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07-17-95 agendaCITY OF RICHFIELD, MINNESOTA MONDAY, JULY 17, 1995 SPECIAL CITY COUNCIL MEETING WITH HOUSING AND REDEVELOPMENT. AUTHORITY 7:00 P.M. CALL TO ORDER I. CONTINUATION OF' PUBLIC HEARING ON HOUSING PLAN-AND PROGRAM RELATED TO HAMPTON PLACE, HERITAGE SQUARE, CRESTWOOD APARTMENT COMMUNITIES ' COUNCIL LETTER NO. 186 ADJOURNMENT **************************************************************************************************** REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING FOLLOWS MEETING WITH CITY COUNCIL COUNCIL CHAMBERS AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF JUNE 19, 1995 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT 6645 LIPTON AVENUE TO STEVEN M. GRANT HOMES, INC. TO BE KNOWN AS STEVEN-MARLIN GRANT HOMES, INC. IN ACCORDANCE WITH DEVELOPMENT AGREEMENT HRA LETTER N0.41 3. CONSIDERATION OF RESOLUTION RECOMMENDING APPROVAL OF AGREEMENT FOR PURCHASE AND SALE AND PROMISSORY NOTE; SAGE COMPANY HRA LETTER NO. 42 4. CONSIDERATION OF ESTABLISHING THREE NONPROFIT CORPORATIONS TO OWN APARTMENT COMMUNITIES KNOWN AS HAMPTON PLACE, HERITAGE SQUARE-AND CRESTWOOD HRA LETTER N0.43 5. CONSIDERATION OF RESOLUTION SELECTING STUART SHELARD MANAGEMENT CORPORATION TO MANAGE CRESTWOOD, HERITAGE SQUARE AND HAMPTON PLACE HRA LETTER N0.44 6. CONSIDERATION OF SELECTION OF CONSULTANT FOR LYNDALE AVENUE. COMMERCIAL FRONTAGE; ILN REDEVELOPMENT PROJECT HRA LETTER N0.45 7. CONSfDERATION OF RESOLUTION ACCEPTING=CERTAIN MORTGAGES AND RELEASING LETTER OF CREDIT; CSM, PHASE II HRA LETTER N0.46 8. EXECUTIVE DIRECTOR REPORT 9. 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. 46 Agenda July 17, 1995 Issue Statement: Acceptance of mortgage and release of letter of credit; CSM, Phase II. Background: As performance security under the Contract For Private Redevelopment with CSM, CSM provided a $750,000 letter of credit. This was sufficient for. Phase I and the area just east of Colfax Avenue. Phase II now carries a significant potential Liability. It is therefore proposed that the $750,000 letter of credit for Phase I be released and a mortgage in the amount of $3,203,500 be accepted as security for Phase II (general form attached). Recommended Motion: Adopt a motion approving the attached resolution which accepts a mortgage for security for Phase II and releases the letter of credit. Basis of Recommendation: 1. The potential HRA liability for Phase I has been virtually eliminated. 2. The mortgage in the amount of $3,203,500 will provide adequate protection to the HRA. 3. This is acceptable security under the contract. Alternative Recommendation: 1. Refuse to accept the mortgage. 2. Direct staff to modify the dollar amount. . Discussion/Decision Mode: This mortgage will provide adequate protection for the HRA. Respectful) ubmitted, James rosser Executive Director JDP:ds HRA RESOLUTION NO. RESOLUTION ACCEPTING CERTAIN MORTGAGES AND RELEASING LETTER OF CREDIT WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield (the "HRA") did, on or abouf April 29, 1994, execute and enter into a contract-for private redevelopment (the ".Contract") with CSM Corporation; and WHEREAS, CSM Corporation subsequently assigned its interest under the contract to CSM Investors, Inc., a Minnesota corporation (the "CSM"); and WHEREAS, pursuant to the requirements of section 3.2(d)(3) of-the Contract, CSM has given. the HRA security interests first in the form of mortgages covering the Phase I property; and WHEREAS, such mortgages are subsequently released in lieu of a letter of credit and a cash deposit covering CSM's obligations under the Contract with respect to Phase I .and the Colfax Avenue area; and WHEREAS, in accordance with the provisions of the Contract, the HRA is prepared to convey to CSM the Phase II Property; and WHEREAS, the Contract permits the HRA to condition its conveyance upon the receipt of suitable security to assure CSM's continued performance under the. contract with respect to Phase 11; and as substitute security with respect to CSM's letter of credit; and WHEREAS, the HRA has reviewed CSM's potential liability remaining under the contract with respect to Phase II and otherwise, and has determined that security in the form of First Mortgages on the Phase II property in the total amount of $2,203,500 will be .sufficient to adequately protect the HRA. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield; Minnesota as follows: 1. Mortgages in substantially the form of the attached. Exhibit A, and covering the properties and in the amounts shown in Exhibit B are determined to satisfy the preconveyance security requirement contained in the Contract and are. hereby approved. 2. Upon the recording of such Mortgages, the letter of credit in the amount of $750,000 shall be released and returned to CSM. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of July, 1995. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary FORM OF MORTGAGE EXHIBIT A This Indenture made this day of July, 1995, between CSM INVESTORS, INC., a Minnesota corporation, of the County of Ramsey and State of Minnesota, Mortgagor, and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic under the laws of the State of Minnesota, Mortgagee. Witnesseth: That the said Mortgagor, in consideration of the sum of One ($1.00) Dollar and other good, valuable and sufficient consideration, the receipt whereof is hereby acknowledged, does hereby Grant, Bargain, Sell, and Convey unto the said Mortgagee, its successors and assigns, Forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota, described as follows, to-wit: See Exhibit A. To Have and to Hold the Same, Together with the hereditaments and appurtenances thereto belonging to the said Mortgagee, its successors and assigns, forever. And the said Mortgagor, for itself, and its successors and assigns, does covenant with the said Mortgagee, its successors and assigns, as follows: That it is lawfully seized of said premises and has good right to sell and convey the same; that the same are free from all incumbrances, save and except reservations, restrictions and easements of record; that the Mortgagee, its successors and assigns, shall quietly enjoy and possess the same; and that the Mortgagor will Warrant and Defend the title to the same against all lawful claims not hereinbefore specifically excepted. Provided, Nevertheless, That if said Mortgagor, its successors and assigns, shall keep and perform each and every one of its obligations under and pursuant to that certain Contract for Private Development dated April 29, 1994, made and entered into between Mortgagor and Mortgagee, and shall keep and perform all the covenants and agreements herein contained, then this deed to be null and void, and to be released at the Mortgagor's expense. This Mortgage secures a principal debt in the amount of Dollars ($ )payable by Mortgagor to Mortgagee under the terms of the Contract for Private Development, dated April 29, 1994, and amendments thereto, between CSM Corporation, whose interests have been assigned to and whose obligations have been assumed by CSM Investors, Inc., and Mortgagee. And the Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree with the Mortgagee, its successors and assigns, to perform its obligations as above specified, to pay all taxes and assessments now due or that may hereafter become liens against said premises at least ten (10) days before penalty attaches thereto; to pay, when due, both principal and interest of all prior liens or incumbrances, if any, above mentioned and to keep said premises free and clear of all other prior liens or incumbrances; to commit or permit no waste on said premises and to keep them in good repair; to complete forthwith any improvements which may hereafter be under course of construction thereon, and to pay any other expenses and attorneys' fees incurred by said Mortgagee, its successors or assigns, by reason of litigation with any third party for the protection of the lien of this Mortgage. JBD91554 RC125-95 A-1 That Mortgagor, does further covenant and agree that if any lien for labor, skill or material shall be filed for record during the life of this Mortgage, upon or against the premises hereby mortgaged, the said Mortgagor will, within thirty (30) days after the date of its filing for record, either pay off the said lien and secure its satisfaction of record, or will protect the Mortgagee against any loss or damage growing out of its enforcement, by furnishing a bond for the same amount in the form and with the sureties to be approved by the Mortgagee. In case of failure to pay said taxes and assessments, prior liens or incumbrances, expenses and attorneys' fees as above specified, or to insure said buildings and deliver the policies as aforesaid, the Mortgagee, its successors or assigns, may pay such taxes, assessments, prior liens, expenses and attorneys' fees and interest thereon, or effect such insurance, and the sums so paid shall bear interest at the highest rate permitted by law from the date of such payment, shall be impressed as an additional lien upon said premises, and be immediately due and payable from the Mortgagor, its successors or assigns, to said Mortgagee, it successors or assigns, and this Mortgage shall from date thereof secure the repayment of such advance with interest. In case of default in any of the foregoing covenants, the Mortgagor confers upon the Mortgagee the option of declaring a default and hereby authorizes and empowers said Mortgagee, its successors and assigns, to foreclose this Mortgage by judicial proceedings or to sell said premises at public auction and convey the same to the purchaser in fee simple in accordance with the statute, and out of the money arising from such sail to retain all sums secured hereby, with interest and all legal costs and charges of such foreclosure and the maximum attorneys' fee permitted by law, which costs, charges and fees the Mortgagor herein agrees to pay. In Testimony Whereof, The said Mortgagor has hereunto set its hand the day and year first above written. CSM INVESTORS, INC. By: Its: State of Minnesota County of The foregoing instrument was acknowledged before me this the Minnesota corporation, on behalf of the corporation. This Instrument was Drafted by: Kennedy & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 (612) 337-9300 day of , 1995, by of CSM Investors, Inc., a otary u is JBD91554 RC125-95 A-2 E~~IBIT ~ SCHEDULE Parcel 1 and 14 2 7 and g 9 and 10 11 12 and 13 15, 16, 1'7, 1 S, and 19 20 21 ?2 23, 24 and 2S 2~ Mort~a~e Amonrit $ 322,225.00 $ 75,075.00 ~ $1,07s.0o $ 567,57s.00 $ 209,075.00 $ 131,125.00 $ 64,625.00 ~ ~a~0,07s.oo $ 159,075.00 $ 267,575.00 $ 107,575.00 $ 169,075.00 $ 107,575,00 JBD915~d5 P.CIL~-95 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 4s Agenda July 17, 1995 Issue Statement: . Selection of a consultant for the Lyndale Avenue commercial frontage; ILN Redevelopment Project. Background: With redevelopment being well underway south of 77th Street, the HRA recently discussed the need to proceed with formulating a strategy for improving the commercial area along Lyndale Avenue. In preparation for this undertaking the HRA chair, .the Mayor and City Manager .have talked with Dan Linnihan, Planning Commission Chair, about the commission taking the lead in such a study. Recently seven consulting firms were invited to submit their qualifications and proposed work program. Four firms responded and were interviewed. The interview panel consisted of Dan Linnihan, Bill Schatzlein, and Julie Urban, Bruce Nordquist and Bruce Palmborg, staff. The firms interviewed included the following: • BRW Inc., Minneapolis • Camiros, Ltd., Minneapolis • RLK Associates Ltd., Hopkins • Hoisington Koegler Group, Inc., Edina The unanimous conclusion of the interview panel was to select the Hoisington Koegler Group, Inc. (HKGI). Excerpts from their proposal are attached. Recommended Motion: Adopt a motion approving the execution of a contract with HKGI for an eight month .period ending in February 1996 not to exceed $54,090. Basis of Recommendation: 1. HKGI understands the need that residents and business people have for personal involvement in this process and their work program reflects that involvement.. 2. HKGI has experience in working suburban projects, tax increment and redevelopment in commercial areas. 3. Mr. Fred Hoisington, President will be the project manager. He has previously worked as a municipal staff person.. See his attached resume. 4. The otherteam members including Maxfield Research Group for marketing, Benshoof & Associates for traffic and Maier Steward Associates Engineers will provide experienced support to HKGI. 5. HKGI understands the nature of the project as indicated in the "Statement of Understanding." 6. The proposed cost. of $54,09'0 is reasonable and funds are available. 7. Reference checks indicated satisfaction with both process and end product. Alternative Recommendation: 1. Delay action. 2. Direct staff to evaluate other firms. 3. Select another consultant. Discussion/Decision Mode: A decision at the July 17 HRA meeting will make it possible for the process to be initiated. Respectf submitted, James D. rosser Execut Director JDP:ds QUALIFICATIONS Hoisin n Koe~ler Grown Inc, (HKGi) City of Richfield Lyndale Avenue Proposal Established in 1982, HKGi is a Minneapolis based urban planning and landscape architectural firm which provides urban planning and design services to its governmental, business and land development clients. The Firm specializes in comprehensive planning, downtown planning, corridor studies and urban design. HKGi has a staff of ten professionals and support personnel including six landscape architects and two planners. It has full computer capabilities including AutoCAD, GIS and photo visualization. HKGi and its personnel have prepared plans for several very large scale projects including the H.B. Fuller Corporate Campus, Vadnais Heights, MN; the Larpenteur Avenue Streetscape Study, Falcon Heights, MN; Vision 2002 Downtown Plan,. Chanhassen, MN; Community arid- Stz'eetscape Framework Plan, Duncan, OK; County Road 3 Corridor Study, Hopkins, MN; and the 50th and France Planning Study, 50th and France Business Association, Miruleapolis, MN. HKGi builds teams to provide the client with the very best expertise available to satisfy all project needs. Because decision making can be very difficult at times, HKGi practices a community based consensus building approach for nearly every project it undertakes. The Firm principals are known for their ability to both shape and listen to those for whom plans are drawn. HKGi is frequently sought out to resolve conflict because it is able to balance input with plan integrity. Several factors highlight the ability of HKGi to serve its clients `,yell: A highly satisfied clientele as reflected in frequent repeat engagements. • A total commitment to uali 1 q ty p arming and design and the creation of value for our clients. • Principals have over 60 years of professional experience with downtown, corridor and comprehensive planning and urban design. • Balanced public and private consulting experience. • Certification and/or registration of principals (AICP, ASLA). • Senior staff members have served as directors of city and regional planning agencies. , • 25 years of experience with the design and conduct of public participation goal setting/visioning programs. • Computer visualization/CAD and GIS. Maxfield Research Grouv Inc. .Maxfield Research Group, Inc. is a full service market research company serving real estate developers, health care organizations, government agencies, investors, and lenders. The Firm does consulting on a wide variety of real estate and related issues for residential and commercial projects, financial institutions, and health care organizations. The scope of work ranges from hourly consulting to market feasibility studies including attitudinal surveys and focus groups. The Firm was formed in Minneapolis in 1983 and under the leadership of Lee Maxfield, former president of Development Concept Corporation, and quickly became the premier real estate market research firm in the Upper Midwest. As Maxfield Research Group, Inc. the Firm expanded its scope of work to include services for all types of commercial as well as residential developments. The hallmark of Maxfield Research Group, Inc. is specific recommendations based on extensive primary and secondary research. Our expertise in all areas of real estate development and a close working relationship with clients allows us to define the important market issues for each project. Studies reflect a commitment to thorough examination of the unique factors affecting each development, and our work has earned praise from developers, government agencies, lenders, and others involved in the development industry. Maxfield Research Group, Inc.'s knowledge and experience as well as genuine enjoyment of our work means that the highest quality research is produced for each of our clients. Maier Stewart & Associates Inc. (MSA) MSA Consulting Engineers is a growing full-service engineering company whose role it will be to develop infrastructure cost estimates if and as needed. City of Richfield ~ndale Avenue Proposal Page 2 EXPERIENCE HKGi is known for its ability to handle very sensitive projects and situations which have the potential to be explosive. in the public arena. Our track record has been excellent in getting particularly sensitive projects both approved and built. Our successes are attributable to several important factors: • We involve the public before plans are drawn and throughout the process making those who participate partners in the final outcome. We embrace public participation as a legitimate way to arrive at buildable solutions, • We listen to and weigh all ideas and viewpoints, • We have no real or perceived conflicts-of-interest which will detract from the project and our ability to perform successfully, • We are credible presenters and responders and maintain respect in the face of adversity. In response to the City's request for brevity, we will briefly describe a sampling of similar and related projects that are in process. or have been completed by HKGi within the past year: Vision 2002 Downtown Plan, Chanhassen MN. HKGi has been working in downtown Chanhassen continuously for ten years. During that time we have developed numerous plans and provided ongoing redevelopment coordination all of which culminated in the Vision 2002 Downtown Plan (attached). Virtually the entire downtown has been transformed as a result of our planning efforts. The process included significant public participation and, in spite of massive changes, the results enjoy a high degree of public support (see Project Description in Appendix). Larpenteur Avenue Urban Desi~n~ Study Falcon Heights MN. HKGi is Curren±ty completing an urban design study for two miles of Larpenteur Avenue in Falcon Heights, Minnesota, the City's main east-west street. The project actually embraces a considerable area beyond the immediate street's environs. Urban design plans are being done in concert with the reconstruction of Larpenteur Avenue by Ramsey County. Because of the framework planning approach employed by HKGi and substantial public involvement, the plans City of Richfield Lyndale Avenue Proposal Page 3 have been strongly endorsed by the community, City Staff, Planning Commission and City Council. The project is scheduled for construction in 1996-97. County Road 3 Land Use and Urban Desisno Study Hopkins, MN. The study included land use, economic/redevelopment, highway cross-section and streetscape design elements. It included atailor- made public participation process which made skeptical neighbors and businesspersons partners in the outcome of the process. It also included a strong implementation component which was completed in concert with Ehlers/Publicorp (see Project Description in Appendix). The project will be constructed in 1996-97. HKGi is currently developing detailed streetscape plans for the project. Downtown Plan, Plymouth, MN. This project involves the development of a concept plan for Plymouth's downtown including an assessment of appropriate and marketable commercial land uses, the formulation of design guidelines and the development of implementation strategies. The project is being conducted as a strategic planning process which started with an assessment of strengths and weaknesses and will end with a development strategy and the statement of action steps. The process involves a highly successful public participation process (we have already conducted two Town Meetings) which brings adjacent residents and businessowners together to resolve conflict. HKGi is teamed with Ehlers/Publicorp. Brooklyn Boulevard streetscape Design, Brooklyn Park, MN. Hoisington Koegler Group is currently working with the City of Brooklyn Park to prepare streetscape plans for portions of I-Ierulepin County Roads 152 and 14 as well as a number of adjacent local streets. The project is part of the Brooklyn Boulevard .Redevelopment Area which is intended to revitalize the City's oldest commercial district. Physical streetscape improvements are being combined with business retention/recruitment programs and rehabilitation of surrounding multi-family housing to improve the appearance and function of the area. In addition to the streetscape areas, HKGi is responsible for the design of a recreational trail along Shingle Creek, apedestrian/transit plaza, entry nodes and a community sign location. The total cost of the improvements is estimated at $2.1 million with construction beginning in June of .1995. City of Richfield Lyndale Avenue Proposal Page 4 PROCESS/WORK PLAN STATEMENT OF UNDERSTANDING Based on HKGi's knowledge of the Lyndale Avenue Corridor and discussions with both Byron Wallace and Bruce Palmborg we understand the project to be as follows: 1. The study area extends from West 74th Street to West 77th Street where most all of the development is commercial with the exception of the Century apartments. While advantageously located just north of the CSM project and I-494, commercial development within the Lyndale corridor does not currently meet contemporary standards for retailing or parking attributable to insufficient land. 2. The CSM project lying south of West 77th Street is a great success. As CSM development continues the Lyndale corridor will also become increasingly desirable for commercial use. 3. The neighborhoods on either side of the retail strip are in excellent condition. A high degree of attention must be given to the potential vulnerability of the larger neighborhoods proximate to the corridor. 4. The City currently has a policy, perhaps unwritten, which discourages the removal of housing. Nonetheless, the area generally lying between Aldrich and Garfield Avenues should be embraced within the study area. It is our opinion that at least one alternative should be driven by neighborhood preservation rather than commercial expansion. 5. The City of Richfield has a history of involving the public in the planning process. Even if public participation is not solicited, there will be involvement and it will likely not be supportive. It will be essential, therefore, that stakeholders be actively encouraged to participate in the process from beginning to end. 6. The City wants the Consultant to evaluate several development concepts ranging from merely cosmetic to complete redevelopment. Parking and/or the absence thereof will be a driving force in arriving at a solution. City of Richfield Lyndale Avenue Proposal Page 8 7. The end result must be market-driven. No developers have been solicited nor have any shown interest in the project to- date. Some amount of research will be needed to target market supported businesses especially since the scale and character of development may vary from one plan alternative to another. 8.. In that it is a relatively low rent commercial district, several of the existing businesses will not be able to remain should redevelopment be pursued. Business persons must, therefore, be deeply involved in the process from beginning to end. 9. The ultimate solution should be in the form of a concept plan though, certainly, the types of businesses likely to locate on Lyndale Avenue should be determined. The plan should provide enough direction and detail so that the City can tender a request for proposal to targeted businesses. 10. The district is partially within a TIF district. All work related to public finance will be handled by Publicorp. There may be some difficulty in rationalizing the use of TIF for businesses which displace housing. This simply reinforces the need for strong communications .with all stakeholders. 11. The ultimate product of the process should be an action plan rather than a land use plan. It will be essential that a strategic planning approach be used to directly link plans with solutions. - City of Richfield Lyndale A~nenue Proposal Page 9 APPROACH Hoisington Koegler Group Inc. (HKGi) has developed an excellent reputation in urban planning and design for an approach which includes strategic planning, inclusive participation and framework planning and design. This is the approach the HKGi team will apply to Richfield's Lyndale Avenue corridor. 1. Strategic Planning. Because the City wants actions rather than plans, the HKGi team will use a strategic planning approach which directly links plans with implementation strategies. We will produce a series of implementation strategies, with action steps, which will result in solutions that are buildable and verifiable in the marketplace. We will also produce a development strategy to insure that projects get built. 2. Inclusive Participation. Because some of the alternatives that may be considered could involve the displacement of residents and business persons, it will be imperative that a truly hands- onpublic participation process be conducted. HKGi proposes an approach which includes individual meetings with every resident and businessperson within the corridor defined by Aldrich and Garfield Avenues. We also propose to conduct neighborhood and business person group meetings at key steps in the process, starting with public information and input meetings before plans are drawn and extending throughout the process. 3. Framework Planning and Design. The HKGi team will draw heavily from the existing natural, historical and cultural characteristics of the general area and translate those into a series of alternative concept plans. Because the adjoining neighborhoods are such important elements of the built environment, and since a retail project could potentially have a great impact on the neighborhood, at least one concept will be developed which entirely reflects the perspectives of the adjoining neighborhoods. City of Richfield Tyndale q~nenue Proposal Page 10 WORK PLAN The Consultant will: 1.0 Identify What Exists. The purpose of this task will be to gain an objective understanding of how the corridor functions and its relationship to the adjoining neighborhoods. Subtasks will include the following: 1.1 A site and neighborhood analysis to gain an understanding of the forces at work within the corridor. This will include a photo analysis. 1.2 An abbreviated market analysis to identify potential business targets. The market analysis will include a site and location analysis, demographic analysis, retail and office market assessment and report preparation. The analysis will also include inventories of existing office and retail uses in the target area, a comparative analysis, interviews and an assessment of the redevelopment potential of the project area. This subtask will be especially important to determine the marketability of alternative commercial developments that are in scale with the respective concept plans. 1.3 The review of background information to be provided by the City and the identification of the existing problems and needs associated with the corridor. This will include an evaluation of existing land use, parking, infrastructure, traffic, zoning, economic information, and property ownership. 1.4 Mapping of background information as appropriate to help all participants understand the corridor, its relationship to the neighborhood and the problems and opportunities it offers. 1.5 Development of a site opportunities graphic illustrating the potential that could be realized. 1.6 Meetings with City staff (three estimated) to develop a City of Richfield process for public, resident and businessperson Lyndale Avenue Proposal involvement, collect information and take input. Page 11 1.7 Development of a newsletter medium to communicate with all neighbors and businesspersons within the study area from Aldrich to Garfield Avenues on a continuing basis. 2.0 Involve and Communicate with the Stakeholders Continuousl . The objectives will be to insure that information is disseminated, to actively solicit stakeholder participation before plans are drawn and throughout the process so that stakeholders can play a positive role in shaping plans for the corridor . Subtasks will include the following: 2.1 Individual meetings with every neighbor businessperson within the corridor (excluding Century apartment residents) to explain the project scope and listen to problems and concerns. 2.2 The conduct of one Public Information Meeting each with the adjacent neighborhoods and business community to explain the project purpose and scope, elicit ideas and take initial input. 2.3 Summarization of the conclusions of the meetings for distribution to the Planning Commission and City Council. 2.4 Development of a set of guiding principles or objectives to be used to focus the project on a set of commonly accepted themes and ideas. 2.5 The conduct of Planning Commission/City Council/ HRA Workshop #1 to review the product of the initial stakeholders input. 2.6 Preparation of Newsletter #1 to present the outcome of stakeholder .involvement and the guiding principles (City to reproduce and distribute). City of Richfield Lyndale Avenue Proposal Page 12 and the 3.0 Explore the Possibilities. The objective of this task will be to evaluate a range of alternatives and employ public participation as a means to select a land use concept and strategy for further development in subsequent tasks. Subtasks will include the following: 3.1 Development of several alternative concept plans ranging. from simple facade improvements to redevelopment. At least one concept will look at the corridor entirely from the perspective of neighborhood preservation. Plans will be diagrammatic in nature illustrating land use and circulation patterns. 3.2 Development of an approach to organize the evaluation of alternatives. This will include the establishment of criteria and the use of matrices. 3.3 The development of a range of alternative strategies to be used for plan implementation. The purpose will be to correlate .alternative concept plans with supportive strategies. 3.4 One meeting with the Planning Commission to review the alternative plans and strategies. 3.5 The conduct of Corridor Meeting #1 to involve all stakeholders in the review of alternative plans and strategies.. 3.6 The conduct of Workshop Session #2 with the Planning Commission, City Council and HRA to review options and select a course of action. 3.7 The summarization of the conclusions of Task 3.0 in Newsletter #2 (City to reproduce and distribute). City of Richfield Lyndale Avenue Proposal Page 13 4.0 Demonstrate How the Area Should Look. The objective of this task will be to refine the preferred alternative and define costs associated with public improvements. Subtasks will include the following: 4.1 The development of the preferred plan which reflects public and decision-maker input. The plan will be general in nature reflecting land use types, circulation, access and public spaces, as appropriate. 4.2 The formulation of site design guidelines to insure that development is responsive to and compatible with the adjoining neighborhoods. Site design guidelines will address transit stops, public spaces, parking, setbacks, sidewalks and landscaping. 4.3 Development of graphic cross-sections illustrating the neighborhood /business relationships embodied in the preferred alternative and, if appropriate, the mitigative measures that will need to be employed to improve land use relationships. 4.4 The calculation of costs associated with public improvements for the preferred plan. 4.5 Preparation of Newsletter #3 summarizing the results of Task 4.0 (City to reproduce and distribute). 5.0 Develop a Strategy to Get It Done. The objective of this task will be to develop the action steps that will be required to implement the plan.. Subtasks will include the following: 5.1 Formulation of a specific strategy with action steps. T'he strategy will likely deal with acquisition, land use controls, funding, guidelines for an RFP to targeted businesses, etc. 5.2 Meetings with City Staff and Publicorp (two estimated) to define a funding strategy. 5.3 The conduct of Corridor Meeting #2 for neighbors and City of Richfield businesspersons to discuss the preferred plan and take Lyndale Avenue Proposal further input. Page 14 5.4 The conduct of Planning Commission/City Council/ HRA Workshop #3 to discuss the recommended strategy and action steps. 6.0 Seek Agreement to Move Forward. The objective of this task will be to document the results and move forward with the preferred plan. Subtasks will include the following: 6.1 Documentation of the plan in draft form to be reproduced and distributed by the City. 6.2 Preparation for and -attendance at one formal public hearing on the plan. 6.3 Completion of the final plan report in written and graphic form and transmittal to the City. The Consultant will provide 50 copies of the final plan document. The plan will include the site and neighborhood analysis, the market analysis summary, guiding principles, site design guidelines, plans and implementation strategies with action steps. City of Richfield Lyndale Avenue Proposal Page 15 r~ h+i ^~ i-~ a~ Q U . ,.., b~~A a~ ~ ~ ~ ~. ~ ~ ~ U ~ ~ w _~ ~ C~ ~ ~ ~ _~ ~~ Q U C L1, O ~. ~bA O x O bA .~ O x ae .a 7 Downtown Chanhassen Vision 2002 -Chanhassen, MN ®® Client: City of Chanhassen Project Description: Vision 2002 is a planning process aimed at defining the appropriate future for downtown Chanhassen. It began with a recognition that the community's downtown should be the focus of commercial, civic, social and cultural activity, and that Chanhassen already has the beginnings of a significant center. The process for creating a plan for downtown Chanhassen utilized extensive public input including three (3) focus group sessions (60-80 participants each) and a series of meetings with a task force assembled to guide the process. From these, a vision statement and a series of guiding principles were established as the basis for the plan. Finally, a community survey was conducted to help confirm the direction set by the plan. Hoisington Koegler Group structured the process to guarantee that the plan reflects the needs and desires of the community, and that downtown continues to serve a vital role as the focal point for community activities. The plan balances the vehicle environment by defining a strong pedestrian network and creating pedestrian pockets through the downtown. It recognizes the important relationship between buildings and the street, and structures guidelines for parking, building placement and building entries. The character of the larger landscape of Chanhassen is recalled by the use of native landscape materials at downtown entries and extending those materials as dominant landscape patterns in developments near the entries. Public spaces, such as pedestrian pockets and parks, were given prominence in the plan to ensure that these elements are considered first. As a whole, the plan proposes a compact downtown, one that encourages pedestrian activity and strongly integrates downtown with the rest of the community. The final product of the study was a newsletter report that was mailed to every residence in Chanhassen. It served as the basis for the community survey. The survey strongly supported all plan elements. Services Performed: This project was recently completed (October, 1994). HKG was responsible for all project tasks except the community survey (Decision Resources of Minneapolis) including planning, futures paper, urban design, public participation and newsletter preparation. Fred Hoisington served as principal-in-charge and project manager. Michael Schroeder was the urban designer. Road 3 Corridor Study - H Client: City of Hopkins kins, MN H K ~~ i Project Description: Hoisington Koegler Group recently completed a corridor study for County Road 3 from the western border to the eastern border of the City of Hopkins. The study resulted in a strategic plan addressing land use, su'eetscape, roadway improvements and plan implementation. The County Road 3 study included an extensive public participation program utilizing a steering committee and a four different focus groups representing four specific geographic areas. Major components of the study included an assessment of the strengths and weaknesses of the corridor, the development of a series of roadway and land use alternatives, the testing of each alternative, and the selection of a preferred alternative. HKG developed a detailed land use plan including design guidelines. The implementation strategy portion of the project will include funding sources, redevelopment recommendations, phasing and business relocation requirements. The final plan was approved by the City in February 1995. Services Performed: Hoisington Koegler Group was the prime consultant for the County Road 3 Corridor Study. In addition to overall project management, the firm was responsible for all urban design tasks and the .design and implementation of an extensive ublic participation process. P Five members of the Hoisington Koegler Group firm were involved in the Hopkins County Road 3 Corridor Study. Mark Koegler served as both principal-in-charge and project manager. As such, he had overall responsibility for the successful completion of the study and coordination of all work elements. Coordination included direction of the work of all subconsultants. Michael Schroeder was the project designer. He was responsible for all landscape architectural and urban design recommendations. As project planner, Bruce Chamberlain assisted in the completion of landscape architectural and urban design tasks. Fred Hoisington designed the public participation process and coordinated all steering committee and focus group activities. Rusty Fifield of Ehlers and Associates was responsible for the implementation portion of the project including public finance. His specific responsibilities included creation of a computer based economic model for the corridor and identification of various funding sources including tax increment financing. FRED L. HOISINGTON, AICP PRESIDENT ©m EDUCATION ®® M.S. Resource Development and Urban Planning, Mi h c igan State University B.S. Urban Planning, Michigan State University MEMBERSHIPS AND AFFILIATIONS American Institute of Certified Planners American Planning Association Minnesota Planning Association .Eden Prairie Chamber of Commerce, President 1988 Coalition For Sensible Land Use,. President 1990/91/92 World Future Society PROFESSIONAL EXPERIENCE FRED HOISINGTON is a planning consultant with 30 years of public and private experience in Minnesota, Colorado and Michigan. He specializes in comprehensive planning, redevelopment planning and land use analysis. He also specializes in the design and facilitation of public input programs to arrive at publically supportable planning solutions. Prior to forming HKG, Mr. Hoisington served as Senior Vice President for Brauer & Associates, LTD.; Director of Planning for Traverse City, Michigan; President of Brauer & Associates Rocky Mountain, Inc., Colorado; Planning Director for Edina, Minnesota, and Assistant Planner, Tri-County Regional Planning Commission, Lansing, Michigan. While employed by Traverse City, he also served as Director for the Traverse City Housing Commission and as Acting Executive Director for the Downtown Development Authority. REPRESENTATIVE PROJECT EXPERIENCE • City of Virginia, Comprehensive Plan Update • City of Luverne, Comprehensive Plan Update • City of Luverne, Zoning Ordinance • City of Falcon Heights, Comprehensive Plan Update • City of Crystal, Comprehensive Plan Update • 50th and France Business Association, Urban Design Study • City of Chanhassen, Vision 2002 City Center Study • Hennepin County Community Works Greenwa Stud ; y y Minneapolis, MN City of Richfield • City of Hopkins, County Road 3 Corridor Study Lyndale Avenue Proposal Fred Hoisington/Resume/Page 2 City of Richfield Lyndale Avenue Proposal • Adel, IA, Mainstreet Resource Team • City of Falcon Heights, Larpenteur Avenue Streetscape Plan • City of Rosemount, Community Needs Study • City of Rosemount, Comprehensive Plan and Zoning Ordinance • City of Chanhassen, Downtown Redevelopment Concept Plan • City of Champlin, Old Town Redevelopment and TIF Plans • City of Shakopee, Canterbury Downs Race Track District Land Use and Transportation Study, Race Track District and PUD Ordinances • St. Peter Revitalization, Inc., St. Peter Downtown Economic Feasibility Study • City of Chanhassen, Broadened Study Area, Land Use and Transportation Plan • City of Chanhassen, Downtown Redevelopment/TIF Plans • H. B. Fuller Company; Vadnais Heights, MN; Resource Management and Water Resources Plans • City of St. Paul, Recreation Center Site Selection Process • City of Traverse City, MI; Comprehensive Plan • City of Detroit Lakes, Downtown Redevelopment Program • Independent School District 272, Central Middle School Campus Master Plan; Eden Prairie, MN • H. B. Fuller Company, Corporate Headquarters Master Plan; including permits and approvals (EAW, ISP, Wetland Alteration) Vadnais Heights, MN • City of Chanhassen, Trunk Highway 101/5 Preliminary Alignment and Land Use Corridor Study, 1989 and 1994 • Hennepin County, Landfill Site Selection Process • City of Waconia, Comprehensive Plan Update • City of Chanhassen, Downtown Redevelopment Coordination • Southcross Properties Master Planning, Gonyea Land Company; Burnsville, MN • City of Edina, Retail Districts TIF Planning • Southwest Metro Transit Commission, Park and Ride Lot Site Selection, TDM and Design For Transit Strategies • City of Long Lake, Annexation Study • Ramsey County, Economic Development Consensus Building • Mower County, Comprehensive Plan Update • City of Long Lake, Downtown Development Plan • City of Woodbury,' Shoreland Ordinance • Mower County, Shoreland Ordinance • City of Bayport, Comprehensive Plan • City of Northfield, Strategic Plan • City and Town of St. Cloud, Land Use Study/Mediation Process HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 44 Agenda July 17, 1995 Issue Statement: Consideration of a resolution selecting Stuart Shelard Management Corporation to manage Crestwood, Heritage Square and Hampton Place. Background: As an apartment community owner, the HRA needs to manage the property in an exemplary manner. The most effective and efficient way to manage these properties is to retain the services of a private for fee management company. Staff is recommending Stuart Shelard Management Corporation of St. Paul. Representatives of four highly regarded fee management companies were interviewed. The interview committee was comprised of Jim Prosser, City Manager; Jack Erskine, Director of Public Safety; Byron Wallace, Director of Community Development; Bruce Palmborg, Housing and Redevelopment Coordinator; and Mark Ruff, Publicorp. Companies which were interviewed included the following: - Great Lakes Management, Mike Pagh Trammel Grow, Gary Wilson Newman, Herfurth & Durand, Sandy Durand Stuart Shelard, Elaine Swenson Staff prepared a list of 20 statements to which each company was requested to respond. The statements were formulated to cover all aspects of apartment management. A copy of the "Proposal Submission Background and Guidelines" is attached. A copy of the response of Stuart Shelard to the 20 statements is also attached. Recommended Motion: 1. Adopt the attached resolution selecting Stuart Shelard as the fee management company for Crestwood, Heritage Square and Hampton Place. 2. Direct staff to negotiate a management contract subject to review and approval at a subsequent meeting. 3. Recommend approval to the Boards of Directors. Basis of Recommendation: 1. On the basis of the proposals presented both in writing and orally the interview _ committee concluded Stuart Shelard could best provide the management services needed. 2. Stuart Shelard is an accredited management organization so designated by the Institute of Real Estate Management evaluated business practice. 3. In -1992, the management organization received a "Quality Service Award" from the Minnesota Council for Quality for customer service and innovation. 4. They manage 4,000 units in the midwest. 5. Lisa Moe would be the property manager for these three communities. -She is a Certified Registered Manager, a recognition bestowed by the MN Multi-Housing Association. Her management portfolio would contain approximately .1.000 units with the addition of these properties. (The industry standard is 1,000 to 1,500 units for a position of this type). Alternative Recommendation: 1. Recommend to the Board of Directors another company. 2. Delay action. Di~~ussion/Decision Mode: The transition from Sage ownership and management must be smooth. Selection of a management company at this time would help provide for that smooth transition. Respectfully,~submitted, James Prosser Executive Director. JDP:ds HRA RESOLUTION NO. RESOLUTION ACCEPTING SELECTION OF PROPERTY MANAGER AND DIRECTING APPROVAL OF SAME (HAMPTON PLACE, CRESTWOOD, HERITAGE SQUARE EAST) WHEREAS, pursuant, to authority granted to it by special law of the 1995 Minnesota Legislature (the "Act"), the HRA has participated in the creation of three non- profit corporations ("Corporations") each of which will own, manage and operate one of the following apartment communities in the City of Richfield: 1. Hampton Place 2. Crestwood 3. Heritage Square East; and WHEREAS, pursuant to the Act, the HRA is empowered to direct the activities of such Corporations; and WHEREAS, the HRA has received and reviewed proposals from. independent fee management companies involving the management of the above referenced apartment communities and is fully informed as to the provisions of such proposals. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield as follows: 1. That the proposal by Stuart Shelard is hereby accepted. 2. That each Corporation, upon formation, is hereby directed to approve the selection of Stuart Shelard subject to the negotiation of a suitable contract and to carry out all acts and do all things necessary to consummate the directions contained in this resolution. 3. That the Executive Director and Commission Chairperson of the HRA are directed to take all actions and do all things required to effectuate the provisions of this resolution, Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of July,1995. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary PROPOSAL SUBMISSION BACKGROUND AND GUIDELINES Proposals are due by February 2, 1995 at 4:30 P.M. at the reception desk, Richfield City Hall, 6700 Portland Avenue South. Six copies must be submitted in an envelope marked "Attention: Bruce Palmborg'. Conciseness and brevity should be part of the standard for preparing the submittal. One hour interviews will be conducted on February 8th at City Hall. No more than 30 minutes will be allowed for oral presentations. The remaining time will be for discussion. Background: The three apartment communities (Hampton Place, Heritage Square and Crestwood) were offered by the Sage Companies to the Richfield Housing and Redevelopment Authority (HRA). 1. The 420 apartment units in 20 buildings are, generally, in good condition with high occupancy rates approximating 95%. 2. Sage Companies has followed a systematic capital investment program. 3. The overall condition of the facilities has been evaluated by professionals, including the City Building Official. 4. A Phase I environmental evaluation by Nova Environmental Services, Inc. revealed no hazardous conditions. 5. Publicorp Inc., financial consultants to the HRA, has reviewed the historical income and operating expenses, including the FHA insured mortgages. They report the "industry standard for the ratio of debt service to net operating income will be exceeded. " Note the HRA is only interested in ownership because of the opportunity which would be provided to formulate and implement imaginative and innovative management practices which would demonstrate that the changing needs of apartment owners and residents may be met. Because of the public ownership, management must be exemplary. It is not intended that these communities become public housing or public-housing-like. It is intended that these communities be diverse, vibrant with life and energy; places which their residents call home; and from which they would make a valued and welcomed contribution to the larger community. To help us evaluate your company's ability to achieve our goal, we ask that you respond to the following statements. In addition to written words, use graphics if they could better convey responses. Describe your customer service policy and the way in which your company operates and is organized and sized to implement that policy. 2. ~ Describe how you would make the transition from Sage management. Include objectives and the significant steps of the process. 3. Describe the administrative organization to be in place on-site, the way in which the three sites would be related, and links to the company's .primary administrative office. Identify positions by title, function, responsibility and desired experience. Include resumes of the personnel who are likely to work on these properties, including property managers, senior management and accounting personnel. 4. Include a program which would be implemented as submitted to evaluate performance in all areas of management. 5. Describe how longevity of on-site management personnel would be encouraged. Include salary ranges for each position and provisions for education and training. 6. Identify by street address, name, city and state, the apartment communities which your company currently manages which are similar to these properties in terms of age, size and tenant profile. For each of these properties, identify the average vacancy and collection rate for 1994. Also indicate the range of rates for the same period. 7. For the property identified in number 6, above, identify tenant screening techniques and policies with regard to evictions and unlawful detainers. 8. For the communities in which the apartments listed in number 6, above, are located, indicate by name and telephone number a building official and police official who would be familiar with the ..property, or who would have access to data on the property and who could be contacted by City of Richfield personnel or their representative. 2 9. Identify any innovations your company has implemented in the management of multi-unit buildings during the last three years. Discuss the strengths and weaknesses of each. 10. Discuss your company's experience in managing multi-unit properties 20 to 30 years old. 11. Describe your experience in developing and executing marketing and management plans for multi-family residential properties. Discuss the results. 12. Discuss experience with repositioning apartments in the market place. Identify the objectives and success or failure of the efforts. 13. List the five largest multi-family projects your company has managed iri the past three years. Include the number of units and define the tenants' profile. 14. Describe programs implemented for preventative maintenance. 15. ~ List by name, address and location, the elderly housing projects your firms has managed in the past three years. 16. List the projects by name, address and location which your company has managed on behalf of a Housing and Redevelopment Au#hority, Economic Development Authority, City, the Department of Housing and Urban Development, or other government agency. Include the length of time managed. 17. List by name, address and location, projects which your company has managed which have included some form of rental assistance administration. 18. Please describe the type and nature of the accounting system which your company utilizes in managing properties. If you are computerized, please describe the hardware and software systems being utilized. Does the software package have the capability of doing custom written reports? 19. In your opinion, what financial expertise, marketing expertise, management expertise, and other resources do you possess that makes you an attractive management company for the HRA? 20. Please describe in detail the management and administrative charges which would be paid in compensation for your services. Again, please be concise and brief in your responses. Use 'bullet` type statements if appropriate. [redev]Apart 4 Companies Invited to Submit a RFP Great Lakes ~lewman, Herfurth & Durand Stuart Shelard Mr. Mike Pagh Ms. Sandy Durand Ms. Elaine Swenson Trammel Crow Mr. Gary Wilson HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 43 Agenda July 17, 1995 Issue Statement: Establishment of three nonprofit corporations to own the apartment communities known as Hampton Place, Heritage Square and Crestwood. Background: On July 10, 1995 the City Council approved the special legislation recently approved by the State Legislature. The next step is for-the HRA to consider the establishment of the nonprofit corporations and approval of the proposed By-laws. The necessity for the corporations is HUD/FHA policies: Each of the three apartment communities has an outstanding mortgage. The most cost effective way to assume this debt would be to take over the existing mortgages. HUD/FHA rules require that each corporation have but one asset, the mortgage. Three corporations are proposed. Each named after their respective apartment community. The Articles and Bylaws for each corporation are the same except for the name:. The Articles of Incorporation to be filed with the state grant the corporations the powers needed to operate their asset the apartment communities in ten articles. The member of the corporation would be the HRA.. The HRA statute and these Articles and Bylaws prescribe the operating procedures. Members are prohibited from any financial gain from net profits and no member would have personal liability for corporate obligations. The Bylaws encompass seven articles and define the operating ,procedures. Officers of the Board of Directors would be chairperson and vice chairperson.. Officers of the corporation would be Executive Director (same person as is Executive Director of HRA), Secretary and Treasurer (Chief financial officer of the City). All officers would be indemnified by the corporation as HRA Members are currently. Other articles discuss records and financial items. The fiscal year is January through December. Recommended Motion: Adopt a motion approving the Articles of Incorporation and Bylaws and recommend adoption to the Boards.. Basis of Recommendation: 1. HUD/FHA rules require-that single asset corporations be established to assume the existing mortgages. 2. The proposed Articles, of Incorporation and Bylaws meet requirements of state law. 3. The HRA is clearly responsible for the apartment communities as membership on the Board of Directors is coincidental with a term on the HRA. Alternative Recommendation: 1. Recommend to the Board of Directors to modify the proposed Articles and Bylaws. 2. Delay action. Discussion/Decision Mode: It is important to keep the establishment of the corporations in step with the other items related to the Sage transaction. Respectf ly submitted, James Prosser Executi a Director JDP:ds ARTICLES OF INCORPORATION OF CRESTWOOD APARTMENTS, INC. We, the undersigned, being persons of full age and citizens of the State of Minnesota, for the purposes of forming a corporation under and pursuant to the provisions of Chapter 317A of the Minnesota Statutes, known as the Minnesota Non-Profit Corporation Act, and all laws amendatory thereof and supplementary thereto, do hereby adopt the following Articles of Incorporation: ARTICLE I The name of this corporation shall be Crestwood Apartments, Inc. ARTICLE II The registered office of the corporation shall be: 6700 Portland Avenue South Richfield, Minnesota 55423. ARTICLE III The duration of this corporation shall be perpetual. ARTICLE IV A. The purpose of this corporation shall be to own and operate a housing development in the City of Richfield known as Crestwood Apartments financed with mortgages insured by the Federal Housing Administration the United States Department of Housing and Urban Development to be occupied by low or moderate income persons and families. B. The corporation shall have all the powers conferred by the laws of the State of Minnesota, and by way of example, but not by way of limitation, this corporation shall have the following powers as reasonably necessary in carrying out its purpose as set forth in Section A of this Article: 1. To accept, acquire, receive, take, and hold by bequest, devise, grant, gift, purchase, exchange, lease, transfer, judicial order or decree, or otherwise, or any combination thereof, on any such terms, conditions, limitations and trusts, for any of its objectives and purposes, any property, real, personal or mixed, of whatever kind, nature, or description, and wherever situated either within or without the State of Minnesota. 2. To sell, exchange, convey, mortgage, lease, transfer, or otherwise dispose of, at such price or prices and upon such terms and conditions any property, real, personal JML91566 RC125-102 or mixed, and in the best interests of the corporation, its objectives and purposes; subject, however, to any. applicable limitation and conditions contained in any bequests, devise, grant or give or under the law. 3. To borrow, make, accept, endorse, execute and issue bonds, debentures, promissory notes, bills of exchange and other evidences of indebtedness of the corporation for money borrowed or in payment for property acquired or for any of the purposes of the corporation, and to secure the payment of any such obligation by mortgage, pledge, deed, indenture, agreement, or other instrument of trust, or by other lien upon, assignment of, or agreement in regard to all or' any part of the property, rights, or privileges of the corporation, wherever situated, including .property, rights or privileges hereafter to be acquired.. 4. To sue and be sued. 5. To enter into obligations or contracts and do any act incident to the transaction of any business or expedient to the purposes and objectives hereinabove stated at Section A of this Article. 6. To do and perform all acts reasonably necessary to accomplish the purposes of the corporation as set forth in Minnesota Session Laws, 1995,. Article 3, Section 42, or as it may be amended from time to time, including the assumption of and agreement to be bound by a Regulatory Agreement acceptable to the Secretary of Housing and Urban Development acting by and through the Federal Housing Commissioner. 7. Receive and disburse funds or other property incident to or reasonably necessary for the accomplishment of the aforesaid purposes and do any and all acts incidental to the transaction of the business of this corporation or expedient for the attainment of the purposes stated herein. C. The only member of the corporation shall be the Richfield Housing and Redevelopment Authority ("HRA"). When acting as a member of the corporation the HRA shall be bound by the same voting requirements that exist when the HRA board of commissioners acts on behalf of the HRA, unless such requirements are inconsistent with Minnesota Statutes chapter 317A. The member shall approve the corporation's articles of incorporation, bylaws, directors, projects, expenditures, the sale or conveyance of projects, the issuance of obligations, and such other actions of the corporation as the member may determine. D. Property owned by the corporation shall be treated as public property exclusively used for a public purpose under Minnesota Statutes, Section 272.02 subdivision 1. ARTICLE V The corporation shall not afford pecuniary gain, incidentally or otherwise, to its members. No part of the net earnings of this corporation shall inure to the benefit of any member of this corporation, except that reasonable compensation may be paid for services rendered to or for the corporation affecting one or more of its purposes. Such net earnings, if any, of this corporation JML91566 2 RC125-102 shall be used to carry out the non-profit corporate purposes set forth in' these Articles hereof. No member, director or officer of this corporation, nor any private individual, shall be entitled to share in the distribution of any corporate assets upon dissolution or winding up the corporation, whether voluntary or involuntary, or by operation of law, except as and to the extent otherwise provided or required by law. ARTICLE VI The name and address of the incorporator is: James Prosser City of Richfield 6700 Portland Avenue South Richfield, Minnesota 55423 ARTICLE VII Subject to Article IV C. of these Articles, the affairs of the corporation shall be governed by a Board of Directors. The Board of Directors shall be members of the HRA board of commissioners or HRA employees and shall hold office until the first annual meeting of the Board of Directors or until their successors are elected and qualified. ARTICLE VIII No incorporator, member, officer or director of this corporation shall have any personal liability for corporate obligations. ARTICLE IX This corporation shall have no capital stock. ARTICLE X Upon dissolution of this corporation, the HRA shall take title to the property consistent with Minnesota Session Laws, 1995, Article 3, Section 42, or as it may be amended from time to time, and any regulatory agreement as provided in Article IV, B. 6. of these Articles. James Frosser, Incorporator JML91566 2 RC125-102 J ACKNOWLEDGEMENT STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) I, the undersigned, a notary public, hereby certify that on the day of July 1995, the above named incorporator personally- appeared before me and being by me first duly sworn, declared that he is the person who signed the foregoing document as incorporator, and that the statements therein contained are .true. WITNESS my hand and official seal. Notary Public JML91566 4 RC125-102 ARTICLES OF INCORPORATION OF HAMPTON PLACE APARTMENTS, INC. We, the undersigned, being persons of full age and citizens of the State of Minnesota, for the purposes of forming a corporation under and pursuant to the provisions of Chapter 317A of the Minnesota Statutes, known as the Minnesota Non-Profit Corporation Act, and all laws amendatory thereof and supplementary thereto, do hereby adopt the following Articles of Incorporation: ARTICLE I The name of this corporation shall be Hampton Place Apartments, Inc. ARTICLE II The registered office of the corporation shall be: 6700 Portland Avenue South Richfield, Minnesota 55423. ARTICLE III The duration of this corporation shall be perpetual. ARTICLE IV A. The purpose of this corporation shall be to own and operate a housing development in the City of Richfield known as Hampton Place Apartments financed with mortgages insured by the Federal Housing Administration the United States Department of Housing and Urban Development to be occupied by low or moderate income persons and families. B. The corporation shall have all the powers .conferred by the laws of the State of Minnesota, and by way of example, but not by way of limitation, this corporation shall have the following powers as reasonably necessary in carrying out its purpose as set forth in Section A of this Article: 1. To accept, acquire, receive, take, and hold by bequest, devise, grant, gift, purchase, exchange, lease, transfer, judicial order or decree, or otherwise, or any combination thereof, on any such terms, conditions, limitations and trusts, for any of its objectives and purposes, any property, real, personal or mixed, of whatever kind, nature, or description, and wherever situated either within or without the State of Minnesota. 2. To sell, exchange, convey, mortgage, lease, transfer, or otherwise dispose of, at such price or prices and upon such terms and conditions any property, real, personal JM590193 RC125-102 _ or mixed, and in the best interests of the corporation, its objectives and purposes; subject, however, to any applicable limitation and conditions contained in any bequests, devise, grant or give or under the law. 3. To borrow, make, accept, endorse, execute and issue bonds, debentures, promissory notes, bills of exchange and other evidences of indebtedness of the corporation for money borrowed or in payment for property acquired or for any of the purposes of the corporation, and to secure the payment of any such obligation by mortgage, pledge, deed, indenture, agreement, or other instrument of trust, or by other lien upon, assignment of, or agreement in regard to all or any part of the property, rights, or privileges of the corporation; wherever situated, including property, rights or privileges hereafter to be acquired. 4. To sue and be sued. 5. To enter into obligations or contracts and do any act incident to the transaction of any business or expedient to the purposes and objectives hereinabove stated at Section A of this Article. 6. To do and perform all acts reasonably necessary to accomplish the purposes of the corporation as set forth in Minnesota Session Laws, 1995, Article 3, Section 42, or as it may be amended from time to time, including the assumption of and agreement to be bound by a Regulatory Agreement acceptable to the Secretary of Housing and Urban Development acting by and through the Federal Housing Commissioner. 7. Receive and disburse funds or other property incident to or reasonably necessary far the accomplishment of the aforesaid purposes and do any and all acts incidental to the transaction of the business of this corporation or expedient for the attainment of the purposes stated herein. C. The only member of the corporation shall be the Richfield Housing and Redevelopment Authority ("HRA"). When acting as a member of the corporation the HRA shall be bound by the same voting requirements that exist when the HRA board of commissioners acts on behalf of the HRA, unless such requirements are inconsistent with Minnesota Statutes chapter 317A. The member shall approve the corporation's articles of incorporation, bylaws, directors, projects, expenditures, .the sale or conveyance of projects, the issuance of obligations, and such other .actions of the corporation as the member may determine. D. Property owned by the corporation shall be treated as public property exclusively used for a public purpose under Minnesota Statutes, Section 272.02 subdivision 1. ARTICLE V The corporation shall not afford pecuniary gain, incidentally or otherwise, to its members. No part of the net earnings of this corporation shall inure to the benefit of any member of this corporation, except that reasonable compensation may be paid for services rendered to or for the corporation affecting one or more of its purposes. Such net earnings, if any, of this corporation JMS90193 2 RC125-102 shall be used to carry out the non-profit corporate purposes set forth in these Articles hereof. No member, director or officer of this corporation, nor any private individual, shall be entitled to share in the distribution of any corporate assets upon dissolution or winding up the corporation, whether voluntary or involuntary, or by operation of law, except as and to the extent otherwise provided or required by law. ARTICLE VI The name and address of the incorporator is: James Prosser City of Richfield 6700 Portland Avenue South Richfield, Minnesota 55423 ARTICLE VII Subject to Article IV C. of these Articles, the affairs of the corporation shall be governed by a Board of Directors. The Board of Directors shall be members of the HRA board of commissioners or HRA employees and -shall hold office until. the first annual meeting of the Boazd of Directors or until their successors are elected and qualified. ARTICLE VIII No incorporator, member, officer or director of this corporation shall have any personal liability for corporate obligations. ARTICLE IX This corporation shall have no capital stock. ARTICLE X Upon dissolution of this corporation, the HRA shall take title to the property consistent with Minnesota Session Laws, 1995, Article 3, Section 42, or as it may be amended from time to time, and any regulatory agreement as provided in Article IV, B. 6. of these Articles. James Prosser, Incorporator JMS90193 3 RC125-102 ACKNOWLEDGEMENT STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) I, the undersigned, a notary public, hereby certify that on the day of July 1995, the above named incorporator personally appeared before me and being by me first duly sworn, declared that he is the person who signed the foregoing document as incorporator, and that the statements therein contained are true. , WITNESS my hand and official seal. Notary Public JM590193 Rclzs-loz 4 ARTICLES OF INCORPORATION OF HERITAGE SQUARE EAST APARTMENTS, INC. We, the undersigned, being persons of full age and citizens of the State of Minnesota, for the purposes of forming a corporation under and pursuant to the provisions of Chapter 317A of the Minnesota Statutes, known as the Minnesota Non-Profit Corporation Act, and all laws amendatory thereof and supplementary thereto, do hereby adopt the following Articles of Incorporation: ARTICLE I The name of this corporation shall be Heritage Square East Apartments, Inc. ARTICLE II The registered office of the corporation shall be: 6700 Portland Avenue South Richfield, Minnesota 55423. ARTICLE III The duration of this corporation shall be perpetual. ARTICLE IV A. The purpose of this corporation shall be to own and operate a housing development in .the City of Richfield known as Heritage Square East Apartments financed with mortgages insured by the Federal Housing Administration the United States Department of Housing and Urban Development to be occupied by low or moderate income persons and families. B. The corporation shall have all the powers conferred by the laws of the State of Minnesota, and by way of example, but not by way of limitation, this corporation shall have the following powers as reasonably necessary in carrying out its purpose as set forth in Section A of this Article: 1. To accept, acquire, receive, take, and hold by bequest, devise, grant, gift, purchase, exchange, lease, transfer, judicial order or decree, or otherwise, or any combination thereof, on any such terms, conditions, limitations and trusts, for any of its objectives and. purposes, any property, real, personal or mixed, of whatever kind, nature, or description, and wherever situated either within or without the State of Minnesota. 2. To .sell, exchange, convey, mortgage, lease, transfer, or otherwise dispose of, at such price or prices and upon such terms and conditions any property, real, personal JML91565 RC125-102 or mixed, and in the best interests of the corporation, its objectives and purposes; subject, however, to any applicable limitation and conditions contained in any bequests, devise, grant or give or under the law. 3. To borrow, make, accept, endorse, execute and issue bonds, debentures, promissory notes, bills of exchange and other evidences of indebtedness of the corporation for money borrowed or in payment for property acquired or for any of the purposes of the corporation, and to secure the payment of any such obligation by mortgage, pledge, deed, indenture, agreement, or other instrument of trust, or by other lien upon, assignment of, or agreement in regard to all or any part of the property, rights, or privileges of the corporation, wherever situated, including property, rights or privileges hereafter to be acquired. 4. To sue and be sued. 5. To enter into obligations or contracts and do any act incident to the transaction of any business or expedient to the purposes and objectives hereinabove stated at Section A of this Article. 6. To do and perform all acts reasonably necessary to accomplish the purposes of the corporation as set forth in Minnesota Session Laws, 1995, Article 3, Section 42, or as it may be amended from time to time, including the assumption of and agreement to be bound by a Regulatory Agreement acceptable to the Secretary of Housing and Urban Development acting by and through the Federal Housing Commissioner. 7. Receive and disburse funds or other property incident to or reasonably necessary for the accomplishment of the aforesaid purposes and do any and all acts incidental to the transaction of the business- of this corporation or expedient for the attainment of the purposes stated herein. C. The only member of the corporation shall be the Richfield Housing and Redevelopment Authority ("HRA"). When acting as a member of the corporation the HRA shall be bound by the same voting requirements that exist when the HRA board of commissioners acts on behalf of the. HRA, unless such requirements are inconsistent with Minnesota Statutes chapter 317A. The member shall approve the corporation's articles of incorporation, bylaws, directors, projects, expenditures, the sale or conveyance of projects, the issuance of obligations, and such other actions of the corporation as the member may determine. D. Property owned by the corporation shall be treated as public property exclusively used for a public purpose under Minnesota Statutes, Section 272.02 subdivision 1. ARTICLE V The corporation shall not afford pecuniary gain, incidentally or otherwise, to its members. No part of the net earnings of this corporation shall inure to the benefit of any member of this corporation, except that reasonable compensation may be paid for services rendered to or for the corporation affecting one or more of its purposes. Such net earnings, if any, of this corporation JML91565 2 RC125-102 shall be used to carry out the non-profit corporate purposes set forth in these Articles hereof. No member, director or officer of this corporation, nor any private individual, shall be entitled to share in the distribution of any corporate assets upon dissolution or winding up the corporation, whether voluntary or involuntary, or by operation of law, except as and to the extent otherwise provided or required by law. ARTICLE VT The name and address of the incorporator is: James Prosser City of Richfield 6700 Portland Avenue South. Richfield, Minnesota 55423 ARTICLE VII Subject to Article IV C. of these Articles, the affairs of the corporation shall be governed by a Board of Directors. The Board of Directors shall be members of the HRA board of commissioners or HRA employees and shall hold office until the first annual meeting of the Board of Directors or until their successors are elected and qualified. ARTICLE VIII No incorporator, member, officer or director of this corporation shall have any personal liability for corporate obligations. ARTICLE IX This corporation shall have no capital stock. ARTICLE X Upon dissolution of this corporation, the HRA shall take title to the property consistent with Minnesota Session Laws, 1995, Article 3, Section 42, or as it may be amended from time to time, and any regulatory agreement as provided in Article IV, B. 6. of these Articles. James Prosser, Incorporator JML91565 Rcizs-ioz 3 ACKNOWLEDGEMENT STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) I, the undersigned, a notary public, hereby certify that on the day of July 1995, the above named incorporator personally. appeared before me and being by me first duly sworn, declared that he is the person who signed the foregoing document as incorporator, and that the statements therein contained are true. WITNESS my hand and official seal. Notary Public JML91565 4 RC125-102 BYLAWS OF CRE5TWOOD APARTMENTS, INC. ARTICLE I. NAME OFFICES AND CORPORATE SEAL 1. NAME. The name of this corporation is Crestwood Apartments, Inc. 2. OFFICES. Registered and Princiual Offices. The registered office is the office of The Richfield City Manager, Ciry of Richfield, 6700 Portland Avenue South, Richfield, MN 55426. 3. CORPORATE SEAL. This corporation shall have no corporate seal. ARTICLE II. MEMBERS 1. ME_ The sole member of the corporation shall be the Richfield Housing ~~ and Redevelopment Authority (HRA) as it shall be constituted from time to time. The powers, authority and duties of the member of this corporation, the time and place of its meetings, and such other provisions that aze not inconsistent with the express provisions of the Articles of Incorporation or Minnesota law, shall be as specified in these Bylaws. 2. ANNUAL MEETING. The annual meeting of the member shall be held on the same date, time and location as the first January meeting, of the HRA each year, or as otherwise changed by the Board of Directors. 3. SPECIAL MEETING. Special meetings of the member may be called by the Chairperson of the Board of Directors, or by a sufficient majority of the HRA board of commissioners to act pursuant to Minnesota Statutes, chapter 469. 4. NOTICE. Notice of all meetings of the member shall be mailed to the HRA by the Secretary of the Board of Directors, addressed to its Executive Director, at least five and not more than thirty days before the day on which the meeting is to be held. Each notice shall state the time and place of such meeting, and if a special meeting, the purpose thereof. Notice of all regular or special meeting shall also be made in the same manner as is provided by Minnesota Statutes, Section 471.705. 5. ORGANIZATION. At each meeting of the member, the Chairperson of the Board of Directors, or in his or her absence, the Vice Chairperson of the Board of Directors shall preside. The Secretary of the Board of Directors, or in his or her absence, a person appointed by the presiding officer, shall act as secretary of the meeting. JMS91570 RC125-102 6. QUORUM. A quorum for the transaction of business at any meeting of the member shall be a quorum of the board of commissioners of the HRA as provided under Minnesota Statutes, chapter 469. The act of a majority of the member boazd at any meeting at which a quorum is present shall be the act of the member. In the absence of a quorum, a majority of the member representatives present may adjourn any meeting from time to time until a quorum be had. 7. CUMULATIVE VOTING. There shall be no cumulative voting at any meeting of the member of the corporation. 8. PROXIES. There shall be no vote by proxy. 9. RIGHTS OF MEMBERS. 12.1 The member, or its agents or attorneys, may inspect all books and records for any proper purpose at any reasonable time. 12.2 Upon request by the member, the corporation's financial statements for its most recent annual accounting period shall be furnished. Such records shall be maintained at all times at the Principal Offices of the corporation. ARTICLE III. DIRECTORS 1. DIRECTORS. Subject to the rights retained by the member set forth in the Articles of Incorporation, the business, property and affairs of this corporation shall be managed by a boazd consisting of five (5) directors who shall be the commissioners on the HRA. The directors shall hold office for a period of equal to their term as commissioner of the HRA and thereafter, until their successors to the HRA are duly appointed and qualified. Directors shall, at all times, be on the board of the HRA. 2. ANNUAL MEETING. The annual meeting of the Board of Directors shall be held on the same date, time and location as the first January meeting on the HRA each year, or as otherwise changed by the Boazd or Directors. The purpose of the annual meeting of the Board of Directors shall be to elect the officers of this corporation and for the transaction of such other business as shall come before the meeting. 3. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chairperson of the Board of Directors, by the Secretary, or by a majority of a quorum of the board of the member directing that a meeting of the Boazd of Directors be held. Action taken at such meeting is subject to approval by the member in accordance with the Articles. 4. NOTICE. Notice of all meetings of the Board of Directors shall be mailed to the HRA by the Secretary of the Boazd of Directors, addressed to its Executive Director, at least five and not more than thirty days before the day on which the meeting is to be held. Each notice shall state the time and place of such meeting and if a special meeting, the purpose thereof. JMS91570 2 RC125-102 Notice of all regular or special meetings shall also be made in the same manner as is provided by Minnesota Statutes, Section 471.705. 5. ORGANIZATION. At each meeting of the Board of Directors, .the Chairperson or, in his or her absence, the Vice Chairperson, shall preside. The Secretary of this corporation or, in his or her absence, a person appointed by the Chairperson, shall act as secretary of the meeting. _ 6. RESIGNATION. Any director of this corporation may resign at any time by giving written notice to the Chairperson of the Board of Directors or to the Secretary. Such resignation will be accepted only if it is also accompanied by a resignation as commissioner of the HRA. The resignation of any director shall take effect at the time, if any, specified therein, or if no time is specified therein, on receipt thereof by the officer of this corporation to whom such written notice is given. Provided, however, that such resignation shall be effective only simultaneous with the effective date of the HRA resignation. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 7. VACANCIES. Any vacancy in the Board of Directors shall be filled by the member. Anew HRA board member will become a new director of the corporation when he or she is appointed to the HRA board of commissioners. 8. UQ ORUM. A quorum for the transaction of business at any meeting of the directors shall be three. The act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, the majority of the directors present may adjourn any meeting from time to time until a quorum be had. 9. OFFICERS. The directors shall elect the officers of the corporation at any annual, regular, or special meeting of the Board of Directors. 10. PROXIES. A director shall not appoint a proxy for himself or herself or vote by proxy at any time. 11. REMOVAL. Any director may be removed by the member at any time, with or without cause. A director who ceases to be on the HRA board of commissioners shall be removed from the Board. of Directors. 12. CHAIRPERSON & VICE CHAIRPERSON OF THE BOARD OF DIRECTORS. A Chairperson of the Board of Directors shall be elected by a vote of a majority of the total number of directors at any annual meeting or at any regular or special meeting if the purpose shall be stated in the notice of such meeting. The Chairperson of the Board of Directors, and, in his or her absence, the Vice Chairperson, shall preside at all meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors. JMS91570 3 RC125-102 ARTICLE IV. OFFICERS 1. OFFICERS. There shall be one or more natural persons exercising the functions of the offices of president, secretary and treasurer, however, designated. The officers of this corporation shall be elected by the Board of Directors, subject to approval of the member. The officers shall consist of an Executive Director, a Secretary, and a Treasurer. Officers shall be elected at the annual meeting of the Board of Directors for. a term of one (1) yeaz. Each officer shall hold office until the next annual election of officers, until his or her death, until he or she shall resign, or until he or she shall have been removed in the manner herein provided. Any number of offices or functions of those offices may be held or exercised by the same person. Subject to approval of the member, the Board of Directors may create other offices and appoint officers thereto by a vote of a majority of the total number of directors, at any annual, regular or special meeting, if the purpose shall be stated in the notice. 2. RESIGNATION. Any officer may resign at any time by giving written notice of his or her resignation to the Secretary of this corporation. Any such resignation shall take effect at later of: i) the date, if any specified on the resignation; ii) the date on which a successor is elected. 3. REMOVAL. Subject to approval of the member, any officer may be removed, with or without cause, by a vote of a majority of the total number of directors, at any annual, regular, or special meeting, if the purpose shall be stated in the notice. 4. VACANCIES. A vacancy in any office because of death, resignation, removal, or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in these Bylaws for election such office. 5. EXECUTIVE DIRECTOR. The Executive Director of the HRA shall be the Executive Director of the corporation. The Executive Director shall be the chief executive officer of this corporation and shall have general supervision over the business of this corporation; shall see that all orders and resolutions of the Board of Directors aze carried into effect; may execute and deliver the name of the corporation (except. in cases in which such execution and delivery shall be expressly delegated by the directors to some other officer or agent of this corporation or shall be required by law to be otherwise executed and delivered) any deeds, mortgages, leases, bonds, contracts, or other instruments pertaining to .the business of this corporation; shall perform such other duties as may from time to time be prescribed by the Board of Directors; and, in general, shall perform all duties usually incident to the office of the Executive Director. 6. SECRETARY. The Secretary, when present, shall record, or have recorded, proceedings of all meetings of the Boazd of Directors; shall keep a register of the names and addresses of the board of commissioners of the member of this corporation; shall at all times keep on file a complete copy of the Articles of Incorporation -and all amendments and restatements thereof and a complete copy of the Bylaws and all amendments and. restatements thereof; shall give proper notice of meetings of the Board of Director; shall perform such other JMS91570 4 RC125-102 duties as may from time to time be prescribed by the Board of Directors or by the Executive Director; and, in general, shall perform all duties usually incident to the office of Secretary. 7. TREASURER. The Chief Financial Officer of the City of Richfield shall be the Treasurer. The Treasurer shall be responsible for seeing that an accurate account of all monies of this corporation received or disbursed is kept; shall render to the directors or members, whenever required, an account of the financial condition of this corporation; shall perform such other duties as may from time to time be prescribed by the Board of Directors; and, in general, shall perform all duties usually incident to the office of Treasurer. 8. OTHER OFFICES. Subject to approval of the member, the Board of Directors may from time to time establish other offices as it deems are in the best interest of the corporation. Such officers shall perform such duties and have such responsibilities and accountabilities as may be prescribed by the Board of Directors in the resolution creating the office. ARTICLE V. INDEMNITY 1. INDEMNITY. Each present or future director or officer, whether or not in office, and the personal representatives or other legal representative of any such director or officer, shall be indemnified by the corporation in the same manner and to the same extent as he or she would be for actions taken on behalf of the HRA. ARTICLE VI. RECORDS AND FINANCIAL MATTERS 1. BOOKS AND RECORDS. The Board of Directors of the corporation shall cause to be kept: (a) records of all proceedings and minutes of the Board of Directors; and (b) such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business; and (c) a manual containing all policies and procedures of the corporation. 2. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of Directors shall cause to be kept at the registered office and at the principal office of this corporation copies of: (a) records of all proceedings of the members and of the Board of Directors; and (b) all financial statements; and JMS91570 5 RC125-102 (c) Articles of Incorporation and Bylaws and all amendments and restatements thereof. The documents kept at the principal office shall be the original records of the. corporation and those kept at the registered office of this corporation shall be considered duplicate records. 3. NOT PUBLIC DATA. All data regarding tenants of the corporation's apartment or other information that is not public data under Minnesota law, shall be maintained and discussed at all meetings in a confidential manner as allowed by Minnesota law. 4. ACCOUNTING SYSTEM AND AiJDIT. The Board of Directors shall cause to be established and maintained, in accordance with generally accepted accounting principles applied on a consistent basis, an appropriate accounting system for this corporation. The Board of Directors may cause the records and books of account of this corporation to be audited, at least once in each fiscal year, and at such other times as may be necessary or appropriate, and may retain such person or firm such as it may deem appropriate. 5. FISCAL YEAR. The fiscal year of the corporation shall be January 1 through December 31. ARTICLE VII. AMENDMENTS 1. AMENDMENTS. The Board of Directors may propose amendments to these Bylaws consistent with law and the Articles of Incorporation, by resolution adopted by a majority of the total number of directors, setting forth the proposed amendments and directing that they be submitted for adoption at an annual or special meeting of the member of the corporation, provided that no amendment shall be adopted, the purpose or effect of which would be to divert the purpose or property of the corporation. Amendments shall be effective upon approval by the member of the corporation. Executive Director JMS91570 6 RC125-102 BYLAWS OF HAMPTON PLACE APARTMENTS, INC. ARTICLE I. NAME OFFICES AND CORPORATE SEAL 1. NAME. The name of this corporation is Hampton Place Apartments, Inc. 2. OFFICES. Registered and Princiual Offices. The registered office is the office of The Richfield City Manager, City of Richfield, 6700 Portland Avenue South, Richfield, MN 55426. 3. CORPORATE SEAL. This corporation shall have no corporate seal. ARTICLE II. MEMBERS 1. MEMBERS. The sole member of the corporation shall be the Richfield Housing and Redevelopment Authority ("HRA") as it shall be constituted from time to time. The powers, authority and duties of the member of this corporation, the time and place of its meetings, and such other provisions that are not inconsistent with the express provisions of the Articles of Incorporation or Minnesota law, shall be as specified in these Bylaws. 2. ANNUAL MEETING. The annual meeting of the member shall be held on the same date, time and location as the first January meeting, of the HRA each year, or as otherwise changed by the Board of Directors. 3. SPECIAL MEETING. Special meetings of the member may be called by the Chairperson of the Board of Directors, or by a sufficient majority of the HRA board of commissioners to act pursuant to Minnesota Statutes, chapter 469. 4. NOTICE. Notice. of all meetings of the member shall be mailed to the HRA by the Secretary of the Board of Directors, addressed to its Executive Director, at least five and not more than thirty days before the day on which the meeting is to be held. Each notice shall state the time and place of such meeting, and if a special meeting, the purpose thereof. Notice of all regular or special meeting shall also be made in the same manner as is provided by Minnesota Statutes, Section 471.705. 5. ORGANIZATION. At each meeting of the member, the Chairperson of the Board of Directors, or in his or her absence, the Vice Chairperson of the Board of Directors shall preside. The Secretary of the Board of Directors, or in his or her absence, a person appointed by the presiding officer, shall act as secretary of the meeting. JMS90283 RC125-102 6. UO ORUM. A quorum .for the transaction of business at any meeting of the member shall be a quorum of the board of commissioners of the HRA as provided under Minnesota Statutes, chapter 469. The act of a majority of the member board at any meeting at which a quorum is present shall be the act of the member. In the absence of a quorum, a majority of the member representatives present may adjourn any meeting from time to time until a quorum be had. 7. CUMULATIVE VOTING. There shall be no cumulative voting at any meeting of the member of the corporation. 8. PROXIES. There shall be no vote by proxy. 9. RIGHTS OF MEMBERS. 12.1 The member, or its agents or attorneys, may inspect all books and records for any proper purpose at any reasonable time. 12.2 Upon request by the member, the corporation's financial statements for its most recent annual accounting period shall be furnished. Such records shall be maintained at all times at the Principal Offices of the corporation. ARTICLE III. DIRECTORS 1. DIRECTORS. Subject to the rights retained by the member set forth in the Articles of Incorporation, the business, property and affairs of this corporation shall be managed by a board consisting of five (5) directors who shall be the commissioners on the HRA. The directors shall hold office for a period of equal to their term as commissioner of the HRA and thereafter, until their successors to the HRA are duly appointed and qualified. Directors shall, at all times, be on the board of the HRA. 2. ANNUAL MEETING. The annual meeting of the Board of Directors shall be held on the same date, time and location as the first January meeting on the HRA each year, or as otherwise changed by the Board or Directors. The purpose of the annual meeting of the Board of Directors shall be to elect the officers of this corporation and for the transaction of such other business as shall come .before the meeting. 3. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chairperson of the Board of Directors, by the Secretary, or by a majority of a quorum of the board of the member directing that a meeting of the Board of Directors be held. Action taken at such meeting is subject to approval by the member in accordance with the Articles. 4. NOTICE. Notice of all meetings of the Board of Directors shall be mailed to the HRA by the Secretary of the Board of Directors, addressed to its Executive Director, at least five and not more than thirty days before the day on which the meeting is to be held. Each notice shall state the time and place of such meeting and if a special meeting, the purpose thereof. JMS90283 2 RC125-102 Notice of all regular or special meetings shall also be made in the same manner as is provided by Minnesota Statutes, Section 471.705. 5. ORGANIZATION. At each meeting of the Board of Directors, the Chairperson or, in his or her absence, the Vice Chairperson, shall preside. The Secretary of this corporation or, in his or her absence, a person appointed by the Chairperson, shall act as secretary of the meeting. 6. RESIGNATION. Any director of this corporation may resign at any time by giving written notice to the Chairperson of the Board of Directors or to the Secretary. Such resignation will be accepted only if it is also accompanied by a resignation as commissioner of the HRA. The resignation of any director shall take effect at the time, if any, specified therein, or if no time is specified therein, on receipt thereof by the officer of this corporation to whom such written notice is given. Provided, however, that such resignation shall be effective only simultaneous with the effective date of the HRA resignation. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 7. VACANCIES. Any vacancy in the Board of Directors shall be filled by the member. Anew HRA board member will become a new director of the corporation when he or she is appointed to the HRA board of commissioners. 8. QUORUM. A quorum for the transaction of business at any meeting of the directors shall be three. The act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, the majority of the directors present may adjourn any meeting from time to time until a quorum be had. 9. OFFICERS. The directors shall elect the officers of the corporation at any annual, regular, or special meeting of -the Board of Directors. 10. PROXIES. A director shall not appoint a proxy for himself or herself or vote by proxy at any time. 11. REMOVAL. Any director may be removed by the member at any time, with or without cause. A director who ceases to be on the HRA board of commissioners shall be removed from the Board of Directors. 12. CHAIRPERSON & VICE CHAIRPERSON OF THE BOARD OF DIRECTORS. A Chairperson of the Board of Directors shall be elected by a vote of a majority of the total number of directors at any annual meeting or at any regular or special meeting if the purpose shall be stated in the notice of such meeting. The Chairperson of the Board of Directors, and, in his or her absence, the Vice Chairperson, shall preside at all meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors. JM590283 3 RC125-102 ARTICLE IV. OFFICERS 1. OFFICERS. There shall be one or more natural persons exercising the functions of the offices of president, secretary and treasurer, however, designated. The officers of this corporation shall be elected by the Board of Directors, subject to approval of the member. The officers shall consist of an Executive Director, a Secretary, and a Treasurer. Officers shall be elected at the annual meeting of the, Board of Directors for a term of one (1) year. Each officer shall hold office until the next annual election of officers, until his or her death, until he or she shall resign, or until he or she shall have been removed in the manner herein provided. Any number of offices or functions of those offices may be held or exercised by the same person. Subject to approval of the member, the Board of Directors may create other offices and appoint officers thereto by a vote of a majority of the total number of directors, at any annual, regular or special meeting, if the purpose shall be stated in the notice. 2. RESIGNATION. Any officer may resign at any time by giving written notice of his or her resignation to the Secretary of this corporation. Any such resignation shall take effect at later of: i) the date, if any specified on the resignation; ii) the date on which a successor is elected. 3. REMOVAL. Subject to approval of the member, any officer may be removed, with or without cause, by a vote of a majority of the total number of directors, at any annual, regular, or special. meeting, if the purpose shall be stated in the notice. 4. VACANCIES. A vacancy in any office because of death, resignation, removal, or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in these Bylaws for election such office. 5. EXECUTIVE DIRECTOR. The Executive Director of the HRA shall be the Executive Director of the corporation. The Executive Director shall be the chief executive officer of this corporation and shall have general supervision over the business of this corporation; shall see that all orders and resolutions of the Board of Directors are carried into effect;- may execute and deliver the name of the corporation (except in cases in which such execution and delivery shall be expressly delegated by the directors to some other officer or agent of this corporation or shall be required by law to be otherwise executed and delivered) any deeds, mortgages, leases, bonds, contracts, or other instruments pertaining to the business of this corporation; shall perform such other duties as may from time to time be prescribed by the Board of Directors; and, in general, shall perform all duties usually incident to the office of the Executive Director. 5. SECRETARY. The Secretary, when present, shall record, or have recorded, proceedings of all meetings of the Board of Directors; shall keep a register of the names and addresses of the board of commissioners of the member of this corporation; shall at all times keep on file a complete copy of the Articles of Incorporation and all amendments and restatements thereof and a complete copy of the Bylaws and all amendments and restatements thereof; shall give proper notice of meetings of the Board of Director; shall perform such other JMS90283 4 RC125-102 duties as may from time to time be prescribed by the Board of Directors or by the Executive Director; and, in general, shall perform all duties usually incident to the office of Secretary. 7. TREASURER. The Chief Financial Officer of the City of Richfield shall be the Treasurer. The Treasurer shall be responsible for seeing that an accurate account of all monies of this corporation received or disbursed is kept; shall render to the directors or members, whenever required, an account of the financial condition of this corporation; shall perform .such other duties as may from time to time be prescribed by the Board of Directors; and, in general, shall perform all duties usually incident to the office of Treasurer. 8. OTHER OFFICES. Subject to approval of the member, the Board of Directors may from time to time establish other offices as it deems are in the best interest of the corporation. Such officers shall perform such duties and have such responsibilities and accountabilities as may be prescribed by the Board. of Directors in the resolution creating the office. ARTICLE V. INDEMNITY 1. INDEMNITY. Each present or future director or officer, whether or not in office, and the personal representatives or other legal representative of any such director or officer, shall be indemnified by the corporation in the same manner and to the same extent as he or she would be for actions taken on behalf of the HRA. ARTICLE VI. RECORDS AND FINANCIAL MATTERS 1. BOOKS AND RECORDS. The Board of Directors of the corporation shall cause to be kept: (a) records of all proceedings and minutes of the Board of Directors; and (b) such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business; and (c) a manual containing all policies and procedures of the corporation. 2. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of Directors shall cause to be kept at the registered office and at the principal office of this corporation copies of: (a) records of all proceedings of the members and of the Board of Directors; and (b) all financial statements; and JMS90283 5 RC125-102 (c) Articles of Incorporation and Bylaws and all amendments and restatements thereof. The documents kept at the principal office shall be the original records of the corporation and those kept at the registered office of this corporation shall be considered duplicate records. 3. NOT PUBLIC DATA. All data regarding tenants of the corporation's apartment or other information that is not public data under Minnesota law, shall be maintained and discussed at all meetings in a confidential manner as allowed by Minnesota law. 4. ACCOUNTING SYSTEM AND AUDIT. The Board of Directors shall cause to be established and maintained, in accordance with generally accepted accounting principles applied on a consistent basis, an appropriate accounting system for this corporation. The Board of Directors may cause the records and books of account of this corporation to be audited, at least once in each fiscal year, and at such other times as may be necessary or appropriate, and may retain such person or firm such as it may deem appropriate. 5. FISCAL YEAR. The fiscal year of the corporation shall be January 1 through December 31. ARTICLE VII. AMENDMENTS 1. AMENDMENTS. The Board of Directors may propose amendments to these Bylaws consistent with law and the Articles of Incorporation, by resolution adopted by a majority of the total number of directors, setting forth the proposed amendments and directing that they be submitted for adoption at an annual or special meeting of the member of the corporation, provided that no amendment shall be adopted, the purpose or effect of which would be to divert the purpose or property of the corporation. Amendments shall be effective upon approval by the member of the corporation. Executive Director JMS90283 6 RC125-102 BYLAWS OF HERITAGE SQUARE EAST APARTMENTS, INC. ARTICLE I. NAME, OFFICES AND -CORPORATE SEAL 1. NAME. The name of this corporation is Heritage Square East Apaztments, Inc. 2. OFFICES. Registered and Principal Offices. The registered office is the office of The Richfield City Manager, City of Richfield, 6700 Portland Avenue South, Richfield, MN 55426. 3. CORPORATE SEAL. This corporation shall have no corporate seal. ARTICLE II. MEMBERS 1. MEMBERS. The sole member of the corporation shall be the Richfield Housing and Redevelopment Authority ("HRA") as it shall be constituted from time to time. The powers, authority and duties of the member of this corporation, the time and place of its meetings, and such other provisions that aze not inconsistent with the express provisions of the Articles of Incorporation or Minnesota law, shall be as specified in these Bylaws. 2. ANNUAL MEETING. The annual meeting of the member shall be held on the. same date, time and location as the first January meeting, of the HRA each year, or as otherwise changed by the Board of Directors. 3. SPECIAL MEETING. Special meetings of the member may be called by the Chairperson of the Board of Directors, or by a sufficient majority of the HRA board of commissioners to act pursuant to Minnesota Statutes, chapter 469. 4. NOTICE. Notice of all meetings of the member shall be mailed to the HRA by the Secretary of the Boazd of Directors, addressed to its Executive Director, at least five and not more than thirty days before the day on which the meeting is to be held. Each notice shall state the time and place of such meeting, and if a special meeting, the purpose thereof. Notice of all regular or special meeting shall also be made in the same manner as is provided by Minnesota Statutes, Section 471.705. 5. ORGANIZATION. At each meeting of the member, the Chairperson of the Board of Directors, or in his or her absence, the Vice Chairperson of the Board of Directors shall preside. The Secretary of the Board of Directors, or in his or her absence, a person appointed by the presiding officer, shall act as secretary of the meeting. JMS91569 RC125-102 6. QUORUM. A quorum for the transaction of business at any meeting of the member shall be a quorum of the board of commissioners of the HRA as provided under Minnesota Statutes, chapter 469. The act of a majority of the member board at any meeting at which a quorum is present shall be the act of the member. In the absence of a quorum, a majority of the member representatives present may adjourn any meeting from time to time until a quorum be had. 7. CUMULATIVE VOTING. There shall be no cumulative voting at any meeting of the member of the corporation. 8. PROXIES. There shall be no vote Uy proxy. 9. RIGHTS OF MEMBERS. 12.1 The member, or its agents or attorneys, may inspect all books and records for any proper purpose at any reasonable time. 12.2 Upon request by the member, the corporation's financial statements for its most recent annual accounting period shall be furnished. Such records shall be maintained at all times at the Principal Offices of the corporation. ARTICLE III. DIRECTORS 1. DIRECTORS. Subject to the rights retained by the member set forth in the Articles of Incorporation, the business, property and affairs of this corporation shall be managed by a board consisting of five (5) directors who shall be the commissioners on the HRA. The directors shall hold office for a period of equal to their term as commissioner of the HRA and thereafter, until their successors to the HRA are duly appointed and qualified. Directors shall, at all times, be on the board of the HRA. 2. ANNUAL MEETING. The annual meeting of the Board of Directors shall be held on the same date, time and location as the first January meeting on the HRA each year, or as otherwise changed by the Board or Directors. The purpose of the annual meeting of the Board of Directors shall be to elect the officers of this corporation and for the transaction of such other business as shall come before the meeting. 3. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chairperson of the Board of Directors, by the Secretary, or by a majority of a quorum of the board of the member directing that a meeting of the Board of Directors be held. Action taken at such meeting is subject to approval by the member in accordance with the Articles. 4. NOTICE. Notice of all meetings of the Board of Directors shall be mailed to the HRA by the Secretary of the Board of Directors, addressed to its Executive Director, at least five and not more than thirty days before the day on which the meeting is to be held. Each notice shall state the time and place of such meeting and if a special meeting, the purpose thereof. JMS91569 2 RC125-102 Notice of all regular or special meetings shall also be made in the same manner as is provided by Minnesota Statutes, Section 471.705. 5. ORGANIZATION. At each meeting of the Board of Directors, the Chairperson or, in his or her absence, the Vice Chairperson, shall preside. The Secretary of this corporation or, in his or her absence, a person appointed by the Chairperson, shall act as secretary of the meeting. b. RESIGNATION. Any director of this corporation may resign at any time by giving written notice to the Chairperson of the Board of Directors or to the Secretary. Such resignation will be accepted only if it is also accompanied by a resignation as commissioner of the HRA. The resignation of any director shall take effect at the time, if any, specified therein, or if no time is specified therein, on receipt thereof by the officer of this corporation to whom such written notice is given. Provided, however, that such resignation shall be effective only simultaneous with the effective date of the HRA resignation. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 7. VACANCIES. Any vacancy in the Board of Directors shall be filled by the member. Anew HRA board member will become a new director of the corporation when he or she is appointed to the HRA board of commissioners. 8. QUORUM. A quorum for the transaction of business at any meeting of the directors shall be three. The act of a maj ority of the .directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, the majority of the directors present may adjourn any meeting from time to time until a quorum be had. 9. OFFICERS. The directors shall elect the officers of the corporation at any annual, regular, or special meeting of the Board of Directors. 10. PROXIES. A director shall not appoint a proxy for himself or herself or vote by proxy at any time. 11. REMOVAL. Any director may be removed by the member at any time, with or without cause. A director who ceases to be on the HRA board of commissioners shall be removed from the Board of Directors. 12. CHAIRPERSON & VICE CHAIRPERSON OF THE BOARD OF DIRECTORS. A Chairperson of the Board of Directors shall be elected by a vote of a majority of the total number of directors at any annual meeting or at any regular or special meeting if the purpose shall be stated in the notice of such meeting. The Chairperson of the Board of Directors, and, in his or her absence, the Vice Chairperson, shall preside at all meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors. JMS91569 3 RC125-102 ARTICLE IV. OFFICERS 1. OFFICERS. There shall be one or more natural persons exercising the functions of the offices of president, secretary and treasurer, however, designated. The officers of this corporation shall be elected by the Board of Directors, subject to approval of the member. The officers shall consist of an Executive Director, a Secretary, and a Treasurer. Officers shall be elected at the annual meeting of the Board of Directors for a term of one (1) year. Each officer shall hold office until the next annual election of officers, until his or her death, until he or she shall resign, or until he or she shall have been removed in the manner herein provided. Any number of offices or functions of those offices may be held or exercised by the same person. Subject to approval of the member, the Boazd of Directors may create other offices and appoint officers thereto by a vote of a majority of the total number of directors, at any annual, regular or special meeting, if the purpose shall be stated in the notice. 2. RESIGNATION. Any officer may resign at any time by giving written notice of his or her resignation to the Secretary of this corporation. Any such resignation shall take effect at later of: i) the date, if any specified on-the resignation; ii) the date on which a successor is elected. 3. REMOVAL. Subject to approval of the member, any officer may be removed, with or without cause, by a vote of a majority of the total number of directors, at any annual, regular, or special meeting, if the purpose shall be stated in the notice. 4. VACANCIES. A vacancy in any office because of death, resignation, removal, or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in these Bylaws for election such office. 5. EXECUTIVE DIRECTOR. The Executive Director of the HRA shall be the Executive Duector of the corporation. The Executive Director shall be the chief executive officer of this corporation. and shall have general supervision over the business of this corporation; shall see that all orders and resolutions of the Board of Directors are carried into effect; may execute and deliver the name of the corporation (except in cases in which such execution and delivery shall be expressly delegated by the directors to some other officer or agent of this corporation or shall be required by law to be otherwise executed and delivered) any deeds, mortgages, leases, bonds, contracts, or other instruments pertaining to the business of this corporation; shall perform such other duties as may from time to time be prescribed by the Boazd of Directors; and, in general, shall perform all duties usually incident to the office of the Executive Duector. 6. SECRETARY. The Secretazy, when present, shall record, or have recorded, proceedings of all meetings of the Board of Directors; shall keep a register of the names and addresses of the board of commissioners of the member of this corporation; shall at all times keep on file a complete copy of the Articles of Incorporation and all amendments and restatements thereof and a complete copy of the Bylaws and all amendments and restatements thereof; shall give proper notice of meetings of the Boazd of Director; shall perform such other JMS91569 4, RC125-102 duties as may from time to time be prescribed by the Board of Directors or by the Executive Director; and, in general, shall perform all duties usually incident to the office of Secretary. 7. TREASURER. The Chief Financial Officer of the City of Richfield shall be the Treasurer. The Treasurer shall be responsible for seeing that an accurate account of all monies of this corporation received or disbursed is kept; shall render to the directors or members, whenever required, an account of the financial condition of this corporation; shall perform such other duties as may from time to time be prescribed by the Board of Directors; and, in general, shall perform all duties usually incident to the office of Treasurer. 8. OTHER OFFICES. Subject to approval of the member, the Board of Directors may from time to time establish other offices as it deems are in the best interest of the corporation. Such officers shall perform such duties and have such responsibilities and accountabilities as may be prescribed by the Board of Directors in the resolution creating the office. ARTICLE V. INDEMNITY 1. INDEMNITY. Each present or future director or officer, whether or not in office, and the personal representatives or other legal representative of any such director or officer, shall be indemnified by the corporation in the same manner and to the same extent as he or she would be for actions taken on behalf of the HRA. ARTICLE VI. RECORDS AND FINANCIAL MATTERS 1. BOOKS AND RECORDS. The Board of Directors of the corporation shall cause to be kept: (a) .records of all proceedings and minutes of the Board of Directors; and (b) such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business; and (c) a manual containing all policies and procedures of the corporation. 2. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of Directors shall cause to be kept at the registered office and at the principal office of this corporation copies of: (a) records of all proceedings of the members and of the Board of Directors; and (b) all financial statements; and JMS91569 5 RC125-102 (c) Articles of Incorporation and Bylaws and all amendments and restatements thereof. The documents kept at the principal office shall be the original records of the .corporation and those kept at the registered office of this corporation shall be considered duplicate records. 3. NOT PUBLIC DATA. All data regarding tenants of the corporation's apartment or other information that is not public data under Minnesota law, shall be maintained and discussed at all meetings in a confidential manner as allowed by Minnesota law. 4. ACCOUNTING SYSTEM AND AUDIT. The Board of Directors shall cause to be established and maintained, in accordance with generally accepted accounting principles applied on a consistent basis, an appropriate accounting system for this corporation. The Board of Directors may cause the records and books of account of this corporation to be audited, at least once in each fiscal year, and at such other times as may be necessary or appropriate, and may retain such person or firm such as it may deem appropriate. 5. FISCAL YEAR.. The fiscal year of the corporation shall be January 1 through December 3 L ARTICLE VII. AMENDMENTS 1. AMENDMENTS. The Board of Directors may propose amendments to these Bylaws consistent with law and the Articles of Incorporation, by resolution adopted by a majority of the total number of directors, setting forth the proposed amendments and directing that they be submitted for adoption at an annual or special meeting of the member of the corporation, provided that no amendment shall be adopted, the purpose or effect of which would be to divert the purpose- or property of the corporation. Amendments shall be effective upon approval by the member of the corporation. Executive Director JMS91569 Rc12s-lot 6 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 42 Agenda July 17, 1995 Issue Statement: Consideration of resolution recommending approval of Agreement for Purchase and Sale and a Promissory Note; Sage Company. Background: Both the HRA and City Council have become familiar with the proposal by Sage Company of Minnetonka to gift the HRA three apartment communities, Heritage Square, Hampton Place and Crestwood. There were extensive discussions at the concurrent HRA and City Council meeting on June 19. An appropriate step at this time is the approval of a proposed purchase agreement or Agreement for Purchase and Sale which is attached. The primary points of the agreement are as follows: Article I Purchase of Property • Sage will gift real estate, furniture, fixtures and other personal property and sell the replacement reserves. • The HRA will accept the gift subject to mortgages and buy the reserves. • Sage will make available all operating information for the past two years. Article II Purchase Price, Payment and Closing • The purchase price of the reserve is approximately $680,000. • Closing shall take place within 90 days of execution of the agreement. • Sage is to provide a warranty deed, Bill of Sale with an inventory of property, site surveys, plans and specifications, Assignment of Tenant Leases, rent roll. • Sage also agrees that until closing happens, it will continue to operate the property responsibility. • The HRA will provide an executed copy of the Promissory Note (attached). • HUD must approve mortgage transfers. • HRA will have an agreement with City for payment in lieu of taxes. • HRA must be satisfied with condition of property including the existence of environment pollution or contamination. • Parties acknowledge existence of underground tank at Heritage Square. Sage is responsible for costs of removal of existing tank and cleanup. Sage also partially reasonable for cost of replacement tank. • Sage to provide a commitment for title insurance. • If substantial damage to property HRA may terminate the agreement. • Sage to pay an amount equal to security and other tenant deposits plus interest and other amounts described. • Taxes and assessments in year of closing prorated. • Sage to list all contracts or other agreements for services to property. • Sage shall end any management agreement as of the date of closing. • Delinquent rents to be paid by HRA to Sage if collected. Article 3 Warranties • Sage agrees that a list of statements on pages 7, 8, .and 9 are true regarding. a variety of conditions. • The HRA warrants it may enter into this agreement.. • Other Articles include Article 4 regarding Notices; Article 5 related to Liquidated Damages and Article 6 General Provisions. The Promissory Note obligates the HRA to pay for the replacement reserve. The estimate of the value of that fund is $680,000. It would be paid at the rate of $160,000 per year or 50% of the net cash flow for two years with the balance due in 1998. The interest rate would be 5.5%. Recommended Motion: Adopt the attached resolution and recommend to the Boards of Directors that the Agreement For Purchase and Sale and or Promissory Note be approved. Basis of Recommendation: 1. Drafting of the agreement has involved Stuart Nolan, Mark Ruff, John Dean and other attorneys at Kennedy & Graven and staff. 2. The agreement has been negotiated with Sage Companies. 3. The agreement is thorough and is intended to help provide a smooth transaction to ownership by the HRA. Alternative Recommendation: `' 1. Recommend to the Board of Directors to modify the proposed Articles and Bylaws. 2. Delay action. Discussion/Decision Mode: The transaction cannot progress without a purchase agreement. fitted, Jamesosser Executiv erector JDP:ds HRA RESOLUTION NO. RESOLUTION ACCEPTING PURCHASE AGREEMENTS AND DIRECTING APPROVAL OF SAME (HAMPTON PLACE, CRESTWOOD, HERITAGE SQUARE EAST) WHEREAS, pursuant to authority granted to it by special law of the 1995 Minnesota Legislature (the "Act"), the HRA has participated in the creation of three non- profit corporations ("Corporations") each of which will own, manage and operate one of the following apartment communities in the City of Richfield: 1. Hampton Place 2. Crestwood 3. Heritage Square East; and WHEREAS, pursuant to the Act, the HRA is empowered to direct the activities of such Corporations. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield as follows: That the proposed purchase agreements and each of them are hereby accepted. 2. That each Corporation, upon .formation, is hereby directed to .approve the purchase agreement pertaining to it and to carry out all acts and do all things necessary to consummate the transaction. 3. That the Executive Director and Commission Chairperson of the HRA are directed to take all actions and do all things required to effectuate the provisions of this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. this 17th day of July,1995. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary July A 1 1995 AGREIIViENT FOR PURCHASE AND SALE THIS AGREEMENT FOR PURCHASE AND SALE ("Agreement" herein), is made and entered into as of this .day of 1995, by and between and , a Minnesota corporation having its principal address at 6700 Portland Avenue South, Minnesota 55423 ("Buyer" herein) , with reference to the following: A . Seller is the owner of that certain real property and the improvements thereon consisting of a unit apartment complex situated in .the City of Richfield, County. of Hennepin, .State of Minnesota, commonly known as as more particularly described on Exhibit A attached hereto, and of all furniture, fixtures and other personal property owned by Seller, and used in the operation of said real property but only as such property is described in the attached Exhibit B-1, all easements, rights and other appurtenant rights and benefits the reserve funds described on Exhibit B-2 owned by Seller with respect to said ~ real property, all manufacturers' and contractors' guarantees and warranties, if any, with respect to such property, all rights, if any, of the Seller against materialmen, contractors and/or subcontractors and all tenant leases affecting the real property (collectively the "Property") . B . Seller is also the owner of certain replacement reserves which is described in the attached Exhibit B-2 ("Fund"). C . Seller desires to donate the Property which donation will be subject to the lien of that certain mortgage described on Exhibit B-3 ("Mortgage") and sell the Fund to Buyer, and Buyer desires to accept the gift of the Property and to purchase and acquire the Fund, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing recitals and their mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt of which is .hereby acknowledged, Seller and Buyer hereby agree as follows ARTICLE 1 purchase of the Property 1.1 Seller shall sell and gift to Buyer, and Buyer shall purchase and accept as a gift, subject to the Mortgage, the Fund and the Property, respectively, upon the terms and conditions hereinafter set forth. 1.2 If Seller has not previously delivered the following records and documents to Buyer, Seller shall deliver (but only if available in the form described) one copy of the following to Buyer or its agents within fifteen (15) days following the execution of this Agreement by both Buyer and Seller: 1.2.1 Property operating information for the two prior calendar years and year-to-date as may be requested by Buyer, including, without limitation, income and expense statements, utility bills, employee expenses, maintenance records, real and personal property taxes, insurance policies and JBD90188 RC125-73 notices, and inventory of personal property, and warranties, permits and licenses, tenant leases. and a complete rent roll. Until Closing, the Buyer shall have access for the purpose of review only and may not retain or copy or disseminate the material provided pursuant to this section. In the event that this agreement is terminated for any reason all records provided Buyer shall be promptly returned to Seller. Simultaneously with the execution of this Agreement, the parties will enter into a confidentiality agreement in substantially the form of the attached Exhibit B-4. ARTICLE 2 Purchase Price, Payment and Closing 2.1 Purchase Price. The Purchase Price for the Fund shall be Dollars ($ ) or such lesser or greater amount as is equal to the outstanding balance of the Fund on .the Closing Date, which the parties estimate to be in the amount of $ 2.2 Gift and Payment of Purchase Price. The parties acknowledge and agree that (i) the net value of the Property wYuch for the purpose of this Agreement will be the difference between the fair market value of the Property excluding the Fund and the amount of the Mortgage shall be deemed a gift by Seller to Buyer. At Closing, Buyer shall execute and deliver to ...the Seller a promissory note in substantially the form of the attached Exhibit /~ Payment of the Purchase Price shall be made through payments pursuant to said Note . 2.3 Closin Subject to the written .approval or written waiver by the respective party of the conditions precedent set forth in subparagraph 2.3.5, the closing of this Agreement shall occur on the date which is ninety (90) days after the execution of this Agreement, time being of the essence, at the offices of Buyer's counsel; provided that, upon mutual agreement, Closing shall occur at such earlier date which is ten (10) days after written notice thereof from Buyer to Seller. The term "Closing Date", as used herein, shall be deemed to be the date upon which Buyer accepts conveyance of title to the Property pursuant to this Agreement, and on the same date as, the transfer to the respective parties of all other documents and funds . All prorations and adjustments shall be effected as of midnight of the day preceding the Closing Date, unless otherwise mutually agreed to by the parties ("Adjustment Date") . 2.3.2 Seller shall deliver at Closing in form reasonably acceptable to Buyer's Counsel (unless otherwise provided) (a) A Warranty Deed ("Deed") , duly executed and acknowledged, which conveys the Property to Buyer, accompanied by a standard Seller's Affidavit and a well certificate or statement that no wells are located on the Property; (b) A Bill of Sale duly executed and an Inventory (attached thereto) conveying to Buyer on an "as-is" basis the personal property and fixtures owned by Seller presently used in the operation of the Property, as described in the attached Exhibit B-1 together with Seller's representation that it is the true owner of all such items and has the power to convey the same; JBD90188 RC125-73 2 (e) The most recent tax bill for the Property from the local tax assessor; (d) A current "as-built" survey of the Property by a licensed surveyor or engineer, if available; (e) At least one (1) copy of all plans and specifications covering the Property, but only if available to Seller; (f) An Assignment of Tenant Leases affecting the Property, duly executed and acknowledged; (g) An Assignment of all assignable existing warranties of the Property, the contracts and agreements described in Exhibit B attached hereto (reserving to Seller the right to def overnmentagli enses and related to the contract rights sold to Buyer) , g permits pertaining to the Property, tax and insurance impound accounts, if any, and trade name of the Property, duly executed;, (h) Rent Roll of the Property (including security deposits) , corrected and accurate, as of the Closing Date; (i) .Concurrently with the execution of this Agreement, an affidavit from Seller stating: (i) its United States taxpayer identification number for federal income tax purposes; and (ii) it is not ~~ a "foreign person within the meaning of section 1445, et seq. , of the Internal Revenue Code of 1986, as amended. 2.3.3 During the pendency of this Agreement Seller shall continue to operate the Property in the ordinary course of business, including (i) absent consent from Buyer, not renting any unit for a term in excess of 12 months; and (ii) absent consent of Buyer, not renting any unit at rates less than current rates . Buyer agrees to give its written consent in situations in which the request will not affect the reasonable interests of Buyer. 2.3.4 Buyer shall deliver at Closing: (a} .The Promissory Note set forth in Paragraph 2.2 above; and (b) A mortgage on the Property, subordinate to the Mortgage, securing Buyers obligations under the Promissory Note. 2.3.5 The following shall be conditions precedent to Buyer's obligations hereunder and shall be for the sole benefit of Buyer: (a) Seller's representations and warranties contained herein remain materially true and correct as of the Closing Date, and Seller shall have materially performed its covenants contained herein; (b) Buyer must be able to procure a commitment for an ALTA Owner's Policy of Title Insurance in the amount of the principal balance of the Mortgage (which the parties believe is less than the fair market value of the Property) subject to those encumbrances, which shall include the Mortgage, scheduled in the attached Exhibit /~ ("Permitted Encumbrances") . If Buyer is not able to obtain .such commitment in writing on or before said date, Buyer may terminate this JJBD90188 RC125-73 3 Agreement thereafter by providing a written notice of termination to Seller; (c) Buyer shall have obtained final authorization from the U. S . Department of Housing and Urban Development (the "HUD") and from any mortgagee which approves and determines the acceptability of the transfer of the Property and the assignment and assumption of the existing HUD mortgage or the Property subject only to modification reasonably acceptable to the Buyer; (d) Buyer shall have obtained approval of the City of Richfield for Buyer's acquisition of the Property, including. an agreement for navment in lieu of taxes artd tla.~ adop~o~ a~ a.~iou.sing,plan ~nt~ hqus (e) [All except Heritage] Buyer shall have determined that the physical condition of .the Property, including the .absence of environmental pollution or contamination, is acceptable to Buyer. Buyer agrees to accept the Property subject to all those matters disclosed in the following reports: [List all environmental reports previously prepared on the Property and provided to Buyer. ] Buyer shall have the further right until Closing to conduct such further environmental tests, at its sole expense to determine: i) whether there are material adverse changes with respect to matters contained in the referenced reports; or ii) whether the physical condition of the Property is materially and adversely affected by matters which were not contained in the referenced reports. All such tests and inspectors shall be done upon the giving of at least 2 day prior written notice to Seller; and shall be conducted in such a manner as not to unreasonably interfere with the use and operation of the Property. Buyer will indemnify, defend and hold harmless the Seller, its officers, agents or employees from any claim or cause of action arising out of or occasioned by Buyer's testing activities on the Property. Buyer may terminate this agreement for failure of Seller to permit such further testing or in the event that the test results disclose matters described in i) or ii) above.. (e) [Heritage only] Except as to the matter described in paragraph (f) below, Buyer shall have determined that the physical condition of the Property, including the absence of environmental pollution or contamination, is acceptable to Buyer. Buyer agrees to accept the Property subject to all those matters disclosed in the following reports : [List all environmental reports previously prepared on the Property and provided to Buyer. ] Buyer shall have the further right until Closing to conduct such further environmental tests, at its sole expense to determine: i) whether there are material adverse changes with respect to matters contained in the referenced reports; or ii) whether the physical condition of the Property is materially and adversely affected by matters which were not contained in the referenced reports. All such tests and inspectors shall be done upon the giving of at least 2 day prior written notice to Seller; and shall be conducted in such a manner as not to unreasonably interfere with the use and operation of the Property. Buyer will indemnify, defend and hold harmless the Seller, its officers, agents or employees from any claim or cause of action arising out of or occasioned by Buyer's testing activities on the Property. Buyer may terminate this agreement for JBD90188 RC125-73 failure of Seller to permit such further testing or in the event that the test results disclose matters described in i) or ii) above. (f) [Heritage only] The parties acknowledge that an underground storage tank currently located on the Property is to be removed and replaced after Closing. Buyer may conduct such reasonable and necessary pre-closing tests in accordance with paragraph (e) above to satisfy itself whether to Close. Subsequent to Closing, Buyer shall provide for the removal and replacement of the tank. The Seller shall be responsible for all costs incurred by Buyer in connection with the removal of the existing tank and any cleanup, remediation or monitoring activities relating to the existing tank. The Seller shall also be responsible for 16.7 [ 5 / 30 ] of the cost of a new tank and associated piping (such actual amount to be computed based upon a tank of the same size as the existing tank) . Buyer shall submit to Seller all invoices showing costs incurred a described above. Seller shall have 30 days from the date of submission to pay the same. Buyer may thereafter reduce payments on the Note by a like amount. If any of the preceding conditions (a) through (e) [or (f) in Heritage] are not satisfied by the time specified, Buyer may terminate this agreement by notice to .Seller and Buyer shall be entitled to a refund of its entire earnest money deposit from Escrowholder, together with all interest earned thereon and this Agreement shall be null and void and neither party shall have any liability to the other . The following shall be conditions precedent to Seller's obligations hereunder and shall be for the sole benefit of Buyer: (aa) Buyer's representations and warranties contained herein are true and correct as of the Closing Date, and Buyer shall have performed its covenants contained herein; (bb) Seller shalvalue of the Property acceptable to Sellersal of the Property setting If any of the preceding conditions (aa) through (bb) are not satisfied by the time specifbe nu leand Vold and neitherlpar~ shall have any liability to the oth~eement shall 2.3.6 On or before Closing, Seller shall provide Buyer with the latest current rent roll of the Property, and Seller represents and warrants same to be true and accurate . Z . 3.7 Seller and Buyer shall, prior to the Closing Date, execute any and all documents, and perform any and all acts reasonably necessary and appropriate to consummate the purchase and sale pursuant to the terms of this Agreement, including, but not necessarily limited to, additional instructions required by the Title Company. 2.3.8 Seller shall furnish to Buyer (to be paid by Buyer) a commitment for an Owner's ALTA Form B Policy of Title Insurance, including a mechanics' lien endorsement (or equivalent policy) issued by the Title Company, insuring title in Buyer, free and clear of all matters, encumbrances and survey exceptions except for Permitted Encumbrances . Buyer specifically agrees that, subject to the provisions 2.3.5(c) the HUD insured mortgage on the property is a permitted exception to title. JBD90188 5 RC125-73 (a) Such Policy of Title Insurance shall have a liability limit equal to the principal balance of the Mortgage . In the event any additional exceptions, except as permitted in this Paragraph, shall show (or purport to be shown) in the Policy of Title Insurance to be provided to the Buyer hereunder, if the same results from any voluntary action by Seller, or if the same may be removed solely by payment of money, Seller shall cause such exceptions to be removed. With regard to any other additional exceptions, if Seller fails to remove the same within the time allowed for Closing, the Buyer shall have the right to terminate this Agreement as the Buyer's sole and exclusive remedy, and any deposit made herein shall be returned to the Buyer by Title Company in full plus interest accrued thereon, and Seller agrees to pay any escrow and title cancellation fees in connection therewith. (b) Seller shall provide Buyer (at Seller's expense) with a complete abstract of title to the Property, including, without limitation, all appropriate name searches, continued at least to 30 days before Closing . 2.3.9 If, before legal title or the possession of the Property has been transferred to Buyer, any portion of the Property is damaged without fault of the Buyer, or is taken by eminent domain by any governmental entity, and i) such damage or taking is less than $100, 000 and does not significantly interfere with the full operation of the Property, then the transaction shall proceed to Closing and all insurance proceeds shall be assigned to Buyer; or ii) such damage or taking is in excess of $100, 000 or significantly interferes with the full operation of the Property, then Buyer shall have the option to either (i) terminate this Agreement, and all documents and monies shall be returned to the party which had delivered any such documents or monies, or (ii) proceed with the purchase of the Property, in which case, Seller shall assign to Buyer any amounts due from any governmental entity as a result of the taking, or the amounts due under any policy of insurance . The risk of loss during the pendency of this Agreement rests with Seller, and Seller covenants to keep and maintain during the pendency of this Agreement casualty insurance in an amount not less than the full replacement value of the Property . 2.3.10 Upon Closing, the Title Company shall cause the Deed and any other instruments required to be recorded or filed, to be recorded and filed in the Office of the County Recorder for Hennepin County, Minnesota, or where otherwise required to be so recorded or filed all costs and fees incurred in recording documents necessary to vast title in the Seller shall be paid by Seller, all costs and fees necessary to transfer title to Buyer shall be paid by Buyer. The Deed shall have noted thereon that, after recordation thereof , the same is to be returned to Buyer's counsel . 2.3.11 Seller shall be entitled to all rents for the period of time prior to Closing. Delinquent rents due Seller as of Closing, if and when collected by Buyer, shall be paid to Seller. Provided, however, that this paragraph shall place no obligation to collect any delinquent rents, or to credit any rent payments to delinquent rent . Buyer does agree to provide reasonable assistance to the extent that expenses so incurred will be reimbursed by Seller. 2.3.12 Buyer shall secure its own casualty insurance, and Seller shall be entitled to any unearned premium if any existing policy. JBD90188 RC125-73 6 2.3.13 Seller will pay Buyer in cash at closing an amount equal to the security and other tenant and pet deposits, whether or not refundable, accrued interest on any such deposits if required by local law, prepaid rents and advance deposits, all as will be shown on the updated Rent Roll delivered at Closing. Buyer will pay Seller in cash at closing an amount equal to i) property tax escrow, ii) the unearned premium on any mortgage insurance on the Property, iii) hazard insurance escrow, and iv) the operating account. The proper amount of such payments shall be agreed upon by the parties not later than 10 days prior to the Closing Date . Upon payment at Closing of such cash amounts, Seller shall transfer to Buyer all right, title and interest to and in all such accounts . 2.3.14 Final readings and final billings for utilities will be made if possible as of the Adjustment Date . Seller shall pay all outstanding amounts due as of such time . Seller shall also be entitled to any applicable refunds of security deposits with any utility companies . If final readings and billings cannot be obtained as of Closing, the final bills when received shall be prorated based upon the number of days Seller owned the Property in such final billing period . 2.3.15 Seller shall pay all charges for deliveries made and services rendered and all other operating costs of the Property up to the Adjustment Date. Any items on order but undelivered as of the Adjustment Date will be reviewed and accepted or cancelled as desired by Buyer. Employee salaries, benefits, sick leave, vacation pay, and employer contributions to governmental agencies of each employee of the Property shall be paid current by Seller as of the Adjustment Date . It is understood that this transaction does not involve the transfer of employees from Seller to Buyer. Furthermore, Buyer agrees not to seek to employ (and shallt instruct its agents and property managers not to employ) any of Sellers employees without Seller's written consent . 2.3.16 Real and personal property taxes and assessments due and payable in the year of Closing (not delinquent) and all other current expenses of operation of the Property shall be prorated as of the Adjustment Date . Seller shall pay all taxes and special assessments due and payable in the years prior to the year of Closing. Buyer shall be responsible for all pending special assessments . 2.3.17 If any adjustment or proration hereunder shall be found to be incorrect within sixty (60) days after the Closing Date, Buyer and Seller agree to timely effect the correction or readjustment thereof . 2.4 Donation. At Closing, Seller shall gift to Buyer, and Buyer shall accept, the Property at the appraised value for the Property as set forth in the appraisal to be obtained by Seller (plus the value of any personal property and minus the lien of any existing encumbrance to be assumed by Buyer) . In accepting this gift, Buyer acknowledges that Buyer is a governmental subdivision and is accepting any gift hereunder for purely public purposes. Except for the specific re resentations contained herein, Seller agrees and acknowledges that the Buyer is making no representations or warranties regarding Seller's entitlement to a charitable contribution under the Internal Revenue Code or the amount of any such entitlement and the Buyer shall not be required to make any representations to the Internal Revenue Service except with respect to the terms of this Agreement or as otherwise required by law. Buyer agrees that it will cooperate with Seller in the providing of information requested by Seller and reasonably necessary to assist JHD90188 RC125-73 7 Seller in pursuing any claim for tax treatment. Seller may terminate this Agreement at any time prior to closing if, in Seller's reasonable judgment, it appears that it will not be entitled to receive the tax treatment presently contemplated. ARTICLE 3 Warranties 3.1 Seller's Warranties, Etc. Except as to matters within the Buyer's actual knowledge, Seller hereby represents, warrants and covenants (which warranties, representations and covenants shall survive the Closing Date) that, as of the date of this Agreement and as of the Closing Date, the following are true and correct 3.1.1 Seller has full power and authority to enter into and perform this Agreement in accordance with its terms; 3.1.2 Seller has good and marketable title in fee simple to all of the Property, subject to Permitted Encumbrances above; 3.1.3 Seller has not received any notice or communication from any governmental entity indicating that a condition exists with respect to the Property or with respect to the improvements thereon which violates any city, .county, state or federal law, ordinance, regulation, or code; nor has any notice or communication been received from an insurance carrier of the Property regarding dangerous, illegal or other conditions requiring corrective action; 3.1.4 Seller has not entered into any labor union contracts for the operation of the Property; 3.1.5 Seller has not entered into any operating or service contracts or other agreements relating to the Property (other than tenant leases), except for those contracts and agreements a list of which is set forth in Exhibit B attached hereto and copies of which have been provided to Buyer; 3.1.6 The Property is not subject to any outstanding agreement(s) of sale, option (s) or other right (s } of third parties to acquire any .interest therein, except from the occupancy rights of tenants in possession; 3.1. ? Any existing management agreement or contract between Seller and a property management company for the Property will terminate as of the Closing Date; 3.1.8 Seller shall operate the Property in the normal course before the date of Closing, but Seller shall not be responsible for latent defects not known to Seller; all vacant apartments shall be in rentable conditions {which shall mean that they have not only been properly cleaned but that they contain the normal complement of furniture, fixtures and equipment normally included by Seller .when renting its apartments) ; and all of the appliances in the apartments which are normally rented with the apartments (including, without limitation, stoves, ranges, refrigerators, dishwashers, .and garbage disposals) are owned by Seller and are not the property of the tenant or any other party; 3.1.9 None of the tenants on the Property have been given any concession or consideration for the rental of any space which shall apply after JBD90188 RC125-73 8 the Adjustment Date; no tenants are entitled hereafter to any concessions, rebates, allowances or free rent for any period after the Adjustment Date; and none of the apartments have been rented for professional or business use; 3.1.10 There have been no claims asserted by tenants for offsets against rent or any other monetary claim made against Seller as landlord which shall apply after the Adjustment Date.. If any claim is made against Buyer following the Adjustment Date by any tenant asserting an offset against rent or otherwise with respect to any matter which arose prior to the Adjustment Date, Seller shall indemnify and hold Buyer harmless for all losses, damages and expenses in connection therewith and Seller shall have the right to defend itself in connection therewith; 3.1.11 There is no litigation or proceeding pending or, to Seller's knowledge, threatened against or relating to any of the Property, nor does Seller know or have reasonable grounds to know of any basis for any such action, and Seller hereby agrees to indemnify Buyer, hold it harmless, and protect and defend it from and against any and all claims, demands, damages, losses, liens, liabilities, actions, causes of action and other proceedings of any nature, together with all costs and expenses thereof (including, without limitation, reasonable attorneys' fees and court costs) resulting directly or indirectly in any manner from such litigation; 3.1.12 Except as noted in paragraph 2.3.5(e) with respect to an underground storage tank located on the Property, there are no substances located, stored, used or disposed of on the Property which are listed as "hazardous" or "toxic" in the Comprehensive Environmental Response Compensation Act, 42 USC § 9601 et seq. , the Resource Conservation and Recovery Act, 42 USC ~ 6901 et seq. , or any other federal, state or local law regulating toxic or hazardous substances; and to the best of Seller's knowledge, there have been no such substances on the Property except to the extent that the chlorine and muriatic acid used for pool cleaning purposes could be considered to be in such categories; 3.1.13 To the best of Seller's knowledge and belief, all public utilities, including, without being limited to, sewers, water, electric, gas, telephone, etc. , required for the operation of the Property, either enter the Property through public roads or adjoining private land and do so in accordance with value public easements or private easements . All of said public utilities are installed and operating, and all installation and connection charges have been paid for in full; 3.1.14 No assessments for public improvements have been made against the Property that remain unpaid, including, without limitation, those for construction of sewer and water lines and mains, street lights, streets, sidewalks and curbs; 3.1.15 Seller has not failed to disclose to the Buyer any material adverse fact or condition regarding this Agreement or the transactions contemplated hereunder; 3.1.16 To the best of Seller's knowledge and belief, there are no off-record agreements relating to entrances, exists, access and service roads affecting the Property; JBD90188 RC125-73 3.1.17 Seller knows of no material defects in the fitness or physical condition of the Property, without making a special inspection for purposes of this warranty, which is attached hereto and incorporated herein; 3.1.18 All personal property to be purchased hereunder is free of liens and encumbrances and is being purchased in an "AS IS" condition; and 3.1.19 Seller is not a "foreign person" within the meaning of section 1445, et seq. , of the Internal Revenue Code of 1986, as amended. 3.1.20 There are no wells and, except as provided in paragraph 2.3.5(e) underground storage tanks located on the Property. 3.1.21 Seller has fully and accurately accounted to Buyer with respect to all accounts, funds, or deposits being held by Seller or which are held by others either at Seller's request or for Seller's benefit without limiting the foregoing. Seller agrees to indemnify and hold harmless the Buyer. Seller agrees that it will either pursue the procedures described in Minnesota Statutes, § 504.20, or will indemnify and hold harmless the Buyer for any claims for security deposits in excess of the noticed for amount . 3.2 Buyer's Warranties . Buyer hereby represents, warrants and covenants (which warranties, representations and covenants shall survive the Closing Date) that, as of the date of this Agreement and as of the Closing Date, Buyer has full power and authority to enter into and perform this Agreement in accordance with its terms . 3.3 Additional Buyer Covenant. Buyer further covenants to Seller, that absent the consent of Seller, Buyer will not voluntarily convey title to the Property for a period of two years following the Closing Date . ARTICLE 4 Notices 4.1 All written notices and demands of any kind, which either party may be required or may desire to serve upon the other party in connection with this Agreement, may be served (as an alternative to personal service} by registered or certified mail or by national overnight courier. Any such notice or demand so served by registered or certified mail shall be deposited in the United States Mail with. postage thereon fully prepaid and addressed to the party to be served at the address set forth at the beginning of this agreement, or such other address as the other party may provide in writing. Service of any such notice or demand so made by mail shall be deemed complete two (2) business days after the day of mailing, and service made by national overnight courier shall be deemed complete when delivered by such courier. A copy of any such notice shall also be sent to Escrowholder. ARTICLE 5 Liquidated Damages 5.1 The parties have discussed and negotiated in good faith upon the question of damages to be suffered by either party in the event of breach of this JBD90188 RC125-73 1 0 Agreement by the other party, and they hereby agree that in the event of a breach of this Agreement by either party, the nonbreaching party shall, as liquidated damages, be entitled to receive its fees and expenses incurred or obligaExceot as date o ed n this Artcle,lthe parties shall have no personal liability hereunder. proved ARTICLE 6 General Provisions 6.1 The titles and headings of the various Articles and Paragraphs ur rose are intendedosaoll diyf fo explann or place any onst uction on any of the provisions of whatsoever Y ~ this Agreement . 6.2 This Agreement constlatl tter hereof and may not be modifiedh amended hereto with respect to the sub]ect or otherwise changed in a and all documentsbexecut dnin econnec tonyherewith for hereto . This Agreement pursuant to the terms hereof shall be governed by and construed in accordance wit the laws of the State of Minnesota. 6.3 This Agreement and nure to the benefit ofmthe par ies hereto and theidr herein shall be binding upon and cement only with respective successors and assigns . Buyer may assign this Agr rovided that Seller's consent, which cadversel aaffectt he tax or othler economic impact of this the assignment does not Y transaction or of the Other Transactions.. 6.4 The provisions and coadieio and aid p ovisions and cond iion a shat any deed or instrument of convey survive the Closing. 6.5 Each party hereby indemnifies the o and all claims~l demand sldamages, and agrees to defend and protect it against, any losses, liabilities, liens, legal athereofn(ncluding,Cewithoutolimit t'onur reasonable with all costs and expenses an erson or entity attorneys' .fees and court costs) arising from a claim by Y P (including, without limitation, by affiliates or Seller) for a real estate commission or a finder's fee in this transaction based upon any contacts or dealings such party may have had with Seller . 6.6 Each party shall pay the fees charged by any attorney retained by it is connection with this transaction. g . 7 The parties acknoo the gransactions describedt n those two separate contemplated herein is related t ~~ agreements entitled : " " and ("Other Transactions") bearinge ne ther aarty may terminateathis Agreement the n+t,oY. m,.A„~ant;ons fails to clos , P JHD90188 l.1 RC125-73 By Its By Its [SELLER] By Its By Its JBD90188 1 2 RC125-73 Exhibit A Legal Description Exhibit B Contracts & Agreements Exhibit B-1 Furniture, Fixtures, Personal Property Exhibit B-2 Reserve Funds Exhibit B-3 Mortgage Exhibit B-4 Form of confidentiality Agreement Exhibit D Promissory Note Exhibit E Permitted Encumbrances JBD90186 1.3 RC125-73 EXHIBIT A LEGAL DESCRIPTION [to be completed prior to execution] JBD90186 RC125-73 1 4 EXHIBIT B List of Operating Contracts/Agreements [to be completed prior to execution] JBD90188 RC125-73 1 rJ _..... ~3BT~` WW1'! > .. ;'. <': ............................................ ........................... ............................................ ......................... ;. Lisp cd.' Persnnt~ Pe JBD90188 RC125-73 1 6 EXHI~I~I` B~2' ....................................... Reserve ; ens __ __ ......... ............................... .......... .............................. __ JBD90188 RC125-73 1 7 ~'#3TT' S-3 ''' ~art~ag JBD90188 RC125-73 1 8 EXHIBIT C Promissory Note [to be completed prior to execution] JBD90188 RC125-73 1 9 EXHIBIT n PRONIISSORY NOTE Richfield, Minnesota 1995 FOR VALUE RECEIVED, the undersigned hereby agrees and promises to pay, to the order of , a Minnesota or its assigns ("Holder") at its principal office at , or at such other places as the Holder may rom time to time designate, the principal sum of and no / 100 ($ ) Dollars , together with interest thereon accrued rom 19 at the rate of interest of /~ $ per annum (the "Stated Rate") as set forth on the Payment Schedule attached hereto as Attachment A, and in the amounts stated thereon until (the "Maturity Date') when the remaining unpaid .principal balance together with any accrued but unpaid interest shall be paid in full. The payments shown in Attachment A are intended to represent the minimum payments to be made . Actual payments will be the greater of the amount shown or 50$ of Annual Net Cash Flow. For the purposes of this note: "Annual Net Cash Flow" means Project Revenues less Project Expenses less Debt Service as calculated by the HRA on a to fiscal year. "Project Revenues" means rental revenues from apartment units and garages, income from vending machines or laundry facilities, and interest income excluding interest income on Restricted Funds . "Project Expenses" means all expenses incurred by the owner in the operation of the rental units including mandatory and voluntary payments-in- lieu-of real estate taxes, replacement reserve deposits, annual auditing expense, and other legal and financial expenses. "Debt Services" means all principal and interest payments and mortgage insurance premiums "Restricted Funds" means account balances such as tenant security deposits, replacement reserve .deposits, etc. which are restricted in use by state or federal law or regulations or by mortgage documents . All payments on this Promissory Note shall be applied to interest and to principal as shown in Attachment A . This note is made pursuant to the laws of the State of Minnesota. If default be made in any payment of principal and interest when due in accordance with the terms and conditions of this Promissory Note, the entire unpaid principal balance of this Promissory Note, together with accrued interest hereon, shall, upon ten (10) days' written notice to the undersigned is not cured within such period, become immediately due and payable at the option of the Holder hereof . No delay or omission on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other remedy under this Promissory Note . A waiver on any one occasion shall not be construed as a bar to JHD90188 RC125-73 C-1 or waiver of any such right or remedy on a future occasion. The Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in writing. This Promissory Note may not be amended, modified or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modification or change is sought. In the event of any default hereunder, the undersigned agrees to pay the costs of collection, including reasonable attorneys' fees . The maker, endorsers, sureties, guarantors and all other persons liable for all or any part of the principal balance evidenced by this Promissory Note severally waive presentment for payment, protest and notice of non-payment. Such parties hereby consent, without affecting their liability to any extension or alteration of the time or terms of payment hereof, to any renewal, any release of any or all part of the security given for the payment hereof, any acceptance of additional security of any kind and any release of or resort to any party liable for payment hereof . All agreements between the maker and the Holder are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Holder for the use, forbearance, loaning or detention of the indebtedness evidenced hereby exceed the maximum permissible under applicable law. If from any circumstances whatsoever, fulfillment of any provision hereof or any other security instrument at any time given for the performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, the obligation to be fulfilled shall automatically be reduced to the limit of such validity, and if from any circumstances the Holder should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be in excess of interest shall be applied to the reduction of the principal balance evidenced hereby and not to the payment of interest. This provision shall control every provision of all agreements between the maker and Holder and shall also be binding upon and available to any subsequent Holder or endorsee of this Promissory Note . If any term of this Promissory Note, or the application thereof to any person or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Promissory Note, or the application of such term to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term of this Promissory Note shall be valid and enforceable to the fullest extent permitted by law. The undersigned may prepay this Note at any time by paying Holder the remaining principal balance and any accrued interest . In the event shall refinance or otherwise pay the existing debt on the Property or agrees so to do, or if any ownership interest in the Property is sold, transferred, pledged or assigned except to the undersigned, then at the sole option of the Holder, the Holder may declare the entire unpaid principal balance due hereunder, together with interest, which would be due and payable if this note had gone to maturity. If no such election is made, then the undersigned shall continue to be liable for payments as described in Attachment A. ,7BD90188 RC125-73 ri-2 HOUSING AUTHORITY RICHFIELD. By: AND REDEVELOPMENT IN AND FOR THE CITY OF Its By: Its STATE OF MINNESOTA ) SS COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1995, by and , the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. Notary Public JBD90188 RC125-73 C_3 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 41 Agenda July 17,.1995 Issue Statement: Public hearing- and authorization. of the sale of Richfield Rediscovered property at 6645 Upton Avenue to Steven M. Grant, #o be known as Steven-Marlin Grant Homes, Inc. Background: The HRA has acquired 6645 Upton Avenue under the Richfield Rediscovered Program. Staff has worked with Marlin Grant Homes on the attached plan and has negotiated a development agreement with the .following conditions: .Sale Price Minimum Value $29,000 $120,000 Price at Completion $140,000 Marlin Grant built a similar home at 6321 Humboldt Avenue. The development agreement, form remains essentially unchanged from those previously used for Richfield Rediscovered. The agreement requires the builder to: • pay for the site at the stated lot value. The HRA has already contracted far demolition. • provide financial. security during the construction period with a letter of credit, or similar security, that reflects the value of the lot sale price; and • complete the home by December 31, 1995, except for exterior.concrete work and landscaping which would be deferred until May 1996. Marlin Grant Homes, .Inc. is .reorganizing his operation. (See attached summary.) The name will become Steven-Marlin Grant Homes when incorporated. Marlin's son Steven, who actually builds the homes now, will enter into development agreements with the HRA. Marlin will continue to finance the projects and work with the HRA. Steven-Marlin projects to date have been promptly developed, and all of the HRA's financial requirements were met. Recommended Motion: Following the public hearing., adopt the attached. resolution which authorizes the Chair and Executive Director to execute agreements which sells 6645 Upton Avenue to Steven M. Grant for the development of a new single family home. Basis of Recommendation: 1. A check of references indicates the builder to be experienced, capable and financially secure. 2. The HRA has acquired 6645 Upton Avenue. 3. A development agreement has been negotiated and is in .conformance with program guidelines, 4. Notice of public hearing was published in Sun-Current on June 28, 1995. Alternative Recommendation: Do not sell to Steven M. Grant and direct staff to find other buyers. Discussion/Decision Mode: Closing is anticipated to occur later in July and construction will -start shortly thereafter. Respe submitted, James rosser Executi Director JDP:ds HRA RESOLUTION NO. RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6645 UPTON AVENUE TO STEVEN M. GRANT IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT 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 Redevelopmenf Project (Project) hereto adopted by the City of Richfield (City) and the HRA, said real property being described as follows: Pro a Legal Description 6645 Upton Avenue Lot 15, Block 5, Tingdale Bros. Lincoln Hills Addn, Hennepin County WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a developer, Steven M. Grant has been identified as the purchaser of the described property at 6645 Upton Avenue, in accordance with a development agreement; and WHEREAS, the public hearing has been held after proper public notice; and WHEREAS, a finding has been made that the disposition of the property for residential purposes is consistent with the Comprehensive Plan. NOW, THEREFORE, BELT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and 6645 Upton Avenue is authorized to be sold to Steven M. Grant. 2. The purchase price for 6645 .Upton Avenue is $29,000. 3. The Chairperson and Executive Director are authorized to execute the Development Agreement and other agreements as required to effectuate the sale. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this .17th day of July, 1995. Thomas E. Harms, Chair ATTEST: Vern Luettinger, Secretary s~; ,~ _. c~.~a MARLIN GRANT HOMES, INC. BUILDING HOMES SINCE 1955 TO: DATE: June 12, 1995 RE: Contemplated changes at Marlin Grant Homes, Inc. FROM: Marlin D. Grant When Marlin Grant created Marlin Grant Homes, Inc. in 1992, it was his intent and desire that after the company was in operation for a certain period Steven Grant, Marlin's son, would take over the company and continue Marlin's tradition in building new homes for happy satisfied customers. And that Marlin would then begin fazing .out of the business as far as management is concerned. Marlin now believes that time has arrived and therefore is proposing the following changes which he wishes to share with you and to seek your input and advise. The plan is as follows. 1. Anew corporation would be formed named Steven-Marlin Grant Homes which would be totally owned by Steven Grant, who at age 34 has now been building new homes for the past 16 plus years and-has achieved a great. deal of home building experience. 2. Marlin Grant Homes would be renamed to Marlin Grant Realty. This company would continue to be totally owned by Marlin Grant, which would be responsible for the securing of building sites for Steven-Marlin Grant Homes and would be .the real estate broker who would sell the homes to be built by Steven-Marlin Grant Homes. Marlin Grant would continue to provide his. services in securing building sites such as those lots previously purchased from the City of Richfield and will handle the purchase and the closing of such sites on behalf of Steven-Marlin Grant Homes and will also handle the closing of the new homes to their buyers. 3. Marlin Grant will provide his expertise and service to Steven-Marlin Grant. Homes in the placement and elevation for the placement of the new homes built by Steven-Marlin Grant Homes. 4. Marlin Grant will acquaint himself with the homeowners on each side of the building sites~to be purchased from the City of Richfield in the .future just as he has done in the past so that neighborhood harmony will continue. This change in company ownership and certain of the duties will allow Marlin Grant to have more time to secure building sites that Steven-Marlin Grant Homes will be able to build new homes upon. Steven Grant will then be able to have complete control over the pricing, scheduling and construction of the new homes. Marlin and Steven request your input and thoughts in this regard. 8901 Lyndale Avenue S • Bloomington, MN 55420 • phone 612.884.1926 • fnx 884.7726 • License #0004412 Y Y v° i _. z 0 d 1!~ W ~0 uil~~l ilp,Tm ~~1 E 0 o`1~p iiilP' ill ~~ Z O a W ~" li W J .,,, Z O a W W Q W :~ ~ L•11~R M.y. r r J ~ ~ ~ iA l of-Nx 7:.0 1 ~ O ~ N i xt Z ~ ~ M Rah - - Z )8 ~ r Yr^~T'ac •cc6w "~x#T 4` cor.la. ~. lyl.~,-- Z I _sl"1• 91.5• 1 - s/8 v.+tir~ ` F r---~ --- t .II ~ O I I ~ -L~i !~~ ~ __ 1 • , WO N _ ~ Krtcw~.~ S° ~ ~ ~ ~ Zr, Vw~ Zs n ~ ~ _ O »..~.~ ~..» '~ 1---~ _ Ji I I ~ Ji^ r Z' - -- , I I ~ . L _ _ 6Y~1~ .~~ I LJ.' I 41_[S G4°~_LOTSL ___.~ t'," I 11•_n' SxL\-'x-040 UPPER LEVEL -------- ~-------tea,-~.-~-.. , P __ ~ - °, . AA f~- „ ~..~ r•.- lol-O" I lol-S' 8°•.+w•.h Id vw '+' 4 +.-re,av Gat . ~ I I _ =`+b• ~w+E vri.wt 3dx ;o'xt9Y ca+c. fTlvH ~ 4M.acE ayt // (1' of ~i) ~ - ~ ~~. ~ f r .~ Y"i 13La Lo`.S` ~ I I ~ ~ I ~C; 1" o ~1 I I 1. 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