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12-19-94 agendaCITY OF RICHFIELD MONDAY, DECEMBER 19, 1994 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS 7:00 P.M. AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF NOVEMBER 21, 1994 1. OPPORTUNITY FOR CITIZENS TO .ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF RESOLUTION AUTHORIZING ACQUISITION OF 7216 FIRST AND 6318 KNOX AVENUES WITH NEW HOME PROGRAM/CDBG FUNDS HRA LETTER NO. 81 3. CONSIDERATION OF CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN HRA AND EHLERS & KOLLER FAMILY DENTISTRY (REDEVELOPERS) FOR REDEVELOPMENT OF 6601 BLOOMINGTON AVENUE HRA LETTER N0. 82 4. EXECUTIVE DIRECTOR REPORT 5. CLAIMS AND PAYROLL ADJOURNMENT AUXILIARY AIDS FOR INDIVIDUALS WITH DISABILITIES ARE AVAILABLE UPON REQUEST. REQUESTS MUST BE MADE AT LEAST 96 HOURS IN ADVANCE TO THE ADMINISTRATIVE SERVICES DIRECTOR AT 861-9702. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 82 Agenda December 19, 1994 Issue Statement: Approval of a Contract for Private Redevelopment between the HRA and Ehlers & Koller Family Dentistry (redevelopers) for the redevelopment of 6601 Bloomington Avenue. Background: At the November meeting, the HRA approved a loan of 550,000 to the redevelopers. The loan has now been placed in the context of a Contract for Private Redevelopment, a copy of which is attached. The loan is discussed along with preconditions which must exist before the loan is closed in Article IV, page 7. Two payments of 525,.000 each will be made. The first payment will be made after the redevelopers own the property, have relocated the tenant and executed the Promissory Note for repayment. The note also contains a guaranty agreement. Through the Guaranty Agreement, the redevelopers personally guarantee the payment of the note. The second payment will be made when the improvements are completed and the modified note has been signed. The loan payment schedule is attached as Attachment A to Schedule B which is the Promissory Note. The terms of the loan repayment are as follows: • Principal amount of loan is $50,000. • 0% interest and no principal payment for 2 years. • 20 interest only payments for years 3 and 4. • 4% interest only payments for years 5 and 6. • 6% interest only for years 7 through 10. • Years 11 through 15 pay principal as if it were to be amortized over 10 years but balloon it in the 15th year with interest at the current rate. As the note indicates in the fourth paragraph, there are several conditions which, if they came into existence, would require the loan to be repaid in total. The other provisions of the contract are standard and are listed in the Table of Contents. It is important to note that this is not a tax increment project nor is it a project whereby the HRA would be purchasing property. Recommended Motion: Adopt a motion approving the Contract For Private Redevelopment between the HRA and Ehlers and Koller Family Dentistry. Basis of Recommendation: 1. The HRA approved the redevelopment plan and project November 21, 1994. 2. The HRA authorized the use of a loan to help finance the project November 21, 1994. 3. The Planning Commission found the redevelopment plan and project to be in conformance with the comprehensive plan at their meeting on December 6, 1994. 4. The City Council held a public hearing and approved the redevelopment plan and project at their December 12th, 1994 meeting. Alternative Recommendation: 1. Delay action. 2. Refuse to act. 3. Propose a modification. Discussion/Decision Mode: A decision on December 19 would make it possible .for the redevelopment to proceed. Respectful submitted, James D. rosser Executive Director JDP:cak Holmes & Graven, Chartered December 12, 1994 .CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD AND EHLERS & KOLLER, FAMILY DENTISTRY, a professional corporation 1994 This document was drafted by: Holmes & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 JBD80615 RC125-91 TABLE OF CONTENTS ARTICLE I Definitions Section 1.1. Definitions 2 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority 4 Section 2.2. Representations by the Redeveloper 4 ARTICLE III [B~l ARTICLE IV Loan Section 4.1. Loan . ~ . 7 Section 4.2. Preconditions 7 ARTICLE V Tax Increment Section 5.1. [Blank] 8 ARTICLE VI Additional Provisions Section 6.1. Equal Employment Opportunity 9 Section 6.2. Restrictions on Use 9 Section 6.3. Notices and Demands 9 Section 6.4. Disclaimer of Relationships 9 Section 6.5. Covenants Running with the Land 9 Section 6.6. Modifications 9 Section 6.7. Counterparts 9 SIGNATURES TESTIMONIALS SCHEDULE A REDEVELOPMENT PROPERTY LEGAL DESCRIPTION SCHEDULE B NOTE AND GUARANTY AGREEMENT JHD80615 RC125-91 i CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the day of , 1994, by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD (hereinafter referred to as the "Authority") and Ehlers & Koller, Family Dentistry, a professional corporation (hereinafter referred to as the "Redeveloper"), WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001-.047 (the "Act") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Richfield (hereinafter the "City") pursuant to Section 469.003 (formerly Section 462.425) of the Act; and WHEREAS, in furtherance of the objectives of the Act, the Authority has engaged in carrying out a redevelopment project known as the East 66th Street Redevelopment Project Area (hereinafter referred to as the "Project"} in an area (hereinafter referred to as the "Project Area") located in the City; and WHEREAS, as of the date of this Agreement there has been prepared and approved by the Authority and the City Council of the City a redevelopment plan for the project (which Plan is hereinafter referred to as the "Redevelopment Plan") ; and WHEREAS, in order to finance, in part, the public redevelopment costs of the Project, the Authority has established its development fund (the "Fund") ; and WHEREAS, there has been presented by the Redeveloper to the City and the Authority for their consideration a proposal for the development of a dental office facility within the Project on property located within the Project Area; and WHEREAS, the Authority has reviewed the Redeveloper's development proposal and has determined that such proposal if completed would serve to accomplish the goals and objectives for which the Project was created; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan the Authority will provide, from the Fund, a loan to the Redeveloper to assist the Redeveloper in acquiring the Redevelopment Property and preparing it for redevelopment; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan, without which the Authority believes that redevelopment of the Redevelopment Property could not take place, the Authority has determined to provide aid and assistance to the Redevelopment Property in the form of a loan from its Fund subject to all of the provisions hereinafter contained; and WHEREAS, the Authority believes that the redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted. JHD60615 RC125-91 1 NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows ARTICLE I Definitions Section 1.1. Definitions . In this Agreement, unless a different meaning clearly appears from the context "Act" means Minnesota Statutes, Sections 469.001-469.047 (formerly Municipal Housing and Redevelopment Act, Minnesota Statutes, Sections 462.411-462.711), as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented . "Assessed Market Value" or "Assessed Market Valuation" means the market value of real property as determined by the county assessor of the county in accordance with Minnesota Statutes, Section 273.11 (or as finally adjusted by the assessor, board of equalization, commissioner of revenue, or any court) . "Authority" means the Housing and Redevelopment Authority in and for the City of Richfield, or any successor or assignee. "City" means the City of Richfield, a Minnesota municipal corporation and statutory city according to the laws of the State of Minnesota. "Closing" means the completion of the transaction contemplated in this Agreement between the parties hereto . "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which shall be at least as detailed as the plans required to be submitted to the building inspector of the City. "Minimum Improvements" means the improvements described in the Preliminary Plans containing a dental office facility of approximately 6,000 square feet. "Preliminary Plans" means those plan sheets and other descriptive material which are identified in the attached Schedule E. "Project" means Redevelopment Plan for the East 66th Street Redevelopment Project Area . "Project Area" means the real property located within the boundaries of the Project . "Redeveloper" means Ehlers & Koller, Family Dentistry, a professional corporation or its successors and assigns. JHD80615 RC125-91 2 "Redevelopment Property" .means the real property, a legal description of which property is contained on the attached Schedule A. "Redevelopment Plan" means the plan for the East 66th Street Redevelopment Project Area as amended as of the date of this Agreement. "Tax Official" means any city or county assessor; county auditor; city, county or state board of equalization, the commissioner of revenue of the state, any state or federal district court, the tax court of the state, or the State Supreme Court. "Unavoidable Delays" means delays which are the direct result of acts of God, unforeseen adverse weather. conditions, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action causes delays, acts of any federal, state or local governmental unit {other than the Authority in enforcing its rights under this Agreement), Authority defaults as to the Redeveloper's delays, Redeveloper defaults as to the Authority's delays, or other matters which are not within the control of the .Redeveloper as to the Redeveloper's delays or not within the control of the Authority as to the Authority's delays . JBD80615 RC125-91 3 ARTICLE II Bepresentations and Warranties Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained (a) The Authority has the right, power and authority to execute, deliver and perform its obligations according to this Agreement and all other documents to be executed by the Authority pursuant hereto. The Authority will take all appropriate actions in order to complete the transaction contemplated according to this Agreement. The Authority assures the Redeveloper that the individuals who execute this Agreement and all other documents executed by the Authority or on behalf of the Authority are duly authorized to sign the same on behalf of the Authority and to bind the Authority thereto . (b) The Project is a "redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. Section 2.2. .Representations by the Redeveloper. The Redeveloper represents that: (a) The Redeveloper has the right, power and authority to execute, deliver and perform its obligations according to this Agreement. (b) If the Redeveloper, constructs the Minimum Improvements on the Redevelopment Property, it will do so in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and zoning, building code and public health laws and regulations . (c) The Minimum Improvements will be constructed at a cost of approximately $500, 000 exclusive of soft costs . (d) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area .may be or will be in violation of any environmental law or regulation. The Redeveloper is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure. In the event that the Authority is required to take any action to obtain any necessary permits or approvals with respect to the Redevelopment Property under any local, state or federal environmental law or regulation, the Redeveloper will cooperate with the Authority in connection with such action. (e) If the Redeveloper constructs the Minimum Improvements, it will do so in accordance with all applicable local, state or federal energy conservation laws or regulations . (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any restriction or any evidences of indebtedness, agreement or instrument of any evidences of JBD80615 RC125-91 4 indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing . JBD80615 RC125-91 rj ARTICLE III [BLANK] JBD80615 RC125-91 ARTICLE IV LOAN Section 4.1. Loan. The Authority agrees that upon performance by the Redeveloper of all of the conditions precedent as hereinafter described, it will loan to Redeveloper the amount of $50, 000. Such loan shall be repaid in accordance with the provisions of a promissory note in substantially the form of the attached Schedule B (the "Note") . Section 4.2 . Preconditions . The Authority's obligations under Section 4.1 shall be preconditioned upon the occurrence of each of the following: a) The Authority having reviewed and approved the Construction Plans for the Minimum Improvements; b) The Authority having determined, based upon information provided it by Redeveloper, that Redeveloper has acquired marketable title to the Redevelopment Property; c) The Redeveloper has provided the Authority with evidence satisfactory to the Authority that the present Redevelopment tenant has vacated the Property; d) The Redeveloper is not in default of any of its obligations hereunder; e) A certificate of occupancy has been issued by the City Building Official evidencing completion of construction of the approved Minimum Improvements; and f) The Redeveloper has executed and delivered to the Authority the Note and Guaranty Agreement. Upon the occurrence of the items listed in a), b), c) and d) the Authority shall provide the first $25,000 of the loan in return for the Note (modified to show a principal balance of $25, 000) . Upon the additional occurrence of the event described in e) above, and, if all other matters remain unchanged, the Authority shall lend the Redeveloper the second $25, 000 in return for the Note modified to show the increased principal balance . In the event that all of the preconditions have not taken place on or before December 31, 1995 , either party may, upon written notice to the other, declare this agreement to be null and void, whereupon, each party shall be relieved of any further obligation to the other. JBD80615 RC125-91 ARTICLE V Tax Increment [BLANK ] JBD80615 RC125-91 ARTICLE VI Additional Provisions Section 6.1. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that in the event the Minimum Improvements are constructed as provided for in the Agreement, it will comply with all applicable federal, state and local equal employment and nondiscrimination laws and regulations . Section 6, 2. Restrictions on Use. The Redeveloper agrees for itself, and its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to, and only to and in accordance with, the land use regulations of the City of Richfield. Section 6.3 . Notices and Demands . Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement or the Redevelopment Deed by either party to the other shall be sufficiently given or delivered only if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally;. and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at ;and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 6700 Portland Avenue South, Richfield, Minnesota 55423, or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 6.4 . Disclaimer of Relationships . The Redeveloper acknowledges that nothing contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or construed by the Redeveloper or by any third person to create any relationship of third-party beneficiary, principal and agent, limited or general :partner, or joint venture between the Authority and the Redeveloper . Section 6.5. Covenants Running with the Land. The terms and provisions of this Agreement shall be deemed to be covenants running with the Redevelopment Property and shall be binding upon any successors or assigns of the Redeveloper and any future owners or encumbrances of the Redevelopment Property. Section 6.6 . Modifications . This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. Section 6.7 . Counterparts . This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the Authority has caused this Agreement to be executed in its corporate name by its duly authorized officers and sealed with its corporate seal; and the Redeveloper has caused this Agreement to be executed in its corporate name as of the date first above written. JBD80615 RC125-91 9 THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA (SEAL ) STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) By: Its Chairperson And Its Executive Director On this day of , 1994, before me, a Notary Public within and for said county, appeared and to me personally known, who being by me duly sworn, did say that they are respectively the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body, corporate and politic, known as the Housing and Redevelopment Authority in and for the City of Richfield, under the laws of the State of Minnesota, on behalf of the Housing and Redevelopment Authority. Notary Public JHD60615 RC125-91 10 REDEVELOPER: EHLERS & KOLLER, FAMILY DENTISTRY, a professional corporation By: Its Attested By: Its STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of 1994, by and ,the and of Ehlers & Koller, Family Dentistry, a professional corporation, on behalf of the corporation . Notary Public JBD80615 RC125-91 11 SCHEDULE A to CONTRACT FOR PRIVATE REDEVELOPMIIVT REDEVELOPMENT PROPERTY LEGAL DESCRIPTION: [to be. supplied prior to execution] JBD80615 RC125-91 A~ 1 PROMISSORY NOTE SCHEDULE, B $50,0001 Made By: („X„ ) Payable To : Housing and Redevelopment Authority in and for the City of Richfield ("Authority" ) Date X promises to pay the Authority the sum of Fifty Thousand Dollars ($50,000), together with interest thereon at the rates as shown on Attachment A. Interest and principal, shall be due and payable as shown on Attachment A. X may prepay at any time . In the event that X elects or is required to prepay this note, prepayment shall be made by paying all interest accrued on the note, together with the remaining, principal balance on the note . Provided, also, that if X discontinues its operations in Richfield or reduces its full-time staff in Richfield by more than 50$ of the level achieved on the first anniversary of this Note, or sells the Redevelopment Property or refinances its acquisition or construction costs, or fails to pay real estate taxes or to make any payment due under this Note at the time shown in Attachment A, the balance of the note shall be due in 90 days (including the prepayment amounts as determined above). This note is secured by personal guarantees of certain X shareholders identified in the Guaranty Agreement attached hereto as Attachment B . If any payment required by this Note is not paid within 10 days after it becomes due, the full sum of both principal and interest shall become immediately due and payable at the Holder's option. In the event any payment is not made as required by this note, the Holder may employ an attorney for purposes of collection and, in that event, X shall reimburse the Holder reasonable costs and attorneys fees. If any litigation is instituted to enforce payment of this note, the prevailing party shall recover from the other party, in addition to costs and disbursements allowed by law, the sums as the court may allow as attorney fees in the litigation, including any appeals . X By Its This note is secured by the attached guaranty agreement. lIn the event that a partial payment is made pursuant to Article IV, this amount will be reduced to $25 , 000 to reflect the partial payment and then increased if and when the full $50,000 is loaned to Redeveloper. JHD80615 RC125-91 A-2 ATTACHMENT A TO SCHEDULE B PAYMENT SCHEDULE2 PMT # DATE BEGINNING BALANCE PRINCIPAL PAYMENT INTEREST RATE INTEREST. PAYMENT TOTAL PAYMENT ENDING BALANCE• 1 12/31/95 50,000.00 0.00 0.00 0.00 0.00 50,000.00 2 12/31/96 50,000.00 0.00 0.00$ 0.00 0.00 50,000.00 3 12/31/97 50,000.00 0.00 2.00 1,000.00 1,000.00 50,000.00 4 12/31/98 50,000.00 0.00 2.00$ 1,000.00 1,000.00 50,000.00 5 12/31/99 50,000.00 0.00 4.00$ 2,000.00 2,000.00 50,000.00 6 12/31/00 50,000.00 0.00 4.00 2,000.00 2,000.00 50,000.00 7 12/31/01 50,000.00 0.00 6.00 3,000.00 3,000..00 50,000.00 8 12/31/02 50,000.00 0.00 6.00 3,000.00 3,000.00 50,000.00 9 12/31/03 50,000.00 0.00 6.00 3,000.00 3,000.00 50,000.00 10 12/31/04 50,000.00 0.00 6.00 3,000.00 3,000.00 50,000.00 11 12/31/05 50,000.00 3,213.31 9.503 4,750.00 7,963.31 46,786.69 12 12/31/06 46,786.69 3,006.80 9.50$ 4,444.74 7,451.54 43,779.90 13 12/31/07 43,779.90 3,292.45 9.50$ 4,159.09 7,451.54 40,487.45 14 12/31/08 40,487.45 3,605.23 9.50$ 3,846.31 7,451.54 36,882.22 15 12/31/09 36,882.22 36,882.22 9.50$ 3,503.81 40,386.03 0.00 2Schedule assumes closing on January 1, 1995. Schedule will be revised before note is executed to reflect actual closing date. 3Stated interest rate is only for example, actual rate for years 11 through 15 will be equal to the rate at which the city can borrow on a taxable basis as of December 31, 2005 . JHD80615 RC125-91 A-3 ATTACHMII~TT B TO SCHEDULE B GUARANTY AGREEMENT THIS GUARANTY AGREEMENT is made and entered into as of , 199 (the "Guaranty") by and between CHARLES D . EHLERS and JAMES G . KOLLER (jointly and severally, the "Guarantors") and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, (the "Authority") . - WHEREAS, pursuant to that certain promissory note of even date herewith ("Note") between Ehlers & Koller, Family Dentistry ("E & K") and the Authority, E & K agreed to provide financial assistance to E & K on the condition that, among other things the Guarantors execute and deliver this Guaranty to the Authority. NOW, THEREFORE, in consideration of the premises and to induce Authority to provide financial assistance to E & K, the Guarantors hereby agrees as follows Section 1. Guaranty. The Guarantors hereby unconditionally guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, all obligations of E & K now or hereafter existing under the Note, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Obligations") , and agree to pay any and all expenses incurred by the Authority in enforcing any rights under this Guaranty. Section 2 . Guaranty Absolute . The Guarantors unconditionally guarantee that the Obligations will be paid strictly in accordance with the terms of the Note, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Authority with respect thereto. The liability of the Guarantors under this Guaranty shall be absolute and unconditional irrespective of (i) any lack of validity or enforceability of the Note or any other agreement or instrument relating thereto; - (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Note or any other amendment or waiver of or any consent to departure from the Note or any other agreement or instrument relating thereto; (iii) any exchange, release or non-perfection of any collateral or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations; or (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, E & K in respect of the Obligations. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Authority upon the insolvency, bankruptcy or reorganization of E & K or otherwise, all as thorough such payment had not been made . JHD80828 RC125-91 Section 3. Waiver. The Guarantors hereby waive promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty and any requirement that the Authority exhaust any right or take any action against E & K or any other person or entity. Section 4. [Blank] Section 5 . Representations and Warranties . The Guarantors hereby represent and warrant that: (a) each has full power and authority to enter into and perform the obligations under this Guaranty; and (b) the execution and delivery and compliance with the terms hereof shall not contravene or constitute a default under any indenture, commitment, agreement or other instrument to which either is bound or any judgment, order or decree to which either is subject. Section 6. Amendments, Etc._ No amendment or waiver of any provision of this Guaranty shall in any event be effective unless the same shall be in writing and signed by the Authority, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Section 7 . Addresses for Notices . All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, addressed to the respective parties at the respective addresses specified on the signature page hereunder, or as to each party as such other address as shall. be designated by such party in a written notice to the other party. All such notices and other communications shall, when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered to the telegraph company, respectively, addressed as aforesaid. Section 8. No Waiver; Remedies. No failure on the part of the Authority to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by laws . Section 9. Continuing guaranty. This Guaranty is a continuing guaranty and shall: (i) remain in full force and effect until payment in full of the Obligations and all other amounts payable under this Guaranty, (ii) be binding upon the Guarantors and Guarantors' personal representatives, heirs and assigns, and (iii) inure to the benefit of and be enforceable by the Authority and its successors, transferees and assigns. Section 10. Governing Law; Severability. This Guaranty shall be governed by, and construed in accordance with, the laws of the State of Minnesota. If any provision of this guaranty shall be held to be invalid by any court of competent jurisdiction, the invalidity of such provision shall not affect any of the remaining provisions . Section 11. Counterparts. This Guaranty may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument . JBD80828 RC125-91 2 IN WITNESS WHEREOF, the. Guarantors has caused this Guaranty to be duly executed and delivered as of the date first above written. STATE OF MINNESOTA ) ss COUNTY OF HENNEPIN ) GUARANTORS {Address) HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By By Its Commission Chairperson Its Executive Director The foregoing instrument was acknowledged before me this day of 199_, by Notary Public JBD80828 RC125-91 3 STATE OF MINNESOTA ) ss COUNTY OF HENNEPIN ) On this day of , 1994, before me, a Notary Public within and for said county, appeared and to me personally known, who being by me duly sworn, did say that they are respectively the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body, corporate and politic, known as the.Housing and Redevelopment Authority in and for the City of Richfield, under the laws of the State of Minnesota, on behalf of the Housing and Redevelopment Authority. - Notary Publie JBD80828 RC125-91 4 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 81 Agenda December 19, 1994 Issue Statement: Authorization to acquire 7216 First and 6318 Knox Avenues with New Home Program/CDBG funds. Background: The HRA utilizes the New Home Program to clear blighted housing and initiate first time home buyer opportunities.. Both Vo-Tech and Habitat For Humanity. have expressed an interest in initiating projects in 1995. Staff has identified two sites: 7216 First and 6318 Knox Avenues. It is proposed that CDBG revenues be used for the two purchases. The property at 7216 First is tenant occupied and the absentee owner is offering the property for sale. BCL Appraisals has valued the property at $43,000. The HRA typically does not purchase tenant occupied property because tenant relocation benefits must be paid and cannot be waived. However, this property has not been vacant or owner occupied in the many years it has been formally or informally "on the market". It is unlikely the tenant status will change. The tenant benefit typically covers relocation counseling, replacement housing assistance, and moving expenses. A maximum benefit approximates $5,000 to 57,000. The HRA last paid for tenant relocation when purchasing 7528 Colfax for a Vo-Tech project in 1990. The HRA has already authorized purchase of 6318 Knox Avenue in September 1994 for $53,000. The property is owner occupied.. It is requested that CDBG funds be used for purchase rather than Richfield Rediscovered funds as previously proposed. Because of HUD rules, it may be necessary to request the City Council to purchase the property. Should that need arise, the City would purchase using CDBG funds and sell to the HRA for development. Recommended Motion: Authorize the Chair and Executive Director to enter into a purchase agreement and take those actions necessary to acquire 7216 First for $43,000 and 6318 Knox for $53,000 with CDBG funds. Basis of Recommendation: 1. The properties at 7216 First and 6318 Knox have been voluntarily offered for sale and meet voluntary acquisition program requirements as to condition and usage. 2. Both properties are uniquely suited to support affordable home initiatives. The property at 7216 First is 50 ft X 117 ft; 5,850 sq. ft. The property at 6318 Knox is 40 ft X 128 ft; 5,120 sq. ft. The Richfield Rediscovered market responds much more slowly to sites of this size. 3. CDBG funds are budgeted for these acquisitions. 4. A variance, given lot size consideration, has already been received from the Hearing Examiner for 6318 Knox. The purchase of 7216 First is contingent on a similar finding which will be requested. 5. Properties will be available for development by Vo-Tech and/or Habitat in 1995. Development proposals would be brought to the HRA at the appropriate time. Alternative Recommendation: Do not acquire the properties at this time with CDBG funds. However, no better sites have been identified for the HRA first time buyer projects. Discussion/Decision Mode: With authorization at this time, several processes related to -these acquisitions would begin. Initiating and completing environmental clearance, relocation, and variance considerations, will allow site acquisition in February or March 1995. Respe 1 y submitted, James rosser Executi~ Director JDP:cak HRA RESOLUTION N0. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD AUTHORIZING THE ACQUISITION OF 7216 - 1ST AND 6318 KNOX AVENUES WITH CDBG FUNDS WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) acquires property and builds and rehabilitates structures for residential purposes; and WHEREAS, the HRA desires to acquire the real property at 7216-1st Avenue, legally described as: Lot 5, Block 3, Wooddale Second Addition. Based on an appraised fair market value of 543,000; and WHEREAS, the HRA desires to acquire the real property at 6318 Knox Avenue and legally described as: Lot 6, Block 8, Ray's Lynnhurst Addition based on an appraised fair market value of $53,000; and WHEREAS, the owner of these properties has volunteered to sell in accordance with New Home Program guidelines; and WHEREAS, Community Development Block Grant (CDBG) funds will finance the acquisition of these parcels; and WHEREAS, the Planning Commission .has made a finding that the acquisition and disposition of these parcels for residential purposes is consistent with the Comprehensive Plan; and WHEREAS, the acquisition is also contingent on CDBG procedures such as an environmental review and a favorable consideration by the Richfield Hearing Examiner as to a lot size variance request at 7216-1st Avenue. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, as follows: 1. The Executive Director is authorized to take those actions necessary to acquire 7216-1st Avenue for 543,000 utilizing CDBG funds. 2. The Executive Director is authorized to take those actions necessary to acquire 6318 Knox Avenue for $53,000 utilizing CDBG funds. 3. The property acquisitions are contingent on CDBG acquisition procedures for purchase and the favorable evaluation of a lot size variance request at 7216-1st Avenue by the Richfield Hearing Examiner. Adopted by the Housing and Redevelopment Authority in and for the City. of Richfield, Minnesota this 19th day of December, 1994. Thomas E. Harms, Chairperson ATTESTa Vern Luettinger, Secretary