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10-21-91 agenda.a ~...', _ HOUSING AND REDEVELOPMENT AUTHORITY OCTOBER. 21, 1991 7:00 P.M. COUNCIL CHAMBERS AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF SEPTEMBER 16, 1991 1. OATH OF .OFFICE TO HRA COMMISSIONER, JOAN HELMBERGER 2. OPPORTUNITY FOR CITIZENS TO ADDRESS THE_HRA ON ITEMS NOT ON THE AGENDA ~ ®~ ~„ 3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING PrPPP-~4~ SALE OF RICHFIELD REDISCOVERED PROPERTY AT 7129 FIRST AVENUE 1 TO RSM HOMES,. INC. HRA LETTER N0. 36 4. EXECUTIVE DIRECTOR REPORT ~:os-- 5. CLAIMS AND PAYROLL ADJOURNMENT HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 36 Agenda October 21, 1991 Issue Statement: Public hearing and authorization of the sale of a Richfield Rediscovered property at 7129 First Avenue to RSM Homes, Inc. Background• In, July 1991, the HRA authorized staff to modify the Richfield Rediscovered program to include the following: - participation by more .than one builder; - HRA responsibile for. marketing; and - greater house design flexibility. Since July, staff has worked with potential buyers and builders interested in developing the seven available HRA owned available sites. RSM Homes, Inc. of Prior Lake, MN., has secured a contingent purchase agreement from a buyer for the lot at 7129 First Avenue. The sale price would be 527,000 for a house valued at 5101,900. A development agreement has been prepared which requires RSM, Inc. to: - pay the stated lot value upon completion of the home; - provide financial security during the construction period with a letter of credit, or similar security, that has a value of $34,990; - complete the home and pay for the lot by March 31, 1992; and - meet design and insurance requirements which are specified. A copy of the draft development agreement is attached. RSM Homes, Inc. builds about 100 homes a year, primarily in Lakeville, Apple Valley, Burnsville, and Prior Lake. Their homes average 598,000 in price. Their building inspection and supplier references verify that they are a "real good builder with. an above average product that always pays the bills on time". A representative of RSM Homes has been asked to be available at the HRA meeting if there are any questions. Recommended Motion: Following the public hearing, adopt the attached resolution which authorizes the Chairperson and Executive Director to execute agreements which sell 7129 First Avenue to RSM Homes,. Inc., for development of a new single family home. Basis of Recommendation: 1. A check of references indicates RSM Homes, Inc. is an experienced, capable, financially secure builder. 2. The HRA has the lot at 7129 First Avenue available to sell. 3. A development agreement has been negotiated and is in conformation with program guidelines. 4. The participation fee of $500 has been paid. 5. Notice of public hearing has been published. 6. Previously the, Planning Commission found the sale of the lot for development of a new home to be in conformance with the City's comprehensive plan. Alternative Recommendation: Do not proceed with a development agreement with RSM Homes, Inc. and direct staff to find another buyer. Discussion/Decision Mode:. RSM, Inc. would like to close by the end of October and start construction immediately thereafter. Respectf ly submitted, James Prosser Execut ve Director JDP:ds Attachments RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED,AT 7129 FIRST AVENUE TO RSM HOMES, INC., IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Expanded New Home Program Redevelopment Project (Project) heretofore adopted. by the City of Richfield (City) and the HRA, said real property being described as follows: Lot 17, Block 1, "Sheldon Blar's Wooddale Fourth Addition" and located at 7129 First Avenue; and, WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and, WHEREAS, a developer, RSM Homes, Inc., of Prior Lake has been identified as the purchaser of the described property, in accordance with a development agreement; and, WHEREAS, the public hearing has been held after proper public notice; and, WHEREAS, the Planning Commission has made a finding that the disposition of the property for residential purposes is consistent with the comprehensive plan. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and 7129 First Avenue is authorized to be sold to RSM Homes, Inc., for $27,000 in accordance with a development agreement with the HRA. 2. That the Chairperson and Executive Director are authorized to execute the Development Agreement and other agreements as required to effectuate the sale to RSM Homes, Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 1991. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary Property Address: .7129 First Ave. DRAFT CONTRACT FOR PRIVATE DEVELOPMENT Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA • and RSM Homes, Inc. .~ This Instrument Drafted by: Holmes ~ Graven, Chartered 470 Pillsbury Center Minneapolis, Minnesota 55402 Telephone: (612)337-9262 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made .and entered into as of this 21st day of October 19 91 , by and between the Housing and Redevelopment Authority in and for the City of Richfield, a body corporate. and politic under the laws of the state of Minnesota, having its principal office at 6700 Portland Avenue, Richfield, ,_. Minnesota (HRA), and RSM Homes, Inc. (Developer). WITNESSETHs WHEREAS, the City of Richfield. (City) and the HRA have created and established a Redevelopment Project (Project) and Tax increment Financing District (TIF District) pursuant to the authority granted in Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.174 through 469.179; (collectively, the Acts); and WHEREAS, pursuant to the Aets, the City and the HRA have adopted a redevelopment plan (Redevelopment Plan) and a tax increment financing plan (TIF Plan) to finance all or a portion of the public development costs of the Project; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan and TIF Plan as hereinafter defined and particularly to make specified land in the Project available for development by private enterprise for and in accordance with the Redevelopment Plan, the HRA has determined to provide substantial aid and -. assistance to finance public development costs in the Project; and WHEREAS, the Developer has proposed a development as hereinafter defined within the Project which the HRA has determined will promote and carry out the objectives for which the Project has been undertaken, will assist in carrying out the obligations of the Redevelopment Plan and TIF -Plan, will be in the vital best interests of the City and the health, safety and welfare of its residents, and is in accord with the public purposes and provisions of the applicable state and local laws and requirements under which development in the Project has been undertaken and is being assisted. NOW, THEREFORE, in .consideration of the mutual covenants and obligations of the HRA and the Developer, each party does hereby represent, covenant and agree with the other as follows: ARTICLE I. DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement, the following terms have the meanings given below unless the context clearly requires otherwise: (a) City. TheCity of Richfield, Minnesota. (b) Construction Plans.. Collectively, the plans, drawings and related documents related to the Improvements. (e) Developer. RSM Homes , Inc . (d) Development. The Property and the Improvements to be constructed thereon according to the Construction Plans approved by the HRA. (e) HRA. The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. (f) Homeowner. A purchaser for value of the Property but not including any individual, corporation or entity related to the Developer. (g) Housing and Redevelopment Authorities Act (HRA Act). Minnesota Statutes Sections 469.001 through 469.047. (h) Improvements. Each and all of the structures and site improvements constructed on the Property by the Developer, as specified in the Construction Plans approved by the HRA. (i) Minimum Value. ~ 95,000.00, which represents the minimum value for which the Developer will construct the Improvements. (j) Mortgage and Holder. The term "mortgage" shall include the mortgages referenced in Article VI of this Agreement and any deed of trust or other instrument creating an encumbrance or lien upon the Property or any part thereof, as security for a loan. The term "holder" in reference to a 2 mortgage includes any insurer or guarantor (other than the Developer) of any obligation or condition secured by such mortgage or deed of trust. (k) Property. The real property located within the District at 7129 First Ave. So , the legal. description of which is Lot 17, Block 1, Sheldon Illair's Wooddale Fourth Addition, Hennepin County (1) Redevelopment Project (Project).. The Redevelopment -Project established by the HRA pursuant to Minnesota Statutes Sections 469.001 through 469.047 and described in the Redevelopment Plan. (m) Redevelopment Project .Plan (Redevelopment .Plan). The plan. for implementation of the Project adopted by the HRA pursuant to Minnesota Statutes Sections 469.001 through 469.047. (n) Tax Increment. The tax increment. produced by the increase in the valuation of the Property following certification of the original tax capacity by the county auditor and construction of the Improvements by the Developer. (o) Tax Increment Financing Act (TIF Act). Minnesota Statutes Sections 469.174 through 469.179. (p) Tax Increment Financing District (TIF District). The TIF District created by the HRA pursuant to Minnesota Statutes Sections 469.174 through 469.179 and described in the TIF Plan adopted therefor. (q) Tax Increment Financing Plan (TIF Plan). The plan for development of the .TIF District adopted by the HRA pursuant to Minnesota Statutes, Sections 469.174 through 469.179. (r) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles, fire or other casualty to the Improvements, litigation .commenced by third parties which results in delays or acts of any federal, state or local government, except those contemplated by this Agreement, which are beyond the control of the Developer. Section 1.2 Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: A. Form of Certificate of Completion B. Housing Design Criteria C. Form of Quit Claim Deed Section 1.3 Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the state of Minnesota. 3 (b) The words "herein" and "hereof" and words of similar import, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof. (c) References herein to any particular section or subdivision hereof are to the section or subdivision of .this Agreement as originally executed. (d) Any titles of the several parts, articles and. sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. ARTICLE II. , REPRESENTATIONS AND UNDERTAKINGS Section 2.1 By the Developer. The Developer makes the following representations and undertakings: (s) The Developer has the legal authority and power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement; (b) The Developer has the necessary equity capital or will obtain commitments for financing necessary for construction of the Improvements; (c) The Developer will construct the Improvements in accordance with the terms of this Agreement, the Redevelopment Plan, the TIF Plan and all local, state and federal laws and regulations; (d) The Developer will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, the requirements of all local, state and federal laws and regulations which must be obtained or met before the Improvements may be constructed; and (e) The plans for the Improvements have been prepared by an architectural designer. Section 2.2 By the HRA. The HRA makes the following representations as the basis for the undertaking on its part herein contained: (a) The HRA is authorized by law to enter into this Agreement and to carry out its obligations hereunder; and (b) The HRA will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Developer and will cooperate with the efforts of Developer to secure the granting of any permit, license, or other approval required to allow the construction of the Improvements; provided, however, that nothing con- 4 tained in this subparagraph 2.2(b) shall be construed to limit in any way the reasonable and legitimate exercise of the HRA's discretion in considering any submittal or application. ARTICLE III. ACQUISITION OF PROPERTY; .CONVEYANCE TO DEVELOPER Section 3.1. Sale of Property to Developer. .The HRA has acquired .the Property and has demolished all structures and other improvements on the Property. The HRA agrees to sell the Property to the Developer and the Developer agrees to purchase the Property from the HRA. The sale of the Property is conditioned upon the Developer providing evidence satisfactory to the HRA prior to closing that the Developer has a binding legal commitment for the resale of the .Property to a Homeowner. The HRA agrees to convey the Property to the Developer by Quit Claim deed in the general form of Exhibit C. The HRA's deed to the Developer will be subject to the Right of Reverter required in Section 8.3 of this Agreement. The purchase price for the Property will be $27,000.00 . Section 3.2. Closing. Closing on the Property will take place on or before Oct. 29, 1991 , or such other date as may be agreed to'by the parties in writing. At closing, the Developer will provide the HRA with a letter of credit in the amount of $ 34,990.00 Section 3.3. Taxes and Special Assessments. Real estate taxes will be prorated between the HRA and the Developer as of the date of closing. Levied and pending special assessments, if any, will be satisfied at the time of closing and the Property will be transferred to the Developer free and clear thereof. Section 3.4. Soil Conditions and Hazardous Wastes. The Developer acknowledges that the HRA makes no representations or warranties as to the. 5 conditions of the soils on the Property, its fitness for construction of the Improvements or any other purpose for which the Developer may make use of the Property, or regarding the presence of hazardous wastes on the site. The HRA will allow reasonable access to the Property for the Developer. to conduct such tests regarding soils conditions and hazardous wastes as the Developer may desire. Permission to enter the Property to conduct such tests must be given in writing under the terms and conditions established by the HRA. ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS. Section 4.1. Construction of Improvements.. The Developer shall construct the Improvements on the Property in accordance with the Construction Plans and shall maintain, preserve and keep the Improvements in good repair and condition until sale of the Property to the Homeowner. Section 4.2. Building Plans. No building permit will be issued by the City unless the plans therefore are in conformity with the Developer's Minimum Price, the Redevelopment Plan, the TIF Plan, this Agreement, including the design standards outlined in Exhibit B, and all local, state and federal regulations. The HRA shall, within 25 days of receipt of building plans submitted in application for a building permit, review such plans to determine whether the foregoing require- ments have been met. If the HRA determines such plans to be deficient, it shall notify the Developer in writing stating the deficiencies and the steps necessary for correction. Issuance of the building permit by the City shall be a conclusive . determination that the building plans have been approved and shall satisfy the provisions of this Section 4.2. Section 4.3 Schedule of Construction. Subject to Unavoidable Delays, construction of the Improvements shall be completed prior to Mar. 31, 1992 . 6 All construction shall be in conformity with the approved Construction Plans. Periodically during construction the Developer shall make reports in such detail as may reasonably be requested by the HRA .concerning the actual progress of construction. If at any time prior to completion of construction the HRA has cause to believe that the Developer will be unable to complete construction of the Improvements in the time permitted. by this Section 4.3, it may notify the Developer and demand assurances from the Developer regarding the Developer's construction schedule. If such assurances are not forthcoming or are deemed by the HRA at its sole discretion to be inadequate, the HRA may declare an Event of Default and may avail itself of any of the remedies specified in Section 8.2 of this Agreement. • Section 4.4 Certificate of Completion. Promptly after notification by the Developer. of completion of construction of the Improvements, the HRA shall inspect the construction to determine whether the Improvements have been completed in accordance with the Construction Plans and the terms of this Agreement, including the date for the completion thereof. In the event that the HRA is satisfied with the construction, the HRA shall furnish the Developer with a Certificate of Completion in the form attached hereto as Exhibit A. Such certifi- cation by the HRA shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligation of the Developer to constructrthe Improvements. The certification provided for in this Section 4.4 shall be in recordable form. If the HRA shall refuse or fail to provide certification in accordance with the provisions of this Section 4.4, the HRA shall within 15 days of such notification provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Improvements in 7 accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts~~ will be »e~easary, in the opinion of the HRA, for the Developer to take or perform in order to obtain such certification. Prior to the issuance of :Certificate of Completion, no occupancy of the Impcovea-ents shall be permitted. Due to weather or seasonal considerations, conditional or limited occupancy of the Improvsments may be permitted wader such terms as may be specified by the HRA. Section 4.5 Failure. to Construct. In the event that construction of the Improvements is not completed as provided in Section 4.3 of this Agreement, the Developer shall be liable to the HRA for the amount o! the HRA's expenses as liquidated damages. As security for the obligations created in this Section 4.5 and in Sactioa 3.2, the Developer shall deliver to the HRA at Nosing, an irrevocable letter of credit or other security- satisfactory to the HRA in the amount of ~4 ~ 990.00.. The security ahail be retained by the HRA until the closing on the sale of the Property from the Developer to the Homeowner. Upon receipt by the HRA of the purchase price of the Property, the security will be returned to the Developer and all xiability under this Section 4.S shall terminate. If at any time prior to the issuance of the Certificate of Completion, the HRA dttermines that, for whatever reason the amount of security is inadequate, the HRA shall »otify the Developer of such determination, and the Developer shall have SO days from the date of notification to furnish new security in the original amount less any drafts previously made against it. The provisions of this Section 4.5 shall not be construed to prejudice or limit any~additional rights of tht HRA under Article VIII of this Agreement. 8 ARTICLE V. INSURANCE Section 5.1 Insurance. The Developer will provide and maintain or cause to be provided and maintained at alltimes during the process of constructing the Improvements and, from time to time at the request of the HRA, furnish the HRA with proof of payment of premiums on: (a) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to 100% of the insurable value of the Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy; (b) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's l?olicy with limits ,against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (c) Workers' compensation insurance, with statutory coverage. The policies of insurance required pursuant to clauses (a) and (b) above shall be in form and content satisfactory to the HRA and shall be placed with financially sound and reputable insurers licensed to transact business in Minnesota. The policy of insurance delivered pursuant to clause (a) above shall contain an agreement of the insurer to give not less than thirty (30) days advance notice to the HRA in the event of cancellation of such policy or change affecting the coverage thereunder. Section 5.2. Modification. In order to facilitate obtaining financing for the construction of the Improvements, the.~HRA agrees to modify this Article V to accommodate the interests of the Developer or the Holder of the First Mortgage; provided, however, that the HRA determines, in its reasonable judgment, that any such modification will adequately protect the legitimate interests and security of the HRA with respect to the Improvements. 9 ARTICLE VI. .FINANCING Section 6.1 . Financing. Within 15 days of the date of execution of this ' Agreement, the Developer shall submit to the. HRA evidence. of financing for the Improvements . in compliance with the provisions of Section 2.1(b) of this Agreement. If the HRA finds that the financing is adequate in amount to provide for the construction of the Improvements, the HRA shall notify the Developer of its approval. If the HRA rejects the evidence of financing as inadequate, the Developer shall have 30 days. or such additional period of time as the Developer may reasonably .require from the date of such notification to submit evidence of • financing satisfactory- to the HRA. If the Developer fails to submit such evidence or fails to use due diligence in pursuing financing, the HRA may terminate this Agreement and both parties shall be released from any further obligation or liability hereunder, except for the HRA's remedies pursuant to Section 4.5 of this Agreement. Section 6.2 Limitation Upon Encumbrance of Property. Prior to the issuance of the Certificate of Completion, neither the Developer nor any successor in interest to the Property or any part thereof shall engage in any financing or any other transaction creating any Mortgage or other encumbrance or lien upon the Property, whether by express agreement or operation of law, or suffer any encum- brance or lien to be made- on or attached to the Property other than the liens or encumbrances attached for the purposes of obtaining funds to the extent necessary for making the Improvements without the prior written approval of the HRA. The HRA shall not approve any Mortgage which does not contain terms which conform to the terms of this Article VI and Section 8.2 of this Agreement. 10 Section 6.3 Copy of Notice of Default to Lender. Whenever the HRA shall deliver .any notice or demand to the Developer with respect to any Event of Default by the Developer in its obligations or covenants under this Agreement, the HRA shall at the same time forward a copy of such notice or demand to each Holder of any Mortgage authorized by the Agreement at the last address of such Holder shown in the records of the HRA. Section 6.4 Lender's Option to Cure Defaults. After ,notification of any Event of Default referred to in Section 8.1 of this Agreement, each such Holder, insofar as the rights of the HRA are concerned, shall have the right, at its option, to cure or remedy such Event of Default, or such Event of Default to the extent that it relates to the part of the Property covered by its Mortgage, and to add the • cost thereof to the Mortgage debt and the lien of its Mortgage; provided that if the Event of Default is with respect to construction of the Improvements, nothing contained in this Section 6.4 or any other section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction of the Improvements or .completion- of the Development beyond the extent necessary to conserve or protect Improvements or construction already made without first having expressly assumed the obligation to the HRA, by written agreement, to complete, in the manner provided in this Agreement, the Development or the part thereof to which the lien or title of such Holder relates. Any such Holder who shall promptly complete the Development or appli- cable part thereof shall be entitled, upon written request made to the HRA, to certification by the HRA to such effect in the manner provided in Section 4.4 of this Agreement, and any such certification shall, if so requested by such Holder, mean and provide that any remedies or rights that the HRA shall have or be 11 entitled to because of failure of the Developer or any successor in interest to the Property, or any part thereof, to cure or remedy any Event of Default .with respect to the construction of the Improvements on other parts or parcels of the Property, or because of any other default in or breach of the Agreement by the Developer or such successor, shall not apply to the Property to which such certification relates. Section 6.5 HRA's Option to Cure Default. In the event the Holder of financing authorized pursuant to this Article VI sends a notice of an Event of Default to the Developer,. the Holder shall also use its best efforts. to notify the HRA in writing of; (a) the fact of the default, (b) the elements of the default, and (c) the actions required to cure the default. If the Developer fails to cure the Event of Default in a timely manner or fails to make arrangements satisfactory to • the Holder to cure said default, the HRA shall have 30 days from the expiration of such cure period to cure the default. If the HRA cures the default as set forth above, the Holder shall pursue none of its remedies under the financing based upon the said default of the Developer. In the event of a transfer of the title to the Property to a third party approved by the HRA and Holder, which approval cannot be unreasonably .withheld, regardless of whether required to cure an Event of Default, said transfer shall not constitute an Event of Default under the financing unless the security of the Holder has, in fact, been impaired by said transfer. In the event of such approved transfer which does not impair the security of the Holder, the Holder shall permit the• transferee to .assume all outstanding obligat-ions and receive all remaining disbursements under the financing. Section 6.6 Subordination. In order to facilitate obtaining financing for the construction of the Improvements by the Developer, the HRA shall agree to modify this Agreement in the manner and to the extent it deems reasonable, upon request by the financial institution and the Developer. 12 ARTICLE -VII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1 Representation as to Redevelopment. The Developer represents and agrees that its undertakings pursuant to the Agreement, are for the purpose of development of the Property and not for speculation in landholding. The Developer further recognizes that, in view of the importance of the development of the Property to the general welfare of Richfield and the substantial financing and other public aids that have been made available by the HRA for the purpose of making the Development possible, the qualifications and identity of the Developer are of particular concern to the HRA. The Developer further recognizes that it is because of .such qualifications and identity that the HRA is entering into this Agreement, and, in so doing, is further willing to rely on the representations and undertakings of the Developer for the faithful performance of all undertakings and covenants agreed by the Developer to be performed. Section 7.2. Prohibition Against Transfer of Property and Assignment of Agreement. For the reasons set out in Section 7.1 of this Agreement, the Develop- er represents and agrees that, except for associating with other individuals or entities, prior to the completion of Improvements as certified by the HRA: (a) Except only by way of security for, and only for the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to the Development under this Agreement, and any other purpose authorized by this Agreement, the Developer, except as so authorized, has not made or created, and that it will not make or create, or suffer to be made. or created, any total or partial sale, assignment, conveyance, or any trust or power, or transfer in any other mode or form of or with respect to. this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA; and (b) The HRA shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such approval under this .Section ?.2 that: (i) Any proposed transferee shall have the qualifications and financial responsibility, as determined by the-HRA, necessary and adequate to fulfill 13 the obligations undertaken in this Agreement by the Developer or, in the event the transfer is of or relates. to part of the Property, such obligations to the extent that they relate to such part. (ii) Any proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, shall for itself and its .successors and assigns, and specifically for the benefit of the HRA, have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to such obligations, restrictions and conditions or, in the event the transfer is, of, or relates to part of the Property, such obligations, conditions, and restrictions to the extent that they relate to such part; provided, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property or any part thereof, shall, for whatever reason, not have assumed such obligations or agreed to do so, shall not, unless and only to .. the extent otherwise specifically provided in the. Agreement or agreed to in writing by the HRA, relieve or except such transferee or successor from such obligations, conditions, or restrictions, or deprive or limit the HRA of or with respect to any rights or remedies or controls with respect to the Property or the construction of the Improvements; it .being the intent of this Section 7.2, together with other provisions of this Agreement, that to the fullest extent permitted by law and equity and excepting only in the manner and to the extent specifically provided otherwise in the Agreement no transfer of, or change with respect to, ownership in the Property or any .part. thereof, or any interest therein, however consummated or occurring, whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit .the HRA, of any rights or remedies or controls provided in or .resulting from this Agreement with respect to the Property and the eon- -- struction of the Improvements that the HRA would have had, had there been no such transfer or change. (iii) There shall be submitted to the HRA for review all instruments and other legal documents involved in effecting ' transfers described herein, and if approved by the HRA, its approval shall be indicated to the Developer in writing. In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA thereof shall be deemed to relieve the Developer from any of its obligations with respect thereto. The sale of the Development to the Homeowner shall not be deemed to be a transfer within the meaning of this Section 7.2. .~ Section 7.3 Approvals. Any approval required to be given by the HRA under this Article VII may be denied only in the event that the HKA reasonably determines that the ability of the Developer to perform its obligations under this Agreement will be materially impaired by the action for which approval is sought. 14 ARTICLE VIII. EVENTS OF DEFAULT Section 8.1 Events of Default Defined. The following shall be deemed Events of Default under this Agreement and the term shall mean, whenever it is used in this Agreement, unless. the context otherwise provides, any one or more of the following events: (s) Failure by the Developer to pay when due the payments required to be paid or secured under any provision of this Agreement; (b) Failure by the Developer to observe .and substantially perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder; (c) If the Developer shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the Property; (d) If .the Developer, on a petition in bankruptcy filed against it, be adjudicated a bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of the Developer, a receiver of the Developer or of the whole or substantially ell of its property, or approve a petition filed against the Developer seeking reorganization or arrangement of the Developer under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or stayed within 60 days from the date of entry thereof; or (e) If the Developer is in default under any Mortgage and has not entered into awork-out agreement with the Mortgagee. Section 8.2. Remedies on Default. Whenever any Event of Default occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, take any one or more of the following actions: (a) suspend its performance under this Agreement until it receives assurances from the Developer, deemed reasonably adequate by the HRA, that the Developer will cure its default and continue its performance under this Agreement; (b) cancel or rescind this Agreement; (c) withhold the Certificate of Completion; or 15 (d) take whatever action at law or in equity may appear necessary or desirable to the HRA to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement; provided, however, that any exercise by the HRA of its rights or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any Mortgage authorized by this Agreement and (b) any rights or interests. provided in this Agreement for the protection of the Holders of a Mortgage; and provided further that should any Mortgagee succeed by foreclosure of the Mortgage or deed in lieu thereof to Developer's interest in the Property, it shall, notwithstanding the foregoing, be obligated to perform the following obligations of the Developer only to the extent that the same have not theretofore been performed by the Developer: Sections 3.2 • and 3.5, Sections 4.1 through 4.5; Sections 5.1 and 5.2. Said Mortgagee, upon foreclosure or taking of a deed in lieu, shall have no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. Section 8.3. Reinvesting Interest in HRA Upon Happening of Event of Default Subsequent to Conveyance of Property to Developer. In the event that subsequent to the closing or the sale of the Property to the Developer and prior to the issuance of the Certificate of Completion: (a) the Developer fails to begin construction of the Improvements in conformity with this Agreement, and such failure is not due to Unavoidable Delays; (b) the Developer, after commencement of the construction of the Improvements, defaults in or violate is obligations with respect to the construction of the Improvements, including the nature and the. date for-the completion thereof, or abandons or substantially suspends construction work, and such act or actions is not due to Unavoidable Delays; (c) the- Developer or successor in interest fails to pay real estate taxes or assessments on the Property or any part thereof when due, or places thereon any encumbrance or lien unauthorized by this Agreement, or suffers any levy or attachment to be made, or any materialmen's or mechanic's lien, or any other unauthorized encumbrance or lien to attach; 16 (d) there is, in violation of Article VII of this Agreement, any transfer of the Property or any part thereof; or (e) the Developer fails to comply with any of its covenants under this Agreement, then the HRA shall have the right upon 30 days written notice to Developer and the Developer's failure to cure within .such 30 day period to re-enter and take possession of the Property and to terminate and revest in the HRA the interest of the Developer in the Property;. provided, however, that such revestiture of title shall be subject to the lien of any prior encumbrance permitted under this Agreement. Section 8.4 No Remedy Exclusive. No remedy- herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or • remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at -law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.5 No Additional Waiver Implied by One Waiver. In the event of the occurrence of any Event of Default by either party, which Event of Default is thereafter .waived by the other party, such waiver shall be limited to the particular Event of. Default so waived and shall not be deemed~to waive any other concurrent, previous or subsequent Event of Default. 17 ARTICLE IX. ADDITIONAL PROVISIONS Section 9.1 Conflict of Interests; Representatives Not Individually Liable. No HRA officer who is authorized to take .part in any. manner in making this Agreement in his or her official capacity shall voluntarily have a personal financial interest in this Agreement or benefit financially therefrom. No member, official, or employee of the HRA shall be personally .liable to the Developer, or any successor in interest, for any Event of Default by the HRA or for any amount which may become due to 'the Developer or successor or on any obligations under the terms of this Agreement. Section 9.2 Non-Discrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and non-discrimination, and any affirmative action program of the City shall be considered a part of this Agreement and binding on the Developer as though fully set forth herein. Section 9.3 Notice of Status and Conformance. At such time as all of the provisions of this Agreement have been fully performed by the Developer, the HRA, upon not less than ten days prior written notice by the Developer, agrees to execute, acknowledge and deliver, without charge to the Developer or to any person designated by the Developer, a statement in writing in recordable form certifying the extent to which this Agreement has been performed and the obliga- lions hereunder satisfied. Section 9.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is sent by mail, postage prepaid, return receipt requested or delivered personally: 18 (a) As to the City: Richfield HRA Executive Director 6700 Portland Avenue Richfield, Minnesota 55423. (b) As to the Developer: RSM Homes Inc.. 16817 Duluth Ave. S.E.' Prior Lake. MN 55372 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 9.4. Section 9.5 Provisions not Merged with Deed. None of the provisions of this Agreement is intended to or shall be merged by reason of any deed transferring any • interest in the .Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.6 Counterparts. This Agreement may be simultaneously executed in any ,number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly exe- cuted in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly executed as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By CRAFT Its Chairperson CRAFT . By Its Executive Director 19 RSM Homes, Inc. ~~~~ sy Its President By Its RC125-041 STATE OF MINNESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1991, by Thomas E. Harms and James D. Prosser, the Chairperson • and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a body corporate and politic, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) ss COUNTY OF ) .~ The foregoing instrument was acknowledged before me this day of 1991, by and ,the and respectively, of , on behalf of the corporation. Notary Public 20 EXHIBIT A PORM OF CERTIFICATE OP COMPLETION The undersigned hereby certifies that has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development," dated between the Housing and Redevelopment Authority in and for the .City of Richfield, Minnesota with respect to construction of the Improvements in accordance with the approved construction plans and is released and forever discharged from its obligations to construct under such above-referenced Article. DATED: By Its Chairperson ey Its Executive Director EXHIBIT B DESIGN GUIDELINES Housing Desictn and Site Development Criteria Siding materials, exterior facade presentation, roof, window., siding and building line variability, finished landscape, interior space function and use are all important considerations. The development of all sites shall meet the development objectives listed below. The guidelines were created to insure that the homes built on the identified lots blend in with the surrounding neighborhood and respond to specific concerns of the HRA. 1. General: a. Each home shall be single-family, owner occupied. b. The value of each new home must meet or exceed the value specified for each property in the development agreement.. 2. Site Standards: a. The entire grounds shall be finish landscaped to be aesthetically pleasing in all seasons. Land forms and plants materials shall be used to define the site and - blend with adjoining property. b. Utility meters shall be screened from street view; locations must be specified on plans. c. Site drainage shall be accommodated on the site so that water is directed away from the new home and the neighboring properties. Neighboring properties should not be disturbed to create drainage swales. d. Existing trees shall be preserved when possible. Care should be taken to preserve existing root systems. A tree. wrap, with board reinforcement shall be used on trees directly adjacent to active grading and construction areas. e. The construction. site, neighboring property and adjacent public streets-shall be kept free of construction debris at all times. . f. All air conditioning units must be located in the rear yard of the house. g. Egress window area well foundations must meet side setback requirements (be a minimum of 5' from the property line), or be located in the rear yard of the house. h. No construction workers, construction equipment or construction material shall enter neighboring properties. 3. Building Standards: a. Three and four bedroom homes are preferred. However, a minimum of two finished bedrooms and easily finished space for a third bedroom will be acceptable. b. Two full bathrooms are preferred. However, a minimum of one full bath and a 1/2 bath roughed-in will be acceptable. c. A two car garage, attached or detached, must be provided on the site for single family detached units. d. Exterior materials (siding, soffit, doors and windows), should be low maintenance. Aluminum and vinyl are preferred. Natural cedar lap is acceptable if properly stained or painted. Hardboard panels or hardboard lap siding, are not acceptable. e. Unit height and mass of the new homes shall be compatible with the scale of the surrounding neighborhood. f. Plans must present a balanced and pleasing distribution of wall and window areas from all views. -g. A full basement shall be provided in the house unless the selected design results in a split level, garden level type of basement. h. All building plans must have been prepared in consultation with an Architectural Designer with a minimum two year technical degree. An Architect may also be consulted. i. All construction must conform to the Sound Attenuation Building Standards for properties located in 65-69 and 70-74 Ldn zones. A copy of the Sound Attenuation Building Standards Specifications will be provided to developers building in those zones. ._ -««w..s~at-ourTeu-wo[[a . tewwtaas~ r Iptwnw~p r Ce.votww~ «Irt,ts.~ts rr~..a. v.rr.r. c.......w ar..a. ue+n EXHIBIT C No delinquent ease[ and tranafet entered; Certtfia4 of Aeal Estate Value ( ) toted ( )not required Certificate of Real Estate Valw No. X19 by County Auditor ' STATE DEED TAX DUE HEREON: _ Date: ~ 19 _, fOR VALUABLE CONSIDERATION, the Nousin and R dev the City of Richfield, Minnesota ,a tublie body eoreorat ayo~Q sof Min^~•^~~ ,Grantor, hereby conveys and quitclaims to Grantct, • ttndcr the laws of .real property in County, Minnesota, described v foUow[: (insert legal description of Property prior to execution) IN nqr. qb M rr~tl.0, asntwtn M b.ek) together with aU hereditaments and appurtenaroes belot~iny thereto. 1{t x U!~rtJ Taa Stamp Nrrr 8y lta t_hairneraen STATE OF MINNESOTA COUNTY OF By lta Fs.~utty. nir.~rnr ~m The foreyoin~ was ac><nowledied before me this day of .19_ , by Thomas Har,n~ and Names Pzosser the Chairperson acrd Executive Dizectoz of tsnder the law c ~ nneso a . a public body eoraorate and oolitic on behalf of ttt HW- woraaiwi [rwia'oi stwi coa or~cu seita oa aw>Rr aoxarvas or nsaox r.ssaro •eorowLaaorrarrr ~itirt t. 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