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06-15-98 agenda
CITY OF RICHFIELD MONDAY, JUNE 15, 1998 SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY/CITY COUNCIL/ PLANNING COMMISSION/COMMUNITY SERVICES COMMISSION MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 7 P.M. AGENDA CALL TO ORDER 1. CONDUCT A STUDY SESSION REGARDING THE STATUS OF RICHFIELD LAKE AREA HRA LETTER NO. 32 ADJOURNMENT REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS IMMEDIATELY FOLLOWS SPECIAL MEETING AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF MAY 18, 1998 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF REPORT FROM CSM ON STATUS OF INTERCHANGE WEST FEASIBILITY STUDY AND AUTHORIZATION TO FORMULATE DEVELOPER'S AGREEMENT HRA LETTER NO. 33 3. CONSIDERATION OF RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN HRA AND GRAMERCY PARK COOPERATIVE OF RICHFIELD; GRAMERCY TIF DISTRICT 0 HRA LETTER NO. 34 4. CONSIDERATION OF RESOLUTION AUTHORIZING CONDEMNATION AND QUICK TAKE FOR 6724 LYNDALE AVENUE, SUBSURFACE RIGHTS BENEATH ALLEY ADJACENT TO 6700 LYNDALE AVENUE, AND DRAINAGE EASEMENT FOR GRAMERCY SENIOR COOPERATIVE PROJECT HRA LETTER NO. 35 5. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF 7332 QUEEN AVENUE TO VARIETY HOMES, 7204 FIRST AVENUE TO STEVEN MARLIN GRANT HOMES, AND 7645 NICOLLET AVENUE TO MAHONEY CONSTRUCTION FOR RESIDENTIAL DEVELOPMENT HRA LETTER NO. 36 6. CONSIDERATION OF AUTHORIZATION OF RICHFIELD REDISCOVERED APARTMENT REMODELING PROGRAM HRA LETTER NO. 37 7. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 6824 PARK AVENUE UNDER RICHFIELD REDISCOVERED PROGRAM HRA LETTER NO. 38 8. CONSIDERATION OF EXPENDITURE OF 1998 BOND PROCEEDS FOR • CONSTRUCTION OF NEW 1-35W BRIDGE AT 66TH STREET HRA LETTER NO. 39 9. CONSIDERATION OF RESOLUTION AUTHORIZING SUBMISSION OF CERTIFICATE OF CORPORATE RESOLUTION WITH MINNESOTA HOUSING FINANCE AGENCY FOR RENTAL ASSISTANCE FOR FAMILY STABILIZATION PROGRAM HRA LETTER NO. 40 10. CONSIDERATION OF EXECUTION OF CONTRACT WITH MINNESOTA HOUSING FINANCE AGENCY FOR RICHFIELD HRA TO MONITOR 4(d) PROPERTY TAX CLASSIFICATION PROGRAM HRA LETTER NO. 41 11. EXECUTIVE DIRECTOR REPORT 12. 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 861-9702. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 41 Agenda June 15, 1998 Issue Statement: Approval of the execution of a contract with Minnesota Housing Finance Agency (MHFA) for Richfield HRA to monitor the 4(d) Property Tax Classification program. Background: The property tax reform process during the 1997 state legislative session created a new property tax classification for apartment owners that rent to lower income households. During 1998, MHFA has invited owners of rental properties to apply for the 4(d) Property Tax Classification Program if they are qualified. Units that are certified for taxation under class 4(d) are to be taxed at a class rate of one percent. To qualify, owners of rental property must pledge to meet the following requirements on their rental unit(s). The owner must: Rent the unit to households with incomes equal to or less than 60 percent of median income adjusted for family size. Some examples follow: Household Size 60% of Median Annual Income 1 Person $25,560 2 Persons $29,160 3 Persons $32,820 4 Persons $36,480 • Rent the unit for less than or equal to 30 percent of the income limit adjusted for unit size. Two bedroom units must rent at or below $774 per month. One bedroom units must rent at or below $644 per month. • Ensure the property passes Richfield's apartment inspection. • Offer Section 8 certificate/voucher holders at least 20% of the pledged units in each building. • Execute a five-year rent restriction agreement and record it with the county. During the five-year period, the rent cannot exceed the rent calculation based on 30 percent of the income limit adjusted for unit size. Approximately 1,090 rental units in Richfield have been pledged by owners to receive the 4(d) property tax classification for 1998. The 4(d) property tax class rate will be used to determine tax in the 1998 assessment year and will first impact property taxes payable in 1999. The owner must certify that all classification requirements have been met. If the requirements are violated, the owner could lose the 4(d) property tax status and be required to pay back property tax. • • C In order to ensure that the owners are meeting all of the classification requirements, MHFA has sought local organizations to provide monitoring and inspection services. HRA's have typically been the organizations of choice given they already provide rent qualifying and inspection services. Staff will be required to make site inspections to review files on 25 percent of the properties and 20 percent of the units in those properties as chosen by MHFA each year. The City of Richfield currently performs an inspection related to the annual licensing of rental properties and this inspection satisfies 4(d) requirements. HRA's current rent assistance staff of three would handle the monitoring of the 4(d) property tax classified units without diminishing the quality of service to Section 8 clients and applicants. A monitoring fee of $15 per unit per year is provided by MHFA. This per unit fee will cover all administrative expense and would potentially increase rent assistance program funding by $16,000 per year. Recommended Motion: Approve the execution of a contract with MHFA for monitoring and arranging for the inspection of units for apartment owners to quality for a 4(d) property tax classification. Basis of Recommendation: 1. Apartment owners renting to qualifying classification called 4(d). households benefit from a new property tax 2. MHFA does not have the capacity to administer the program directly and sees local agencies, particularly HRA's to administer the program. 3. The Richfield HRA has been designated by MHFA as a qualifying local administrator for the program. 4. Current staff will be able to monitor inspections, income, and rents. The HRA receives $15 per unit, approximately $16,350 annually in additional revenue for the rent assistance program. Alternative Recommendation: 1. Decline participating in the program. 2. Request the City Council to designate an alternative local agency to administer the program. Discussion/Decision Mode: The contract with MHFA will be finalized upon HRA action. Respectf Ily submitted, James . Prosser Executive Director JDP:ds HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 40 Agenda June 15, 1998 Issue Statement: Adoption of a resolution authorizing the submission of a "Certificate of Corporate Resolution" with the Minnesota Housing Finance Agency (MHFA) for the Rental Assistance for Family Stabilization program (RAFS). Background: At the January HRA meeting, the Council approved making application to the MHFA for 20 units of rental assistance for family stabilization vouchers (RAFS). The application was submitted, and Richfield HRA was awarded it's request. RAFS is a 36-month transitional rental assistance program funded by the State of Minnesota. Established in 1992, the RAFS program provides rental assistance of $250 per month to qualified families. A focus of welfare reform has been providing opportunities for recipients to become economically self sufficient. Barriers to self sufficiency are housing, daycare and transportation costs. There are approximately 3,000 Minnesota Family Investment • Program (MFIP) clients currently living in the southwestern suburban Hennepin County It is anticipated that Richfield HTC numbers will increase to 500 by June 30, 1999. Of the 161 MFIP clients currently in the program, approximately 30 clients live in Richfield. The majority of them are not receiving any housing assistance. Some are on a waiting list for Section 8 but will have a three to five year wait. area. MFIP replaces the program formerly known as Aid to Families with Dependent Children (AFDC). MAP has many of the same components of the AFDC program, with a built in self sufficiency component. Approximately 161 MAP clients are participating in a self sufficiency program with Richfield Hennepin Technical College (HTC). Established in 1978, HTC is located at 7145 Harriet Avenue and is a division of the State College System. HTC offers job training and placement services to low-income residents. In 1988, they began administration of PATHS/STRIDE, now known as MFIP. Current staff can administer the 20 RAFS vouchers without diminishing the quality of service to 315 Section 8 clients and 300 applicants. The HRA would receive $40 per unit per month in administrative fees for each family that participates in RAFS. This per unit fee will cover all administrative costs; providing approximately $9,600 per year in additional revenues to the HRH's rent assistance program. 0 Recommended Motion: fa Adopt the resolution authorizing the submission of a "Certificate of Corporate Resolution" with the MHFA, which authorized the execution of a contract with the MHFA for the RAFS program. Basis of Recommendation: 1. RAFS is a program that will benefit Richfield residents who are trying to achieve self sufficiency. 2. Research in the last year by the Minnesota Department of Human Services indicates that MFIP clients that receive Section 8 or RAFS housing assistance are more stable and successful and accomplish their goal to achieve self sufficiency more quickly. 3. Current staff would be able to administer the program, and the HRA would receive $40 monthly per unit per month in administrative fees for each family that participates in RAFS. Alternative Recommendation: Decline entering into a contract with MHFA for RAFS vouchers. However, Richfield residents would lose the opportunity to utilize these state resources. Discussion/Decision Mode: • The contract will be finalized with MHFA following action. Respectfully submitted, Jame . Prosser Executive Director JDP:ds 0 HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SUBMISSION OF A "CERTIFICATE OF CORPORATE RESOLUTION" OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD BE IT RESOLVED THAT, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota hereby authorizes Thomas Harms, Chair, Housing and Redevelopment Authority, Michael Sandahl, Secretary, Housing and Redevelopment Authority, Joan Helmberger, Vice Chair, Housing and Redevelopment Authority, James Prosser, Executive Director, Housing and Redevelopment Authority, and Steven Devich, Treasurer, Housing and Redevelopment Authority to sign or countersign checks, drafts, contract documents, to certify vouchers or any and all other documents on behalf of the Housing and Redevelopment Authority in and for the City of Richfield, and in accordance with its bylaws, which may be required by the Minnesota Housing Finance Agency for administering the Rental Assistance for Family Stabilization Program. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of June, 1998. • Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 39 Agenda June 15, 1998 Issue Statement: Consider approval of the expenditure of 1988 bond proceeds for the construction of the new 1-35W bridge at 66th Street. Background: At its May 11 meeting, the City Council approved a bridge design which will require financial participation by the City and HRA. That design known as Alternate A was prepared by the Richfield members of the 1-35W Aesthetic Design Committee with the help of a landscape architect. In addition to the alternate which was selected, there was another alternate from the committee and one from MnDOT. The second committee alternate would also require City and HRA participation; the MnDOT alternate would not. A drawing of Alternate A is attached. Two funding sources, MSA funds and uncommitted 1988 bond proceeds, have been identified. The amount of MSA funds which can be used is limited to $35,000 based on a per project formula established by MnDOT. Based on the most recent cost estimates and design refinements, the amount of HRA participation would likely approximate $221,000. However, it would be prudent to establish the not to exceed amount at $250,000 in case the actual bid comes in slightly higher. The balance of the 1988 bond proceeds from which the $250,000 would be drawn is approximately $840,000. Refer to the attached cost and funding summary for more details. The expenditure of bond proceeds for public improvements is appropriate under the Richfield Redevelopment Project Area Plan. However a modification of the ILN TIF Plan will be necessary. The purpose of the modification will be to identify a budget for the expenditure of the bond proceeds. The funding of the bridge would be included in that budget. Recommended Motion: Authorize the set aside of $250,000 from 1988 bond proceeds for the 1-35W bridge at 66th Street; direct staff to prepare a plan modification for the ILN TIF Plan, which will establish a budget for the proceeds and make it possible to expend them. Basis of Recommendation: 1. The reconstruction of the bridge presents a rare opportunity for the City to create a unique public works project of landmark quality at a critical gateway location. 2. On May 11, the City Council selected a design alternative which requires financial participation by the City and the HRA. 3. Adequate funding is available in the form of 1988 bond proceeds. 4. Public improvements are an appropriate use of such funds. Alternative Recommendation: 1. Do not authorize the use of bond proceeds for the bridge. 2. Defer action until a later date. Discussion/Decision Mode: The bridge funds can not be expended until City Council approval of a plan modification. The tentative timetable for the plan modification calls for presentation to the HRA on August 17. HRA action on August 17 would permit the Planning Commission to review the plan on August 25, and public hearing and City Council consideration on September 28, 1998. MnDOT has indicated that it would need the funds by February 1999. Respectfu y submitted, Jams . Prosser Exec a Director JDP:ds 0 E BRIDGE COST AND FUNDING SUMMARY MnDOT Estimate For Alternate A Enhancements $508,400 MnDOT Participation (7% of total cost of a basic bridge. The $112,000 basic bridge is estimated to cost $1.6 million.) City Share For Alternate A Enhancements $306,4fl0 Identified Cost Savings - no planters above pedestrian portals $15,400 - two, rather than three-tiered planters along abutments $80,000 - six, rather than seven columns in each of the three piers under the bridge $20,000 - City share of lighting cost reduced from $50,000 to $25,000 $25,000 Total Identified Cost Savings $140,400 Adjusted City Share $256,000 Funding Sources - MSA Funds (maximum allowable for under MnDOT formula) $35,000 - 1988 Bond Proceeds $221,000 Total Funding $256x000 0 ?-? ('? I ?= I I I eQ ? p d F Ulm E 0 iu. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 38 Agenda June 15, 1998 Issue Statement: Adoption of a resolution authorizing the purchase of 6824 Park Avenue under the Richfield Rediscovered Program. Background: The property at 6824 Park Avenue consists of an 882 square foot, one bedroom house and a single car detached garage. The layout and structural construction of the house do not allow for extensive remodeling nor an addition. Inspections staff identified a multitude of repairs that are required for health and safety, not including needed updates to fixtures, flooring and walls. The Department of Housing and Urban Development (HUD) owns the property and has been unable to sell it. The property is on a wide lot. A purchase price of $54,000 has been negotiated with HUD, significantly below its current assessed market value. Recommended Motion: Adopt the resolution authorizing: 1. The purchase of the property at 6824 Park Avenue for $54,000. 02. The Executive Director and HRA Chairperson to execute Purchase Agreements and other documents to effectuate the purchases. Basis of Recommendation: 1. The property meets program requirements for acquisition. 2. Funding for Richfield Rediscovered acquisition is available. 3. HUD has voluntarily indicated an interest in selling the vacant property to the HRA. 4. Purchase has been negotiated significantly below the assessor's market value. Alternative Recommendation: Do not authorize acquisition. Discussion/Decision Mode: Agreements to purchase are ready to be prepared in final form. Respectfully submitted, Jam . Prosser • Executive Director JDP:ds HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6824 PARK 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 properties being described as follows: 6824 Park Avenue: That part of Lot 1 lying south of North 150 feet thereof and North 1.3 feet of Lot 4, Portland Avenue Acres Addition; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property meets all program requirements for acquisition; and WHEREAS, the HRA has negotiated a sale price below the estimated market value and received a 10 percent HUD discount; and • WHEREAS, funds have been provided by the HRA and are available for acquisition. NOW, THEREFORE, BE IT RESOLVED, by the Richfield Housing and Redevelopment Authority: 1. The purchase price for 6824 Park Avenue is approved at $54,000. 2. That the Chairperson and Executive Director are authorized to execute a Purchase Agreement and other documents to effectuate purchase for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of June, 1998. Thomas E. Harms, Chair • ATTEST: Michael Sandahl, Secretary HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 37 Agenda June 15, 1998 Issue Statement: Authorization of the Richfield Rediscovered Apartment Remodeling Program. Background: The Metropolitan Council has awarded a Livable Communities Grant to the Richfield HRA to facilitate an apartment remodeling program. The amount of the grant is $575,000. Richfield, and other fully developed communities in the region with aging apartments, demonstrate the types of resources required to initiate change and improvement. Richfield was selected because of the HRH's success with single family programs through Richfield Rediscovered. The apartment remodeling program has several new and expended elements: • Remodeling and Design Advisor Services. Dave Schaffer and Paul Bruegger are assisting apartment owners, and developing remodeling fact sheets for apartments. • Finance Advisor Services. The Center for Energy and Environment (Center) will assist small to medium sized apartment owners seeking mortgage and equity . products to help leverage resources for remodeling. The Center is a lender that specializes in apartment financing and manages apartment programs for Minneapolis neighborhoods and remodeling programs of the City of Fridley. A summary of scope of service is provided as an attachment. • Apartment Remodeling Deferred Loan. Patterned after the HRA's successful Transformation Loan program, a zero interest, no monthly payment, as long as you own your apartment building loan of up to $2,500 per unit is being offered with an owner match of $2,500. The $400,000 in loan funds are provided by the Livable Communities Grant and are used on a case by case basis to: • update exteriors: front entrances, windows, doors • improve landscaping and expand green space • improve parking, and pedestrian and traffic circulation • improve lighting, appearance, security • keep the apartments transit (bus) friendly • Apartment Case Studies. At Hampton Place, 77th and Chicago Avenue, a $75,000 grant will finance the addition of a,playground, security fencing, added green space, community space, and an analysis of space needs for transit and parking to better serve this 220 unit development. At 76th and Oliver/Penn, a $75,000 grant will help • redevelop a vacant corner with four new apartment units on Oliver, add gateway features on Penn, and develop joint parking, landscaping and exterior improvements that will allow five separate owners of 35 units of housing to work together to update and develop an apartment neighborhood. The program will also encourage owner participation in the "This Old Apartment" property tax incentive program, facilitate major investor mortgage revenue bond financed rehabilitation of larger apartment communities as the opportunities arise, and facilitate the development of new apartments which may be undertaken in redevelopment areas. To coordinate the complete package of services, an Apartment Remodeling Coordinator, Dennis Daniels, has been identified to act as consultant. Dennis Daniels was the Bloomington HRA Administrator for 14 years and Minneapolis Community Development Agency Downtown Development Director for eight years. The complete scope of services for his contract is summarized as an attachment. The cost of his services is estimated at $20,000, which has been allocated from the grant funds and HRA funds as well. The remaining elements of the new program are ongoing marketing and the contract relationship with the Metropolitan Council for the receipt of the Livable Communities funds. Recommended Motion: to Authorize a (1) contract with the Metropolitan Council for a $575,000 Apartment Remodeling Program, Livable Communities Grant; (2) professional services agreement with the Center for Energy and Environment; (3) professional services agreement with Dennis Daniels; and (4) the apartment remodeling program scope of services as outlined herein. Basis of Recommendation: 1. A comprehensive program is needed to facilitate change and make improvements to the existing apartment housing stock. 2. The remodeling program compliments the HRA's Community Apartment Program's attention on management practices. The remodeling program focuses on the physical repairs and improvements needed in apartment communities. 3. A $575,000 Livable Community Grant provides the resources to demonstrate a program of repairs and improvements. 4. The remodeling, design, financial, marketing, and program coordinating resources have been identified to facilitate a comprehensive effort. 5. Deferred loan program and case study approaches have been developed to serve both apartment owners on scattered sites and specific apartment communities with specific challenges. Alternative Recommendation: 1. Decline participation and program funding. 2. Modify the program elements. Discussion/Decision Mode: Contracts would be finalized upon HRA action. Respectfully submitted, James . Prosser Execut a Director JDP:ds 0 1/2 APARTMENT REMODELING PROGRAM SCOPE OF SERVICES Program Features: NEW AND IMPROVED APARTMENTS 1. Technical assistance from the Richfield Remodeling Advisor, Dave Schaffer. Leave a message for Dave at 861-9772. 2. Design assistance by referral to architects and architectural draft persons from the Remodeling Advisor. 3. Financial advice from Center for Energy and Environment, 335-5858. 4. "This Old Apartment" legislation that allows owners who remodel buildings that are at least 30 years old to exclude the value of structural improvement for five years. The increased valuations will be phased in over the following five years. The total cost of the qualifying improvements must exceed $5,000 per unit, and runs through January 1, 1999. 5. Apartment Remodeling Deferred Loan. A zero interest, no monthly payment, as long as you own your apartment building, loan of up to $2,500 per unit with an owner match of $2,500. Designed to be used with services 1 through 4 listed above, it provides additional resources that focus on the exterior of the property. The funds, on a case by case basis are used to: • update exteriors to provide a more modern appearance such as front entrances, windows, and roof lines. • encourage adjacent building owners to work together to create a sense of neighborhood where a series of isolated buildings may exist. • improve landscaping and expands green space. • improve parking, pedestrian and traffic circulation. • improve exterior lighting for appearance and security. • keep the apartments transit (bus) friendly. 0 Apartment Remodeling Program 2/2 NEW AND IMPROVED APARTMENTS Case Study: 76th Street and Oliver The Challenge In a half block area near 76th and Penn, the following exists: • right-of-way improvements have left a remainder vacant parcel that is marginally maintained. • five separate owners exist for 40 units of housing. • general transit systems exist and informal "park and ride" at an adjacent church parking lot and corner bus stops exist but no shelter or transit emphasis is provided. • small owner resources are insufficient to facilitate change and apartments remain in the condition and serving the market place of the 1960's. The Opportunity • a consortium of owners agree to improvements as partners. • coordinated parking, landscaping, new units (from townhouse to a 6 to 8 unit apartment) are possible. Coordination of appearance improves the concept of neighborhood. • new units, one and two bedroom choices, provide models and examples to emulate through remodeling. • resources, incentives and property tax benefits support investment. • a blighted corner becomes a gateway neighborhood of apartments. • the apartments become a well maintain neighborhood to the community and apartment residents. • transit becomes a feature of the neighborhood. Case Study: Hampton Place, 77th Street and Chicago Avenue The Challenge: • the apartment complex (approximately 221 units in 13 buildings) is densely developed and prone to crime. One homicide occurred in July, 1997. • the complex lacked good management practices in tenant selection. • the complex is isolated between a major arterial street and 1-494 and has no neighborhood or direct access to transit. The Opportunity: • create more green space and play areas for children, reducing off-street parking. • create community spaces for positive informal gathering and organized programming; park programs are brought in, drop-in center is created. • provide resources in exchange for good management. • create a neighborhood out of an apartment community that some would prefer to see removed entirely. • develop a transit information center and improved access to transit service. MAR-19-1998 10:34 CTR FOR ENERGY & ENVIRON 6123355888 P.05/07 DRAFT - EXHIBIT B 98 Center for Energy and Environment 0 Scope of Services Duties and Res onsibilities of Richfield Housing and Redevelopment Authori : 1. Develop program guidelines and supervise implementation. 2. Market program to rental property owners. 3. Provide Remodeling Advisor services. 4. Manage the program. Monitor and reconcile all reports from CEE. 5. Service loans in accordance with industry standards. Duties and Responsibilities of CEE: 1. Assist the HRA market the program to the rental property owners. 2. Run a credit report for all applicants. Verify applicant is current on all mortgage (contract for deed) payments and property taxes. 3. Verify that applicant's Loan to Value ratio, when combined with the new loan, does not exceed 110%. 4. Review description of proposed project and verify that it is an eligible improvement under program guidelines. 5. Approve or deny application based on program guidelines. CEE's decision shall be final. 6. Originate and close all loans. 7. File appropriate mortgage documents for all loans as required. Filing fees for mortgage will be paid by the borrower at time of closing. 8. Origination fees will be paid from the Program's Administrative Budget. 9. Disburse proceeds to contractor upon completion of work and receipt of 1) final invoice, 2) final inspection report, 3) lien waiver, 4) completion certificate, 5) evidence that permits are abated. 10. Manage loan fund and provide the HRA with monthly reports which include: e Beginning Balance of fund • Any additional funds received from the HRA • # of applications received for month e # of Originations Richfield Rediscovered Apartment Remodeling Program Page B-I Center for Energy and Environment 3117198 MAR-19-1998 10:35 CTR FOR ENERGY & ENVIRON 6123355888 P.06i07 DRAFT - EXHIBIT B-98 • • # of defaults (including a listing of these loans) • Total value of Originations • Names and addresses of loan recipients • Origination, Bank, and Inspection fees assessed to Program Budget • Loan Principal Repayments • Ending balance of fund 11. Submit other reports and information as may be required by the HRA. 12. Act as fiscal agent for the program on behalf of the HRA. • CEE shall establish a separate interest bearing bank account ("separate account") to originate loans and receive repayments of loan principal. Interest earned on bank balances and repayments of loan principal ("program income's shall accrue to the benefit of the HRA and shall be used to finance program operating expenses or additional program expenses within the parameters of the Program guidelines. Loan originations and fees owed to CEE for financing and related services will first be paid from original program funds. When the original program funds are exhausted, loan origination, and fees owed to CEE shall be funded from program income. ICJ Richfield Rediscovered Apartment Remodeling Program Page 8-2 Center for Energy and Environment 3117/98 • MAR-19-1998 10:35 CTR FOR ENERGY & ENVIRON 6123355888 P.07/07 DRAFT - EXHIBIT C98 Richfield Rediscovered Apartment Remodeling Program Budget 1998 Allocations for Loan Program 1998 Program Capital Matching Deferred Administrative Funds (All "New") Origination: Loans Installation Verifications • $380,600 Total $381,900 $ 15,600 $ 2,500 Total $18,100 Grand Total $400,000 1. Loan funds will be allocated to rental property owners. 2. Program Capital cannot be diverted to Administrative Funds unless approved through a contract amendment. 3. Administrative services performed by CEE in accordance with the following: Loan Origination: with CEE financing $250.00 per Loan Loan Origination: without CEE financing $350.00 per Loan Installation Verifications $ 50.00 per inspection Richfield Rediscovered Apartment Remodeling Program - Exhibit C99 Center for Energy and Environment Page C-1 3/17/98 TOTAL P.07 Scope of Service Apartment Remodeling Coordinator Daniels shall perform the following services as they apply to the Richfield Rediscovered Apartment Remodeling Program. 1. Work with staff in start-up, marketing, and on-going administration of program. 2. Be available to attend Community Apartment Program functions, Remodeling Fair, and other promotional events. 3. Meet with apartment owners, business and community groups as requested to promote and implement program. 4. Generate ownership interest through contacts. 5. Assist with information services that keep participating owners fully informed. 6. Meet with apartment owners on site to assist with the following: a. Property evaluation. b. Identify and discuss needs, wants, and design considerations. c. Explain program procedures, advisor services, and lending information including loan requirements. 7. Provide routine follow-up, monitoring and reporting of progress; arranging a data and pictorial record of performance and results that meets program funding criteria; particularly the performance reporting of the Livable Communities funds. 8. Be available to assist apartment owners through the various program stages leading to remodeling. This may include additional design and technical assistance, contractor selection, and the securing of a loan. All arranged through program advisors or by meeting directly with advisors. 9. Submit monthly reports as requested, both written and oral, to HRA documenting measurable objectives which include: a. Number of owner calls made and received, (and the number of units affected by the contact). b. Number of site visits. c. Number of referrals to remodeling advisor and results. d. Number of referrals to finance advisor and results. e. Record of marketing results. f. The amount of resources committed/expended by the lender. 10. Explore other housing programs that support development for rehabilitation of multi- unit housing; for example "rollover" housing, and mortgage revenue bond financed rehabilitation. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 36 Agenda June 15, 1998 Issue Statement: Public hearing and authorization to sell 7332 Queen Avenue to Variety Homes, 7204 First Avenue to Steven Marlin Grant Homes, and 7645 Nicollet Avenue to Mahoney Construction for residential development. Background: The HRA acquired the properties at 7332 Queen and 7204 First Avenues under the Richfield Rediscovered Program. It is proposed that the HRA sell 7332 Queen Avenue to Variety Homes for the development of a new single family home in accordance with a development agreement. The new home will be a three bedroom, two bath home with a minimum value of $140,000. The property at 7204 First Avenue is proposed to be sold to Steven Marlin Grant Homes (SMGH) for the construction of a single family home valued at least at $150,000 to be made part of the Parade of Homes fall showcase. The property at 7645 Nicollet Avenue was acquired by the City as part of the 77th Street project. A developer, Mahoney Construction, has proposed a twin home for the site. Each unit would have approximately 1,200 feet of finished living space, and an attached double car garage. A conditional use permit would be required for owner- occupied twin homes. The Planning Commission will consider the request on June 23, 1998. Each unit will be priced at approximately $120,000. Mahoney Construction has successfully built a number of single family homes and townhomes in the City of Bloomington. Bloomington HRA staff (Housing Specialist) and Inspections' staff have spoken well of the builder and indicate that he is responsible and timely. Recommended Motion: Following a public hearing, adopt the resolution authorizing the sale of 7332 Queen Avenue to Variety Homes, 7204 First Avenue to Steven Marlin Grant Homes, and 7645 Nicollet Avenue to Mahoney Construction. Basis of Recommendation: 1. The builders have provided evidence of experience, capability and financial security. Mahoney Construction is building under the program for the first time. 2. The HRA acquired 7332 Queen and 7204 First Avenues for the Richfield Rediscovered Program. 3. The HRA acquired 7645 Nicollet Avenue from the City after the 77th Street project was completed. 4. The terms of the development agreements have been negotiated and are in conformance with program guidelines. 5. Notice of public hearing on sale of the properties was published on June 3, 1998 in the Sun-Current. Alternative Recommendation: Do not proceed with the development agreement with the recommended builders/developers and direct staff to find other buyers. Discussion/Decision Mode: Closings would occur in June or July with construction starting soon afterwards. The site clearance work will be completed shortly on Queen and First Avenues; the site on Nicollet Avenue has been cleared. Respectfully submitted, Ja D. Prosser Exec tive Director 0 JDP:ds ?J 0 HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 7332 QUEEN AVENUE TO VARIETY HOMES, 7204 FIRST AVENUE TO STEVEN MARLIN GRANT HOMES, AND 7645 NICOLLET AVENUE TO MAHONEY CONSTRUCTION WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Richfield Rediscovered Program adopted by the HRA, said real property being described as follows: Address Legal Description 7332 Queen Avenue Lot 6, Block 2 Penn Lake Terrace First Addition 7204 First Avenue Lot 2, Block 3 Wooddale Second Addition 7645 Nicollet Avenue The northerly 8 feet of Lot 9 and all of Lot 10 in Block 4, A.G. Bogen Company's Nicollet Avenue Addition WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the purchaser of the described property has been identified and a development agreement negotiated as follows: Address Sale Price Performance Security Builder 7332 Queen Avenue $35,000 $35,000 Variety Homes 7204 First Avenue $33,000 $33,000 Steven Marlin Grant Homes 7645 Nicollet Avenue $36,800 $36,800 Mahoney Construction WHEREAS, a public hearing has been held after proper public notice. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield: 1. A public hearing has been held and 7332 Queen Avenue is authorized to be sold for $35,000 to Variety Homes, 7204 First Avenue is authorized to be sold for $33,000 to Steven Marlin Grant Homes and 7645 Nicollet Avenue is authorized to be sold for $36,800 to Mahoney Construction. 2. The Chairperson and Executive Director are authorized to execute a Contract for Private Development and other agreements as required to effectuate the sales to Variety Homes, Steven Marlin Grant Homes, and Mahoney Construction. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of June, 1998. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • is Q z in 4` 40 N 1 ?-r f=, t) I.?J c r ?. bl a? a? ?I • E • I i I I I ------------- 1 I 1 I I I e 4 a Z Q l J ¢ a i - w? `? W• ?y e 1 i W IL 4 - x 1b F IL Wo Is IV ¢ Ilo p.i e ? o ?? 'a•o x n Y J' fit IL WI e j t e ?? W 1 a a-.sr '•0i o-.rt DI-.91 S-.C al-AI !-.L DI•DI •ml an-: ora-t 'CI'O Ji 19 m oam _ r r-? ?, `? eo o-c ? Q 'a'o J: av ?? 190 9®R X00 `° R _ g u o e T O-AI 1 J-A ? A-.91 Y ? II ? p M o-Al a o- 1_= d J f A-.LI p z N y } Yn ? x Q ?- tR aao a.r ,ml _ r ; Olfi-: •?1 SIR= OI-.fl - DI•DI !-.Z DI-AI O•AI a•.f: i Q. • 0 r? L._J Rear View Front View 7204 1 st Avenue i L- i I Left View Right View • • First Floor r'1 u Second Floor 4) Q C 4 0 ?J N CO L O '*m W c a a ?1 I} Z lit- d I ?i i? I i ?I - ? I c?-y ? ai. y at -= ilU 0 9 ? IOU aN 21 Lam. I T t 'e, ??xn ,?. ?? 9 { K Poo= s lot d.S. ?.? 1 ? HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 35 Agenda June 15, 1998 Issue Statement: Adoption of a resolution authorizing condemnation and quick take for 6724 Lyndale Avenue, subsurface rights beneath the alley adjacent to 6700 Lyndale Avenue, and a drainage easement for the Gramercy Senior Cooperative Project. Background: Gramercy Corporation is undertaking land assembly for the senior cooperative housing project at Lakeshore Drive and Lyndale Avenue. The land included in this site area is the VFW Post 555 property at 710 Lakeshore Drive; the Hules property at 6724 Lyndale Avenue which is occupied by a tenant, Labor Ready temporary employment services; and the subsurface area under the north half of the alley immediately south of 6700 Lyndale Avenue. Gramercy has negotiated a purchase agreement with the VFW. They have also attempted to negotiate the purchase of 6724 Lyndale Avenue. However, Mr. Hules, the owner, has a tenant in the property. Under the lease, the tenant's occupancy can only be terminated through condemnation. Therefore, in order to obtain title to the property in a timely manner, Gramercy is requesting the HRA to acquire the property through quick-take condemnation, as this parcel is a critical component of Phase I. In order to meet their needs for inside parking, Gramercy needs to be able to develop a portion of the space beneath the alley which borders the VFW site to the north. The alley was installed by the City after easements were provided by the adjoining property owners. Finally, the VFW property is subject to a drainage easement which is no longer necessary. Condemnation will provide the needed site area in a timely manner. Coincidentally, negotiations will continue. Recommended Motion: Adopt the attached condemnation and quick take resolution for 6724 Lyndale Avenue, the alley subsurface rights adjacent to 6700 Lyndale Avenue and the drainage easement for 710 Lake Shore Drive. Basis of Recommendation: 1. Gramercy has negotiated a purchase with VFW Post 5555 for their property at 710 Lakeshore Drive and has requested that the HRA undertake certain condemnation activities for site assembly for the balance of the site area. 2. HRA staff has been in contact with the property owners of 6724 Lyndale Avenue and 6700 Lyndale Avenue regarding the project and the timeliness of acquiring the subject properties. 0 3. The subject properties considered for condemnation action are critical to the project. 4. The HRA has the authority to condemn the property necessary to complete site assembly for the project. 5. Gramercy Corporation will be paying all costs associated with the proposed actions. Alternative Recommendation: 1. Delay consideration of the resolution. 2. Direct staff to continue to negotiations with the property owners. Discussion/Decision Mode: Condemnation would require 90 days for processing which would effectively provide the Gramercy Corporation with site possession in September 1998. A delay in property acquisition could result in a delay in the start of construction. Respectfully submitted, James . rosser Executi Director 9 JDP:ds U 0 HRA RESOLUTION NO. RESOLUTION AUTHORIZING EMINENT DOMAIN PROCEEDINGS TO ACQUIRE CERTAIN REAL PROPERTY WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") is a housing and redevelopment authority duly constituted and organized under law, with all of the powers enumerated in Minnesota Statutes, Sections 469.001 to 469.047 (the "Act"); and WHEREAS, the HRA is authorized to develop and carry out redevelopment plans and redevelopment projects, as those terms are respectively defined in Minnesota Statutes, Section 469.002, subdivisions 16 and 14; and WHEREAS, the HRA adopted a redevelopment plan (the "Redevelopment Plan") for the Richfield Redevelopment Project Area on May 17, 1993, and said plan was approved -by' the Richfield City Council on June 14, 1993; and WHEREAS, the HRA adopted a tax increment financing plan (the "TIF Plan") for the area in the City of Richfield generally known as The Gramercy Redevelopment Tax Increment Finance District within the Richfield Redevelopment Project Area (the "Project Area") which has • been found by the City Planning Commission to be consistent with the City's Comprehensive Plan, and which is proposed to be approved by the City Council on June 22, 1998; and WHEREAS, the Plans, as modified, contemplate the acquisition of certain real property interests (the "Property") which are located in the Project Area and which are more particularly described in Exhibit A. attached hereto and incorporated herein; and WHEREAS, the HRA has authorized the execution of a contract for private redevelop- ment (the "Contract") of land lying within the Project Area (including, but not limited to the Property); and WHEREAS, in order to meet anticipated construction deadlines for the redevelopment project contemplated by the Contract, it is necessary for the HRA to acquire title to and possession of the Property by the earliest date permitted in accordance with Minn. Stat. § 117.042. NOW, THEREFORE, BE IT RESOLVED by The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. Subject to the City Council approval of the TIF Plan to include the Property, it is necessary to acquire the real estate interests which are described in Exhibit A to this resolution ("Property") in order for the HRA to carry out the purposes of the Plans, as modified, and the Act, to eliminate and prevent the development or spread of conditions of blight found to exist by the City and the HRA and to assure full utilization of property which is vacant, unused, underused, and inappropriately used. RJL144626 1 RC125-184 2. Subject to the City Council approval of the TIF Plan to include the Property, acquisition of the Property by eminent domain, in the manner provided by Minnesota Statutes, Chapter 117, is deemed to be necessary and for a public purpose and is hereby authorized. 3. Subject to the City Council approval of the TIF Plan to include the Property, the HRA deems it necessary for the reasons set forth in the Plans, as modified, and in order to meet anticipated construction schedules, to proceed without delay under Minnesota Statutes, Section 117.042, to acquire title to and possession of the Property prior to the filing of a final report of commissioners. 4. Subject to the City Council approval of the TIF Plan to include the Property, the HRA's attorney and staff are authorized and directed to commence eminent domain proceedings to acquire the Property, pursuant to Minnesota Statutes, Section 117.042 and to pay to the owner(s) or into court, a sum of money to secure compensation to the owners of the Property, which amount shall be equal to petitioner's approved appraisal of value for each of the respective portions of the Property, as determined by staff. 5. The Property to be acquired is described on the attached Exhibit A. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of June, 1998. • ATTEST: Michael Sandahl, Secretary E Thomas E. Harms, Chairperson RJL144626 2 RC125-184 0 EXHIBIT A (Legal Descriptions of Property Interests to Be Acquired) Parcel One: (P.I.D. No. 27-028-24-32-0010) Property Address: 6724 Lyndale Avenue South Legal Description of Property and Description of Taking: Taking in fee simple absolute. That part of Lot 23, Block 3, Fairwood Shores, according to the plat thereof on file in the office of the Registrar of Titles; Hennepin County, Minnesota, described as follows: Beginning at a point on the Southerly line of said Lot 23, at a point 75.00 feet West, measured along the South line of said Lot 23, from the southeast corner thereof; thence East along the South line of said Lot 23, a distance of 75.00 feet to the Southeast corner thereof; thence Northeasterly along the East line of said Lot 23, a distance of 44.00 feet; thence Northwesterly a distance of 64.40 feet to a point distant 78.40 feet Northeasterly from the point of beginning; thence is Southwesterly a distance of 78.40 feet to the point of beginning. Together with all rights in and to any and all streets and alleys adjacent thereto, vacated or to be vacated, and together with any and all appurtenant easements. 9 Parcel Two: (P.I.D. No. 27-028-24-32-0009) Property Address: 710 Lake Shore Drive Legal Description of Property Interests to be Acquired: Easement in favor of Northern States Power Company burdening Parcel Two for the benefit of Parcel One, Running North-South Over Lot 23, Granted Via Doc. #790921. Description of Taking: Legal Description (Per Doc. #790921) Extinguishment of an easement encumbering a 10.00 foot strip of land the center line of which is described as follows: Beginning at a point on the Northeasterly line of the below described property which point is 16.50 feet Southeasterly of the most Northerly corner of said property, thence Southerly across said property a distance of 120.00 feet more or less, to the most Northerly corner of the exception in the below described property, and there terminating. Lot 23 except that part thereof described as follows: Commencing at a point on the Southerly line of Lot 23, Block 3, Fairwood Shores, at a point 75.00 feet West, measured along the South line of said Lot 23 from the Southeast corner thereof; thence East along the South line of said Lot 23 a distance of 75.00 feet to the Southeast comer thereof; thence Northeasterly along the East line of said Lot 23 a distance of 44.00 feet; thence Northwesterly a distance of 64.40 feet to a point distant 78.40 feet Northeasterly from the point of beginning; thence Southwesterly a distance of 78.40 feet to the point of beginning, Block 3, Fairwood Shores, according to the plat thereof on file or of record in the office of the Registrar of Titles in and for said County of Hennepin, State of Minnesota. 0 Parcel Three: (P.I.D. No. 27-028-24-32-0009) Property Address: 710 Lake Shore Drive Property Interests to be Acquired: Drainage easement burdening Parcel Three for the benefit of Parcel Seven and other Property, Granted Via Doc. #373832 to Rose Holding Company. Legal Description (6/10/98) Lots 21 and 22, Block 3, Fairwood Shores, according to the plat thereof on file in the office of the Registrar of Titles, Hennepin County, Minnesota. is 0 Parcel Six: (P.I.D. No. Unassigned) Property Address: Unassigned Property Interests to be Acquired: Fee simple absolute ownership of alley adjoining the northeasterly side of the project for construction and for continued existence of an underground parking garage (subject to continued use of alley) and temporary easement precluding use of alley for 14 month period beginning September 28, 1998. Legal Description (6/10/98) That part of the full width of the alley (labeled Auto Lane on the herein described plat) lying in Block 3, Fairwood Shores, according to the recorded plat thereof on file in the office of the Registrar of Titles, Hennepin County, Minnesota, described as follows: That part of said alley in Block 3 lying northeasterly of Lots 19, 20, 21, 22 and 23, said Block 3, lying southwesterly of Lots 1, 2, 3, 4 and 5, said Block 3, lying southeasterly of the northeasterly production of the northwest line of said Lot 19 and lying northwesterly of the northeasterly production of the southeast line of • said Lot 23. Parcel Seven: (P.I.D. No. 27-028-24-32-0006) Property Address: 6700-6718 Lyndale Avenue South Property Interests to be Acquired: Temporary construction easement over the southerly portions of Lots 1 through 5, Block 3, Fairwood Shores, adjoining and northerly of the alley (subject to owners continued use of existing building except doors opening to easement area) for purposes of grading, potential foundation shoring, anchoring, and construction access for a 14 month period beginning September 28, 1998. Legal Description (6/10/98) The southwesterly 20.00 feet of Lots 1, 2, 3, 4 and 5, Block 3, Fairwood Shores, according to the recorded plat thereof on file in the office of the Registrar of Titles, Hennepin County, Minnesota. c: • Parcel Eight: (P.I.D. No. 28-028-24-41-0017) Property Address: 6639 Lake Shore Drive Property Interests to be Acquired: Temporary Construction Easement over Public Walk Lying Along the Northwest Side of the Site for a 14 month period beginning September 28, 1998. Legal Description (6/10/98) That part of the public strip labeled "Lake View Walk' lying northwest of and adjacent to Lot 19, Block 3, Fairwood Shores, according to the plat thereof on file in the office of the Registrar of Titles, Hennepin County, Minnesota, which lies northwest of said Lot 19, southeasterly of Lot 18, said Block 3, northeasterly of a line between the most westerly corner of said Lot 19 and the most southerly corner of said Lot 18 and southwesterly of a line from the most northerly corner of said Lot 19 to the most easterly corner of said Lot 18. • 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 34 Agenda June 15, 1998 Issue Statement: Consideration of a resolution approving a Contract for Private Development between the Housing and Redevelopment Authority (HRA) and Gramercy Park Cooperative of Richfield; Gramercy TIF District. Background: At the May meeting, the HRA approved the establishment of the Gramercy Tax Increment Financing District. (The City Council has scheduled a public hearing on the request of the HRA to consider approving the establishment of the district at their June 22 meeting.) That Plan identified two phases; Gramercy Park Cooperative and a future commercial and housing development. It would now be appropriate for the HRA to consider approving a contract with Gramercy Park Cooperative. The contract details the responsibilities of both the HRA and Gramercy Park Cooperative in bringing about the redevelopment of the site. Gramercy Park will construct a 16 story, 218 unit senior cooperative housing building along with a 5,000 sq. ft. space to be occupied by the VFW Post 5555. The project will be built on the current VFW site and the adjacent commercial property to the east (the Hules' property), but will also require the use of the area beneath the adjacent alley to the north. This subsurface area will be occupied by the underground parking structure. . A table of contents listing the ten articles of the contract and their subdivisions appears on pages i-iii. A summary of the major points of the Articles follows: • Articles I and II (p. 2-6) contain definitions and representations for the developer and H RA. Article III (p. 7-12) addresses the purchase and conveyance of the properties. It is envisioned that the developer would purchase the properties and then convey them to the HRA by quit claim deed. The HRA would then quit claim the property to the developer. If the developer is unable to successfully negotiate the purchase of any of the property involved, the HRA would exercise its right of eminent domain. Regardless of means of acquisition, the developer would be responsible for all costs of securing title. The alley to the north of the VFW site will be temporarily closed during construction. The developer shall be responsible for providing alternate access to all affected properties. The developer will accept the property "as is" from the HRA. The HRA will make payments to the developer based on a Limited Revenue Tax Increment Note (Exhibit D) of $3,000,000 at 7 1/2 percent interest. Schedule A of the note delineates the principle amount of the payments. The only source of revenue with which to pay the note is the tax increment generated by the development. If the development does not pay taxes, the developer does not receive payment (this is a "pay-as-you-go" project similar to Gaylan's CSM). • Article IV (p. 13, 14) covers building plans and the issuance of a Certificate of Completion and Article V (p. 15) covers insurance. • Article VI (p. 16) addresses tax increment and calls for the issuance of the note upon satisfactory completion of the minimum improvements and the issuance of a Certificate of Completion. • Article VII (p. 17, 18) places restrictions on the developer's financing and Article VIII • (p.19, 20) restricts the developers ability to transfer the property. • Article VIIII (p. 21, 22) discusses defaults and Article X (p.23, 24) contains miscellaneous provisions. The basis for providing the tax increment assistance is the "But For..." test. That is, but for the availability of tax increment, the project would not proceed. Mr. Sid Inman of Ehlers & Associates will be at the June 15 meeting to discuss his review of the project. Recommended Motion: Adopt the attached resolution which approves the Contract for Private Development between the HRA and Gramercy Park Cooperative of Richfield and the economic assistance proposed, subject to approval by the City Council of the Gramercy Tax Increment District and the Gramercy Tax Increment Financing Plan. Basis of Recommendation: 1. The proposed development cannot proceed without a contract and without the tax increment assistance proposed. 2. The proposed contract is consistent with previous "pay-as-you-go" tax increment projects. 3. Gramercy Park is a successful housing developer with other facilities completed and under construction in the metropolitan area. 4. The City Council has scheduled a public hearing on the Tax Increment Plan for June 22, 1998. Alternative Recommendation: 1. Delay approval. 2. Propose modifications. Discussion/Decision Mode: Action on June 15, 1998 will make it possible for the development to proceed. The public hearing on the land sale will occur at the July 22, 1998 HRA meeting. Respectfully submitted, Jame Prosser Executive Director JDP:cak 0 HRA RESOLUTION NO. RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT WITH GRAMERCY PARK COOPERATIVE OF RICHFIELD WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "Authority") has properly created and is administering its Redevelopment District (the "District") pursuant to Minnesota Statutes Chapter 469 in an effort to encourage the development and redevelopment of certain designated areas within the City of Richfield; and WHEREAS, among the development activities proposed to be assisted by the Authority in the District are the development of housing facilities; and WHEREAS, there has been presented before the Authority a form of Contract for Private Redevelopment ("Contract") between the Authority and Gramercy Park Cooperative of Richfield, setting forth the parties respective responsibilities in developing the facility; and WHEREAS, the Authority has reviewed the contract and finds that the execution of the same and the Authority's performance of its obligations thereunder are in the best interest of the Authority and its residents. • NOW, THEREFORE, BE IT RESOLVED, by the Richfield Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. That the proposed development within the District is not economically feasible without the assistance to be provided. 2. That the contract, as presented to the Authority, is hereby in all respects approved, subject to insubstantial modifications which may be subsequently approved by the board's chair and the Authority's legal counsel. 3. That the proper Authority officers are hereby authorized to execute the contract on behalf of the Authority and to carry out, on behalf of the Authority, the Authority's obligations thereunder. 4. That the Authority's approval of the contract is contingent upon the City Council's approval of the Gramercy Park Tax Increment Financing District and the Gramercy Tax Increment Financing Plan. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of June, 1998. Thomas E. Harms, Chair • ATTEST: Michael Sandahl, Secretary 0 ATTACHMENT Minimum accepted proposal. At least $18,000 is required to fully fund the acquisition and rehabilitation of one house. However, Cornerstone has lost two homes due to the discontinuation of a HUD program, and needs to replace those units to keep up with the need. 6/11/98 Draft CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD AND GRAMERCY PARK COOPERATIVE OF RICHFIELD a Minnesota Cooperative Corporation 1998 This document was drafted by: Kennedy & Graven, Chartered (JBD) 41 470 Pillsbury Center 200 South Sixth Street Minneapolis, MN 55402 JBD144650 RC125-170 TABLE OF CONTENTS ARTICLE I Definitions Section 1.1. Definitions ............................................. 2 Section 1.2. Exhibits ............................................... 4 Section 1.3. Rules of Interpretation ..................................... 4 ARTICLE II Representations Section 2.1. Representations by the Redeveloper ............................ 5 Section 2.2. Representations by HRA ................................... 5 ARTICLE III Land Sale Section 3.1A. Acquisition of Parcel A on the Redevelopment Property .............. 7 Section 3.1 B. Initiation and continuation of HRA Activities ..................... 7 Section 3.2. Conveyance of the Redevelopment Property ..................... 10 Section 3.3. Time of Acquisition and Conveyance .......................... 11 Section 3.4. Title ................................................. 11 Section 3.5. Section 3.6. Soil Conditions ......................................... Purchase Price ........... 11 12 Section 3.7. Taxes and Special Assessments ............................... 12 Section 3.8. Other Costs ........................................... 12 Section 3.9. Property Conveyed As Is .................................. 12 Section 3.10. Termination ........................................... 12 ARTICLE IV Construction of Minimum Improvements Section 4.1. Agreement to Construct .................................... 13 Section 4.2. [Blank] ............................................... 13 Section 4.3. [Blank] ............................................... 13 Section 4.4. Concept Plans .......................................... 13 Section 4.5A . Commencement of Construction ............................. 13 Section 4.6. Construction Reports ..................................... 13 Section 4.7. Completion of Construction - Certificate of Completion ............. 13 ARTICLE V Insurance 0 Section 5.1. Insurance ............................................. 15 JBD144650 RC125-170 1 • ARTICLE VI Tax Increment Section 6.1. Statement of Purpose ..................................... 16 Section 6.2. Minimum Improvements ................................... 16 ARTICLE VII Financing Section 7.1. Limitations Upon Encumbrance .............................. 17 Section 7.2. Copy of Notice of Default to Lender ........................... 17 Section 7.3. Lender's Option to Cure Defaults ............................ 17 Section 7.4. HRA's Option to Cure Default .............................. 17 Section 7.5. Subordination .......................................... 18 ARTICLE VIII Prohibitions Against Assignment and Transfer Section 8.1. Representation as to Development ............................. 19 Section 8.2. [Blank] .............................................. 19 Section 8.3. Prohibition Against Transfer of Property and Assignment of Agreement ................................. 19 Section 8.4. Following Completion .................................... 20 Section 8.5. Approvals ............................................ 20 ARTICLE IX Events of Default Section 9.1. Events of Default Defined ................................. 21 Section 9.2. Remedies on Default ...................................... 21 Section 9.3. No Remedy Exclusive .................................... 22 Section 9.4. No Additional Waiver Implied by One Waiver .................... 22 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; HRA Representatives Not Individually Liable ..................................... 23 Section 10.2. Nondiscrimination ....................................... 23 Section 10.3. Provisions Not Merged With Deed ............................ 23 Section 10.4. Notice of Status and Conformance ............................ 23 Section 10.5. Wage and Job Covenants ................................... 23 Section 10.6. Redeveloper Deposit ...................................... 24 Section 10.7. Notices and Demands ..................................... 24 Section 10.8. Identification Marker ..................................... 24 0 Section 10.9. Counterparts ........................................... 24 JBD144650 RC125-170 11 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this day of December, 1996, is by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and Gramercy Park Cooperative of Richfield, a Minnesota cooperative corporation, (the "Redeveloper"). WITNESSETH: WHEREAS, the City of Richfield and HRA have established the ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and have established within the Project Area the ("TIF District") and adopted a Tax Increment Financing Plan ("hereinafter defined as the "Tax Increment Plan") for the TIF District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage redevelopment of the Project Area by a combination of public and private activity within the Project Area and in accordance with the Tax Increment Plan adopted by the City, on , and HRA on , following extensive study and preliminary • work conducted by the City and HRA and others engaged by them; and WHEREAS, the Redeveloper has proposed a development (hereinafter defined as the "Development") within such Project Area which the HRA believes will promote and carry out the objectives for which redevelopment is undertaken, will be in the vital best interests of the City, will promote the health, safety, morals, and welfare of its residents and will be in accord with the public purposes and provisions of the applicable state and local laws and requirements under which activities within the Project Area have been undertaken and are being assisted; and WHEREAS, the Redeveloper is willing to purchase property from the HRA within the Project Area such property being legally described in the attached Exhibit A (hereinafter defined as the "Redevelopment Property") and to develop the Redevelopment Property for and in accordance with this Agreement; and WHEREAS, consistent with the Tax Increment Plan, the HRA is willing to provide financial assistance in accordance with the provisions of this Agreement; NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties contained herein, each of them does hereby represent, covenant and agree with the others as follows: • JBD144650 RC125-170 ARTICLE I DEFINITIONS, EXHIBITS RULES OF INTERPRETATION Section I.I. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Act, located at Minnesota Statutes, Chapter 469, as amended. "Agreement" means this Agreement, as the same may be from time-to-time modified, amended, or supplemented. "Certificate of Completion" means the certification, in the form of the certificate contained in Exhibit B attached to and made a part of this Agreement, provided to the Redeveloper, pursuant to Section 4.7 of this Agreement. "City" means the City of Richfield. "Closing" means the date on which title to the Redevelopment Property is transferred to the Redeveloper. "Commencement of Construction" means excavation for the purpose of setting footings or foundation. "Completion of Construction" means the completion of construction of the Minimum Improvements except for tenant finish work. "Concept Plans" mean the plans, drawings and narrative descriptions for the Minimum Improvements and related site work which are on file in the office of the Director of Community Development for the City. The term also includes detailed marketing plans and occupant mix projections. "Construction Contract" means a contract or contracts which provides for completion of the Minimum Improvements. "County" means the County of Hennepin. "Development" means the Minimum Improvements to be constructed on the Redevelopment Property. • "Event of Default" means an action by the Redeveloper listed in Section 10.1 of this Agreement. JBD144650 RC125-170 2 "Minimum Improvements" means the improvements to be constructed by Redeveloper on the Redevelopment Property and related site work all as shown on the Concept Plan. "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes Sections 116D.01 et sea., as amended. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes Sections 11613.01 et sea., as amended. "National Environmental Policy Act" means the federal law located at 42 U.S.C. Section 4311 et sea., as amended. "Note" means the Limited Revenue Tax Increment Note to be executed and delivered in the form set forth on Exhibit D, pursuant to Section 3.6. "Redeveloper" means Gramercy Park Cooperative of Richfield, a Minnesota cooperative corporation. "Redevelopment Property" means the real property described as such on Exhibit A of this Agreement, and consisting of Parcel A, Parcel B (Cricket) and Parcel C (alley). "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property which is remitted to the Authority as Tax Increment pursuant to the Tax Increment Plan, after reduction (if any) of fiscal disparities' contributions which are mandated by state law to be made with respect to any parcel. "Tax Increment Act" means the statutes located at Minnesota Statutes Section 469.174 through 469.179, of the Economic Development Act. "Tax Increment Plan" means the tax increment financing plan adopted by the City in connection with the creation of the Tax Increment District and as such may be modified and amended from time to time. "Tax Official" means any City or county assessor; County auditor; City, County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Unavoidable Delays" means unexpected delays which are the direct result of adverse weather conditions, shortages of materials, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other judicial action, directly results in delays, or acts of any federal, state or local governmental unit other than those provided for under this Agreement or any other cause or force majeure beyond the control of Redeveloper which directly results in delays, provided, however, that adverse market conditions or tenant actions affecting the marketability or profitability of the Minimum Improvements, or the inability to secure financing of the Minimum Improvements shall not constitute Unavoidable Delays. JBD144650 RC125-170 3 Section 1.2. Exhibits. The following exhibits are attached to and made a part of this Agreement. A. Redevelopment Property Description; B. Certificate of Completion; C. [Blank]; D. Limited Revenue Tax Increment Note ("Note"); Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota; (b) The words "herein" and "hereof" and words of similar importance, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof; (c) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. 9 JBD144650 RC125-170 ARTICLE II REPRESENTATIONS Section 2.1. Representations by the Redeveloper. (a) The Redeveloper has the power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper action. (b) If the conditions precedent to construction occur, subject to the other terms of this Agreement, the Redeveloper has the financial capability to construct the Minimum Improvements. (c) If the conditions precedent to construction occur, subject to the other terms of this Agreement, the Redeveloper will construct the Minimum Improvements described in the Concept Plans in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations. (d) The Redeveloper will exercise all reasonably diligent efforts to obtain, in a timely manner, all required permits, licenses, and approvals and if all such approvals are obtained, and subject to Unavoidable Delays and the satisfaction of all preconditions set forth in this Agreement will meet in a timely manner, all lawful requirements of all local, state, and federal laws and regulations which must be obtained or met before the Minimum Improvements may be constructed. (e) Redeveloper will comply in all material respects, with all applicable local, state and federal environment laws and regulations, will have obtained any and all necessary environmental reviews, licenses or clearances under, and will be in material compliance with the applicable requirements of the National Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and the Critical Area Act of 1973 and any other applicable environmental law or regulation. Redeveloper has not received notice or communication from any local, state or federal official indicating that the activities of Redeveloper may be or will be in violation of any environmental law or regulation. Redeveloper is not aware of any facts the existence of which would cause the Redeveloper to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act; Section 2.2. Representations by HRA. The HRA makes the following representations as the basis for the undertakings herein contained. (a) The HRA has the power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper. (b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain all federal, state, and regional agency land use, environmental or other regulatory approvals which are required of Redeveloper and necessary to implement the Development. JBD144650 c RC125-170 5 (c) The Project Area, TIF District and the Tax Increment Plan have been properly and legally established and are currently fully operative. The TIF District was certified on ; and the first tax increment from the TIF District is expected to be remitted to the HR A. in (d) The Redeveloper has been given true and accurate copies of the Tax Increment Plan and all amendments to it. No challenge to the Tax Increment Plan or the TIF District is currently pending or anticipated. (e) The HRA has no knowledge that any tax increment projections or similar material furnished to the Redeveloper is untrue, but further makes no representation concerning its accuracy. (f) The HRA will provide Redeveloper with all reports, investigations and studies in the HRA's possession which have as their subject the Redevelopment Property. • • JBD1446SO RC125-170 6 0 ARTICLE III Acquisition and Conveyance of Property Section 11A. Acquisition of Parcel A on the Redevelopment Property. The Redeveloper represents that it will, not later than 30 days following the date of this Agreement obtain title to or options to acquire title to Parcel A on the Redevelopment Property. Subject to the terms of this Agreement, the HRA agrees that it will, subsequent to the Redeveloper's acquisition of title to Parcel A on the Redevelopment Property, acquire said Parcel from the Redeveloper. It is intended that the HRA will acquire title to Parcel A at the same time it obtains title to Parcels B and C. The conveyance from the Redeveloper to the HRA shall be by a standard quit claim deed. Immediately after the HRA's acquisition of the said Parcel, the HRA shall, by quit claim deed, reconvey such property to the Redeveloper for development in accordance with the terms of this Agreement. The HRA may also be utilizing its authority to remove certain stormwater easements covering Parcel A as further provided in Section 3.4(a); and to obtain temporary construction easements as may be necessary to facilitate construction of the Minimum Improvements. The cost to the HRA shall be reimbursed as provided hereinafter. Section 3.113. - Initiation and continuation of HRA Activities. (a) Promptly upon the execution of this Agreement by the parties and upon the mutual agreement of the parties concerning the matters to be included, the HRA shall commence eminent domain action for the purpose of acquiring title to the Parcels and interests, the HRA may, if it deems appropriate, seek to acquire title to and possession of the Parcels and interests by the earliest date permitted in accordance with Minnesota Statutes, § 117.042. (b) During the pendency of such actions, the Redeveloper shall be required to promptly pay all expenses incurred by the HRA in connection with the prosecution thereof, such expenses include legal, survey, title, appraisal, relocation, process service, court costs and similar expenses. The HRA shall, not more often than the monthly during the pendency of the action, furnish the Redeveloper with a written itemized statement of all such expenditures. Redeveloper shall have two weeks from the receipt of such statement to pay the same. (c) Not later than five days prior to any date on which the HRA is required to deposit any amount into court in order to obtain title and possession to portions of the Property or to make relocation benefit payments to persons entitled to such payments, Redeveloper shall deliver to the HRA funds payable to the HRA in the amount of any such deposit or payment. The HRA shall then have the right, and subject to the terms and conditions hereof, the obligation to use such funds to make such deposit or such payments. The HRA shall have no obligation to repay such funds received deposited or paid pursuant to this Agreement should the redevelopment covered by this Agreement not be completed for any reason. (d) The obligation of the HRA to make the deposit and obtain title to and possession of any of the parcels shall, unless waived in writing by the HRA, be specifically subject to the following: JBD144650 7 RC125-170 1. Redeveloper is not in default of any provisions of this Agreement and all amounts due and payable under this Agreement have been paid. 2. Redeveloper has reviewed the condition of title as such is to be acquired by the HRA and notified the HRA in writing that such condition of title is satisfactory. 3. The Redeveloper has provided the HRA with an undertaking in the form of a written agreement, and with security (which, if other forms of security are not reasonably acceptable to the HRA, may include the right of the HRA to take an assignment of leases) all reasonably acceptable to the HRA which will assure payment by the Redeveloper of:. (i) any condemnation award in excess of the previously deposited sums; (ii) any relocation benefits which are not yet paid; Such undertaking and security is to remain in effect according to its terms, and in any event, until suitable and adequate substitute security is agreed to by the parties. 4. The Redeveloper has furnished the HRA with written notice, reasonably acceptable to the HRA, indicating that, based upon Redeveloper's own investigation it is satisfied in all respects with the nature and condition of the parcels and interests to be acquired by the HRA, and accepts the same AS IS and WHERE IS. 5. The HRA is satisfied that the Redeveloper has obtained, or will be obtaining, fee simple title to any portions of the Redevelopment Property which are not the subject of the condemnation; and that Redeveloper has made reasonable efforts to acquire Parcels B and C and to extinguish the surface water easement. 6. Redeveloper has furnished the HRA with written evidence reasonably acceptable to the HRA that it has funds, whether in the nature of Equity or Financial Commitment or otherwise which are sufficient for construction of the Minimum Improvements. 7. Redeveloper has supplied the HRA with written evidence reasonably acceptable to the HRA that it has presale agreements for at least _% of the residential units. 8. Redeveloper has supplied the HRA with a signed written statement, reasonably satisfactory to the HRA, to the effect that, to the best of Redeveloper's knowledge, upon Closing, there will be no remaining matters which would affect the prompt commencement of construction of JBD144650 RC125-170 8 the Minimum Improvements - and the continuation of construction to completion. The statement must also acknowledge that the Redeveloper understands that the HRA is relying on the statement as a inducement to its activities hereunder. 9. Redeveloper has obtained all permissions and approvals required by the city and other governmental authorities relating to such matters as, without limitation, disruption or closure of rights of way, encroachment above streets and allesy for construction activities, and use of public lands for storage of construction equipment and materials. It is understood that such permissions may be conditioned upon such terms as the approving authorities may in their discretion deem advisable. 10. Redeveloper has entered into indemnity and held harmless agreements with the City and HRA protecting those parties from damage or third party claims relating to construction activities; and from claims relating to use of the [North Alley] following its reopening. 11. The HRA has reviewed and approved the Concept Plan. 12. The City and Redeveloper have reached written agreement regarding the location and nature and cost of any public improvements to be located on qO the Redevelopment Property; and the City has reviewed and approved the plans for the reestablished [North Alley] including all matters relating to the supporting structural design and maintenance and repair issues. 13. The Redevelopment Property has been rezoned to a classification which allows the proposed activities. The HRA may, in its sole judgment, but only with consent of the Redeveloper, commence and continue its activities under this section even though some or all of the conditions stated above have not been satisfied, or waived. In such event, the HRA will notify the Redeveloper of its election to proceed and shall also notify the Redeveloper of the dates by which some conditions must be satisfied. If the conditions have not been satisfied or waived by such extended date, the HRA shall have the right to terminate time and the Redeveloper shall be responsible for any costs, expenses or liabilities incurred by the HRA as of, and/or as a result of such termination. (e) Should the HRA terminate this Agreement for a failure of Redeveloper to satisfy any of the conditions in paragraph (d) after the HRA has acquired title to and possession of either Parcels B or C or both, the HRA shall have the unrestricted right to utilize all or part of the same in any manner which it, in its sole discretion deems appropriate, including, without limitation, the sale of all or part of the same to others, all on terms and for amounts which the HRA in its exclusive judgment deems appropriate. In the event that the HRA elects to sell all or part of such property, the HRA agrees to reimburse the Redeveloper from, and only from the sale proceeds (if any), amounts expended by JBD144650 n RC125-170 9 the Redeveloper in connection with acquisition of the Parcels B and C and paid to the HRA pursuant to section 3.2(b) and (c) after first deducting from the sale price: Amounts still owing the HRA under section 3.2(b) and (c) and the amount of any remaining obligations under section 3.2(d)3.(i)-(vii). 2. All expenditures incurred by the HRA in connection with such subsequent transaction which were intended to be paid through the sale price. The Redeveloper acknowledges that the HRA's obligation hereunder shall be enforceable against no other source then the sale proceeds, if any, and does not constitute a lien or encumbrance on the property or any other HRA asset. This provision places no fiduciary obligation on the HRA to act in any manner which would preserve, protect, secure or enhance the property or the amount of reimbursement which the Redeveloper might receive. (f) On the date of Closing, and as a further precondition to the HRA's obligations to deliver title, Redeveloper shall provide the HRA with a lien, in recordable form and recordable against the Redevelopment Property. The lien shall be in a form acceptable to the HRA and in an amount deemed by the HRA in its reasonable judgment to be sufficient to cover each of the matters described in Section 3.2(d)(3) above. The HRA agrees that it will, from time to time, hear and consider requests from the Redeveloper to release or modify the lien, or to subordinate w the same, and will do so if in its reasonable judgment such action will not impair the adequacy of the HRA's security. Unless the HRA specifically determines otherwise, the lien provided for in this paragraph is an additional form of security to the other forms of security interest provided for in 3.2(d)(3) above. (g) Redeveloper Liability. Notwithstanding anything herein to the contrary, in the event the Redeveloper shall fail or refuse to perform its obligations under paragraphs (b) and (c) above, or fail to satisfy the conditions set forth in paragraph (d) above, then the HRA,upon written notice thereof from Redeveloper, may immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation shall be: i) to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its acquisition activities; ii) to indemnify and save harmless the HRA and the City and their officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities and the HRA's sole remedy shall be to obtain such reimbursement and indemnity from the Redeveloper. Section 3.2. Conveyance of the Redevelopment Property. The HRA shall reconvey title to and possession of the Parcel A Redevelopment Property and convey to title to and possession of Parcels B and C to the Redeveloper under a quit claim deed. The conveyance of and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement. The conveyance of title to and the Redeveloper's use of the Redevelopment Property shall also be subject to building and • zoning laws and ordinances and all other applicable local, state and federal laws and regulations. JBD144650 10 RC125-170 Section 3.3. Time of Acquisition and Conveyance. (a) Closing on the simultaneous sale and repurchase and purchase transactions contemplated herein shall occur not later than 10 days following the date on which the HRA has acquired title to Parcels B and C provided that the Redeveloper is not in default of any obligation under this agreement and that all monies due the HRA hereunder have been paid, and provided. Further that all other conditions, events or actions which under this Agreement must occur prior to Closing have either occurred or been waived in writing by the parry in whose favor the requirement runs; The Redeveloper shall take possession of the Property the day of execution and delivery of the deed by the HRA. The HRA and the Redeveloper acknowledge, that unless so required by others, the deeds which are contemplated in this transaction need not be recorded. (b) Unless otherwise mutually agreed by the HRA and the Redeveloper, the execution and delivery of all deeds shall be made at the principal office of the HRA. Section 3.4. Title. (a) Prior to and as a condition to the HRA's obligation to acquire Parcel A, the Redeveloper shall obtain and furnish to the HRA a commitment for the issuance of a policy of title insurance. The HRA shall have twenty (20) days from the date of its receipt of such • commitment to review the state of title and to provide the Redeveloper with a list of written objections to such title. No objection may be made by the HRA to any defect or encumbrance on the title unless and to the extent that such defect or encumbrance would, if uncured, have the effect of precluding Redeveloper's construction of the Minimum Improvements. Upon receipt of the HRA's list of written objections, the Redeveloper shall proceed in good faith and with all due diligence to attempt to cure the objections made by the HRA. Within ten (10) days after the date that all such objections have been cured, to the reasonably satisfaction of the HRA, the HRA shall proceed with its acquisition and reconveyance of the Redevelopment Property. The HRA shall have no obligation to take any action to clear defects in the title to the Redevelopment Property. If requested to do so by Redeveloper, the HRA agrees to utilize its best efforts to assist the Redeveloper in the removal of any storm water easements currently existing on Parcel A, provided however that the HRA shall not be obligated thereby to incur any cost or expense. (b) The HRA shall take no actions to encumber title to the Redevelopment Property between the moment the HRA acquires to the moment on which the Authority's Deed is delivered to the Redeveloper, it being understood that such conveyances will occur simultaneously. Section 3.5. Soil Conditions. The Redeveloper acknowledges that the HRA makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property. The Redeveloper further agrees that it will • indemnify, defend, and hold harmless the HRA, its governing body members, officers, and employees, from any third party claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevelopment Property; but only to the extent that such claims or JBD144650 RC125-170 11 actions are based upon the HRA's ownership of the Redevelopment Property required herein and for no other reason. Section 3.6. Purchase Price. (a) The HRA shall pay the Redeveloper as purchase price for Parcel A the aggregate principal amount contained in the Note. Payment of the Purchase Price will be made entirely and exclusively in accordance with the terms of said Note. The Note is to be executed by the HRA and delivered to Redeveloper at Closing. (b) The purchase price to be paid by the Redeveloper for the reconveyance of the Parcel A and conveyance of Parcels B and C from the HRA shall be $1.00. Section 3.7. Taxes and Special Assessments. Redeveloper shall pay all taxes and installments of special assessments due and payable in years prior to the year of Closing. Redeveloper shall pay all installments of taxes and special assessments due and payable in the year of Closing. Installments of special assessments due and payable in future years shall be responsibility of Redeveloper. Section 3.8. Other Costs. No cost, fee or other payment relating to any real estate transaction of any nature shall be payable by the HRA to any person or entity; and except as otherwise set forth in this Agreement, the HRA's entire obligation in connection with the is purchase and sale of the Redevelopment Property shall be payment of the purchase price and reconveyance of the Redevelopment Property as provided in this Agreement. Section 3.9. Property Conveyed As Is. Redeveloper acknowledges that the HRA shall have no obligation to perform any site work in connection with the proposed transaction or otherwise. The HRA's only obligation hereunder is to convey the Redevelopment Property to the Redeveloper in the condition in which it was obtained by the HRA. All site work, including, without limitation, grading, soil preparation and demolition of all structures and improvements shall be done by the Redeveloper at Redeveloper's cost. Section 3.10. Termination. In the event that Closing has not occurred by , either party may give the other party written notice of its intention to terminate this Agreement. If the other party does not proceed to Closing within 30 days following the giving of such notice this Agreement may be declared null and void by either party giving written notice of such declaration to the other party and thereupon, neither party shall have any obligation or liability to the other hereunder. • JBD144650 12 RC125-170 0 ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Agreement to Construct. Subject to the acquisition of the Redevelopment Property, the Redeveloper agrees that it will construct the Minimum Improvements substantially in accordance with the approved Concept Plans; the construction and all construction activities shall be conducted in strict conformity with the ordinances, codes and regulations of the City and other governmental units having jurisdiction over such activities. Section 4.2. [blank]. Section 4.3. [blank]. Section 4.4. Concept Plans. The HRA hereby approves the Concept Plans which have been submitted by the Redeveloper. If the Redeveloper desires to make any material change in the Concept Plans, the Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Concept Plans, the HRA shall approve the proposed change and • notify the Redeveloper in writing of its approval. Such change in the Concept Plans shall, in any event, be deemed approved by the HRA unless rejected, in whole or in part, by written notice by the HRA to the Redeveloper, setting forth in detail the reasons therefor within twenty (20) days after receipt of the notice of such change. Final construction plans and specifications shall be reviewed by the City Building Official in connection with issuance of building permits. No building permit may be issued if the final construction plans and specifications materially depart from the approved Concept Plans. Section 4.5A. Commencement of Construction. Subject to Unavoidable Delays, the Commencement of Construction for the Minimum Improvements must occur no later than days following the Closing. Section 4.6. Construction Reports. At the request of the HRA, the Redeveloper will provide the HRA with copies of the portions of any construction reports prepared by Redeveloper's architect and which show the status of construction. Section 4.7. Completion of Construction - Certificate of Completion. Once commenced, construction of the Minimum Improvements for any phase shall be diligently prosecuted to completion. Promptly after notification by the Redeveloper of completion of the Minimum Improvements, the HRA shall inspect the construction to determine whether such Minimum Improvements are completed substantially in accordance with the terms of this Agreement. If • the HRA is satisfied, it will promptly furnish the Redeveloper with a Certificate of Completion. Such certification by the HRA shall, except as further provided in this Section 4.7, be a conclusive determination of satisfaction and termination of the agreements and covenants in this JBD144650 13 RC125-170 • Agreement, with respect to the obligations of the Redeveloper to construct the Minimum Improvements. The certification provided for in this section shall be in recordable form. If the HRA shall refuse or fail to provide the Redeveloper a certification in accordance with the provisions of this Section 4.7, the HRA shall, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the reasonable opinion of the HRA, for the Redeveloper to take or perform in order to obtain such certification. The HRA may not impose as a condition for issuance of the certificate, any requirement which has previously been deemed satisfied either by actual approval or the passage of time. If the HRA fails to act on the Certificate of Completion within 60 days following the date it is notified of completion of construction of a phase, all objections shall be deemed waived and the certificate shall issue for such phase. • 0 JBD144650 RC125-170 14 ARTICLE V INSURANCE Section 5.1. Insurance. Prior to Closing,the Redeveloper shall provide evidence of insurance, covering property, casualty, workers compensation, fire, indemnity, general liability, employer's liability and such other coverage and in such amounts as the HRA shall reasonably require. n U is JBD144650 RC125-170 15 • ARTICLE VI TAX INCREMENT Section 6.1. Statement of Purpose. The parties acknowledge that the development which is proposed by the Redeveloper would not be feasible absent the assistance which is provided the Redeveloper in this Article VI. Section 6.2. Minimum Improvements. Upon the issuance of a Certificate of Completion for the Minimum Improvements, but only if Redeveloper has not committed an Event of Default under this Agreement for which cure has not occurred, the HRA shall become obligated to make payments to the Redeveloper under and in accordance with the terms of the Note. The HRA's obligation under this Agreement to make payments to the Redeveloper is entirely limited to the terms of the Note. • • JBD144650 16 RC125-170 ARTICLE VII FINANCING Section 7.1. Limitations Upon Encumbrance. Prior to the issuance of a Certificate of Completion, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property or any part thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attached to the Redevelopment Property or any part thereof, except only for the purpose of obtaining funds to the extent necessary for purchasing or redeveloping the Redevelopment Property or funding construction of the Minimum Improvements. Section 7.2. Copy of Notice of Default to Lender. Prior to the issuance of a Certificate of Completion, whenever the HRA shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations under this Agreement, the HRA shall at the same time forward a copy of such notice or demand to each holder ("Holder") known to the HRA of any mortgage or other financing agreement authorized by this Agreement by sending such notice to last known address of the Holder as shown in the records of the HRA. . Section 7.3. Lender's Option to Cure Defaults. After any Event of Default by the Redeveloper referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the HRA are concerned) have the right for a period of ninety (90) days, at the Holder's option, to cure or remedy such Event of Default to the extent that it relates to the part of the Redevelopment Property covered by its financing and to add the cost thereof to the debt and the lien of its financing, provided, that if the breach or event of default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction or completion of the Minimum Improvements (beyond the extent necessary to conserve or protect such Improvements or construction already made) without first having expressly assumed the Redeveloper's obligations described in Section 4.5 hereof by written agreement reasonably satisfactory to the HRA to complete the Minimum Improvements or the part thereof to which the lien or title of such holder relates, provided further, however, that the HRA will not unreasonably withhold its consent to any changes in the Minimum Improvements which are requested by the Holder if the requested changes do not alter the basic design of the Minimum Improvements. (It being understood that such consent shall in no way act to bind or influence the power of the City, in the exercise of its governmental authority not to approve any proposed changes or alterations to the Minimum Improvements. Any such Holder who shall perform the Redeveloper's obligations under Section 4.5 hereof, relating to the Redevelopment Property or applicable part thereof, shall be entitled, upon written request made to the HRA, to a certification by the HRA to such effect in the manner provided in Section 4.7 of this Agreement. . Section 7.4. HRA's Option to Cure Default. Prior to the issuance of a Certificate of Completion, if the Redeveloper is in default under any financing authorized pursuant to Article VIII of this Agreement, the Holder, prior to exercising any of its remedies, shall notify the HRA JBD144650 RC125-170 1?7 / in writing by sending it a copy of any notice of default sent to the Redeveloper. If, within thirty (30) days after receipt of said notice, the HRA cures the default, then the Holder shall pursue none of its remedies under the financing based upon the said default of the Redeveloper. Section 7.5 Subordination. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements by the Redeveloper, the HRA agrees to modify and to subordinate its right under this Agreement to the mortgage or other financing agreement held by the financial institution providing such funds, provided, however, that nothing in this Section 7.5 shall be deemed to require the HRA to agree to any modification or subordination of its rights which in its judgment would be contrary to its best interests, or to the prompt and timely construction of the Minimum Improvements; or which would fail to obligate any Holder to the provisions of Section 7.3. • • JBD144650 lp RC125-170 O 0 ARTICLE VIII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 8.1. Representation as to Development. The Redeveloper further recognizes that, in view of (a) the importance of the development of the Redevelopment Property to the general welfare of the community; and (b) the substantial financing and other public aids that have been made available by the City and the HRA, for the purpose of making such development possible; that the qualifications and identity of the Redeveloper are of particular concern to the community and the HRA. Any change as hereunder described with respect to the identity of the Redeveloper or the purchase of Redeveloper's interest by any other party or parties is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the Redeveloper further recognizes that it is because,of such qualifications and identity that the HRA is entering into this Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby then to be performed. Section 8.2. [Blank]. Section 8.3. Prohibition Against Transfer of Property and Assignment of Agreement. For the foregoing reasons, the Redeveloper represents and agrees that prior to the issuance of a • Certificate of Completion for that Phase: (a) Except only by way of security for, and only for, the purpose of obtaining financing of the nature described in Section 7.1, the Redeveloper (except as so authorized) has not made or created, and that it will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA. (b) The HRA shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such action described in paragraph (a) above that: (i) any proposed transferee shall have the qualifications and financial responsibility, as reasonably determined by the HRA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations to the extent that they relate to such part); (ii) any proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, shall for itself and its successors and assigns, and expressly for the benefit of the HRA, have expressly assumed all of the obligations of the Redeveloper under this Agreement and agreed to be subject to the terms of the Redevelopment Plan (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations, conditions, and restrictions to the extent that they relate to such part); provided, that the fact that any transferee of, or any other successor in interest whatsoever the reason, shall have assumed such obligations or agreed, shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the HRA) relieve or except such transferee or successor of or from such obligations, JBD144650 1^ RC125-170 7 conditions, or restrictions, or deprive or limit the HRA or with respect to any rights or remedies or controls with respect to the Redevelopment Property or the construction of the Minimum Improvements; it being the intent of this, together with other provisions of this Agreement, that (to the fullest extent permitted by law and equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, of any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the HRA of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Redevelopment Property and the construction of the Minimum Improvements that the HRA would have had, had there been no such transfer or change; (iii) there shall be submitted to the HRA for review all instruments and other legal documents involved in effecting transfer, and if approved by the HRA its approval shall be indicated to the Redeveloper in writing. The HRA shall not unreasonably delay the taking of any action required of it under this paragraph. (c) [Blank] (d) In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, or from any of its obligations with respect thereto. The HRA may, however, in its reasonable discretion exercised in accordance with the standards and requirements • of Section 8.3(b) relieve Redeveloper if such transferee or assignee is acceptable to the HRA. Section 8.4. Following Completion. Upon the issuance of the Certificate of Completion, the provisions of Sections 8.1, 8.3 and 8.5 shall be deemed to have no further force and effect; and the Redeveloper may transfer the Redevelopment Property and assign its interest under this Agreement at any time upon written notice to the HRA. Section 8.5. Approvals. Any approval required to be given by the HRA under this Article VIII of this Agreement may be denied only in the event that the HRA reasonably determines that the performance of the obligations of Redeveloper under this Agreement will be materially impaired by the action for which approval is sought. At the HRA's request, the Redeveloper shall provide to the HRA's attorney for privileged review on behalf of the HRA financial information as to any proposed general partners, or controlling stockholders of proposed assignees or transferees, and financial information as to any such partnership or corporation. Failure to provide such information shall be an adequate basis for the denial of any requested approval; however, it shall not otherwise be construed as a default under this Agreement. JBD144650 2U RC125-170 ARTICLE IX EVENTS OF DEFAULT Section 9.1. Events of Default Defined. The following shall, after the Redeveloper has received notice of the same and has failed to cure in accordance with Section 9.2, be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper to pay when due any payments required to be paid under Article III of this Agreement. (b) Subject to Unavoidable Delay, failure by the Redeveloper to observe and substantially perform any material covenant, condition, obligation, or agreement on its part to be observed or performed hereunder. (c) If the Redeveloper is in default under any mortgage and fails to cure any such default within thirty (30) days after written demand from the HRA to do so. . (d) If the real estate taxes are not paid when due, subject to Redeveloper's right to contest same in accordance with applicable law. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, but only after at least sixty (60) days notice to the Redeveloper and its failure to cure (unless a different cure period is provided with respect to specific defaults under this Agreement) or such longer cure period if reasonably required and the actions to cure have been commenced within such 60-day period, find the Redeveloper in default (Default) and take any one or more of the following actions: (a) Suspend its performance under the Agreement until it receives assurances from the Redeveloper or mortgagee reasonably deemed adequate by the HRA, that the Redeveloper will cure the default and continue performance under this Agreement. (b) If Closing has not yet occurred, cancel pursuant to Minnesota Statutes Section 559.21, and rescind this Agreement, in which case the 60-day cure period shall commence with notice of cancellation. (c) Withhold the Certificate of Completion if the Event of Default relates to the failure of the Redeveloper to complete the Minimum Improvements as provided in this Agreement. (d) Subject to the limitations stated in Article III take whatever action at law or in equity may appear necessary or desirable to the HRA to collect any payments due under this Agreement, JBD144650 21 RC125-170 or to enforce performance and observance of any obligation, agreement or covenant of the Redeveloper under this Agreement. Provided, however, that any exercise by the HRA, its successors or assigns, of its right or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b) any rights or interests provided in this Agreement for the protection of the Holder of such mortgages. Provided further, however, that should any Holder succeed by foreclosure of the mortgage or deed in lieu thereof, to Redeveloper's interest in the Redevelopment Property, it shall, notwithstanding the foregoing provision, be obligated and, shall agree in writing to perform all of the obligations of the Redeveloper, set forth in this Agreement. Said Holder shall have no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. Section 9.3. No Remedy Exclusive. Except as provided in Article III, no remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article X or by applicable law. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any obligation contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. • JBD144650 RC125-170 22 0 ARTICLE X ADDITIONAL PROVISIONS Section 10.1. Conflict of Interests; HRA Representatives Not Individually Liable. No member, official, or employee of the HRA shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the HRA shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the HRA or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as though fully set forth herein. Section 10.3. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to be or shall be merged by reason of any deed transferring any interest in any part of the Property and any such deed shall not be deemed to affect or impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the provisions of is this Agreement shall be binding upon and inure to be benefit of the successors and assigns of the parties hereto. Section 10.4. Notice of Status and Conformance. The HRA agrees that from time to time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute, acknowledge and deliver, without charge, to Redeveloper or to any person designated by Redeveloper, a statement in writing certifying, to the extent true, that this Agreement is unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has not received any notice of default, that to the knowledge of the HRA no event of default exists hereunder (or if any such event of default does exist, specifying the same and stating that the same has been cured, if such be the case), that the HRA to its knowledge, has no claims against the Redeveloper hereunder, and any other information reasonably requested by the Redeveloper. It is the intention of this Section 10.4 to provide a mechanism for obtaining estoppel certificates which may be requested by from time to time by Redeveloper or Redeveloper's mortgagee. Section 10.5. Wage and Job Covenants. (a) By no later than two years after the first date on which the Redeveloper receives any payment under a note issued to Redeveloper pursuant to Sections 6.2 hereof, the Redeveloper shall create on the Redevelopment Property at least _ new jobs and the average hourly wage rates for such _ employees of Redeveloper located on the Redevelopment Property shall be no less than $ per hour. The Redeveloper shall submit to the HRA a written report by April 1 of each year after completion of the Minimum Improvements describing employment and wages in sufficient detail to enable the HRA to determined compliance with this Section. JBD144650 23 RC125-170 (b) Unless the Redeveloper complies with the wage and job covenants of this Section at least once during the two year period following the first payment to it of tax increment, the Redeveloper shall repay the HRA, upon written demand from the HRA, any payments made to the Redeveloper under the Note. Nothing in this Section shall be construed to limit the HRA's other remedies hereunder. Section 10.6. Redeveloper Deposit. The parties acknowledge that the Redeveloper has previously deposited $10,000 with the HRA. The purpose of the deposit is to reimburse the HRA for costs incurred by it in connection with the preparation of this Agreement and the establishment of the Gramercy Tax Increment District. Any portions of the deposit which are not needed for that purpose shall be returned to the Redeveloper within 15 days following the Closing; or the termination of this Agreement for failure to close. It is understood that the deposited amount is not a limitation on the Redeveloper's obligation to reimburse for such costs; and the Redeveloper shall pay the HRA for any such costs in excess of the deposit within 30 days of written request to do so. Section 10.7. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally: As to the HRA: Housing and Redevelopment Authority 6700 Portland Avenue South Richfield, Minnesota 55423 Attention: Executive Director As to the Redeveloper: Gramercy Park Cooperative of Richfield or at such other address with respect to either such party as that parry may, from time to time, designate in writing and forward to the other. Section 10.8. Identification Marker. The Redeveloper, the HRA will work with the city, as part of the PUD Plan approval process, in the formulation of plans for an Identification Marker to be located on or near the Redevelopment Property and near the intersection of Lyndale Avenue and Lake Shore Drive. The plans will address such matters as design, message, location, cost, and maintenance. Section 10.9. Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. i JBD144650 RC125-170 24 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: By: Its: GRAMERCY PARK COOPERATIVE OF RICHFIELD a Notary Public • By: STATE OF MINNESOTA ) ) SS COUNTY OF ) Its: The foregoing instrument was acknowledged before me this day of , 1998, by and , the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. JBD144650 RC125-170 25 E • ,TBD144650 RC125-170 [Developer Acknowledgement] 26 EXHIBIT D $3,000,000 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD LIMITED REVENUE TAX INCREMENT NOTE 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 Gramercy Park Cooperative of Richfield (the "Owner"), to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $3,000,000 (the "Principal Amount"), together with interest thereon accrued from the date of this Note, at the rate of interest of 7.5% per annum (the "Stated Rate"), in the amount and on the dates (the "Scheduled Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and in the amounts stated thereon (the "Scheduled Payments"). Unpaid interest accruing from the date of 40 this Note, shall be added to principal on a semi-annual basis on each August 1 and February 1 until February 1, 2001. Any payments on this Note shall be applied first to accrued interest and then to the Principal Amount in respect of which such payment is made. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at it postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority to aid in financing a "project," as defined in Minnesota Statutes, § 469.174, of the Authority within and for the benefit of the Interchange Tax Increment Financing District ("District"). THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED • BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Scheduled JBD144650 RC125-170 D-1 Payment Date "Available Tax Increment." For the purpose of this Note, "Available Tax Increment" means: Seventy-five Percent (75%) of the tax increment received from the real estate described in Schedule B the "Redevelopment Property" for years beginning with 1998 and ending in 2026, after first deducting therefrom i) any amount needed to make a previously due but unpaid Scheduled Payment to Owner; and ii) any amount required to make a payment due but not otherwise paid to the Authority under the Development Contract. For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment Dates set forth on Schedule A attached hereto. To the extend that on any Payment Date the Authority is unable to make a full Scheduled Payment due to insufficient Available Tax Increment (which insufficiency is not due to a failure of the Owner to pay full real estate taxes payable on the Redevelopment Property), such deficiency shall be deferred and paid along with future Scheduled Payments but only to the extent of Available Tax Increment. This Note shall terminate upon the earlier of i) the date when the Redeveloper has been fully reimbursed according to the terms hereof; or ii) February 1, 2026 This Note shall also terminate and the Authority's obligation to make any payments under this Note shall be discharged and the Authority shall have no obligation and incur no liability to make any payments hereunder immediately upon the occurrence of an Event of Default under the Contract for Private Development, dated , 1998, (the "Development Contract") between the Authority and the Owner, subject to the notice and cure provisions of Section 9.2 thereof. • This Note shall not be payable from or constitute a charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other public body, and neither the Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of the Development, but only with prior written notice thereof to the Authority. The Owner may also, without prior notice to or consent of the Authority transfer or assign the Note or the right to receive payments under the Note to a wholly-owned subsidiary of the Owner. . This Note may be prepaid in full at any time at the option of the Authority; and may also be prepaid at the request of the Owner, but in either instance only if the Authority first JBD144650 T1 RC125-170 D-2 determines that sufficient tax increment is or will be generated to permit such prepayment, and the parties agree upon the actual prepayment amount. This Note is issued pursuant proper action of the Authority by Resolution and the Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority or the City of Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures of the Chairperson and the Executive Director of the Authority and has caused this Note to be dated , 1998. is Chairperson Executive Director JBD144650 RC125-170 D-3 C-] E • SCHEDULE A SCHEDULED PAYMENT DATES SCHEDULED PAYMENTS SCHEDULED PAYMENT DATES SCHEDULED PAYMENTS 8/1/01 142,584 2/1/14 168,885 2/1/02 142,584 8/1/14 171,243 8/1/02 144,617 2/1/15 171,243 2/1/03 144,617 8/1/15 173,894 8/1/03 146,679 2/1/16 173,894 2/ 1 /04 146,679 8/1/16 176,148 8/1/04 148,788 2/1/17 176,148 2/1/05 148,788 8/1/17 178,635 8/1/05 150,885 2/1/18 178,635 2/1/06 150,885 8/1/18 181,155 8/1/06 153,031 2/1/19 181,155 2/1/07 153,031 8/1/19 183,710 8/1/07 155,205 2/1/20 185,710 2/1/08 155,205 8/1/20 185,299 8/1/08 157,410 2/1/21 185,299 2/1/09 157,410 8/1/21 188,923 8/1/09 159,643 2/1/22 188,923 2/1/10 159,643 8/1/22 191,582 8/1/10 161,907 2/1/23 191,582 2/1/11 161,907 8/1/23 194,277 8/1/11 164,202 2/1/24 194,277 2/1/12 164,202 8/1/24 197,009 8/1/12 168,528 2/1/25 197,009 2/1/13 168,528 8/1/25 199,777 8/1/13 168,885 2/1/26 140,742 JBD144650 RC125-170 A-1 0 EXHIBIT B CERTIFICATE OF COMPLETION The undersigned hereby certifies that Gramercy Park Cooperative of Richfield a 45 Minnesota cooperative corporation has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development," dated 1998, between THE HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF RICHFIELD and , with respect to construction of the Minimum Improvements located on the tract of land described in the attached Exhibit A In accordance with the requirements of such document and is released and forever discharged from its obligations to construction the Minimum Improvements under such above-referenced Article on the above-referenced tract. DATED: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Chairperson • By JBD144650 RC125-170 B-1 Its Executive Director HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter N0.33 Agenda June 15, 1998 Issue Statement: Consideration of a report from CSM on the status of the Interchange West feasibility study and authorization to formulate a developer's agreement. Background: In June 1997, the HRA and the City entered into a six month exclusive rights agreement to allow CSM to undertake a feasibility study regarding redevelopment of the Interchange West area. The area is bounded by Penn and Knox Avenues and by 76th and 78th Streets. In December of that year, CSM was given an additional six months to continue the study. The study period expires this month. CSM prepared two draft redevelopment options. Option A involved redevelopment of the existing commercial areas and the removal of ten homes along 77th Street. Option B involved redevelopment of the entire area, including all homes north of 77th Street. Through a neighborhood participation process, area homeowners responded to two surveys asking which option was preferred. The results indicated that 70 percent of those who responded prefer Option B. Those results were presented to the HRA and the City Council in May. In light of the results, the HRA directed CSM to present a status report at the June meeting and to present a preliminary development plan for the entire area. A copy of the preliminary master plan is attached. Recommended Motion: Listen to a presentation from CSM regarding the status of the proposal; direct staff to begin negotiating a contract for private redevelopment for presentation to the HRA in August. Basis of Recommendation: 1. The homeowner survey indicated that 70 percent of respondents favor redevelopment of both the commercial and residential areas. 2. The exclusive rights agreement between CSM and the HRA expires in June. 3. CSM continues to report progress in its negotiations with the two car dealerships. 4. Redevelopment of the entire area is consistent with the City's Comprehensive Plan. 5. An update letter was sent to all owners and occupants which included mention of the HRA meeting on June 15. Alternative Recommendation: Delay any consideration of this matter in June. Discussion/Decision Mode: The exclusive rights agreement expires in June. The next step would be to negotiate a developer's agreement. Respectfully submitted, Jam D. Prosser Executive Director JDP:ds • 40 Celebrating ZO Years ofServirtg yo. CSM Corporation 2575 University Ave. W., Suits 15o -St. Pew, uN 551 m-8024 June 11, 1998 Mr. John Melin City of Richfield 6700 Portland Avenue Richfield, Minnesota 55423 Re: Interchange West Status of CSM Activity Dear John- 6!21646-7717 9 FAX 8121646.2404 By Fax & 1 st Class Mail 861-9749 This correspondence will serve as an update to our progress on the proposed development of the Interchange West area in Richfield. Proieet Master Plan In accordance with the direction given by the HKA at its May 18, 1998 meeting, the Master Plan for the redevelopment of the Interchange West area includes not only commercial development south of the existing 77th Street, and east of Logan Avenue, but also redevelopment of the residential area between 76th and 77th Street. We have developed the enclosed Plan on the basis of our own market research and feasibility analysis, however, as you can appreciate the Plan is likely to change as refinements are added over the course of the next several months' planning process. Highlights of the enclosed Plan include commercial development consisting of approximately 375,000 square feet of office space in two towers (seven stories each), the construction of a 350 room full service hotel, including 12,500 square feet of meeting and convention space, and two full service sit down restaurants totaling approximately 18,520 square feet. The foregoing components are all located generally south of the existing 77th Street, with parking provided with a combination of surface and underground parking stalls. Redevelopment of the commercial area east of Logan Avenue will include a 100 unit senior apartment complex, in combination with 30,000 square feet of office space, with parking being supported by surface and underground parking stalls. The final commercial component of the Master Plan includes a gas station/converdence store and small retail facility located at the southwest corner of Knox Avenue and 76th Street. Residential redevelopment consists of approximately 168 new townhouses and urban homes, constructed in cluster style. The residential component of the redevelopment also includes a small park centered around a central water feature, a significant trail system and other amenities. We look forward to presenting a more detailed presentation of the Master Plan, including a preliminary elevation study for the office buildings at the HRA meeting on June 15, 1998. Neighborhood Involvement As you know, and as was presented to the HRA at its May 18th meeting, there has been significant neighborhood participation project undertaken by residential homeowners, CSM, the City, and facilitated by the Mediation Center and Nancy Welsh. While we are encouraged by the results of the latest survey conducted as part of that process, we recognize that there are still a significant number of homeowners who are not in support of the project, and do not wish to relocate. We are committed to dealing fairly with all of the property owners (both residential and commercial) who will be affected by our proposed redevelopment, and hopefully we will be successful in addressing the individual concerns and requirements of each and every property owner in the project area. Ne&qtiations with Car Dealers As you know, the automobile dealerships located along I-494 represent the largest share of the commercial area to be redeveloped. To date we have had significant, frequent and substantive discussions with Mr. Paul Walser, and Mr. Wallace McCarthy. Those discussions have advanced to the point where they have included such topics as compensation, the timing of our development, relocation, and other significant factors that would be required to complete a Purchase Agreement. At this point we have not entered into a formal written agreement with either Mr. Walser or Mr. McCarthy, but we are confident that as the project moves into the next phase of planning and discussions with the City Staff and its boards, commissions and council, that we will be successful in reaching agreement with both automobile dealers that will address concerns each has raised individually regarding the redevelopment of this area, and will provide for a reasonable and appropriate level of compensation. Next Steys As part of our involvement with the Neighborhood we presented a preliminary schedule for the project, which schedule was sent to each of the residential homeowners. Attached hereto please find a copy of that Schedule. As you can see, our timing has slipped somewhat from the anticipated beginning of the City approval process indicated for March of 1998. This is primarily the result of the process which was initiated to involve the Neighborhood in a discussion about the extent of our redevelopment north of 77th Street. We are hopeful that we can compress the required approvals, together with our acquisition activity into a shorter time frame, such that we can be in a position of obtaining our final approvals by Fall of 1998. Obviously there are several factors that may impact this Schedule, but we are hopeful that we can be in a position to remove our conditions for acquisition not later than the end of this year. Property acquisition could 0 K:IHOME%MISCDATAICAROLYN%WORDPRO?CORRESPWURRAY1199AMelMI commence thereafter, however we have committed to homeowners that we would not be acquiring their property during the holiday season between Thanksgiving and New Year. We look forward to discussing these and other issues regarding our proposed redevelopment of the Interchange West area with the HItA at its meeting on Monday evening. Should you have any questions re ing the enclosed information, please do not hesitate to contact me. "rely yo S, urray 7Koo berg Acquisi& Finan ' Enclosure cc: Gary Tushie 0 • H H W V O oG V z ?? ox 0 H V W 0 H W Cr O and W W • r C A W ? C Q } E V U. • c A v z c 2'i c O a 75 aab T a a `m a m LL C w U O 'o z 0 a m 0 0 A c m 0 93 a Y 6 O ? w > O d c C m m v A m m E a r z c N c a c _o O A 0 °° c ° Q a 0 c m c a E ? 8 co m li LL a v c ?p b d a V Q -. c a c c w w o "' a c c c d c .? 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I I m LOGAN I° ? la I I Rig eel A 6R -- I s ? .1 1 .1 s??t ?N? pN Z;i g13n? ? ??g m m? w A UI? ? m D m ? pN ?oI (S N > ymI ?W 61WVN j N ?? oOL?? m 5 ?f?R t) `n N ? R 3f b Z yg yg 41 N 1t=n s 41 4>>1 ? ?! < ? P ? i? v SOS ? C ? tmp f?si ?m ? P N ?t?1? A rS?A?A fn O NNSN N N oP? O? ? N{ ^? aN ? ? ? a HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter N0.32 Agenda June 15, 1998 Issue Statement: Conduct a study session with the City Council, Planning Commission and Community Services Commission regarding the status of the Richfield Lake Area (RLA). Background: The first agenda item for the June 15 meeting is a report by planning consultants Fred Hoisington and Michael Schroeder of Hoisington Koegler regarding the RLA study. The purpose of this meeting is to allow the HRA, City Council, Planning Commission and Community Services Commission to be updated on the development of a master plan for the Richfield Lake Area. It is not a public hearing. No plans are being approved. Rather, the plan is a work-in-progress representing a changed Lyndale Avenue corridor during the next 15 to 20 years. First, Mr. Schroeder will discuss the additional detail that has been added to the plan. Starting from 62nd Street (Crosstown Highway) and heading south, new commercial centers with adjacent multi-unit housing have been added. Century Courts (63rd and Lyndale) becomes new multi-unit housing. Lyndale Garden Center (64th and Lyndale) also provides new housing. The K-Mart store and Richfield State Agency introduce new mixed uses of housing, retail, office, ramp parking, transit stops and skyways. Lyndale Hardware keeps its dominant position on the corner of 66th Street. The neighborhoods located at the 6600 block of Pleasant/Grand Avenue and the 6400 and 6500 blocks of Emerson Avenue are designed as housing study areas. The neighborhood has received a set of answers to recently asked questions and they are now expressing preferences via a survey. A multiple colored map is included representing the draft to date. Second, Mr. Hoisington will summarize the next steps: design guidelines, traffic management strategies, transit planning, timing of project phases and financial aspects. There should be sufficient detail in these areas for presentation at a public open house planned for August 13. An open house on May 28 introduced the draft master plan being presented at the study session. Most of the 90 persons that dropped in were pleased with what they saw and felt their questions were being answered. The new ideas were characterized as "exciting". Those in attendance that oppose redevelopment don't want to impact the lake and the existing neighborhoods and businesses. A desire for greater detail about timelines to implement the plan; anticipated traffic congestion; and an unsupportable concern that new rental housing will cause a decline in property value will be addressed at the August open house. Recommended Motion: 1. Accept the report. 2. Direct the consultant and staff to continue with more detailed plans, design guidelines, financial feasibility and traffic planning. Basis of Recommendation: 1. The Richfield Lake Area study is one of several studies in the community that focuses on maintaining the vitality of Richfield through the use of redevelopment. 2. Planning provides the opportunity to evaluate the RLA as a community asset for replacing lost housing, improving housing choices, commercial investment, recreational enhancement and improved gateways and transportation functions. 3. The kind of broad capital improvement and redevelopment success that has occurred elsewhere in Richfield has resulted from actions taken by the HRA, City Council, Planning Commission and Community Services Commission. 4. The RLA process has been developed to ensure information is routinely provided; feedback is sought and received; and the neighborhood and community are involved. 5. The neighborhood study areas have recently received answers to their questions and are being asked by the Mediation Center to respond to an initial survey of preference or to ask more questions. Alternative Recommendation: 1. Modify the recommendation. 2. Do nothing. However, housing, commercial and transportation changes will affect RLA regardless. The RLA is seen as an area of opportunity for a greater variety of housing choices, upgraded commercial/retail properties and the fuller enjoyment of Richfield Lake by residents. Discussion/Decision Mode: The July Your City publication, which is being distributed before July 4, will include the draft plan and an update on Richfield Lake. Respectfu submitted, James Prosser Executive Director 0 JDP:ds N 4-4 to c; ! r t? , ?c 00 N a z CQ7 'C? o a Y o a }} la? _ f n f c p v 12 CL o y LU LU Q U C N A C i) m V w F C7 z C N o '= U y E Q LL W N O A a fa r O L v .f?, O y N OU a w a 3 :3 o. III c. -i m c V o O V = E u C .. 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