03-27-95 agendaCITY OF RICHFIELD, MINNESOTA
MONDAY, MARCH 27, 1995
7:00 P.M.
COUNCIL CHAMBERS
CONCURRENT CITY COUNCIL/SPECIAL HOUSING AND
REDEVELOPMENT AUTHORITY MEETING
AGENDA
INTRODUCTORY PROCEEDINGS
CALL.TO ORDER
PLEDGE OF ALLEGIANCE
ITEMS TO BE CONSIDERED BY HRA:
APPROVAL OF MINUTES OF THE (1) REGULAR HRA MEETING OF FEBRUARY 28,
1995 AND (2) CONCURRENT HRA/CITY COUNCIL MEETING OF MARCH 13,-1995
1. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 7429
DUPONT AVENUE FOR RICHFIELD REDISCOVERED PROGRAM
HRA LETTER NO. 19
2. CONSIDERATION OF MODIFIED SUBORDINATION AGREEMENT; PHASE I,
..GSM
HRA LETTER NO. 20
3. CLAIMS AND PAYROLLS
ITEM TO BE CONSIDERED CONCURRENTLY BY HRA AND CITY COUNCIL•
1. ~ CONCURRENT MEETING WITH CITY COUNCIL TO CONSIDER A
RESOLUTION APPROVING HOUSING PLAN AND ISSUANCE OF TAX
EXEMPT REVENUE BONDS TO PURCHASE AND RENOVATE CENTURY
COURT APARTMENTS
HRA LETTER NO. 21
2. CONSIDERATION OF RESOLUTION APPROVING HOUSING PLAN AND
ISSUANCE OF TAX EXEMPT REVENUE BONDS TO PURCHASE AND
RENOVATE CENTURY COURT APARTMENTS
COUNCIL LETTER NO. 81
ADJOURNMENT OF HRA
REGULAR CITY COUNCIL MEETING
CONTINUES AFTER CONCURRENT MEETING
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF THE REGULAR CITY COUNCIL MEETING OF
MARCH 13, 1995
PRESENTATIONS
1. OPPORTUNITY FOR PERSONS TO ADDRESS THE COUNCIL ON ITEMS NOT
LISTED .ON THE AGENDA .
2. PRESENTATION OF PUBLIC SAFETY DEPARTMENTAL COMMENDATION TO
.POLICE OFFICER WILLIAM NIKITUK IN RECOGNITION OF RECEIVING BEST
POLICE OFFICER PERFORMANCE EVALUATION FOR 1994
AGENDA APPROVAL
3: COUNCIL APPROVAL OF AGENDA
CONSENT CALENDAR
4. CONSENT CALENDAR CONTAINS SEVERAL SEPARATE ITEMS WHICH ARE
ACTED UPON BY THE CITY COUNCIL IN ONE MOTION. ONCE THE
CONSENT CALENDAR HAS BEEN APPROVED, THE INDIVIDUAL ITEMS AND
RECOMMENDED ACTIONS HAVE ALSO BEEN APPROVED. NO FURTHER
COUNCIL ACTION IS NECESSARY. HOWEVER, ANY COUNCIL MEMBER
.MAY REQUEST THAT AN ITEM BE REMOVED FROM THE CONSENT
CALENDAR AND PLACED ON THE REGULAR AGENDA FOR COUNCIL
DISCUSSION AND ACTION. ALL ITEMS LISTED ON THE CONSENT
A. CONSIDERATION OF APPROVAL OF APPLICATION FOR ARBY'S, 7744
FIFTH AVENUE, TO INSTALL DIRECTIONAL SIGN IN 77TH STREET
CORRIDOR C.L. 82
B. CONSIDERATION OF APPROVAL OF REMOVAL OF STOP SIGNS AT 76TH
STREET AND EMERSON AVENUE C.L. 83
C. CONSIDERATION OF APPROVAL OF CONSENT AND AGREEMENT.
RELATING TO EMERSON AVENUE LICENSURE AGREEMENT AND
COLFAX AVENUE AGREEMENT; CSM, PHASE I C.L. 84
D. CONSIDERATION OF APPROVAL OF PAYMENT IN EXCESS OF $5,000 TO
LEAGUE OF MINNESOTA CITIES IN AMOUNT OF $9,907.92 C.L, 85
E. CONSIDERATION OF APPROVAL OF PURCHASE IN EXCESS OF $5,000
FOR SUMMER BROCHURE PRINTING FROM NYSTROM .PUBLISHING IN
AMOUNT OF $5,498 C.L. 86
f. CONSIDERATION OF APPROVAL OF BID MINUTES/TABULATION AND
AWARD OF CONTRACT FOR DEMOLITION AND REMOVAL OF BUILDINGS
AT 6913 AND 6933. PENN AVENUE TO APPLE EXCAVATING, INC. IN
AMOUNT OF $7,450.00 C.L. 87
G. CONSIDERATION OF APPROVAL OF BID MINUTES/TABULATION AND
AWARD OF CONTRACT FOR ONE HIGH VELOCITY SEWER CLEANER
FROM FLEXIBLE PIPE & TOOL COMPANY IN AMOUNT OF $41,291.86 C.L.
88
H. CONSIDERATION OF APPROVAL OF BID MINUTES/TABULATION AND
AWARD OF CONTRACT FOR ONE NEW ASPHALT PATCH BOX FOR USE
•
BY STREET MAINTENANCE DIVISION FROM RUFFRIDGE-JOHNSON
COMPANY IN AMOUNT OF $17,935.67 C.L. 89
I. CONSIDERATION OF APPROVAL BID MINUTES/TABULATION AND
AWARD OF CONTRACT FOR NEW HYDRAULIC KNUCKLE BOOM LOADER
WITH 18' BOX FROM CRYSTEEL TRUCK EQUIPMENT IN AMOUNT OF
$35,230 C.L.. 90
PUBLIC HEARINGS -
5. PUBLIC HEARING REGARDING AMENDMENT TO CONDITIONAL USE PERMIT
TO ALLOW EXPANSION OF ERASER SCHOOL, 2400 WEST 64TH STREET
COUNCIL LETTER NO. 91
6. PUBLIC HEARING AND SECOND READING OF TRANSITORY ORDINANCE
VACATING PORTION OF-OLD 77TH STREET BETWEEN EMERSON AND
COLFAX AVENUES; CSM, PHASE
COUNCIL LETTER N0. 92
7. PUBLIC HEARING AND SECOND READINGS OF: ORDINANCE AMENDMENT
TO ZONING ORDINANCE QN ADULT USES; AMENDMENT TO SECTION
2020.01 PROHIBITING NUDITY IN LICENSE ESTABLISHMENTS; ADULT
ESTABLISHMENT ORDINANCE; AND ORDINANCE RELATING TO PREMISES
CONDUCIVE TO HIGH-RISK SEXUAL CONDUCT
COUNCIL LETTER NO. 93
8. CONTINUANCE OF PUBLIC HEARING TO EXPAND BOUNDARIES OF
REDEFINED INTERSTATE/NICOLLET/LYNDALE/77TH STREET ASSESSMENT
PROJECT AREA AND CONSIDERATION OF RESOLUTION ORDERING
UNDERTAKING OF CURRENT MAINTENANCE SERVICE PROJECT FROM
JANUARY 1 THROUGH DECEMBER 31, 1995, CITY PROJECT NO. 901
COUNCIL LETTER NO. 94
9. CONSIDERATION OF TRANSITIONAL ACTIVITY. PERMIT AND OFF-STREET
PARKING PERMIT FOR RICHFIELD PLUMBING AND HAGEN MICRO AGE, 510
WEST 77TH STREET
COUNCIL LETTER N0. 95
RESOLUTION
10. CONSIDERATION OF RESOLUTION APPROVING LABOR AGREEMENT
BETWEEN CITY OF RICHFIELD AND RICHFIELD POLICE SUPERVISORS
BARGAINING UNIT LOCAL -162 FOR 1995
COUNCIL LETTER NO. 96
PROPOSED ORDINANCES
11. CONSIDERATION OF RESOLUTION AUTHORIZING ACQULSITION OF 7216
.FIRST AVENUE TO PERMIT HRA TO PROCEED WITH HENNEPIN TECHNICAL
Z
COLLEGE NEW CONSTRUCTION PROJECT AND FIRST READING OF
ORDINANCE AUTHORIZING SALE OF PROPERTY TO HRA
COUNCIL LETTER NO. 97
12. CONSIDERATION OF FIRST READING OF COMPREHENSIVE REVISION OF
ZONING CODE
COUNCIL LETTER NO. 98
ADMINISTRATIVE REPORTS & OTHER BUSINESS
13. CONSIDERATION OF RECEIPT OF UNAUDITED 1994 FINANCIAL REPORT
COUNCIL LETTER NO. 99
14. CONSIDERATION OF REQUEST FOR- DETERMINATION ON APPROPRIATE
ZONING CLASSIFICATION FOR DRAPERY SERVICE BUSINESS, 7301 PENN
AVENUE
COUNCIL LETTER NO. 1A0
AIRPORT BUSINESS
15. AIRPORT STATUS REPORT
77TH STREET PROJECT BUSINESS
16. 77TH STREET PROJECT STATUS REPORT
CORRESPONDENCE
17. LEGISLATIVE REPORT
COUNCIL CHOICE
18. COUNCIL DISCUSSION ITEMS
19. CLAIMS AND PAYROLLS
20. 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. 21
Agenda March 27, 1995
Issue Statement:
Concurrent meeting with the City Council to consider a resolution approving a housing
plan and the issuance of tax exempt revenue bonds to purchase and renovate the
Century Court apartments.
Background:
The City Council gave preliminary approval to the issuance of tax exempt bonds on
December 29, 1994 and authorized application for the allocation of bonding authority.
This action was taken at the request of Dominium Management Services, Inc.
(Dominium). The State subsequently awarded $19,679,000 in bonding authority to
provide for the purchase and renovation of Century Court apartments in Richfield.
When preliminary approval was granted by the City Council it was given subject to
review of the financial. and. rehabilitation- packages. Discussions have been held-
between staff and Dominium representatives. A public hearing was held on March 13,
1995 at a joint meeting ofithe HRA and City Council:
All attachments are with Council Letter No. 81.
Recommended Motion:
Provide input to the City Council as appropriate.
Basis of Recommendation:
1. The City Council approved the preliminary resolution on December 29, 1994.
2. This type of tax exempt revenue bond financing does not become a debt of the
City nor is the City responsible in any way for the payment of the bonds. Applicant
will receive dollar benefit from the tax exempt issuance through the City in an
amount approximating $3.5 to $4.0 million.
3. All parties recognize that some degree of renovation will be required for these
apartment buildings. Staff has had an evaluation made of the buildings by an
outside consultant as well as by relevant staff. Stuart Shelard estimated the rehab
requirements at $6.8 million. Dominium has stated that this same level of work
could be completed for $4.7 million.
4. Review of Issues:
A. Amount of rehabilitation
• Dominium has agreed to $3.5 to rehab the apartment properties.
• Staff estimates of dollar benefits accruing -from the issuance of tax
exempt bonds through the City range from $3.5 to 4.0 million.
B. Timing of rehabilitation
• Dominium-has proposed the initial two year expenditure of $2,284,000
with the remainder from 50% of the .cash flow. (If a tax credit
.syndication is established, the entire $3.5 million would be expended in
the initial period.) See Dominium letter of March 22,.1995 and
Rehabilitation Plan.
• Publicorp estimates that a 50% of cash flow payment system will
require five to six years to establish the full dollar amount. See letter
dated March 21, 1995 from Publicorp.
C. Assurance of payment.
• Doninium would agree to payment of gross revenue to a Trustee who
would allocate funds including the 50% for rehab.
• A Escrow Account will provide an agreed: upon allocation of funds
provided there is a positive cash flow.
D. Tax credits
Dominium indicates that the current structure of the partnership would
not allow the utilization of tax credits. If such partnership was
restructured and tax credits became available, .the percentage of low or
moderate income- units qualifying for tax credits would have to be
negotiated with the City. Some 40% would be required by the tax
exempt bond issuance. Donimum has submitted a survey indicating
60% of the .current residents qualify.
• Amore finite survey of tenants with the implications therefrom would
have to be accomplished at the time of request.
E. Assurance of issuance and sale of bonds.
• Donimum. has $200,000 on deposit to assure the issuance of the bonds
by April 7,1995. The process would entail issuance and "parking" of
the bonds. To assure the City that the bonds would be "unparked" and
sold, Dominum would deposit the $200,000 with the City less the
amount of out-of-pocket costs of approximately $75,000.
• The City wishes to avoid ,any adverse consequence which may result if
bonds are not "unparked".
F. Issuer's fee and replacement revenues.
• A change in property tax classification will result in lowering the
property tax to be paid. Dominium would agree to replace lost tax
revenues to the City and school district. An issuer's fee of 1/8 of 1%
-would be folded into the revenue replacement amount.
• Century Courts is the largest tax payer in the City and a change in
classification has major consequences.. Replacement of this revenue
to the City and the school district for its excess levy- is necessary. It is
also appropriate to establish an issuer's fee in this type of situation.
G. Maintenance Reserve
• A maintenance reserve will be established for repair and replacements.
• The maintenance reserve is to be over and above the amounts noted in
the rehabilitation plan
5. The basic underlying- documents related to the transfer of property have been.
reviewed by the City Attorney's office:
6. A Management Plan has been submitted and attached:
7. Additional documents on the bond issuance are attached including:
A. Indenture agreement
B. Loan agreement
C. Regulatory agreement
D. Housing plan
E. Proposed resolution
8. Unless the underlying documents are restructured, the current owners (Wolfenson
and Ratner) would become the limited half interest partners and Dominium would
become the general partner and half interest owner.
9. Dominium has deposited $25,000 with the City to cover the- excess-cost of review -
of the proposal.
10. The City Council-must take action on the proposal and the HRA is available for
discussion and input as appropriate.
Alternative Recommendation:
1. Reject the proposal unless there is an agreement to fund the entire $3.5 million for
rehab of the units within the initial two year period. The savings of $3.5 to $4.0
.million resulting from the issuance of tax exempt bonds through the City should be
reinvested in the project promptly without contingencies.
2. Reject the proposal unless all rehab work outlined. by Stuart Shelard in a report to
the City be accomplished in an amount estimated by Stuart Shelard at $6,803,000
and restated by Dominium with their applicable costs at $4,720,314.
Discussion/Decision Mode:
Final action .must be taken at the March 27, 1995 meeting by the City Council in order
to sell the bonds by the April deadline or the right to issue is lost.
Respectful) submitted,
Jame .Prosser
Executive Director
JDP:cak
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 20
Agenda March 27, 1995
Issue Statement:
Consideration of approval of modified Subordination Agreement, Phase I, CSM.
Background:
On February 28, 1995, the HRA approved a Subordination Agreement. CSM was
seeking permanent financing for Phase I of Shops at Lyndale. CSM intended to obtain
that financing from Allstate Life Insurance Company in the amount of $12.9 million.
Allstate and CSM requested the HRA to subordinate its interest in the project to
Allstate. Under the proposal if CSM defaulted, payments due CSM from the HRA would
be paid to the lender, the lender would be free to manage the property to protect its
assets. The agreement approved in February has been modified. The additions are
underlined.
Recommended Motion:
Approve the modified Subordination Agreement with CSM, Phase I, and authorize its
execution.
Basis of Recommendation:
1. The likelihood of default is low given that the three tenants are regional or national in
character.
2. The lender and HRA have similar interests in keeping the project a viable commercial
property.
3. This is a common request from developers and the Contract for Private Development
anticipated such a request.
Alternative Recommendation:
1. Delay action.
2. Refuse to approve.
Discussion/Decision Mode: .
CSM plans a closing with Allstate soon. A timely response would keep the process
moving. Questions regarding the document will be answered at the March 27 HRA
meeting.
Respectfully submitted,
James .Prosser
Executive Director
JDP:cak
~ aosioi~
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gUgQ~INATiD11~ AGP;EGEi1~l~T
This A~,reet~tcat is nub Cffectiv+c as of the ~ day ~ __..1995, by and
aitzortg TfIE ~QY,IS~NCx AND gEDE'VELCfPN~NT A'i,TTHC1ltl'lY Ilrt ANA F~ THE
CITY' C'tF i~,ICHEI~~, hII~NF.SaTA (the ~`Autftority") ALY.STATE LIFE n~TSUItAIVCB
CQ,MPA,NY, a ~ carP~tion {the "Lesttdert0~, and fiSM INYLSTOR.S, INC.,
a I~tuaesvta cc~auratiaa (the "Tloper"~.
The Authority arad CSM C.arpacatioas ("C5M Cotporatxon'~ tittered into a
Corrtraat FOf PrlVate D8'Ye`lopxaent d~sd AprZl ~9,199~4, ae a~manded }3y Re~oltttiOti I~"o.
_, dated . Resclutian Na. ,dated
. and Resclu~ti4a No. .dated {the.
"~evetogmeat Contraet:~, whereby fl3e Autttvttty agreed t0 pr4v:de ~Ci'~3ttY aid and BSSISC2ttCC
to the d~-eiopa wader the Develapsxteat Contrast through try of public fiends td ice
c~erkairs costs a£de^velopmcnt of the Fhase ~ Prapett~r and tht Phase II Psaperty {as defined in
the L3cveiopmant Contract).
~t to as Assignment and Ass+amptian dated as of August 1, 1994 {the
"Assisaament Agreement"3, CSM Ca~rporatian assigned all cf its rights and ~.tei-ests is the
L?evelopmeat Contract to tEu Developer sad the Developer assuta~ed all of CSM
CorperaSion's obligations under the Development Ccz~tract
Pursuant to t[ie Developxrxsnt ~trsct, the Authority has eacecuted and
delivered to the. Developer a Limited Renegue Tax lnaem~t Note {Phase ~ (the ``~veaue
Note', pursuant to which the Authar~y wiu make i3ask~llmeat payments to the L?Cvelopes as
th,ereisi provided.
The Lender has wade a lean #a Develc~pet 2s of the date hereof is she ax~uat
of ~ 12,90t],a00 (the "Lender Loa~s"~ ro ice a retail shopping center facility located tin the
iat:d described iat F.xhibi3 At attached hcseto and l~,mersort Aver3ue South and/or Galfax
Ave~ve South ~ the exte:~# the saute ors vacated aid acquired by the Developer (collectivelr~,
tke foregoixtg land is tailed the "Land"; collectively, the retail shopping center facilitq amd
tusy otizer imprdvcmtxtts now sxistiag to to be coastrticted on the Land are tailed the
"Project": '~ Lender Loan is evidenced by the C3eveloget's promissory ante. dazed as of
I995, payable t4 thin order of the Leader (the "Lender NotE`''). The
i7eveleper's obligat~.o,QS wader the Leader Note are securad, among other tTa~iaga, pursuant to a
I-iloxtgage, Assigataeat of Lea.~es, Rents and Contracts, Ses~uity Agreem.estt ar~d Fixture P`tiigg
dated as of ,1995 (the "Lerida MongaSe"~ and by aa~ Assignnxeat of
Leases aid keass dated as of _ . _ ,1995 (fie "tea Assigmaeat of
Rears^; caltectivrl~y, the i.einder Note, rise Leader Mortgage and the Linder Assig~mertt of
li.ents are called the "Lender Low Docuncnts"~.
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AG. ~3s [~F
As a aotzditiaa of ~ the Lender I.oast, the Leader bas r~equircd that the
Auths:ri#y (i) fitily subardittate ail of the terrsts. covenants. conditions and restrictions
cozened ie the ~]evelop~aer-t Contract and alI rights cad ;~+*~~ of the Authority in ar w t~
P><ojeet or tlu Land (collectively, the Project and the Lazed are called the "Premises"} of nay
Idnd wha~so~ever wader the I9evelaFYrceat Contract or atberwise to the lien ~f the Leaxd~
Mongagc and the Leadea~ Assigazu~t of Rea#s and t+o ~Y comer Um ar security inteseat at auy
tune bereafier acquired by the Leader itr all e~ $tay pottiaa of the Premises and {ii) upon
t~ipt of`written stotzce from the Lender certifying that art ~veflt of 17efault 2LS defined in the
Leader Mortgage has occurred and has :tat bees: cued by the Developer withg+ axcy applicable
sure pesie~d, make ail futtue paymer~Es becemittg doe and payable under tfie Rewrnue ~Tntt sa
t#te Leader or to atsy tramsfere~ of the L+endes_
Accordit>Egly, the A.ulthorit~r, the l~evelaper clad the L~et7der hereby agr+ae as
falIows~
i . Ilse A,ntharity eckndwledges $ad agrees tltiat 2111 tights ~rdnlterests of
the Authority uodec th$ ~tevelopmea# Contract or athrrwisc itr o;r ~ the Premises sre axui shall
remit flirty subordi>,ata and subj>rct m the lielss of the Lessder Mortgage attd the Leader
A,~gnmant of Rents sad ai! Ieeas ar se~rity iatemsts now held or at nay tetree Y~rea#~er
acquired by the Lender ta~ Secerte ether foatts of Gxtensians of credit made by the Leader_ In
further olariftr.,~iota of thr subordination accomplished by the precCdiYtg setttesrte~e, acrd net 1st
iiztut.atiaa t#teseof, the Aut~rority arlCnowle:dges and agrees that C) auy rig~tt which the
Authority has larder Section 3.2 afthe D~-ciogsst>~nt Costuact ar othesa+ise to ufxli~e or sew the
Premises after default by rh~e Developer is fully subordinate to and subject ro the liege of the
i.ender Mortgage attd the Leader Assig~rreent of Rents, {iii nay right which tlxe Authority ba4
erodes Sex#ion 6,2 to receive;~~**~nce prvaeeds ar m ree the Premises to bt: rebuilt in the
event of ;s casualty to the Premises is fully sesbordittate to asd subject to the rights of the
Lender vadex the Leaden lliarzgage and ~ Larder AssigQS::ert of heats, and
(iii) aotR-ltbstandiag tteprovisions of Sectiatts 8.3 and 20.2 of the Developmdrit Cantirac~,
ei#her before or after foreclostue by the Leader ar action is Iiet: thereof~ tHc Leader or tha
Lender's ass~.ee tray. without assuming azty of the obligations of'the Developer under the
Development Cott#raa' cad writhout arty cam from the Authorityt; uadeztalcc ti aorttioue to
complete c~anstruarion of the Project with such changes to the Project as the Lextdrt des
necess~- or appropnats, 21nd (iv) aotwtthstaridutg the prorristotts afSectaort $.4 of the
Dewelopmeitt Cotlttatrt, the Lmdar shall have no abligatiaa w provide to the Authority atey
notice of any Event of Defaaclt an tlrc pant a>F ~e Developer ceder thre i.eader mortgage
(except as provided in par.~gt aph 9 blow) and the Authority sha]1 have no riglet tQ tare nay
Event of Def2lxtit on the part of the Developer wader ~ Lander Mastgagc.
2. Y'he Authority hereby acksro'wle~dges that the Revesrue Mete will be
pledged, endorsed and assigned to the Leader as additional coliaterai far p2tyxr~rat of the
Ler~dex Loan: made by the Leader to the Developer. If in the furore there is ors Event of
-a-
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Default try the Devetc~p+sr under thee La~det Vie. the Leader, ~ its aptioa may require
that alt subsaquetrt ~ due under the Revemue note be paid solely and directtY m she
Leader or s+a tha I,rader's ~ig~ee. Upon the Authority's r~ipt ~ ~9 each natif r~tioa to
tip qtr the bavelaper hrroby suthari~*s gad directs tiu Authority, and tTze Aeitbority
~e~,y agrees, that art subser~ueat paymetds dut to the Dcvetopts under the teza~s and
conditions of the due Nate wits be paid solely and exaiusivatY do the Ler+der or to nay
suct- ~igriee, as the rise maybe. "i'he 1`3e~-~oper e~ agFees tbat thin ~,~ceeme~ shall
conakitttte an irrtvoc$ble diredioa end fu11 ~$at of auhorisy to the Autbntitg to pay a ~~- .
araoursts m the Leader upon recCipt of aotire from the i.ender direCtuzg the p~auhority,
with u~ proof of ttie Event of Defauh relied upon is +en9 each notice- I'he Authority is hereby
irrevocably sne~e~yzed to~rety upon and carnpty with C~ s ba fiilZy pro~ecoed is ao dai~
~y riOtityC or detnarrd by the cadet far the paytne~t to the Lestder of nay ~~ duo tv the
doper v~ader tha Rzvasue NoRc aad thr Authority alp st] have no ditty at oblige to
inquire as to wheth+s ~' Evcat of De£wlx Hader tl-e I~ndet Mortgaga ha4 actually oac~ssred
er is then exista~ The 1eveloper agrees to indeatai€y and hotd the Autla~aity hatatlasa frua~
alt alaasms. dads, aad,~udgments recovered a~aiast the Authoority and any costs ar expenses.
iactu~d tYy the Authority wliiclt arise aS a result af`thc A~uth~arity's mah~ P~ uadst'
tl~ R,evenue Note to the Lender as provided is this paragraph ~ Nv~d~g ~Y
. prdvssoa is this Agreemect to the con~-dry, the .quthotity, tlu i7evelepec and the I,rnria
acknowledge attd a~ee that th,c A'ity shalt have no ablig~ar- ~ rnatx adY P~
under the Roue Hots to the Larder if an $ve~t of Default has defined is the bevelopmeat
Contract) rstatittg notary to Der+eloper's Pbaze I Propr~y obruta has ac+ctaared under the
Y?rctireloprrient Cazttract on the part of the I7eveEopes and such $veat of DtfauYt ~ ~ _~~ the
wazvcd by the AuthaxYt3- ar cured by the Developer arithin the time period permtitc
Deveieputeat Contract ar cured by the Lender within a ceaso~ble time; proms how$~rrr,
tl~t upon waiver by the Authority yry~by~~cure of tha Event of Default by L~evetogtrsj,a
* 1 ~kr.2 .•a or 1'~1P 1JGY{~ydE~~~i iii. * ~~ Q~t~
die Ol7~ltj~atCd t0 ~ ~ ~ p~nerits cinder tho dtevenue Note to the Leader. 'i'he
~;ty ~g~s th2pt t~otwiths'caaditzg asY other pr~avisiaa in Revcrsue Note to she cvmracy,
the phrase "~verzt of Dafa~xtt under the Contract far Private Develc~pmenst" is the ser~and full
p~,~ph ~ page U-2 of the I~c~venvo Nau refexs to $a. Event of alt rcl~tg solely to
13ce Plu~se I Prap~y Cos delisted in tiro pwelopment Contraot) ~d std 'out of the aril oas
or omissions of the Developer ~ e3cci cdiug E~veats of Defaults axising out of the actions or
oraissiosts af'tbe Authority or the City of Richf:eid, MiAnesata, subject to ilia notice and cure
of SeClioa I0.2 thereo#: "`'3~3.~' -r, in ' pia .~~+r in the
prO~BiO~tS ~ ~. ~ r~~.ri t r atf FYP.!!t_4
~~•• t d.. rd ~ ti~sheriey awe thaz_if as $f
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ND.9~3 Git
3. ?he Authosiiy sad the Developer each ackao~vledge that the
nprneat Coatrscc is its wand. legal, binding sod eraforceabie obiig$tiou, aud, ~s of the
date IxerCOf, has not heart assigned (except to the L~velaper ag described is the Recita3s),
abadified, sstppletn:nted or amended.
4. '1'be Autharitr and the Developer earh ar~sowlydge zbat the Phase I
Property h~ been oad is being de~reloped in accordance with ttia Concept Playas (as defined iA
the Develaprnent Coaa'actj.
S. Th,~ Aeltharity ~d the Developer asgree'Ihat natwititstamdiag the
provisiogs ofSeatio3a 4.5 of tine D~eveloptttent Agceament, the Develagtr shall irav~e untyi
l]ecertrber I2M 19-45 tv coatpae~te the canstructiva of all of the i<'hase I Mtaimum
Impravetrteets.
' ~. To the bcst of tie Authority's knowledge and to the best of the
Developer's knowledge, na ~ve~s uof 33efst~tt (as defttted in the Develop eat Contract} or
event, which with the ga.a of daze or The giving of aAti+cc, ar both, would 6e such. as Evans
of ~?afautt, has occurrtad and is caatiauia& under the Y?cvelapraeat Contract. as of the d~
hereof.
?. If as Event of l3efault ass defined in th,e Y~vrlopeneat Contract) shalt
ecevr uzxder the Development Canisact, the Actthc~rYty si~sil give +amttea notice thereof to the
Lender and the Leader shall bawa the right', but no obligatir~n. to cure such $vt~t of Default
within a re~oaable time theresftet_ A~ notice given to the Leader pursnaat to this
P~aB ~ sha13 be seat 6y certaf ed or regia~red ttXdil to the Lender at the foIlowisxg address:
. A€istate Life xastn'aace Ca:apaap
Allstate Piaxa West M2C
3144 Sanders Itaad
Northbroolt; Illinois 6pD62
Alta: Cornaiesrral Moge Loan Servicing Manager
IiV"tth a copy to:
A.ilstete Insurance ComPa~'
Allstate Plaza west MSC
Fis~cial Law Diviseart
310t} Sanders Road
xe~rhbzoo~ r~=s soo6z
$. 'The Atuharity acknowledges receipt of copies df tlLe Lender 1Vlos~egage
anct the Lender Assignment of Rer~s and acimawiedgeS that the LeIIdee Mortgage, tIu Lender
-4-
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@3r1S,~9^.~ $8s5i FAEC~ AND- BEPC37N + 6i2 b~e6 24~sd
+aruizipl4
N0.933 pE
Assi~tnetzt of Rents, and the devclopmxeut of Phase I Property and Phase Ii Property a:a
authorized by aisd agPrarved udder the Development Contract
9. 'F'he Leader ~~ to provide writ~a. notice to the Authority of the
o~ of as ~vezu of ~ on the pest of the Dev~opa imdar the Lender Mortgage
pear to coiameuriag aap farecl~ns~ue proceeding with rasped to the Pr,Gruises or prior to
aaceptiug a deed ire lieu of foreclosure vri#h respect Gv rise Premises. Anp aodce given m the
Authority pursaaat to this ~ 9 shalt be -seat by registe,ced or certified malt tm tt~
Authority at this folla~wisig address:
~'he Hausidg dad Redevelapaneat Authority
is and fos the City c~f'Richfield
6711(? 1?'ottlaad Avenue South
R:ichfxtld, Mianesot~ 55423
Attcatiwrt: Faeecuth-a Dixector
The faituro aftlie L~der ~ provide the ftutkority'aritb ~ such aotiae shah not impair the
ef'the Lender agaiatst the Developer or limit Leader's right to foreclose again-9t rite
Land os exi,Re surly dad all remedies available c[i Leader u:sdet cbe Leader I.eari Dots.
i Q. Iatiriag the fourty--five {4~ day Period Ethe "Optroa Period" vo~mencittg
~-n the datic rhea the Leaxdetir suds is the Authority the ~. natiae desrri6e+d is paragraph
9 above, the Aiitho~- shal~,have.ttie option t4 pturliase the LeizderLoait aria ~e rctattd
LeadeS Loan Dacataents frern -the Lender, without representation ar ra~oourse of arty Ideid !yy
the Lender and pursuant to aSSnent documeatatiuit~ acceptable m thaw Leader, far a
purchase prYCe egctal to the out~taitding principal baiartce of the Leader ?roan pies all accrued
amd unpaid iataest thereon dad nay. other pzemkuxas, pe~lues, few costs ~d pacpen.~s owiQg
to the Lender under the Lender Loan. Dorim~ails as of the data of funding of stub pur~ase.
'l"he Authorit~t acknowledges-and agrees that the Lc:ider stay coaiinance focea3anire
prc~ie~sdixtg's arxd ~ ~~-~~ ate rights and remrdxrs available to tt~e I.enc'ter` under tl~
Deader Leann Dect~nts during thre Option Period; provided, however, that ~ Lender shal3
not accept a decd ins lieu of forecloSinre vrlth respect to the Premises uat~ after ~ expiration.
of the Option Period. 'i7ie Authority further eckaowledges elide if the Am#satYLy elects to
~~:~~-_ its option td purchase eke Lender L,oaa. tuii3er this paragraph lfl, the feiudiag of such
purchase awst aecur prior to 5:00 p.an. (lMiancapolis time) on die lid day of the 4ptian
Period, The. Lender furteher agrcxs that during the Option Pe:rxod, the A~- IDaY propose
far ?~ Lender's coasi+dera+tiort a substitute developer who, among other tiuags: would assurme
a!f of the obligations of the I]evelaper wader the Development Corn~rai:-t and under the Leader
Loan Uocumcnts; provided, ltowevcr, me Lercdar snail have as obtig~io:s to either co3ssider
Qr accept any such substitute developer, aisd, pro~+ided, fi>rthcr, in th~e~e~ent tlxat the Lender, in
its note disrxdicya, sliatl daterrnirse tQ consider or accept such substitute developer, such
-5-
uoii~iau ~a.iw rtis olc u~u cyu4 ~ poi Luuuiv+ltut~ ~U13/Oi<
• a~is~ 86:52 FpEE~ ~ sErsDN -- 6i2 sas 2aBa NQ. ~ ~
can3ide~atiott and/or acceptance sba11 be on such terms as the Wider shall determine in its
sole discYetiaa_
1 Z . Ity fotlovvi~ng any Event of De~uttt Ens dafiried under the Lender
Mortgage} Hadar the Leader Mortgage, the Leodar obtains title m the Premises through
forcal;,osure or by accepting a dead tc tlae Premises from the Developer; the Authority agrees
that apart expiraniott of al! redanptiot: periods, is the case of a forecivaure, or upon the
recording of such deed, is thG soar of a dead is liw of foreclosure, as the cast maybe; aIi
rights and i of the Authorisy under the Dcvcloptacnt Caniract and is and tti the
Fre~ises under the Dcvr_IvpAeent CoYttcacx or otherwise, includua,~ without limitation, all
restrictive ccvenaa~s coataiard therein, shall be acstoxnStiCally null and wid without the need
for the p~cccu'tian or te~rdis~ of any other docuraeni. Notwittt.*-taridiug the foregoing, the
Auhority shall retain such rights as it bas uttdar the term8 and condttipns of the Revenut
Note, as modified pgrsua:it to paragraph 2 hereirs. ~ .
I2. The Authority acknowledges •tltac the Developer has been selected as tlu
developer for the Phaae~ Propetip (as defitud is tb` DCVtiopauat ~oatuscx}. Tlie Authority
fiuther ackuowisdges that in accordance witlx the p«ovision9 of Section ~.2A(e) of the
Dfevel~apment. Contract; the. Authority has notified tiu Developer is writing to prace~ed with
Fb~ase. ~[ uacter the Iyeve~Ioptaeat Corot. 'fie Authority also acknowledges that it preseatfy
lows of ao facts that would coarse it td deny a request by the Drv~elflpes to carsdcma the
Phase R Properly and to cxtnvey fee simple title us the !~'hase II Property to the Developer for
use isi couueexioawith the Protect being constructed by the Developer oIa the Ladd.
13. She Authority represents to the Lender and the Developer thaz the .
making„ detivtry and performance efthis Agreement have baQt•duly authoiiaed by alt
aeaessarp arxion and tbs's ~ Rrhea ~, shall be the valid and binding obligation
of the Aut~tority, caforcegble is amoadance with its t+etms.
14_ Tlie Leader reps~ts to the Authority acid the Developer that the
making delivery and performance of this Agreement have been duty suthocixed by aU
Y action, and executed and delivered wvill cnastittite the legal, ~ralid and biadir~g
obIigalum of the Loader rofarceable is accordance witi~ its tee
Y 5. The Developer repres+pats to the Audt4xis~r sad the'Lmdar rbat the
making, delivery and gexformanrx of this Ameat have been doily authorizead by a71
reressatp action, and when end and delivered will constitt;te the fegat, valid and biudiag •
obligation of the Derv~loper enforceable in accordance wiflt its arms. .
16. The Authority, rho Deveelopa, and the Lender ar3mawledge that the
t.eatdrx is trot a pony to the Devdopmmt Contract cad chat this Agreameat contains the entire
Agreement bet~rren the Authority and the Leader with respect tp nay rights or obligations
~r-
as/15/95 09:15. F~ 6i2 646 2404 . _ CSl[ C081'~DRATION X014/014
03+1 08:5 f Ahlil ~t7rt ~ 612 646 2gg4' ~
~- ~ ~
either xai~t otitecwi~ have with respect to the odYer uncfez t#ze l~cvnlopmtnt Caatract end
wader the Authority Mortgages, and that this Ag~ea# nor be atnentied only is wririz~
~ b3'the Pertzes hcred~. By acecuti~ ar?d deliv,d~iag this Agxt, ~ ~~
not incur aay abLigations tti the Authority or rc the Developer of aay kind wr~a, acap=
hose ~ the Awhority rich ere expresslq sat fntth hrre~an, and the L.eadar rosy 8dmimistej its
extrusion o~'or+edit x~nder-the L.endez` Lean Doss ira such maataes' as it abaft deertt
aPP~Fn~ ~ritbeut ~Y ttaticx to or caaseot from-the Authority.
i 7. The Atatl~ority egrr~s that ttie. Lander, at aay a apd from lino m time,
" oxtend du m~ty, modify the iAf+erest rate or agree to alter any a~the tens of peymeF~
of tht Leader Lana ewide~ced by the ~-der Loam ]~oct~eats, or re3ease parses liable for'
payment thereof, o: alter, a~ecd, wawa ar sapplemeat, tat aay way, auy of the leans aid
provisiohs of the Lender Marsgage~ ~e Lender Assignment q~Re3tts and al! rCla~d
dccurAeats, alf without any notice to or taasrat of ~e Authority.
I8, This Ag~er~t shall ha binding upt+~n aszd inure to the benefit of the
AmhaTity, the Leader aad the D~Ioppc and their re~pectiva: successets aad ,
Facxuted as of the day and ~-,~' first above writtta.
HQUSIriI'G Ai1tI~~ REI~E'~ELUP11~`NT
ArTJ'IT~QRT!'Y IIJ ArTI~ ~'+OR 2"F;E CI"T"Y Qp
RICF.I~
Its Chairpersao:
$9
its Executive Director
ALISTATE LIFE IIriSL• ~'RArrC>r COi~IP'AIvY
By _~
Its Authorized Signatories
_~..
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 19
Agenda March 27, 1995
Issue Statement:
Adoption of a resolution authorizing the purchase of 7429 Dupont Avenue for the
Richfield .Rediscovered Program.
Background:
It is proposed that a new home be built to be featured in the 1995 fall Parade of Homes.
Last year, Richfield featured its first Parade of Homes entry built by Marlin Grant
Homes, Inc.
The existing property has been inspected to determine that it meets program
requirements for acquisition. An appraisal by BCL Appraisals was conducted and a
purchase price was negotiated at the $45,000 appraised value.
Recommended Motion:
Adopt the attached resolution which. authorizes:
1. The purchase of the property for $45,000.
2. The Executive Director and HRA Chairperson to execute a purchase agreement and
other documents to effectuate the purchase.
Basis of Recommendation:
1. The property meets program requirements for acquisition.
2. Funding is available.
3. The owner has voluntarily indicated an interest in selling his property to the HRA.
4. Purchase has been negotiated at $45,000.
Alternative Recommendation:
Do not authorize acquisition.
Discussion/Decision Mode: `
The owner is ready to sell. Staff is working with Marlin Grant on a 1995 Parade of
Homes development at this site.
Respectf Ily submitted,
Jame .Prosser
Execu ve Director
JDP:ds
RESOLUTION NO.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION AUTHORIZING PURCHASE OF REAL
PROPERTY LOCATED AT 7429 DUPONT AVENUE SOUTH
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (HRA) desires to purchase certain real .property pursuant to and in furtherance of the
Richfield Rediscovered Redevelopment Project (Project) heretofore adopted by the City of
Richfield (City) and the HRA, said real property being described as follows:
Lot 17 and the South 1/2 of Lot 18
Block 13, Irwin Shores Addition
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 caused an appraisal of the subject property to be made by a
qualified independent professional real estate appraiser and has negotiated a purchase price
with the owner based on the stated value; 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. That the approved purchase price is $45,000.
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 27th day of March, 1995.
Thomas E. Harms, Chairperson
ATTEST:
Vern Luettinger, Secretary
CITY OF RICHFIELD
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
SCHEDULED FOR MONDAY, MARCH 20, 1995
HAS BEEN CANCELED.
A CONCURRENT CITY COUNCIL/HOUSING AND REDEVELOPMENT AUTHORITY
MEETING HAS BEEN SCHEDULED FOR MONDAY, MARCH 27, 1995 AT 7 P.M. IN
THE RICHFIELD CITY HALL COUNCIL CHAMBERS, 6700 PORTLAND AVENUE.
ITEMS TO BE CONSIDERED INCLUDE:
• CONSIDERATION OF APPROVAL OF HRA MINUTES OF FEBRUARY 28, 1995
AND MARCH 13, 1995,
• CONSIDERATION OF APPROVAL OF HRA CLAIMS AND PAYROLL,
• CONSIDERATION OF ACQUISITION OF 7429 DUPONT AVENUE,
• DISCUSSION OF REQUEST OF DOMINIUM INC. FOR ISSUANCE OF TAX
EXEMPT REVENUE BONDS TO PURCHASE-AND RENOVATE CENTURY
COURT APARTMENTS.