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09-20-99 agendaCITY OF RICHFIELD MONDAY, SEPTEMBER 20, 1999 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 SEPTEMBER 13, 1999 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF RESOLUTION AUTHORIZING FIRST AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN HRA AND RICHFIELD STATE AGENCY FOR URBAN VILLAGE PROJECT (WOODLAKE CENTRE) HRA LETTER NO. 58 3. CONSIDERATION OF RESOLUTIONS PERMITTING INITIATION OF RICHFIELD REDISCOVERED PROGRAM FOR 1999 HRA LETTER NO. 59 4. CONSIDERATION OF RESOLUTION AUTHORIZING FORM OF TAX INCREMENT PLEDGE AGREEMENT WITH CITY OF RICHFIELD RELATING TO $1,700,000 GENERAL OBLIGATION TAXABLE TAX INCREMENT BONDS, SERIES 1999A HRA LETTER N0.60 5. CONSIDERATION OF CITY COUNCIL RESOLUTION AUTHORIZING CONTINUED PARTICIPATION IN LIVABLE COMMUNITIES ACT PROGRAMS ADMINISTERED BY METROPOLITAN COUNCIL HRA LETTER NO. 61 6. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 7241 SECOND AVENUE UNDER RICHFIELD REDISCOVERED PROGRAM HRA LETTER N0.62 7. EXECUTIVE DIRECTOR REPORT 8. CLAIMS AND PAYROLL ADJOURNMENT AUXILIARY AIDS FOR INDIVIDUALS WITH DISABILITIES ARE AVAILABLE UPON REQUEST. REQUESTS MUST BE MADE AT LEAST 96 HOURS IN ADVANCE TO THE ADMINISTRATIVE SERVICES DIRECTOR AT 612-861-9702. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No.62 Agenda September 20, 1999 Issue Statement: Authorization of a resolution authorizing the purchase of 7241 Second Avenue under the Richfield Rediscovered Program. Background: The property at 7241 Second Avenue has been identified for purchase under the Richfield Rediscovered Program. The 560 sq. ft. house has no basement. Although floor and wall coverings have been updated, the restricted size and layout limit opportunity for remodeling or an addition. Due to the continued strength of the housing market, values of even very small properties remain high. The property was appraised at $79,000. However, the owner is interested in selling at $70,000 due to several code repairs that would otherwise be required. Recommended Motion: Adopt the attached resolution authorizing: 1. The purchase of the property at 7241 Second Avenue for $70,000. 2. The Acting Executive Director and HRA Chairperson to execute a Purchase Agreement and other documents to effectuate the purchase. Basis of Recommendation; 1. The property meets program requirements for acquisition. 2. Funding for Richfield Rediscovered acquisitions has been approved. The actual purchase of this property is contingent upon receipt of funds. 3. The owner has voluntarily indicated an interest in selling the property to the HRA. 4. Purchase has been negotiated based on a reduction of the estimated market value. Alternative Recommendation: Do not authorize acquisition. Discussion/Decision Mode: The purchase agreement is ready to be prepared in final form. R p ctf Ily submi , vi Acting Executive Direc or SLD:ds HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 7241 SECOND AVENUE FOR THE RICHFIELD REDISCOVERED PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the Richfield Rediscovered Redevelopment Project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real property being described as follows: 7241 Second Avenue: Lot 14, Block 6, Wooddale Second Addition WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operations;. and WHEREAS, the property meets all program requirements for acquisition; and WHEREAS, the HRA has a negotiated purchase price with the owner based on the estimated market value; and WHEREAS, continued funding of the Project has been authorized by the HRA and the purchase of this property is contingent upon receipt of those funds. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield: 1. The purchase price of 7241 Second Avenue is approved at $70,000 2. The Chairperson and Acting Executive Director are authorized to execute Purchase Agreements and other documents to effectuate purchases for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of September, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary U HOUSING AND REDEVELOPMENT AUTHORITY • HRA Letter No.6i Agenda September 20, 1999 Issue Statement: Consideration of a City Council resolution authorizing continued participation in the Livable Communities Act programs administered by the Metropolitan Council. Background: The Livable Communities Program (also known as "The Local Housing Incentive Account Program") is a 15 year housing goal strategy encouraging communities in the region to provide more diverse housing options. As part of the program, Richfield has identified and is committed to accomplishing the attached housing goals. The goals and the principles on which they are based were originally approved in 1996. The state legislature requires communities to annually renew their resolution to continue participation in the Livable Communities Program. A copy of the resolution the Council will act on is attached. The City has approved renewal each year since 1996, recognizing that participation has allowed Richfield to remain competitive in securing state and regionally distributed funds.. With the availability of secured funds, Richfield has made significant progress towards its housing goals: • Thirteen new homes were constructed this past year through the Richfield Rediscovered program (twelve with a market value of over $150,000). The Transformation Homes loan program allowed fifteen households to remodel in excess of $50,000. • .More than 500 housing units will be available in 2000 as part of the Gramercy Park, Urban Village and Lyndale Gateway developments; offering a variety of owner/rental townhouse, life cycle and replacement housing choices. • Apartment choices have been preserved and enhanced. By the end of the year, the Housing and Redevelopment Authority (HRA) through a Livable Communities grant award from the Metropolitan Council, will have distributed over $300,000 in deferred loans and grants to apartment owners to facilitate reinvestment in rental properties. The apartment building at 901 East 66th Street illustrates the success of this program in enhancing the livability and visual quality of Richfield's older rental housing. The grant money has also allowed two larger apartment communities to make significant property improvements, creating a positive neighborhood environment, improving security, reducing blight and encouraging good management. Hampton Place Apartments is a good example; with the new play ground and parking improvements already completed. • A variety of affordable housing opportunities are available through the HRA's first- time homebuyer program, Hennepin Technical College construction and Habitat for Humanity projects. A summary of Richfield's affordability performance is attached in the document entitled "Affordable Housing Opportunities in Richfield". Recommended Motion: • Adopt a motion recommending that the City Council adopt the resolution authorizing continued participation in the calendar year 2000 in the Local Housing Incentive Account Program under the Metropolitan Livable Communities Act. Basis of Recommendation: 1. Program participation and established housing goals for Richfield remain consistent with community goals. The Metropolitan Council supports the goals. 2. Participation keeps Richfield competitive in securing state and regional community development resources. 3. Policies may change as a result of recommendations made by the Replacement Affordable Housing Task Force. Those changes could be implemented for the 2001 Livable Communities Program. Alternative Recommendation: 1. Withdraw from participation; however, funding applications would no longer be competitive. 2. Modify the housing goals; however, decisions on housing policies are required now for Year 2000 and the outcomes of Replacement Affordable Housing Task Force won't be known until early next year for the HRA to further consider. Discussion/Decision Mode: The Metropolitan Council must be informed of Richfield's plans to participate prior to November 15, 1999. This has been placed on the September 20, 1999 HRA agenda and, after approval, will be placed on the Consent Calendar for the September 27, 1999 Council meeting. SLD:cak Attachments • Acting Executive Director RESOLUTION NO. • RESOLUTION ELECTING TO CONTINUE PARTICIPATING IN THE LOCAL HOUSING INCENTIVE ACCOUNT PROGRAM UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT FOR CALENDAR YEAR 2000 WHEREAS, the Metropolitan Livable Communities Act (Minnesota Statutes Section 473.25 to 473.254) establishes a Metropolitan Livable Communities Fund which is intended to address housing and. other development issues facing the Metropolitan Area defined by Minnesota Statues Section 473.121; and WHEREAS, -the Metropolitan Livable Communities Fund, comprising the Tax Base Revitalization Account, the Livable Communities Demonstration Account and the Local Housing Incentive Account, is intended to provide certain funding .and other assistance to metropolitan area municipalities; and WHEREAS, a metropolitan area municipality is not eligible to receive grants or loans under the Metropolitan Livable Communities Fund or eligible to receive certain polluted sites cleanup funding from the Minnesota Department of Trade and Economic Development unless the municipality is participating in the Local Housing Incentives Account Program under the Minnesota Statues Section 473.254; and WHEREAS, the Metropolitan Livable Communities Act requires the Metropolitan Council to negotiate with each municipality to establish affordable and life-cycle housing goals for that municipality that are consistent with and promote the .policies of the Metropolitan Council as provided in the adopted Metropolitan Development Guide; and WHEREAS, each municipality must identify to the Metropolitan Council the actions the municipality plans to take to meet the established housing goals through preparation of the Housing Action Plan; and WHEREAS, a metropolitan area municipality which elects to participate in the Local Housing Incentives Account Program must do so by November 15 of each year; and WHEREAS, for calendar year 2000, a metropolitan area municipality that did not participate in the Local Housing Incentive Account during the calendar year 1999, can participate under Minnesota Statues Section 473.254 only. if: (a) the municipality elects to participate in the Local Housing Incentives Account Program by November 15, 1999; and (b) the Metropolitan Council and the municipality have successfully negotiated affordable and life-cycle housing goals for the municipality. NOW, THEREFORE, BE IT RESOLVED that the City of Richfield hereby elects to participate in the Local Housing Incentives Program under the Metropolitan Livable. Communities Act during the calendar year 2000. Adopted by the City Council of the City of Richfield, Minnesota this 27th day of September, 1999. Martin J. Kirsch, Mayor • ATTEST: Thomas P. Ferber, City Clerk Exhibit A AFFORDABLE HOUSING OPPORTUNITIES IN RICHFIELD Creating New Homes. / The Richfield HRA is able to purchase substandard or blighted property from voluntary sellers, demolish the existing buildings, and build new homes on the sites. Acquisition and clearance are done with local funds under Richfield Rediscovered; federal Community Development Block Grant (CDBG) fiords are used for other programs. - Habitat for Humanity builds decent, safe, affordable homes for low income (50% of the median income) homebuyers. Since 1990, 6 Habitat homes have been built in the community. Habitat also has programs that help the new owners learn about maintenance, upkeep, and on being a responsible neighbor. / The HRA cooperates with Hennepin Technical College to build new homes, available for sale to a first-time buyer of moderate income (does not exceed 80% of the area median). One or two homes are built annually under the New Home Program. Since 1990, 16 homes have been built under the program. / Three other new homes have been built for moderate income buyers by a non profit developer. The Richfield Rediscovered Program provides construction opportunities for builder/buyer teams. Some of the affordable opportunities by non-profit developers have occurred under the program, and many market rate opportunities occur. annually. Since 1990, approximately 85 new homes have been built under the program. Finding and Improving Existing Homes. / The federal Section 8 Program provides rental assistance to 340 families in Richfield. Of those, 242 originated in Richfield and 98 have moved to Richfield from other communities. - The Deferred Loan Program provides interest-free loans to low-income homeowners (income does not exceed 50% of the median), so that they may maintain their home. For some, it provides the means they need to stay in the home. Loan funds are available through CDBG funds. Since 1990, approximately 130 loans have been completed. / In 1997, the Fii°st Time Advantage Loan was initiated through funding from the Minnesota Housing Finance Agency (MHFA). Twelve loans have been completed and 3 are underway. Moderate income owners (income does not exceed 80% of the median) who have been in their home for less than a year may be eligible for the loan. Since most first-time buyers have put most of their cash into closing costs and down payment, the loan provides a new home buyer the opportunity to do updating and general improvements. / The Trans formation Program provides incentive for large scale remodeling in Richfield to encourage households to stay in the community. Since the program began in 1993, 58 loans have been provided. Participating households remodeled in excess of $30,000, often times adding square footage which allowed them to stay in the community rather than getting their housing needs met by moving to another community. - Remodeling Advisor services are free and available to all Richfield home owners. The Remodeling Advisor provides technical advice on a particular project, cost estimates, and information on financing options. • Livable Communities Act -- Housing Goals as Determined by the Metropolitan Council • The City of Richfield supports these goals: 1. A balanced housing supply, with housing available for people at all income levels. 2. The accommodation of all racial and ethnic groups in the purchase, sale, rental and loca of housing within the community. 3. A variety of housing types for people in all stages of the life cycle. 4. A community ofwell-maintained housing and neighborhoods, including ownership and rental housing. 5. Housing development that respects the natural environment of the community while stn to accommodate their need for a variety of housing types and costs.- 6. The availability of a full range of services and facilities for its residents, and the improvement of access to and linkage between housing and employment. .The City of Richfield exceeds the requirements of the Met Council's Affordability Index: / 97% of Richfield single family homes are considered affordable (64 to 77 percent is recommended) / 64% of Richfield's rental housing is considered affordable (32 to 45 percent is recommended) tion 'ving Opportunities and Outcomes In Redevelopment / Fair market value and relocation compensation is provided to all owners and tenants who must relocate. / Each project is evaluated for opportunities to include affordable housing. Project Homes Removed Homes Added by the Project by the Project LHN Redevelopment 4l units • 178 units, Lake Shore Drive (affordable senior ownership') • 92 units, Woodlake Village (affordable ownershipz) • 166 units, Village Shores (senior rental) • 157 units, Woodlake Point (ownership3) Gramercy Cooperative 0 units 160 units being added (market rate) Rae Drive Townhomes 4 units 10 units (affordable single family homes) Sheridan Court 2 units 30 units (affordable apartments for developmentally disabled adults) Urban Village 14 units 218 units being added, including 12 affordable rental and 78 senior assisted living Lyndale Gateway Approx. 14 single family l 45 units of affordable senior rental with (project pending) homes in the project area services as part of the plan [n 1998, sales of units in Lake Shore Drive ranged from approximately $40,000 to $107,000; the average sale price was $77,000. '' In 1998, sales of units in Woodlake Village ranged from approximately $66,000 to $96,000; the average sale price was $80,800. • ' In 1998, sales of units in Woodlake Point ranged from approximately $66,000 to $120,000; the average sale price was $81,960. Improving the Quality of Life. • / Income qualified Richfield families (generally with incomes less than $30,000) are provided CDBG funds from the City to supplement financial gaps in their ability to pay for quality day care. Approximately 5 to 7 households are assisted annually. / People interested in purchasing a new home in Richfield are referred to a home buyer education program, sponsored by MFHA, and facilitated by Community Action for Suburban Hennepin. The City/HRA's CDBG funds help provide that service. - Reduced interest rate mortgage money has been annually secured by the City/HRA for first- time buyers from MHFA. Eligible buyers' income must be moderate (below 80% of the median). 1 Job training opportunities will be available in June 1.999 for low-income apartment residents in Richfield. The Foyer Pilot Program is a collaboration between the City of Richfield, the Chamber Commerce, the Minnesota School of Business, and Hennepin County's Neighborhood Employment Network. The training will occur in specified apartment buildings, providing training without requiring transportation to a remote site. Certificates of completion will help participants to obtain entry level jobs. 1 Rent Assistance for Family Stabilization (RAFS) is a state program administered by staff. RAFS is a shallow rent subsidy that is given to families who receive no other rent subsidy and are currently participating in aself-sufficiency program with an employment and education plan. Currently Richfield has six participants in RAFS. / Staff provides monitoring to owners participating in the 4(d) Property Tax Classification Monitoring program. To benefit from the reduced tax classification rate, owners must rent units to households with incomes that do not exceed 60% of the median income. In Richfield, 1,092 units are benefiting from the 4(d) program. 1 Enterprise Facilitation -- Small business assistance provided, including start up advice, business locating and other support services. p:mayor-at~'ordabi I ity • Exhibit B • Richfield Housing Goals and Housing Action Plan 1996 to 2010 • in response to the Metropolitan Livable Communities Act Presented by THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY and THE CITY OF RICHFIELD June 1996 • ICHFT ~~N~&~~~p INS"" LD • Richfield Housing Action Plan Contents ^ Executive Summary of the ,Plan. ^ Housing Goals Agreement. ^ Housing Program and Marketplace Framework. ^ Single Family Program Summary, 1996 to 2001. ^ Multifamily Program Summary, 1996 to 2001. ^ Process Statement for Achieving Richfield Housing Goals, .1996 to 2010. ^ The Draft Comprehensive Plan; scheduled completion in 1996. Richfield Housing Action Plan Executive Summary In 1995, The Minnesota State Legislature created the Livable Communities Act and directed the Metropolitan Council of the Twin Cities Metropolitan Area to oversee the development of Housing Action Plans. The Plan for the City of Richfield reflects unique market challenges. To summarize: ^ Richfield is found to be a very affordable place to live and is committed to maintaining a supply of affordable housing choices. ^ Richfield needs a more diverse housing stock. Richfield should encourage single family market rate new construction and remodeling which will increase home values. Richfield should also promote the construction of attached and detached townhomes which provide greater life-cycle housing choices. ^ Richfield needs a greater variety of apartment choices. The "Housing Goals Agreement" presents the goals (index) and a fifteen year proposed change in the index (the benchmark) which were developed by the Metropolitan Council. The City Council and Richfield Housing and Redevelopment Authority responded with goals, in five year increments given best efforts, market conditions, and resource availability. Richfield's goals-are further supported with materials in the plan, including the following: ^ . Housing Program and Marketplace Framework and Program Summary; describing local program responses at various marketplace value segments. ^ The Process Statement for Achieving Richfield Housing Goals; explaining the strategy for creating life cycle housing and increasing housing choices and housing density. ^ The 1996 Draft Comprehensive Plan; outlining proposed changes in land use and density over the long term. Housing Goals Agreement ~ Metropolitan Livable Communities Act PRINCIPLES The City ofRichfield supports: O A balanced housing supply, with housing available for people at all income levels. © The accommodation of all racial and ethnic groups in the purchase, sale, rental and location of housing within the community. ® A variety of housing types for people in all stages of the life-cycle. ® Acommunity ofwell-maintained housing and neighborhoods, including ownership and rental housing. OO Housing development that respects the natural environment of the community while striving to accommodate the need for a variety of housing types and costs. ® The availability of a full range of services and facilities for its residents, and the improvement of access to and linkage between housing and employment. GOALS To carry out the above housing principles, the City ofRichfield agrees to ^ .Use benchmark indicators for communities of similar location and stage ofdevelopment as affordable and life-cycle housing goals for the specified periods. ^ Make its best efforts, given market conditions and resource availability, to remain within or make progress towazd these benchmazks. ^ These goals will be reviewed by the Richfield Housing and Redevelopment Authority (HItA) in 2001 and 2006. CITY INDEX BENCHMARK RICHFIELD GOAL FOR RICHFIELD (1996 to 2001) (1996 to 2001) • Affordability Ownership 97% 64-77% 92% Rental 64% 32-45% 59% Life-Cycle Type(Non-single family detached) 36% 38-41% 36-41% Owner/RenterMix 65/35% 64-70 / 30-35% 65-70 / 30-35% Density Single-Family Detached 3.6/acre 2.3-2.9/acre " 2.9-3.6/acre Multifamily 21/acre 11-15/acre 15-21/acre To achieve the above goals, the City of Richfield elects to participate in the Metropolitan Livable Communities Act Local Housing Incentives Program, and will prepare and submit a plan to the Metropolitan Council by June 30, 1996, indicating the actions it will take to carry out the above goals. CERTIFICATION Mayor - January 15, 1996 Date • x 0 3 v 4~ u 8 0 .b a~ t~ U p. N +"~.+ .~ 3 0 0 i.^ a .~ . 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The City ofRichfield is challenged to accomplish the following four objectives: O Increase the ownership ratio of market rate homes to affordable homes. To make progress toward a 15 year goal by 2001, 500 more homes over $115,000 should be provided by public and private initiatives. These goals, performance, and resources would be reviewed in 2001 and 2006. ® Increase the ratio of higher rent units to affordable rent units. To make progress towazd a 15 yeaz goal by 2001, 250 units should have higher market 'values. These goals, performance, and resources should be reviewed in 2001 and 2006. m Increase the ratio and variety of ownership choices if possible. ® Increase housing density from the present "City Index" if possible. -. • HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No.6o Agenda September 20, 1999 Issue Statement: Adoption of a resolution authorizing the form of a Tax Increment Pledge Agreement with the City of Richfield relating to $1,700,000 General Obligation Taxable Tax Increment Bonds, Series 1999A. Background: On August 16, 1999, the Housing and Redevelopment Authority (HRA) approved the sale of taxable revenue bonds to fund Richfield Rediscovered and Transformation Home programs. On September 20, the HRA will consider approving a modification to the Richfield Redevelopment Project Area Plan and modifications to the Gramercy and Urban Village Tax Increment Financing (TIF) District Plans and creation of the Richfield Rediscovered TIF District Plan so that future tax increments can be pledged to the bond payments. The City Council will meet in October to award the bond sale to the qualifying buyer. In order to commit tax increments toward the payment of principal and interest on the bonds, it is necessary for the HRA to enter into a Tax Increment Pledge Agreement with the City. Execution of the agreement will be requested after the bond sale. Approval of the form of that agreement is requested at this time.' Recommended Motion: Adopt a resolution authorizing the form of the Tax Increment Pledge Agreement with the City of Richfield relating to $1,700,000 General Obligation Taxable Tax Increment Bonds, Series 1999A. Basis of Recommendation: 1. The HRA approved obligating future tax increment resources through the sale of taxable revenue bonds on August 16, 1999. 2. The City Council approved the sale of general obligation tax increment revenue bonds on behalf of the HRA on August 23, 1999. 3. The HRA will consider modification to the Richfield Redevelopment Project Area and Project Plan, modifications to the Gramercy and Urban Village TIF Plans, establishment of the Richfield Rediscovered TIF District, and creation of the Richfield Rediscovered 1999 TIF District Plan on September 20, 1999. 4. The City Council will hold a public hearing on October 11, 1999 to consider the Richfield Redevelopment Project Area and Project Plan, modifications to the Gramercy and Urban Village TIF Plans, establishment of the Richfield Rediscovered TIF District, and creation of the Richfield Rediscovered 1999 TIF District Plan modification. 5. The City Council will meet in October to award the bond sale to a qualifying buyer. 6. The HRA's legal counsel recommended approval of the form of the Tax Increment • Pledge Agreement prior to the bond sale in October. 7. Pledge Agreements were commonly used in the LHN in the 1980s when bond sales to finance redevelopment were common. Alternative Recommendation: 1. Defer this proposal. 2. Choose not to enter into a Tax Increment Pledge Agreement with the City. Discussion/Decision Mode: Approval of this agreement will facilitate the financing process for Richfield Rediscovered and make it possible for the City Council to act on this item as well. R s e tfully submi , ve evich Acting Executive Director SLD:ds Attachment • HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE FORM OF A TAX INCREMENT PLEDGE AGREEMENT WITH THE CITY OF RICHFIELD RELATING TO $1,700,000 GENERAL OBLIGATION TAXABLE TAX INCREMENT BONDS, SERIES 1999A WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") has established the Richfield Redevelopment Project Area (the "Project Area"), and approved a Redevelopment Plan (the "Project Plan") for the Project Area, dated June 14, 1993; and WHEREAS, pursuant to authority conferred by Minnesota Statues, Section 469.178, and Minnesota -Statutes, Chapter 475, the City Council ("the City") has agreed to finance certain public redevelopment costs to be incurred by the HRA in the Project Area through the issuance of general obligation bonds of the City in the principal amount of $1,700,000, designated the General Obligation Taxable Tax Increment Bonds, Series 1999A, and hereinafter referred to as the "Bonds"; and WHEREAS, sale of the Bonds is subject to HRA and City approval of modification of the Project Area and Project Plan, modification of the Gramercy and Urban Village Tax Increment Financing ("TIF") district plans, establishment of the Richfield Rediscovered TIF District and creation of the Richfield Rediscovered 1999 TIF District Plans; and WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for the principal and interest on the Bonds; and WHEREAS, there has been presented to the HRA a Tax Increment Pledge Agreement between the HRA and the City providing for the pledge of tax increments from the Gramercy and Urban Village TIF Districts and the new Richfield Rediscovered 1999 TIF Districts to pay principal and interest on the Bonds. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "Authority") as follows: 1. The Chair and Acting Executive Director are hereby authorized to execute and deliver a Tax Increment Pledge Agreement with the City of Richfield, Minnesota substantially in the form on file with the City, providing for the pledge of tax increment for the payment of the principal of, premium if any, and interest on, the Bonds. 2. This resolution shall be effective as of the date hereof. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of September, 1999. Thomas E. Harms, Chair ATTEST: • Michael Sandahl, Secretary First Draft • Wednesday, September 15,1999 PLEDGE AGREEMENT This Pledge and Allocation Agreement, dated as of September _, 1999 (the "Agreement"), is entered into between the City of Richfield, a home rule city and political subdivision of the State of Minnesota (the "City"), and the Richfield Housing and Redevelopment Authority, a political subdivision of the State of Minnesota established and .organized under 1980 Minnesota Laws, Chapter 595, as amended, and Minneapolis Code of Ordinances, Title 16, Chapter 422, as amended (the "Authority"). RECITALS WHEREAS, for the purpose of financing the public redevelopment costs of the City and the Authority (the ."Public Costs") in conjunction with the development of residential housing and (the "Development") located in the Gramercy and Urban Village areas of the City, the City has issued, or is proposing to issue, the following obligations: (i) its Taxable Variable Rate General Obligation Bonds (Richfield Rediscovered Project), Series 1999A (the "Series 1999A Bonds"), in the original aggregate principal amount of $1,700,000, proposed to be issued on , 1999; and WHEREAS, the Development is located within the Gramercy and Urban Village Development Districts, Development District Nos. _ (the "Development Districts"), development districts established under the provisions of Minnesota Statutes, Sections 469.124-469.134, as amended (the "Development District Act"), and tax increment financing district have been established within the Development District, designated Tax Increment Financing District No. _ ("TIF District _"), pursuant to the provisions of Minnesota Statutes, Section 469.174-469.179, as amended (the "Tax Increment Act"); and WHEREAS, pursuant to a resolution of the City Council of the City adopted on October 11, 1999, subject to the prior lien of both prior pledge agreements and the other contractual obligations relating to such tax increment revenues, the City has pledged the following revenues to the payment of the principal and premium of and interest on the Note, the Series 1999A Bonds: (i) certain tax increment revenues generated from the Development District, TIF District _, as described in the Redevelopment Contract; and (ii) certain other revenues described in the Redevelopment Contract. NOW, THEREFORE, the City and the Authority hereby agree as follows: 1. Pledge to the Series 1999 Bonds. The following revenues are hereby pledged to the payment of the principal and premium of and interest on the Series 1999A Bonds: (a) Each semiannual installment of tax increment revenues generated from TIF District _ is hereby pledged by the City and the Authority to the payment of the principal of, premium, if any, and interest on the Series 1999 Bonds, to the extent such revenues are not applied to the payment of the principal of, premium, if any, or interest on the Note, and to the extent such revenues are not applied by the Authority or the City to an authorized cost of the Development District or of TIF District (b) The full faith and credit and the taxing power of the City are irrevocably pledged to the payment of the principal of, premium, if any, and interest on the Series 1999A Bonds. 1 4. Authorization and Consent to Pledge. -The Authority hereby authorizes the City to make the pledge described in Section 1 above. The City and Authority consent to the application of the tax increment revenues to be derived from TIF District _ to the payment of the debt service obligations on the Bonds. 5. Filed Conv. An executed copy of this Agreement shall be. filed with the Director of Property Taxation of Hennepin County (or other official of Hennepin County exercising the powers of a county auditor on behalf of Hennepin County) and shall constitute the authority of the City and Authority to apply the tax increment revenues herein referred to asprovided in this Agreement. 6. Enforcement. This Agreement is executed and delivered by the Authority and the City for the benefit of the owner of the Note and for the benefit of U. S. Bank Trust National Association and its successors or assigns,. as paying agent under the Resolution (the "Resolution"), and the owners of the Series 1999A Bonds. The terms of this Agreement may be enforced by the owner of the Note, the Paying Agent, or the owners of the Series 1999 Bonds. The Authority and the City may enforce the terms of this Agreement. 1N WITNESS WHEREOF, the City and Authority have caused this Agreement to be duly executed on their behalf and their seals to be hereunto affixed as of , 1999. CITY OF RICHFIELD, NIINNESOTA RC 145-363 168589v.1 • By: Its: Manor Countersigned: _ Its: City Manager RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY By: Its: Chairperson By: Its: Executive Director 2 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No.59 Agenda September 20, 1999 Issue Statement: Consideration of resolutions that would permit the initiation of the Richfield Rediscovered Program for 1999. Background: Since 1990, the Richfield Rediscovered New Construction Program has provided the vehicle for the purchase and clearance of small, substandard houses and availability of vacant lots for the construction of larger, single family homes. The .demand for this new housing continues. Over time, however, the dynamics of the program has changed such that a new approach to a funding was required in order to sustain the program. To that end, the Housing and Redevelopment Authority (HRA) and City Council have recently completed actions to provide funding for the next several years. The new 1999 program cycle is specifically aimed at: • Providing a composite list of 33 qualifying candidate properties for acquisition; • Purchasing and demolishing approximately 28 substandard properties (including seven early acquisition properties) over a four year period (or approximately seven per year); • Providing for the construction of approximately seven new homes per year valued at an average market value of $135,000. (This proposed modification incorporates those recent actions of the HRA and City Council with regards to financing and updates the list of candidate properties that could be purchased by the program.); • Generating land sale proceeds in the average amount of $30,000 per lot as a source of program revenue; • Providing a revenue source for 30 to 40 housing renovations under the transformation housing element of the program; • Utilizing the 15 percent housing trust fund revenue source from the Gramercy and Urban Village tax increment projects; • Issuing general obligation tax increment revenue bonds in an amount not to exceed $4,827,586 (over a four year period) with an initial bond issue of $1.7 million; and • Re-evaluating future bonding options after two years. The Redevelopment Plans and Tax Increment Plans under the current proposal are attached for review. The following is a summary of these plans. It is encouraged that the maps, budgets, and cashflows contained within the plans be reviewed in conjunction with this summary. Modification of Richfield Redevelopment Project Area Plan: • Project boundary expansion to incorporate the contours of the former Richfield Rediscovered Project Areas A and B. (The two separate project areas under the program in the past will no longer be used due to funding strategy under the 1999 cycle.) Additional information is located in Appendix A of the Modification to the Redevelopment Plan, attached Exhibit B, six pages from the end of the document. • Identification of 33 scattered sites within the project area which are qualifying, substandard candidate properties for acquisition and redevelopment. Additional information is located in Appendix B of the Modification to the Redevelopment Plan, attached Exhibit B, five pages from the end of the document. Modification to the Gramercy Tax Increment Financing Plan: Budget modification to allow for additional expenditures and the issuance of new debt for the purpose of supporting the Richfield Rediscovered activity. Modification to the Urban Village Tax Increment Financing Plan: Budget modification to allow for additional expenditures and the issuance of new debt for the purpose of supporting the Richfield Rediscovered activity. Establishment of the Richfield Rediscovered 1999. Tax Increment Financing District (redeveloument district: • Creation of a new scattered-site, tax increment redevelopment district consisting of 33 parcels within the modified Richfield Redevelopment Project Area whose term is not to exceed 25 years. • Provision for the acquisition, demolition, and construction of 28 new, single family, market rate homes based on the current funding level. • Establishment of new tax increment sources and uses budgets. • Provision for bonding capacity not to exceed the budgeted amount of $4,827,586. In order to implement the proposed program, the attached two resolutions are proposed for adoption by the HRA. Upon approval, the documents will be referred to the (a) Planning Commission for review and comment with regard to conformity to the Comprehensive Plan of the City at their September 28, 1999 meeting, then (b) the City Council for consideration, public hearing, and proposed approval at their October 11, 1999 meeting. Recommended Motion: Adopt the following resolutions: 1) Resolution regarding demolition of structurally substandard buildings and inclusion of lots in the redevelopment tax increment financing district for Richfield Rediscovered 1999 Tax Increment Financing District and Plan related thereto; 2) Resolution modifying the Richfield Redevelopment Project Area and adopting the modification to the Redevelopment Plan related thereto; modifying the Tax Increment Financing Plan for the Gramercy Tax Increment Financing District; modifying the Tax Increment Financing Plan for the Urban Village Tax Increment Financing District; Establishing within the Richfield Redevelopment Project Area the Richfield Rediscovered 1999 Tax Increment Financing District and adopting the Tax Increment Financing Plan related thereto, all relating to the Richfield Rediscovered New Construction Program. Basis of Recommendation: 1. The Richfield Rediscovered New Construction Program continues to be a successful HRA RESOLUTION NO. RESOLUTION REGARDING DEMOLITION OF STRUCTURALLY SUBSTANDARD BUILDINGS AND INCLUSION OF LOTS IN THE REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT FOR RICHFIELD REDISCOVERED NEW CONSTUCTION PROGRAM, 1999 WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") is a public body corporate and politic under the laws of Minnesota and organized and operated under Minnesota Statutes, Sections 469.001 through_469.047 as amended (the "HRAAct"); and - WHEREAS, the HRA has previously established a project ("Richfield Rediscovered") pursuant to the HRA Act which provides for the acquisition and removal of substandard single family dwellings and the construction of decent, safe and sanitary housing on those properties; and WHEREAS, the HRA has previously adopted one or more tax increment financing plans for redevelopment tax increment financing districts composed of non-contiguous- parcels containing substandard single family residential structures; and WHEREAS, the HRA has previously indicated its intent to create additional tax increment financing districts within Richfield Rediscovered when appropriate; and WHEREAS, seven additional parcels were previously identified which contained structures which were so deteriorated and substandard as to pose an immediate threat to health and safety and which required demolition prior to the date they could be added to a new tax increment financing district; and WHEREAS, Minnesota Statutes, section 469.174, subd. 10(d) allows the HRA to remove structurally substandard buildings and to include those parcels in a new tax increment financing district within three years of the date of demolition if the HRA adopts a resolution finding the structures to be substandard and expressing the HRA's intent to incorporate them into a new tax increment financing district for the Richfield Rediscovered New Construction Program, 1999; and WHEREAS, the HRA has previously authorized acquisition of the parcels and subsequently demolished six of the substandard structures thereon after performing an inspection of the interior of each principal structure to determine whether it was substandard within the meaning of Minnesota Statutes, section 469.174, subd. 10(b) but prior to adopting a resolution pursuant to state statute regarding the HRA's intent to include said parcels within a tax increment financing district within three years of the date of demolition of the structures; and WHEREAS, the substandard structures on one of the parcels has not been demolished but has likewise been inspected for the condition of the principal structures thereon. NOW, THEREFORE, BE IT RESOLVED by the HRA as follows: 1. The principal buildings located on the seven parcels listed on Exhibit A attached hereto are hereby found to be structurally substandard within the meaning of Minnesota Statutes, section 469.174, subd. 10(b). The HRA's finding in this regard is based on a report prepared after an interior inspection of each of the properties by HRA staff, which report is on file with the HRA and will be retained for the life of the tax increment financing district. 2. The HRA hereby declares its intent to include the seven parcels listed on Exhibit A in a new tax increment financing district at the current-date-and in doing so intends to rely on Minnesota Statutes, section 469.174, subd. 10(d). 3. The. HRA owns the parcels listed on Exhibit A and has demolished or will demolish the substandard structures thereon. Approved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, this 20th day of September, 1999. Thomas E. Harms, Chair Attest: Michael Sandahl, Secretary • EXHIBIT A The seven parcels which contain or contained substandard structures which were or will be demolished and which the HRA intends to include in a new tax increment financing district for the Richfield Rediscovered New Construction Program, 1999 are as follows: 1. 6224 Bloomington Avenue 2. 6915 13th Avenue 3. 7133 Lyndale Avenue 4. 7025 Nicollet Avenue 5. 6855 Penn Avenue 6. 6833 Penn Avenue 7. 690112th Avenue • HRA RESOLUTION NO. RESOLUTION MODIFYING THE RICHFIELD REDEVELOPMENT PROJECT AREA AND ADOPTING THE MODIFICATION TO THE REDEVELOPMENT PLAN RELATING THERETO; MODIFYING THE TAX INCREMENT FINANCING PLAN FOR THE GRAMERCY TAX INCREMENT FINANCING DISTRICT; MODIFYING THE TAX INCREMENT FINANCING PLAN FOR THE URBAN VILLAGE TAX INCREMENT FINANCING DISTRICT; ESTABLISHING WITHIN THE RICHFIELD REDEVELOPMENT PROJECT AREA, RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT AND ADOPTING THE TAX INCREMENT FINANCING PLAN RELATED THERETO; ALL RELATING TO THE RICHFIELD REDISCOVERED NEW CONSTRUCTION PROGRAM. WHEREAS, it has been proposed that the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") adopt the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area, Modification to the Tax Increment Financing Plan for the Gramercy Tax Increment Financing District, Modification to the Tax Increment Financing Plan for the Urban Village Tax Increment Financing District, establish the Richfield Rediscovered 1999 Tax Increment Financing District, and adopt the Tax Increment Financing Plan related thereto, (collectively; the "Plans"), all related to the Richfield Rediscovered New Construction Program, and all pursuant to and in conformity with existing law, including Minnesota Statutes,- Sections . 469.001 through 469.047, and Sections 469.174 to 469.179, inclusive, as amended, all as reflected in the Plans and presented for the HRA's consideration; and WHEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the proposed developments as described in the Plans, in the opinion of the HRA, would not reasonably be expected to occur solely through private investment within the reasonable foreseeable future and, therefore, the use of tax increment financing is deemed necessary; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the Plans, but not limited to, notification of Hennepin County and School District No. 280 having taxing jurisdiction over the property to be included in Gramercy, Urban Village, and Richfield Rediscovered 1999 Tax Increment Financing Districts, notice of the modifications and proposed redevelopment district to the local county commissioner, a request for review of and written comment on the Plans by the City Planning Commission, and a request that the City Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield as follows: 1) The HRA is modifying the boundaries of the Richfield Redevelopment Project Area • and identifying additional parcels for acquisition. 2) The HRA hereby approves the modification to the Richfield Redevelopment Project Area Plan. 3) The HRA is not modifying the boundaries of the Gramercy Tax Increment Financing District nor modifying the boundaries of the Urban Village Gramercy Tax Increment Financing District. 4) The HRA is modifying the budgets relating to the Gramercy and Urban Village Tax Increment Financing Districts. 5) The HRA hereby approves the modifications to the Tax Increment Financing Plans for the Gramercy Tax Increment Financing District and Urban Village Tax -Increment Financing District. 6) The HRA hereby finds that the Richfield Rediscovered 1999 Tax Increment Financing District is in the public interest and is a "redevelopment district" under .Minnesota Statutes, Section 469.174, subd. 10 (a)(1), and finds that the adoption of the proposed Plans will advance the HRA's and City's objectives of encouraging redevelopment within the Richfield Redevelopment Project Area. 7) The HRA did previously identify and purchase seven substandard properties and demolished six of the properties with the intention of including these properties in the Richfield Rediscovered 1999 Tax Increment Financing District and plan related thereto, pursuant to Minnesota Statutes, section 469.174, subd. 10(d). 8) The HRA hereby establishes the Richfield Rediscovered 1999 Tax Increment Financing District and approves the Tax Increment Financing Plan relating thereto. 9) Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the Community Development Department at the City of Richfield. 10) Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to the HRA for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. C7 11) Upon approval of the Plans by the City Council, the Executive Director is • authorized to forward a copy of the Plans to the Hennepin County Auditor and the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175, subdivision 2. Approved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of September, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • Exhibit B • Draft as of September 13, 1999 Draft for HRA Consideration MODIFICATION TO THE REDEVELOPMENT PLAN FOR RICHFIELD REDEVELOPMENT PROJECT AREA; MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE GRAMERCY TAX INCREMENT FINANCING DISTRICT; MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE URBAN VILLAGE TAX INCREMENT FINANCING DISTRICT; AND THE TAX INCREMENT FINANCING PLAN FOR THE ESTABLISHMENT OF RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT (a redevelopment district) RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY CITY OF RICHFIELD HENNEPIN COUNTY STATE OF MINNESOTA Public Hearing: October 11, 1999 Adopted: • Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive Roseville, Minnesota 55113-1105 Phone: (651) 697-8500 Fax: (65 ]) 697-8555 E-mail: info@ehlers-inc.com Web Site: www.ehlers-inc.com TABLE OF CONTENTS (for reference purposes only) SECTION I -MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA ...................... 1-1 Foreword ....................................................................1-1 Subsection C. Description of Redevelopment Project Area ......................... 1-1 Subsection G. Acquisition and Relocation Activities .............................. 1-2 SECTION II - MODIFICATION TD THE TAX INCREMENT FINANCING PLAN FOR THE GRAMERCY TAX INCREMENT FINANCING DISTRICT ..:....................... 2-1 Foreword .. ................................ ................................2-1 SECTION III -MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE URBAN VILLAGE TAX INCREMENT FINANCING DISTRICT ...................:. 3- I Foreword .....................................................................3-1 SECTION IV -TAX INCREMENT FINANCING PLAN FOR RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT ..................................... 4-1 Subsection 4-1. Foreword .............:...................................... 4-1 Subsection 4-2. Subsection 4-3. Subsection 4-4. Subsection 4-5. Subsection 4-6. Subsection 4-7. Subsection 4-8. Subsection 4-9. Subsection 4-10. Subsection 4-11. Subsection 4-12. Subsection 4-13. Subsection 4-14. Subsection 4-15. Subsection 4-16. Subsection 4-17. Subsection 4-18. Subsection 4-19. Subsection 4-20. Subsection 4-21. Statutory Authority ...................:....... ............... 4-1 Statement of Objectives ....................................:.... 4-1 Redevelopment Plan Overview ................................... 4-1 Legal Description of Property in Richfield Rediscovered 1999 .......... 4-2 Classification of Richfield Rediscovered 1999 TIF District ............. 4-3 Original Tax Capacity and Tax Rate ............................... 4-4 Estimated Captured Net Tax Capacity Value/Increment .......:........ 4-5 Property To Be Acquired ... ................................... 4-5 Uses of Funds ......... ... ................................ 4-5 Sources of RevenueBonded Indebtedness .......................... 4-6 Definition of Tax Increment Revenues ............................. 4-7 Duration of Tax Increment Financing Richfield Rediscovered 1999 ...... 4-7 Estimated Impact on Other Taxing Jurisdictions ...................... 4-7 Notification of Prior Planned Improvements ........................ 4-8 Administration of Tax Increment Financing Richfield Rediscovered 1999 . 4-8 Municipal Approval and Public Purpose ............................ 4-8 Fiscal Disparities Election ....................................... 4-9 State Tax Increment Financing Aid ................................ 4-9 County Road Costs ..................................... .....4-10 Summary .............................................. ...4-10 APPENDIX A -BOUNDARY MAPS OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE RICHFIELD REDISCOVERED 1999 TIF DISTRICT ...............:...... A-1 APPENDIX B -LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT .. B-1 APPENDIX C -ESTIMATED CASH FLOW FOR THE RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT ..........................:............... C-1 REDEVELOPMENT QUALIFICATIONS FOR THE RICHFIELD REDISCOVERED 1999 TAX • INCREMENT FINANCING DIST~tICT' .......................................... D-1 • SECTION I MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA Foreword The following text represents a Modificationto the RedevelopmentPlan for Richfield Redevelopment Project Area. This modification represents a continuation ofthe goals and objectives set forth in the Redevelopment Plan for Richfield Redevelopment Project Area. Generally, the substantive changes include modifying the boundaries of Richfield Redevelopment Project Area as specified below. For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project Area, adopted July 16, 1990, is recommended. It is available in the Community Development Department of the City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Richfield Redevelopment Project Area. Subsection C. Description of Redevelopment Project Area The modified boundary lines for Richfield Redevelopment Project Area are as follows: Beginning at the intersection of the north city boundary line of Richfield and the center line of Trunk Highway 77, thence southerly along said line to its intersection with the southern city boundary. Thence, westerly, along said city boundary, to its intersection with the center line of Penn Avenue. Thence, northerly, along said center line to its intersection with the center line of 78`'' Street. Thence, westerly more or less along said center line to its intersection with the center line of Thomas Avenue. Thence, northerly along said center line to its intersection with the center line of 77`'' Street. Thence, easterly along said center line to its intersection with the center line of Sheridan Avenue. Thence, northerly along said center line to its intersection with the center line of 76`h Street. Thence, easterly along said center line to its intersection with the center line of Knox Avenue. Thence, southerly along said center line to its intersection with the north lot line of Tract A, Registered Land Survey No. 1037. Thence, easterly along said lot line to its intersection with the center line of Interstate 35W. Thence, northerly along said center line to its intersection with the center line of 73`d Street. Thence, westerly along said center line to its intersection with the center line of Penn Avenue. Thence, southerly along said center line to its intersection with the center line of 74d' Street. Thence, westerly along said center line to its intersection with the center line of Sheridan Avenue. Thence, southerly along said center line to its intersection with the center line of 76`~ Street. Thence, westerly along said center line to its intersection with the center line of Xerxes Avenue. Thence, northerly along said center .line to its intersection with the center line of West 66`'' Street. Thence, easterly along said center line to its intersection with the center line of Queen Avenue. Thence, northerly, more or less, along said center line to its intersection with the north line of 65`h Street. Thence, westerly along said north line to its intersection with the west lot line of Lot 2, Block 1, Harry Tickner's Subdivision. Thence, northerly along said lot line, as extended, to the south right-of--way line ofTrunk Highway 62. Thence, easterly along said south right-of- way line to its intersection with the center line of the west roadway of Pleasant Avenue. Thence, southerly along said center line to its intersection with the center line of 63rd Street. Thence, westerly along said center line to its intersection with the center line of Harriet Avenue. Thence, southerly along said center line to its intersection with the center line of 64-1/2 Street. Thence, easterly along said center line to its intersection with the west lot line of Lot 2, Block 6, Lyndale Oaks Addition. Thence, southerly along said lot line to the north line of Hauser's Second Addition. Thence, easterly along said north line to its intersection with the Richfield HRA Modification to the Redevelopment Plan for Redevelopment Project Area A 1-1 east line of Pleasant Avenue. Thence, continuing easterly along the north boundary of PID No. 27-028-24- 24-0005 and PID No. 27-028-24-24-0004 to its intersection with the east line of Pillsbury Avenue. Thence, northerly along said east line to the south block. line of Block 6, Rearrangement of Nicollet Homes Second Addition. Thence, continuing east along said south block line of Lot 6, through the south lot line of Lot 7 and to the middle of Block 8, Rearrangement ofNicollet Homes Second Addition. Thence, northerly along the east lot lines of Lots 6, 7, 8, 9, and 10, Block 8, Rearrangement of Nicollet Homes Second Addition to its intersection with the center line of 64`'' Street. Thence, easterlyalong the said center line to its intersection with the west line of Lot I5, Block 8, Town's Edge Addition. Thence, southerly along said west line past Lots 14, 13, 12 and 11, Block 8, Town's Edge Addition to its intersection with the east line of First Federal Richfield Addition. Thence, southerly more or less along said east line to the center line of 65"' Street. Thence, easterly along said center line to the center line of 15` Avenue. Thence, southerly along said center line to the center line of 66`h Street. Thence, easterly along said center line to the center line of I 1 `h Avenue. Thence, northerly along said center line to its intersection with the south right-of--way line of Trunk Highway 62. Thence, easterly along said south right-of--way to its intersection with the north city boundary line of Richfield. Thence, easterly to point of beginning. Subsection G. Acquisition and Relocation Activities Acauisition In furtherance of the Richfield Rediscovered Housing Program, HRA staff maintained standards set forth in previous years to identify property for acquisition. As in the past, residential property owners were contacted and surveyed to determine (a.) whether or not they continued to express an interest in selling their property on a voluntary basis and (b.) if interested, within which time frame. Additional means of obtaining candidate properties were made by (a.) property owners contacting the HRA requesting that their property be considered for the program and (b.) referrals by the City's health and inspections department. Candidate properties were further evaluated for program eligibility and inspected. The properties identified for acquisition are listed in Appendix A ofthe Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District. Relocation The HRA accepts as binding its obligations under provisions of federal and state law (M.S., Chapter 117) for relocation. • Richfield HRA Modification to the Redevelopment Plan for Redevelopment Project Area A 1-2 SECTION II MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE GRAMERCY TAX INCREMENT FINANCING DISTRICT Subsection 2-1.Foreword The City of Richfield ("City"), the Richfield Housing and Redevelopment Authority (the "HRA"), staff and consultants have prepared the following information to expedite a modification to the Tax Increment FinancingPlan for the Gramercy Redevelopment Tax Increment FinancingDistrict("the GramercyDistrict"), a redevelopment tax increment financing district, located in the Richfield Redevelopment Project Area. The following Modification represents a modification to the budget to allow for additional expenditures and the issuance of debt for the purpose of supporting the Richfield Rediscovered activity. The primary activity will take place in the Richfield Rediscovered 1999 Tax Increment Financing District, to be created on October 11, 1999. This plan is being amended to incorporate modifications to the following sections. Subsection 2-10. Uses of Funds The budget for Gramercy is amended as follows: Richfield Original Redis. Uses of Funds Gramercv Project 2 Project 3 Total 1999 As Amended Land Acquisition $1,425,000 $2,903,520 $4,277,537 $8,606,057 $1,820,000 $10,426,057 Demo./Relocation $85,000 $755,000 $800,000 $1,640,000 $280,000 $1,920,000 Rehabilitation $1,120,000 $1,120,000 Site Work $623,093 $360,000 $400,000 $1,383,093 $1,383,093 Utilities/Roads/Walks $98,850 $750,000 $800,000 $1,648,850 $1,648,850 Permits $872,000 $500,000 $600,000 $1,972,000 $1,972,000 Interest $14,000,000 $1,500,000 $15,500,000 Admin.(up to 10%) $3,250,000 $107,586 $3,357,586 TOTAL $3,103,943 $5,268,520 $6,877,537 $32,500,000 $4,827,586 $37,327,586 Subsection 2-11. Sources of RevenueBonded Indebtedness The City intends to issue bonds for this activity. The total principal amount of bonded indebtedness or other indebtedness related to the use of tax increment financing will not exceed $37,400,00 without a modification to the Plan pursuant to applicable statutory requirements. The sources of funds for the Gramercy District are amended as follows: Richfield HRA Modification to the Tax Increment Financing Plan for the Grarnercy Tau Increment Financing District 2-! Sources of Funds Tax Increment Local Contribution Land Sales Other Tax Increment TOTAL Original Total Richfield Redisc. 1999 Amended Total $30,875,000 $1,075,860 $31,950,860 $1,625,000 $53,793 $1,678,793 $840,000. $840,000 $2,857,92'7 $2,857,927 $32,500,000 $4,827,580 $37,327,580 Richfield HRA Modification to the Tax Increment Financing Plan for the Gramercy Tax Increment Financing District 2-2 SECTION III MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE URBAN VILLAGE TAX INCREMENT FINANCING DISTRICT Subsection 3-1.Foreword. The City of Richfield ("City"), the Richfield Housing and Redevelopment Authority (the "HRA"), staff and consultants have prepared the following information to expedite a modification to the Tax Increment Financing Plan for the Urban Village Tax Increment Financing District, a redevelopment tax increment financing district, located in the Richfield Redevelopment Project Area. The following Modification represents a modification to the budget to allow for additional expenditures and the issuance of debt for the purpose of supporting the Richfield Rediscovered activity. The primary activity will take place in the Richfield Rediscovered 1999 Tax Increment Financing District, to be created on October 11,1999. This plan is being amended to incorporate modifications to the following sections. Subsection 3-10. Uses of Funds The budget for Urban Village is amended as follows: Uses of Funds Original Total Richfield Redis. 1999 As Amended Land Acquisition $2,000,000 $1,820,000 $3,820,000 Site Improvements 2,000,000 - $2,000,000 Demo./Relocation $280,000 $280,000 Public Improvements - 7,000,000 $7,000,000 public road Public Utilities -parkway 2,000,000 $2,000,000 Trust Fund 2,000,000 $2,000,000 Rehabilitation $1,120,000 $1,120,000 Interest 8,750,000 $1,500,000 $10,250,000 Admin (up to 10%) 2,500,000 $107,586 $2,607,586 TOTAL $26,250,000.0 $4,827,586 $31,077,586 Subsection 3-11. Sources of RevenueBonded Indebtedness The City intends to issue bonds for this activity. The total principal amount of bonded indebtedness or other indebtedness related to the use of tax increment financing will not exceed $31,100,000 without a modification to the Plan pursuant to applicable statutory requirements. The sources of funds for Urban Village Tax Increment Financing District are amended as follows:. Richfield HRA Modification to the Tax increment Financing Plan for the Urban Village Tax Increment Financing District 3-1 Sources of Funds Original Total Richfield Redisc. 1999 Amended Total Tax Increment $25,000,000 $1,075,860 $26,075,860 Local Contribution $1,250,000 $53,793 $1,303,793 Land Sales $840,000 $840,000 Other Tax Increment $2,857,927 $2,857,927 TOTAL $26,250,000 $4,827,580 $31,077,580 • Richfield HRA Modification to the Tax Increment Financing Plan for the Urban Village Tax Increment Financing Disvict 3-2 SECTION IV TAX INCREMENT FINANCING PLAN FOR RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT Subsection 4-1.Foreword The City of Richfield ("City"), the Richfield Housing and Redevelopment Authority (the "HRA"), staff and consultants have prepared the following information to expedite the establishment of the Richfield Rediscovered 1999 Tax Increment Financing District ("Richfield Rediscovered 1999"),a redevelopment tax increment financing district, located in Richfield Redevelopment Project Area. Subsection 4-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the City and HRA have certain statutory powers pursuant to Minnesota Statutes ("M.S.'), Sections 469.001 through 469.047, inclusive, as amended, and M.S., Sections 469.174 through 469.179, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This Section contains the Tax Increment Financing Plan (the "Plan") for Richfield Rediscovered 1999. Other relevant information is contained in the Modification to the Redevelopment Plan for Richfield Redevelopment Project Area. Subsection 4-3.Statement of Objectives Richfield Rediscovered 1999 consists of33parcels oflandand adjacentand internalrights-of--way. Richfield Rediscovered 1999 is created to facilitate the demolition of substandard houses and enable home buyers to construct new houses on the lots through a program known as Richfield Rediscovered, which is administered by the HRA. The funding, as currently proposed, allows for the potential construction of up to 28 new homes. This plan is expected to achieve many of the objectives outlined in the Modification to the Redevelopment Plan for Richfield Redevelopment Project Area. The activities contemplated in the present Modification to the Redevelopment Plan and the Tax Increment Financing Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Richfield Rediscovered 1999 and Richfield Redevelopment Project Area. Subsection 4-4.Redevelopment Plan Overview Property to beAcquired -Selected property located within RichfieldRediscovered 1999 may be acquired by the City or HRA and is further described in this Plan. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the City or HRA may sell to a developer selected properties that they may acquire within Richfield Rediscovered 1999. The City or HRA may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public streets work Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax increment Financing District 4-1 within Richfield Rediscovered 1999. Subsection 4-S.Legal Description of Property in Richfield Rediscovered 1999 Richfield Rediscovered 1999 encompasses all property and adjacent rights-of--way identified by the parcels listed below. Please see the map in Appendix A for further information on the location of Richfield Rediscovered 1999. PID Number Address 6220 Clinton Avenue 27-028-24-11-0001 6608 Stevens Avenue 27-028-24-42-0073 .6625 3`d Avenue 27-028-24-41-0084 6637 5`h Avenue 27-028-24-41-0015 6800 Pillsbury Avenue 27-028-24-34-0016 6744 Blaisdell Avenue 27-028-24-31-0007 6833 Park Avenue 26-028-24-33-0086 6833 Grand Avenue 27-028-24-33-0070 7036 ls~ Avenue 34-028-24-12-0015 7241 2"d Avenue 34-028-24-13-0150 7316 Clinton Avenue 34-028-24-14-0086 7301 Garfield Avenue 34-028-24-23-0129 .7544 2nd Avenue 34-028-24-42-0104 7333 Emerson Avenue 33-028-24-13-0090 6224 Bloomington Avenue 26-028-24-12-0047 6928 14~'Avenue 26-028-24-43-0069 6915 13~'Avenue 26-028-24-43-0064 7133 Lyndale Avenue 34-028-24-22-0055 7025 Nicollet Avenue 34-028-24-12-0022 6315 Newton Avenue 28-028-24-22-0097 6310Irving Avenue 28-028-24-21-0075 6306 Irving Avenue 28-028-24-21-0126 6320 Girard Avenue 28-028-24-12-0033 6645 Know Avenue 28-028-24-31-0032 6800 Logan Avenue 28-028-24-33-0001 6912 Penn Avenue 29-028-24-44-0161 6933 Queen Avenue 29-028-24-44-0170 6855 Penn Avenue 28-028-24-33-0146 6833 Penn Avenue 28-028-24-33-0045 Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-2 6929 Queen Avenue 6901 12`h Avenue 6945 Clinton Avenue 7615 Pillsbury Avenue 29-028-24-44-0171 26-028-24-43-0082 27-028-24-44-0108 34-028-24-34-0045 Subsection 4-6. Classification of Richfield Rediscovered 1999 Tax Increment Financing District The City and HRA, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.179, as amended, inclusive, finds that Richfield Rediscovered 1999, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. 1 D(a)(1) as defined below: (a) "Redevelopment district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority frnds by resol ution that one of the following conditions, reasonably distributed throughout the district, exists: (1) parcels consisting of 70 percent of the area in the district are occupied by buildings, streets, utilities, or other improvements and more than SO percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; or (2) The property consists of vacant, unused, underused, inappropriately used, or infrequently used railyards, rail storage facilities or excessive or vacated railroad rights-of--way. (b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements oracombination ofdefrciencies in essential utilities andfacilities, lightand ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to juste substantial renovation or clearance. (c) A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be mod fed to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building. is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the sine, type, and age of the building, the average cost ofplumbing, electrical, or structural repairs or other similar reliable .evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard... (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities or other improvements unti115 percent of the area of the parcel contains improvements. Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-3 (f) For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district under pat~agraph (a) to be included in the district, and the entire are of the district must satisfy paragraph (a). In meeting the statutory criteria described above, the City and HRA rely on the following facts and findings: ^ Richfield Rediscovered 1999 is a redevelopment district consisting of 33 parcels. ^ An inventory of the parcels shows that at least 70 percent of the area of Richfield Rediscovered 1999 consists of parcels in Richfield Rediscovered 1999 that are occupied as defined in the TIF Act. An inspection ofthe buildings located within Richfield Rediscovered 1999 finds that more than 50 percent ofthe buildings are structurally substandard as defined in the TIF:Act. Because Richfield Rediscovered 1999 is a scattered site redevelopment district, each parcel qualifies individually. (See Appendix D) Subsection 4-7.Original Tax Capacity and Tax Rate Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for Richfield Rediscovered 2000 is based on the market values placed on the property by the assessor in 1999 for taxes payable 2000. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 1999) the amount by which the original value has increased or decreased as a result of: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district; 3. change due to adjustments, negotiated or court-ordered abatements; 4. change in the use of the property and classification; 5. change in state law governing class rates; or 6. change in connection with previously issued building permits. In any year in which the current Net Tax Capacity value of Richfield Rediscovered 1999 declines below the ONTC, no value will be captured and no tax increment will be payable to the City or HRA. It is expected that the original local tax rate for Richfield Rediscovered 1999 will be the local tax rate for taxes payable 2000. The estimate below is payable 1999. The Original Tax Capacity and the Original Local Tax Rate for Richfield Rediscovered 1999 appear in the table below. Original Tax Capacity Value $4,550 Percent Retained by City 100% Original Local Tax Rate 1.50904 Subsection 4-8.Estimated Cautured Net Tax Capacity Value/Increment Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of Richfield Rediscovered 1999, within Richfield Redevelopment Project Area, upon completion ofthe project, will annually approximate tax increment revenues as shown in the table Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing Disvict 4-4 below. The City and HRA request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2001. The project tax capacity listed is an estimate of values when the project is completed. Project Estimated Tax Capacityty f P PTC C l i 538 $48 on o roject ( upon omp et ) , Original Estimated Net Tax Capacity (ONTC) 4,550 Estimated Captured Tax Capacity (CTC) 43,988 Estimated Annual Tax Increment (CTC x Local Tax Rate) $66,380 Subsection 4-9. Property To Be Acquired The City or HRA may acquire any parcel within Richfield Rediscovered 1999 including interior and adjacent street rights of way. The parcels are listed in Subsection 2-5. Any properties identified for acquisition will be .acquired by the City or HRA only in order to accomplish one or more of the following: carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. 2. The following are conditions under which properties not designated to be acquired may be acquired: The City or HRA may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this tax increment financing plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 4-10. Uses of Funds Currently under consideration for Richfield Rediscovered 1999 is a proposal to facilitate the acquisition and demolition of substandard houses and enable home buyers to construct new houses on the lots. The City and HRA have determined that it will be necessary to provide assistance to the project for certain costs. The City has studied the feasibility of the development or redevelopment of property in and around Richfield Rediscovered 1999. To facilitate the establishment and- development or redevelopment of Richfield Rediscovered 1999, this Plan authorizes. the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with Richfield Rediscovered 1999 over the life of the district is outlined in the following table. Uses of Funds Total Land Acquisition ~ $1,820,000 Site Preparation/Demolition/Grading 280,000 Rehabilitation 1,120,000 Interest 500,000 Administrative Costs (up to 10%) 107,586 TOTAL $4,827,580 Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-5 Estimated costs associated with Richfield Rediscovered 1999 are subject to change. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within Richfield Rediscovered 1999 will be spent on activities related to development or redevelopment outside ofRichfield Rediscovered 1999 but within the boundaries ofRichfield Redevelopment Project Area, (including administrative costs, which are considered to be spent outside ofRichfield Rediscovered 1999) subject to the limitations as described in this Plan. Subsection 4-11. Sources of RevenueBonded Indebtedness Acquisition and site preparation costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The City or HRA reserves the right to use other sources of revenue legally applicable to the Modification to the Redevelopment Plan and the Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contributions from the .developer and investment income, to pay for the estimated public costs. The City or HRA reserves the right to incur bonded indebtedness or other indebtedness as a result ofthe Plan. As presently proposed, the project may be financed by a bond issue or loans.. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness or other indebtedness related to the use oftax increment financing will not exceed $4,827,580 without a modification to the Plan pursuant to applicable statutory requirements. This provision does not obligate the City or HRA to incur debt. The. City or HRA may issue bonds or incur other debt only upon the determination that such action is in the best interest ofthe City. The City or HRA may also finance the activities to be undertaken pursuant to the Plan through loans from funds of the City or HRA. The estimated sources of funds for Richfield Rediscovered 1999 over the life ofthe district are contained in the table below. Sources of Funds Total Tax Increment $1,075,860 Land Sales 840,000 Other Tax Increment 2,857,927 Local Contribution 53,793 TOTAL $4,827,580 Subsection 4-12. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. the proceeds from the sale or lease of property, tangible or intangible, purchased by the Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-6 authority with tax increments; 3. repayments of loans or other advances made by the authority with tax increments; and 4. interest or other investment earnings on or from tax increments. Subsection 4-13. Duration of Tax Increment Financing Richfield Rediscovered 1999 Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of Richfield Rediscovered 1999 must be indicated within the Plan. Pursuant to M.S., Section 469.176, Subd. I (b), the duration of Richfield Rediscovered 1999 will be 25 years from the date of receipt of the first increment by the City or HRA. The date of receipt by the City of Richfield of the first tax increment will be approximately .2001. Thus, it is estimated that Richfield Rediscovered 1999, including any modifications of the Plan for subsequent phases or other changes, would terminate after 2026, or when the Plan is satisfied. The City or HRA does reserve the right to decertify Richfield Rediscovered 1999 prior to the legally required date. Subsection 4-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes construction which would have occurred without the creation of Richfield Rediscovered 1999. If the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding, the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact that the construction would not have occurred without the assistance of the City or HRA, the following estimated impact of Richfield Rediscovered 1999 would be as follows if the "but for"test was not met: IMPACT ON TAX BASE 1998/1999 Estimated Captured Total Net Tax Capacity (CTC) Percent of CTC Tax Capacity Upon Project Completion to Enti Total Hennepin County 925,993,876 43,988 0.0048% LS.D. No. 280 24,774,702 43,988 0.1776% City of Richfield 17,777,731 43,988 0.2474% IMPACT ON TAX RATES 1998/1999 Percent Potential Extension Rates of Total CTC Taxes Hennepin County 0.409940 27.17% 43,988 18,032 LS.D. No. 280 0.721270 47.80% 43,988 31,727 City of Richfield 0.285940 18.95% 43,988 12,578 Metro 0.060350 4.00% 43,988 2,655 Other 0.031540 2.09% 43.988 1.387 Total 1.509040 100.00% 66,380 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the 1998/Pay 1999 rate. The total net capacity for the entities listed above are based on Pay 1999 figures. Richfield Rediscovered 1999 will be certified under the actual 1999/200 rates, which Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-7 were unavailable at the time thisPlan was prepared. Subsection 4-15. Notification of Prior Planned Improvements The City or HRA shall, after due and diligent search, accompany its request for certification to the County Auditor or its notice of Richfield Rediscovered 1999 enlargement with a listing of all properties within Richfield Rediscovered 1999 or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original value of Richfield Rediscovered 1999 by the value of improvements for which a building permit was issued. Pursuant to M.S., Section 469.177, Subd 4, the City is in the process of reviewing the area to be included in Richfield Rediscovered 1999 to determine if any building permits have been issued during the 18 months immediately preceding approval of the Plan by the City and HRA. Subsection 4-16. Administration of Tax Increment Financing Richfield Rediscovered 1999 Administration of Richfield Rediscovered 1999 will be handled by the Executive Director of the HRA of the City of Richfield. Subsection 4-17. .Municipal Approval and Public Purpose The. reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for. Richfield Rediscovered 1999 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that Richfield Rediscovered 1999 is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a) (1). Richfield Rediscovered 1999 consists of 33 parcels, with plans to redevelop the area for residential purposes. The Council generally believes that each of the parcels in the District are occupied by buildings, streets, utilities, or other improvements and the buildings in Richfield Rediscovered 1999, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. Because Richfield Rediscovered 1999 is a scattered site redevelopment district, each parcel qualifies individually. These findings are based upon general information about buildings of similar age and construction because building owners did not consent to interior inspections at this time. Prior to a parcel being certified with Hennepin County, an interior inspection will be conducted to confirm that the redevelopment district criteria have been met. (See also Appendix D) 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely throughprivate investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment frnancing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the - maximum duration of Richfield Rediscovered 1999 permitted by the Plan. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings and the cost of financing the proposed improvements, this project is feasible only through assistance, in • part, from tax increment financing. Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-8 A comparative analysis of estimated market values both with and without establishment of Tax Increment Financing Richfield Rediscovered 1999 and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in Richfield Rediscovered 1999, the total increase in market value would be up to $1,960,000 It is the Council's finding that no development with a market value of greater than $1,478,866 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition and.site improvements in the general area of Richfield Rediscovered 1999 (see Cashflow in Appendix C). 3. Finding that the Tax Increment Financing Plan for Richfield Rediscovered 1999 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan will be reviewed by the Planning Commission on September 28, 1999 in order to find that the Plan is in conformance with the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for Richfield Rediscovered 1999 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Richfield Redevelopment Project Area by private enterprise. The project to be assisted by Richfield Rediscovered 1999 will result in the renovation of substandard properties, increased tax base of the State and add a high quality development to the City. Additional findings are set forth in the Authorizing Resolution of the City. Subsection 4-18. Fiscal Disparities Election No commercial/industrial property is expected to be constructed in Richfield. Rediscovered 1999. Subsection 4-19. State Tax Increment Financing Aid Pursuant to M.S., .Section 273.1399, fortax incrementfinancing districts forwhich certification was requested after Apri130,1990, a municipality incurs a reduction in state tax increment financing aid (RISTIFA) applied to the municipality's Local Government Aids (LGA) first and, Homestead and Agricultural Aid (RAGA) second, in an amount equal to a formula based upon the equalized qualifying captured tax capacity (QCTC) of the tax increment financing district. Pursuant to M.S., Section 273.1399, Subd. 6, the City or HRA may choose an option to the LGA-RAGA penalty. Richfield Rediscovered 1999 is exempt from the LGA-RAGA reduction if the City or HRA elects to make a qualifying local contribution at the time of approving the tax increment financing plan. To qualify for the exemption in each year, the City or HRA must make a qualifying local contribution to the project of a certain percentage. The local contribution for a redevelopment district is 5 percent. The maximum local contribution for all districts in the City in any year is limited to two percent of the City's net tax capacity, after which point the City or HRA must make an additional contribution equal to the lesser of (a) 0.25 percent of the City's net tax capacity or (b) 3 percent of tax increment revenues for that year. The amount of the local contribution must be made out. of unrestricted money of the City or HRA, such as the general fund, a property tax levy, or a federal or state grant-in-aid which may be spent for general government purposes. The local contribution may not be made, directly or indirectly, with tax increments Richfield HRA .Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax increment Financing District 4-9 or developer payments. The local contribution must be used to pay project costs and cannot be used for general government purposes. The City elects to make the annual local contribution to the project to exempt itself from the LGA- HACApenalty. The City or HRA will pay for costs of the project described in this Plan, in an amount equal to 5 percent of annual tax increment for Richfield Rediscovered 1999, subject to the limitations described above, in any year in which such amount exceeds 2 percent of the City's net tax capacity. Such contribution may be in form of either lump sum or annual payments (in addition to tax increment payments) towards costs identified in this Plan or other costs related to that development or redevelopment. The contribution may also be made in the form of public. improvements financed by the City or HRA or other unit of government with unrestricted funds. Subsection 4-20. County Road Costs Pursuant to M.S., Section 469.175, Subd. la, the county board may require the City or HRA to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and ifthe road improvements are not scheduled within the next five years under a capital improvement plan or other county plan. In the opinion of the City and HRA and consultants, the proposed development outlined in this Plan will have little or no impact upon county roads. If the county elects to use increments to improve county roads, it must notify the City or HRA within thirty days of receipt of this Plan. Subsection 4-21. Summary The City of Richfield is establishing Richfield Rediscovered 1999 to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The Tax Increment Financing Plan for Richfield Rediscovered 1999 was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55402-4100, telephone (651) 697-8500. • Richfield HRA Tax Increment Financing Plan for Richfield Rediscovered 1999 Tax Increment Financing District 4-10 APPENDIX A BOUNDARY MAPS OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT APPENDIX A_~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~ fstiarivls o~z ~ lstz funz ' p •~ ~f~Mst ul /.y 1 ~~1./1 L f118t 0~~ ~~~ f{11L 0~ OO~~ fl19L ,-^0~0~0C HlSt ~ fort face fuzz fart ~ Funs ~ ~~ ~ 09b'Jl~q ?~ W sn~r„a, NMdd ~ 3nvw~ruaod 3 fus a fir 3 ~~ ~ ~ W ~ °'~ C G a sr~n3ts 1st ~e,~~ ~ O ~~ J fuzicv~nt,,aM a lea 0 wva~ 13~ ~~ ~ ~,d~, ~~ ~ ~"~ 9 xv~ W fos ~ lrtovrar.~d azroa~ V lapeww ~rtv~ai s~vvr xora rro~o, r~aaow Natni~~t ~ ienrp anvfrad 3 Cessna ~ ~ News ~ C 11'°" ~ L t JilfIBSYM _~ 'w V ~\Y JI a ill ~~~~ll II 11 1g-ii ~ ~ ~ 1'n ~ ~ ~ l-n ~ t"ii ~ gin ~i ~8 ~ ~ ~ ~ ~ ~ ~ ~R~~~ z ~_ w U~ O ~OL~ 3gM2h'1T3~ ~~~ fu9t O Joo D ,~ ,~~~ ~ NOL°MJYVOOlB ~ > Ft1St ,vu0~ ~ - fort fast 700 ~t `~ fuu co 70~~ l ~t ca ca '~i OE)bJl-fJ +~ •C N 700 ~ ~ ~ C o ~00~ wrabv p g' 30o a c ~d~tt~~ ~ ~ ~, •~ c 300 ~ No„~,n; .~' ~ ~ ti 3~0 aae ~ ~S ~ ~ 700 n sransis ~ 7~~~ U 1st 3~~ anv.~~w ~' _ c`3 700 ~ ,~asnne a~ a~ c ~ ~ ~ 7 ~ ~ ,3~ ~° '° ~ 5 ~ ~~ ~~ ~~ ~,d~, roe f JO~O l,~ro~ae .~'., a ]ADO xv~ 7~0 1,VOd10 ]~~ Noszano ]D ~ •-- s~vr w xofa rnr~oi rnr~ow ftainn~ ~ ienra 3nvriaa rs~no 0 ~a cgi rroa~s ]D sw~oHi ~~ 17~,M q ~- ~ ra~nesvnn (~ I I~ I I f 7/1\ 3AV Sic o ~' ~ sn ~ !n sn ~ !n !n ~ • ~ uuuu~ ~~~~~ o X0000 000 ~ °oooo APPENDIX B LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT PID Number Address 6220 Clinton Avenue 27-028-24-11-0001 6608 Stevens Avenue 27-028-24-42-0073 6625 3rd Avenue 27-028-24-41-0084 6637 5`h Avenue 27-028-24-41-0015 6800 Pillsbury Avenue 27-028-24-34-0016 6744 Blaisdell Avenue 27-028-24-31-0007 6833 Park Avenue 26-028-24-33-0086 6833 Grand Avenue 27-028-24-33-0070 7036 1" Avenue 34-028-24-12-0015 7241 2nd Avenue 34-028-24-13-0150 7316 Clinton Avenue 34-028-24-14-0086 7301 Garfield Avenue 34-028-24-23-0129 7544 2rtd Avenue 34-028-24-42-0104 7333 Emerson Avenue 33-028-24-13-0090 6224 Bloomington Avenue 26-028-24-12-0047 6928 14d'Avenue 26-028-24-43-0069 6915 13w Avenue 26-028-24-43-0064 7133 Lyndale Avenue 34-028-24-22-0055 7025 Nicollet Avenue 34-028-24-12-0022 6315 Newton Avenue 28-028-24-22-0097 6310 Irving Avenue 28-028-24-21-0075 6306 Irving Avenue 28-028-24-21-01.26 6320 Girard Avenue 28-028-24-12-0033 6645 Know Avenue 28-028-24-31-0032 6800 Logan Avenue 28-028-24-33-0001 691.2 Penn Avenue 29-028-24-44-0161 6933 Queen Avenue 29-028-24-44-0170 6855 Penn Avenue 28-028-24-33-0146 6833 Penn Avenue 28-028-24-33-0045 6929 Queen Avenue 29-028-24-44-0171 6901 12'~ Avenue 26-028-24-43-0082 6945 Clinton Avenue 27-028-24-44-0108 7615 Pillsbury Avenue 34-028-24-34-0045 APPENDIX g_~ APPENDIX C ESTIMATED CASH FLOW FOR THE RICHFIELD REDISCOVERED 1999 TAX INCREMENT 'FINANCING DISTRICT • APPENDIX C-1 osioa~ss CITY OF RICHFIELD, MINNESOTA TAX INCREMENT FINANCING DISTRICT -RICHFIELD REDISCOVERED TAX INCREMENT CASH FLOW Page 2 Base Project Captured Semi-Annual Admin. Semi-Annual ~ Local Match I Years PERIOD BEG INNING Tax Tax Tax Gross Tax at Net Tax j at ~ Of PER IOD ENDING ~ Yrs. Mth. Yr. Ca acit Ca acit Ca acit Increment 10.25% Increment i 5.00% I Increment Yrs. Mth. Yr. 0.0 08-01 1999 4,550 4,550 0 0 0 0 ~ 0 ! 0.0 0.5 02-01 2000 0.5 02-01 2000 4,550 4,550 0 0 0 O I 0 ~ 0.0 1.0 08-01 2000 1.0 08-01 2000 4,550 4,550 0 0 0 0 ~ 0 i 0.0 1.5 02-01 2001 1.5 02-01 2001 4,550 12,135 7,585 5,723 (587) 5,136 2861 0.5 2.0 OS-01 2001 2.0 08-01 2001 4,550 12,135 7,585 5,723 (587) 5,136 286 1.0 2.5 02-01 2002 2.5 02-01 2002 9,100 24,269 15,169 11,445 (1,173) 10,272 572 1.5 3.0 08-01 2002 3.0 08-01 2002 9,100 24,269 15,169 11,445 (1,173) 10,272 572 2.0 3.5 02-01 2003 3.5 02-01 2003 13,650 .36,404 22,754 17,168 (1,760) 15,408 858 2.5 4.0 OS-01 2003 4.0 08-01 2003 13,650 36,404 22,754 17,168 (1,760) 15,408 858 3.0 4.5 02-01 2004 4.5 02-01 2004 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 3.5 5.0 08-01 2004 5.0 OS-01 2004 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 4.0 5.5 02-01 2005 5.5 02-01 2005 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 4.5 6.0 OS-01 2005 6.0 OS-01 2005 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 5.0 6.5 02-01 2006 6.5 02-01 2006 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 5.5 7.0 08-01 2006 7.0 08-01 2006 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 6.0 7.5 02-01 2007 7.5 02-01 2007 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 6.5 8.0 08-01 2007 8.0 OS-01 2007 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 7.0 8.5 02-01 2008 8.5 02-01 2008 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 7.5 9.0 08-01 2008 9.0 OS-01 2008 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 8.0 9.5 02-01 2009 9.5 02-01 2009 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 8.5 10.0 08-01 2009 10.0 08-01 2009 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 9.0 10.5 02-01 2010 10.5 02-01 2010 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 9.5 11.0 08-01 2010 11.0 08-01 2010 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 10.0 11.5 02-01 2011 11.5 02-01 2011 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 10.5 12.0 08-01 2011 12.0 08-01 2011 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 11.0 12.5 02-0i 2012 12.5 02-01 2012 18,200 48,538 30,338 22,891 (2,346) 20,544 `1,145 11.5 13.0 08-01 2012 13.0 08-01 2012 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 12.0 13.5 02-01 13.5 02-01 2013 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 12.5 14.0 08-01 ~ 14.0 08-01 2013 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 13.0 14.5 02-01 2014 14.5 02-01 2014 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 13.5 15.0 08-01 2014 15.0 08-01 2014 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 14.0 15.5 02-01 2015 15.5 02-01 2015 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 14.5 16.0 08-01 2015 16.0 08-01 2015 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 15.0 16.5 02-01 2016 16.5 02-01 2016 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 15.5. 17.0 08-01 2016 17.0 08-01 2016 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 16.0 17.5 02-01 2017 17.5 02-01 2017 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 1.6.5 18.0 08-01 2017 18.0 08-01 2017 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 17.0 18.5 02-01 2018 18.5 02-01 2018 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 17.5 19.0 08-01 2018 19.0 OS-01 2018 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 18.0 19.5 02-01 2019 19.5 02-01 2019 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 18.5 20.0 08-01 2019 20.0 OS-01 2019 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 19.0 20.5 02-01 2020 20.5 02-01 2020 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 19.5 21.0 08-01 2020 21.0 OS-01 2020 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 20.0 21.5 02-01 2021 21.5 02-01 2021 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 20.5 22.0 08-01 2021 22.0 08-01 2021 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 21.0 22.5 02-01 2022 22.5 02-01 2022 18,200 48,538. 30,338 22,891 (2,346) 20,544 1,145 21.5 23.0 08-01 2022 23.0 08-01 2022 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 22.0 23.5 02-01 2023 23.5 02-01 2023 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 22.5 24.0 08-01 2023 24.0 08-01 2023 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 23.0 24.5 02-01 .2024 24.5 02-01 2024 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 23.5 25.0 08-01 2024 25.0 OS-01 2024 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 24.0 25.5 02-01 2025 25.5 02-01 2025 18,200 48,538 30,338 22,891 (2,346) 20,544 1,145 24.5 26.0 OS-01 2025 26.0 08-01 2025 18,200 48,538 30,338 22,891 2,346 20,544 1,145 25.0 26.5 02-01 2026 Totals 1,075,860 1.10,276 965,584 53,793 Present Values 481,134 49 316 431,818 Ehlers and Associates, Inc. p1~1,~a • U`J/UW`J`J Ehlers and Associates, Inc. CITY OF RICHFIELD, MINNESOTA TAX INCREMENT FINANCING DISTRICT -RICHFIELD REDISCOVERED T.LF. CASH FLOW ASSUMPTIONS Interest Rate: 6.000% Tax Extension Rate: 1.50904 Estimate Inflation Rate: p 0000° BASE VALUE INFORMATION Tax MV Per Unit # Units Market Value Capacity Various Parcels 65,000 28 1,820,000 18,200 Totat 1 g,p00 PROJECT VALUE INFORMATION Type of Tax Increment District: Housing Number of Units: 2g Class Rates: Single Family <$76k 1.0000% Single Family >$76k 1.6500% Estimated Market Value On all Projects: Estimated Total Market Value per Unit Estimated Tax Capacity Per Unit:. Estimated Tax Capacity Total: Estimated Taxes: Estimated Taxes Per Unit: Estimated-Tax Increment: Estimated Tax. Increment Per Unit: 3,780,000 (7 a yearforfouryears) 135,000 1.734 48,538 (7 a yearforfouryears) 73,246 2,616 .11,445 409 BUT /FOR ANALYSIS Current Market Value -Est. 1,820,000 New Market Value -Est. 3,780,000 Difference 1,960,000 Present Value of Tax Increment 481,134 i Difference 1,478,866 Value Likely to Occur W Rhout TIF is Less Than: 1 478 866 t'age t PIanl.wk4 APPENDIX D REDEVELOPMENT QUALIFICATIONS FOR THE RICHFIELD REDISCOVERED 1999 TAX INCREMENT FINANCING DISTRICT The HRA staff has provided the opportunity for property owners to allow access to the property in order to undertake an interior inspection. Each property has been reviewed to determine property substandardness in accordance with M.S., Section 469.174, Subd. 10. All findings are on file for review at the City of Richfield, Community Development Department. APPENDIX ~-~ a HOUSING AND REDEVELOPMENT AUTHORITY • HRA Letter No.Ss Agenda September 20, 1999 Issue Statement: Authorization of the First Amendment to the Contract for Private Redevelopment between the Housing and Redevelopment Authority and Richfield State Agency for the Urban Village Project (AKA Woodlake Centre). Background: Urban Village, now known as Woodlake Centre, is under construction. The Housing and Redevelopment Authority (HRA) 'approved the Contract in November 1998. The HRA and Richfield State Agency (RSA) were able to determine the amount of assistance that could be provided in February 1999. The amount of tax increment assistance approved by the HRA is $9.5 million. This assistance reimburses RSA for the cost of ramp construction and other public improvements and, to the extent possible with the balance, the cost of acquisition, relocation, and demolition of property within the project area. The HRA's financial consultant, Ehlers and Associates, and legal counsel, Kennedy and Graven, have subsequently worked with RSA and their lenders to prepare the specific form and content to the pay-as-you-go "Limited Revenue Tax Increment Note." The attached "First Amendment to the Contract for Private Redevelopment" reflects the • exact financing structure that was not known in February. The Amendment calls for issuance of a Tax Exempt Note in the amount of $5,000,000 to Marquette Capital Bank N.A. A taxable note would be issued to Richfield State Agency in the amount of $4,500,000. The amendment to the Contract eliminates wording in the original Contract for Private Development that would jeopardize the tax-exempt status of the note. Legal counsel will be available at the meeting to answer any questions. Jan Susee, representing RSA, will answer questions and provide a status report on project progress. The attachments provide a current letter from Richfield Bank on development progress, the construction schedule, and a summary of concerns expressed by residents that live south of the development. Recommended Motion: Adopt a resolution approving the First Amendment to the Contract for Private Redevelopment between the Housing and Redevelopment Authority and Richfield State Agency for the Urban Village Project (Woodlake Centre). Basis of Recommendation: 1. The amended Contract for Redevelopment and the form and content of the notes provide the greatest level of assurance to the lender that the HRA is ready to issue its obligations. Actual issuance is tied to the completion of construction (projected for 2000) and the timing of issuance of tax exempt debt acceptable under the City debt cap (also projected for 2000). 2. The issuance of a combination of tax exempt and taxable debt, secured with future tax increment on apay-as-you-go basis, maximizes the best lending rate that could be secured by RSA's from its lenders. 3. The amendment and notes have been finalized. 4. The project is on schedule. RSA has been very responsive to concerns expressed about the development as they have arisen. Alternative Recommendation: 1. Modify the agreements further. 2. Defer action on the agreements. However, RSA prefers an action now, which provides lender assurances of progress on both construction and contracts. Discussion/Decision Mode: The resolution authorizes the Acting Executive Director and Chair to take those actions necessary that follow. SLD:ds Attachments HRA RESOLUTION NO. RESOLUTION APPROVING FIRST AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT URBAN VILLAGE WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) and Richfield State Agency, Inc. ("Redeveloper") entered into a Contract for Private Redevelopment dated as of November 1998 ("Contract"), describing the parties' respective responsibilities in redevelopment of the property described in Exhibit A of the Contract; and WHEREAS, in the Contract, the HRA agreed to provide certain tax increment financing assistance to the Redeveloper in order to make the redevelopment of the Redevelopment Property financially feasible; and WHEREAS, in order to implement a program of financial assistance that will make the redevelopment financially feasible, it is necessary to modify and amend the Contract; and WHEREAS, the Redeveloper and the HRA staff and consultants have prepared and presented to the Board a proposed amendment to the Contract and have fully informed the Board of its contents; and WHEREAS, the' Board has reviewed the proposed First Amendment, and is satisfied as to its form and content. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The First Amendment is hereby approved. 2. The Chairperson and Acting Executive Director are hereby authorized to take all actions and do all things necessary to carry out this approval. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of September, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary FIRST AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made and entered into this day of , 1999, is by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and RICHFIELD STATE AGENCY, INC. a Minnesota corporation, (the "Redeveloper"). WHEREAS, the HRA and the Redeveloper entered into a Contract for' Private Redevelopment dated as of November 16, 1998 (the "Contract"), describing the parties' respective responsibilities in redevelopment of the property described in Exhibit A of the Contract and Schedule A of this Amendment ("Redevelopment Property"); and WHEREAS, in the Contract, the HRA agreed to provide certain tax increment financing assistance to the Redeveloper in order to make redevelopment of the Redevelopment Property financially feasible; and WHEREAS, in order to implement the HRA's financial assistance, the parties have determined a need to modify the Contract as described in this Amendment. 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: 1. Section 1.1 of the Contract. is amended to insert the following new or revised definitions: "Amendment" means this First Amendment to the Contract. "Notes" means, collectively, the Taxable Note and the Tax Exempt Note. "Taxable Note" means the Taxable Tax Increment Revenue Note, Series 2000B to be issued by the HRA in substantially the form described in the Taxable Note Resolution. "Taxable Note Resolution" means the resolution authorizing issuance of the Taxable Note, to be approved by the HRA in substantially the form attached as Schedule C to this Amendment. "Tax Exempt Note" means the Tax Increment Revenue Note, Series 2000A to be issued by the HRA substantially the form described in the Tax Exempt Note Resolution. "Tax Exempt Note Resolution" means the resolution authorizing issuance of the Tax Exempt Note, to be approved by the HRA in substantially the form attached as Schedule B to this Amendment. "Tax Increment District" or "'I'IF District" means the Urban Village Tax Increment Financing District. 2. In Section 1.2 of the Contract, the "Assessment Agreement" referred to in paragraph (d) is deleted, and the "Notes" referred to in paragraph (b) are replaced by Schedules B and C to this Amendment. 3. Sections 3.2(1) and 3.3(d) are deleted. 4. In Section 4.5, the second paragraph is amended to read as follows: 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 Delay 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. 5. In Article VI, a new Section 6.2. is added to read as follows: Section 6.2. Reconstruction. The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair, reconstruct and restore the Minimum i Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the net proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction and restoration shall be the property of the Redeveloper. 6. In Article VII, Section 7.1 is amended to read as follows: Section 7.1. In order to make development of the Minimum Improvements financially feasible, and to reimburse the Redeveloper for the costs of acquisition of the Redevelopment Property or portions thereof, the HRA shall issue the Tax Exempt Note in the maximum principal amount of $5,000,000, and the Taxable Note in the maximum principal amount of $4,500,000, all in accordance with the terms of this Section. (a) Tax Exempt Note. The HRA will issue and sell the Tax Exempt Note to Marquette Capital Bank, N.A, or such other purchaser designated by Redeveloper, in S accordance with the Tax Exempt Note Resolution. The Tax Exempt Note shall be payable solely from the revenues, mature on the dates, and bear interest at the rate or rates specified in the Tax Exempt Resolution substantially in the form attached as Schedule B to this Amendment. The HRA shall approve the Tax Exempt Note Resolution upon written SJB-167999 2 RC125-182 request by the Redeveloper, but no earlier than January 1, 2000. Delivery of the Note shall • be conditioned upon (i) receipt by the HRA of an investment letter from the purchaser in a form reasonably acceptable to the HRA, and (ii) there being no Event of Default under the Contract. The HRA will disburse proceeds of the Tax Exempt Note to the Redeveloper, net of costs of issuance, upon delivery to the HRA of written evidence satisfactory to the HRA that the cost incurred by the Redeveloper to acquire the Redevelopment Property is at least equal to the principal amount of the Tax Exempt Note. Such evidence shall include, at a minimum, copies of purchase agreements and certificates of real estate value. (b) Taxable Note. The HRA will issue and sell the Taxable Note to the Redeveloper, in accordance with the Taxable Note Resolution. The Taxable Note shall be payable solely from the revenues, mature on the dates, and bear interest at .the rate or rates specified in the Taxable Note Resolution substantially in the form attached as Schedule C to this Amendment. The HRA shall approve the Taxable Note Resolution upon written request by the Redeveloper and issuance of the Tax Exempt Note. The HRA and the Redeveloper agree that the consideration from the Redeveloper for the purchase of the Taxable Note shall consist of the Redeveloper's incurring the cost of acquisition of the Redevelopment Property in excess of the amount financed with proceeds of the Tax Exempt Note. Upon or before delivery of the Taxable Note, the Redeveloper shall have delivered to the HRA written evidence satisfactory to the HRA that the cost incurred by the Redeveloper to acquire the Redevelopment Property (and not financed with proceeds of the Tax Exempt Note) is at . least equal to the principal amount of the Taxable Note. Such evidence shall include, at a minimum, copies of purchase agreements and certificates of real estate value. (c) No Warranties. The Redeveloper understands and acknowledges that the HRA makes no representations or warranties regarding the amount of Available Tax Increment (as defined in the Notes), or that revenues pledged to the Note will be sufficient to pay the principal of and interest on the Notes. Any estimates of Tax Increment prepared by the HRA or its financial advisors in connection with the TIF District, the Contract and the Notes are for the benefit of the HRA, and are not intended as representations on which the Redeveloper or any purchaser of the Notes may rely. 7. Section 8.3 of the Contract is revised to read as follows: Section 8.3. Lender's Option to Cure Defaults. After any breach or event of default referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the HRA are concerned) have the right for a period of ninety (90) days, at the Holder's option, to cure or remedy such 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 or any other section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or i continue the construction or completion of the Minimum Improvements (beyond the extent necessary to conserve or protect such Improvements or construction already made) without first having expressly assumed the Redeveloper's obligations described in Section 10.2 hereof by written agreement reasonably satisfactory to the HRA to complete SJB-167999 3 RC125-182 the Minimum Improvements or the part thereof to which the lien or title of such holder relates, provided further, however, that the HRA will not unreasonably withhold its consent to any changes in the Minimum Improvements which aze requested by the Holder if the requested changes do not alter the basic design of the Minimum Improvements (it being understood that such consent shall in no way act to bind or influence the power of the City, in the exercise of its governmental authority not to approve any proposed changes or alterations to the Minimum Improvements.) Any such Holder who shall perform the Redeveloper's obligations under Section 4.6 hereof, relating to the Redevelopment Property or applicable part thereof, shall be entitled, upon written request made to the HRA, to a certification by the HRA to such effect in the manner provided in Section 4.8 of this Agreement. 8. Section 9.7 is revised to add a new paragraph (e) as follows: (e) Notwithstanding anything to the contrary in the Contract or this Amendment, the HRA shall have no right to enforce, and the Redeveloper shall have no obligation to take any actions or make any payments, under pazagraphs (a), (b) and (c) of this Section 9.7 unless and to the extent that the HRA shall have received an opinion of a nationally- recognized bond counsel selected by the HRA to the effect that the receipt by the HRA of such payment will not cause the interest on the Tax Exempt Note to become includable in gross income of the holder thereof for purposes of federal income taxation. 9. Section 10.1, pazagraph (g) is deleted. 10. The last pazagraph of Section 10.2 is revised to read as follow: Notwithstanding any provision in this Section to the contrary, it is understood that with respect to a default which relates to an Element, the HRA's remedies under this Agreement following conveyance of the Redevelopment Property to the Redeveloper, if prior to the Commencement of Construction of the Element, shall be limited to the return of title to the portion of the Redevelopment Property which contains the Element. Redeveloper agrees to reconvey such portion upon default and following failure to cure; and agrees that until the issuance of a Certificate of Completion for that Element, and without the consent of the HRA, the HRA's right to reconveyance its interest in the land reconveyed shall be free and cleaz of any liens, encumbrances or other interests. Notwithstanding anything to the contrary in this paragraph, the HRA shall have no right to enforce, and the Redeveloper shall have no obligation to take any actions or make any payments, under this paragraph unless and to the extent that the HRA shall have received an opinion of anationally-recognized bond counsel selected by the HRA to the effect that the receipt by the HRA of such payment will not cause the interest on the Tax Exempt Note to become includable in gross income of the holder thereof for purposes of federal income taxation. 11. Section 10.5(c) is deleted and replaced with the term "Intentionally Omitted." • SJB-167999 t~ RC125-182 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: Its Chair By: Its: Executive Director RICHFIELD STATE AGENCY, INC. By: Its: . STATE OF MINNESOTA ) SS COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1999, by and ,the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. Notary Public STATE OF MINNESOTA ) SS COUNTY OF ) The foregoing instrument was acknowledged before me this 1999, by ~ the Agency, a Minnesota corporation, on behalf of the corporation. Notary Public • day of , of Richfield State SJB-167999 5 RC125-182 SCHEDULE A Legal Description SJB-ib7999 A- j RC125-182 ~~ r • SJB-167999 RC125-182 SCHEDULE B Tax Exempt Note Resolution B-1 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $5,000,000 TAX INCREMENT REVENUE NOTE, SERIES 2000A. BE 1T RESOLVED BY the Board of Commissioners ("Board") of the Housing and Redevelopment Authority in and for the City of Richfield (the "Authority") as follows: Section 1. Authorization: Award of Sale. 1.01. Authorization. The Authority and City of Richfield ("City") have heretofore approved the establishment of the Urban Village Tax Increment Financing District (the "'TlF District") within the Richfield Redevelopment Project ("Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby fords and determines that it is in the best interests of the Authority that it issue and sell its $5,000,000 Tax Increment Revenue Note, Series 2000A (the "Note") for the purpose of financing certain public costs of the Project. 1.02. Issuance Sale, and Terms of the_Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with that certain Contract for Private Redevelopment between the Authority and Richfield State Agency, Inc. ("Redeveloper") dated November 16, 1998 as amended by a First Amendment thereto dated .1999 (the "Agreement"). The Note shall be sold to Marquette Capital Bank, N.A. (the "Owner") at a price of par. The Note shall be dated as of the date of delivery thereof, shall bear interest at the rate of 5.6% per annum to the earlier of maturity or prepayment, subject to adjustment as provided in the Note, and shall be payable in installments of principal on the dates ("Payment Dates") and in the amounts ("Scheduled Payments") set forth in Schedule A attached to the Note. The Note is not subject to prepayment or redemption before maturity except as otherwise provided in Section 4 of this Resolution. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount, interest rate and payment schedule adjusted as of the date of issue: • SJB-167999 RC125-182 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD No. R-1 $5,000,000 TAX INCREMENT REVENUE NOTE SERIES 2000A Date of Original Issue The Housing and Redevelopment Authority in and for the City of Richfield (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Marquette Capital Bank, N.A., its endorsees, successors and assigns (the "Holder"), solely from the sources and to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $5,000,000 or such lesser amount advanced herein under the Development Agreement hereinafter described, together with interest on the principal balance of this Note outstanding from time to time (the "Principal Balance") at the rate of interest hereinafter set forth. The principal of this Note is payable in installments on the dates (the "Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and in the amounts stated thereon (the "Scheduled Payments"). Interest accruing on the Principal Balance from the date of this Note, shall be paid on each August 1 and February 1, commencing 2001, to and including February 1, 2025 (the "Maturity Date"), when the entire Principal Balance and all accrued and unpaid interest shall be due and payable. The interest rate on this Note shall be 5.60% per annum from the date of original issue to and including 20_. The interest rate shall be reset as of 20_, 20 ,and 20_ (each a "Reset Date") to equal the [Moody's Municipal AAA Bond Curve for five-year obligations as most recently published prior to each such Reset Date] plus 150 basis points or, if such index is no longer published, then Any payments on this Note shall be applied first to accrued interest and then to the Principal Balance. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Holder and mailed to the Holder at its postal address within the United States which shall be designated from tune to time by the Holder. • SIB-167999 RC125-182 2 The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority to provide funds to defray certain public redevelopment costs of a project pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and is Issued pursuant to resolution of the Authority approved , 2000 ("Resolution") and Minnesota Statutes, Section 469.178. THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE REVENUES PLEDGED PURSUANT TO THE RESOLUTION. The principal and interest due on any Payment Date are payable solely from and only to the extent that the Authority shall have received as of such Payment Date "Available Tax Increment" together with any other amounts pledged to the Debt Service Fund under the Resolution, the terms of which are incorporated as if fully set forth herein. For the purpose of this Note, "Available Tax Increment" means seventy-five percent (75%) of the tax increment attributable to the portion of the Urban Village Tax Increment Financing District ("T'IF District") described in Schedule B that is received by the Authority from Hennepin County in the six- month period before a Payment Date. The Principal Balance of this Note shall be prepaid on each Reset Date ,without premium or penalty, from and to the extent of any amounts deposited in the Prepayment Fund, as described in the Resolution Any prepayments of principal shall be applied to the last maturing installments of principal on Schedule A without affecting the amount or timing of any remaining Scheduled Payment This Note shall not otherwise be subject to prepayment or redemption. This Note shall not be payable from or constitute a chazge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments and other funds pledged to the payment of the Note under the Resolution, and then only to the extent and in the manner specified in the Resolution. The Holder shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other public body, and neither the Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield; nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, this Note shall be transferable upon the books of the Authority kept for that purposes at the principal office of the Registraz, by the Owner hereof in person or by such owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the owner. Upon such SJB-167999 xclas-lsa 3 transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate pnnclpal amount, bearing interest at the .same rate and maturing on the same dates. The Note shall be transferred or assigned only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser of an investment letter substantially in the form of Exhibit C hereto. The Boazd of Commissioners has designated the Note as a "qualified tax exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the Code) relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar yeaz of issue. TT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Boazd of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield has caused this Note to be executed with the manual signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above. Housing and Redevelopment Authority in and for the City of Richfield Executive Director Chair REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Registration Registered Owner Marquette Capital Bank, N.A. • Signature of City Finance Manager SJB-167999 Rc12s-1sa 4 Date of Authentication: Note Registrar's Authentication Certificate This is one of the Notes described in the within mentioned Resolution. Note Registrar By Section 3. Terms, Execution and Delivery. Authorized Signature 3.01. Denomination, Pa meat. The Note shall be issued as a single typewritten note numbered R-1 in the denomination of the original principal amount of the Note. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Manager to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall be transferred -only to an "accredited SJB-167999 RC125-182 $ investor" within the meaning of Regulation D of the Securities and Exchange • Commission and only upon execution and delivery by the purchaser to the Registrar of an investment letter substantially in the form of Exhibit C hereto. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Chazges. For every transfer or exchange of the Note, the Registrar may impose a chazge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registraz of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registraz of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has akeady matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Prepazation and Delivery. The Note shall be prepared under the direction of the Executive Director of the. Authority and shall be executed on behalf of the Authority by the signatures of the Chair and the Executive Director, provided that said signatures may be printed, engraved, or lithographed facsimiles thereof. In case any officer whose signature, or a facsimile of SJB-167999 RC125-182 6 whose signature, shall appear on the Note shall cease to be such officer before the delivery of the . Note, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such offer had remained in office until delivery. Notwithstanding such execution, the Note shall not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. The executed certificate of authentication on each Note shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Note has been so executed and authenticated, it shall be delivered by the Executive Director to the purchaser thereof upon payment of the purchase price, and the purchaser shall not be obligated to see to the application of the purchase price. Section 4. Security Provisions. 4.01. Creation of Funds' Priori of Payments. There are hereby created special funds designated as the "Project Fund," the "Debt Service Fund," the "Reserve Fund," and the "Prepayment Fund," to be held and administered by the Authority separate from other funds or accounts of the Authority. The Authority hereby pledges Available Tax Increment (as defined in the Note) to the following funds or uses in the following order of priority: First: to the Debt Service Fund in the amount necessary to pay the Scheduled Payment together with accrued interest due on the Note in the succeeding year commencing August 2; Second to the Reserve Fund in the amount necessary to bring the balance therein to the Reserve Requirement (hereinafter defined); Third to the registrar for the Taxable Tax Increment Revenue Note, Series ZOOOB (the "Series 2000B Note"), for deposit in the debt service fund established in the resolution approving issuance of the Series 2000B Note; and Fourth to the Prepayment Fund. 4.02: Project Fund. The Authority appropriates to the Project Fund proceeds of the Note in the amount of $ .Moneys in the Project Fund shall be used to pay public costs of the Project in accordance with the terms of the Agreement. Upon completion and payment of all public costs financed with the proceeds of the Note deposited in the Project Fund, any balance remaining in the Project Fund shall be credited and paid to the Debt Service Fund hereinafter created. Interests earnings on amounts in the Project Fund will be credited to the Project Fund. 4.03. Debt Service Fund. The Authority appropriates to the Debt Service Fund proceeds of the Note in the amount of $ as capitalized interest payable through Februaryl, 20 .The Debt Service Fund together with all funds deposited therein pursuant to this Resolution aze hereby pledged to the payment of principal of and interest on the Note and shall be used for no other purpose. To the extent that on any Payment Date the Authority is unable to pay the foil Scheduled Payment and accrued interest due because of insufficient revenues on hand in the Debt Service Fund after making the deposits required under Sections 4.01 and 4.04 hereof, such deficiency shall be deferred and paid on the next Payment Date on which the Authority has SJB-167999 RC125-182 7 received Available Tax Increment (after making the deposit required under Section 4.01 second ) • in excess of the amount needed to pay the principal and interest due on that Payment Date. Any Available Tax Increment remaining in the Debt Service Fund shall be transferred to the Authority's account for the TIF District upon the payment of all principal and interest to be paid with respect to the Note. Interest earnings on amounts in the Debt Service Fund will be credited in the same manner as Available Tax Increment. 4.04. Reserve Fund. The Authority appropriates to the Reserve Fund proceeds of the Note in the amount of $ ,which amount is the lesser of: {i) the maximum principal and interest due on the Note in any succeeding one year period commencing on August 2 or (ii) 125°!0 of the average annual debt service payable on the Note in the succeeding one year periods commencing on August 2 or (iii) ten percent of the proceeds of the Note {such lesser amount being referred to as the "Reserve Requirement"). If on any Payment Date the amount on deposit in the Debt Service Fund is insufficient to pay the principal and interest due on such date, the Finance Manager shall transfer from the Reserve Fund to the Debt Service Fund an amount equal to such deficiency. In the determining the balance on hand in the Reserve Fund for purposes of this Section, investments shall be valued at their fair market value as of the date of such valuation, which shall be at least annually. Interest earnings on amounts in the Reserve Fund will be credited in the same manner as Available Tax Increment. Amounts in the Reserve Fund shall be applied, together with amounts in the Prepayment-Fund and the Debt Service Fund, to the final Scheduled Payment on the Note. 4.05. Prepayment Fund. There is hereby created a special fund designated as the "Prepayment Fund" to be held and administered by the Authority. Amounts in the prepayment fund • will be applied on each Reset Date (as defined in the Note) to prepay in part, without .premium or penalty, the outstanding principal balance of the Note. Any such prepayment will be applied to the last maturing installments of principal on Schedule A attached to the Note without. affecting: the amount or timing of any remaining Scheduled Payment. Interest earnings on amounts in the Prepayment Fund will be credited in the same manner as Available Tax Increment. 4.06. Additional Obli ag bons. While the Note is outstanding, the Authority shall not pledge or permit the pledge of all or any portion of the Available Tax Increment to the payment of principal of or interest on any obligations of the Authority or City other than the Note except (i) the subordinate .pledge of Available Tax Increment to the Series 2000B Note, and (ii) any pledge approved in writing by the Holder (as defined in the Note). 4.07. Covenants Re~ardin~ TIF District and Agreement. The Authority covenants for the benefit of the Holder that while the Note is outstanding (a) it will not take any action to remove all or any portion of the property described in Schedule A attached to the Note from the TIF District or alter or impair the collection of Available Tax Increment including without lunitation any modification of the TIF District in such a manner that would materially affect the amount or timing of receipt by the Authority of Available Tax Increment, and • SJB-167999 RC125-182 g • (b) it will enforce the Agreement to the extent consistent with the covenants in Section 6 hereof, except to the extent of any Redeveloper obligations that have no material bearing on the collection of Available Tax Increment. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and mazketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Tax Covenant. 6.01. The Authority covenants and agrees with the holders from time to time of the Note that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Note to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as . presently existing or as hereafter amended and made applicable to the Note. 6.02. The Authority will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Note under Section 103 of the Code, including without limitation requirements relating to temporary periods for .investments, limitations on amounts invested at a yield greater than the yield on the Note, and the rebate of excess investment earnings to the United States. 6.03. The Authority further covenants not to use the proceeds of the Note or to cause or permit them or any of them to be used, or cause the Note to be paid or secured, in such a manner as to cause the Note to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. ]:n order to qualify the Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Note is not a "private activity bond" as defined in Section 141 of the Code; (b) the Authority hereby designates the Note as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code; • SJB-167999 RC125-182 9 (c) the reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the Authority) during calendar year 2000 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2000 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. The Authority will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Continuing Disclosure. The continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") do not apply to the Notes, because the offering is exempt from such requirements under Section 15c2-12(d)(1)(i). Consequently, the Issuer will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Note. Section 8. Effective Date. This resolution shall take effect and be in force from and after its approval. • SJB-167999 RC125-182 10 Adopted this day of , 2000. Chair ATTEST: Executive Director C7 • SJB-167999 xcizs-isa 11 S iry • SCHEDULE C Taxable Note Resolution • SJB-167999 C-1 RC125-182 HOUSING AND REDEVELOPMENT AUTHORITY • IN AND FOR THE CITY OF RICHFIELD RESOLUTION NO. RESOLUTION AWARDING THE SALE. OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $ TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2000B BE TI' RESOLVED BY the Board of Commissioners ("Board") of the Housing and Redevelopment Authority in and for the City of Richfield (the "Authority') as follows: Section 1. Authorization: Award of Sale. 1.01. Authorization. The Authority and City of Richfield ("City') have heretofore approved the establishment of the Urban Village Tax Increment Financing District (the "TIF District") within the Richfield Redevelopment Project ("Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and • sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby fords and determines that it is in the best interests of the Authority that it issue and sell its $ Taxable Tax Increment Revenue Note, Series 2000B (the "Note") for the purpose of financing certain public costs of the Project. 1.02. Issuance Sale. and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with that certain Contract for Private Redevelopment between the Authority and Richfield State Agency, Inc. ("Redeveloper") dated November 16, 1998 as amended by a First Amendment thereto dated , 1999 (the "Agreement'. The Note shall be sold to the Redeveloper (the "Owner"), inconsideration for the Redeveloper's acquisition of certain Redevelopment Property (as defined in the Agreement) at a cost at least equal to the principal amount of the Note. The Note shall be dated as of the date of delivery thereof, shall bear interest at the rate of % per annum to the earlier of maturity or prepayment, subject to adjustment as provided in the Note, and shall be payable in installments of principal on the dates ("Payment Dates") and in the amounts ("Scheduled Payments") set forth in Schedule A attached to the Note. 1.03. Prepayment. The Note is subject to prepayment at the option of the Authority in whole or in part on any date, with a premium equal to: 103% of the principal amount prepaid through , 20 ; 102% of the principal amount prepaid through , 20 101% of the principal amount prepaid through , 20 , SJB-167999 RC125-182 and without premium thereafter. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount, interest rate and payment schedule adjusted as of the date of issue: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD No. R-1 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2000B Date of Original Issue The Housing and Redevelopment Authority in and for the City of Richfield (the "Authority"), hereby acknowledges itself to be indebted and,-for value received, promises to pay to the order of Richfield State Agency, Inc., its. endorsees, successors and assigns (the "Holder"), solely from the sources and to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $ or such lesser amount advanced herein under the Development Agreement hereinafter described, together with interest on the principal balance of this Note outstanding from time to time (the "Principal Balance") at the rate of interest hereinafter set forth. The principal of this Note is payable in installments on the dates (the "Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and in the amounts stated thereon (the "Scheduled Payments"). Interest accruing on the Principal Balance from the date of this Note, shall be paid on each August 1 and February 1, commencing August 1, 20_, to and including February 1, 2025 (the "Maturity Date"). Unpaid interest accruing from the date of this Note shall be added to principal on a semiannual basis on each August 1 and February 1 until February 1 20_. The interest rate on this Note shall be per annum from the date of original issue to and including 20_. The interest rate shall be reset as of 20 20 ,and 20_ (each a "Reset Date") to equal the [ ]plus [ 150] [ 140 ]basis points or, if such index is no longer published, then Any payments on this Note shall be applied first to accrued interest and then to the Principal Balance. SJB-167999 itC125-182 2 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 Holder and mailed to the Holder at its postal address within the United States which shall be designated from time to time by the Holder. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority to provide funds to defray certain public redevelopment costs of a project pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and is issued pursuant to resolution of the Authority approved , 2000 ("Resolution") and Minnesota Statutes, Section 469.178. THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE REVENUES PLEDGED PURSUANT TO THE RESOLUTION. The principal and interest due on any Payment Date are payable solely from and only to the extent that the Authority shall have received as of such Payment Date "Available Tax Increment" together with any other amounts pledged to the Debt Service Fund under the Resolution, the terms of which are incorporated as if fully set forth herein. For the purpose of this Note, "Available Tax Increment" .means seventy-five percent (75%) of the tax increment attributable to the portion of the Urban Village Tax Increment Financing District ("TIF District") described in Schedule B that is received by the Authority from Hennepin County in the six- month period before a Payment Date, subject to the prior pledge of such tax increment to the Authority's. $5,000,000 Tax increment Revenue Note, Series 2000A ("Series 2000A Note"). The obligations of the Issuer to pay any Scheduled Amount on this Note shall not be deemed to be in default in the event Available Tax Increment is not sufficient to pay the principal and interest due on this Note on any Payment Date. The obligation of the Authority to pay principal of an interest on this Note shall terminate on the Maturity Date, without regard to any amounts that remain unpaid. The Note is subject to prepayment at the option of the Authority in whole or in part on any date, with a premium equal to: 103% of the principal amount prepaid through , 20 ; 102% of the principal amount prepaid through , 20 ; 101% of the principal amount prepaid through , 20 ; and without premium thereafter. Upon payment in full of the Series 2000A Note, the Principal Balance of this Note shall be prepaid on each Reset Date, without premium or penalty, from and to the extent of any amounts deposited in the Prepayment Fund, as described in the Resolution. Any prepayments of principal shall be applied to the last maturing installments of principal on Schedule A without affecting the amount or timing of any remaining Scheduled Payment SJB-167999 xcias-isa 3 This Note shall not be payable from or constitute a charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments and other funds pledged to the payment of the Note under the Resolution, and then only to the extent and in the manner specified in the Resolution. The Holder shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other public body, and neither the Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield; nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, this Note shall be transferable upon the books of the Authority kept for that purposes at the principal office of the Registrar, by the Owner hereof in person or by such owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the owner. Upon such transfer or exchange and the payment by the .Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. The Note shall be transferred or assigned only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser of an investment letter substantially in the form of Exhibit C hereto. TT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield has caused this Note to be executed with the manual signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above. Executive Director • Housing and Redevelopment Authority in and for the City of Richfield Chair SJB-167999 Rcl~.s-lsa 4 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Registration Registered Owner Marquette Capital Bank, N.A. Signature of City Finance Manager Date of Authentication: Note Registraz's Authentication Certificate This is one of the Notes described in the within mentioned Resolution. • By Note Registrar Authorized Signature Section 3. Terms Execution and Delivery. 3.01. Denomination, Payment. The Note shall be issued as a single typewritten note numbered R-1 in the denomination of the original principal amount of the Note. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates• Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Manager to perform the functions of registraz, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: SJB-167999 RC125-182 5 (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount alid maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall be transferred only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser to the Registrar of an investment letter substantially in the form of Exhibit C hereto. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registraz for transfer, the Registrar may refuse to transfer the same until it is satisfied that • the endorsement on such Note or separate instrument of transfer is legally authorized. The Registraz shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may. treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and dischazge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Chazges. For every transfer or exchange of the Note, the Registrar may impose a chazge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental chazge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registraz in connection • therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the SJB-167999 RC125-182 6 ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director of the Authority and shall be executed on behalf of the Authority by the signatures of the Chair and the Executive Director, provided that said signatures may be printed, engraved, or lithographed facsimiles thereof. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such offer had remained in office until delivery. Notwithstanding such execution, the Note shall not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. The executed certificate. of authentication on each Note shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Note has been so executed and authenticated, it shall be delivered by the Executive Director to the purchaser thereof upon payment of the purchase price, and the purchaser shall not be obligated to see to the application of the purchase price. Section 4. Securit~Provisions. • 4.01. Creation of Funds; PrioritY,of Payments. There are hereby created special funds designated as the "Debt Service Fund" and the "Prepayment Fund," to be held and administered by the Authority separate from other funds or accounts of the Authority. The Authority hereby pledges Available Tax Increment (as defined in the Note) to the following funds or uses in the following order of priority: First to the Debt Service Fund in the amount necessary to pay the Scheduled Payment due on the Note in the succeeding year commencing August 2, provided that such pledge is subordinate in every respect to pledge of Available Tax Increment to the Authority's $5,000,000 Tax Increment Revenue Note, Series 2000A ("Series 2000A Note"); and Second, after payment in full of the principal of an interest on the Series 2000A Note, to the Prepayment Fund. 4.02. Debt Service Fund. The Debt Service Fund together with all funds deposited therein pursuant to this Resolution are hereby pledged to the payment of principal of and interest on the Note and shall be used for no other purpose. To the extent that on any Payment Date the Authority is unable to pay a full Scheduled Payment and accrued interest due because of insufficient revenues on hand in the Debt Service Fund after making the deposits required under Section 4.01 hereof, such deficiency shall be deferred and paid on the next Payment Date on which the Authority has received Available Tax Increment in excess of the amount needed to pay the Scheduled Payment on that Payment Date. Any Available Tax Increment remaining in the Debt Service Fund shall be transferred to the Authority's account for the TIF District upon the payment SJB-167999 RC125-182 7 of all principal and interest to be paid with respect to the Note. Interest earnings on amounts in the Debt Service Fund will be credited in the same manner as Available Tax Increment. 4.03. Prepayment Fund. There is hereby created a special fund designated as the "Prepayment Fund" to be held and administered by the Authority. Amounts in the prepayment fund will be applied on each Reset Date (as defined in the Note) to prepay in part, without premium or penalty, the outstanding principal balance of the Note. Any such prepayment will be applied to the last maturing installments of principal on Schedule A attached to the Note without affecting the amount or timing of any remaining Scheduled Payment. Interest earnings on amounts in the Prepayment Fund will be credited in the same manner as Available Tax Increment. 4.06. Additional Obli ag bons. While the Note is outstanding, the Authority shall not pledge or permit the pledge of all or any portion of the Available Tax Increment to the payment of principal of or interest on .any obligations of the Authority or City other than the Note except any pledge approved in writing by the Holder (as defined in the Note). 4.07. Covenants Regarding TIF District and Agreement. The Authority covenants for the benefit of the Holder that while the Note is outstanding (a) it will not take any action to remove all or any portion of the property described in Schedule A attached to the Note from the TIF District or alter or impair the collection of Available Tax Increment including without limitation any modification of the TIF District in such a manner that would materially affect the amount or timing of receipt by . the Authority of Available Tax Increment, and (b) it will enforce the Agreement except to the extent of any Redeveloper obligations that have no material bearing on the collection of Available Tax Increment. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Continuing. Disclosure. The continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") do not apply to the Notes, because the offering is exempt from such requirements under Section i5c2-12(d)(1)(i). Consequently, the Issuer will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Note. Section 7. Effective Date. This resolution shall take effect and be in force from and after its • approval. SJB-167999 RC125-182 g t Adopted this day of , 2000. Chair ATTEST: Executive Director • L SJB-167999 RC125-182 662 Li~u~t.t .~<F~tf ~utTe • Ri~:t~f"iei.u, M1l~ ;.5~}2S i~,i:', -y,;-3-Ii~t~ G~ ~~ • September 1999 Dear Friends: AN UPDATE ON WOODLAKE CENTRE On behalf of Richfield Bank and the holding company, Richfield State Agenc}~, Inc., ~~~e're excited about the new development taking place at 66`h Street and Lyndale Avenue. Many customers have seen the beginning stages of our progress and ha~~e asked questions: We are experiencing the rebirth of downtown Richfield and our renewed commitment to friends, customers, and employees of the Richfield community. This communication describes the new Woodlake Centre development. We hope it will provide valuable information and assist you in visiting the bank over the coming months. There are six components of Woodlake Centre, four of which are under construction at the present time. Improved Parking Ramp: Currently under construction, the ramp will be located immediately adjacent and east of the. existing bank building. Covered accommodations for approximately 650 vehicles ~~ill be offered within the 6-story structure. Partial use of the ramp will begin in late 1999, with the entire ramp scheduled for completion in February of 2000. Premier Apartment Living: " • An apartment complex is presently under construction between Grand and Pleasant Avenues. The project, known as "The Oaks on Pleasant," will contain 138 upscale apartments and t~~o- level rental townhomes. All apartment units will feature fireplaces andfull-sized washers and dryers. The Oaks' amenities include underground parking, indoor pool, whirlpool; sauna, exercise facilities, concierge services, billiards room, and many other services that will set a new standard for apartment living in Richfield. The rental agent, Metes & Bounds Management Company, can be reached for showings or rental brochures at (612) 862-7600. The apartment units are scheduled for occupancyMay 1, 2000. McDonald's: The NlcDonaid's restaurant has been a tenant ofthe bank for nearl}' 12 years and is now being relocated to a freestanding building at 67`h and Lyndale. Dave and Eliisa Reinert, ~~ho currently operate the McDonald's restaurant, are great supporters of the City of Richfield and are looking forward to providing quality food from their new easy-access location. An early November 1999 completion date:is-r-argeted. ~._, .- ,_ New Dnve-Up Banking: ~_ . :~... -: .. ..: _ .. A ne}v drive-up banking facil~t~ }s 1?eing coz~stracted immediately to the south of the existing bank building. The tree drive-up willhave state ofthe-art video monitors for-added security of _ . custtimer~transactions. The drive ti~~anlang;fae~ryis+e~edtol~y~r'a~imt~te October 2999. .. - _. z , _. -~ - .. _ ~ ~: - - ; w~~ .. ; ~ ~r ,w (over) _ . _ r. _ ~_ Member FDIC AN UPDATE ON WOODLAKE CENTRE (CONTINUED) • Assisted Living Facility: Construction of a 78-unit assisted living facilit}~ will begin late September 1999. The. facility will be located immediately south of the parking ramp and will be ready for occupancy in August of 2000. The assisted living facility will satisfi~ the communih~'s need for a residence which provides additional care services for individuals desiring. to live in Richfield. Lang Nelson Company will manage the facility. Interested renters should call (612) 920-5338. Restaurant/Commercial In December 1999, work will commence on a 100,000 square foot restaurant, retail and office space addition at the site of the existing McDonald's parkinglot (66`h and Lvndale). The addition will connect the bank building and the Woodlake Medical Clinic. Perhaps the most exciting recent news is attaining agreements with three fine food service organizations: Dunn Bros. Coffee, D. Brian's Deli, and Houlihans restaurant. Each of these fine establishments will enhance the hometown feeling for which Richfield has always been known. We believe you will appreciate the quality atmosphere they bring to Woodlake Centre. Also, to provide the feel of summer year-round,. the commercial building will feature a winter garden and athree-story atrium with skylights. The garden/atrium area will provide space for indoor concerts and events. Inquiries regarding space rental in the commercial and retail areas should be directed to Gary Glockner and Jeff Hart with Collier Towle at (612) 341-4444. Residents of Richfield will enjoy the ambiance of their hometown community from the new urban park integrated within the site. The park will have a sculpture garden honoring the founders of Richfield Bank, William and Garnett Kirchner. We are certain you will appreciate and enjoy the atmosphere ofthis unique setting. As with any progress, there are growing pains. As many of you have already experienced, the construction is causing parking and traffic problems for our valued employees, customers, and tenants. We request your cooperation in following the customer parking directional signage placed around the premises. We will make certain you are provided reasonable parking near the main office and clinic throughout the construction process. We also im~ite you to use any of our other six bank locations. We can only begin to convey the enthusiasm everyone at Richfield Bank, the City of Richfield, and our tenants feel toward Woodlake Centre. We hope you, too, share the vision and the anticipation. We respectfully ask for your patience during the construction period. We want you to know Richfield Bank's employees and tenants will do everything possible to make this transition as smooth as possible. It is a great time of progress for all of us and your continued support is sincerely appreciated. Yours very truly, /~%~~ Martin V. Chorzempa Chief Executive Officer RICHFIELD BANK Steven L. Kirchner President RICHFIELD STATE AGENCY, INC. • Woodlake Centre Schedule (as of August 1999) McDonald's Construction: Projected Occupancy: Parking Ramg Construction: Projected Occupancy: Commercial/Restaurant Construction: Projected Occupancy: Multi-Family Housing Construction: Projected Occupancy: Assisted Living • Construction: Projected Occupancy: Common Site Areas: Construction: H:/CDADMIN/REAP/UVSCHEDULE August -November 1999 November 1999 April 1999 -March 2000 Partial- November 1999 Full -March 2000 September 1999 -November 2000 December 2000 April 1999 -March 2000 April 2000 September 1999 -November 2000 December 2000 September 1999 -June 2001 • Neighborhood Survey -Urban Village Construction Activity Comments & Responses • Is Pleasant Avenue going to be blocked off permanently? The lack of direct access to the HUB area is inconvenient. Pleasant Avenue will be closed off permanently to vehicular traffic. The streets are being closed in response to neighborhood concerns about traffic impacts and speeds. There will be pedestrian access from the neighborhood through the new development. There were no streetlights in the neighborhood for several days. The power pole that supplied power to the street lights had to be moved to accommodate construction .and demolition activities. Unfortunately, the contractor did not plan enough in advance to arrange for the new pole to be in place before the old pole had to be removed. The City did not anticipate this disruption and had to rely on the contractor to restore services as quickly as possible. We apologize for the inconvenience. Additional disruptions of this type are not anticipated. There is parking by bank employees and customers on Harriet Avenue during construction. The City contacted the developer, Richfield State Agency (RSA), about the parking issue. RSA made plans for employees to park at K-Mart during construction, but not all employees and customers are following this plan. RSA has notified its employees not to use Harriet Avenue for temporary parking. The parking appears to have gotten better. If the parking gets worse, we encourage you to contact Jan Susee, the developer representative, at 861-8531. If the developer is unresponsive, contact . Bruce Nordquist at City Hall at 861-9777. If excessive parking on the street causes safety problems, the City's Transportation Engineer, Tom Foley, can assess the situation and consider possible solutions. One solution, until the ramp is completed, could be for the neighborhood to develop a petition for "no parking 8:00 a.m. to 4:00 p.m." signs or something similar: This solution would also impact resident parking. Tom can be reached at 861-9791. Note: A portion of the parking ramp may be available for employee parking as early as this Fall. The pile driving was very loud and it occurred early in the morning. The pile driving for the ramp is finished. Additional pile driving for the commercial building will begin around November 1. The City's noise ordinance prohibits loud activities between 10:00 p.m. and 7:00 a.m. If you hear loud, persistent noise from the construction site during these hours, contact Public Safety immediately to report it (861-9800 or 911). There have been a large number of trucks using Harriet Avenue and driving at high speeds. Two projects caused an unusual number of trucks to use Harriet Avenue. The bank donated several trees from the project area to Little Bob's Park. Trucks moved the trees to the park and then City. crews worked in the park adding mulch and watering the trees over a period of several days. City crews also installed a light in the park in response to a request from the neighborhood. This project took the City crew a couple of days to complete. We don't anticipate any upcoming projects that August 6, 1999 Neighborhood Survey -.Urban Village Construction Activity Comments & Responses would require trucks to use Harriet Avenue. If you notice an unusual number of City trucks using the .' street and/or driving too fast, please contact the Public Works Department immediately (861-9175). The Harriet Avenue sidewalk and 67th Street intersection is also being evaluated to determine the best pedestrian/vehicle strategies. Snow removal will be a problem, especially for the Harriet/Grand Avenue alley. The permanent curbing may be installed before this winter. If not, the Public Works Department will work with the developer and builder to accommodate snow removal. in the area. A road closed sign is located on the boulevard making it difficult to maintain the grass. The sign has been moved to the street. There should still be adequate room for cars to maneuver around the sign. If the signs create problems, residents should contact Derick Anderson at City Hall, 861-9798, and we'll evaluate other strategies for notifying drivers of the road closure. How can RSA homestead the single family homes they bought after they destroyed them? According to the Hennepin County Assessor, a property's value and homestead status is determined on January 2 of each year for the taxes payable the following year. The value and classification of the properties purchased by RSA were established on January 2, 1999 for taxes payable in 2000. Many of the properties were not purchased until after January 2, 1999 and continue to carry the homestead rate of the owner occupant for taxes payable in 2000. RSA should cover any damages to my property caused by construction activities. Residents should contact Jan Susee, the developer representative, at 861-8526 if problems arise. Keep the neighborhood updated on present and future construction plans. The City communicates development information to residents through a variety of sources including Your Ci the Sun Current, and the City web page (www.richfield.ci.mn.us). You can also contact Bruce Nordquist at City Hall, 861-9777, if you have specific questions about the Urban Village construction project.. An estimated construction timetable has been enclosed for your information. August 6, 1999