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07-15-96 agenda• CITY OF RICHFIELD, MINNESOTA MONDAY, JULY 15, 1996 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS 7:00 P.M. CALL TO ORDER AGENDA APPROVAL OF MINUTES OF (1) REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING OF JUNE 17, 1996; (2) SPECIAL HRA MEETING OF JUNE 24, 1996; (3) SPECIAL HRA MEETING OF JULY 1, 1996; AND (4) SPECIAL JOINT HRA/CITY COUNCIL MEETING OF JULY 1, 1996 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING i SALE OF 7200 THIRD AVENUE TO STEVEN MARLIN GRANT HOMES, INC. AND 6318 KNOX AVENUE TO TWIN CITIES HABITAT FOR HUMANITY FOR SINGLE FAMILY HOME DEVELOPMENT HRA LETTER N0.41 3. CONSIDERATION OF RESOLUTION AUTHORIZING EXECUTION OF CONTRACT WITH HENNEPIN TECHNICAL COLLEGE TO INITIATE 1996-97 NEW HOME. PROGRAM PROJECT AT 6432-15TH AVENUE HRA LETTER NO. 42 4. CONSIDERATION OF RESOLUTION AUTHORIZING ISSUANCE OF COMPLETION CERTIFICATES FOR RICHFIELD REDISCOVERED PROPERTIES TO: • ROCKPORT HOMES, INC. FOR 6812-13TH AVENUE AND 6601 LOGAN AVENUE • STEVEN M. GRANT HOMES, INC. FOR 6645 UPTON AVENUE • LOYAL THOMPSON FOR 6845 NEWTON AVENUE • AFFORDABLE SUBURBAN HOUSING, INC. FOR 6844-14TH AVENUE • D.L. RUSSELL CO. FOR 6715-14TH AVENUE HRA LETTER NO. 43 • 5. CONSIDERATION OF REQUEST TO EXECUTE SUBORDINATION, NON- DISTURBANCEAND ATTORNMENTAGREEMENT FOR CSM AND EINSTEIN BROS. BAGELS, INC., SHOPS AT LYNDALE, PHASE II HRA LETTER NO. 44 6. EXECUTIVE DIRECTOR REPORT 7. 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. 44 Agenda July 15, 1996 • Issue Statement: Request to execute Subordination, Non-Disturbance and Attornment Agreement for CSM and Einstein Bros. Bagels, Inc., Shops at Lyndale, Phase II. Backaround: CSM is finalizing lease arrangements with Einstein Bros. Bagels, Inc. to occupy space in the Shops at Lyndale, Phase II. As part of their negotiations, the HRA is being asked to execute the Subordination, Non-Disturbance and Attornment Agreement which is attached. Basically, the agreement will permit Einstein Bros.. Bagels, Inc. to continue operation on the site in the event that CSM defaults under its mortgages with the HRA and the HRA takes the property back. Recommended Motion: Approve and execute the Subordination, Non-Disturbance and Attornment Agreement for Einstein Bros. Bagels, Inc. relating to Shops at Lyndale, Phase II. Basis of Recommendation: 1. The agreement is a necessary prerequisite for Einstein Bros. Bagels, Inc. to enter into a tenant lease. The HRA approved a similar agreement for the Baby Superstore, Inc. in June 1996. 2. The proposed agreement has been reviewed by staff and the HRA's legal counsel together with a copy of the proposed lease for the tenant.. 3. The agreement will help assure tenancy if the. HRA took over the property due to a mortgage default. Alternative Recommendation: 1. Do not,approve nor execute the Subordination, Non-Disturbance and Attornment .Agreement for Einstein Bros. Bagels, Inc. 2. Delay approval. Discussion/Decision Mode: Approval and execution of the proposed agreement will expedite tenant negotiations between CSM and Einstein Bros. Bagels, Inc. Resp , f ly submitted, Jame .Prosser Execu ' I Director JDP:cak RECORDING REQUESTED BY, AND WHEN RECORDED RETURN TO: Mary C. Muehlstein, Esq. Pedersen & Houpt 161 North Clark Street Suite 3100 Chicago, Illinois 60601 SUBORDINATION NON-DISTURBANCE AND ATTORNMENT AGREEMENT THIS NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the "Agreement") is made and entered into this day of~ , 1996 by and among Einstein Bros. Bagels, Inc., a Delaware corporation ("Tenant") and The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota ("Lender") and CSM Investors, Inc., a Minnesota corporation ("Landlord"). RECITALS: WHEREAS, Landlord and Tenant executed a Lease, First Addendum to Lease, and Second Addendum to Lease .each dated as of March 15, 1996 (the "Lease"), a memorandum of which may be recorded simultaneously herewith, covering a certain Premises therein described located on a parcel of real estate, commonly known as the "Shops at Lyndale -Phase II"., a legal description of which is attached hereto and incorporated herein by this reference as Exhibit "A" (said parcel of real estate and the Premises being sometimes collectively referred to herein as the "Shopping Center"); and WHEREAS, Landlord has executed a mortgage or mortgages (collectively, the "Mortgage") identified as Exhibit "B" attached hereto in favor of Lender, payable upon the terms and conditions described therein; and WHEREAS, it is a condition to the Mortgage, that the Mortgagee shall unconditionally be and remain at all times a lien or charge upon the Demised Premises, prior and superior to the Lease and to the leasehold estate created thereby; and WHEREAS, the parties hereto desire to assure Tenant's possession of the Demised Premises under the Lease upon the terms and conditions therein contained. MCM 81514 .2 Juty¢ , 1996 NOW, THEREFORE, for and in consideration of the mutual promises herein made and other • good and valuable consideration, the~receipt and sufficiency of which are hereby acknowledged and confessed by the parties hereto, the parties hereto do hereby agree as follows: AGREEMENT: 1. The Lease is and shall be subject and subordinate to the Mortgage, and to all renewals, modifications, consolidations, replacements and extensions thereof, and to all future advances made thereunder. 2. Should Lender become the owner of the Demised Premises, or should the Demised Premises be sold by reason of foreclosure, or other proceedings brought to enforce the Mortgage which encumbers the Demised Premises, or should the Demised Premises be transferred by deed in lieu of foreclosure, or should any portion of the Demised Premises be sold under a trustee's sale, provided tenant is not in default under the Lease (beyond applicable cure periods), the Lease shall continue in full force and effect as a direct lease between the then owner of the Demised Premises resulting from the enforcement of the Mortgage and Tenant, upon, and subject to, all of the terms, covenants and conditions of the Lease for the balance of the term thereof remaining, including any extensions therein provided. Tenant does hereby agree to attorn to Lender or to any such owner as its landlord, and Lender hereby accepts such attornment. 3. Notwithstanding any other provision of this Agreement, Lender shall not be (a) liable for any default of any landlord under the Lease (including Landlord), provided that Lender may, but shall not be obligated to cure any norunonetary default of Landlord that is continuing as of the date Lender forecloses the Demised Premises within thirty (30) days from the date Tenant delivers written notice to Lender of such continuing default, unless such default is of such a nature to reasonably require more than thirty (30) days to cure and then Lender shall be permitted such additional time as is reasonably necessary to effect such cure, provided Lender diligently and continuously proceeds to cure such default; (b) subject to any offsets or defenses which have accrued prior to the date of foreclosure; (c) bound by any rent that Tenant may have paid under the Lease more than one (1) month in advance; (d) bound by any amendment or modification of the Lease hereafter made without Lender's prior written consent; and (e) responsible for the return of any security deposit delivered to Landlord under the Lease and not subsequently received by Lender. 4. If Lender sends written notice to Tenant to direct its rent payments under the Lease to Lender instead of Landlord, then Tenant agrees to follow the instructions set forth in such written instructions and deliver rent payments to Lender; however, Landlord and Lender agree that Tenant shall be credited under the Lease for any rent payments sent to Lender pursuant to such written notice. 5. All notices which may or are required to be sent under this Agreement shall be in writing and shall be sent by certified or registered U.S. mail, postage prepaid,. return receipt requested, and MCM 81514 .2 July 2, 1996 2 sent to the party at the address appearing below or such other address as any party shall hereafter inform the other party by written notice given as set forth above: Tenant: Einstein Bros. Bagels, Inc. 1526 Cole Blvd., Suite 200 Golden, Colorado 80401 with a copy to: Mary C. Muehlstein, Esq. Pedersen & Houpt 161 N. Clark Street Suite 3100 Chicago, Illinois 60601 Lender: Housing and Redevelopment Authority in and for the City of Richfield, Minnesota c/o John Dean Kennedy & Groven 200 S. Sixth Street Minneapolis, Minnesota 55402 All notices delivered as set forth above shall be deemed effective three (3) days from the date deposited in the U.S. mail. Tenant shall provide lender with thirty (30) days notice and opportunity to have any Landlord default prior to exercising any right to terminate under the Lease. 6. Said Mortgage shall not cover or encumber and shall not be construed as subjecting in any manner to the lien thereof any of Tenant's moveable improvements or trade fixtures, furniture, equipment or other personal property at any time placed or installed in the Demised Premises. In the event the- Demised Premises or any part thereof shall be taken for public purposes by condemnation or transfer in lieu thereof or the same are damaged or destroyed, the rights of the parties to any condemnation award or insurance proceeds shall be determined and controlled by the applicable provisions of this Lease, but proceeds shall be applied per mortgage. 7. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their successors in interest, heirs and assigns and any subsequent owner of the Demised Premises secured by the Mortgage. 8. Should any action or proceeding be commenced to enforce any of the provisions of this Agreement or in connection with its meaning, the prevailing parry in such action shall be awarded, in addition to any other relief it may obtain, its reasonable costs and expenses, not limited to taxable costs, and reasonable attorneys/ fees. r - 3 - MCM S 1514 .2 July 2, 1996 r 9. Tenant shall not be enjoined as a party/defendant in any action or proceeding which may be instituted or'taken by reason or under any default by Landlord in the performance of the terms, covenants, conditions and agreements set forth in the Mortgage unless required by law. • LENDER: The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota By:_ Name: Title: TENANT: Einstein Bros. Bagels, Inc., a Delaware Corporation Bv: Name: David G. Stanchak Title: Vice President LANDLORD: CSM Investors, Inc., a Minnesota Corporation By: _ Name: Title: - 4 - MCM 81514 .2 Juty 2, 1996 IN WITNESS WHEREOF, the parties hereto have caused this Non-Disturbance Agreement to be executed as of the day and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 43 Agenda July 15, 1996 • • Issue Statement: Authorization to issue completion certificates for the following Richfield Rediscovered properties: • Rockport Homes Inc. for 6812-13th Avenue and 6601 Logan Avenue; • Steven M. Grant Homes, Inc. for 6645 Upton Avenue; • Loyal Thompson for 6845 Newton Avenue; • Affordable Suburban Housing Inc. for 6844-14th Avenue; and • D.L. Russell Co. for 6715-14th Avenue. Background: The HRA authorized development of the above referenced properties in late 1995 and early 1996. The development agreements provide. for the issuance of a certificate of completion when construction is completed. (A sample certificate is attached). All homes have been completed and occupied. Recommended Motion: Authorize by resolution for the Chair and Executive Director to execute completion certificates for: • Rockport Homes Inc., for 6812-13th Avenue and 6601 Logan Avenue; • Steven M. Grant Homes, Inc. for 6645 Upton Avenue; • Loyal Thompson for 6845 Newton Avenue; • Affordable Suburban Housing Inc., for 6844-14th Avenue; and • D.L. Russell Co. for 6715-14th Avenue. Basis of Recommendation: 1. Construction has been completed and Certificates of Occupancy have been issued by the City's Inspection Division. . 2. The builders have performed in accordance with construction agreements and have requested the issuance of completion certificates and the release of performance security in the following amounts: Builder Rockport Homes Inc. Rockport Homes Inc.. Steven M. Grant Homes Inc. Loyal Thompson Affordable Suburban Housing Inc. D.L. Russell Co. Property Address 6812-13th Avenue 6601 Logan Avenue 6645 Upton Avenue 6845 Newton Avenue 6844-14th Avenue 6715-14th Avenue Performance Securit Amount 30,000 $30,000 $29,000 $26,000 $26,000 $30,000 Discussion/Decision Mode: This matter will be presented at the July 15 HRA meeting. Respectf ly submitted, James Prosser Execute' Director JDP:cak HRA RESOLUTION NO. RESOLUTION AUTHORIZING ISSUANCE OF COMPLETION CERTIFICATES FOR RICHFIELD REDISCOVERED PROPERTIES AT 6812-13TH, 6601 LOGAN, 6645 LIPTON, 6845 NEWTON, 6844-14TH AND 6715-14TH AVENUES WHEREAS, the Richfield Housing and Redevelopment Authority in and for the City of Richfield ("HRA") entered into a "Contract for Private Development" with Rockport Homes Inc., Steven M. Grant Homes Inc., Loyal Thompson, Affordable Suburban Housing, Inc., and D.L. Russell Co., for the construction of single family homes; and WHEREAS, the new homes are located at: 6812-13th, 6601 Logan, 6645 Upton, 6845 Newton, 6844-14th, and 6715-14th Avenues; and WHEREAS, the construction is completed at all properties; and WHEREAS, performance security in the following amounts were received by the specified builders: Builder Rockport Homes Inc. Rockport Homes Inc. Steven M. Grant Homes, Inc. Loyal Thompson Affordable Suburban Housing Inc. D.L. Russell Co. Address 6812-13th Avenue 6601 Logan Avenue 6645 Upton Avenue 6845 Newton Avenue 6844-14th Avenue 67.15-14th Avenue Performance Securit $30,000 $30,000 $29,000 $26,000 $30,000 $30,000 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, as follows: 1. Construction is complete and completion certificates may be issued for 6812-13th, 6601 Logan, 6645 Upton, 6845 Newton, .6844-14th, and 6715-14th Avenues. 2. The performance security can be released and fully discharged to the builders of these homes in satisfaction of all conditions of the respective "Contract for Private Development". Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of July, 1996. ATTEST: Thomas E. Harms, Chair Vern Luettinger, Secretary By CERTIFICATE OF CONTRACT COMPLETION SAMPLE The undersigned hereby certifies that (builder) has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development ,between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and (builder dated (date) .filed (date) as Document No. with respect to construction of the Improvements at address .legally described as (leg_al description) . in accordance with the approved construction plans and is released and forever discharged from its obligations to construct under such above-referenced Article. Dated: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD gy - Its Chairperson Its Executive Director STATE OF MINNESOTA COUNTY OF HENNEPIN SS The foregoing instrument was acknowledged before me this 19_, by and the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: The Housing and Redevelopment Authority in and for the City of Richfield 67090 Portland Avenue South Richfield, MN 55423 [H:CdAdmin:Housing:Form:Cert-Com] day ofi HOUSING AND REDEVELOPMENT AUTHORITY '~ HRA Letter No. 42 Agenda July 15, 1996 Issue Statement: Authorization to execute a contract with Hennepin Technical College-(HTC) to initiate a 1996-97 New Home Program project at 6432-15th Avenue. Back rg. ound_: The HRA has purchased the property at 6432-15th Avenue. The structure currently on the property is substandard in size and function. Demolition has been arranged. HTC has requested that the HRA participate in a new construction project for the 1996- 97 school year. The 6432-15th Avenue site is a good location. Like the project recently completed by HTC and the HRA at 7216 First Avenue, a home with three bedrooms and space for a future fourth bedroom is envisioned. Performance standards established last year between the two organizations ensure that the home will be framed, roofed and sided by the end of fall quarter, December 1996. Interior wall framing, general carpentry, electrical, plumbing, and heating will be completed during winter quarter, March, 1997. Concrete steps and walks, exterior brick facing, landscaping and interior finishes will be completed by June 1997. The home will then be marketed and sold next summer. This schedule worked well at 7216 First Avenue. ~' The project at 6432-15th Avenue, to be stick built on site, is the only HTC project commitment for the 1996-97 school year. Subcontractors to HTC provide the electrical, plumbing, heating, and painting portion of the project. Staff, in cooperation with HTC architectural drafting faculty, has developed a project plan for this 48 foot. wide lot which meets all setback requirements, compliments the neighborhood and incorporates interior features desirable in today's market. A copy of the plans is attached. The new house will have approximately 1,500 square feet of finished living area. Features include a living room, dining area, kitchen, three finished bedrooms, 1-3/4 bathrooms, a deck and room for a future fourth bedroom. This home has additional features given proximity to the airport: an air-to-air heat exchanger and central air conditioning. The "exchanger" is becoming common in new construction to help prevent moisture build up in a tightly constructed home. The amount of the HTC contract for this project is not to exceed $83,025. This cost is consistent with previous projects given design. and square footage variabilities and the addition of the exchanger and air conditioning. Staff has been given preliminary support by the MAC Sound Insulation Program so that the cosf of the central air conditioning can be covered by that program. The contract would be adjusted downward by that amount, if finalized. • The estimated project costs and funding sources follow: ACTIVITY Acquisition Demolition HTC Contract: Landscaping: Legal (Sale): Closing Costs: AMOUNT $55,000 $ 3,750 $83,025 $ 4,000 $ 600 2 500 Total Cost .$148,075 FUNDING SOURCE CDBG Funds CDBG Funds Proceeds of Sale Proceeds of Sale Proceeds of Sale Proceeds of Sale Hennepin Technical College, and all Minnesota Technical Colleges, are now part of the Minnesota State Colleges and Universities system. Because of this change, the contract document has been revised, .reviewed, and found acceptable by legal counsel. Although the completed value of the home. has not yet been determined by independent appraisal, staff estimates that the home will be sold with a second mortgage to a moderate income first time buying family for $90,000. Recommended Motion: It is recommended that the HRA adopt the resolution authorizing the execution of the HTC contract in the amount of $83,025 for the 1996-97 new construction project at 6432-15th .Avenue. Basis of Recommendation: 1. Administrative changes with HTC have proven successful and the most recent project at 7216 First Avenue was completed on schedule. 2. Plans have been developed for 6432-15th Avenue that will meet site requirements and program needs of the HRA. 3. The contract provisions are similar to previous contracts with HTC; a summary of the contract provisions is attached. 4. HTC has demonstrated a unique ability to provide a desirable product at a more modest cost than other builders on sites that are challenging to market. • Alternative Recommendation: Do not authorize execution of the HTC contract. Discussion/Decision Mode: Site work begins in August 1996 with full construction starting in September to coincide with the start of the school year. Respectfully submitted, James .Prosser Execut a Director JDP:cak • • HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF A CONTRACT WITH HENNEPIN COUNTY TECHNICAL COLLEGE (HTC) FOR DEVELOPMENT OF 6432-15TH AVENUE WHEREAS, on January 4, 1996, the HRA purchased the property at 6432-15th Avenue, legally described as: Lot 9, Block 3, Nokomis Gardens Rearrangement of Blocks 1, 2, 3, 4, & 5 Girard Parkview; and WHEREAS, a project has been proposed as a cooperative effort between the HRA and HTC; and WHEREAS, the property at 6432-15th Avenue would be developed with a new single family home; and WHEREAS, the cost for constructing a new home in accordance with the plans and specifications will not exceed $83,025; and WHEREAS, following completion of construction the. property will be sold to a modest income, first time buying family. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that the HRA Chairperson and Executive Director are authorized to enter into a Construction Agreement. with HTC for an amount not to exceed $83,025 for the construction of a new home at 6432-15th Avenue. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of July, 1996. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary • July 15, 1996/HRA 6432-15th Attachment SUMMARY OF CONTRACT REQUIREMENTS FOR HTC PROJECT AT 6432-15TH AVENUE • The construction of a new home at 6432-15th Avenue. • The professional installation of heating, electrical and plumbing systems. • Completion by July 1, 1997. • Supervision of labor and insurance coverage to be the responsibility of HTC. • HTC is responsible for aone-year warranty for defects caused by faulty workmanship or defective materials; atwo-year warranty on installation of plumbing, electrical, heating and. cooling system; and aten-year warranty on structural. defects. • Performance standards have been established specifying HTC's responsibilities (~ concerning timely completion of the home and routine site maintenance during the construction period: By end of December, excavate, place footings and foundation, frame, install windows and doors, side and roof. • By end of March, interior wall framing, insulating, gypsum, cabinets and the majority of plumbing, heating and electrical should be installed. • By end of June, concrete steps, sidewalk, brick work, deck and driveway or parking pad will be completed. • • ~_ ~ ~ .. ~ ~ ;A. r ~, ~-- , -, I ~, . ~_~~ _,, ~- 0 a W H Z 0 o~ .. '. w' ~-.:" ~. 6 _ ,_ _ , jf r 1K..- 0' ~_ __ - ." 2 3 N f - r ~~ ~_ N '.~~-' _ _ 'T . ~- -. ~ =- s _r: Z 0 ~~'( a tJ~ v _..Q ~" N .., , ~, r ~ .-, ~ ~ - r ~ , ~ ;, `,~' y . 3 r I I ~. t 1.1. I i ~ I i ,1 ~l, }'I I y <~ _ _. Ml ~~ ~~ ~ ~ '~~ ~ O ~ r ~ lll~~~^^^ ~ 3 ~ ~ ~ . .. - - - -? :.._- ->w • ~ \ F >F J W W J x.3.4 /~ ~ - ~ _ F' ~ N ~ ~~ ~ ~ O ~~Y ~ ~ ~ 1 3 Y 1 ~ ~'' W ..~ ~.. ~ , ' I .. ... - .. ~~ ~ I - a ~ J Z o. w ~~ a o _ o ~ . ~ . ~, . , - . __ ___ ~ . ~ ._ . ~._ ~~ _ J ~_ LL ~ ~ -+~_ T ~ `W I ~ ~ _ ~i ~ 1 ~ p+ Ai ~~ ?; aY ~ W ~r ~~ Q- ~ - > ~ W 'i / ~ ~ a Tl I r,_~h ~ y ~ I ,, 7 ,~ ;~ ~~ ;: :.Y' . • HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 41 Agenda July 15, 1996 Issue Statement: Public hearing and sale of 7200 Third Avenue to Steven Marlin Grant Homes, Inc. (SMGH) and 6318 Knox Avenue to Twin Cities Habitat for Humanity (Habitat) for single family home development. Background• The HRA has acquired 7200 Third and 6318 Knox Avenues for Richfield Rediscovered Program new home development. It is proposed that the HRA sell 7200 Third Avenue to SMGH and 6318 Knox Avenue to Habitat in accordance with development agreements. The development agreements are similar in form and content to those used previously.. The new home at 7200 Third Avenue will be a three bedroom home with two bathrooms, and an emphasis on single level living. A full basement and attached double car garage will be part of the development. An end value of approximately $120,000 is anticipated. The sale price of the lot is $28,000. The performance security provided by the builder is $28,000. The buyer is incorporating a concept called "life design" which focuses on changes in shelter needs as one ages. The single level living and accessible entry are examples of life cycle housing features. The Habitat project is an "affordable homes initiative" and has the following standard changes to the development agreement: • A minimum value and performance security is not required. It is anticipated that the 1,400 sq: ft., three bedroom, single level home will have a property value upon completion of approximately $90,000. A copy of the proposed plan is attached. • The sale price of the property from the HRA to Habitat is $1. The development agreement will be recorded and requires Habitat to pay $20,000 for the site if they fail to perform. A Certificate of Completion would release this lien. • Habitat requires the home buyer to execute a $20,000 second mortgage to the HRA to secure the land value upon completion of the home. • The HRA is responsible for demolition of the existing house. • Habitat makes every effort to repurchase the home from the home buyer, should they need to sell, by satisfying the buyer's accumulated equity interest. The home would then be resold to another qualifying lower income family. • Habitat is rovided 12 months to complete the project rather than the five to six p months builders typically receive. Habitat has typically completed the home in five to six months. The additional time is provided to reflect the voluntary nature of the construction process. Habitat Executive Director Stephen Seidel is anticipated to be at the July HRA meeting to answer any questions the HRA may have. A consortium of Baptist churches have volunteered labor for the development by Habitat. A neighborhood meeting was held on June 24, 1996. Neighbors at the meeting expressed interest in helping with the construction and spoke favorably of the project.. Recommended Motion: Following a public hearing, adopt the resolution authorizing the HRA Chair and Executive Director to develop new single family homes at 7200 Third Avenue to Steven Marlin Grant Homes, Inc. and 6318 Knox Avenue to Twin Cities Habitat for Humanity. Basis of Recommendation: 1. Both builders have proven to be experienced, capable and financially secure. 2. The HRA acquired 7200 Third and 6318 Knox Avenues for the Richfield Rediscovered Program. 3. The terms of the development agreements have been negotiated and are in conformance with program guidelines. 4. The public hearing for 7200 Third Avenue was published and continued from the June 17, 1996 HRA meeting while house plans were finalized. 5. Notice of public hearing for 6318 .Knox Avenue was published in the Sun Current on July 3, 1996 for July 15, 1996. consideration. Alternative Recommendation: Do not proceed. with development agreements with SMGH and Habitat and direct staff to find other buyers. Discussion/Decision Mode: Closings would occur in late July with construction starting soon afterwards. The site clearance work at 6318 Knox Avenue should be completed by July 22, 1996. The site at 7200 Third Avenue has been cleared. submitted, Director JDP:cak HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 7200 THIRD AND 6318 KNOX AVENUES TO STEVEN MARLIN GRANT HOMES, INC. AND TWIN CITIES HABITAT FOR HUMANITY, RESPECTIVELY, IN ACCORDANCE WITH DEVELOPMENT AGREEMENTS 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 7200 Third Avenue Lot 1, Block 6, Wooddale Second Addition 6318 Knox Avenue Lot 6, Block 8, Ray's Lynnhurst Addition WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, purchasers of the described. property have been identified and development agreements negotiated as follows: Performance Address Sale Price Se urit Builder 7200 Third Avenue $28,000 $28,000 Steven Marlin Grant Homes, Inc. 6318 Knox Avenue $1.00 $20,000 Twin Cities Habitat for (land lien) Humanity, Inc.; and 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 7200 Third Avenue is authorized to be sold for $28,000 to Steven Marlin Grant .Homes, Inc. in accordance with a development agreement with the HRA. 2. A public hearing has been held and 6318 Knox Avenue is authorized to be sold for $1.00 to Twin Cities Habitat for Humanity in accordance with a development agreement with the HRA.- 3. The Chairperson and Executive Director are authorized to execute a Contract for Private Development and other agreements as required to effectuate the sale to Steven Marlin Grant Homes, Inc. and Twin Cities Habitat for Humanity. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of July 1996. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary • • C O +~ _~ W t ~_ c 0 +r W +~ d J • z w 0 w ~ . 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