Plans in accordance with the
terms of this Agreement, the Redevelopment Plan and all local, state and federal
laws and regulations.
(d) The Redeveloper will exercise all reasonable efforts to obtain, in a timely manner,
all required permits, licenses, and approvals and will meet in a timely manner, all
lawful requirements of all local, state, and federal laws and regulations which
must be obtained or met before the improvements may be constructed.
(e) Redeveloper will comply in all material respects, with all applicable local, state
and federal environment laws and regulations, will have obtained any and all
necessary environmental reviews, licenses or clearances under, and will be in
material compliance with the applicable requirements of the National
Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and
the Critical Area Act of 1973 and any other applicable environmental law or
regulation. Redeveloper has not received notice or communication from any
local, state or federal official indicating that the activities of Redeveloper may be
or will be in violation of any environmental law or regulation. Redeveloper is not
aware of any facts the existence of which would cause the Redeveloper to be in
violation of any local, state or federal environmental law, regulation or review
.procedure or which would give any person a valid claim under the Minnesota
Environmental Rights Act.
Section 2.2. Representations by HRA. The HRA makes the following representations as
the basis for the undertakings herein contained.
(a) The HRA is authorized by law to enter into this Agreement and to carry out their
obligations hereunder.
(b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain
all federal, state, and regional agency land use, environmental or other regulatory
approvals necessary to implement the Project.
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(c) The Project Area, the District and the Tax Increment Plan have been duly adopted
and validly exist in accordance with applicable law.
(d) The HRA has the financial capacity to provide the Public Assistance. to the
Redeveloper as provided. in this Agreement.
•
•
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ARTICLE III
Closing and Public Assistance
Section 3.1. Closing Contingencies. The Redeveloper shall not be obligated to proceed
to Closing unless, on or before September 1, 2000, the HRA and the Redeveloper certify to each
other in writing that the following "Closing Contingencies" have been satisfied or waived:
(a) A landscape plan in connection with the Minimum Improvements and the timing
of installation thereof shall be agreed upon by the Parties;
(b) A construction period tree protection plan shall be agreed upon by the Parties, it
being agreed that the Redeveloper shall be responsible for the cost of developing
and implementing such plan.
(c) An agreement between the Redeveloper and Minnstar consented to by the HRA,
shall be entered into establishing security for Minnstar's performance under the
Minnstar Development Agreement and remedies available to Redeveloper upon
an Event of Default on the part of Minnstar and failure to cure within the period
allotted in the Minnstar Development Agreement, including without limitation,
the right to take title to the Minnstar Property and complete the Minimum
Improvements in accordance with this Agreement and the Minnstar Development
Agreement.
(d) The Redeveloper shall have secured (i) Construction Financing in an amount
sufficient to pay the costs of constructing the Minimum Improvements and upon
the terms reasonably acceptable to the Redeveloper, and (ii) all permits and
approvals necessary for construction of the Minimum Improvements.
(e) Except as is qualified by any agreement of the parties pursuant to section 3.2, the
Redeveloper has obtairied valid and binding purchase agreements for all of the
Redevelopment Property at a cost of $3,450,000, or less.
(f) The Redeveloper has entered into valid and binding leases for at least 66% of the
net rentable area of the Minimum Improvements.
If the HRA and the Redeveloper have not delivered such written certification to each
other on or before September 1, 2000, the Redeveloper shall not be obligated to proceed to
Closing, and this agreement shall terminate. If such certification is delivered on or before
September 1, 2000, the Redeveloper shall be obligated to schedule the Closing by no later than
September 15, 2000 and notwithstanding any contrary terms herein or Event of Default
hereunder, the HRA shall be irrevocably obligated to deliver the Public Assistance at Closing in
accordance with Sections 3.3 and 3.4 below. The Redeveloper shall be required to provide the
HRA at least ten (10) days advance written notice of any closing Date finally determined
pursuant to this Section 3.1. The HRA and the Redeveloper agree not to unreasonably withhold
or delay their certification of the Closing Contingencies as provided in this Section 3.1.
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Section 3.2. Condemnation. The Redeveloper shall use its best efforts to acquire every
parcel of the Redevelopment property and/or correct any conditions rendering title to any parcel
unmarketable. To the extent the Redeveloper is unable to so acquire and/or correct such
conditions after reasonable and diligent efforts, the HRA shall, upon written request of the
Redeveloper, utilize -its powers of eminent domain to acquire such parcel(s) and/or correct such
condition(s) of title. As a precondition to the HRA's obligation to utilize its powers. of eminent
domain, the specific rights and obligations of the Redeveloper and the HRA in connection with
any such condemnation proceeding shall be agreed to in writing prior to commencement thereof.
Any delay caused by a condemnation proceeding initiated pursuant to this Section 3.2 shall be
considered an "Unavoidable Delay" for the purposes of this Agreement.
Section 3.3. Cash Contribution. Subject to Section 3.1 above, the HRA shall contribute
at Closing the entire cash component of the Public Assistance ($685,000) towards the payment
of the aggregate purchase price for the Redevelopment Property as established by the Purchase
Agreements, including commissions and closing costs associated therewith. The Redeveloper
shall pay the remaining amount of the purchase price for the Redevelopment Property and all
other costs associated with the Closing.
Section 3.4. Issuance of Note. Subject to Section 3.1 above, the HRA shall, at Closing,
execute and deliver to the Redeveloper the Note as reimbursement for a portion of the costs
incurred by the Redeveloper in connection with the acquisition of the Redevelopment Property.
The Note shall be paid in a maximum of _semi-annual installments, with interest thereon at a
rate of 8% per annum; on each February 1st and August 1st ("Payment Dates") commencing
upon the second August 1St following the Phase I Assessment Date and concluding no later than
February 1, 20_, all in accordance with the payment schedule attached to the Note. Such
payments shall be made from Available Tax Increment as defined herein and from no other
source. Concurrent with delivery of the Note, the HRA shall deliver to the Redeveloper an
opinion of counsel opining that the Project Area, the District and this Agreement meet the
requirements of and are in compliance with the HRA Act and the Finance Act.
Section 3.6 Securit~Not later than Closing, and as a precondition to the HRA's
obligation to deliver the Cash Contribution, the Redeveloper shall. deliver to the HRA a corporate
guarantee (Guarantee") from CSM Investors, Inc.("Guarantor"). The Guarantee will be in a
form reasonably acceptable to the HRA; and will provide that upon the occurrence of an Event
Default by Redeveloper relating to the commencement or completion of construction of the
Minimum Improvements, and following any applicable cure period, Guarantor will be obligated
and will pay to the HRA on demand the Cash Contribution paid to Redeveloper. Collection
under the Guarantee shall be in addition to other remedies available to the HRA hereunder,
except that it shall be in lieu of any other remedy to secure reimbursement of the Cash
Contribution from the Redeveloper.
Redeveloper further agrees, that upon the determination of any such Event of Default and failure
to cure, it will also assign and .transfer to the HRA .and guarantee of security which Redeveloper
has received from Minnstar relating to the commencement and/or completion of the Minnstar
Minimum Improvements.
Section 3.5. Survival. The provisions of this Article III shall survive any Event of
Default hereunder or any termination of this Agreement pursuant to its terms.
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ARTICLE IV
Commencement of Construction;
Assessment Agreement
Section 4.1. Commencement of Construction. Subject to Section 3.1 above and
Unavoidable Delays, Commencement of Construction shall occur within thirty (30) days after
the Closing Date.
Section 4.2. Assessment Agreement. Within ten (10) days after Commencement of
Construction pursuant to Section 4.1 above, the Redeveloper shall execute and deliver to the
HRA an Assessment Agreement in the form attached hereto as Exhibit D, which Assessment
Agreement shall establish a minimum Assessed Market Value as of January 2, 2001 for each
Building to be constructed as a part of the Minimum Improvements. The Redeveloper
understands and agrees that the minimum Assessed Market Values established in the Assessment
Agreement shall be binding upon the Redevelopment Property and/or each subdivided portion
thereof, notwithstanding any failure by the Redeveloper to complete the Minimum
Improvements by such date. The Assessment Agreement shall terminate on ,
and shall thereafter not be binding with respect to the Redevelopment Property and/or each
subdivided portion thereof.
•
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• ARTICLE V
Construction of Minimum Improvements
Section 5.1. Agreement to Construct. Subject to the terms and conditions of this
Agreement, the Redeveloper agrees that it will construct the Minimum Improvements in
accordance with the approved Concept Plans.
Section 5.2. Demolition. The Redeveloper shall, at its sole expense, raze and remove all
structures on the Redevelopment Property, including any abandoned City utilities,
Section 5.3. Soil Correction; Contamination. As between the Parties hereto, the
Redeveloper shall have the sole responsibility and bear the cost necessary to make any necessary
soil correction or to remedy or otherwise respond to the existence of any contamination or
pollution in, on or under the Redevelopment Property. The HRA has made any representations
concerning the nature of soils, the suitability of such soils for the Minimum Improvements, the
existence of contaminants or pollutants, or the cost of correcting any unsuitable soil conditions,
contamination or pollution.
Section 5.4. Concept Plans. The HRA has reviewed and approved the Concept Plans,
which include. a marketing plan and tenant mix projections and the anticipated dates for
commencement and completion of construction of the Minimum Improvements. If the
Redeveloper desires to make any material change in the Concept Plans after the Agreement Date,
the Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept
Plans, as modified by the proposed change, conform to the general requirements of this
Agreement and the previously approved Concept Plans, the HRA shall approve the proposed
change and notify the Redeveloper in writing of its approval. Such change in the Concept Plans
shall, in any event, be deemed approved by the HRA unless rejected, in whole or in part, by
written notice by the HRA to the Redeveloper, setting forth in detail the reasons therefor. Such
rejection shall be made within twenty (20) days after receipt of the notice of such change. Final
construction plans and specifications shall be reviewed by the City Building Official in
connection with issuance of building permits. No building permit may be issued if the final
construction plans and specifications materially depart from the approved Concept Plans.
Section 5.5. Commencement and Completion of Construction. Subject to the terms and
conditions of this Agreement, the Redeveloper shall commence construction of the Minimum
.Improvements in accordance with Section 4.1 above and shall complete construction thereof on
or before September 1, 2001. The Redeveloper shall not be considered in breach of, or default in
its obligations with respect to the commencement and completion of construction of the
Minimum Improvements, if the occurrence of an Unavoidable Delays requires extension of the
time or times for performance of the Redeveloper with .respect to construction of the Minimum
Improvements provided, that the Redeveloper shall, within fifteen (15) days after the beginning
of any such Unavoidable Delay, have notified the HRA thereof in writing, and of the cause or
causes thereof, and further provided that the excused delay in performance may not exceed the
duration of the Unavoidable Delay.
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Section 5.6. Construction Reports. During construction of the Minimum Improvements,
the Redeveloper shall make reports at such times and in such detail as may be reasonably
requested by the HRA concerning the progress of construction.
Section 5.7. Certificate of Completion. Promptly after notification by the Redeveloper
of completion of the Minimum Improvements or a building constituting a part thereof, the HRA
shall inspect the construction thereof to determine whether .the Minimum Improvements or a
building constituting a part thereof is substantially completed in accordance with the terms of
this Agreement. The Minimum Improvements or a building constituting a part thereof shall be
considered substantially completed in accordance with the terms of this Agreement upon the
issuance of a Certificate of Occupancy by the City with respect thereto..: If the Minimum
Improvements or a building constituting a part thereof is substantially completed pursuant to this
Section 5.7, the HRA shall execute and deliver to the Redeveloper a Certificate of Completion in
the form attached hereto as Exhibit C, which certification shall be recordable with the County
recorders office and/or registrar of titles. Such certification by the HRA shall be a conclusive
determination of satisfaction of the agreements and covenants in this Agreement as to the
Minimum Improvements or a building constituting a part thereof.
If the HRA shall refuse or fail to provide the Redeveloper a certification in accordance
with the provisions of this Section 5.7, the HRA shall, within ten (10) days after written request
by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate
detail in what respects the Redeveloper has failed to complete the Housing Unit in accordance
with the provisions of this Agreement and what measures or acts will be necessary, in the
reasonable opinion of the HRA, for the Redeveloper to take or perform in order to obtain such
certification.
•
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ARTICLE VI
Public Improvements
Section 6.1. Defined. With respect to the construction of Public Improvements in the
Project Area, the HRA and the Redeveloper agree as follows:
(a) Lyndale and 76t" Street Intersection. If the results of a traffic analysis of the
intersection (to be conducted by the Redeveloper, TCCH or Minnstar) indicate a level of service
(LOS) of "E" or lower with respect to traffic turning southbound on Lyndale Avenue from
westbound 76t" Street, the HRA will, at its cost, take action which is necessary to attain LOS "D"
or better, provided that -such action is no more costly than the installation of a left turn arrow at
the existing traffic signal at Lyndale Avenue and 76t" Street.
(b) 77t" Street Soundwalls. The HRA shall be responsible for the relocation of the
existing soundwall and support structures, provided however that the Redeveloper will be
responsible for the removal of the soundwall on the west side of Lyndale Avenue as shown on
the approved site plan (with TCCH responsible for the removal of the soundwall on the east side
of Lyndale Avenue). The Redeveloper. shall provide the HRA with not less than fifteen (15)
days notice prior to the removal of any part of the soundwall and will allow HRA/City personnel
the opportunity to observe and or assist in said removal.
(c) Lyndale Avenue. 76`" Street and 77t" Street Streetscape Improvements. The HRA
shall complete and pay for all of the improvements (i) shown on Exhibit attached hereto lying
between the west curb line of Lyndale Avenue, the south curb line of 76t" Street, the north curb
line of 77t" Street and the line shown on Exhibit as "Limits of Improvements W"; and (ii)shown
on Exhibit H attached hereto lying between the east curb line of Lyndale Avenue, the south curb
line of 76t" Street, the north curb line of 77t" Street and the line shown on Exhibit H as "Limits of
Improvements E"; and (iii) on the south side of 76t" Street lying between said "Limits of
Improvements E" line and the extended west curb line of Garfield Avenue; and (iv) on the north
side of 77t" Street lying between said "Limits of Improvements W" line and the extended east
curb line of Aldrich Avenue, provided however that the HRA shall have no obligation to expend
in excess of $525,000 for the foregoing improvements.
(d) Aldrich Avenue. The Redeveloper shall be responsible for the cost of (i)
removing the existing curbs along the east side of Aldrich Avenue which are adjacent to the
Redevelopment Property, and (ii) the landscape improvements constructed along the east side of
Aldrich Avenue as shown on the approved Landscape Plan, provided however that the
Redeveloper shall not be required to pay for the cost of a sidewalk (if any is required) along the
east side of Aldrich Avenue.
(e) ~ndale Avenue. The HRA (or the City)shall be responsible for the
reconstruction. of Lyndale Avenue (including above and below surface improvements, curbs and
gutters, medians, public utilities located within the Lyndale Avenue right of way, landscaping
and street lighting)at its sole cost and expense.
(f) 77t" Street. The HRA (or the City)shall be responsible for the new construction.
on 77*Street (including above and below surface improvements, .curbs and gutters, medians,
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public utilities located within the 77th .Street right of way, landscaping and street lighting
including the construction of the new deceleration lane on west bound 77th Street. Provided,
however that the HRA shall be obligated to such landscape and street lighting work only to the
extent that the funds described in paragraph (c) above will not be needed for those purposes.
Section 6.2. No Assessments. Except as expressly provided for herein, the costs
associated with the Public Improvements shall be the responsibility of the HRA or others, and in
any event shall not be assessed, in whole or in part, against the Redevelopment Property or any
portion thereof
Section 6.3. Plan Review. The Redeveloper shall have ten (10) days to review and
comment on the proposed plans and specifications- and engineer's cost estimates for the
construction of the Public Improvements prior to bid.
Section 6.4. Completion of Construction. Subject to Unavoidable Delays, and unless as
further agreed by the parties, the HRA shall substantially complete all of the Public
Improvements on or before November 15, 2000: The HRA shall be liable to the Redeveloper for
any damages that it suffers as a result of the failure of the HRA to so complete.
Section 6.5. Payment. All payments due from Redeveloper under this Article VI shall
be due not later than thirty (30)days after is has received a written invoice from the HRA.
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ARTICLE VII
Insurance
Section 7.1. Insurance. The Redeveloper agrees that during construction of the
Minimum Improvements it will keep and maintain in full force and effect insurance policies
insuring the Minimum Improvements against casualty loss in an amount at least equal to the
greater of: (i) their replacement value, or (ii) the amount of any mortgage indebtedness.
•
•
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ARTICLE VIII
Release and Indemnification Covenants
Section 8.1. Release and Indemnification Covenants.
(a) The Redeveloper releases from and covenants and agrees that the HRA and the
City and the governing body members, officers, agents, servants and employees
thereof shall not be liable for and agrees to indemnify and hold harmless the HRA
and the City and the governing body members, officers, agents, servants and
employees thereof against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Minimum
Improvements.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of
the following named parties, the Redeveloper agrees to protect and defend the
HRA and the City and the governing body members, officers, agents, servants and
employees thereof, now or forever, and further agrees to hold the aforesaid
harmless from any claim, demand, suit, action or other proceeding whatsoever by
any person or entity whatsoever arising from the actions of the Redeveloper, its
officers, agents or employees with respect to the acquisition, construction,
installation, ownership, and operation of the Minimum Improvements.
(c) Except where arising from the negligent act or omission of the following named
parties, the HRA and the City and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the
persons or property of the Redeveloper or its officers, agents, servants or
employees or any other person who may be about the Redevelopment Property or
Minimum Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the HRA
contained herein shall be deemed to be the covenants, stipulations, promises,
agreements and obligations of the HRA and not of any governing body member,
officer, agent, servant or employee of the HRA in the individual capacity thereof.
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ARTICLE IX
Financing
Section 9.1. Limitations Upon Encumbrance. Except for Construction Financing, prior
to the issuance of a Certificate of Completion pursuant to this Agreement, neither the
Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof
shall engage in any financing or any other transaction creating any mortgage or other
encumbrance or lien upon the Redevelopment Property or any part thereof, whether by express
agreement or operation of law, or suffer any encumbrance or lien to be made on or attached to
the Redevelopment Property or any part thereof.
Section 9.2. Copy of Notice of Default to Lender. Prior to the issuance of a Certificate
of Completion, whenever the HRA shall deliver any notice or demand to the Redeveloper with
respect to any breach or default by the Redeveloper in its obligations under this Agreement, the
HRA shall at the same time forward a copy of such notice or demand to each Lender ("Lender")
known to the HRA by sending such notice to last known address of the Lender as shown in the
records of the HRA.
Section 9.3. Lender's Option to Cure Defaults. After any breach or event of default
referred to in Section 11.1 hereof, each Lender shall (insofar as the rights of the HRA are
concerned) have the right for a period of ninety (90) days, at the Lender's option, to cure or
remedy such breach or event default to the extent that it relates to the part of the Redevelopment
Property covered by its financing and to add the cost thereof to the debt and the lien of its
financing, provided, that if the breach or event of default is with respect to construction. of the
Minimum Improvements, nothing contained in this Section 9.3 or any other section of this
Agreement shall be deemed to permit or authorize such Lender, either before or after foreclosure
or action in lieu thereof, to undertake or continue the construction or completion of the Minimum
Improvements (beyond the extent necessary to conserve or protect such Minimum Improvements
or construction already made) except in accordance with the terms and conditions of this
Agreement, provided further, however, that the HRA will not unreasonably withhold its consent
to any changes in the Minimum Improvements which are requested by the Lender if the
requested changes do not alter the basic design of the Minimum Improvements or result in a
significant decrease. in value below. the amounts estimated by the parties in the Assessment
Agreement. (It being understood that such consent shall in no way act to bind or influence the
power of the City, in the exercise of its general governmental authority, not to approve any
proposed changes or alterations to the Minimum Improvements.) Any such .Lender who shall
perform the Redeveloper's obligations under Section this Section 9.3 shall be entitled, upon
written request. made to the HRA, to a certification by the HRA to such effect in the manner
provided in Section 5.7 of this Agreement.
Section 9.4. HRA's Option to Cure. Default. Prior to the HRA's obligation to issue a
Certificate of Completion, if the Redeveloper is in default under any Construction Financing
authorized pursuant to Article IX of this Agreement, the Lender shall notify the HRA in writing
by sending it a copy of any notice of default sent to the Redeveloper. If, within ten (10) days
after receipt of notice of a monetary default, or within thirty (30) days after receipt of a notice of
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anon-monetary default, the HRA cures the default, then the Lender shall. pursue none of its
remedies under the financing based upon the said default of the Redeveloper.
Section 9.5. Subordination. In order to facilitate the obtaining of construction or
permanent financing for the Minimum Improvements by the Redeveloper, the HRA consents to
the assignment of this Agreement (to the extent applicable to such financing) and the Note and to
subordinate its rights under this Agreement to the mortgage securing any such construction or
permanent financing subject and pursuant to the terms and conditions of the Subordination
Agreement attached hereto as Exhibit E. The HRA agrees to promptly enter into a Subordination
Agreement in the form attached, following Redeveloper's written request.
•
•
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ARTICLE X
Prohibitions Against Assignment and Transfer
Section 10.1. Representation as to Development. The Redeveloper represents and agrees
that its undertakings pursuant to the Agreement are, and will be used, for the purpose of
development of the Redevelopment Property and not for speculation in land holding. The
Redeveloper further recognizes that, in view of (a) the importance of the development of the
Redevelopment Property to the general welfare of the community; and (b) the substantial
financing and other public aids that have been made available by the City and the HRA, for the
purpose of making such development possible;, that the qualifications and identify of the
Redeveloper are of particular concern to the community and the HRA. The Redeveloper further
recognizes that it is because, of such qualifications and identify that the HRA is entering into this
Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the
obligations of the Redeveloper for the faithful performance of all undertakings and covenants
hereby then to be performed. Any significant change with respect to the identity of the
Redeveloper or the purchase of Redeveloper's interest by any other party or parties is for
practical purposes a transfer or disposition of the property then owned by the Redeveloper.
Section 10.2. Prohibition Against Transfer of Property and Assignment of Agreement.
For the reasons set forth in Section 10.1 above, the Redeveloper represents and agrees that:
(a) Except only by way of security for, and only for, the purpose of obtaining
Construction Financing ,and any other purpose authorized by the Agreement,
prior to the completion of construction of the Minimum Improvements the
Redeveloper (except as so authorized) has not made or created, and that it will not
make or create, or suffer to be made or created, any total or partial sale,
assignment, conveyance, or any trust or power, or transfer in any other mode or
form of or with respect to the Agreement or the Redevelopment Property or any
part thereof or any interest therein, or any contract or agreement to do any of the
same, without the prior written approval of the HRA.
(b) The HRA shall be entitled to require, except as otherwise provided in the
Agreement, as conditions to any such transfer that: (i) any proposed transferee
shall have the qualifications and financial responsibility, as reasonably determined
by the HRA, necessary and. adequate to fulfill the obligations undertaken in the
Agreement by the Redeveloper (or, in the event the transfer is of or relates to part
of the Redevelopment Property, such obligations to the extent that they relate to
such part); (ii) any proposed transferee, by instrument in writing satisfactory to
the HRA and in form recordable among the land records, shall for itself and its
successors and assigns, and expressly for the benefit of the HRA, have expressly
assumed all of the obligations of the Redeveloper under the Agreement (or, in the
event the transfer is of or relates to part of the Redevelopment Property, such
obligations„ conditions, and restrictions to the extent that they relate to such part);
provided, that the fact that any transferee of, or any other successor in interest
whatsoever the reason, shall have assumed such obligations or agreed, shall not
(unless and only to the extent otherwise specifically provided in the Agreement or
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agreed to in writing by the HRA) relieve or except such transferee or successor of
or from such obligations, conditions, or restrictions, or deprive or limit the HRA
or with respect to any rights or remedies or controls with respect to the
Redevelopment Property or the construction of the Minimum Improvements; it
being the intent of this, together with other provisions of the Agreement, that (to
the fullest extent permitted by law and equity and excepting only in the manner
and to the extent specifically provided otherwise in the Agreement) no transfer of,
or change with respect to, ownership in the Redevelopment Property or any part
thereof, of any interest therein, however consummated or occurring, and whether
voluntary or involuntary, shall operate, legally or practically, to deprive or limit
the HRA of or with respect to any rights or remedies or controls provided in or
resulting from the Agreement with respect to the Redevelopment Property and the
construction of the Minimum Improvements. that the HRA would have had, had
there been no such transfer or change; (iii) there shall be submitted to the HRA
for review all instruments and :other legal documents involved in effecting
transfer, and if approved by the HRA its approval shall be .indicated to the
Redeveloper in writing, which approval shall not be unreasonably withheld or
delayed.
(c) Notwithstanding the prohibitions against transfer contained in this Section 10.2,
the Redeveloper shall have the right to transfer ownership interests in the
Redeveloper, this Agreement, or the Redevelopment Property to Gary S. Holmes,
his family members, or entities controlled by Gary S. Holmes or his family
members, for tax and/or estate planning purposes, or due. to death or incapacity.
(d) In the absence of specific written agreement by the HRA to the contrary, no such
transfer or approval by the HRA thereof shall be deemed to relieve the
Redeveloper, or any other party bound in any way by the Agreement or otherwise
with respect to the construction of the Minimum Improvements, or from any of its
obligations with respect thereto. The HRA may, however, in its reasonable
discretion relieve Redeveloper if it presents a transferee or assignee acceptable to
the HRA.
Section 10.3. Information as to Stockholders or Partners. In order to assist in the
effectuation of the purposes of this Article X of this Agreement, the Redeveloper agrees that
prior to the HRA's obligation to issue a final Certificate of Completion, , (a) the Redeveloper will
promptly notify the HRA of any and all changes whatsoever in the ownership of stock or
partnership interests, legal or beneficial which in the aggregate exceed ten percent (10%) of the
issued stock or partnership interests in Redeveloper, or of any other act or transaction involving
or resulting in any change in the ownership or stock or partnership interests of such Redeveloper
or in the relative distribution thereof, which in the aggregate exceeds ten percent (10%) of the
issued stock or partnership interests of Redeveloper, and (b) Redeveloper shall, at such time or
times as the HRA may reasonably request, furnish the HRA with a complete statement,
subscribed and sworn to by the President, general partner, or other executive officer of
Redeveloper, setting forth all of the stockholders or partners of Redeveloper and the extent of
their respective holdings, and in the event any other parties have a beneficial interest in such
stock or partnership interest, their names and the extent of such interest, all as determined or
indicated by the records of Redeveloper, by specific inquiry made by any such officer, of all
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• parties who on the basis of such records own ten percent (10%) or more of the stock or
partnership interest of Redeveloper, and by such other knowledge or information as such officer
shall have.
Section 10.4. Approvals. Any ~ approval required to be given by the HRA under this
Article X may be denied only in the event that the HRA reasonably determines that the
performance of the obligations of Redeveloper under this Agreement will be materially impaired
by the action for which approval is sought.
•
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ARTICLE XI
Events of Default
Section 11.1. Defined. The term "Event of Default" shall mean any failure by any party
to observe or perform any covenant, condition, obligation or agreement on its part to be observed
or performed under this Agreement.
Section 11.2. Remedies. Whenever any Event of Default occurs, the non-defaulting
party may exercise the following remedies .after providing thirty (30) days written notice to the
defaulting party of the Event of Default, but only if the Event of Default has not been cured
within said thirty days or, if the Event of Default is by its nature incurable within thirty days, the
defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party
that the Event of Default will be cured as soon as reasonably possible:
(a) Suspend its performance under this Agreement or the Note;.
(b) Cancel, rescind or terminate this Agreement or the Note; or
(c) Take whatever other action .permitted by law, including legal, equitable or
administrative action, which may appear necessary or desirable to collect any
payments due under this Agreement, or to enforce performance and observance of
any obligation, agreement, or covenant under this Agreement.
Section 11.3. No Remedy Exclusive.. No remedy herein conferred upon or reserved to
the HRA or Redeveloper is intended to be exclusive of any other available remedy or remedies.
Each and every such remedy shall be cumulative and shall be in addition to every other remedy
given under this .Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any remedy or power accruing upon any Event of Default shall
impair any such remedy or power or shall be construed to be a waiver thereof. Any such remedy
and power may be exercised from time to time and as often as may be deemed expedient. In
order to entitle either party to exercise any remedy reserved to it, it shall not be necessary to give
notice, other than such notice as may be required in this Article XI.
Section 11.4. No Additional Waiver Implied by One Waiver. In the event any Event of
Default is waived by the non-defaulting party, such waiver shall be limited to the particular
Event of Default so waived and shall not be deemed to waive any other concurrent, previous or
subsequent Event of Default hereunder.
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ARTICLE XII
Additional Provisions
Section 12.1. Conflict of Interests; HRA Representatives Not Individually Liable. No
member, official, or employee of the HRA shall have any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official or employee participate in any decision
relating to the Agreement which affects his personal interests or the interests of any corporation,
partnership, or association in which he is, directly or indirectly, interested. No member, official,
or employee of the HRA shall be personally liable to the Redeveloper, or any: successor in
interest, in the event of any default or breach by the HRA or for any amount which may become
due to the Redeveloper or successor or on any obligations under the terms of the Agreement.
Section 12.2. Nondiscrimination. The provisions of Minnesota Statutes, § 181.59, which
relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as
though fully set forth herein.
Section 12.3. Provisions Not Merged With Deed. None of the provisions. of this
Agreement are intended to be or shall be merged by reason of any deed transferring any interest
in any part of the Redevelopment Property and any such deed shall not be deemed to affect or
impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the
provisions of this Agreement shall be binding upon the successors and assigns of the parties
i hereto.
Section 12.4. .Notice of Status and Conformance. The HRA agrees. that from time to
time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute,
acknowledge and deliver, without charge, to Redeveloper or to any person designated by
Redeveloper, a statement in .writing certifying, to the extent true, that this Agreement is
unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has
not received any notice of default, that to the knowledge of the HRA has not received any notice
of default, that to the knowledge of the HRA no event of default exists hereunder (or if any such
event of default does exist, specifying the same and stating that the same has been cured, if such
be the case), that the HRA to its knowledge, has no claims against the Redeveloper hereunder,
and any other information reasonably requested by the Redeveloper. It is the intention of this
Section .12.4 to provide a mechanism for obtaining estoppel certificates which may be requested
by Redeveloper's mortgagee.
Section 12.5. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either parry to
the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally:
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As to the HRA: Housing and. Redevelopment Authority
in and for the City of Richfield
6700 Portland Avenue South
Richfield, MN 55423
Attention: Executive Director
As to the Redeveloper: CSM Investors II, Inc..
2575 University Avenue West
St. Paul, MN 55114
Attention: Murray Kornberg
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 12.6. Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, all of which shall constitute one. and the same instrument.
Section 12.7. Relocation. The Parties acknowledge that each of the Purchase
Agreements provides for a purchase price that includes relocation benefits, if any, and that each
seller thereunder has waived any and all rights to further relocation benefits.
Section 12.8. Law Governing. This Agreement will be governed and construed in
accordance with the laws of Minnesota.
Section 12.9. Severability. If any provision of this Agreement is declared invalid, illegal
or otherwise unenforceable, that provision shall be deemed to have been severed from this
Agreement and the remainder of this Agreement shall otherwise remain in full force and effect.
Section 12.10. Complete Agreement. This Agreement is the complete agreement
between the parties hereto with respect to the matters addressed herein and- shall, as of the
Agreement Date supersede all prior agreements related thereto, both oral and written.
Section 12.11. Authority. Each of the undersigned parties warrants that it has full
authority to exercise this Agreement, and each individual signing this Agreement on behalf of a
corporation hereby warrants that he or she has full authority to sign on behalf of the corporation
that he or she represents and to bind such corporation thereby.
•
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IN WITNESS WHEREOF, the parties hereto haveset their hands and seals as of the day
and year first above written.
By:
STATE OF MINNESOTA )
ss
COUNTY OF )
HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF
RICHFIELD, MINNESOTA
Its Chairperson
By:
Its Executive Director
The foregoing instrument was acknowledged before me this day of ,
by and the Chairperson and .Executive
Director, respectively, of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic, on behalf of such public body.
Notary Public
•
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•
CSM INVESTORS II, INC.
By:
Its
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
1999, by ,the of CSM Investors II, Inc., a
Minnesota corporation, on behalf of the corporation.
Notary Public
•
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27
•
EXHIBIT A
Description of Redevelopment Property
•
Legal Description:
The Redevelopment Property consists of the following tracts of land:
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A-1
EXHIBIT B
Form of Limited Revenue Tax Increment Note
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
No. R-1 $1,240,000
LIMITED REVENUE TAX INCREMENT NOTE
SERIES
Date of
Interest Rate Original Issue
g% $1,240,000
The Housing and Redevelopment Authority in and for the City of Richfield (the
"Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay
to the order. of CSM Investors II, Inc. (the "Owner"), to the extent and in the manner hereinafter
provided, the original principal amount of this Note, being $1,240.00 (the "Principal Amount"),
together with interest thereon accrued from the date of this Note, at the rate of interest of 8% per
annum (the "Stated Rate"), in the amount and on the dates (the "Scheduled Payment. Dates") set
forth on the Payment Schedule attached as Schedule A hereto and in the amounts stated thereon
(the "Scheduled Payments"). Unpaid interest accruing from the date of this Note, shall be added
to principal on a semi annual basis on each August 1 and February 1 until February 1,
Any payments on this Note shall be applied first to accrued interest and then to the
Principal Amount in respect of which such payment is made.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at it postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
which has been issued by the Authority to aid in financing a "project," as defined in Minnesota
Statutes, § 469.174, of the Authority within and for the benefit of the Tax Increment
Financing District ("District").
THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR
THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE
CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF
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SHALL BE LIABLE ON THE .NOTE, .NOR SHALL THE NOTE BE PAYABLE OUT OF
ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS
DEFINED BELOW.
The Scheduled Payment of this Note due on .any Scheduled Payment Date is payable
solely from and only to the extent that the Authority shall have .received as of such Scheduled
Payment Date "Available Tax Increment" as that term is defined in Section 1.1 of that certain
Contract for Private Redevelopment between the Authority and the Owner dated ,
2000 (the "Redevelopment Contract"). For purposes of this Note, a "Payment Date" shall mean
each of the Scheduled Payment Dates set forth on Schedule A attached hereto. To the extent
that on any Payment Date the Authority is unable to make a full Scheduled Payment due to
insufficient Available Tax Increment (which insufficiency is not due to a failure of the Owner to
pay full real estate taxes payable on the Redevelopment Property), .such deficiency shall be
deferred and paid, with interest at the Stated Rate along with future Scheduled Payments, but
only to the extent of Available Tax Increment. This Note shall terminate upon the earlier of (i)
the date when the Owner has been fully reimbursed according to the terms hereof; or (ii)
February 1,
The Authority's obligation to make any payments under this Note may be suspended and
the Authority shall have no obligation and incur no liability to make any payments hereunder
immediately upon the. occurrence of an "Event of Default" under the Redevelopment Contract
subject to the notice and cure provisions of Section 11.2 thereof, and limited only to defaults
which relate to the Redevelopment Property.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or
be deemed to have obligated itself to pay hereon from any funds except the Available Tax
Increments, and then only to the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or the .City of Richfield or of any other public body, and neither
the Authority or the City of Richfield nor any director, commissioner, council member, board
member, officer, employee or agent of the Authority or the City of Richfield, nor any person
executing or registering this Note shall be liable personally hereon by reason of the issuance or
registration hereof or otherwise.
This Note shall not be transferable or assignable, in whole or in part, by the Owner
without the prior written consent of the Authority; provided that the Owner may pledge the
payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of
the Redevelopment, but only with prior written notice thereof to the Authority.
The Owner may also, without prior notice to or consent of the Authority transfer or
assign the Note or the right to receive payments under the Note to a wholly-owned subsidiary of
the Owner.
This Note may be prepaid in full at any time at the option of the Authority; and may also
be prepaid at the request of the Owner, but in either instance only if the Authority first
determines that sufficient tax increment is or will be generated to permit such prepayment, and
JBD-174346v4 B-2
RC125-153
the parties agree upon the actual prepayment amount. Available Tax Increment generated by the
Redevelopment Property which is not needed to make a Scheduled Payment shall be used to
make a partial prepayment of the balance due on this Note.
•
This Note is issued pursuant proper action of the Authority by Resolution and the Owner
is entitled to the benefits thereof, which Resolution is incorporated herein by reference.
IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed. precedent to and in the issuance of this Note have been done, have
happened, and. have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Authority or the City of
Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does
not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional
or statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this
Note to be executed by the manual signatures of the Chairperson and the Executive Director of
the Authority and has caused this Note to be dated , 2000.
Chairperson
Executive Director
JBD-174346v4
RC125-153
B-3
SCHEDULE A
Payment Schedule
SCHEDULED SCHEDULED SCHEDULED
PAYMENT DATES PAYMENTS PAYMENT DATES
JBD-174346v4 B-4
RC125-153
SCHEDULED
PAYMENTS
EXHIBIT C
Form of Certificate of Completion
The undersigned hereby certifies that CSM Investors II, Inc., a Minnesota corporation,
has fully and completely complied with its obligations under that certain document entitled
"Contract for Private Redevelopment," dated , 2000, between the HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, a public
body corporate and politic and. CSM INVESTORS II, INC., a Minnesota corporation (the
"Contract") with respect to construction of the "Housing Unit" located upon the tract of land
described in the attached Exhibit A in accordance with the requirements of the Contract and is
released and forever discharged from its obligations under the Contract with respect to the
construction of Minimum Improvements on the property described in Exhibit A attached hereto.
DATED:
•
HOUSING AND .REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD
By
Its Chairperson
By.
Its Executive Director
•
JBD-174346v4
RC125-153 C-1
s
EXHIBIT D
Form of Assessment Agreement
ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the day of
between the Housing and Redevelopment Authority in and for the Cit
body, corporate and politic (the "Authority") and CSM Investors
corporation (the "Redeveloper").
2000, and
y of Richfield, a public
II, Inc., a Minnesota
WITNESSETH, that
WHEREAS, on or before the date hereof the Authority and Redeveloper have entered
into a Contract for Private Redevelopment dated , 2000 (the "Redevelopment
Contract"), pursuant to which the Authority is to facilitate development of certain property in the
City of Richfield hereinafter referred to as the "Property" and legally described in Exhibit A
hereto; and
WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to
construct certain "Minimum Improvements" upon the Property consisting of two (2) commercial
buildings (as more particularly described in Section 1.1 of the Redevelopment Contract) as
depicted upon the map attached hereto as Exhibit B; and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market value
for each Building pursuant to Minnesota Statutes, § 469.177, Subdivision 8; and
WHEREAS, the Authority and the Assessor for Hennepin County (the "Assessor") have
reviewed the preliminary plans and specifications for the Minimum Improvements and have
inspected such improvements;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. The minimum market value which shall be assessed for each of the Builidngs to
be constructed upon the Property, for ad valorem tax purposes, shall be as follows as of January
2, 2002:
Minimum Value
Building A $1,466,000
Building B $3,000,000
TOTAL $4,466,000
3. The minimum market values herein established for each Building shall be of no
further force and effect and this Agreement shall terminate on , 20_.
JBD-174346v4 D_ ]
RC125-153
• 4. This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
5. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Redevelopment Contract between the Authority
and the Redeveloper.
6. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
7. Each of the parties has authority to enter into -this Agreement and to take all
actions required of it, and has taken all actions necessary to authorize the execution and delivery
of this Agreement.
8. In the event any provision of this Agreement shall be held invalid and
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
9. The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements,
amendments and modifications hereto, and such further instruments as may reasonably be
required for correcting any inadequate, or incorrect, or amended description of the Property or a
Housing Unit, or for carrying out the expressed intention of this Agreement, including, without
limitation, any further instruments required to delete from the description of the Property such
part or parts as may be included within a separate assessment agreement.
10. Except as provided in Section 9 of this Agreement, this Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
11. This Agreement may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
12: This Agreement shall be governed by and construed in accordance with the laws
of the State of Minnesota.
•
JBD-174346v4 j~_2
RC 125-153
• HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA
By:
Its Chairperson
By:
Its Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of ,
2000, by and the Chairperson and
Executive Director, respectively, of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a public body corporate and politic, on behalf of such public body.
Notary Public
•
JBD-174346v4 D-3
RC125-153
r~
CSM INVESTORS II, INC.
sy:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
2000, by ,the of CSM Investors II, Inc., a
Minnesota corporation, on behalf of such corporation.
Notary Public
•
JBD-174346v4
RC 125-153
D-4
• .CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the values assigned to the
land and improvements are reasonable.
County Assessor for the County of
Hennepin
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
2000 by ,the County Assessor of the County of Hennepin.
Notary Public
•
JBD-174346v4 D-5
RC125-153
• EXHIBIT A of ASSESSMENT AGREEMENT
Leal Description of Property
JBD-174346v4 D-6
RC125-153
EXHIBIT E
Subordination Agreement
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this
day of 2000, between ("Lender"), whose address is at
and the HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic
("HRA"), whose address is 6700 Portland Ave. South, Richfield, Minnesota 55423.
RECITALS
A. , a Minnesota corporation ("Developer"), is the
owner of certain real property situated in Heririepin County, Minnesota and legally described in
Exhibit A attached hereto and incorporated herein (the "Property").
B. Lender has made a mortgage loan to Developer in the original principal amount of
$ (the "Loan"). The Loan is the evidenced and secured by the following documents:
(i) a certain promissory note (the "Note") made by Developer dated
2000, in the amount of $ ;and
(ii) a certain mortgage, security agreement and fixture financing statement
(the "Mortgage") made by Developer dated , 2000, filed , 2000,
as Hennepin County Recorder/Registrar of Titles Doc. No. encumbering the
Property; and
(iii) a certain assignment of leases and rents (the "Assignment") made by
Developer dated 2000, filed 2000, as Hennepin County
Recorder/Registrar of Titles Doc. No. encumbering the Property.
The Note, the Mortgage, the Assignment, and all other documents and instruments
evidencing, securing and executed in connection with the Loan, are hereinafter collectively
referred to as the "Loan Documents."
C. HRA is the owner and holder of certain rights under:
(i) a certain unrecorded Contract for Private Redevelopment (the "Contract")
by and between Developer and HRA dated ,2000;
(ii) a certain Assessment Agreement dated 2000, filed
2000, as Hennepin County Recorder Doc. No. encumbering
the Property (the "Assessment Agreement"); and
(iii) a certain Limited Revenue Tax Increment Note in the original principal
amount of $ (the "TIF Note").
JBD-174346v4
RC125-153 E-1
. NOW, THEREFORE, in consideration of the foregoing and as an inducement to Lender
to make the Loan, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto represent, warrant and agree as follows:
1. Consent. The HRA acknowledges that the Lender is making the Loan to the
Developer and consents to the same. The HRA also consents to and approves the assignment of
the Contract and TIF Note by the Developer to the Lender as collateral for the Loan; provided,
however, that this consent shall not deprive the HRA of or otherwise limit any of the HRA's
rights or remedies under the Contract and TIF Note and shall not relieve the Developer of any of
its obligations under the Contract and TIF Note; provided further, however, the limitations to the
HRA's consent contained in this Paragraph l are subject to the provisions of Paragraph 2 below.
2. Subordination. The HRA hereby agrees that the rights of the HRA with respect to
f 1 under the Contract are and shall remain subordinate and subject to
liens, rights and security interests created -by the -Loan Documents and to any and all
amendments, modifications, extensions, replacements or renewals of the Loan Documents;
provided, however, that nothing herein shall be construed as subordinating the requirement
contained in the Contract or the Deed that the Property be used in accordance with the provisions
of Section 3.3(c) of the Contract, or as subordinating the Assessment Agreement or the HRA's
rights under the TIF Note to suspend payments and to allocate Available Tax Increment (as
defined therein) in accordance with the TIF Note.
3. Notice to HRA. Lender agrees to use commercially reasonable efforts to notify
HRA of the occurrence of any Event of Default given to Developer under the Loan Documents,
in accordance with Section of the Contract. The Lender shall not be bound by the other
requirements in Section of the Contract.
4. Statutory Exception. Nothing in this Agreement shall alter, remove or affect
Lender's obligation under Minnesota Statutes, § 469.029 to use the Property in conformance with
the Concept Plan, as defined in the Contract.
5. No Assumption. The HRA acknowledges that the Lender is not a party to the
Contract and by executing this Agreement does not become a party to the Contract, and
specifically does not assume and shall not be bound by any obligations of the Developer to the
HRA under the Contract, and that the Lender shall incur no obligations whatsoever to the HRA
except as expressly provided herein.
6. Notice from HRA. So long as the Contract remains in effect, the HRA agrees to
give. to the Lender copies of notices of any Event of Default given to Developer under the
Contract.
7. Governing Law. This Agreement is made in and shall be construed in accordance
with the laws of the State of Minnesota.
8. Successors. This Agreement and each and every covenant, agreement and other
provision hereof shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, including any. person who acquires title to the Property
through the Lender of a foreclosure of the Mortgage.
JBD-174346v4
RC 125-153 E-2
9. Severability. The unenforceability or invalidity of any provision hereof shall not
render any other provision or provisions herein contained unenforceable or invalid.
10. Notice. Any notices and other communications permitted or required by the
provisions of this Agreement shall be in writing and shall be deemed to have been properly given
or served by depositing the same with the United States Postal Service, or any official successor
thereto, designated as registered. or certified mail, return receipt requested, bearing adequate
postage, or delivery by reputable private carrier and addresses as set forth above.
11. Transfer of Title to Lender. The HRA agrees that in the event the Lender, a
transferee of Lender, or a purchaser at foreclosure sale,-acquires-titleto-the Property pursuant to
a foreclosure, or a deed in lieu thereof, the Lender, transferee, or purchaser shall not be bound by
the terms and conditions of the Contract except as expressly herein provided. Further the HR.A
agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale
acquires title to the Property pursuant to aforeclosure...sale or a deed in lieu thereof, then the
Lender, transferee, or purchaser shall be entitled to all rights conferred upon the Developer under
the Contract, provided that no condition of default exists and remains uncured beyond applicable
cure periods in the obligations of the Developer under the Contract.
12. Estoppel. The HRA hereby represents and warrants to Lender, for the purpose of
inducing Lender to make advances to Developer under the Loan Documents that:
(a) No default or event of default by Developer exists under the terms of the
Contract, the Deed, or the Assessment Agreement on the date hereof;
(b) The Contract has not been amended or modified in any respect, nor has any
material provision thereof been waived by either the HRA or the Developer, and
the Contract is in full force and effect;
(c) Such other reasonable certifications as the Lender may request.
13. Amendments. The HRA hereby represents and warrants to Lender for the
purpose of inducing Lender to make advances to Developer under the Loan Documents that
HRA will not agree to any amendment or modification to the Contract, the Deed, the Assessment
Agreement, or any TIF Note issued under the Contract which in any way affects the Property
without the Lender's written consent.
•
JBD-174346v4
RC125-153 E-3
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day
and year first written above.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD
By:
Its
Approved as to form:
STATE OF MINNESOTA )
)ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of ,
by and the Chairperson and Executive
Director, respectively, of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic, on behalf of such public body.
•
Notary Public
JBD-174346v4
RC125-153 E-4
EXHIBIT B
FREERS
ASSO~,aTES,N~ iNIEM~RANDUM
TO: John Stark -City of Richfield
John Dean -Kennedy and Graven
FROM: Sid Inman -Ehlers & Associates
DATE: January 12, 2000
RE: South Lyrtdule Project - But/For Update
You ask us to comment on the impact that the increase class rate would have on the "But/For" tCSt for the
TCCH project. Please be aware that the change will have no impact on the test. The amount on income
after debt that the TCCH project receives is capped at 1.25°b of debt service. Therefore any increase in
income from any source that exceeds that coverase amount goes back to the city for distribution as per the
development abreetnent
Please review these and if you have any questions, please fc~:l free to call me at (651) 697-8507.
from the desk of
Sid Jnman
1Ctirtnncia! Advisor
Ehlers 6i Associates. htc.
9060.Centre Point Drive
Roseville. D91T 55113
Phone: (651) 697-8507
Fax: (66~t) 697-8555
N1MmncotaUttchfieMU.YN71t~CiAP•MFMO.1 l.wpd
EXHIBIT C
FREERS
b aSSOCIATES INC •~^ E M O R A N D U M
TO: John Stark -City of Richfield
John Dcan • Kcttncdy and Graven
FROM: Sid Inman -Ehlers & Associates
DATE- January 12, 2000
RE: South Lyndaie Project - Tsx Increment Plan Budget Review
You ask me, to comment on the impact the change is class rates on the TCCH project has. on the tax
increment plan budgets. As you rrc:all the purposed incentives are as follows;
L TCCH's total assistance is $4,217,439.
2. CSM's total assistance is $1,925,000:
3. Ron Clark's total assistance is $1,086,300:
4. The city's estimated bond proceed amount is $1,565,000 comes from the candlewood.
.district.
S. Cities cash amount is $106.300 comes from other sources.
6. This leaves a net amount of tax increment from the Lyndale South District of $5,557,439.
You will note that the total budget for the direct assistance is $9,000,000. Please review these and if you have
any questions, please feel fm to call me at (651) 697-8507.
,from the desk Rf
S!d Inman
Ftinancial Advisor
.Ehlers BL Associgttes, Inc.
8060 G~enhe Point Drive
Rosevllla, D01T 66113
Phone: (652) 697.8807
Fax: (bbl) 697.8555
N:N7iansgalRithfl~tdV.YN7IF~GAP-MEMO-12.wpd
•
EXHIBIT D
Lyndale Gateway Tentative Project Schedule
•
Phase 3 (West Side of Lyndale Avenue /East Side of Aldrich Avenue)
CSM -Commercial Space
Activi Date Com lete
HRA A royal of Redevelo ment Contract Jan. 19, 1999 X
Establishment of TIF District June 14, 1999 X
Plannin Commission A royal of Rezonin Au . 24, 1999 X
HRA Final A royal of Public Fundin Se t. 13, 1999 X
HRA A royal of Modified Conce t Plan Se t. 13, 1999 X
Cit Council Final A royal of Rezonin Se t. 13, 1999 X
Commitment from Dru Store ma'or tenant) Dec. 8, 1999 X
HRA A royal of Revised Contract Jan. 18, 2000
Plannin Commission A royal of Final Plan Jan. 25, 2000
Cit Council A royal of Final Plan CUP/FDP Feb. 14, 2000
Commitment from Dental Office (ma'or tenant) Feb. 15, 2000
Purchase Offers Made on Pro erties Mar. 1, 2000
Re uest for Condemnation on Pro erties Without Ne otiated Deal A r. 17, 2000
Notice of Relocation Benefits to Tenants A r. 17, 2000
Contin encies are Removed From Purchase Offers A r. 17, 2000
Tenants Must Vacate Jul 17, 2000
Closin s of Pro ert Sales Jul 17, 2000
HOUSING AND REDEVELOPMENT AUTHORITY `~
HRA Letter No. 1o
Agenda January 18, 1999
Issue Statement:
Consideration of report and recommendations of the Affordable Replacement Housing
Policy Advisory Committee; mitigative area.
Background:
In July 1999, the Housing and Redevelopment Authority (HRA) established the
Affordable Replacement Housing Policy Advisory Committee (Committee), "...to
provide recommendations regarding what policies and initiatives should be considered
to address replacement of affordable housing in a manner consistent with the City's
adopted Livable Communities housing goals, the Comprehensive Plan and the.
Mitigation Proposal."
The following occurred as a result of that action:
• A facilitator was identified: Jeanne Massey, a consultant to South Hennepin
Regional Planning Agency.
• The membership was identified-- 17 members who represented a cross section of
the community.
. a~ The Committee met eight times for two hours each to review background information
:'~-~, prepared by staff, listen to experts and special interest groups on each topic and
~' ~ formulate recommendations.
The recommendations are set forth in report form and included in this letter. The key
recommendations follow:
• The guiding values as shared by the Committee are presented on page 11 of the
report.
• Affordable housing is defined as 50 percent of median or below for renters
(approximately $31,800 for a family of four in 1999) and 80 percent of median or
below for homeowners (approximately $47,800 for a family of four in 1999).
• Replacement housing is defined as new units built or existing housing that becomes
available :and is kept affordable.
• A guideline ratio for replacement housing is determined; achieve mixed income
housing with 10 to 20 percent of the units affordable to people at 30 to 60 percent of
median ($19,080 to $38,160) with a matching 10 to 20 percent of units targeted for
upper incomes and the remaining 60 to 80 percent sold or rented at market
responsive rates.
• Within this guideline and as market conditions allow the number of affordable
replacement units should match the mix of rental and ownership (approximately 60
percent ownership and 40 .percent rental in the mitigative area).
• Phased redevelopment in the mitigative area provides residents the best opportunity
for finding other housing choices in Richfield.
• Actively pursue all potential resources that will help achieve the guideline ratios.
• Continue Richfield Rediscovered and increase resources for Habitat for Humanity
and Hennepin Technical College homes. Encourage the Richfield faith community
to partner in building a Habitat for Humanity home annually.
• Improve service program linkages between the mitigative area and the community,
considering health, spiritual, recreation, education, social interaction, employment,
training, transportation, transit and childcare as part. of new development. A "support
System Task Force" of the Richfield Community Council should be considered.
• Prioritize communication and public awareness in the mitigative area by:
a) Surveying residents to determine replacement housing needs;
b) Considering a temporary East Richfield support office during redevelopment; and
c) Continuing communication efforts on mitigation plans, general redevelopment
and the need for affordable housing.
• Continue Richfield's affordable housing program efforts.
Jeanne Massey will present the report and introduce the committee members in
attendance. Some of the Committee Members are prepared to give brief reports.
Committee member, Father Tix, will not be able to attend and has provided a letter
(Attachment A).
. Recommended Motion:
1. Direct staff to:
a) Use the guideline ratio in considering program ideas that the committee...
introduced and redevelopment opportunities in general
b) Utilize the guiding values and principals in applications for Livable Communities
resources from the Metropolitan Council.
c) Actively pursue affordable housing resources, which keep available existing
housing affordable.
d) Continue to emphasize communication strategies concerning the mitigative area,
.redevelopment and affordable housing.
2. Request the Richfield Community Council to consider the role of a "Support System
Task Force" to develop a livability plan for the mitigative area.
3. Prepare correspondence from the HRA, which thanks Committee Members for their
time and effort.
Basis of Recommendation:
1. The Committee has completed its work and prepared and presented its
recommendations.
2. The subject of affordable housing is complex and challenging and the work of the
. Committee was determined as the HRA's best way to respond to the challenge.
3. The Committee was able to consider the affordable housing position of Interfaith in
this process.
4. The recommended motion puts the outcomes of the Committee into action.
Alternative Recommendation:
1. Do not consider development unless the affordability ratio was met. However, the
Committee presented the ratio as a best effort strategy in considering available
resources and proceeding with development-based on the best effort evaluation.
2. Use Interfaith'sposition as the guideline. and require a higher ratio of affordability:
However, the Committee believes that resources are insufficient for the higher level
of affordability sought by Interfaith and Richfield has multiple housing needs beyond
affordable housing that must also be considered.
3. Request the Committee to continue its discussion. However, the Committee
believes it has completed its work.
4. Amend the report based on considerations by the HRA.
Discussion/Decision Mode:
Guidelines and recommendations will be immediately implemented.
Res Fully submitted,
~ ~~~
tha Orduno
Executive Director
SO:cak
L_J
Attachment A
''
Church of the Assumption
305 East 77th Sweet
Mimiapolis. Minnesota 35423
(612) 866-5019
January 7, 2000
Tom Harms, Chair
City of Richfield Housing and Redevelopment
6700 Portland Avenue
Richfield, Minnesota 55423
Dear Tom and Members of the HRA:
~b~m ~o
~//?Lfir Rio
Unfortunately I cannot be at your January meeting for Richfield Affordable Replacement
Housing Policy Advisory Committee's presentation of recommendations to you. Since
the committee's inception in September I have been a member of the group. Because
of my absence, 1 have been asked. to write to you about the work of the committee.
In speaking of the work of our committee I must first express thanks to Jeanne Massey
who was both facilitator of the group and writer of the report you have received. Jeanne
did a fantastic job!
My experience of the group itself was very positive. In our various gatherings all of us
learned more about what is happening today regarding housing initiatives in Richfield.
We all also learned that the question of affordable housing is very complex and one this
community does not face alone. At the same time, however, Richfield like any other
community must do its share to provide for housing that is available and.. affordable.
Certainly the most difficult recommendation for us to make was regarding the level of
subsidy to the number of those being served. Dollars for subsidy are limited and a
choice had to be made. As a group we struggled greatly with this question. From the
report you can see that our consensus was to subsidize more people with our limited
dollars, rather than fewer people with a greater subsidy (cf. Ratio of Affordable
Replacement Housing). While this was our consensus, it is important we do not forget
the poorest of the poor and seek ways to help them meet basic human needs.
The looming question that remains in the mind of everyone is low-frequency noise from
the new north/south runway and its impact on the East Side of Richfield. As you are
well aware, the answers to -these very real questions remain unanswered. One of the
Attachment B
Richfield
Affordable Replacement Housing
Policy Advisory Committee
Recommendations
to the
Richfield Housing and Redevelopment Authority
January 1 D, 2000
Jeanne Massey, Project Consultant
South Hennepin Regional Planning Agency
C
[~
TABLE OF CONTENTS
BACKGROUND ......................................................................................................................................... 2
PURPOSE OF THE COMMITTEE ................................................................................................................ ... 2
TASK OF THE COMMITTEE ..............................:...................................................................................... ... 2
COMMITTEE MEMBERS..........:.......: .....................:.................................................................................... 2
FACILITATION AND COORDINATION ..: .................................:...........:...............:.......:................................ 3
COMMITTEE PROCESS ............................................................................................................................... 3
SUMMARY OF KEY FACTS AND ISSUES ....................................................:..................................... 5
THE MITIGATIVE AREA .......................................................................................................................... .. 5
REDEVELOPMENT TRENDS IN RICHFIELD .........................:..................................................................:.. .. S
HOUSING AFFORDABILITY ............................................................................:......................................... .. 6
In the Metropolitan Area ..........................................:......................................................................... .. 6
In Richfield .....................................:................................................................................................... .. 6
In the Mitigative Area ................................:........................................................................................ .. 7
FINANCING AFFORDABLE REPLACEMENT HOUSING .............................................................................. .. 8
TARGETING AFFORDABLE REPLACEMENT HOUSING .........................................................:................... .. 9
RECOMMENDATIONS .........................................................:............................................................... 11
GUIDING VALUES AND PRINCIPLES .........:.............................................................................................. 11
DEFINITIONS ........................................................................................................................................... 11
AFFORDABLE REPLACEMENT HOUSING GOALS ..................................................................................... 12
Ratio of Affordable Replacement Housing ......................................................................................... 12
Location and Timing of Affordable Replacement Housing ................................................................ 12
CONTINUUM OF AFFORDABLE HOUSING CHOICES ................................................................................. 12
Target Markets for Affordable Replacement Housing ........................................................................ 12
Characteristics o A ordable Re lacement Housin .....:.............................:.....
.f .~ P g ................................ 12
CREATING/FUNDING AFFORDABLE REPLACEMENT HOUSING ............................................................... 13
LINKAGES BETWEEN AFFORDABLE REPLACEMENT HOUSING AND THE BROADER
COMMUNITY ........................................................................................................................................... 14 _
COMMUNICATIONS AND PUBLIC AWARENESS ....................................................................................... 14
Recommendations Report to the Richfield HRA, January 10, 2000 1
•
BACKGROUND
Purpose of the Committee
Richfield is challenged by airport impacts and the need to remain vital through redevelopment
of the fully developed community. A significant number ofmulti-family and single-family
homes are within close proximity to the location of the-north-south runway, which is currently
under construction. It is possible that those homes will be purchased and replaced with- airport
compatible uses. The City's adopted mitigation program envisions replacement of those homes.
Additionally, Richfield initiated an effort in 1998 throughout the city to construct S00 new
homes (single and multifamily) within five years and 1,000 in 10 years. To date, the City has
376 units under construction, including 160 at Gramercy and 216 at Urban Village. Both the
loss and development of housing requires consideration of affordability.
On July 27, 1999, the Richfield Housing and Redevelopment Authority (HRA) approved the
formation• of the Richfield Affordable Replacement Housing Policy Advisory Committee,
herein referred to as the Committee, to develop recommendations regarding policies and
financing initiatives to address the development. of affordable replacement housing in Richfield.
These recommendations will help guide the development of affordable housing in Richfield
over the next several years.
Task of the Committee
Within the context of Richfield's Livable Community Act Housing Goals, Comprehensive Plan
and Mitigation Proposal, the Committee was asked to make recommendations regarding:
• Definition of affordable housing
• Replacement affordable housing goals
• Continuum of affordable housing choices for different age groups, ethnic groups and
household types
• ..Practical affordable housing financing strategies
• Community design features linking housing, employment, transportation, shopping and
recreational needs
• Linkages with community. support services such as, FamiLink resource center, housing
financial assistance, health care services, etc..
The Committee was additionally asked by the City Council to evaluate Interfaith Action's
Housing Goals for Richfield, presented at an October 7 Town Hall meeting, and to determine if
these goals should be incorporated into the policy recommendations.
Committee Members
The Committee consisted of 15 community members representing various community
organizations and two staff representatives from the City of Richfield. The Committee
members are listed below:
Andy Akins, Richfield Apartment Management Association (RAMA)
Recommendations Report to the Richfield HRA, January 10, 2000 2
Steve and Sunni Cory, Richfield Apartment Management Association (RAMA)
Camillo DeSantis, Richfield Community Council
Barbara Devlin, Richfield Public Schools
Pastor Claude James, Faith Pentacostal
Pastor Peter Hawkinson, Bethany Covenant Church
Leslie Kerkhoff, FamiLink Richfield
Dave Kromschroeder, Public Safety Department
Bruce Nordquist, Community Development staff
Alfonso Morales/Sylvia Altamirano, Richfield residents with school-age children
Carmen Rizo, Richfield resident with school-age children
Susan Rosenberg, City Council
Sue Sandahl, City Council
Kristal Stokes, HRA and City Council
Fr. Tix, Assumption Church
Gertrude Ulrich, League of Women Voters
Facilitation and Coordination
The Richfield HRA contracted with the South Hennepin Regional Planning Agency (SHeRPA)
to facilitate the Committee and to develop the recommendations report. Jeanne Massey,
consultant and former director of SHeRPA, was hired by SHeRPA to coordinate the project.
SHeRPA is a joint and cooperative organization among the communities of Bloomington, Eden
Prairie, Edina and Richfield, providing human services related research, planning and
rr coordination services.
Bruce Nordquist, Community Development Department staff, served as a• resource to the
Committee and a liaison to the Community Development Department.
Committee Process
The task force met from late September through early January to collect information and
develop recommendations. The agendas of the Committee meetings were as follows:
Meeting 1-Overview and orientation of the Mitigative Area, presented by Bruce Nordquist.
Meeting 2 -Guy Peterson, of the Housing and Redevelopment Authority (HRA) and Jim Barns
of the Minnesota Housing Finance Agency presented on metropolitan definitions
of affordable housing and affordable housing activity in the Metropolitan Area.
Meeting 3 -Jim Prosser, former City Manager of Richfield, and Mark Ruff, consultants with
Ehlers & Associates presented on the need for mixed-income replacement housing
.for multiple target markets and housing financing opportunities. Mark Hinds, staff
with the City of Richfield also attended as a resource to the group.
Meeting 4 -Demographic overview of the City of Richfield and Mitigative Area, presented by
Jeanne Massey and Bruce Nordquist. Introduction of Interfaith Action's
Affordable Housing Goals for Richfield.
Recommendations Report to the Richfield HRA, January ]0, 2000 3
Meeting 5 -Additional background information relating to the anticipated replacement housing
to be added in redeveloped areas and the proportion of affordable replacement
housing anticipated given current resources. Presentation and discussion of
Interfaith Action's Affordable Goals proposal.
Meeting 6 -Small group discussion to develop recommendations.
Meeting 7 -Full group discussion and formulation of draft recommendations.
Meeting 8 -Review and consideration of final recommendations.
r
Recommendations Report to the Richfield HRA, January 10, 2000: 4
SUMMARY OF KEY FACTS AND ISSUES
The following is summary of the key facts and issues discussed by the Committee. It is a
synopsis of a large volume of background information presented to the group. Summary notes
of the meetings and background, documents are available upon request.
The Mitigative Area
The "Mitigative Area" is that area of Richfield next to the airport that will be highly impacted
by low frequency noise due to the development of the new north-south runway, scheduled for
completion in 2003. The area extends from Cedar on the east to 16th Avenue on the west, and
from the Crosstown on the North to Highway 494 on the South. The area will become
significantly 'impaired' because of the impact of low-frequency noise and is, therefore, the
reason to plan for redevelopment. At this time, redevelopment plans include both residential
and commercial development.
The Mitigative Area is 52 city blocks and is one of the biggest redevelopment sites in the
nation. A total of 1,100 housing units - 650 single family units and 400 rental units - will be
lost due to redevelopment. Approximately 800 higher density units are planned to be replaced,
along with commercial development and park space. Redevelopment of the site will occur over
a I O-year period.
The total estimated cost to acquire the property, relocate households and businesses and prepare
the land for redevelopment is $187 million, which will be financed by a variety of sources
including, TIF (Tax Increment Finance) funds, land sale proceeds and federal and state grants.
Developers will pay for the development of residential and commercial construction.
Additional resources, however, will need to be found to create affordable replacement housing.
These resources may include State, Federal Housing and Urban Development (HUD),
Metropolitan Council and Holtman funds.
Redevelopment Trends in Richfield
As an aging first-ring suburban community, redevelopment has been occurring in Richfield for
many years. Redevelopment opportunities are part of the long-range vision for Richfield set
forth in the Comprehensive Plan, Livable Communities Act and other planning documents.
Redevelopment occurs in urban areas that become "impaired" and no longer desirable as
residential or commercial property. Former, current and proposed redevelopment sites in
Richfield include:
• Lyndale Hub Nicollet (LHN)
~ CDP
• Interstate Lyndale Nicollet (ILN)
• Urban Village
• Interchange West
• Lyndale Gateway
• Gramercy/VFW
• PASS (Penn and 66th Street)
Recommendations Report to the Richfield HRA, January 10, 2000 5
• Lakes at Lyndale
Generally, as redevelopment opportunities occur, higher density residential, retail and
commercial uses are developed in redevelopment sites. Higher density results in a greater
number of replacement housing and businesses in the community.
In contrast to the historical community development trend of developing concentrated
affordable housing, often in isolation from other community neighborhoods, the consistent
trend in Richfield is to create affordable housing on a scattered-site basis throughout the
community. Mixed-income developments are socially and economically integrated and
designed to blend with surrounding neighborhoods and the broader community.
Housing Affordability
In the Metropolitan Area
According to the Metropolitan Council, housing is affordable if it does not exceed 30 percent of
household income at up to 50 percent of the Area Median Income (AMI) ($63,600 in 1999)
among rental households and up to 80 percent among homeowners. This means that the
maximum price of an "affordable" ownership unit is $134,250, with a 7.5 percent mortgage.
The maximum rent price of an affordable rental unit is $636 for a one bedroom unit for an
average two-person household. Affordability rates vary by household size.
Based on this definition of affordability, there is currently an estimated unmet need for 115,000
units of affordable housing metropolitan wide. The shortage of affordable housing has grown
over the past 10 years due to a variety of reasons:
• Increasing rental rates and housing prices
• Conversion of Section 8 housing units to market rate units
• Decreasing federal funding for affordable housing
• Complexity and expense of developing affordable housing, including the cost of new or
the acquisition and demolition of existing land
• Lack of investment return for developers to provide affordable housing in the private
market
• Lack of consensus regarding who affordable housing should be built.for
• Community reaction to affordable housing
In 1995, Minnesota passed the Livable Communities Act (LCA) in response to the need to
create more affordable housing. The program is a system of incentives, providing funds to
communities for new housing development and cleanup of polluted development sites. The
incentives work in two ways. First they encourage growing suburbs to dedicate resources to the
construction of affordable housing. Second, they encourage fully developed communities, like
Richfield, which already have a relatively large supply of affordable housing, to create higher
income choices and mixed income developments. The aim is to create a more balanced
allocation of affordable housing throughout the Metropolitan Area.
The Livable Communities Act has been only marginally successful in creating affordable
housing in the Metropolitan Area, primarily because most of the affordable housing created
tends to be targeted toward the maximum affordable price. Thus, the unmet need for affordable
housing metro wide remains significant.
Recommendations Report to the Richfield HRA, January 1 Q 2000 6
In Richfield
Richfield is a community of affordable housing. Of the current total approximate 15,144
housing units in Richfield, 86 percent of ownerhip units and 64 percent of rental units are
affordable (based on the Metropolitan Council's affordability definition).
This share exceeds the Livable Community Act (LCA) affordable housing benchmarks set for
Richfield, which are as follows:
• 32 to 45 percent of rental housing should be affordable
• 64 to 67 of ownership housing should be affordable
While Richfield has a relatively large supply of affordable housing compared to other suburban
communities, it continues to set aside a portion of replacement housing for those with low and
moderate incomes in an effort to maintain an existing affordable housing stock throughout the
City. Since 1990, 19 out of the 100 homes (nearly 20 percent) built have been affordable for
those earning $20,000 to $45,000.
Approximately a third of the Richfield HRA's $6.2 million operating budget is targeted toward
affordable housing programs, which include:
• Affordable rental programs:
~ Section 8 Project-Based
~ Section 8 Vouchers and Certificates
4d Tax Credits
• Affordable Homeownership programs
~ Habitat for Humanity
~ New Home program
~ Deferred Rehabilitation Loan
~ First-time Advantage Loans (remodeling loans)
To preserve and upgrade Richfield's housing stock, Richfield also provides two housing
programs for market rate housing - Richfield Rediscovered and Transformation Homes.
In the Mitigative Area
The potential loss of housing in the Mitigative Area is greater than in any redeveloped site in
Richfield and is why the HRA requested this Committee to consider affordable replacement
housing issues.
In general, the value of single family homes in the Mitigative Area remain strong and have
increased during the 1990s. Richfield's housing stock, however, is moderately priced relative to
other suburban communities and, thus, most of the single family homes in the Mitigative Area
are affordable at up to 80 percent of the AMI:
• 17 units are affordable at or below 60 percent of the AMI
• 558 units are affordable at 80 percent of the AMI
• 75 units are valued at costs that exceed affordability at 80 percent of the AMI
Recommendations Report to the Richfield HRA, January 10, 2000 '7
Based on a survey of rental rates in the. Spring of 1999, all of the 400 rental apartment units in
the area are affordable at 30 to 50 percent of the AMI. At that time, apartments rented for less
than $500 on average for a one bedroom and less than $600 on average for a two bedroom.
Note that the rents may have increased since this point in time.
The expected loss of affordable housing in the Mitigative Area is significant and will likely
result in a net loss of affordable housing city-wide. Nonetheless, given the total projected
affordable housing after redevelopment in the Mitigative Area and other sites, the total share of
affordable housing units in Richfield - 67.5 percent (or 10,432 units of a total 15,440 units) -
will still exceed the LCA affordability benchmarks set for Richfield.
Financing Affordable Replacement Housing
There are two primary ways to subsidize housing to create affordability. The first is to
subsidize the construction and mortgage/rent of new housing. The second is to subsidize the
mortgage/rent of existing housing. A greater number of affordable units (rental or ownership)
can generally be created by subsidizing existing units, for two main reasons: firstly, there are no
construction costs to pay for; and secondly, generally existing units are older and less expensive
at market rate.
The cost of subsidizing an existing housing unit in Richfield is minimally $25,000, to either
bring down the cost of a mortgage or subsidize rent for a five year period. The construction
cost of an example new apartment complex of 30 affordable units (ranging from an affordability
level of 30 to 60 percent of AMI) is $123,700 per unit. This demonstrates the significant
subsidies required to provide new affordable housing, why a variety of funding sources is
typically necessary to cover the. subsidies, and why keeping the affordable existing stock is so
important. The example provided here is based on standard construction and does not include
the additional construction costs of attenuating noise in affordable replacement units in the
Mitigative Area.
The primary sources of funding for affordable rental housing include:
• Low-income housing tax credits, an MHFA program available to people earning up to
60 percent of median income. This is the largest housing subsidy, costing nearly $6
million statewide in 2000.
• Federal programs, including HUD, FHA and FNMA Insured Mortgage.
• Tax-exempt bonds to writedown borrowing costs. These bonds are typically issued by
state or county governments for the benefit of not-for-profit or governmental
developers. These are often combined with insured mortgages.
• Hollman or MHOP (Metropolitan Housing Opportunities Program) funds. These
federal funds are meant for scattered-site housing (no more than 10 percent of units in
any development), providing up-front capital funding as a match for other funds.
• Other smaller funds, typically used as "gap fillers" include Livable Communities Act
funds, Family Housing Fund (McKnight Foundation funds), HUD block grant funds,
TIF, Federal Home Loan Bank Board and local fee waivers.
The primary sources of funding for affordable ownership housing include:
• Tax Increment Financing funds. When feasible, Richfield sets aside a portion of TIF
funds generated from redevelopment to support community housing initiatives.
Recommendations Report to the Richfield HRA, January 10, 2000
• First-time homebuyer programs, which provide reduced interest, rates for households
earning up to 80 percent of median income and are typically financed through tax-
exempt bonds
Targeting Affordable Replacement Housing
There are two general ways to think about how to target affordable replacement housing. The
first is to consider the housing needs of current residents displaced by the redevelopment in the
Mitigative Area. The second is to consider the housing needs of future residents, taking into
account population change over time. Among both current and future residents, there are
multiple household types or target markets .for affordable replacement housing, including: those
who are new to the workforce and earn entry-level wages; working poor families, whose
income is not sufficient to cover housing costs; seniors with fixed incomes; and people who
have a change in family circumstances, e.g., divorced parent.
Regarding the needs of current residents, specific current demographic information of the
population does not exist. The 1990 census information, however, is helpful in highlighting how
the residents in the Mitigative Area compare with the general population. In 1990, the
Mitigative Area (as roughly indicated by census tracts) compared with the City overall in the
following ways:.
• It was diverse within itself, with the southern most tract having more rental units than
the other two tracts.
• It was somewhat younger, with more children and young adults than the City overall.
• It had a larger share of families with children, including single-parent families.
• It had ahigher-than-city-average homeownership rate, except for the southern tip,
which was primarily rental. Even fewer seniors than average rent in the Mitigative
Area
• The racial and ethnic composition was about the same as it is for the City overall, with
the exception of the southern tip, which had a significantly higher share of racial and
ethnic minorities.
• The same was true with respect to poverty status, with approximately the same share of
residents living at the poverty level as the City overall except for those living in the
southern tip, where the share was slightly higher at the poverty level and significantly
higher at 150 percent of the poverty level.
• While a slightly higher share of people lived in poverty in the southern most tract,
median rental and housing prices were slightly higher than for the City overall as well
as the other two tracts.
Regarding the needs of future residents, a review of Richfield demographics show that
affordable replacement housing efforts should consider the following population trends, which
are based on Metropolitan Council population projections:
• First, Richfield has experienced a continuing decline in its overall population during the
1990s, with a declining average household size and changing composition of household
types, including:
~ A growing senior .population, who, as they reach the age of 75 and beyond, tend to
live alone
•
Recommendations Report to the Richfield HRA, January 10, 2000 9
A declining number of household with children as baby boomers become empty-
nesters
~ A growing number of young. single adults (i.e., echo-boomers or children of baby
boomers who leave home)
• Second, the population decline is projected to turn around and population growth is
expected over the coming two decades'. The trends leading this turnaround include:
~ As Richfield's housing stock turns over, there should be an increase in the number
of young families with children, especially among immigrants and other ethnic
minorities, who tend to be young single adults or families with children and have
larger than average household sizes
~ Echo-boomers will begin to have children during the coming decade, increasing the
share of families with children
~ Higher density residential development in redeveloped areas should also help to
increase population
• Third, the changing population mix will generate a greater mix of economic
households:
~ baby-boomers at their peak earning years
~ young adults starting careers and earning entry-level wages
~ young immigrant families earning entry-level wages
~ seniors earning affixed-income
•
' Note that the Metropolitan Council population projections do not take into account any population
changes that may occur due to planned redevelopment activity such as that anticipated in the Mitigative
Area.
Recommendations Report to the Richfield HRA, January 10, 2000 1 Q
RECOMMENDATIONS
w
Guiding Values and Principles
1. Affordable housing is a vital part of community development and planning.
2. A healthy community is an economically balanced and sustainable community.
3. Affordable housing is an investment in the community the same way schools, parks and
roads are investments, all of which improve quality of life.
4. Affordable housing gives people housing choices and enables people to live close to where
they work.
5. Affordable housing options create stability for families and children to improve their lives.
6. Balanced redevelopment is best served by promoting rental and homeownership
opportunities, affordable housing and mixed-income communities.
7. Life-cycle housing promotes housing for. all residents and creates community stability.
8. Residents displaced by redevelopment are a priority for replacement housing.
9. Affordable housing is most viable when it is physically undistinguished from market-rate
housing and blended with surrounding neighborhoods and the broader community.
10. Multifamily housing works best when integrated with surrounding neighborhoods and the
broader community.
11. Richfield is a diverse community and promotes housing reflective of various cultural
values, life styles and preferences.
Definitions
1. Affordable Housing: The Committee defines affordable housing as that which does not
exceed 30 percent of monthly family income at up to 50 percent of the Area Median Income
(AMI) for renters and 80 percent of the Area Median Income for homeowners. This is the
definition used by the Metropolitan Council.
2. Replacement Housing: Replacement housing includes new units built as part of a
redevelopment as well as rollover housing, which is existing housing that becomes
available as a result of new residential development when residents move from existing to
new housing. Replacement housing includes both rental and ownership units.
Recommendations Report to the Richfield HRA, January 10, 2000
11
Affordable Replacement Housing Goals
Ratio of Affordable Replacement Housing
To sustain affordability and a balance ofmixed-income housing in Richfield, 10 to 20
percent of replacement housing should be set aside as affordable at 30 to 60 percent of the
AMI, with a matching 10 to 20 percent of replacement housing targeted for the upper-
income bracket. The remaining 60 to 80 percent of housing should be rented or sold at
whatever the market will bear and in accordance with Richfield's Livable Community Act
goals.
2. Within this guideline, maximize the number of affordable replacement units in Richfield.
3. Replacement affordable housing should be created on a city-wide basis for housing lost in
the Mitigative Area.
4. Maintain, to the extent possible and as market conditions allow, the mix of rental and
ownership housing currently existing in the Mitigative Area.
Location and Timing of Affordable Replacement Housing
1. Create scattered-site affordable replacement housing within the Mitigative Area (wherever
.feasible based on noise levels) and throughout the City.
2. Prioritize the use of the existing housing stock, as units become available, to create.
scattered-site affordable units.
3. Redevelop in stages so that households displaced in the Mitigative Area will be more likely
to find housing within Richfield. Ensure an appropriate development timeline to provide
residents with sufficient notice and time to find replacement housing.
Continuum of Affordable Housing Choices
Target Markets for Affordable Replacement Housing
1. Highest priority for affordable replacement housing should be given to those households
displaced by removal of housing in the Mitigative Area.
2. Second priority for affordable replacement housing should be given families with children
in the school district, ensuring appropriate design, size and density of units for this
population.
3. Plan for long-term affordability through life-cycle housing city-wide that considers the
needs of both current and future households needs.
Characteristics of Affordable Replacement Housing
1. Develop mixed-income housing in an effort to balance affordable housing needs and
middle-class retention.
Recommendations Report to the Richfield HRA, January 10, 2000 12
2. Develop replacement housing that is .socially and economically integrated housing designed
to blend with surrounding neighborhoods and the broader .community.
3. Develop a range of housing styles and affordability to meet various life styles, living
arrangements and age groups.
4. Incorporate housing designs that promote community connections (e.g., the use of front
porches) and that are reflective of various cultural values, life styles and preferences.
5. Explore feasibility of innovative housing designs to create affordability.
Creating/Funding Affordable Replacement Housing
1. Actively pursue Holtman funds as part of the mix of financing mechanisms to create
affordability.
2. Pursue multiple sources of funding, seeking input from developers on funding possibilities,
including additional funds from MAC, the State and the Federal government to create.
affordable housing in the Mitigative Area.
3: Explore feasibility of a federal demonstration project to fund affordable replacement
housing.
4. Ensure subsidies for affordable replacement housing targeted to both new and rollover
housing to create affordability throughout the City and at various density levels.
5: Purchase. and subsidize HUD (Housing and Urban Development) foreclosed homes in
Richfield to create scattered-site affordable housing.
6. Create flexible housing construction requirements where feasible to reduce cost, including,
but not limited to: -
• Parking requirements
• Setbacks
• Road width
• Rezone some neighborhoods to permit higher density housing
7. Expand existing down payment and closing cost assistance programs for home buyers,
including:
• Providing grants or delayed loans with pay-off at time of sale that would roll over to
fund new buyers
• Establishing Individual Development Accounts that assist people in saving funds for a
down payment
8. Promote the establishment of a private tax-exempt, non-profit housing corporation in
Richfield.
9. Balance the Richfield Rediscovered Program with an increase in resources-for Habitat for
Humanity and Hennepin Technical homes. Create partnerships with the faith community to
build one or more Habitat for Humanity homes annually.
Recommendations Report to the Richfield HRA, .January 10, 2000 13
Linkages Between Affordable Replacement Housing and the Broader
Community
1. Create transportation linkages between replacement housing and employment, commercial
and other city amenities, with consideration given to the following:
• Connection to and expansion of the BE-Line (Bloomington-Edina) bus system and the
66th and 77th street loop
• Improvement of walk ways, bike ways and bus stops
• Exploring the use of the school bus system for specialized non-school uses
2. Include development requirements in the Mitigative Area to provide community space and
inside-amenities (e.g., Edinborough Park in Edina) to increase opportunities for social
interaction within neighborhoods and to withstand low-frequency noise. Strive to create an
East Richfield community with neighborhood amenities.
3. Create a Support System task force to develop a "livability plan" for the Mitigative Area,
with consideration given to:
• Health, spiritual, social service, recreation, social interaction, employment, training &
development, transportation and child care needs
• Flexibility to adapt to changing community demographics
• Involvement of the faith community, Common Bond and other organizations in the
design, planning and implementation of programs to provide practical ways to assist
low-income immigrants and other new residents to obtain jobs and integrate into the
broader community.
• Recruitment of businesses into the community that can hire and train low-income
residents who live in the community
4. Encourage mixed-use developments to maximize linkages between appropriate commercial
and residential uses.
Communications and Public Awareness
1. Develop alternative development plans, one assuming full MAC, state and federal funding
to redevelop the Mitigative Area and one assuming no or little funding. In both plans,
assess the impact on the ability to replace affordable housing and timing of development.
2. Continue to promote awareness of redevelopment opportunities among Richfield residents,
creating ways to bring people together to promote understanding, community support for
one another and community pride.
3. Survey the residents of the Mitigative Area to determine who they are and to better
understand their replacement housing needs.
4. Create a communication campaign to inform residents of the redevelopment process and
replacement housing options, and to improve access to and responsiveness among city
officials. A variety of communication channels should be considered, such as a temporary
"East Richfield" community support office during redevelopment. Provide incentives for
public participation at meetings, e.g., Viking ticket drawings.
Recommendations Report to the Richfield HRA, January 10, 2000 14
5. Continue to seek community input on housing issues, ensuring housing is reflective of the
community's diversity
6. Call on the community's leadership among all sectors (city, school, faith community,
business community and others) to communicate the need for affordable housing for all
markets.
7. Remain active in advocating for affordable housing throughout the Metropolitan .Area to
ensure all communities provide affordable homes for families and individuals.
•
Recommendations Report to the Richfield HRA, January 10, 2000 1 S
5
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 9
Agenda January 18, 2000
Issue Statement:
Consideration of the "City Bella" development concept and an agreement with
Gramercy Corporation for exclusive cooperation with the Housing and Redevelopment
Authority in exploring the feasibility of redeveloping the Southwest Quadrant of Lyndale
Avenue and 66th Street; Gramercy Redevelopment Project Area.
Background:
Gramercy Corporation is proposing a development concept for the southwest corner of
Lyndale Avenue and 66th Street called City Bella. City Bella is a unique multi-purpose
housing, office, retail concept for the west Lyndale frontage south of 66th Street. The
proposal would integrate with the new VFW and Gramercy's 160-unit senior housing
development and the existing Lake Shore Drive Condominium. The concept envisions
the creation of a public piazza (plaza) surrounded by a mixed-use development
consisting of up to 250 apartments, 20 to 30 owner-occupied townhomes, a 10,000 sq.
ft. spa and fitness club, 40,000 sq. ft. of commercial space, which would include one
fine dining restaurant, and an office/commercial complex to be located on the site of the
existing Lyndale Hardware store. Parking would be provided in a multi-level ramp
beneath the plaza and in a ramp connected to the office building. The plaza would
extend with a bridge connection over Lake Shore Drive to Woodlake Nature Center.
Gramercy Corporation is seeking an agreement for a period of one year m order to
complete a thorough feasibility study which would include a market analysis, site plan
and design study, soil testing, financial analysis, and traffic and pedestrian circulation
study.
The agreement is similar to other such agreements used in the past by the Housing and
Redevelopment Authority (HRA). Key features of the agreement include:
• The term of the agreement is for a period of one year.
• During the one-year term of the agreement, the HRA will not provide financial
assistance or authorize condemnation to be used by any third party.
• The agreement does not obligate the HRA to take further redevelopment actions
such as providing tax increment assistance, assisting in the acquisition or
condemnation of property, or seeking zoning approval. Such actions are separate
from .this agreement.
• An initial deposit of $25,000 must be made by the developer to cover consultant
costs used by the HRA during the feasibility study period.
• The agreement may be terminated by either party with 30 days written notice.
Mike. Conlon and Lou Stocco from Gramercy Corporation will be attending the HRA
meeting to present the City Bella concept and answer questions.
Recommended Motion:
Authorize the Chairperson and Executive Director to execute the attached Agreement
with Gramercy Cooperation, following payment of $25,000 by Gramercy.
Basis of Recommendation:
1. The redevelopment of this area has been a goal of the HRA since 1975.
2. Redevelopment of the South West Quadrant is consistent with the Lakes at Lyndale
Master Plan.
3. Gramercy Corporation already has a development presence and is demonstrating
their capability.
4. The cost of the feasibility analysis is a developer responsibility.
5. The agreement form and content is similar to those used by the HRA in other
projects.
6. Gramercy and staff have already. begun the communication process with property
owners within the quadrant including Lake Shore Drive Condominiums. The HRA
ombuds has met with the condominium association.
7. Gramercy has negotiated agreements to purchase Lyndale Hardware and the
Lynch residential property, .key property owners in the area.
Alternative Recommendation:
1. Defer action until a later date.
2. Deny the request.
Discussion/Decision Mode:
An agreement at this time allows listed activities to proceed during 2000 in anticipation
of a 2001 construction start.
Respe fully submitted,
~~
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a.rnar~ ha Ordu o
Executive Director
SO:ds
Attachments
•
AGREEMENT
THIS AGREEMENT is made and entered into this 18th day of January, 2000, by
and between the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota a Minnesota public body corporate and politic ("HRA") and Gramercy
Corporation, a Minnesota corporation ("Redeveloper").
RECITALS
First: The Redeveloper is interested in pursuing the redevelopment of that certain area
identified on Appendix A (hereinafter the "Redevelopment Area");
Second: The Redeveloper is proposing redevelopment within the Redevelopment Area
which may include office, restaurant, retail, and residential uses (hereinafter the
"Redevelopment");
Third: The HRA wishes to cooperate with Redeveloper's efforts with Redevelopment
and are willing to proceed as described in this Agreement;
Fourth: The parties acknowledge that Redeveloper will expend substantial time and
effort, and incur substantial expense in pursuing the Redevelopment;
Fifth: Redeveloper is willing to undertake the above described activities with the
reasonable assurance from the HRA that they will support and cooperate with
Redeveloper in its Redevelopment efforts;
Sixth: The HRA and Redeveloper have executed this Agreement to document their
understanding with respect to the proposed Redevelopment.
AGREEMENTS
NOW THEREFORE, in consideration of the premises and mutual obligation of the
parties contained herein, each of them does hereby represent, covenant and agree with
the other as follows:
1. Statement of Intent.
It is the intention of the parties that Redeveloper will proceed with the development
activities necessary to permit Redevelopment in a manner, and on terms and
conditions, which are mutually acceptable to Redeveloper and the HRA. The parties
acknowledge that in order for Redevelopment to be .constructed, Redeveloper may
at some point need financial and/or site assembly assistance from the HRA. This
Agreement does not, however, constitute either approval of such financial or site
assembly assistance, nor does it obligate the HRA to provide such assistance.
•
2. Undertaking by Redeveloper.
Redeveloper intends to undertake and pursue certain activities with respect to the
Redevelopment generally as outlined herein and within the term of this agreement.
Redeveloper activities will include the following: site planning feasibility, the
development of plans for the. Redevelopment, application for necessary government
approvals, marketing and financial analysis, soil and engineering analysis, and such
other activities as would be customary and necessary to permit the Redevelopment.
3. HRA's Undertaking and Agreement.
The HRA agrees to cooperate with Redeveloper in Redeveloper's undertakings, anal
specifically agrees that during the term of this Agreement the HRA will not (i) provide
or enter into an agreement for provision of financial assistance to any third party in
connection with any proposed development within the Redevelopment Area, or (ii)
except as may be .necessary in connection with the provision of public
improvements, condemn or agree to proceed with the condemnation of any property
within the Redevelopment Area to assist or facilitate development within such area
by any third party:
4. Term.
The term of this Agreement shall be for a period of one (1) year, provided that, either
party may terminate this Agreement as to all or any portion of the Redevelopment
Area upon thirty (30) days written notice to the other, in the event that: (a) the HRA
determines, in -good faith, that Redeveloper is not diligently pursuing the
Redevelopment, or (b) Redeveloper determines, in good faith, that the
Redevelopment is not feasible. The HRA may also terminate the Agreement for
failure of Redeveloper to meet its obligations under paragraphs 5D or 5E.
Redeveloper will provide the HRA with written reports at least quarterly regarding the
status of its activities hereunder.
Any such notice shall be deemed delivered if either actually delivered, or if faxed and
mailed to the parties at the following addresses:
Gramercy Corporation
Attn: Mike Conlan, President
7900 International drive, Suite 1035
Bloomington, MN 55425
Richfield Housing and Redevelopment Authority
Attn: Executive Director
6700 Portland Avenue South
Richfield, MN 55423
Phone: (612) 861-9760
Fax: (612) 861-8974
5. Miscellaneous.
A. This Agreement constitutes the entire agreement between the parties relative to
the proposed Redevelopment. Unless specifically described herein, no
obligation shall be inferred or construed.
B. As expansion of the foregoing, Redeveloper understands that further and
separate action, for which no obligation is created hereunder, will be required
before the HRA is obligated to take various actions with respect to the
Redevelopment. Those actions may include, without limitation:
a. establishment of or modification of the Project Area and Tax Increment
District;
b. agreements to provide tax increment or other financial assistance to the
Redevelopment;
c. request for zoning and subdivision approvals;
d. acquisition of land within the Redevelopment Area by either voluntary
purchase or condemnation (or both); and
e. construction of public improvements to serve the Redevelopment
C. Redeveloper further understands that many of the actions which the HRA may be
called upon to take require the reasonable discretion and in some instances the
legislative judgement of the HRA or City Council, such actions may be made only
following established procedures; and the HRA may. not, by agreement, agree in
advance to any specific decision in such matters.
D. Redeveloper hereby indemnifies, holds harmless and agrees to defend, the HRA,
their officers, agents and employees from any claim or cause of action of
whatever nature occasioned by or arising out of this Agreement or the HRA's
performance thereunder.
E. Redeveloper agrees that it will pay all reasonable costs and expenses incurred
by the HRA relating to the preparation of this Agreement and all actions taken by
the HRA in furtherance of their obligations hereunder. Such payment shall be
made to the HRA in the following method: 1) an initial $25,000 deposit to be held
by the HRA and drawn on to cover costs which can be subsequently supported
with necessary detail, 2) additional increments of $10,000, when requested by
the HRA to maintain a working balance in the account.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the date
and year first above written.
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
By:
Its:
BY:
Its:
GRAMERCY CORPORATION
By:
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•
APPENDIX A
GRAMERCY REDEVELOPMENT PROJECT AREA
66TH ST.
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SOUTHWEST QUADRANT
PROJECT AREA
JANUARY 2000
NORTH
RICHFIELD
MAYOR
MARTIN J. KIRSCH
CITY COUNCIL
SUSAN ROSENBERG
SUZANNE M.SANDAHL
KRISTAL STOKES
BUSS SUSAG
CITY MANAGER
SAMANTHA ORDUNO
•
Community Development Department
January 10, 2000
Property Owners and Tenants within the Southwest Quadrant of 66th Street
and Lyndale Avenue:
Gramercy Corporation, the developer of the new VFW and adjacent 160 unit
housing development is working on another idea. Gramercy would like to
redevelop the Lyndale Avenue frontage south of 66th Street and west of
Lyndale Avenue.
In the last couple of months, Gramercy has introduced their idea, City Bella, to
City staff and Lake Shore Drive residents. They have also started contacting
businesses within the quadrant. The next to hear the idea will be the Richfield
Housing and Redevelopment Authority (HRA). Gramercy will present the idea
during the HRA's meeting on Tuesday, January 18 at 7:00 P.M. in the City Hall
Council Chambers.
Additional housing, office, and retail uses, and improved pedestrian connections
to Woodlake Nature Center are proposed. The purpose of Gramercy's
presentation is to request the HRA to give Gramercy the exclusive opportunity
to study all aspects of the feasibility of the idea. The study will evaluate building
design, engineering and scale, financial aspects, traffic, parking and pedestrian
circulation. During the next 12 months, the results of the study help decide
whether the HRA and Gramercy should proceed to redevelop the Lyndale
Avenue frontage.
Gurirg the next several months, when you may have questions, you-.have
several resources available to you:
• The Lake Shore Drive Board has created a task force that will be meeting to
discuss the idea. Aimee Gourlay (651/523-2359) is an independent
resource made available by the HRA to meet with Lake Shore Drive
representatives. As a neutral third party, she can help address concerns
and formulate questions.
• Lou Stocco of Gramercy can be contacted at 612/854-0467.
• Bruce Nordquist is the project manager at City Hall; telephone 612/861-
9777. The assistant project manager is Pam Dmytrenko at 612/861-9763.
The Urban Hometown
8700 PORTLAND AVENUE, RICHFIELD, MINNESQTA 55423 812.881.9780 FAX:
812.861.8974
www.ci.richtield.mn.us AN EQUAL OPPORTUNITY EMPLOYER
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CI2r`ll BELL~I
An Urban Landmark Concept for Richfield
.Gramercy Corporation believes that the future of urban development is in creating.
communities which incorporate. four key ingredients: 1.) Increased human interaction
.through visually exciting open spaces; 2.) housing which meets the increasing demand
for unique, customized design; 3.) careful planning. for safety and security; 4.) the latest
in leisure, recreation and technology services.
The design for these new. communities will combine the best of today with the old and
~" This concept emphasizes the interactivity and.excitement of the City within
traditional
.
the charm; tradition, and safety of a small town setting. It creates a feeling of living in a
. "village community," which provides a full compliment-of services and activities.
.. .Our first step in creating such. an environment is to establish a direct physical connection
designed"public
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plaza.. This plaza, much like the piazzas located in the heart of every town-and city in
- ~ Italy, will become a public gathering spot where work, recreation, entertainment and"
.leisurely, strolls are everyday experiences_
Our original version was a landscaped open area which.closed offtraffic on Lake Shore
-Drive and welcomed pedestrian traffic to move unhindered from the Park. and up the -
Rome) to the piazza. After reviewing this
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City staff and traffic consultants, however; we agree that the creation of a
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pedestrian bridge, connecting the piazza to grand steps leading down to the park, could be .
equally effective and meet traffic management requirements.
The architectural design for this development is first suggested by the Gramercy Park
Senior Cooperative- located to the east of the steps_ _ This building's front entry contains
large Italianate .arches and palladium windows with a series of glass pendant lights visible
through the archway. The entry~iooks out over the circular driveway ofrose-colored -
pavement and :rises .up to meet the salmon-hued brick and white windows and balconies
of the tower. .
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The public plaza. -'the Piazza - is the centerpiece of City Bella, meaning beautiful city: .
It will borrow many well-known design elements from the Italian citypiazzas on which it
is based i:e., sculpture, mosiac pavers, fountains, extensive and unique landscaping,
• contrasting brick colored surrounding structures, and spaces specifically designed for
music, theatre, fairs; civic celebrations; and Wood Lake Pazk programs. We have akeady
contacted the -Greater Twin Cities Youth Symphonies; the Minnesota Opera, the .
_ Minnesota Orchestra, the St. Paul Chamber Orchestra and the Perpich Center for Arts and
Education to determine their interest in progranuning this beautiful, public space.
Surrounding the plaza will be a multi-use development consisting of 2501uxury
apartments located in a 15-story structure which steps down on both sides to 4-story
wings; 30 - 40 for sale townhouses; a 10,000 square foot spa and fitness club (we are in -
discussions to affiliate with a prestigious. Twin Cities. Athletic Club and spa) 40;000 .
square feet of commercial space, which will include,one fine-dining restaurant; and'a
signature, landmark.office/commercial complex to be located on the site of the existing
Lyndale Hardware Store.
With the exception of the latter structure; the entire Ci Bella development will be built ~ .
within the curve .formed by the creation of a new Lake Shore Drive Parkway whiclrwill
" connect Lyndale .Avenue to Lake Shore. Drive. .
Parking will be located on three levels beneath. the Piazza and will be sufficient to serve.
the residents and commercial custorers. ~ -
The entrance to the residential tower will be off Lyndale at the parkway and. will. invite
.:residents and visitors into a 30' high glass atrium lobby with flowers; fountains and water-
features. -
The office/commercial complex on the site of the existing Lyndale Hardware will .contain.
state of the art telecommunication and fiber optic systems. It will not, however,;take the
form of a traditional office building. This structure will be a midsize, poured-concrete
structure with column-free spans and an~exterior and.roof system to match:the overall
City Bella. design. - It will feature high ceilings, operable windows, balconies and
skylights. This structure will join a growing new wave of creative. office buildings
which, as a recent article in the Wall Street Journal states, "._. targets a growing number .
of tenants who eschew the formality of suits, ties; and sparkling skyscrapers" for .._
"interesting spaces, both inside and out, designed to spark conversation, collaboration,
and creative thought." _
Parking.will be provided in both an~underground and above-ground pazking ramp
_ connected by skyway'acrossthe new parking to the apartments, restaurants, and health
club facility. This ramp will be partially concealed from view at the street level.. - _
intersection of 66th and Lyndale.
We expect that the public piazza, restaurant, commercial space, health club and spa;
office%business center; townhouses and apartments will create significant synergistic
energy as residents, visitors, customers; clients, and the public interact within this new,
beautifully designed signature urban space - Ci , ~ Bella.
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Editorials, labeled "Our Perspective,"repi~se~tt the
institutional voice of the Star Tribune. They are ~
prepared by the Editorial Department, which is StarTriburte
independent of the newsroom:
' oplnlonC~startribune.com
Our perspective
Livable communities
lYlinnesota is learning how to build them
Four years after its passage, the Liv-
able Communities Act is beginning to
show more clearly its influence on
development in the Twin Cities area.
Eight of 12 demonstration grants
awarded by the Metropolitari'Council
last week went to suburbs and city
neighborhoods eager to reinvent them-
selves as more genuine places -places
that offer opportunities to live, work and
shop in closer proximity; to walk and
ride tranSiC more often while driving
less; to reuse existing infrastructure; to
preserve more of nature's beauty.
This is an encouraging turn. Finally
placed in the hands of an administra-
tion that grasps the new competitive
trends in metro growth, the Livable
Communities Act offers local officials,
developers and lenders a layer of con-
fidence that.smartergrowth can work,
that sprawl can be contained.
In addition, the.act shows a poten-
tial to ameliorate the region's severe
shortage of affordable housing. While
it can't pretend to solve the problem,
it elevates the principle that people
with a range of incomes can success-
fully live, shop and work in the same
community. This is a radical notion in
some suburbs, where resistance has
been strong.
Happily, these apprehensions show
signs of weakening. "Affordable hous-
ing" appears as just another item on
the checklist for those cities hoping to
receive Livable Community grants,
just another routine goal along with
mixing housing and retail, reusing va-
cant land, placing buildings directly
on the street with parking to the side
or rear, and designing with transit in
mind. In this way, affordable housing
Variety In roof forms Sign band
becomes ari expected component of a
community's future. That's as it
should be. Eleven of the 12 winning
projects included it.
Take Burnsville. Its innovative Heart
of the City redevelopment at 125th St.
and Nicollet Av. drew the council's
largest award. Of 700 new housing
units planned, 140 will b.e affordable
to people earning incomes at 30 to 50
percent of median. Other features in-
clude shops, parks, walkable streets, a
transit station and, most important of
all, a sense of identity so lacking in
most postwar suburbs. Finally, Burns-
ville's 60,000 residents will have a
downtown, a gathering place to. call
their own. .
Among other suburban awards were
a new town center for Mendota
Heights and acommuter-rail station/
town center for Cottage Gxove. St.
Paul's North Quadrant Urban Village,
meanwhile, impressed the council
with its 1,000 infill housing units fitted
among revamped warehouses. Minne-
apolis winners included plans for
mixed-use .neighborhoods near the
Franklin Avenue and Lake Street LRT
stations, and the Urban Village project
along the 29th Street Greenway.
These are the kinds of redevelop-
ments that will most enhance metro-
politan life in the coming century, as.
the postwar emphasis on cars and big
boxes evolves into a more humane
style. Caren Dewar, chair of the Met
Council's Livable Communities Com-
mittee, is justifiably encouraged.
"There's a broader understanding out
there now about what makes cities
smarter," she. said, "and. about what
good development looks like."
Complementary window patterns
Distinctive corner Outdoor space Balconies
treatments Display windows Arcades
Mixed-use building components: Redevelopments that will most enhance metropolitan life in the
coming century. .
4 Fs
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. s
Agenda January 18, 2000
Issue Statement:
Consideration of a proposal to continue the Community Apartment Program for 2000.
Background:
In January 1999, the HRA approved a contract with Julianne (Manship) Schwietz to
administer the Community Apartment Program (CAP) through January 2000.
Attached for your review are the accomplishments-for 1999 (Attachment A) and
proposed strategies for 2000. The 1999 accomplishments are listed under five
strategies:
1. "To employ a collaborative approach to community building.."
2. "To provide appropriate Community-based programs/services....
3. "To enhance owner/manager involvement and satisfaction..."
4. "To provide information about all CAP initiatives..."
5. "To research and propose a set of measurable factors..."
The four strategies for 2000 include:
1. "To assist owners/managers in utilizing the best management practices..."
2. "To provide appropriate Community-based programs/services..."
3. "To help the community-at-large recognize CAP results..."
4. "To employ a collaborative approach that involves community stake-holders...to
prevent problems..."
A significant accomplishment in 1999 was obtaining $45,000 in grant funds for a two
year period to help match tenant needs at Hampton Place with community resources.
This will be administered in cooperation with the Richfield Community Council.
Julianne Schwietz will be in attendance at the HRA meeting. A copy of the proposed
contract is attached for your review (Attachment B).
The City has been very fortunate to have in place two complimentary HRA programs
that focus on the apartment community -- CAP and the apartment rehabilitation program
(the rehabilitation program is funded on a pilot basis by a grant from the Metropolitan
Council).
Recommended Motion:
Approve the execution of a contract with Julianne Schwietz for the Community
Apartment Program beginning February 1, 2000 for 12 months.
i Basis of Recommendation:
1. CAP is a successful program, which focuses on approximately one-third of the
housing supply in the community.
2. Funds are available in the 2000 approved HRA budget for the $50,000 contract
which is unchanged from 1999.
Alternative Recommendation:
1. Delay approval.
2. End the program.
3. Direct staff to find another consultant.
Discussion/Decision Mode:
The current contract expires January 30, 2000.
Respectfully submitted,
~~ ~c~~
Samantha Orduno
Executive Director
SO:cak
•
Attachment A
C011111111111~/ Apal"t111@Ilt PI'Ogl'~111 .Page 1 of 2
Community Cons>~lting; Julianne Schwietz
Overview of 1999 CAP Accomplishments
The overarching CAP objective of the 1999 plan was to encourage strong, stable, and vital apartment communities
in the City of Richfield. Five strategies were agreed upon to support that CAP objective. Measures and results for
each are listed below.
Richfield CAP
1999 Strategies, Measures, and Results
Overall Goal: To encourage strong, stable, and vital aparhnent communities.
Strategy 1: To employ a collaborative approach to community building that both involves community members and
uses effective communication in order to prevent problems and improve quality of life issues.
Measures &
Results:
•Number of community service providers actively involved will increase by 50% from 1998.
Realized. In 1998 there were three community service providers actively involved with CAP. In
1999, there were an additional six providers.
• 100% of City enforcement departments will be working as Livable Communities Team. Realized.
These are; Police/Crime Prevention, Housing and Fire Inspections, Health, and Section Eight.
• 100% of properties identified by Livable Communities team will be in compliance with housing
codes or will be given formal notice of court proceedings. Realized. The final property focus in
1999 (Dominium) will carry over into 2000.
Strategy 2: To provide appropriate Community-based programs/services to develop resident involvement and
community-building skills.
Measures &
Results:
•Number of residents participating in YouthNet activities will increase by 20% over 1998.
Realized, with nearly a SO% increase. From SO youth in 1998 to 74 youth in 1999.
•Four collaborative activities will be offered to rental residents in 1999. Realized, plus two. These
were: Summer Sign up, communications delivery, (Community Ed.) YouthNet presentations,
Library collaboration for Hispanic families, Hampton Place special event, effort toward the Foyer
Program.
•Establish viability status of MHFA grant opportunity, and establish at least one model tenant
services program. No MHFA grant. Tenantservices grant (from. Community Council) will be
available in 2000.
•Number of rental residents reporting involvement with a resident council will increase by 50%
over 1998. No ormal report from residents was completed in 1999. Hampton Place Resident
Council has seen a SO% increase in their board membership. This number will continue to grow in
2000.
Strategy 3: To enhance Owner/Manager involvement and satisfaction in CAP by ensuring that they have the
opportunity to actively participate in RAMA and CAP events, including CFMH.
Attachment A
Community Apartment Program Page 2 of~2
Community Consulting; Julianne Schwietz
Measures &
Results:
•Number of owner/managers participating on RAMA executive board committees and other
decision making processes will increase by 40% over 1998. Realized, at a 60% increase. There
are nine active members. Two from SAGE, four with Highland Management, one with Otness,
one with Prime Properties, one with Premier Properties.
• 100% of owner/managers will be notified of RAMA Coalition events. Realized. Every property
owner and manager are included in a data base. Updated changes are made every month.
•Number of owner/managers attending RAMA and CAP events will increase by
20% over 1998. Realized, with increase at 32% over 1998.
•Number of owners/managers to complete Crime Free Multi Housing (Gold) certification for their
properties will increase by 20% over 1998. Realized. In 1998 2 properties received full (4 phase)
certification. In 1999, 3 more were added.
Strategy 4: To provide information about all CAP initiatives to owner/managers, residents, collaboration partners,
staff, and other stakeholders.
Measures &
Results:
•Six RAMA Reporters will be published in 1999. Realized.
•An average of five visits/month will be made to owner/managers. Of those willin to be visited,
• the idea was good and early on an average of five visits/month was realized. Those less involved
with RAMA seem to prefer communication via phone or mail. The strategy for 2000 will reflect
this insight.
•Six resident presentations will be given in 1999. Realized, plus two. These were in regard to
YouthNet, the Foyer Program, and collaborations with the Work Force Center.
•Twelve communication distribution contracts will be made in 1999. Eight agreements were
made with owners/managers. in 70 buildings covering 980 units.
Strategy 5: To research and propose a set of measurable factors that would constitute a year to year snapshot for
evaluating progress to the objective of "encouraging a strong, stable, vital apartment community."
Measures &
Results:
•Contact at least 2 research companies and secure draft proposals. Realized. Wilder and Decision
Resources provided proposals. However, prices were too expensive.
•Conduct interviews with stakeholders, deliver report summarizing findings and options. Realized.
The CAP Review Team and collaboration stakeholders are in favor of seeing an in-depth
survey/evaluation be carried out. The purpose would be to discover a set of measurable factors for
evaluating the progress of our CAP goals. The best way to do this may be through the help of a
professional research company. A proposal will be made in 2000 to ident~ a rough cost
approach for evaluating CAP.
•
•
Attachment B
Page 1 of 4
PROFESSIONAL SERVICE AGREEMENT
COMMUNITY APARTMENT PROGRAM
THIS AGREEMENT made and entered into by and between the Housing and
Redevelopment Authority in and for the City of Richfield, STATE OF MINNESOTA,
hereinafter referred to as the HRA, and Community Consulting, Inc., hereinafter referred to as
CCI.
WITNESSETH:
WHEREAS, the HRA wishes to purchase the services of CCl; and
WHEREAS, there are funds available for the purchase of these services.
NOW, THEREFORE, in consideration of the mutual undertakings and agreements
hereinafter set forth, the HRA and CCI agree as follows:
TERMS AND COST OF THE AGREEMENT
CCI agrees to furnish services to the HRA to pursue those outcomes (objectives) within the
identified time period as indicated on the attached."Exhibit A". The total cost of this Agreement
shall not exceed $50,000 plus prior approved expenses. All reports, memos, and other data
produced by CCI become the property of the HRA.
2. PAYMENT FOR SERVICES
Invoices for services performed, and expenses incurred, by CCI may be submitted monthly.
Payment for services and expenses, shall be made directly to CCI by check. Invoices. shall be of
sufficient detail for the HRA to determine the activity and personnel for which payment is being
made. Payment shall be made within 30 days of receipt of an invoice by the HRA.
3. INDEPENDENT CONTRACTOR
CCI shall select the means, method, and manner of performing the services herein in
consultation with the HRA. Nothing is intended or should be construed in any manner as
creating or establishing the relationship of copartners between CCI and the HRA or as
constituting CCI as the agent, representative, or employee of the HRA for any purpose or in any
manner whatsoever. CCI is to be and shall remain an independent contractor with respect to all
services performed under this Agreement. CCI represents that it has or will secure at its own
expense all personnel required in performing services under this Agreement. Any and all
personnel of CCI or other persons while engaged in the performance of any work or services
required by this Agreement shall have no contractual relationship with the HRA, and shall not be
Attachment B
Page 2 of 4
considered employees of the HRA. Any and all claims that may or might arise under the
Unemployment Compensation Act or the Worker's Compensation Act of the State of Minnesota
on behalf of said personnel, arising out of employment or alleged employment, including,
without limitation, claims of discrimination against CCl, its officers, agents, contractors, or
employees shall in no way be the responsibility of the HRA. CCI shall defend, indemnify, and
hold the HRA, its officers, agents, and employees harmless from any and all such claims
irrespective of any determination of any pertinent tribunal, agency, board, commission, or court.
Such personnel or other persons shall neither require nor be entitled to any compensation, rights,
or benefits of any kind whatsoever from the HRA, including, without limitation, tenure rights,
medical and hospital care, sick and vacation leave, Worker's .Compensation, Unemployment
Insurance, disability, severance pay, and PERA.
4. NONDISCRIMINATION
The HRA operates in accordance with the City of Richfield's policies against discrimination. No
person shall be excluded from or denied the benefits of any service performed or contemplated
under the terms of this Agreement on the grounds of race, color, creed, religion, age, sex,.
disability, marital status, public assistance status, ex-offender status, or national: origin; and no
person who is protected by applicable Federal or State laws against discrimination shall be
otherwise subjected to discrimination. CCI shall (1) furnish all information and reports which
may be required by the City's Affirmative Action Policy, and (2) it shall comply with the City's
Equal Employment Opportunity/Affirmative Action Policies with regard to employment and
contracting.
5. INDEMNITY AND INSURANCE
CCI agrees to defend, indemnify, and hold the HRA, its officers, and employees harmless from
any liability claims, damages, costs, judgments, or expenses, including reasonable attorney fees,
resulting directly or indirectly from an act or omission (including without limitation professional
errors or omissions) of CCl, its agents, employees, or assignees in performance of the services
provided by this contract, and against all loss by reason of the failure of CCI to fully perform in
any respect, all obligations under this contract.
6. DATA PRIVACY
CCI agrees to abide by all applicable State and Federal laws and regulations concerning the
handling and disclosure of private and confidential information concerning individuals and/or
data including but not limited to information made non-public by such laws or regulations.
7. RECORDS -AVAILABILITY
CCI agrees that the HRA, the State Auditor, or any of their duly authorized representatives at
any time during normal business hours and as often as they may reasonably deem necessary,
Attachment B
Page 3 of 4
shall have access to and the right to examine, audit, excerpt, and transcribe any books,
documents, papers, records, etc., which are pertinent to the accounting practices and procedures
of CCI and involve transactions relating to this Agreement. Records shall be retained for three
years from date of final payment with respect to the project.
NON-ASSIGNMENT
CCI shall not assign, subcontract, transfer, or pledge this contract and/or the services to be
performed hereunder, whether in whole or in part, without the prior written consent of the HRA.
9. MERGER AND MODIFICATION
a) It is understood and agreed that the entire Agreement between the parties is contained
herein and that Agreement supersedes all oral agreements and negotiations between
the parties relating to the subject matter hereof. All items referred to in this
Agreement at'e incorporated or attached and are deemed to be part of this Agreement.
b) Any material alterations, variations, modifications, or waivers of provisions of this
Agreement shall only be valid when they have been reduced to writing as an
amendment to this Agreement signed by the parties hereto.
10. DEFAULT AND CANCELLATION
a) If CCI fails to perform any of the provisions of this Agreement or so fails to
administer the work as to endanger the performance of the Agreement, this shall
constitute a default. Unless the default is excused, the HRA, may upon written
notice, immediately cancel the Agreement in its entirety.
b) The HRA's failure to insist upon strict performance of any provision or to exercise
any rights under this Agreement shall not be deemed a relinquishment or waiver of
the same, unless consented to in writing. Such consent shall not constitute a general
waiver or relinquishment throughout the entire term of the Agreement.
c) This Agreement may be canceled without cause by either party upon twenty (20) days
written notice.
11. CONTRACT ADMINISTRATION
In order to coordinate the services of CCI with the activities of the HRA so as to accomplish the
purpose of this contract, Bruce Palmborg shall manage this contract on behalf of the HRA and
serve as liaison between the HRA and CCI.
•
• Attachment B
Page 4 of 4
In addition, from time to time, meetings shall be held between CCI and the Community
Apartment Program Team. CCI may. also report. directly to the HRA Board of Commissioners.
12. NOTICES
Any notice or demand which must be given or made by a party hereto under the terms of this
Agreement shall be in writing.
Notices shall be sent as follows:
To the HRA;
Bruce Palmborg
Community Development Director
City Hall
6700 Portland Avenue South
Richfield, MN 55423
To CCI;
Julianne Schwietz
Community Consulting, Inc.
3557 Tara Lane
Woodbury, MN 55125
CCI having signed this contract, and the HRA having duly approved this contract on January 18,
• 2000, and pursuant to such. approval and the proper HRA officials having signed this contract,
the parties hereto agree to be bound by the provisions herein set forth beginning February 1,
2000 for a period of twelve months or until terminated as provided above.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
STATE OF MINNESOTA
By:
Executive Director
By:
Chairperson
COMMUNITY CONSULTING, INC.
By:
Its
• [H:Cdadmin:PPL:ProserCCl]
Attest
Attest
Attest
Community Apartment Program
Community Consulting; Julianne Schwietz
Richfield CAP
2000 Strategies, Tactics (actions), and Measures
Overall Goal: To encourage strong, stable, and vital apartment communities.
Strategy 1: To assist owners/managers in utilizing the best management practices available by enhancing
owner/management involvement and satisfaction in CAP.
EXHIBIT A'
PAGE 1
Tactics: (A) New. Owners of small rental properties are invited/encouraged to attend special training pertinent to
their needs.
(B) Owners/managers are invited to suggest components of CAP events
(C) Invite owners/managers to participate in CAP sponsored educational events.
(D) Encourage owners/managers to complete certification in Crime Free
Multi-Housing program.
(E) Provide accurate, comprehensive, and timely information through
newsletters, flyers, meetings and presentations.
Result Measures
(A) Sixty owners (of small properties) will be invited to attend management training.
(B) Number of owner/managers participating on RAMA executive board
committees and other decision making processes will increase by 10% over 1999.
(C) Number of owner/managers attending RAMA and CAP events will increase
by 15% over 1999.
(D) Number of owner managers to complete Crime Free Multi Housing Phase 1
certification for their properties will increase by ten over 1999.
(D) Number of owner managers to complete Crime Free Multi Housing (Gold)
certification fortheir properties will increase by three over 1999.
. (E) Six RAMA Reporters will be published in 2000.
Strategy 2: To provide appropriate Community-based programs/services to develop rental resident involvement
and a sense of community.
Tactics: (A) New. Develop Tenant Services through grant secured from LCTS funds.
(B) New. Significantly increase the number of youth involved in youth programs.
(C) Distribute communications to rental residents.
(D) Residents will have a direct voice in determining collaborative initiatives.
(E) Replicate the Resident Council model in other properties.
Results Measures:
(A) Establish a Tenant Services program at Hampton Place.
(A) Six tenant activities will be offered at Hampton Place.
(A) Increase by four, the apartment community access to available resources and
services.
(A) Reduce police calls for service by 10%.
(B) Number of residents participating in YouthNet activities will increase by 10%
over 1999.
(C) Ten communication agreements will be made in 2000.
(D) Four collaborative activities will be offered to rental residents in 2000.
(E) Number of rental residents involved with a resident council will increase by 20% over 1999.
Strategy 3: Help the community at large recognize the efforts and positive results of CAP.
Tactics: (A) New. Initiate an interview on CAP and our objectives/results with the
• Richfield Sun-Current.
(B) Provide articles for Your City.
Community Apartment Program
Community Consulting; Julianne Schwietz
(C) Participate in Richfield's annual event
(D) Provide workshop/open house for the general public
Results Measures:
(A) Provide two article ideas/press releases to the Richfield Sun-Current.
(B) Write three articles for Your City.
(C) Be present at the Jan. event. Provide goodwill will candy and information.
(D) Provide one workshop for the general public.
(D) Publicize in Sun-Current.
EXFIIBIT A
PAGE 2
Strategy 4: To employ a collaborative approach that involves community stakeholders, staff, and the CAP
Review Team in order to prevent problems and provide measurable factors for evaluation of our work.
Tactics: (A) New. Propose a cost effective evaluation (with rough expenses) that would constitute a year to year
snapshot of progress of the goal "to encourage a strong, stable, vital apartment community."
(B) Provide info. about all CAP initiatives to collaboration partners, and staff.
(C) Significantly increase the level of community collaboration.
(D) Decrease the level of Housing Code violations/noncompliance.
(E) Continue to meet with the CAP Review Team to look at progress.
Results Measures:
(A) Work with a research company to survey residents, owners/managers for evaluation purposes.
(B) Provide semiannual report to collaboration partners and staff..
(C) Number of community service providers actively involved will increase by 20% over 1999.
(D) 100% of properties identified by Livable Communities Team will be in compliance with
housing codes or will be given formal notice of legal proceedings.
(E) Meet 11 of 12 months with the CAP Review Team.
HOUSING AND REDEVELOPMENT AUTHORITY ~~
HRA Letter No. 7
Agenda January 18, 2000
Issue Statement:
Consideration of a resolution approving a request by CSM Corporation to reduce the
amount of the Letter of Credit for Shops at Lyndale, Phase II.
Background:
On December 16, 1996, the Housing and Redevelopment Authority (HRA) approved the
issuance of the Certificate of Completion for the construction of minimum improvements
for Shops at Lyndale, Phase II. At that time, and in connection with the Certificate of
Completion, CSM Corporation provided the HRA with a Letter of Credit as performance
security for site assembly cost payments and additional site work. Since then, the
Letter of Credit has been reduced to reflect completed work and payments to the HRA
for billings related to site assembly costs, namely condemnation award settlements.
Currently, CSM Corporation is requesting that the Letter of Credit be reduced by
$300,000 for recent condemnation award settlements. Pending approval, CSM will
seek a new Letter of Credit in the amount of $1,070,000 to replace the existing Letter of
Credit. There are two outstanding condemnations. A representative of CSM will be in
attendance at the HRA meeting.
Recommended Motion:
Adopt a motion which approves the attached resolution authorizing a reduction in the
Letter of Credit for Shops at Lyndale, Phase II.
Basis of Recommendation:
1. CSM has requested a reduction in the amount of the Letter of Credit based on
recent payments for condemnation awards.
2. Legal counsel has reviewed the request and is of the opinion that to reduce the
Letter of Credit is reasonable and that the new Letter of Credit in the amount noted
will adequately protect the interest of the HRA.
Alternative Recommendation:
1. Delay the request for reducing the Letter of Credit by $300,000.
2. Do not approve the request for reducing the Letter of Credit by $300,000.
3. Propose an alternative amount for reducing the Letter of Credit.
Discussion/Decision Mode:
CSM Corporation is seeking a timely response to this request.
Respectfully submitted,
iC~~-~....~
a Orduno
Executive Director
SO:ds
Attachment: HRA resolution
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING A $300,000 REDUCTION IN
IRREVOCABLE STANDBY LETTER OF CREDIT
DATED OCTOBER 13, 1999 FOR THE ACCOUNT OF CSM INVESTORS, INC.
SHOPS AT LYNDALE, PHASE II
WHEREAS, the Housing and Redevelopment Authority (HRA) entered into an
Agreement with CSM Corporation (Developer), a Minnesota business corporation,
dated April 11, 1994, pursuant to and in furtherance of the ILN Redevelopment Project
heretofore adopted by the City and the Richfield Housing and Redevelopment Authority;
and
WHEREAS, the Agreement obligated the Developer to construct certain
improvements to property identified in that Agreement; and
WHEREAS, Section 4.7 of the Agreement required the HRA to furnish the
Developer with a Certificate of Completion upon completion of the Phase II construction
in accordance with Concept Plans; and
WHEREAS, the Developer originally provided the HRA with an Irrevocable
Standby Letter of Credit in the amount of $2.0 million dated November 15, 1996 as
performance security for payment of assembly costs for the Shops at Lyndale, Phase II;
and
WHEREAS, since then the Developer has made certain site assembly payments
and has most recently requested that the Irrevocable Standby Letter of Credit dated
October 13, 1999, be reduced in the amount of $300,000; and
WHEREAS, staff has found that payments made toward site assembly costs
would warrant the reduction in the Irrevocable Standby Letter of Credit dated October
13, 1999.
NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority that the Executive Director and HRA Chair are directed to take all steps
necessary to facilitate a reduction in the Irrevocable Standby Letter of Credit dated
October 13, 1999 by $300,000 and obtain a replacement Letter of Credit in the amount
of $1,070,000 from the Developer.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of January, 2000.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
~~
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 6
Agenda January 18, 2000
Issue Statement:
Approval of a resolution ratifying actions taken by the Richfield City Council relating to
tax increment fund accounts.
Background:
The Housing and Redevelopment Authority (HRA), with support of the City Council, has
established various tax increment financing districts (TIF districts) within the City of
Richfield. The City has established accounting funds in which to deposit revenues
generated by the TIF districts, which are paid to the City 'by Hennepin County.
Under various development agreements, the HRA is obligated to make payments to
developers from the TIF funds. In the past, payments to the developers have been
processed as City claims and were approved by the City Council as a part of "claims
and payroll".
The HRA and City's auditing consultant, HLB Tautges Redpath, Ltd, recommends that
the HRA, instead of the City, approve these payments and that the HRA should approve
a resolution to ratify payment actions taken in the past by the City Council. A resolution
is attached for consideration.
Recommended Motion:
It is recommended that the HRA adopt the attached- resolution that ratifies past actions
taken by the Richfield City Council relating to tax increment fund accounts.
Basis of Recommendation:
HLB Tautges Redpath, Ltd, the HRA's auditing consultant, has given the opinion that
the expenditure of TIF funds should come under the HRA's jurisdiction rather than the
City Council's.
Alternative Recommendation:
1. Do not ratify past actions taken by the City Council.
2. Defer this item to another HRA meeting for consideration.
Discussion/Decision Mode:
Ratifying past actions by the City Council verifies approval of the HRA of previous
claims and expenditures of TIF funds.
Resp Fully submitted,
.,..
t~
Samantha Orduno
Executive Director
SO:ds
HRA RESOLUTION NO.
RESOLUTION APPROVING AND RATIFYING ACTIONS
TAKEN BY THE RICHFIELD CITY COUNCIL;
RELATING TO TAX INCREMENT FUND ACCOUNTS
WHEREAS, the Housing and RedevelopmentAuthority in and for the City of
Richfield, Minnesota (the "HRA") is a housing and redevelopment authority duly
constituted and organized under law, with all of the powers enumerated in Minnesota
Statutes, Sections 469.001 to 469.047 (the "Act"); and
WHEREAS, the HRA has established various tax increment financing districts ("TIF
districts")within the limits of the City of Richfield, and the City Council of the City of
Richfield has approved the establishment of the TIF districts; and
WHEREAS, the City of Richfield has established various accounting funds as the
repository for tax increment revenues generated by the TIF districts and paid to the City of
Richfield by the County of Hennepin; and
WHEREAS, the HRA is obligated by various development agreements to make
certain payments from the TIF funds, including payments to developers under various
notes executed as part of the various developments; and
WHEREAS, in the past, payments due and payable to developers under such
notes were .processed as City claims and were approved and paid at the direction of the
City Council of the City of Richfield; and
WHEREAS, the HRA's auditing consultant has recommended that the HRA
approve and ratify said payments.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. The Board hereby ratifies the past actions of the City staff and City Council in
processing, approving, and making payments from the following funds:
Fund No. Fund Name
452 Clover Leaf/Office Site
453 Naegele/Galyan's Development
480 Development Fund
481 LHN Tax Increment
482 ILN Tax Increment
483 CABA Tax Increment
485 RR Tax Increment
486 Interchange Tax Increment
2. This resolution is effective as to all payments made from each of the above
funds since the respective date on which each fund was established, to the extent that the
payments were approved by the City Council of the City of Richfield and were not
previously approved by the Board of the Housing and Redevelopment Authority in and for
the City of Richfield.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of January, 2000.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
•
HOUSING AND REDEVELOPMENT AUTHORITY I D
HRA Letter No.S
• Agenda January 18, 2000
Issue Statement:
Consideration of a modification to the contract with South Hennepin Human Service
Planning Agency.
Background:
On July 27, 1999, the HRA authorized a contract with South Hennepin Human Service
Planning Agency (SHeRPA) to facilitate recommendations from an Affordable Housing
Replacement Policy Advisory Committee. The .recommendations of that committee will
be presented as a separate agenda item at the HRA meeting on January 18. At the
time the contract was proposed, the estimated cost of $5000 appeared to be sufficient.
In December, SHeRPA indicated that the actual cost of completing the recommendations
would exceed the previous estimate by $1500.
Recommended Motion:
Authorize the payment of an additional $1500 under the contract with SHeRPA upon
submittal of appropriate invoices.
Basis of Recommendation:
1. It was exceedingly difficult to estimate the number of hours SHeRPA needed to
prepare the recommendations given the nature of the very complex issue of
housing.
2. Approximately 25 additional hours of research and two additional meetings of the
committee were needed beyond what was originally estimated.
3. Funds are available for the additional cost and will be reimbursed by Ryan
Companies, U.S.
Alternative Recommendation:
1. Refuse to accept the recommendation.
2. Delay consideration of the request.
3. Offer an alternative amount.
Discussion/Decision Mode:
Since the report will be presented at the January HRA meeting, it would be appropriate
to make a decision on this matter at that time.
Respec submitted,
Sa a Orduno
Executive Director
SO:ds
~{G
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No.4
Agenda January 18, 2000
Issue Statement:
Resolutions designating official depositories for the HRA of Richfield for 2000, including
the approval of collateral.
Background:
In accordance with Minnesota Statutes Section 118A.01 - 118A:06, the-HRA of
Richfield must designate financial institutions annually. The institutions must pledge the
collateral over and above the amount of federal insurance, as public depositories. For
the year 2000, two institutions have fulfilled this requirement and will be considered as
depositories for the HRA's Section 8 program and vendor accounts and all savings
deposits in excess of $100,000. They are Richfield Bank and Trust Company, pledging
collateral of $1,315,000, and Firstar Bank of Richfield, pledging collateral of $1,625,000.
Resolutions designating Firstar Bank and Richfield Bank & Trust as the 2000 official
depositories for the Richfield Housing Authority are attached to this letter.
Richfield Bank & Trust and Firstar Bank have received a community reinvestment rating
of "satisfactory." Some of the factors considered when the institutions are evaluated
are community marketing, workshops, contributions, housing/small business loan
programs, and community education.
Another resolution must be provided annually, designating certain savings and loan
associations and banks as official depositories for savings and loan associations and
banks as official depositories for investment of certain City funds. With approval of
these official depositories, the City will be able to invest funds in these institutions, not
exceeding the federal insurance of $100,000.
Finally, a .resolution is also attached which designates certain financial institutions as
depositories for the investment of City funds for 2000. These institutions, such as
investment brokerage firms offer government securities in the manner required by law.
These financial institutions include Richfield Bank & Trust Co., Piper Jaffray Inc., Dain
Rauscher, Norwest Investment Services, Morgan Stanley Dean Witter, Miller, Johnson
& Kuehn, Inc. and Miller & Schroeder Financial, Inc.
Recommended Motion:
It is recommended that the HRA adopt the attached resolutions designating official
depositories, with the understanding that the HRA could not invest in any of the
depositories beyond the level of insurance coverage of the pledged collateral.
Basis for Recommendation:
1. The HRA is required by Minnesota Statute 118A.01 - 118A.06, to designate as a
depository of funds, insured banks or thrift institutions as defined in Section 518.01,
Subdivision 3, Minnesota State Statutes. Any collateral so deposited is
accompanied by an assignment pledged to the City in the amount specified in the
attached resolutions.
2. The HRA has worked with the institutions recommended in the past and has found
to have a good working relationship with these institutions.
Alternative Recommendation:
The HRA could solicit other financial institutions for official depositories, but past
relationships with the depositories recommended have proven satisfactory for the City.
Discussions/Decision Mode:
Action of the HRA is desirable at January 18, 2000, HRA meeting so that the HRA may
invest funds in the approved financial institutions for the year 2000 immediately.
Respe ubmitted,
a Or uno
Executive Director
SO:ds
•
HRA RESOLUTION NO.
RESOLUTION DESIGNATING THE RICHFIELD BANK AND TRUST COMPANY
A DEPOSITORY OF FUNDS OF THE HOUSING AND REDEVELOPMENT AUTHORITY
OF RICHFIELD FOR THE YEAR 2000 AND APPROVING COLLATERAL
BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield as
follows:
That, in accordance with Minnesota Statutes, Section 475.66 and 118.005, the
Richfield Bank and Trust Company be, and hereby is designated a depository of the funds
of the Housing and Redevelopment Authority of Richfield, subject to modification and
revocation at any time by said Housing and Redevelopment Authority, and subject to the
following terms and conditions:
The said depository shall not be required to give bonds or other securities for such
deposits provided that the total sum thereof shall not at any time exceed in any depository
the sums for which its deposits are insured under the Acts of Congress of the United States
relating to insurance of bank deposits; but that in case such deposits in any such depository
shall at any time exceed such insured sum, said depository shall immediately furnish bonds
or other security for such excess according to law, approved by the Housing and
Redevelopment Authority of Richfield.
That said depository shall pay on demand all deposits therein; and shall pay all time
J« deposits, at or after the end of the period for which the same shall be deposited, on
demand.
BE IT FURTHER RESOLVED, that there shall be maintained a general account in
which shall be deposited all monies. The following officers or their facsimile signatures
shall sign checks on this account;
THOMAS E. HARMS, CHAIR
SAMANTHA ORDUNO, EXECUTIVE DIRECTOR
BE IT FURTHER RESOLVED, that there shall be a daily interest savings account.
All withdrawals from said account will be for transfers to the general checking account.
BE IT FURTHER RESOLVED, that collateral in the amount of $1,315,000, is
deposited for safekeeping at the Federal Reserve Bank of Minneapolis, is hereby approved.
Passed by the Housing and Redevelopment Authority of Richfield, Minnesota this
18th day of January, 2000.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
HRA RESOLUTION NO.
RESOLUTION DESIGNATING CERTAIN SAVINGS AND LOAN
ASSOCIATIONS AND BANKS AS DEPOSITORIES FOR THE INVESTMENT
OF THE HOUSING AND REDEVELOPMENT AUTHORITY FUNDS IN 2000
WHEREAS, pursuant to Minnesota Statutes, Section 475.66 and 118.005,.
municipal funds may be deposited in any Savings and Loan Association which has its
deposits insured by the Federal Savings and Loan Insurance Corporation, and
WHEREAS, the amount of said deposits may not exceed the Federal Savings
and Loan Insurance Corporation insurance covering such deposits which insurance
amount is presently $100,000, and
WHEREAS, the deposit of Housing and Redevelopment Authority funds in
Savings and Loan Associations and Banks would provide greater flexibility in the
Housing and Redevelopment Authority's investment program and maximize interest
income thereon.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority of Richfield, Minnesota as follows:
• 1. It is hereby found and determined that it is in the best interest of the proper
management of Housing and Redevelopment Authority funds that certain
Savings. and Loan Association and Banks be designated as additional
depositories for Housing and Redevelopment Authority funds for 2000.
2. The following Savings and Loan Associations and Banks are hereby
designated as additional depositories for Housing and Redevelopment
Authority funds:
Norwest Bank Minnesota, NA
6445 Nicollet Avenue South
Richfield, Minnesota 55423
Richfield Bank & Trust Company
6625 Lyndale Avenue South
Richfield, Minnesota 55423
3. It is further found and determined that the purpose of such depository
designation is to facilitate the proper and advantageous investment of the
Housing and Redevelopment Authority funds and that such designation is not
exclusive nor does it preclude the deposit of any Housing and
Redevelopment Authority funds in other officially designated depositories of
Housing and Redevelopment Authority.
4. The Treasurer and Finance Manager are hereby authorized to deposit
Housing and Redevelopment Authority funds in any or all of the depositories
herein designated up to the amount of $100,000, or such other amount as
may be subsequently permitted by law, such deposits to be in the form of
demand accounts for Public Unit Savings Certificates purchased by the
Housing and Redevelopment Authority of Richfield, payable to the Housing
and Redevelopment Authority of Richfield on the signatures of the Treasurer
or Finance Manager.
Passed by the Housing and Redevelopment Authority of Richfield, Minnesota
this 18th day of January, 2000.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
HRA RESOLUTION NO.
RESOLUTION DESIGNATING CERTAIN FINANCIAL
INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2000
WHEREAS, the Housing and Redevelopment Authority of Richfield has money
which is available for investment, and
WHEREAS, different financial institutions offer different rates of return on
investments, and
WHEREAS, the Housing and Redevelopment Authority of Richfield shall purchase
U. S. Treasury Bills, U. S. Treasury Notes and other such government securities in the
manner required by law from the institution offering the highest rate to the Housing and
Redevelopment Authority providing greater flexibility in the investment program and
maximize interest income thereon.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority of Richfield, Minnesota, as follows:
1. It is hereby found and determined that it is in the best interest of the proper
management of Housing and Redevelopment Authority funds that certain
financial institutions be designated as additional depositories for Housing and
Redevelopment Authority funds for 2000.
2. The following financial institutions designated as depositories for Housing and
Redevelopment Authority funds:
Richfield Bank and Trust Company
Dain Rauscher, Inc.
Norwest Investment Services
Morgan Stanley Dean Witter
Piper, Jaffray & Hopwood
Miller, Johnson & Kuehn, Inc.
Miller Schroeder Financial, Inc.
3. The Treasurer and Finance Manager are hereby authorized to deposit
Housing and Redevelopment Authority funds in any or all of the depositories
herein designated. Such deposits may be made and withdrawn from time to
time by the Treasurer or Finance Managers best judgement and the interests
of the Housing and Redevelopment Authority Dictates.
4. The investment of funds and the reporting thereof pursuant to this resolution
shall be conducted in accordance with established policies regarding the
investment of these funds.
Passed by the Housing and Redevelopment Authority of Richfield, Minnesota
this 18th day of January, 2000.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
HRA RESOLUTION NO.
RESOLUTION DESIGNATING THE FIRSTAR BANK A DEPOSITORY
OF FUNDS OF THE HOUSING AND REDEVELOPMENT AUTHORITY FOR
RICHFIELD FOR THE YEAR 2000 AND APPROVING COLLATERAL
BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield as
follows:
That, in accordance with Minnesota Statutes, Section 475.66 and 118.005, the
Firstar Bank-Richfield be, and hereby is designated a depository of the funds of the
Housing and Redevelopment Authority, and subject to the following terms and
conditions:
The said depository shall not be required to give bonds or other securities for
such deposits provided that the total sum thereof shall. not at any time exceed in any
depository the sums for which its deposits are insured under the Acts of Congress of
the United States relating to insurance of bank deposits.; but not in case such deposits
in any such depository shall at any time exceed such insured sum, said depository shall
immediately furnish bonds or other security for such excess according to law, approved
by the Housing and Redevelopment of Richfield.
That said depository shall pay on demand all deposits therein; and shall pay all
time deposits, at or after the end of the period for which the same shall be deposited,
on demand.
BE IT FURTHER RESOLVED, that there shall be maintained a general account
in which shall be deposited all monies. The following officers or their facsimile
signatures shall sign checks on this account:
THOMAS E. HARMS, CHAIR
SAMANTHA ORDUNO, EXECUTIVE DIRECTOR
BE IT FURTHER RESOLVED, that there shall be a daily interest savings
account. All withdrawals from said account will be for transfers to the general checking
account.
BE IT FURTHER RESOLVED, that collateral in the amount of $1,625,000,
deposited for safekeeping at the Firstar Bank -Milwaukee, Wisconsin is hereby
approved.
Passed by the Housing and Redevelopment Authority of Richfield, Minnesota
this 18th day of January 2000.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 3
January 18, 2000
Issue Statement:
Designation of official newspaper for 2000.
Background:
The Richfield Sun-Current, published by Minnesota Sun Publications, has been the City's
and HRA's ofFcial newspaper for many years.
Attached is a copy of a letter from Minnesota Sun Publications requesting that they be
designated the official newspaper for the City of Richfield for 2000. The 2000 legal
advertising rate structure for legals is as follows:
1 Column Width
$15.50 per inch
$7.75 per subsequent inch
There are 11 lines per inch. The 1999 rate was $14.30 per inch and $7.15 per subsequent
inch.
Recommended Motion:
Designate the Richfield Sun-.Current as the official newspaper of the Richfield HRA for the
year 2000.
Basis for Recommendation:
1. The paper is delivered to nearly all residences in-the City, thereby providing city-wide
coverage of legal notices to residents.
2. The paper has served well as the official newspaper for many years.
3. The paper has expressed a desire to continue to provide this service.
4. The cost for legal publications is reasonable
Alternative Recommendation:
1. Not make a designation and request the City Clerk's office to check into using another
publication, such as the Minneapolis Star Tribune, however, this would be much more
costly.
Discussion/Decision Mode:
The HRA publishes legal notices on a frequent basis; therefore, this item has been placed
on the January 18, 2000 HRA agenda so that a designation can be made for 2000.
Res ly submitted, .
ama a Orduno
Executive Director
SO:cak
•
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ne~rspapers
December 21, 1999
Tom Ferber
City of Richfield
6700 Portland Avnue South
Richfield, MN 55423
Dear t~ir. Ferber:
The Richfield Sun Current would like to be considered for designation as the legal newspaper
for the City of Richfield for the year 2000.
Sun Newspaper is excited to announce that a new feature will be added to legal notices
this year. Beginning in January, all published notices will be posted on our wef~site
(www.mnsun.com) at no additional charge. This will be an enhancement to the local.
news coverage already available on the Internet and broaden the readership of your
legal notices.
The rate structure for legals effective January 1, 2000 will be:
1 column width: $15.50 per inch for first insertion
$7.75 per inch for subsequent insertions
There are 11 lines per inch
Notarized affidavits on each of your publications will be provided with no.additional
charge. The deadline for regular length notices is 2:00 pm the Thursday prior to
publication; notices that are six pages or more deadline an extra 24 hours in advance. If
you rea,uire more information to make your decision, please contact me or Meride!
Hedblom, our Legal Representative, at 612-392-6880.
Thank you for considering the Sun Current as the official newspaper for the City of
Richfield in 2000. We appreciate the opportunity to serve the needs of your community.
Sincerely,
.-~s~' , .
Fra Chilinski
President and Publisher
10917 Varra~ View ROaD ~ EDEN PltnixrE ~ MI~sorA 55344 ~ 612-829-0797 ~ Fax: 612-941-3588
sec. Ly, l~y~ ~:t~ria~ arxtt ixin r~uiv ~ur~ tvu. ~,~~ r. ~~,
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StarlPibune
~r~N~~POtrs • sr. ~auc
425 ~tuttat~d AveEwe.
Minneapolis, Minnesota 55488-0002
FEDEflAL EXPRESS/AIRBORNE MAtI -USE Zip Code 55415
Facsimile Cover Sheet
' FAX NUMBER: X612) 673.4884
PHONE NUMBERS: (61Z) 673-7000
1-800.9Z7.9Z33
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NUMBER OF PAGE5INCLUDING COVER SHEET: I
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HOUSING AND REDEVELOPMENT AUTHORITY / ~~
HRA Letter No.2 `~
Agenda January 18, 2000
Issue Statement:
Designation of Acting Executive Director of the HRA for 2000.
Background:
On January 10, 2000, the City Council appointed the Director of Administrative Services
to serve as the Acting City Manager in the absence of the City Manager.
Since the City Manager also serves as the Executive Director of the HRA, it is
recommended that the Administrative Services Director, Steven Devich, be designated
by the HRA as the Acting Executive Director of the HRA to serve in that capacity during
the absence of the Executive Director.
.Recommended Motion:
The HRA designate Steven L. Devich, Administrative Services Director, as the Acting
Executive Director of the HRA for 2000.
Basis of Recommendation:
1. Designation of an Acting Executive Director is a normal business action of the
HRA similar to the designation of depositories and the official newspaper.
2. The Administrative Services Director has been designated as the Acting Executive
Director in the past.
3. The Administrative Services Director serves as the Acting City Manager, filling
other similar responsibilities for the City Manager in the Manager's absence.
Alternative Recommendation:
1. Make no designation of Acting Executive Director.
2. Make the designation of Acting Executive Director to another individual or
position.
Discussion/Decision Mode:
Designation of the Acting Executive Director is a matter that would normally be
considered at the first business meeting of each year.
Respectfully submitted,
~c..~~~
tha Orduno
Executive Director
SO:cak
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No.1
Agenda January 18, 2000
Issue Statement:
Election of officers for the Housing and Redevelopment Authority for 2000.
Background:
The bylaws of the Richfield Housing and Redevelopment Authority provide that the
HRA hold an annual meeting in January of each year. The bylaws further provide that
the Chair, Vice Chair and Secretary of the HRA be elected at this meeting.
Officers for the years 1998 and 1999 are as follows:
1998
Thomas Harms, Chair
Joan Helmberger, Vice Chair
Mike Sandahl, Secretary
Recommended Motion:
Elect officers for the HRA for 2000.
1999
Thomas Harms, Chair.
Joan Helmberger, Vice Chair
Mike Sandahl, Secretary
Basis of Recommendation:
The bylaws of the 'HRA require that such an election be held at the annual meeting in
January of each year.
Alternative Recommendation:
Do not hold the election. However, this would be in contradiction to the HRA bylaws.
Discussion/Decision Mode:
This item has been scheduled for the January 18, 2000 -HRA meeting in accordance
with the HRA bylaws.
Ily submitted,
Orduno
Director
SO:cak