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05-15-2017 Complete AgendaS P E C IAL JO IN T C IT Y C O U N C IL AN D H O U S IN G AN D R E D E V E LO PME N T AU TH O R IT Y W O R K S E S S IO N R IC H F IE L D MU N IC IPAL C EN TER, B AR T H O L O ME W R O O M MAY 15, 2017 6:30 P M C all to order 1.D evelopment update by the C ommunity D evelopment D epartment. A djournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. CITY OF RICHFIELD, MINNESOTA Office of City Manager May 11, 2017 Council Memorandum No. 48 HRA Memorandum No. 15 The Honorable Mayor Housing and Redevelopment and Authority Commissioners Members of the City Council City of Richfield Subject: Development Update Work Session Council Members and Commissioners: Developer representatives will be attending the work session on Monday, May 15 to present brief project updates. Respectfully submitted, Steven L. Devich City Manager/Executive Director SLD:kcb Email: Assistant City Manager Department Directors R E G U L AR H O U S IN G AN D R E D E V E LO P ME N T AU T H O R IT Y MEET IN G R IC H F IE L D MU N IC IPAL C EN TER, C O U N C IL C H AMB E R S MAY 15, 2017 7:00 P M C all to Order Approval of the Minutes A pproval of the mi nutes of the Regular Housing and Redevelopment A uthority Meeti ng of A pril 17, 2017. AG E N D A AP P R O VAL 1.A pproval of the A genda 2.Consent C alendar contains several separate items which are acted upon by the H R A in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further H R A action on these items is necessary. However, any H R A Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for H R A discussion and action. All items listed on the Consent Calendar are recommended for approval. A .C onsi deration of the approval of a resoluti on approving a S ubordination A greement related to Richfield Urban Vi llage. S taff Report No. 20 B .C onsi deration of the approval of a resoluti on authorizing the HRA to affirm the monetary limits on statutory municipali ty tort liability. S taff Report No. 21 C .C onsi deration of the approval of a resoluti on authorizing the purchase of 6839 C edar Avenue. S taff Report No. 22 3.C onsideration of items, if any, removed from C onsent C alendar R E S O L U T IO N S 4.C onsideration of the approval of a resolution authorizing the Right of E ntry A greement with Inland D evelopment L L C . S taff Report No. 23 P U B LIC H EAR IN G S 5.P ublic heari ng and consideration of the approval of a resolution approving the conveyance of certain real property to Interstate L L C and approving a purchase agreement with respect thereto. S taff Report No. 24 O T H E R B U SIN E S S 6.C onsideration of the approval of a petition requesting that the C ity C ouncil consi der the vacation of a portion of 17th Avenue. The right-of-way is adjacent to the proposed P laza 66 development (approximately 6600, 6608, and 6614 17th Avenue). S taff Report No. 25 H R A D IS C U S S IO N IT E MS 7.H R A D iscussion Items E X E C U T IV E D IR EC TO R R E P O R T 8.E xecutive D i rector's Report C L AIMS AN D PAYR O LL S 9.C laims and P ayrolls 10.A djournment Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96 hours in advance to the C ity Clerk at 612-861-9738. HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting April 17, 2017 CALL TO ORDER The meeting was called to order by Chair Supple at 7:00 p.m. ATTENDANCE HRA Members Present: Mary Supple, Chair; Pat Elliott; Michael Howard; Doris Rubenstein; Sue Sandahl Staff Present: Steve Devich, Executive Director; Karen Barton, Assistant Director of Community Development; and Kate Aitchison, Housing Specialist. Item #1 APPROVAL OF THE MINUTES OF THE REGULAR HRA MEETING OF MARCH 20, 2017 M/Rubenstein, S/Elliott to approve the minutes of the regular HRA meeting of March 20, 2017. Motion carried 5-0. Item #2 HRA APPROVAL OF THE AGENDA M/Elliott, S/Sandahl, to approve the agenda. Motion carried 5-0. Item #3 HRA APPROVAL OF THE CONSENT CALENDAR Executive Director Devich presented the consent calendar. A. Consideration of the approval of a resolution authorizing the Right of Entry Agreement with Interstate Partners LLC. (Staff Report No. 17) B. Consideration of the approval of a resolution consenting to the inclusion by Interstate Partners LLC of certain property with respect to land use approvals. (Staff Report No. 18) M/Elliott, S/Rubenstein, to approve the consent calendar. Motion carried 5-0. HRA Meeting -2- April 17, 2017 Item #4 CONSIDERATION OF THE APPROVAL OF AN ASSIGNMENT AND SUBORDINATION OF THE DEVELOPMENT AGREEMENT AND COLLATERAL ASSIGNMENT OF INTEREST IN THE REVENUE NOTE BETWEEN RM SENIOR LIVING AND THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY. Karen Barton presented Staff Report No. 19. Commissioner Sandahl asked for contextual information on the project. Assistant Community Development Director Barton responded that the projected would include 88 units of assisted living and memory care units. Commissioner Elliott asked for clarification on the role of the two banks involved in this situation. Bo Nickoloff, representative for RM Senior Living, clarified the role of the two banks. Commissioner Rubenstein stated she was happy to see the project moving forward. M/Elliott, S/Sandahl, to approve the assignment and subordination of the development agreement and collateral assignment of interest in the revenue note between RM Senior Living and the Richfield Housing and Redevelopment Authority. Motion carried 5-0. Item #5 HRA DISCUSSION ITEMS Chair Supple asked for an update on the Cedar Point II Housing project led by Boisclair. Executive Director Devich stated that the Preliminary Development Agreement with Boisclair expires at the end of the month and that he is not intending to ask the HRA to extend the preliminary development agreement for Boisclair. He stated that perhaps it is time to talk with other developers while continuing discussions with Boisclair. There is a bill being proposed at the state legislature that would allow for a 10-year extension to the TIF period for this district. Executive Director Devich stated he was hopeful that it would be extended. Chair Supple asked about the status of various grants that have been applied for. Executive Director Devich stated that staff is waiting to hear the results of one application for $1 million in funds to assist with purchasing some of the homes in the area. Results are expected at the end of May. Commissioner Rubenstein asked about the nature of communication between staff and the developer. Assistant Development Director Barton stated that Boisclair had promised weekly updates, but in the past few weeks there haven’t been any new developments on which to update. Chair Supple asked who has been communicating with residents. Assistant Community Development Director Barton explained that she was the primary contact with residents, not the developer. Commissioner Sandahl asked about the time remaining on the TIF district should the extension not be granted. Executive Director Devich stated he thought there were 10-15 years remaining. Commissioner Howard expressed that he sympathizes with residents who are waiting for development in the area. He stated he hopes to see something move forward. HRA Meeting -3- April 17, 2017 Commissioner Elliott expressed disappointment that the development hasn’t lived up to its initial proposal. He stated that it is time to put pressure on them to deliver on their promises, and if they cannot move forward the city needs to pursue other opportunities. Chair Supple asked whether it would be helpful for people to contact their legislative representatives regarding the TIF extension. Executive Director Devich stated that he was optimistic that it would pass, and that it has strong support from the local representatives. Commissioner Howard discussed a memo released from the city regarding the purchase and renovation of the Crossroads at Penn/Concierge Apartments, and the upcoming work session to further discuss the topic. He stated that Season’s Park apartment complex may be selling, and wanted to let the HRA and general public know that non-profit developer Aeon may be interested in purchasing the property, and that he and Councilmember Regan-Gonzalez had submitted a letter of support and encouragement to Aeon. Chair Supple mentioned that she had received a letter from a member of the Housing Visioning committee, who wanted to remind the HRA that policies were enacted regarding various types of housing. The Comprehensive Plan Process will begin soon, and offer opportunities to solicit input from residents. Item #6 EXECUTIVE DIRECTOR REPORT Executive Director Devich gave an update on development projects that are in process throughout the city. Commissioner Sandahl provided an update on what she had heard regarding the purchase of homes on 18th Avenue to make way for development. Commissioner Rubenstein expressed concerns about the shoreline improvements at Lakes and Lyndale, as well as the redevelopment underway in the city of Edina at 66th and York/Xerxes. Commissioner Elliott added his concerns regarding the project at 66th Street and York Avenue, stating that Richfield should keep an eye on the project, to make sure that it doesn’t change course without input. Commissioner Rubenstein questioned whether Xerxes was a county road, or city road. Executive Director Devich stated it was a city road. Item #7 CLAIMS AND PAYROLL M/Elliott, S/Howard, that the following claims and payroll be approved: U.S. BANK 4/17/17 Section 8 Checks: 128622-128710 $ 168,732.24 HRA Checks: 33038-33072 $ 515,495.81 TOTAL $ 684,228.05 Motion carried 5-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 7:38 p.m. HRA Meeting -4- April 17, 2017 Date Approved: May 15, 2017 Mary B. Supple HRA Chair Kate Aitchison Steve Devich Housing Specialist Executive Director AGENDA SECTION:Consent Calendar AGENDA ITEM #2.A. STAFF RE P ORT NO. 20 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: Myrt L i nk, C ommunity D evelopment A ccountant D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 5/10/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/10/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution approving a Subordination Agreement related to Richfield Urban Village. E X E C UT IV E S UM M ARY: The Urban Village Tax I nc rement Financing Distric t (D istrict) was c ertified in J uly 1999. I t is a Redevelopment D istrict that includes B MO Harris Bank, Mc Donald's, The Oaks on Pleasant, The Pines, and other office/retail spac e. I n 2001, the Richfield Housing and Redevelopment A uthority (HRA) entered into a C ontrac t for Private Development and agreed to provide tax increment assistance to the property and to issue tax increment revenue notes to reimburse development costs. This District has two Pay -Go Notes. Note A is a Tax Exempt Note held by B MO Harris Bank N.A. and Note B is a Taxable Note held by W oodlake Partners L L C . B oth notes were issued in 2001 and mature in 2026. Pine I nvestments, LLC owns multi-family housing rental property in the District. They are seeking to refinanc e their debt and before issuing the loan, their lender is requiring the HRA and BMO Harris, the Holder of Note A, to approve a Subordination Agreement. The HRA approved a Subordination Agreement for the Pines on Marc h 20, 2017, but it has been significantly revised due to some objections that B MO Harris had to the original document. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution approving a Subordination Agreement r elated to R ichfield Urban Village. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT The Urban Village Tax I ncrement D istrict was established in J uly 1999. The HRA entered into a Contract for P rivate Redevelopment to provide assistance to the property in 2001. Two P ay -Go Notes were issued in 2001 and mature in 2026. Pines I nvestments, L LC, which owns multifamily property in the D istrict, is seeking to refinance their debt. The Lender is requiring the HRA and the Holder of Note A to approve a subordination prior to issuing the loan. The HRA approved a Subordination A greement at their March 20,2017 meeting. The Holder of Note A (B MO Harris) objected to some of the language in the original Agreement. B MO Harris has agreed to sign this version of the Subordination Agreement. The doc ument was signific antly revised so the HRA is being asked to approve the revised Subordination Agreement. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The Lender is requiring the HRA to approve a Subordination Agreement prior to issuing a loan to Pines I nvestment, L LC. C.C R IT IC AL T IMIN G ISSU E S: Pine I nvestments, L LC is going close on their refinancing. Prior to making the loan, their Lender is requiring a Subordination Agreement from the HRA and B MO Harris. D.F IN AN C IAL IMPAC T: There is no financial impac t to the HRA. E.L E GAL C ON S ID E R AT ION : The resolution was drafted and Subordination Agreement was reviewed by HRA legal c ounsel. ALT E R N AT IV E R E C O MME N D AT IO N(S): Deny the subordination request. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING SUBORDINATION AGREEMENT RELATED TO RICHFIELD URBAN VILLAGE WHEREAS, Pines Investments, L.L.C., a Minnesota limited liability company (the “Developer”), owns certain property located in the City of Richfield, Minnesota (the “Property”), upon which a multifamily housing rental housing project (Richfield Urban Village) has been constructed; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), entered into an Amended and Restated Contract for Private Redevelopment, dated May 21, 2001, with Richfield State Agency, Inc. (as predecessor to the Borrower), as amended pursuant to the First Amendment to Amended and Restated Contract for Private Redevelopment, dated January 25, 2005, between the Authority and Marshall & Ilsley Corporation (as successor by merger to Richfield State Agency, Inc.), as affected by the Assignment and Assumption of Amended and Restated Contract for Private Redevelopment, dated January 25, 2005, from Marshall & Ilsley Corporation to Woodlake-VEF IV, LLC, and as further affected by Assignment and Assumption of Amended and Restated Contract for Private Redevelopment, dated January 31, 2014, from Woodlake-VEF IV, LLC to Woodlake Partners, LLC (collectively, the “Contract”), pursuant to which the Authority agreed to provide tax increment financing assistance to the Property and surrounding property and to issue tax increment revenue notes to reimburse the development costs in connection therewith; and WHEREAS, NorthMarq Capital, LLC, a Minnesota limited liability company (the “Lender”), has agreed to make a loan to the Developer in the amount of $8,050,000 (the “Loan”) pursuant to a Multifamily Loan and Security Agreement (the “Loan Agreement”) between the Lender and the Borrower; and WHEREAS, BMO Harris Bank N.A., a national banking association (“BMO”), is the holder of the Tax Increment Revenue Note Series 2001A (the “TIF Note”), issued by the Authority on October 17, 2001, in the original principal amount of $2,500,000; and WHEREAS, prior to making the Loan, the Lender has required that the Authority subordinate its interests under the Contract and that BMO subordinate its interest under the TIF Note to the interests of the Lender under the Loan Agreement and the Loan Documents defined therein; and WHEREAS, there has been presented before this Board a form of Subordination Agreement – Governmental Entity (the “Subordination Agreement”) proposed to be entered into between the Authority, BMO, and the Lender, which sets forth the terms of the Authority’s and BMO’s subordination of their respective interests to the interests of the Lender; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Subordination Agreement is hereby in all respects authorized, approved, and confirmed, and the Chair and the Executive Directed are hereby authorized and directed to execute the Subordination Agreement for and on behalf of the Authority in substantially the form now on file with the Community Development Director but with such modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all modifications therein. 2 2. The Chair and the Executive Director are hereby authorized to execute and deliver any and all documents deemed necessary to carry out the intentions of this resolution and the Subordination Agreement. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of May, 2017. Mary Supple, Chair ATTEST: Doris Rubenstein, Secretary AGENDA SECTION:Consent Calendar AGENDA ITEM #2.B. STAFF RE P ORT NO. 21 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: J esse S wenson, A ssistant H R Manager D E PA RTM E NT D IRE C TOR RE V IE W: S teven L . D evich, E xecutive D irector 5/4/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/4/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution authoriz ing the H R A to affirm the monetary limits on statutory municipality tort liability. E X E C UT IV E S UM M ARY: The HRA purchases its insurance from the League of Minnesota Cities I nsurance Trust (LMC I T). Each year, the HRA must either affirm or waive its statutory limits of liability by J uly 1. A fter reviewing cost considerations measured against potential risk, the HRA has, historic ally, affirmed the liability limits which are $500,000 for an individual claimant and $1,500,000 per oc currence. Staff is rec ommending the same course of action for the c urrent period. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution authorizing the H R A to affirm the monetary limits on municipal tort liability established by Minnesota Statutes 466.04. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT A requirement of insuranc e coverage through the L MC I T is an annual affirmation or waiver of statutory limits of liability. The c urrent statutory limits of liability for Minnesota c ities and political entities are $500,000 for an individual claimant and $1,500,000 per oc currence. Cities can waive these limits to allow an individual claimant to recover more than $500,000, up to the $1,500,000 per occ urrenc e limit, if excess liability insuranc e is purchased. However, the cost of excess liability insurance c ontinues to be very expensive. An additional $1,000,000 of coverage would c ost the HRA approximately $6,000 annually. Slightly more than half of the cities in Minnesota do not waive its limits of liability. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The State Statute establishes liability limits for cities and the current level is $1,500,000, which appears to be a reasonable limit. Historic ally, just over one-half of the municipalities in Minnesota have not waived the monetary limits on munic ipality tort liability as was established by Statutes 466.06. The HRA c ould waive its statutory limits in future y ears if the Commissioners should dec ide to do so. The C ity of Ric hfield has historically not waived its limits of liability. C.C R IT IC AL T IMIN G ISSU E S: The HRA’s insurance policy with the League of Minnesota Cities I nsuranc e Trust renews on J uly 1, 2017. This action must be completed before that time. The HRA does not have to make a decision on purc hasing excess liability c overage at this time. Coverage suc h as excess liability may be added at any time. D.F IN AN C IAL IMPAC T: There is a slight premium savings for politic al entities that affirm the statutory monetary limits. For the Ric hfield HRA, the savings would be less than $1,000 for the c overage y ear. The HRA has historically not purchased excess liability c overage because of the relatively high cost of suc h coverage. The cost for $1,000,000 of exc ess coverage would likely be between $6,000 and $8,000 per y ear. E.L E GAL C ON S ID E R AT ION : The tort liability limits established by Minnesota statutes have historically protec ted c ities and no Minnesota court has ever established a monetary award in excess of the statutory limits against a munic ipality. Eac h munic ipal entity must annually dec ide whether the entity would voluntarily waive the statute for both the single c laims and each oc currence limit. ALT E R N AT IV E R E C O MME N D AT IO N(S): I f the HRA feels that any single claimant should rec eive more than the $500,000 limit, the HRA could elect to waive the statutory monetary limits. I f the HRA feels that the $1,500,000 per occ urrenc e limit is not adequate, the HRA could purchase excess liability c overage. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: None AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter HRA RESOLUTION NO. RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LIMITS ESTABLISHED BY MINNESOTA STATUTES 466.04 WHEREAS , Minnesota Statute 466.04 provides for Municipal tort liability limits for Minnesota cities and for other municipal entities like the Richfield Housing and Redevelopment Authority; and WHEREAS , the League of Minnesota Cities Insurance Trust has asked that each participating entity review the tort liability limits and determine if the respective entity would choose to waive its limits; and WHEREAS , such decision to affirm or waive the tort liability limits must be filed with the League of Minnesota Cities Insurance Trust at the insurance renewal date. NOW, THEREFORE, BE IT RESOLVED that the Executive Director is directed to report to the League of Minnesota Cities Insurance Trust that the Richfield HRA does not waive the monetary limits on the municipal tort liability established by Minnesota statutes 466.04. Approved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15 th day of May, 2017. Mary Supple, Chair ATTEST: Doris Rubenstein, Secretary AGENDA SECTION:Consent Calendar AGENDA ITEM #2.C. STAFF RE P ORT NO. 22 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: J ulie Urban, Housing S pecialist D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 5/11/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/11/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution authoriz ing the purchase of 6839 C edar Avenue. E X E C UT IV E S UM M ARY: The property at 6839 C edar Avenue (the Property ) was damaged in a fire in December 2016. I t is a single family residential property that is designated for mixed use in the Cedar Avenue C orridor Redevelopment Area and cannot be rebuilt as a single family residence. The owner of the Property has indic ated a willingness to sell to the Housing and Redevelopment Authority (HRA). The P roperty appraised at $56,000, and the owner has agreed to that price. The owner has requested that the HRA pay him $3,000 in earnest money to facilitate his move from the property. Closing would occur by J une 30, 2017. The Property is not loc ated in an area under immediate consideration for redevelopment; however, the HRA would demolish the Property and hold it in antic ipation of future Mixed Use redevelopment. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution authorizing the purchase of 6839 Cedar Avenue. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT I n 2004, the C ity created a Redevelopment Master Plan for the C edar Corridor area and designated the area along Cedar Avenue for offic e use. The City C ounc il adopted an update to the C edar Corridor Master Plan on S eptember 27, 2016, designating the area where the Property is loc ated as Mixed Use. The Property was dec lared uninhabitable by the C ity in 2014 and has been vacant sinc e that time. B ec ause it has been vacant for over a y ear, the property no longer qualifies as legally nonc onforming under the City's Zoning Ordinanc e and cannot be rebuilt as a single family residence. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The C edar Corridor Master Plan (the P lan) designates the property as Mixed Use. The Plan calls for redevelopment of the area from residential to uses more compatible with the adjacent airport. C.C R IT IC AL T IMIN G ISSU E S: The Property has been vacant since 2014 and was damaged by fire in 2016. Purc hase of the Property by the HRA will facilitate timely demolition of the substandard property. Under the purc hase agreement, closing would oc cur by J une 30, 2017. D.F IN AN C IAL IMPAC T: Funds are available in the Housing and Redevelopment Fund for acquisition and demolition. E.L E GAL C ON S ID E R AT ION : The purc hase agreement has been reviewed by legal c ounsel. ALT E R N AT IV E R E C O MME N D AT IO N(S): Decide not to authorize purc hase of the property. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter P urchase A greement C ontract/A greement HRA RESOLUTION NO._______ RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6839 CEDAR AVENUE WHEREAS , the Housing and Redevelopment Authority (HRA) in and for the City of Richfield, Minnesota is supportive of the furthering the goals of the Cedar Avenue Corridor Redevelopment Area; WHEREAS , the City of Richfield, Minnesota desires to purchase certain real property pursuant to and in furtherance of the Cedar Avenue Corridor Redevelopment Area, said property being described as: 6839 Cedar Avenue South Lot 13, Block 4, Rich Acres, Hennepin County, Minnesota, except road WHEREAS , the HRA proposes to hold the property for as part of the future redevelopment in the Cedar Avenue Corridor area; and WHEREAS, Housing and Redevelopment Funds are available for acquisition and removal purposes; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota: 1. The purchase price for the property is approved at $56,000, plus closing costs, not to exceed $59,000. 2. The Chairperson and Executive Director are authorized to execute a Purchase Agreement and to take other actions necessary to purchase the property for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of May, 2017. ______________________________ Mary B. Supple, Chair ATTEST : _______________________________ Doris Rubenstein, Secretary AGENDA SECTION:RESOLUTIONS AGENDA ITEM #4. STAFF RE P ORT NO. 23 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: K aren B arton, C ommunity D evelopment A ssi stant D irector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 5/11/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/11/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution authoriz ing the Right of E ntry Agreement with Inland Development LL C . E X E C UT IV E S UM M ARY: I nland Development LLC (the D eveloper) is proposing to develop c ertain property owned by the Housing and Redevelopment A uthority (HRA) located in the C edar Corridor between 66th and 68th Streets and Cedar and 17th Avenues. The development will have approximately 300 multi-family units and extensively rehabilitate three existing 11-unit buildings. The project will also inc lude the construction of two blocks of Ric hfield Parkway between 66th and 68th Streets. The subject property consists of 14 parcels owned by the HRA, three privately -owned 11-unit apartment buildings, and a single-family home owned by the D eveloper. The Developer has purchase agreements with the three privately -owned property owners, and is proposing to enter into a purchase agreement with the HRA for the 14 HRA-owned parcels. Prior to moving forward with the projec t, the Developer has requested that its consultants enter the properties to conduct geotechnic al testing, environmental assessments, and other related studies, and to c onduct land survey s of the properties to determine the suitability of the properties for the construction of the parkway and the development of the projec t. The Right of E ntry A greement allows the the Developer and its employ ees, consultants, agents, and contractors to enter the HRA-owned properties to conduc t the proposed testing and studies, without granting any permanent interest in the HRA properties to the D eveloper, or exclusive use or possession of the HRA properties to the Developer. This agreement does not obligate the HRA to sell any of the HRA-owned parcels to the D eveloper. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution authorizing the R ight of Entry Agreement with Inland Development L L C. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT The HRA and I nland Development entered into a preliminary Development Agreement in November 2015 relating to the proposed development. This agreement expires in J uly 2017. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): I n J anuary 2017, the City adopted an updated Cedar Corridor Master P lan for the area. The Master Plan calls for redevelopment of the projec t area with high-density and medium-density housing. The D eveloper must obtain the HRA 's permission through an access-agreement prior to conduc ting environmental testing and surveying on the HRA's property. C.C R IT IC AL T IMIN G ISSU E S: The Right of Entry Agreement expires on J une 30, 2017. D.F IN AN C IAL IMPAC T: None E.L E GAL C ON S ID E R AT ION : The Right of Entry Agreement was prepared and approved by the HRA Attorney. ALT E R N AT IV E R E C O MME N D AT IO N(S): Do not approve the resolution. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter Right of E ntry A greement C ontract/A greement HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING RIGHT OF ENTRY AGREEMENT WITH INLAND DEVELOPMENT PARTNERS, LLC WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) owns certain real property (the “Property”) located in the City of Richfield, Minnesota (the “City”) at the addresses and legally described in EXHIBIT A attached hereto: WHEREAS, Inland Development Partners, LLC, a Delaware limited liability company (the “Developer”), has proposed to acquire the Property for redevelopment purposes; and WHEREAS, there has been presented before this Board of Commissioners of the Authority (the “Board”) a Right of Entry Agreement (the “Right of Entry Agreement”) proposed to be entered into between the Developer and the Authority, pursuant to which the Authority will grant to the Developer and its consultants the right to enter the Property for purposes of conducting testing and studies on the Property, including but not limited to soil boring, geotechnical testing, engineering, surveying, and other related studies; and WHEREAS, the Board has reviewed the Right of Entry Agreement and finds that the execution thereof by the Authority and the performance of the Authority’s obligations thereunder are in the best interest of the City and its residents; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Right of Entry Agreement is hereby in all respects authorized, approved, and confirmed, and the Chairperson and the Executive Director are hereby authorized and directed to execute the Right of Entry Agreement for and on behalf of the Authority in substantially the form now on file with the Community Development Director but with such modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all modifications therein. 2. The Chairperson and the Executive Director are hereby authorized to execute and deliver any other documents or certificates deemed necessary to carry out the intentions of this resolution and the Right of Entry Agreement. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of May, 2017. Mary Supple, Chair ATTEST: Doris Rubenstein, Secretary A-1 EXHIBIT A PROPERTY Address Parcel Identification No. Legal Descriptions 6609 17th Avenue South 26-028-24-41-0078 Lot 15, Block 2, Wexler’s Addition 6601 17th Avenue South 26-028-24-41-0079 Lot 16, Block 2, Wexler’s Addition 6615 17th Avenue South 26-028-24-41-0077 Lot 14, Block 2, Wexler’s Addition 6621 17th Avenue South 26-028-24-41-0076 Lot 13, Block 2, Wexler’s Addition 6627 17th Avenue South 26-028-24-41-0075 Lot 12, Block 2, Wexler’s Addition 6633 17th Avenue South 26-028-24-41-0074 Lot 11, Block 2, Wexler’s Addition 6639 17th Avenue South 26-028-24-41-0073 Lot 10, Block 2, Wexler’s Addition 6645 17th Avenue South 26-028-24-41-0072 Lot 9, Block 2, Wexler’s Addition 6620 18th Avenue South 26-028-24-41-0067 Lot 4, Block 2, Wexler’s Addition 6626 18th Avenue South 26-028-24-41-0068 Lot 5, Block 2, Wexler’s Addition 6632 18th Avenue South 26-028-24-41-0069 Lot 6, Block 2, Wexler’s Addition 6638 18th Avenue South 26-028-24-41-0070 Lot 7, Block 2, Wexler’s Addition 6644 18th Avenue South 26-028-24-41-0071 Lot 8, Block 2, Wexler’s Addition 6700 18th Avenue South 26-028-24-41-0080 Lot 1, Block 3, Wexler’s Addition 6708 18th Avenue South 26-028-24-41-0081 Lot 2, Block 3, Wexler’s Addition 6714 18th Avenue South 26-028-24-41-0082 Lot 3, Block 3, Wexler’s Addition 6720 18th Avenue South 26-028-24-41-0083 Lot 4, Block 3, Wexler’s Addition 6726 18th Avenue South 26-028-24-41-0084 Lot 5, Block 3, Wexler’s Addition 6732 18th Avenue South 26-028-24-41-0085 Lot 6, Block 3, Wexler’s Addition 6738 18th Avenue South 26-028-24-41-0086 Lot 7, Block 3, Wexler’s Addition 6744 18th Avenue South 26-028-24-41-0087 Lot 8, Block 3, Wexler’s Addition 6701 18th Avenue South 26-028-24-41-0107 Lot 16, Block 4, Wexler’s Addition 6709 18th Avenue South 26-028-24-41-0106 Lot 15, Block 4, Wexler’s Addition 6721 18th Avenue South 26-028-24-41-0104 Lot 13, Block 4, Wexler’s Addition 6727 18th Avenue South 26-028-24-41-0103 Lot 12, Block 4, Wexler’s Addition 6733 18th Avenue South 26-028-24-41-0102 Lot 11, Block 4, Wexler’s Addition 6739 18th Avenue South 26-028-24-41-0101 Lot 10, Block 4, Wexler’s Addition 6745 18th Avenue South 26-028-24-41-0100 Lot 9, Block 4, Wexler’s Addition 6700 Cedar Avenue South 26-028-24-41-0096 Lots 1 and 2, Block 4, Wexler’s Addition RIGHT OF ENTRY AGREEMENT THIS RIGHT OF ENTRY AGREEMENT (the “Agreement”) is made and entered into this ____ day of May, 2017, between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic (the “Owner”), and Inland Development Partners, LLC, a Delaware limited liability company (the “Developer”). RECITALS First: The Owner is the fee simple owner of the real estate located at the addresses identified and legally described in EXHIBIT A attached hereto (the “HRA Property”). Second: The Developer is investigating the possibility of purchasing the HRA Property for the purpose of redevelopment. Third: The Developer wishes to have its consultants enter the HRA Property and conduct testing and studies on the HRA Property, including but not limited to soil boring, geotechnical testing, engineering, surveying, and other related studies, in order to identify whether the HRA Property is suitable for the Developer’s intended uses. Fourth: The Developer has requested that the Owner grant the Developer, its employees, agents and contractors the right to enter the HRA Property to conduct said testing, surveying, and studies. Fifth: It is understood that in executing this agreement, the Owner will not be granting (a) any permanent interest in the HRA Property to the Developer, or (b) exclusive use or possession of the HRA Property to the Developer. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties contained herein, each of them does hereby represent, covenant and agree with the other as follows: 1. Right of Entry. Effective upon the date hereof, the Owner hereby grants to the Developer, its agents, employees, contractors and invitees, and such other consultants as the Developer may elect (collectively, “Consultants”) the right to enter upon the HRA Property, for the purpose of carrying out the activities described in the third and fourth recitals above (the “Permitted Activities”) relative to the Developer’s possible purchase of the HRA Property. 2. Consideration. In consideration for such right of entry, the Developer agrees to: (a) Notify the Owner of the date and time that work by the Developer or its Consultants on the HRA Property will commence under this Agreement, which notice shall be at least three (3) business days prior to doing any work on the HRA Property in order to permit the Owner’s employees or consultants retained by the Owner to be present during the time any work is being done by the Developer or its Consultants; (b) Secure all appropriate governmental approvals and permits for any work that will occur within public streets adjacent to the HRA Property; 2 499571v1 JAE RC125-348 (c) Provide a copy of all test results and reports prepared by the Developer’s employees or Consultants (except appraisal reports) evaluating the conditions present on the HRA Property to the Owner as soon as reasonably possible following final completion thereof. (d) Dispose of all solid waste generated during the course of the Developer’s sampling activities and other work on the HRA Property in accordance with applicable federal, state and local laws, rules and regulations. (e) Do the work in the shortest period of time reasonably necessary to complete the Permitted Activities under this Agreement as the Developer, in its sole discretion, shall elect to undertake. (f) Use the HRA Property only for the purposes described herein and not park or store any equipment on the HRA Property, except during the limited periods of time when the work on the HRA Property which is contemplated by this Agreement is actually in progress. (g) Do no unnecessary damage to the HRA Property and restore the HRA Property to substantially the same condition as the condition in which it was found by the Developer at the time of the Developer’s or its Consultants’ entry upon the HRA Property pursuant to this Agreement. (h) Indemnify, save harmless, and defend the Owner and its officers and employees, from and against any and all claims, actions, damages, liability and expense in connection with personal injury and/or damage to the HRA Property arising from or out of any occurrence in, upon or at the HRA Property caused by the act or omission of the Developer or its Consultants in conducting the Permitted Activities on the HRA Property, except (a) to the extent caused by the negligence, gross negligence, willful misrepresentation or any willful or wanton misconduct by the Owner, its officers, employees, agents or contractors; (b) to the extent caused by a “Pre-Existing Condition” as defined in this paragraph 2; and (c) caused by the acts or omissions of anyone not within the Developer’s control, including without limitation the Owner and its officers, employees, agents or contractors. “Pre- Existing Condition” shall mean any condition caused by the existence of hazardous substances or materials in, on, or under the HRA Property, including without limitation hazardous substances released or discharged into the drainage systems, soils, groundwater, waters or atmosphere, which condition existed as of the date of this Agreement and became known or was otherwise disclosed or discovered by reason of the Developer’s Consultants’ entry onto the HRA Property. (i) Not permit any mechanics’, materialmens’ or other liens to stand against the HRA Property or any part thereof for work or materials furnished to the Developer in connection with the right of entry granted pursuant to this Agreement; the Developer agrees to indemnify, defend and hold harmless the Owner from and against the same. (j) Ensure that its Consultants or their contractors or invitees which enter the HRA Property pursuant to this Agreement shall carry insurance during the time any work is done on the HRA Property in accordance with the following minimum requirements: A. Workers’ Compensation Insurance with limits as provided by statute, with all necessary statutory elections to provide coverage for and/or claims made by any person doing work on the HRA Property pursuant to this Agreement; 3 499571v1 JAE RC125-348 B. Employer’s liability insurance (often included as coverage (b) in the Workers’ Compensation policy) with limits of at least $100,000; C. Comprehensive Auto (and truck) Liability Insurance with minimum combined single limits of $1 million per occurrence; and D. Comprehensive General Liability Insurance (including coverage for contractual liability, products and completed operations liability, liability arising out of explosion, or underground related incidents) with minimum combined single limits of $1 million per occurrence. In addition, the Comprehensive General Liability policy shall include the Owner and the Developer as additional insureds with respect to work done on the HRA Property. (k) If the Developer or its Consultants remove a sample or portion of the HRA Property for investigation, monitoring or testing or obtains any data or issues any report, it must give the Owner a copy of any data or report. 3. Expiration. The right of entry provided under this Agreement will automatically expire on _______________, 2017. 4. Governing Law. This Agreement shall be interpreted in accordance with the laws of the state of Minnesota. 5. Notices and Demands. All notices, demands or other communications under this Agreement shall be effective only if made in writing and shall be sufficiently given and deemed given when delivered personally, sent by overnight or same day courier, transmitted by facsimile, or mailed by certified mail, return receipt requested, postage prepaid, properly addressed as follows: If to the Developer: Inland Developments Partners, LLC 20505 Lakeview Avenue Deephaven, MN 55331 Attn: _________________ Email: ________________ If to the Owner: Richfield Housing and Redevelopment Authority 6700 Portland Avenue South Richfield, MN 55422 Attn: Steve Devich, Executive Director Email: sdevich@cityofrichfield.org or to such other persons as the parties may from time to time designate in writing and forward to the other persons entitled to receive notice as provided in this section. 6. Amendment. This Agreement may be amended by the parties hereto only by written instrument executed with the same procedures and formality as were followed in the execution of this Agreement. S-1 499571v1 JAE RC125-348 IN WITNESS WHEREOF , the parties have executed this Right of Entry Agreement effective the date and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chair By Its Executive Director S-2 499571v1 JAE RC125-348 Execution page of the Developer to the Right of Entry Agreement, dated as of the date and year first written above. INLAND DEVELOPMENT PARTNERS, LLC By Its A-1 499571v1 JAE RC125-348 EXHIBIT A HRA PROPERTY Address Parcel Identification No. Legal Descriptions 6609 17th Avenue South 26-028-24-41-0078 Lot 15, Block 2, Wexler’s Addition 6601 17th Avenue South 26-028-24-41-0079 Lot 16, Block 2, Wexler’s Addition 6615 17th Avenue South 26-028-24-41-0077 Lot 14, Block 2, Wexler’s Addition 6621 17th Avenue South 26-028-24-41-0076 Lot 13, Block 2, Wexler’s Addition 6627 17th Avenue South 26-028-24-41-0075 Lot 12, Block 2, Wexler’s Addition 6633 17th Avenue South 26-028-24-41-0074 Lot 11, Block 2, Wexler’s Addition 6639 17th Avenue South 26-028-24-41-0073 Lot 10, Block 2, Wexler’s Addition 6645 17th Avenue South 26-028-24-41-0072 Lot 9, Block 2, Wexler’s Addition 6620 18th Avenue South 26-028-24-41-0067 Lot 4, Block 2, Wexler’s Addition 6626 18th Avenue South 26-028-24-41-0068 Lot 5, Block 2, Wexler’s Addition 6632 18th Avenue South 26-028-24-41-0069 Lot 6, Block 2, Wexler’s Addition 6638 18th Avenue South 26-028-24-41-0070 Lot 7, Block 2, Wexler’s Addition 6644 18th Avenue South 26-028-24-41-0071 Lot 8, Block 2, Wexler’s Addition 6700 18th Avenue South 26-028-24-41-0080 Lot 1, Block 3, Wexler’s Addition 6708 18th Avenue South 26-028-24-41-0081 Lot 2, Block 3, Wexler’s Addition 6714 18th Avenue South 26-028-24-41-0082 Lot 3, Block 3, Wexler’s Addition 6720 18th Avenue South 26-028-24-41-0083 Lot 4, Block 3, Wexler’s Addition 6726 18th Avenue South 26-028-24-41-0084 Lot 5, Block 3, Wexler’s Addition 6732 18th Avenue South 26-028-24-41-0085 Lot 6, Block 3, Wexler’s Addition 6738 18th Avenue South 26-028-24-41-0086 Lot 7, Block 3, Wexler’s Addition 6744 18th Avenue South 26-028-24-41-0087 Lot 8, Block 3, Wexler’s Addition 6701 18th Avenue South 26-028-24-41-0107 Lot 16, Block 4, Wexler’s Addition 6709 18th Avenue South 26-028-24-41-0106 Lot 15, Block 4, Wexler’s Addition 6721 18th Avenue South 26-028-24-41-0104 Lot 13, Block 4, Wexler’s Addition 6727 18th Avenue South 26-028-24-41-0103 Lot 12, Block 4, Wexler’s Addition 6733 18th Avenue South 26-028-24-41-0102 Lot 11, Block 4, Wexler’s Addition 6739 18th Avenue South 26-028-24-41-0101 Lot 10, Block 4, Wexler’s Addition 6745 18th Avenue South 26-028-24-41-0100 Lot 9, Block 4, Wexler’s Addition 6700 Cedar Avenue South 26-028-24-41-0096 Lots 1 and 2, Block 4, Wexler’s Addition AGENDA SECTION:PUBLIC HEARINGS AGENDA ITEM #5. STAFF RE P ORT NO. 24 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: K aren B arton, C ommunity D evelopment A ssi stant D irector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 5/10/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/10/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Public hearing and consideration of the appr oval of a resolution approving the conveyance of certain real property to Interstate L L C and approving a purchase agreement with respect thereto. E X E C UT IV E S UM M ARY: I nterstate LLC (Developer) presented a preliminary c oncept plan to the Richfield Housing and Redevelopment A uthority (HRA), City Council, and Planning Commission at a work session on J anuary 24, 2017, for the development of an approximately 10,400 square foot retail building on 66th Street E between 16th and 17th Avenues. Response to the proposal from the polic y makers was favorable and the Developer is pursuing the project. The Developer has applied for land-use approvals, whic h were rec ommended for approval by the Planning Commission at their A pril 24 meeting. The City Council is scheduled to take action on the land-use approvals on May 24. There are six properties located within the proposed development area, three of which are owned by the HRA. The Developer has purchase agreements for the three privately -owned parc els and is requesting to enter into a purchase agreement with the HRA for the remaining parc els. Acquisition of all six parc els is required for the projec t to be constructed as planned. The purc hase agreement also includes payment for right-of-way to be vacated. RE C O M M E ND E D AC T IO N: Conduct and close the public hearing and by motion: Approve a resolution approving the conveyance of certain real property to Interstate L L C and approving a purchase agreement with respect thereto. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT The D eveloper has purc hase agreements for the three privately-owned properties. The three HRA-owned parc els the D eveloper is proposing to acquire are: LOT 001, BL OC K 001, C E D A R S UNRI SE A D D N (Remnant P arc el) LOT 002, BL OC K 001, C E D A R S UNRI SE A D D N (6608 17th Ave S) LOT 016, BL OC K 001, C E D A R S UNRI SE A D D N (Remnant P arc el) B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The 2008 Richfield C omprehensive Plan guides this property for development of community commerc ial. The Planning Commission recommended approval of the rezoning and land-use on April 24, 2017. I n ac cordanc e with Minnesota Statutes, Section 469.029, subdivision 2, the HRA is required to hold a duly noticed public hearing on the c onveyanc e of the property to the Developer. The purc hase agreement requires: the D eveloper to construct an approximately 10,400 square foot retail building on the site; construction to commence within 6 months of closing; and, construction to be c omplete within 18 months of c losing. The HRA has been renting the property located at 6608 17th Ave S . The tenants were given notice as required by law. The tenants have been advised of their rights to reloc ation benefits under the Uniform Relocation Act. C.C R IT IC AL T IMIN G ISSU E S: Closing is required to take place on or before August 15, 2017. Construction must c ommence within 6 months of c losing and be c ompleted within 18 months of closing. The C ity Council is scheduled to take action on the re-zoning and land-use approvals on May 24, 2017. D.F IN AN C IAL IMPAC T: The HRA acquired the parc el located at 6608 17th Avenue S in 2004 for $219,000. The two remnant parcels were acquired as part of the c onstruction of the roundabout in 2004. The purc hase pric e of the three HRA-owned parc els is $450,000, to be paid in full at c losing. The D eveloper is required to submit $15,000 in earnest money. The D eveloper is required to submit $5,000 in escrow to reimburse the HRA for administrative costs related to the sale of the property. The tenants may be eligible for reloc ation benefits as required by law, in an amount as y et undetermined. E.L E GAL C ON S ID E R AT ION : The HRA Attorney drafted the purc hase agreement. The tenants of 6608 17th Avenue South have been notified of their rights under the Uniform Reloc ation Ac t. ALT E R N AT IV E R E C O MME N D AT IO N(S): Do not approve the resolution. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: Representatives of I nterstate L LC AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter P urchase A greement C ontract/A greement Map of P arcels B ackup Materi al HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING CONVEYANCE OF CERTAIN REAL PROPERTY TO INTERSTATE LLC AND APPROVING A PURCHASE AGREEMENT WITH RESPECT THERETO WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) owns certain real property legally described in EXHIBIT A attached hereto (the “Property”) in the City of Richfield, Minnesota (the “City”); and WHEREAS, Interstate LLC, a Delaware limited liability company (the “Developer”), has proposed to acquire the Property for redevelopment purposes; and WHEREAS, in order to promote the redevelopment of land that is underused and underutilized in the City, the Authority is considering conveying the Property to the Developer for the proposed redevelopment thereof; and WHEREAS, on the date hereof, the Board of Commissioners of the Authority (the “Board”) conducted a duly noticed public hearing on the conveyance of the Property to the Developer, in accordance with Minnesota Statutes, Section 469.029, subdivision 2; and WHEREAS, there has been presented before this Board a Purchase Agreement (the “Purchase Agreement”) proposed to be entered into between the Authority and the Developer, pursuant to which the Authority will agree to sell the Property to the Developer, and the Developer will agree to purchase the Property from the Developer; and WHEREAS, the Board has reviewed the Purchase Agreement and finds that the execution thereof by the Authority and the performance of the Authority’s obligations thereunder are in the best interest of the City and its residents; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Purchase Agreement is hereby in all respects authorized, approved, and confirmed, and the Chairperson and the Executive Director are hereby authorized and directed to execute the Purchase Agreement for and on behalf of the Authority in substantially the form now on file with the Community Development Director but with such modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all modifications therein. 2. The Chairperson and the Executive Director are hereby authorized to execute and deliver to the Developer a quit claim deed and any and all other documents or certificates deemed necessary to carry out the intentions of this resolution and the Purchase Agreement. 2 Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of May, 2017. Mary Supple, Chair ATTEST: Doris Rubenstein, Secretary A-1 497258v1 JAE RC125-355 EXHIBIT A LEGAL DESCRIPTION OF THE AUTHORITY PROPERTY LOT 001, BLOCK 001, CEDAR SUNRISE ADDN Tax ID – 2602824410005 LOT 002, BLOCK 001, CEDAR SUNRISE ADDN Tax ID – 2602824410006 LOT 016, BLOCK 001, CEDAR SUNRISE ADDN Tax ID – 2602824410020 1 Final May 4, 2017 PURCHASE AGREEMENT This Purchase Agreement (“Agreement”) is made this ____ day of May, 2017 by and between the Housing And Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota (“Seller”) and Interstate LLC, a Minnesota limited liability company (“Buyer”). 1. PROPERTY. Seller is the owner of certain real estate located in the City of Richfield, Hennepin County, Minnesota and legally described in Exhibit A and the building and improvements constructed or located thereon (the “Property”). 2. OFFER/ACCEPTANCE . In consideration of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property. 3. CONTINGENCIES . This Agreement is subject to the following contingencies: A. Approval of the conveyance of the Property by Seller’s governing body after a public hearing required by law. B. Buyer having determined that it is satisfied with the result of and matters disclosed by Buyer’s investigations, surveys, soil tests, engineering inspections, hazardous substance, and environmental reviews of the Property. C. Buyer having obtained all appropriate approvals and permits necessary for Buyer’s proposed use of the Property, including, but not limited to, plat approval, conditional use permits, signage permits, building permits, and site plan approvals. If the contingencies above are satisfied in a timely manner, then Buyer and Seller shall proceed to close the transaction as contemplated herein. If, however, any of the contingencies at subparagraphs A, B or C above are not satisfied or waived by September 30, 2017, this Agreement shall thereupon be void, Seller shall return the Earnest Money to Buyer, and Buyer and Seller shall execute and deliver to each other the termination of this Agreement. The contingency set forth in subparagraph A cannot be waived. The contingency in subparagraph B can only be waived by the Buyer. The contingency in subparagraph C may only be waived by the Buyer and the Seller. As a contingent purchase agreement, the termination of this Agreement is not required pursuant to Minnesota Statutes Section 559.21, et seq. 4. PURCHASE PRICE AND TERMS. A. PURCHASE PRICE. The Property is approximately 0.053 acres. The total Purchase Price for the Property is $450,000 (the “Purchase Price”). 2 496875v3 JAE RC125-355 B. TERMS. (1) EARNEST MONEY. Earnest money in the amount of Fifteen Thousand Dollars ($15,000) (the “Earnest Money”) is payable to Seller within five business days after approval of this Agreement by Seller’s governing body. (2) BALANCE DUE SELLER. Buyer agrees to pay by certified check or wire transfer of funds on the Closing Date (as defined in Section 7) any remaining balance due according to the terms of this Agreement. (3) DEED/MARKETABLE TITLE. Subject to performance by Buyer, Seller agrees to execute and deliver a Quit Claim Deed in substantially the form attached as Exhibit B (the “Deed”) conveying marketable title to the Property to Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, state and federal regulations; b. Reservation of minerals or mineral rights to the State of Minnesota, if any; and c. Restrictive covenant providing a right of reverter to the Seller to be exercised at Seller’s option if the Buyer fails to perform as provided in Section 12 of this Agreement, as described in the Deed. (4) DOCUMENTS TO BE DELIVERED AT CLOSING. In addition to the Deed, Seller shall deliver to Buyer: a. Standard form Affidavit of Seller; and b. Such other documents as may be reasonably required by Buyer’s title examiner or title insurance company. 5. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. A. General real estate taxes applicable to any of the Property due and payable in the year of closing shall be prorated between Seller and Buyer on a daily basis with Seller paying those allocable to the period prior to the Closing Date and Buyer being responsible for those allocable to the Closing Date and thereafter. B. Seller is not aware of any special assessments currently levied against the Property. 3 496875v3 JAE RC125-355 6. SURVEY AND TITLE MATTERS. Buyer, at its sole expense, shall obtain the title evidence determined necessary or desirable by Buyer. Buyer shall have 10 days following the receipt of same to make its objections in writing to Seller. If the title to the Property or any part thereof, shall be found to be unmarketable, Seller agrees to cure such defects and render the title marketable by the Closing Date; provided, that nothing in this Agreement shall require Seller to exercise its power of eminent domain to make title marketable. It is further understood and agreed that if the title to the Property or any part thereof is found to be unmarketable on the Closing Date, Buyer may, at its option: (a) waive the title defects and proceed to closing; or (b) declare this Agreement null and void, upon which the Earnest Money shall be refunded and neither Buyer nor Seller shall be liable for damages hereunder. If the title to the Property is found marketable and Buyer shall default in any of the covenants or agreements herein provided, then and in that case, Seller may at its option, deem this Agreement terminated by giving written notice thereof to Buyer, and on such termination, the Earnest Money shall be retained by Seller as liquidated damages, time being of the essence hereof. Neither party may enforce this Agreement by specific performance. 7. CLOSING DATE . The closing of the sale of the Property shall take place on a date to be mutually agreed upon by Seller and Buyer (the “Closing Date”), but no later than August 15, 2017. The closing shall take place at the Richfield Municipal Center, or such other location as mutually agreed upon by the parties. 8. ADMINISTRATIVE COSTS OF SELLER . Buyer agrees and understands that it is responsible for and will pay to the Seller all out-of-pocket costs incurred by the Seller (including without limitation reasonable attorney and fiscal consultant fees) in the negotiation and preparation of this Agreement and other documents and agreements in connection with the activities contemplated hereunder (collectively, the “Administrative Costs”). Administrative Costs shall be evidenced by invoices, statements or other reasonable written evidence of the costs incurred by the Seller. Upon execution of this Agreement, the Buyer will deliver a deposit to the Seller in the amount of $5,000 (the “Deposit”) to pay future Administrative Costs. At any time the Deposit drops below $1,000, the Buyer shall replenish the deposit to the full $5,000 within 30 days after receipt of written notice thereof from the Seller. The Seller shall provide invoices to the Buyer for all payments deducted from the Deposit. At any time the Deposit is insufficient to pay invoices related to the activities contemplated hereunder, the Seller will ask for additional Deposits from the Buyer. If the additional Deposit is not made within 30 days following the date of such request, the Seller may elect to either suspend its performance under this Agreement or terminate this Agreement. Such suspension or termination will be effective on the date it is given in writing, or on such later date specified in the notification. Any unexpended or unencumbered portion of the Deposit shall be returned or credited to the Buyer at closing. 9. CLOSING COSTS AND RELATED ITEMS. Seller shall be responsible for payment of recording fees related to the Deed and state deed tax. Unless otherwise provided herein, Buyer shall be responsible for the payment of the recording costs related to instruments required to establish marketable title in Buyer (other than the Deed), the title insurance premium (if any), 4 496875v3 JAE RC125-355 and all closing costs and expenses not paid by Seller. Each party shall be responsible for its own attorneys’ fees and costs. 10. APPROVALS. Buyer may be in need of plat approval, a conditional use permit or other approvals for its proposed use of the Property. Buyer shall be responsible for applying to the city for permits or any other government approvals needed and the costs associated with obtaining them. Seller agrees that it will cooperate with Buyer in providing any information or authorization needed in order for Buyer to apply for the governmental approvals. Buyer’s failure to obtain necessary permits or government approvals shall not be considered Unavoidable Delays (as defined in Section 12 herein). 11. “AS-IS” SALE. Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property “AS IS” with no right of set off or reduction in the purchase price. Such sale shall be without representation of warranties, express or implied, either oral or written, made by Seller or any official, employee or agent of Seller with respect to the physical condition of the Property, including but not limited to, the existence or absence of petroleum, hazardous substances, pollutants or contaminants in, on, or under, or affecting the Property or with respect to the compliance of the Property or its operation with any laws, ordinances, or regulations of any government or other body, except as stated above. Buyer acknowledges and agrees that Seller has not made and does not make any representations, warranties, or covenants of any kind or character whatsoever, whether expressed or implied, with respect to warranty of income potential, operating expenses, uses, habitability, tenant ability, or suitability for any purpose, merchantability, or fitness of the Property for a particular purpose, all of which warranties Seller hereby expressly disclaims, except as stated above. 12. RESTRICTIVE COVENANT. Buyer proposes to improve the Property by constructing a retail building of approximately 10,400 square feet (the “Improvements”). Buyer must commence construction of the Improvements within six months of the Closing Date and complete the Improvements within eighteen months of the Closing Date, barring Unavoidable Delays. “Unavoidable Delays” means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. If Buyer fails to commence or complete construction of the Improvements within the time periods required by this Section, then, pursuant to the Deed, Seller shall have the right to re-enter and take possession of the Property and to terminate the estate conveyed by the Deed to Buyer, as described more fully in the Deed. This Section 12 shall survive the Closing Date. 5 496875v3 JAE RC125-355 13. POSSESSION/CONDITION OF PROPERTY . Seller shall deliver possession of the Property to Buyer on the Closing Date, in materially the same condition as existed on the date of this Agreement. 14. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM . Seller discloses that there is not an individual sewage treatment system on or serving the Property. 15. WELL DISCLOSURE . Seller certifies that Seller [does not know] of any wells on the Property. 16. BROKER COMMISSIONS . Seller represents and warrants to Buyer that Seller has not involved a broker in this transaction or agreed to pay a broker commission to any broker. Buyer represents and warrants to Seller that Buyer has not involved a broker in this transaction or agreed to pay a broker commission to any broker. Each party agrees to indemnify, defend and hold each other harmless for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property. 17. SURVEYING, ENVIRONMENTAL INSPECTION AND SOIL TESTS. Buyer and its agents shall have the right to enter upon the Property after the date of this Agreement for the purpose of surveying and inspecting the Property and conducting such environmental examination and soil tests as Buyer deems necessary. Buyer agrees to indemnify Seller against any liens, claims, losses or damage directly attributable by Buyer’s exercise of its right to enter and work upon the Property. Buyer agrees to provide Seller with a copy of any report or survey prepared as a result of such surveying, inspection, examination, or testing, upon request by Seller. 18. NO MERGER OF REPRESENTATIONS, WARRANTIES . All representations and warranties contained in this Agreement shall not be merged into any instruments or conveyance delivered at closing, and the parties shall be bound accordingly. 19. ENTIRE AGREEMENT; AMENDMENTS . This Agreement constitutes the entire agreement between the parties, and no other agreement prior to this Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 20. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors and assigns. Buyer shall not assign its rights and interest hereunder without the consent of Seller. 21. NOTICE . Any notice, demand, request or other communication which may or shall be given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or certified, postage prepaid and addressed as follows: If to Seller: Richfield HRA 6 496875v3 JAE RC125-355 Executive Director 6700 Portland Avenue South Richfield, MN 55423 If to Buyer: Interstate LLC Lonnie Provencher 6390 Carlson Drive Eden Prairie, MN 55346 22. COUNTERPARTS . This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 23. GOVERNING LAW. The provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 24. PARTNERSHIP OR JOINT VENTURE. Nothing in this Agreement shall be construed or interpreted as creating a partnership or joint venture between Seller and Buyer relative to the Property. S-1 496875v3 JAE RC125-355 IN WITNESS WHEREOF , the parties have executed this agreement as of the date written above. SELLER HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By: Its Chair By: Its Executive Director BUYER INTERSTATE LLC By: Its: ________________________________ 496875v3 JAE RC125-355 A-1 EXHIBIT A LEGAL DESCRIPTION LOT 001, BLOCK 001, CEDAR SUNRISE ADDN Tax ID – 2602824410005 LOT 002, BLOCK 001, CEDAR SUNRISE ADDN Tax ID – 2602824410006 LOT 016, BLOCK 001, CEDAR SUNRISE ADDN Tax ID – 2602824410020 496875v3 JAE RC125-355 B-1 EXHIBIT B FORM OF QUIT CLAIM DEED eCRV number: ___________________ Deed Tax Due: $_______ Date: __________________ QUIT CLAIM DEED FOR VALUABLE CONSIDERATION, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota (the “Grantor”), hereby conveys and quitclaims to Interstate LLC, a Minnesota limited liability company (the “Grantee”) the land described as follows (hereinafter referred to as the “Property”): LOT 001, BLOCK 001, CEDAR SUNRISE ADDN LOT 002, BLOCK 001, CEDAR SUNRISE ADDN LOT 016, BLOCK 001, CEDAR SUNRISE ADDN [Part or all of the land is Registered (Torrens)] To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging subject to the following exceptions: It is understood and agreed that this Quit Claim Deed is given pursuant to that certain Purchase Agreement between Grantor and Grantee dated as of the ___ day of __________, 2017 (the “Agreement”), and is subject to the following covenants, conditions, restrictions and provisions. The capitalized terms not defined herein shall have the meanings given them in the Agreement. Section 1. Reverter. All right, title and interest to and in the Property will revest in the Grantor, at the Grantor’s option, in the event that: (i) construction of the Improvements is not commenced within six (6) months of the date of this Deed; or, (ii) a Certificate of Occupancy is not issued for the Improvements within eighteen (18) months of the date of this Deed; or (iii) if Unavoidable Delay is experienced, after construction is so commenced, a Certificate of Occupancy is not issued for the Improvements within 18 months and the Grantor serves notice upon the Grantee that it is exercising its right of reverter. 496875v3 JAE RC125-355 B-2 Section 2. Termination of Grantor’s Right. Upon issuance of a Certificate of Occupancy, the Grantor will provide the Grantee with a recordable instrument releasing the Grantor’s right contained in Section 1. The Seller certifies that the Seller does not know of any wells on the described real property. A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number: __________________). I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chair By Its Executive Director 496875v3 JAE RC125-355 B-3 STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this ________ day of _____________, 2017, by Mary B. Supple, the Chair of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. Notary Public STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this ________ day of _____________, 2017, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: ________________________________ ________________________________ ________________________________ He nn e pin Cou n ty P ro perty Ma p 660 8 17 th Av e S an d Re mna nt Pa rcels Da te : 5/9 /2 01 7 Comm en ts: 1 inc h = 2 00 fee t PAR CEL ID: 26 028 24 410 00 6 OWN ER N AME: H ra C it y Of Ric hfie ld PAR CEL AD DRESS: 6 608 1 7t h Ave S, Ric h fie ld MN 55 42 3 PAR CEL AR EA: 0.2 3 ac re s, 10,0 05 sq ft A-T-B: Ab stra ct SAL E PR ICE: $21 9,00 0 SAL E D ATA: 0 7/20 04 SAL E C OD E: Exclu de d Fro m Ra tio Stud ies ASSESSED 20 16 , PAYABLE 201 7 PROPERT Y TYPE: R es iden t ial H OM ESTEAD : N on -H ome stea d M AR KET VAL UE: $18 2,00 0 TAX TO TAL: $2 ,7 89.7 4 ASSESSED 20 17 , PAYABLE 201 8 PRO PER TY TYPE: R eside ntial HO MESTEAD: No n-h ome ste ad MARKET VALU E: $2 01 ,0 00 This data (i) is fur nish ed 'A S IS' wit h no represent at ion as t o com ple ten ess or acc urac y ; (ii) is furnis hed w it h n o war rant y of an y k ind; an d (ii i) is not sui tab le for lega l, engi neering or surv ey ing purposes . Hen nepin County s hall not be l iable fo r a ny damage, in jury or los s re sul ting f rom this dat a. COP YRIG HT © H EN N EPIN COU N TY 20 1 7 AGENDA SECTION:OTHER BUSINESS AGENDA ITEM #6. STAFF RE P ORT NO. 25 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: Melissa P oehlman, C ity P lanner D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D epartment 5/10/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/11/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a petition r equesting that the City Council consider the vacation of a portion of 17th Avenue. The right-of-way is adjacent to the proposed Plaz a 66 development (approximately 6600, 6608, and 6614 17th Avenue). E X E C UT IV E S UM M ARY: Tonight the HRA is being asked to c onsider the sale of 6608 17th Avenue S and two remnant parcels to I nterstate Development for construction of a multi-tenant commerc ial building. The proposed development would connect directly to Richfield Parkway on the east side and there will no longer be a public need for the portion of 17th Avenue that is c urrently adjacent to 6600, 6608, and 6614 17th Avenue and additional HRA- owned remnant parc els on the east side of the road (6601, 6609, and 6615 17th Avenue). As the owner of more than 50 percent of the land abutting this right-of-way, the HRA c an petition the Council to vac ate the road. RE C O M M E ND E D AC T IO N: By motion: Approve submittal of the attached petition requesting the vacation of the portion of 17th Avenue adjacent to 6600, 6608, and 6614 17th Avenue to the City Council. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT The c onstruc tion of the roundabout at 66th Street and Richfield P arkway in 2007 eliminated access to/from 17th Avenue from 66th S treet. Construction of a new commerc ial development along 66th Street will eliminate the need for this portion of the road. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The C ounc il may vacate a street, alley, public grounds, or a part thereof, on its own motion or upon the petition of the owners of half of the land abutting the street, alley, public grounds, or part thereof to be vac ated. No vacation may be made unless it appears in the interest of the public to do so. C.C R IT IC AL T IMIN G ISSU E S: A first reading of the proposed vacation is scheduled for the City C ounc il on May 24, 2017. A sec ond reading and public hearing is tentatively scheduled for the City C ounc il on J une 13, 2017. D.F IN AN C IAL IMPAC T: The right-of-way in question was included in the appraisal of the property and the agreed upon purchase price. E.L E GAL C ON S ID E R AT ION : None ALT E R N AT IV E R E C O MME N D AT IO N(S): Deny submittal of the attac hed petition requesting vac ation of 17th Avenue right-of-way. The City Council may proc eed with c onsideration by its own motion. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: None AT TAC H ME N TS : D escripti on Type P etition E xhibit Map B ackup Materi al PETITION FOR VACATION OF STREETS, ALLEYS, AND PUBLIC GROUNDS To: Richfield City Council We, the undersigned owners of land abutting _6600 17th Ave, 6601 17th Ave, 6608 17th Ave, 6609 17th Ave, and 6615 17th Ave , hereby petition that such public land/easement be vacated by the City of Richfield. *Signature Address (please print clearly) City of Richfield Housing and Redevelopment Authority * Signatures may not be removed after the petition is submitted to the City. Print additional sheets if necessary. 66th St 6600 6601 6608 6614 6609 6615 Area of VacationHRA Ownership of 50% of Adjacent Land ±0 110 220 330 44055Feet 1 7 t h A v e 1 6 t h A v e HRA-owned Parcels/Remnants T .H . 7 7 Proposed Vacation Privately owned (Developer purchase agreement) E C O N O MIC D E V E L O P ME N T AU T H O R IT Y ME E TIN G R IC H F IE L D MU N IC IPAL C EN TER, C O U N C IL C H AMB E R S MAY 15, 2017 7:15 P M (I MMEDI AT ELY FO L L OWI NG THE H R A M EE T I N G) Roll C all N E W B U SIN E S S 1.C onsideration of the approval of a resolution establishing the Richfield E conomic D evelopment A uthority and approving certain matters in connection therewith. S taff Report No. 1 2.C onsideration of the election of officers for the Ri chfield E conomic D evelopment A uthority. S taff Report No. 2 3.A djournment Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96 hours in advance to the C ity Clerk at 612-861-9738. AGENDA SECTION:NEW BUSINESS AGENDA ITEM #1. STAFF RE P ORT NO. 1 E CONOMIC DEVELOPME NT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: J ohn S tark, C ommunity D evelopment D i rector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 5/10/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/10/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution establishing the Richfield E conomic D evelopment Authority and appr oving certain matters in connection therewith. E X E C UT IV E S UM M ARY: At both the 2016 goal setting and budget presentations, C ity staff had recommended the c onsideration of the formation of an E conomic D evelopment Authority (E D A) to the Richfield City C ounc il. Based on that rec ommendation, the C ity Council and Housing and Redevelopment Authority (HRA ) held joint work sessions on March 20 and A pril 25, 2017, to discuss the topic . At eac h of those meetings, there was a general consensus that the c reation of an E D A would provide both the authority and a funding mec hanism (through an E D A levy ) to provide benefic ial economic development, business assistanc e, and housing assistance programming. I n particular, an E D A would provide a long-term funding solution to continuing the Kids@Home and Transformation Loan programs. As a result of these ongoing disc ussions and staff recommendations, the Richfield C ity Council approved a resolution authorizing the creation of an E D A at its May 9, 2017, meeting. Acc ording to that resolution, the composition of the E D A's Board of Commissioners is to be coinc idental to that of the HRA. As a result of the City C ounc il's authorization of an E D A, the newly formed E D A must now approve a resolution confirming its establishment. This resolution includes a request that the City enact a levy of up to $600,000 in 2018 and it also inc ludes adoption of E D A bylaws. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution establishing the Richfield Economic D evelopment Authority and approving cer tain matters in connection therewith. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT City staff and the City Council have disc ussed the c reation of an E conomic D evelopment Authority (E D A) on a number of oc casions, inc luding: The 2016 City Counc il Goal S etting Session on March 3, 2016; The presentations of the proposed budget to the City Council on August 31, 2016; A joint work session of the C ity Council and HRA on March 20, 2017; and, A joint work session of the City C ounc il and HRA on April 25, 2017. At eac h of those meetings, there was a general c onsensus that the c reation of an E D A, and the programming that an E D A could administer, would be beneficial to the c ommunity. I n particular, an E D A would provide a long-term funding solution to c ontinuing the Kids@Home and Transformation Loan programs. On May 9, the Richfield City Counc il adopted an enabling resolution establishing the Ric hfield Economic D evelopment Authority. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): An E D A is established by the City Council holding a public hearing and adopting an enabling resolution per State Statute 469.091 (1). On May 9, the Richfield City Counc il adopted an enabling resolution establishing the Ric hfield Economic D evelopment Authority. C.C R IT IC AL T IMIN G ISSU E S: I n order to impose an E D A levy in 2018, the City must form an E D A prior to J uly 1, 2017. This resolution must be approved prior to the establishment of an E D A or taking any actions as an E D A. D.F IN AN C IAL IMPAC T: Acc ording to an analysis conducted by Rebecc a Kurtz of Ehlers Associates, I nc. (the City/HRA financial consultants), the impact of the maximum E D A levy on a Ric hfield homeowner with a homesteaded property with a value between $175,000 - $200,000 will be 28 to 33 cents per year. E.L E GAL C ON S ID E R AT ION : J ulie E ddington of Kennedy and Graven will serve as Legal Counsel to the ED A. Ms. Eddington drafted the attac hed resolution. ALT E R N AT IV E R E C O MME N D AT IO N(S): Adopt the resolution with minor amendments as proposed by the Board of Commissioners with the assent of the ED A Legal Counsel. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: E D A Attorney J ulie Eddington (Kennedy & Graven) AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter B ylaws B ackup Materi al 496941v1 JAE RC260-1 RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. ____________ RESOLUTION ESTABLISHING THE RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY; AND APPROVING CERTAIN MATTERS IN CONNECTION THEREWITH BE IT RESOLVED BY the Board of Commissioners of the Richfield Economic Development Authority (the “EDA”) as follows: 1. Pursuant to Resolution No. 11359, adopted by the City Council of the City of Richfield, Minnesota (the “City”) on May 9, 2017 (the “Enabling Resolution”), the City Council of the City established the EDA in accordance with Minnesota Statutes, Minnesota Statutes, Sections 469.090 through 469.1082, as amended (the “Act”), to promote and to provide incentives for economic development in the City. 2. The Enabling Resolution provides that the EDA has and may exercise all of the powers conferred by the Act upon a housing and redevelopment authority of the City. 3. The EDA approves and adopts the Bylaws of the EDA currently on file with the Executive Director of the EDA. 4. The EDA approves and adopts the official seal of the EDA currently on file with the Executive Director of the EDA. 5. The EDA hereby requests that the City levy a tax in 2017 in the amount equal to 0.01813% of the estimated market value of taxable property within the City (expected to be approximately $600,000) with respect to taxes payable in calendar year 2018. Such request is made in accordance with Section 469.107, subdivision 1 of the Act. 6. The Executive Director of the EDA is authorized and directed to take whatever steps are necessary to give effect to this resolution. The President and Executive Director are authorized and directed to execute, deliver and accept on behalf of the EDA any and all documents and instruments necessary to give effect to this resolution. Approved by the Board of Commissioners of the Richfield Economic Development Authority this 15th day of May, 2017. President ATTEST: Executive Director 496926v1 JAE RC260-1 BYLAWS OF THE RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY ARTICLE I – THE AUTHORITY Section 1. Name of Authority. The name of the economic development authority shall be the “Richfield Economic Development Authority” (the “Authority”). Section 2. Seal of Authority. The seal of the Authority shall be in the form of a circle and shall bear the name of the Authority. Section 3. Office of Authority. The offices of the Authority shall be at City Hall in the City of Richfield, Minnesota, but the Authority may hold its meetings at such other place or places as it may designate by resolution. Section 4. Official Newspaper. The official newspaper shall be the official newspaper designated by the City as its official newspaper each year. ARTICLE II – BOARD Section 1. Number and Appointment of Commissioners. The Authority shall consist of a governing body of five commissioners (the “Board”). Two commissioners shall be members of the City Council and three commissioners shall be members at large. The terms of the commissioners who are also members of the City Council shall coincide with their terms of office as members of the City Council. The three at large commissioners shall be the three at large commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “HRA”). The terms of the commissioners at large shall be six years. At any time an at large commissioner of REDA is not also a commissioner of the HRA, such commissioner’s term on REDA shall terminate. ARTICLE III – OFFICERS Section 1. Officers. The officers of the Authority shall be a President, Vice-President, Treasurer, Secretary, and Assistant Treasurer, each of whom shall have the usual duties and powers of such offices, the duties and powers given to them by the Board from time to time, and those duties and powers prescribed by Minnesota law or these bylaws. The President, Treasurer, and Secretary shall be elected annually by the Board. No commissioner may be both President and Vice-President simultaneously. No commissioner may be both Treasurer and Assistant Treasurer simultaneously. The Secretary and the Assistant Treasurer need not be commissioners. Section 2. President. The President shall preside at all meetings of the Board. Except as otherwise authorized by resolution of the Board, the President shall sign all contracts, deeds, and other instruments made or authorized by the Board. At each meeting the President shall submit such recommendations and information as he or she may consider proper concerning the business, affairs, and policies of the Authority. Section 3. Vice-President. The Vice-President shall perform the duties of the President in the absence or incapacity of the President. In case of the resignation or death of the 2 496926v1 JAE RC260-1 President, the Vice-President shall perform the duties of the President until such time as the Board shall elect a new President. Section 4. President Pro Tem. In the event of the absence or incapacity of both the President and the Vice-President at any meeting, the Board may appoint any remaining commissioner as President Pro Tem to preside at such meeting. Section 5. Secretary. The Secretary shall keep the minutes of all meetings of the Board and shall maintain all records of the Authority and shall have such other duties and responsibilities as the Board may from time to time prescribe by resolution. Section 6. Treasurer. The Treasurer shall have the care and custody of all funds of the Authority and shall deposit the same in the name of the Authority in such national or state bank or banks in Minnesota as the Board may select. The Treasurer shall sign all Authority orders and checks for the payment of money and shall pay out and disburse such moneys under the direction of the Board. The Treasurer shall keep regular books of accounts showing receipts and expenditures and shall render to the Board, at least annually (or more often when requested), an account of such transactions and also of the financial condition of the Authority by filing a detailed financial statement with the Secretary. The Treasurer is responsible for the acts of the Assistant Treasurer and must give bond as required by law. Section 7. Assistant Treasurer. The Assistant Treasurer has the powers and duties of the Treasurer if the Treasurer is absent or disabled. Section 8. Executive Director. The Authority shall employ an Executive Director who shall be the chief executive officer of the Authority and shall have general supervision over the administration of the Authority’s business and affairs, subject to the direction of the Authority. He or she shall have such additional responsibilities and authority as the Board may from time to time by resolution prescribe. Initially, the City Manager shall serve as the Executive Director of the Authority. The Executive Director may designate the City’s Director of Community Development as acting Executive Director during periods when the Executive Director is absent or incapacitated. Section 9. Other Administrative Officers. The Authority may designate an assistant to the Secretary who shall keep the records of the Authority, shall act as recorder of the meetings of the Authority and record all votes, and shall keep a record of the proceedings of the Authority in a journal of proceedings to be kept for such purpose, and shall perform all duties incidental to his or her office. He or she shall keep in safe custody the seal of the Authority and shall have power to affix such seal to all contracts and instruments authorized to be executed by the Authority. Section 10. Additional Employees. The Authority may from time to time such personnel as it deems necessary to exercise its powers, duties, and functions, including but not limited to a chief engineer, other technical experts and agents, and other employees. The selection and compensation of such personnel shall be determined by the Board. Section 11. Advisory Committees. The Authority may by resolution establish one or more advisory committees to the Authority. Section 12. Signature Authority. The following signature authority shall be authorized for transactions executed under direction of the Board: 3 496926v1 JAE RC260-1 (A) All orders and checks of the Authority for payment of money as directed by the Board shall be signed by the ______________ [NOTE: must be an officer] and the Treasurer. (B) All contracts, deeds, and other instruments made or authorized by the Board, except as otherwise authorized by resolution of the Board, shall be signed by the President and the Executive Director. (C) The Vice-President shall have the capacity to sign as an alternate officer of the Authority under extenuating circumstances such as lengthy executed absence, vacancy, termination, resignation, incapacitation or death of the President or of the Executive Director. The Vice-President may sign as an alternate for only one absent individual for any Authority matter until the absent individual has returned or a successor is appointed to fill the office. The Vice-President may not sign in the capacity of more than one individual for any particular item requiring more than one signature. For purposes of this definition, absent is defined as a period, usually significant in length, during which an officer is away and/or unable to fulfill the officer’s role within the Authority leading to the potential for business issues of the Authority to be delayed and/or deadlines to be missed. ARTICLE IV – FINANCIAL MATTERS Section 1. Fiscal Year. The fiscal year of the Authority shall be the same as the fiscal year of the City. Section 2. Accounting System and Audits; Books and Records. The financial records and financial statements of the Authority shall be prepared, audited, filed, and published or posted in the manner required for the financial statements of the City. The books and records of the Authority shall be public records maintained in accordance with state law and with such rules, regulations, and ordinances adopted by the City for maintaining public records. Section 3. Public Money; Checks. All Authority money is public money. An Authority check must be signed as provided in Section 12 under Article III – Officers. The check must state the name of the payee and the nature of the claim for which the check was issued. Section 4. Reports to the City. Annually, at a time and in a form fixed by the City Council, the Authority shall make a written report to the City Council giving a detailed account of its activities and of its receipts and expenditures during the preceding calendar year, together with additional matters and recommendations the Authority deems advisable for the economic development of the City. The Authority shall also submit a report to the City Council annually within 60 days of the anniversary date of the adoption of the enabling resolution stating whether and how the enabling resolution should be modified. Section 5. Financial Statement. Annually, or more often, the Authority shall examine the Treasurer’s detailed financial statement, together with the Treasurer’s vouchers, filed with the Secretary. The financial statement must show all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the Authority’s credits and assets, and the Authority’s outstanding liabilities in a form required for the City’s financial statements. If the Authority finds that the statement and vouchers are correct, it shall approve them by resolution and enter the resolution in its records. 4 496926v1 JAE RC260-1 Section 6. Budget to the City. The Authority shall annually, at a time fixed by the City, send its budget to the City Council. The budget must include a detailed written estimate of the amount of money that the Authority expects to need from the City to do Authority business during the next fiscal year. The needed amount is what is needed in excess of any expected receipts from other sources. Section 7. Employees, Services, Supplies, and Contracts. The Authority shall have all of the power and do all of the things permitted by Minnesota Statutes, Section 469.097, as amended, including but not limited to employing an Executive Director, a chief engineer, technical experts and other employees as it may require; contracting for the services of consultants, agents, public accountants, legal services, and such other persons or services as it may need to perform its duties and exercise its powers; purchasing supplies and materials; and using City facilities, offices, and staff, including the City engineer and City attorney, in the exercise of its powers and the performance of its duties. Section 8. Execution of Contracts. The Authority may make and enter into contracts pursuant to Minnesota Statutes, Section 469.101, as amended, and other applicable law. All contracts, notes, and other written agreements or instruments to which the Authority is a party or by which the Authority may be bound must be executed as provided in Section 12 under Article III – Officers. If the president or the executive director is absent or otherwise unable to execute a document, the vice president may execute the document in place of one individual but not both. ARTICLE V – MEETINGS Section 1. Annual Meeting. The annual meeting of the Authority shall be held on the ________ in January at _____ p.m. at the regular meeting place of the Authority. Section 2. Regular Meetings. Monthly meetings shall be held without notice at the regular meeting place of the Authority on the _____________ of each month at _______ p.m. unless the same shall be a legal holiday, in which event said meeting shall be held on the next succeeding secular day. Section 3. Special Meetings. Special meetings of the Authority may be called by the President or any two commissioners of the Authority for the purpose of transacting any business designated in the call. The call for a special meeting may be delivered at any time prior to the time of the proposed meeting to each member of the Authority or may be mailed to the business or home address of each commissioner of the Authority at least two (2) days prior to the date of such special meeting. At such special meeting no business shall be considered other than as designated in the call, but if all of the members of the Authority are present at a special meeting, any and all business may be transacted at such special meeting. Section 4. Quorum. The powers of the Authority shall be vested in the commissioners thereof in office from time to time. Three commissioners shall constitute a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, but a smaller number may adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may be taken by the Authority upon a vote of a majority of the commissioners present. 5 496926v1 JAE RC260-1 Section 5. Order of Business. At the regular meetings of the Authority the following shall be the order of business: 1. Roll Call. 2. Approval of the Minutes of the Previous Meeting. 3. Reports of the Executive Director. 4. Unfinished Business. 5. New Business. 6. Adjournment. All resolutions shall be in writing and shall be copied in the journal of the proceedings of the Authority. Section 6. Combining Administrative Offices; Compensation. The compensation of the Executive Director and other personnel of the Authority shall be determined by the Authority. Any two or more administrative offices may be combined. Section 7. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the Bylaws or rules and regulations of the Authority. Section 8. Executive Director. The Executive Director shall be appointed by the Authority. Any person appointed to fill the office of Executive Director or any vacancy therein, shall have such term as the Authority fixes, but no commissioner of the Authority shall be eligible for this office. Section 9. Vacancies. A vacancy is created in the membership of the Authority when a commissioner who is also a City Council member ends his or her City Council membership. A vacancy for this or another reason must be filled for the balance of the unexpired term, in the manner in which the original appointment was made. The City Council may set the term of the commissioners who are members of the City Council to coincide with their term of office as members of the City Council. Should the office of President, Vice-President, or Secretary become vacant, the Authority shall elect a successor from its membership at the next regular meeting, and such election shall be for the unexpired term of said office. ARTICLE V – AMENDMENTS Section 1. Amendments to Bylaws. The Bylaws of the Authority shall be amended only with the approval of at least three of the members of the Authority at a regular or a special meeting. Adopted: May 15, 2017 AGENDA SECTION:NEW BUSINESS AGENDA ITEM #2. STAFF RE P ORT NO. 2 E CONOMIC DEVELOPME NT AUT HORIT Y ME E T ING 5/15/2017 RE P O RT P RE PA RE D B Y: J ared Voto, E xecutive A ide/A nalyst D E PA RTM E NT D IRE C TOR RE V IE W: S teven L . D evich, E xecutive D irector 5/11/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 5/11/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the election of officers for the Richfield Economic Development Authority. E X E C UT IV E S UM M ARY: The bylaws of the Richfield Ec onomic Development Authority (E D A) provide that the E D A elec t officers annually. At this first meeting of the E D A, the Board should elect the following officers: President Vice-President Treasurer Secretary (not required to be an E D A Commissioner) Assistant Treasurer (not required to be an E D A C ommissioner) RE C O M M E ND E D AC T IO N: By Motion: Elect officers for the Richfield E conomic D evelopment Author ity. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT Provided in the Exec utive Summary. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The E D A by laws provide for the election of officers. C.C R IT IC AL T IMIN G ISSU E S: None D.F IN AN C IAL IMPAC T: N/A E.L E GAL C ON S ID E R AT ION : None ALT E R N AT IV E R E C O MME N D AT IO N(S): None P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A