02-20-2018 Complete AgendaR E G U LAR H O U S IN G AN D R E D E V E LO P ME N T AU TH O R ITY ME E TIN G
R IC H F IE L D MU N IC IPAL C E N TE R, C O U N C IL C H AMB E R S
F E B R U ARY 20, 2018
7:00 P M
C all to Order
Approval of the Minutes
A pproval of the minutes of the regular Housing and Redevelopment A uthority meeting of J anuary 16, 2018.
P R E S E N TATIO N S
1.2017 HRA /E D A Year in Review
AG E N D A APPR O VAL
2.A pproval of the A genda
3.Consent Calendar 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 onsideration of the approval of a resolution authorizing the purchase of 7300 P ortland Avenue.
S taff Report No. 5
4.C onsideration of items, if any, removed from C onsent C alendar
R E S O L U T IO N S
P U B LIC H E AR IN G S
5.P ublic hearing and consideration of the approval of a resolution authorizing the sale of 6345 B loomington Avenue
to E ndres C ustom Homes and the approval of a C ontract for P rivate D evelopment with E ndres C ustom Homes
for the construction of a single family home through the Richfield Rediscovered P rogram.
S taff Report No. 6
O T H E R B U S IN E S S
6.C onsideration of a settlement of a Housing and Redevelopment A uthority D eferred L oan at 6500 Woodlake
D rive, Unit #405.
S taff Report No. 7
H R A D IS C U S S IO N ITE MS
7.HRA D iscussion Items
E X E C U T IV E D IR E C TO R R E P O R T
8.E xecutive D irector's Report
C LAIMS AN D PAYR O L LS
9.C laims and P ayrolls
10.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.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
January 16, 2018
CALL TO ORDER
The meeting was called to order by Chair Supple at 7:00 p.m.
HRA Members Mary Supple, Chair; Pat Elliott; Michael Howard; Sue Sandahl and Erin
Vrieze Daniels.
Staff Present: Steve Devich, Executive Director, Julie Urban, Housing Manager and Kate
Aitchison, Housing Specialist.
CONSIDERATION OF THE ELECTION OF OFFICERS FOR THE RICHFIELD HOUSING AND
REDEVELOPMENT AUTHORTY
Chair Supple opened nominations.
M/Sandahl, S/Vrieze Daniels to elect Mary Supple to serve as Chairperson.
Motion carried 5-0.
M/Howard, S/Vrieze Daniels to elect Pat Elliott to serve as Vice Chairperson.
Motion carried 5-0.
M/Elliott, S/Sandahl to elect Erin Vrieze Daniels to serve as Secretary.
Motion carried 5-0.
APPROVAL OF THE MINUTES OF THE REGULAR HRA MEETING OF DECEMBER 18, 2017
M/Elliott, S/Vrieze Daniels to approve the minutes of the December 18, 2017 regular
Housing and Redevelopment Authority meeting.
Motion carried 5-0.
Item #1
HRA APPROVAL OF THE AGENDA
M/Sandahl, S/Elliott, to approve the agenda.
HRA Meeting Minutes -2- January 16, 2018
Motion carried 5-0.
Item #2
CONSENT CALENDAR
Executive Director Devich Presented the Consent Calendar
A. Consideration of the approval of resolutions designating official depositories for the
Housing and Redevelopment Authority for 2018, including the approval of collateral.
(SR No. 2)
B. Consideration of the approval of designating the Community Development Director as
the Acting Executive Director of the HRA for 2018 in the event the Executive Director is
absent from the City (SR No. 3).
M/Elliot, S/Sandahl, to approve the consent calendar.
Motion carried 5-0.
Item #4
PUBLIC HEARING AND CONSIDERATION OF THE APPROVAL OF A
RESOLUTION AUTHORIZING THE SALE OF 6525 15TH AVENUE TO ENDRES
CUSTOM HOMES AND THE APPROVAL OF A CONTRACT FOR PRIVATE
DEVELOPMENT WITH ENDRES CUSTOM HOMES FOR THE CONSTRUCTION OF
A SINGLE FAMILY HOMES THROUGH THE RICHFIELD REDISCOVERED
PROGRAM
Housing Specialist Kate Aitchison presented Staff Report 4.
Commissioner Elliott asked concerns of a resident that had recently been raised regarding
prior issues on the site. Executive Director Devich stated that there will not be similar problems
during the construction of this new home.
Commissioner Vrieze Daniels asked for clarification on the Contract for Private
Development’s language regarding garage door dominance. Housing Specialist Aitchison
responded.
Chair Supple opened the public hearing.
M/Elliott, S/Sandahl to close the public hearing.
Motion carried 5-0.
M/Howard, S/Elliott to approve of a resolution authorizing the sale 6525 15th Avenue to
Endres Custom Homes.
Motion carried 5-0.
Item #4
HRA DISCUSSION ITEMS
HRA Meeting Minutes -3- January 16, 2018
Commissioner Elliott asked about the timing of a potential development with Therapy of
Champions on East 66th Street. Executive Director Devich stated that he doesn’t have an update.
Item #5
EXECUTIVE DIRECTOR REPORT
Executive Director Devich stated that he has nothing to report.
Item #6
CLAIMS AND PAYROLL
M/Elliott, S/Sandahl, that the following claims and payroll be approved:
U.S. BANK 1/15/18
Section 8 Checks: 129382 - 129464 $146,126.70
HRA Checks: 33363 - 33394 $ 125,857.20
TOTAL $271,983.90
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:13 p.m.
Date Approved: February 20, 2018
Mary B. Supple
HRA Chair
Kate Aitchison Steven L. Devich
Housing Specialist Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #3.A.
S TAFF REPORT NO. 5
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
2/20/2018
RE P O RT P RE PA RE D B Y: K ate A itchison/C eleste McD ermott, Housing S pecialists
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
2/14/2018
O THE R D E PA RTM E NT RE V IE W: N/A
C ITY MA NA G E R RE V IE W: S teven L . D evich, E xecutive D irector
2/14/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of the approval of a resolution authorizing the purchase of 7300 Portland Avenue.
E X E C UT IV E S UM M ARY:
The owner of 7300 Portland Avenue has expressed an interest in selling the property to the Housing and
Redevelopment Authority (HRA). The 864 square-foot house and detached one-car garage was appraised on
behalf of the HRA at $155,000. A sale price of $141,000 was agreed upon with the seller. Closing would occur
by March 31, 2018.
The small, substandard structure has a non-conforming front setback and is a prime candidate for
redevelopment under the New Home program. Most of the homes in this area have a front set-back of 31 feet
from the property line; however, the home at 7300 Portland is set directly on the front property line on
Portland Avenue (a zero-foot set-back). I n addition, the lot is only 47 feet wide, making market-rate new
construction difficult. Under this program, the HRA would demolish the existing structure and construct a new
home to be sold to income-eligible buyers. A partnership with Twin Cities Habitat for Humanity or the West
Hennepin Affordable Housing Land Trust may be explored.
I n 2015, staff attempted to purchase the foreclosed property through an auction site but was unsuccessful. An
investor purchased it, made cosmetic improvements and re-sold it. The house is now for sale again.
The house was recently evaluated and determined to meet the structurally substandard criteria necessary for
acquisition. The HRA would acquire the property for short-term holding. Staff will explore the opportunity to
rent the home for short-term use (contingent upon necessary upgrades as deemed by the I nspections
Department) but would hold the property with long-term plans to demolish it for redevelopment.
RE C O M M E ND E D AC T I O N:
By motion: Approve a resolution authorizing the purchase of 7300 Portland Avenue.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
The 864 square-foot house was built in 1940. I t has two small bedrooms, one bathroom, and a
newly constructed single-car detached garage.
I n 2015, the property was listed on Auction.com. HRA staff attempted to purchase the home for
$85,000. During staff's attempts to purchase this home, a substandard inspection was conducted,
and the home qualified for redevelopment. Unfortunately, the HRA's offer was not accepted and
an investor bought the property.
During 2015-2016 the home received some modest improvements. The improvement which added
the most value to the property was the addition of a new single-car garage on the property. I f
acquired, the HRA would explore the re-use of the garage. Other improvements include window
replacement, minor bathroom upgrades, and a new boiler.
One year ago, the current seller purchased the home for $136,500. I n December he was
abruptly relocated to the east coast and now desires to sell the property to the HRA. I n order to
cover his costs, he has negotiated a sale price of $141,000.
A new independent substandard evaluation was recently conducted and concluded that despite
cosmetic improvements, the house is still structurally and functionally substandard, containing
many code and structural deficiencies that would be difficult to correct. I n addition, given the zero-
foot front setback, the existing structure doesn't warrant further reinvestment.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The 2008-2018 Richfield Comprehensive Plan states as policy:
Encourage the creation of “move-up” housing through new construction and home
remodeling.
Promote the development of a balanced housing stock that is available to a range of income
levels
T hrough the City’s New Home Program, the HRA purchases and renovates or rebuilds
substandard and functionally obsolete housing to replace it with newer, higher valued
homes that are sold to income-qualified buyers.
C.C R IT IC AL T IMIN G IS S U E S:
The Property is currently vacant, and the owner resides in a different state. He is eager to sell in
order to avoid accruing additional holding costs.
Under the purchase agreement, closing would occur by March 31, 2018.
D.F IN AN C IAL IMPAC T:
Funds are available in the Housing and Redevelopment Fund for acquisition.
The property is more expensive than what is typical for the HRA to pay under the New Home
Program; however, its location on the front setback, its small size and structural issues, and its
frequent change in ownership make it an appropriate acquisition candidate by the HRA.
E.L E GAL C ON S ID E R AT ION:
The purchase agreement has been reviewed by legal counsel.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Decide not to authorize purchase of the property.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
P urchase A greement 7300 P ortland C ontract/A greement
P hoto - 7300 P ortland B ackup Material
A erial P hoto - 7300 P ortland B ackup Material
HRA RESOLUTION NO. ________
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 7300 PORTLAND AVENUE
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (“the HRA”) desires to purchase certain real property pursuant to and
in furtherance of the Richfield Rediscovered Program, said property being described as:
7300 Portland Avenue
Legal: Lot 1, Block 1, Blairs Wooddale Third Addition, together with that part of the
vacated alley which accrued thereon upon the vacation thereof, Hennepin County,
Minnesota.
WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to
acquire real property within its area of operation; and
WHEREAS, Housing and Redevelopment Fund money is available for acquisition
purposes.
NOW THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority in and for the City of Richfield:
1. The purchase price for the property is approved at $141,000 plus closing
costs, not to exceed $145,000.
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 on this 20th day of February, 2018.
_______________________
Mary B. Supple, Chair
ATTEST:
_______________________
Erin Vrieze Daniels, Secretary
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315418v3 CBR RC125-41
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the “Agreement”)is made as of this day of
_______________, 20__, by and between Jimmy Tan,single ("Seller"),and the Housing and
Redevelopment Authority in and for the City of Richfield ,a public body corporate and politic
under the laws of the State of Minnesota (“Buyer”).
RECITALS
Seller is the owner of property located at 7300 Portland Avenue South,Richfield,
Minnesota, which is legally described on the attached Exhibit A ("Property").
The Property includes includes all plants, shrubs and trees, storm windows and/or inserts,
storm doors, screens, awnings, window shades, blinds, curtain-traverse-drapery rods, attached
lighting fixtures with bulbs, plumbing fixtures, water heater, heating system, humidifier, central
air conditioning, electronic air filter, automatic garage door opener with controls, water softener,
cable television outlets and cabling, and built-ins, including dishwasher, garbage disposal, trash
compactor, oven(s), cook top stove, microwave oven, hood-fan, intercom and installed carpeting
located on the premises which are the property of Seller. The property also includes the
following personal property:NONE. Seller is responsible for removal of all personal property.
Seller may remove the following items, provided Seller does not cause any unnecessary damage
to the Property:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
AGREEMENT
1.Offer/Acceptance for Sale of Property.The Seller agrees to sell to Buyer the
Property and Buyer agrees to purchase the same, according to the terms of this Agreement.
2.Purchase Price for Property and Terms.
A.PURCHASE PRICE:The total purchase price for the Property is One
hundred and forty-one thousand and 00/100ths Dollars ($141,000)(the
“Purchase Price”).
B.TERMS:
(1):EARNEST MONEY.The sum of zero Dollars ($0.00)(the “Earnest
Money”)shall be paid by Buyer to Seller.
(2):BALANCE DUE SELLER.Buyer agrees to pay by check or electronic
transfer of funds on the date of closing on the Property (the “Closing
Date”)any remaining balance of the Purchase Price due to Seller
accordin g to the terms of this Agreement.
2
315418v3 CBR RC125-41
(3):DEED/MARKETABLE TITLE.Subject to performance by Buyer,Seller
agrees to execute and deliver a Warranty Deed or Personal
Representative’s 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.
c.Public utility and drainage easements of record which will not
interfere with Buyer’s intended use of the Property.
(4):DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER.In
addition to the Warranty Deed required at paragraph 2B(3) above,Seller
shall deliver to Buyer:
a.Standard form Affidavit of Seller.
b.A “bring-down” certificate, certifying that all of the warranties made
by Seller in this Agreement remain true as of the Closing Date.
c.Certificate that Seller is not a foreign national.
d.If an environmental investigation by or on behalf of Buyer discloses
the existence of petroleum product or other pollutant,contaminant
or other hazardous substance on the Property, either (i) a
closure letter from the Minnesota Pollution Control Agency
(MPCA) or other appropriate regulatory authority that remediation
has been completed to the satisfaction of the MPCA or other
authority; or (ii) Agreement for remediation/indemnification and
security as Buyer may require.
e.Well disclosure certification, if required, or, if there is no well on the
Property, the Warranty Deed or Per sonal Representative’s Deed
given pursuant to paragraph 2B(3) above must include the
following statement:“The Seller certifies that Seller does not know
of any wells on the described real property.”
If Seller is unaware of the location of a well and there is a building
permit issued for the Property prior to installation of a City water
system, Buyer agrees to have a licensed well contractor examine
the Property for purposes of locating a well and assumes
responsibility for sealing the well at Buyer’s ex pense.
3
315418v3 CBR RC125-41
f.Any other documents reasonably required by Buyer’s title insurance
company or attorney to evidence that title to the Property is
marketable and that Seller has complied with the terms of this
Agreement.
3.Contingencies.Buyer's obligation to buy is contingent upon the following:
a.Buyer's determination of marketable title pursuant to paragraph 4 of this
Agreement;
b.Buyer’s determination, in its sole discretion, that the results of any
environmental investigation of the Property conducted pursuant to this
Agreement are satisfactory to Buyer;
c.The parties acknowledge that the Richfield zoning ordinance requires that lots
in the R district meet certain minimum lot width, and area requirements. If
these standards are not met, one or more variances will be necessary prior to
construction of a new dwelling on the property. If the City of Richfield does
not issue all variances necessary to make the property a buildable lot within
the meaning of the zoning ordinance,Buyer at its sole discretion may cancel
this Agreement;and
d.Approval of this Agreement by Buyer’s Board.
Revise if paragraph c is deleted:
Buyer shall have until the Closing Date to remove the foregoing contingencies. The
contingencies at a.,b.,and c. are solely for the benefit of Buyer and may be waived by Buyer. The
contingency at d. may not be waived by either party. If Buyer or its attorney gives written notice to
Seller that the contingencies at a., b.,c.,and d.are duly satisfied or waived,Buyer and Seller shall
proceed to close the transaction as contemplated herein.
If one or more of Buyer’s or Seller’s contingencies is not satisfied, or is not satisfied on time, and is
not waived, this Agreement shall thereupon be void at the written option of Buyer and Seller shall
return the Earnest Money, if any,to Buyer, and Buyer and Seller shall execute and deliver to each
other a termination of this Agreement. As a contingent Agreement,the termination of this
Agreement is not required pursuant to Minnesota Statutes, Section 559.21,et. seq.
4.Title Examination/Curing Title Defects.As soon as reasonably possible after
execution of this Agreement by both parties,
(a)Seller shall surrender any abstract of title and a copy of any owner’s title
insurance policy for the property, if in Seller’s possession or control, to Buyer or to Buyer’s
designated title service provider; and
4
315418v3 CBR RC125-41
(b)Buyer shall obtain the title evidence determined necessary or desirable by Buyer.
The Buyer shall have 20 days from the date it receives such title evidence to r aise any
objections to title it may have. Objections not made within such time will be deemed waived.
The Seller shall have 90 days from the date of such objection to affect a cure; provided, however,
that Seller shall have no obligation to cure any objections, and may inform Buyer of such. The
Buyer may then elect to close notwithstanding the uncured objections or declare this Agreement
null and void, and the parties will thereby be released from any further obligation hereunder.
5.Environmental Investigation.The Seller warrants that the Property has not
been used for production, storage, deposit or disposal of any toxic or hazardous waste or
substance, petroleum product or asbestos product during the period of time Seller has owned the
Property. The Seller further warrants that Seller has no knowledge or information of any fact
which would indicate the Property was used for production, storage, deposit or disposal of any
toxic or hazardous waste or substance, petroleum product or asbestos product prior to the date
Seller purchased the Property. Notwithstanding the above,Seller's warranty regarding petroleum
products does not preclude the presence of heating oil or other similar products used as a heating
fuel for the dwelling but Seller does warrant that if there was a fuel tank on the Property used for
the storage of heating oil or other similar product,Seller has no knowledge of any leak in the
tank or contamination caused thereby.
Seller hereby grants to Buyer and Buyer's agents a license to enter and evaluate the Property for
the purpose of conducting an environmental assessment. The Buyer is required to perform an
environmental assessment prior to committing federal Community Development Block Grant
(CDBG) funds. Further,Buyer or Buyer's agent shall have the right pursuant to the license to
bring persons and equipment onto the Property, make inspections and perform tests and analyses
as Buyer may deem reasonable to determine the presence of any toxic or hazardous waste,
substance, or petroleum product or asbestos product, and ascertain soil conditions on the
Property. Buyer shall bear the cost of the environmental assessment. If the results of the
environmental assessment are not to the satisfaction of Buyer, including a release from
environmental conditions related to the commitment and expenditure of CDBG funds,Buyer at
its sole discretion may cancel this Agreement. If Buyer cancels this Agreement pursuant to this
provision,Buyer shall restore the Property to its original condition or nearl y so as is reasonably
practicable.
6.Real Estate Taxes and Special Assessments.Real estate taxes payable in the
year of closing will be pro-rated between Buyer and Seller to the Closing Date. Seller shall pay all
real estate taxes payable in previous years, the entire unpaid balance of special assessments,and
all installments of special assessments levied and pending, including special assessments
installments payable after the year of closing.Seller also agrees to pay all assessments related to
service charges furnished to the Property prior to the Closing Date (e.g.,delinquent water or sewer
bills, removed or diseased trees), including those charges levied, pending, or certified to taxes
payable in the year of closing.If closing occurs prior to the date the amount of real estate taxes
due in the year of closing are available from Hennepin County, the current year’s taxes will be
pro-rated based on the amount due in the prior year.
5
315418v3 CBR RC125-41
7.Closing Date.The Closing Date will be on or before March 31, 2018.Delivery
of all papers and the closing shall be made at the offices of Buyer,6700 Portland Avenue South,
Richfield, Minnesota 55423, or at such other location as is mutually agreed upon by the
parties. All deliveries and notices to Buyer shall be made to the above address and marked to the
attention of Housing Specialist.
8.Possession/Utilities/Removal of Property/Escrow.
(a)Possession.The Seller agrees to deliver possession not later than the Closing
Date.
(b)Utilities.City water and sewer charges, electricity and natural gas charges, fuel
oil and liquid petroleum gas shall be pro-rated between the parties as of the Closing Date.Seller
shall arrange for final readings as of the Closing Date.
(c)Personal Property.The Seller agrees to remove all debris and all personal
property not included herein from the Property before the possession date. Personal property not
so removed shall be deemed forfeited to and shall become the property of Buyer. The Buyer
may inspect the Property immediately prior to closing and deduct from the purchase price
payable at closing an amount reasonably necessary to pay for the cost of removal of any debris
or personal property then remaining on the Property. The provisions of this paragraph shall not
merge with the deed and shall survive closing on the property.
(d)Escrow.Seller agrees that, at closing,Buyer may retain Five Hundred Dollars
($500.00)from the purchase price for the Property as an Escrow for payment of personal
property removal, disposal ch arges and utility charges. The retained amount, less deductions
provided for this in paragraph 8, will be delivered to Seller no later than 60 days following the
Closing Date or delivery of possession, whichever is later. Said funds shall be held by Kennedy &
Graven, Chartered,as Escrow Agent, pursuant to the terms of the Escrow Agreement attached
here as Exhibit C.
(e)Amounts Due.The Buyer’s ability to deduct amounts due under this paragraph from
the retained escrow is not exclusive but is in addition to Buyer's rights at law and equity to collect such
amounts from Seller. The Seller is responsible for the amounts due under this paragraph even if: (i)Buyer
neglects to deduct the amount from escrow; or (ii)the escrowed amount is insufficient to pay all
amounts due under this paragraph 8.
9.Seller Warranties .
(a)Sewer and Water. Seller warrants that the Property is connected to City
sewer and City water.
(b)Mechanics' Liens.Seller warrants that, prior to the closing, Seller shall pay in full
all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days
immediately preceding the closing in connection with construction, alteration or repair of any
structure upon or improvement to the Property.
6
315418v3 CBR RC125-41
(c)Notices.Sell er warrants that it has not received any notice from any
governmental authority as to violation of any law, ordinance or regulation in connection with the
Property.
(d)Tenants.Seller warrants that the Property is not now occupied by tenants and
was not occupied by tenants at the time Seller first received Buyer's written offer to purchase the
Property.
(e)Broker Commission.Each party represents to the other that it has not utilized the
services of any real estate broker or agent in connection with this Agreement or the transaction
contemplated by this Agreement. Each party agrees to indemnify, defend, and hold harmless the
other party against and in respect of any such obligation and liability based in any way upon
agreements, arrangements, or understandings made or claimed to have been made by the party
with any third person.
(f)Structures.The Seller warrants that the buildings,if any, are entirely within the
boundary lines of the Property. The parties acknowledge that the Property is being sold in "as is"
condition relating to the structural, operational, and mechanical systems.
10.Closing Costs/Recording Fees/Deed Tax.The Buyer will pay: (a) the closing fees
charged by the title insurance or other closing agent, if any, utilized to close the
transact ion contemplated by this Agreement; (b)fees for title evidence obtained by Buyer; and (c)
the recording fee for the deed transferring title to Buyer. Seller will pay all other fees normally paid
by sellers, including (a) any transfer taxes,recording fees and Well Disclosure fees required to
enable Buyer to record its deed from Seller under this Agreement, and (b)fees and charges related
to the filing of any instrument required to make title marketable. Each party shall pay its own
attorney fees.
11.Inspections.From the date of this Agreement to the Closing Date,Buyer, its
employees and agents, shall be entitled to enter upon the Property to conduct such surveying,
inspections, investigations, soil borings and testing, and drilling, monitoring,sampling and
testing of groundwater monitoring wells, as Buyer shall elect; provided, that Seller is given at least
24 hours’ notice.
12.Risk of Loss.It there is any loss or damage to the Property between the date
hereof and the Closing Date, for any reason including fire, vandalism, flood, earthquake or act of
God, the risk of loss shall be on Seller.If the Property is destroyed or substantially damaged
before the closing date, this Agreement shall become null and void, at Buyer’s option. At the
request of Buyer,Seller agrees to sign a cancellation of Agreement.
13.Default/Remedies.If Buyer defaults in any of the covenants herein,Seller may
terminate this Agreement, and on such termination all payments made hereunder shall be
retained by Seller as liquidated damages, time being of the essence. This provision shall not
deprive either party of the right to enforce specific performance of this Agreement, provided this
Agreement has not terminated and action to enforce specific performance is commenced within
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315418v3 CBR RC125-41
six months after such right of action arises. In the event Buyer defaults in its performance of the
terms of this Agreement and Notice of Cancellation is served upon Buyer pursuant to Minn.Stat.
Section 559.21, the termination period shall be thirty (30) days a s permitted by Minn.Stat.,
Section 559.21, Subd. 4.
14.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 personally served upon one of the following indicated recipients for notices or is deposited in
the United States Mail, registered or certified, return receipt requested, postage prepaid and
addressed as follows:
SELLER:Jimmy Tan
PO Box 54952
Richfield, MN 55423
BUYER:Housing and Redevelopment Authority of the City of Richfield
Attn:Housing Specialist
6700 Portland Avenue South
Richfield, MN 55423
AGENT:Kennedy & Graven, Chartered
ATTN:Julie Eddington and
Catherine B. Rocklitz
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
15.Entire Agreement.This Agreement, Exhibits, and other amendments signed by
the parties, shall constitute the entire Agreement between Seller and Buyer and supersedes any
other written or oral agreements bet ween the parties relating to the Property. This Agreement
can be modified only in a writing properly signed on behalf of Seller and Buyer.
16.Survival.Notwithstanding any other provisions of law or court decision to the
contrary, the provisions of this Agreement shall survive closing.
8
315418v3 CBR RC125-41
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and
year above.
Buyer:
Housing and Redevelopment Authority of the
City of Richfield
By: ________________________________
Its Chair
And by: _____________________________
Its Executive Director
Seller:
________________________________
________________________________
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315418v3 CBR RC125-41
EXHIBIT A
Legal Description of Property
Lot 1, Block 1,Blairs Wooddale Third Addition, together with that part of the vacated alley
which accrued thereon upon the vacation thereof, Hennepin County, Minnesota.
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315418v3 CBR RC125-41
EXHIBIT B
Escrow Agreement
THIS AGREEMENT entered into this ______day of ____________,20__,by and
between Jimmy Tan ("Seller"), the HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD,a Minnesota municipal corporation (“Buyer”), and
KENNEDY &GRAVEN, CHARTERED (“Escrow Agent” or “Agent”).
RECITALS
A.Seller and Buyer have entered into a Purchase Agreement dated _____________,
20__(“Purchase Agreement”) for the sale of property located at 7300 Portland
Avenue, Richfield,Minnesota and legally described on the attached Exhibit One
(the ("Property").
B.The parties desire to close the sale of the Property on _____________.
AGREEMENT
The parties agree as follows:
1.Delivery of Possession.Seller shall deliver possession of the Property to Buyer in
accordance with the Purchase Agreement entered into by the parties. The
Purchase Agreement requires Seller to pay all utilities and to remove all personal
property from the Property upon closing.
2 .Escrow.(a) Upon closing and execution of this Agreement, Seller agrees to
deposit into escrow the sum of $500.00 (the “Escrowed Funds”) from the purchase
price, to be held by Agent in a non-interest bearing account.
(b)Within 7 days after requested by Agent, Buyer shall provide to Agent (with
copy to Seller) evidence of expenses incurred for the removal and disposal of
personal property and for payment of utility charges for services provided to the
Property prior to date of possession, if any. Agent shall reimburse Buyer for the
incurred expenses from the Escrowed Funds within 7 days following receipt of
such evidence from Buyer.
(c)Agent shall deliver to Seller the balance of the Escrowed F unds on deposit,
less deductions provided for in paragraph 2(b) above, no later than 30 days
following vacation of the Property by Seller.
(d) The sole duties of Agent shall be those described herein, and Agent shall be
under no obligation to determine whether the other parties hereto are
complying with any requirements of law or the terms and conditions of any other
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315418v3 CBR RC125-41
agreements among said parties.Agent shall have no duty or liability to verify any
amounts deducted from the retained amount and Agent's sole responsibility shall be
to act expressly as set forth in this Escrow Agreement.
3 .Escrow Agent Liability.The sole duties of Escrow Agent shall be those described
herein, and Escrow Agent shall be under no obligation to determine whether the
other parties hereto are complying with any requirements of law or the terms and
conditions of any other agreements among said parties. Escrow Agent may
conclusively rely upon and shall be protected in acting on any notice believed by it to
be genuine and to have been signed or presented by the proper party or parties,
consistent with reasonable due diligence on Escrow Agent's part. Escrow Agent
shall have no duty or liability to verify any such notice, and its sole responsibility
shall be to act expressly as set forth in this Escrow Agreement.
Seller and Buyer understand that Agent is legal counsel to Buyer and each consents
to Agent's serving as Escrow Agent notwithstanding such representation. In the
event Agent determines, in its sole discretion, that it cannot continue to serve as
Escrow Agent herein, Agent shall deposit the funds with Old Republic National
Title Insurance Company or such other Escrow Agent acceptable to Seller and
Buyer.Seller consents to Agent's continued representation of Buyer after a deposit is
made, and Buyer agrees to pay all escrow fees charged by the substitute Escrow
Agent.
4 .Notices to be sent to the parties to this Agreement shall be sent by mail or
personal delivery to:
SELLER:Jimmy Tan
PO Box 54952
Richfield, MN 55423
BUYER:Housing and Redevelopment Authority
in and for the City off Richfield
Attn:Housing Specialist
Richfield City Hall
6700 Portland Avenue South
Richfield, MN 55423
AGENT:Kennedy & Graven, Chartered
ATTN:Julie Eddington and
Catherine B. Rocklitz
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
written above.
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315418v3 CBR RC125-41
SELLER:BUYER:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
___________________________By: _______________________________
Its Chair
___________________________And by: ____________________________
Its Executive Director
ESCROW AGENT:
KENNEDY & GRAVEN,CHARTERED
By: _____________________________
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315418v3 CBR RC125-41
Exhibit One
Legal Description of Property
Lot 1, Block 1, Blairs Wooddale Third Addition, together with that part of the vacated alley
which accrued thereon upon the vacation thereof, Hennepin County, Minnesota
7300 Portland Ave
AGENDA SECTION:PUBLIC HEARINGS
AGENDA ITEM #5.
S TAFF REPORT NO. 6
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
2/20/2018
RE P O RT P RE PA RE D B Y: K ate A itchison/C eleste McD ermott, Housing S pecialists
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
2/14/2018
O THE R D E PA RTM E NT RE V IE W: N/A
C ITY MA NA G E R RE V IE W: S teven L . D evich, E xecutive D irector
2/14/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Public hearing and consideration of the approval of a resolution authorizing the sale of 6345
Bloomington Avenue to Endres Custom Homes and the approval of a Contract for Private
Development with Endres Custom Homes for the construction of a single family home through the
Richfield Rediscovered Program.
E X E C UT IV E S UM M ARY:
Endres Custom Homes (the Builder) is applying to purchase the lot at 6345 Bloomington Avenue from the
Housing and Redevelopment Authority (HRA) for the construction of a single family home. The new home
would be a two-story home with four bedrooms, three baths, a finished basement and a two-car attached
garage. The new home will be 2,135 finished square feet with a minimum end value of $324,900.
W hile the Richfield Rediscovered Program has been very successful in recent years, several lots available
for sale by the HRA have remained undeveloped. I t is likely that proximity to the airport and additional sound
attenuation requirements have deterred buyers from the properties. Endres Custom Homes was approved by
the HRA to purchase four Richfield Rediscovered lots in this area in December and J anuary, and he is now
seeking to purchase the lot at 6345 Bloomington Avenue. The home has been pre-sold to a buyer.
The Builder has worked extensively with the HRA to ensure compliance with sound attenuation standards,
design guidelines and building requirements to find a proposal that is feasible for both the Richfield
Rediscovered Program and the Builder. I n order to make a new home viable on this lot, staff is recommending
a discounted lot sale price to account for additional costs related to required window and sewer-line
improvements.
RE C O M M E ND E D AC T I O N:
Conduct and close the public hearing and by motion:
1. Approve a resolution authorizing the sale of 6345 Bloomington Avenue to Endres Custom
Homes; and
2. Authorize execution of a Contract for Private Development between the Housing and
Redevelopment Authority and Endres Custom Homes for the redevelopment of 6345
Bloomington Avenue.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
The HRA purchased 6345 Bloomington Avenue in 2011 for $79,900.
The existing substandard home was abated and demolished in 2011.
The vacant lot has been listed for $40,000.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The proposed project meets the policy objectives of the Richfield Rediscovered Program:
Removes substandard, functionally obsolete housing and eliminates its blighting influence;
Provides new, higher valued housing; and
Alleviates shortage of housing choice for families.
The project also meets the Housing Design and Site Development Criteria, as defined in the
Richfield Rediscovered Guidelines:
The height and mass of the house is made compatible with other homes in the
neighborhood through the varied roof lines, presence of a roof eave at the first level, and
larger side setbacks (15 feet).
The dominance of the garage door is minimized by the use of windows and panels, the
front porch, living area above the garage, and a front setback greater than the neighboring
houses.
W hile the design provides slightly less window area due to the extraordinary sound
attenuation requirements, the plan provides a balanced and pleasing distribution of wall,
door and window areas from all views.
Site drainage will be accommodated on site. The additional side setback to the north of the
house provides an adequate area to ensure drainage away from the neighboring property.
C.C R IT IC AL T IMIN G IS S U E S:
The Contract for Private Development (Contract) requires the Builder to close on the property by
March 1, 2018, and to complete construction by September 1, 2018. All Richfield Rediscovered
contracts include a provision authorizing staff to grant an extension to these deadlines for a period
up to six months.
D.F IN AN C IAL IMPAC T:
The HRA acquired the 60-foot wide property and structure in 2011 for $79,900.
The appraised value of the vacant lot is $40,000.
Under the terms of the Contract, $37,725 will be due at closing.
A discount to the lot sale price is applied for upgraded window costs and sewer line updates.
Under the terms of the Contract for the property, the contracted minimum market value of the new
home will be $324,900.
Under the terms of the Contract, the Builder will also be required to submit a $10,000 cash
escrow.
E.L E GAL C ON S ID E R AT ION:
Notice of the public hearing was published in the Sun Current on February 8, 2018.
Mailed notification is not required on this item; however, a courtesy notice was mailed to residents
within 350 feet of the property.
The HRA Attorney prepared the Contract for Private Development.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the sale of the property and the Contract for Private Development
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Dustin Endres, Endres Custom Homes, I nc.
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
C ontract for P rivate D evelopment C ontract/A greement
S ite plan E xhibit
House plans E xhibit
L ot P hoto E xhibit
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT6345 BLOOMINGTON AVENUE TO ENDRES CUSTOM HOMES
WHEREAS, the Housing and Redevelopment Authority in and for the City ofRichfield, Minnesota (HRA) desires to develop certain real property pursuant to and infurtherance of the Richfield Rediscovered Program adopted by the HRA, said realproperty being described as:
Address:6325 Bloomington Avenue
Legal:Lot 13, Block 10, Girard Parkview, Hennepin County, Minnesota
WHEREAS, the HRA is authorized to sell real property within its area ofoperation after a public hearing; and
WHEREAS, the purchaser of the described property has been identified asEndres Custom Homes, and
WHEREAS, a Contract for Private Development has been prepared, and the saleprice of 6325 Bloomington Avenue is $37,725 with performance security in the amountof $10,000;and
WHEREAS, a public hearing has been held after proper public notice.
NOW, THEREFORE, BE IT RESOLVED by the Housing and RedevelopmentAuthority in and for the City of Richfield, Minnesota:
1.A public hearing has been held and 6325 Bloomington Avenue is authorizedto be sold for $37,725 to Endres Custom Homes; and2.The Chairperson and Executive Director are authorized to execute a Contractfor Private Development and other agreements as required to effectuate thesale to the Builder.
Adopted by the Housing and Redevelopment Authority in and for the City ofRichfield, Minnesota this 20th day of February, 2018.
Mary B. Supple,ChairATTEST:
Erin Vrieze Daniels, Secretary
516120v2 CBR RC125-315
CONTRACT FOR PRIVATE DEVELOPMENT
Between
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
and
Endres Custom Homes, Inc.
for property located at
6345 Bloomington Avenue South
This Instrument Drafted by:
The Housing and Redevelopment Authority
in and for the City of Richfield
6700 Portland Avenue South
Richfield, Minnesota 55423
Telephone: (612) 861-9760
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516120v2 CBR RC125-315
CONTRACT FOR PRIVATE DEVELOPMENT
THIS AGREEMENT, made and entered into as of this 20th day of February, 2018, by
and between the Housing and Redevelopment Authority in and for the City of Richfield, a public
body corporate and politic under the laws of the State of Minnesota, having its principal office at
6700 Portland Avenue, Richfield, Minnesota (HRA) and Endres Custom Homes, Inc., a
Minnesota Corporation (Builder).
WITNESSETH:
WHEREAS, the City of Richfield (City) and the HRA have previously created and
established a Redevelopment Project (Project) pursuant to the authority granted in Minnesota
Statutes, Sections 469.001 through 469.047 (collectively, the Act); and
WHEREAS, pursuant to the Act, the City and the HRA have previously adopted a
redevelopment plan for the Project (Redevelopment Plan); and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan 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 development costs in the Project; and
WHEREAS, the Builder 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, 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 obligation of the
HRA and the Builder, 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 meaning
given below unless the context clearly requires otherwise:
Building Plans. Detailed plans for the Improvements to be constructed on the Property,
as required by the local building official for issuance of a building permit.
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516120v2 CBR RC125-315
Construction Plans. The construction plans approved by the HRA pursuant to Section
4.1 of this Agreement. The Construction Plans include a schedule for construction of the
Improvements, preliminary plans and schematics of the Improvements to be constructed, and a
landscaping plan.
Development. The Property and the Improvements to be constructed thereon according
to the Construction Plans approved by the HRA.
Event of Default. Event of Default has the meaning given such term in Section 8.1.
Guidelines. The Richfield Rediscovered Program Guidelines Lot Sale Program, revised
March 20, 2017, and attached as Exhibit B to this Agreement.
Homeowner. The individuals purchasing the Property from Builder and who will be
living in the home following purchase.
Improvements. Each and all of the structures and site improvements constructed on the
Property by the Builder, as specified in the Construction Plans to be approved by the HRA.
Minimum Market Value. $324,900, which is the minimum market value for the land
and Improvements as confirmed by the Hennepin County Assessor.
Mortgage. A mortgage obtained by the Builder from a third party lender in accordance
with Section 7.2 of this Agreement.
Property. The real property legally described as:
Lot 13, Block 10, Girard Parkview, Hennepin County, Minnesota
Located on land having a street address of:
6345 Bloomington Avenue South
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 Builder.
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. Program Guidelines – Lot Sale Program
C. Form of Quit Claim Deed
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516120v2 CBR RC125-315
D. Well Disclosure
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.
(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 Builder. The Builder makes the following representations and
undertakings:
(a) The Builder 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 Builder has the necessary equity capital or has obtained commitments for
financing necessary for construction of the Improvements;
(c) The Builder will construct the Improvements in accordance with the terms of this
Agreement and all local, state and federal laws and regulations;
(d) The Builder 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;
(e) The plans for the Improvements have been prepared by a qualified draftsperson or
architect; and
(f) The Builder has read and understands the Guidelines and agrees to be bound by
them.
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516120v2 CBR RC125-315
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 Builder and will cooperate with the efforts of
the Builder to secure the granting of any permit, license, or other approval required to allow the
construction of the Improvements.
ARTICLE III.
ACQUISITION OF PROPERTY; CONVEYANCE TO BUILDER
Section 3.1. Purchase of Property by Builder. The HRA agrees to sell the Property to
Builder and the Builder agrees to purchase the Property from the HRA in an “as-is” condition.
The sale of the Property is contingent upon the Builder providing the HRA with evidence
satisfactory to the HRA that Builder has entered into a binding legal commitment, in the form of
a Purchase Agreement for the resale of the Property to a Homeowner following completion of the
Improvements. The HRA agrees to convey the Property to the Builder by Quit Claim Deed in the
general form of Exhibit C. The HRA’s deed to the Builder will contain the right of reverter
required in Section 8.3. The purchase price for the Property, payable on the Closing Date (as
defined in Section 3.7), will be $37,725 (“Purchase Price”).
Section 3.2. Title and Examination. As soon as reasonably possible after execution of
this Contract for Private Development by both parties,
(a) HRA shall surrender any abstract of title and a copy of any owner’s title insurance
policy for the property, if in HRA’s possession or control, to Builder or to Builder’s designated
title service provider; and
(b) Builder shall obtain the title evidence determined necessary or desirable by
Builder or Builder’s lender, including but not limited to title searches, title examinations,
abstracting, a title insurance commitment or an attorney’s title opinion, at Builder’s selection and
cost, and provide a copy to the HRA.
The Builder shall have 20 days from the date it receives such title evidence to raise any
objections to title it may have. Objections not made within such time will be deemed waived.
The HRA shall have 90 days from the date of such objection to effect a cure; provided, however,
that the HRA shall have no obligation to cure any objections, and may inform Builder of such.
The Builder may then elect to close notwithstanding the uncured objections or declare this
Agreement null and void, and the parties will thereby be released from any further obligation
hereunder.
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516120v2 CBR RC125-315
Section 3.3. Taxes and Special Assessments. Real estate taxes and installments of
special assessments will be prorated between the HRA and Builder as of the Closing Date.
Section 3.4. Soil Conditions and Hazardous Wastes. The Builder acknowledges that
the HRA makes no representations or warranties as to the conditions of the soils on the Property,
its fitness for the construction of improvements or any other purpose for which the Builder may
use the Property, or regarding the presence of hazardous wastes on the Property. The HRA will
allow reasonable access to the Property for the Builder to conduct such tests regarding soils
conditions and hazardous wastes as the Buyer may desire. Permission to enter the Property to
conduct such tests must be given in writing under reasonable terms and conditions established by
the HRA.
Section 3.5. Site Clearance. The HRA will be responsible for clearance of all buildings
as required to prepare the Property for development. All other site preparation is the
responsibility of Builder. Builder will comply with all of the provisions of the Guidelines
relating to tree protection, preservation and replacement.
Section 3.6. Other Preconditions to Closing. Closing may not take place until the
HRA is satisfied that the Project is in all respects in full compliance with the provisions of the
Guidelines contained in Exhibit B. It is anticipated that the Builder will involve the Homeowner
in the various activities required under the Guidelines so that the Homeowner will have an
opportunity to contribute suggestions concerning development of the Property.
Section 3.7. Closing. Closing must take place March 1, 2018, (“Closing Date”) or such
other date as may be agreed to by the Builder and HRA in writing. On the Closing Date, the
Builder will provide the HRA with a a cash deposit for the escrow account established pursuant
to Section 5.1, in addition to the Purchase Price.
Section 3.8. Closing Costs. The Builder will pay: (a) the closing fees charged by its title
insurance company or other closing agent, if any, utilized to close the transaction for
Builder; (b) title services chosen by Builder pursuant to Section 3.2 above, including the premium for
title insurance policy, if any, and (c) the recording fees for the Contract for Private Development and
the deed transferring title to the Builder. HRA will pay (a) any transfer taxes, and (b) fees and
charges related to the filing of any instrument required to make title marketable. Each party shall
pay its own attorney fees.
Section 3.9. Sewer and Water. HRA does warrant that city water and sewer is
available.
Section 3.10. ISTS Disclosure. HRA is not aware of any individual sewage treatment
system on the property. Buyer is responsible for all costs of removing any individual sewage
treatment system that may be discovered on the Property.
Section 3.11. Well Disclosure. HRA’s knowledge of wells on the Property is disclosed
in Exhibit D.
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516120v2 CBR RC125-315
Section 3.12. Methamphetamine Disclosure. To the best of HRA’s knowledge,
methamphetamine production has not occurred on the property.
ARTICLE IV.
CONSTRUCTION OF IMPROVEMENTS
Section 4.1. Construction of Improvements. The Builder shall construct the
Improvements on the Property in accordance with the Guidelines and the Construction Plans,
shall cause the Improvements to meet or exceed the Minimum Market Value specified in Section
1.1, and shall maintain, preserve and keep the Improvements in good repair and condition. The
Builder shall provide his or her proposed construction plans to the HRA for review; if the
proposed construction plans are in conformity with this Agreement and the Guidelines, the HRA
will approve the Construction Plans following review and comment by the Homeowner.
Section 4.2. Construction Plans. No building permit will be issued by the City unless
the Building Plans are in conformity with the Guidelines, the Construction Plans, the Builder’s
Minimum Market Value, other requirements contained in this Agreement, and all local, state and
federal regulations. The Builder shall provide the HRA with a set of Building Plans to be used in
connection with any application for a building permit. The HRA shall, within 25 days of receipt
of the Building Plans review the same to determine whether the foregoing requirements have
been met. If the HRA determines such Building Plans to be deficient, it shall notify the Builder
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 September 1, 2018 (“Construction Completion
Date”). All construction shall be in conformity with the approved Construction Plans and the
Guidelines. Periodically during construction the Builder 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 Builder will be
unable to complete construction of the Improvements in the time permitted by this Section 4.3, it
may notify the Builder and demand assurances from the Builder regarding the Builder’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. After notification by the Builder 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 of the completion thereof. In the event that the
HRA is satisfied with the construction, and upon closing on the sale of the Property to the
Homeowner, the HRA shall furnish the Builder with a Certificate of Completion in the form
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516120v2 CBR RC125-315
attached hereto as Exhibit A. Such certification by the HRA shall be a conclusive determination
of satisfaction and termination of the agreements and covenants in this Agreement. Issuance of
the Certificate of Completion shall also serve as a satisfaction of any obligation of Builder
secured by the escrow account established under Section 5.1, and the cash in the escrow account
will be released to the Builder. At the time a Certificate of Completion is issued, the HRA will
also provide Builder with a $5,000 cash rebate if Builder has obtained Green Community
Concepts certification through LEED for Homes, Minnesota GreenStar, Minnesota Green
Communities or Minnesota Green Path.
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 Builder with a
written statement, indicating in adequate detail in what respects the Builder has failed to
complete the Improvements in accordance with the provisions of this Agreement necessary, in
the opinion of the HRA, for the Builder to take or perform in order to obtain such certification.
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, an Event of Default shall be deemed
to have occurred, and the HRA may proceed with its remedies under Section 8.2.
ARTICLE V.
REDEVELOPMENT ASSISTANCE
Section 5.1. Establishment of Cash Escrow. Builder acknowledges that although it is
purchasing the Property at its fair market value as raw land, the HRA has incurred significant
costs in acquiring and preparing the Property for development by Builder. On the Closing Date,
Builder will deliver to the HRA $10,000 to be placed in a non-interest bearing escrow account
pursuant to the Escrow Agreement, dated as of the date of closing, between Builder and HRA.
The obligation to pay the $10,000 to the HRA will be forgiven, and the cash in the escrow
account will be returned to Builder if: (i) the Builder receives a Certificate of Completion; and
(ii) the Builder is not otherwise in default of any of its obligations hereunder. If such have not
occurred, an Event of Default shall be deemed to have occurred and the HRA may exercise its
remedies under Section 8.2. In certain circumstances, after construction is complete, the Builder
or Buyer may be required to deposit another cash escrow with the planning department of the
City for incomplete improvements. In these cases, following the HRA’s release of the cash
escrow, the cash escrow will be transferred to the City’s planning department for such purpose.
The terms of the escrow will be set forth in an Escrow Agreement between the HRA and the
Builder or Buyer.
ARTICLE VI.
FINANCING
Section 6.1. Financing. HRA acknowledges that Builder has submitted evidence of
financing for the Improvements in compliance with the provisions of Section 2.1(b) of this
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516120v2 CBR RC125-315
Agreement. Builder must notify HRA immediately of any changes to or withdrawal of the
approved financing, HRA shall have 10 days to approve or disapprove changes in financing. If
the HRA rejects a change in the approved financing or if the approved financing is withdrawn,
the Builder shall have 30 days or such additional period of time as the Builder may reasonably
require from the date of the HRA’s notification to submit evidence of financing satisfactory to
the HRA. If the Builder 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. Closing shall not take place until Builder has provided
HRA with acceptable evidence of financing for construction of the Improvements.
Section 6.2. Copy of Notice of Default to Lender. Whenever the HRA shall deliver
any notice or demand to the Builder with respect to any Event of Default by the Builder 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 6.3. Subordination. In order to facilitate obtaining financing for the
construction of the Improvements by the Builder, the HRA may, in its sole and exclusive
discretion, agree to modify this Agreement in the manner and to the extent the HRA deems
reasonable, upon request by the financial institution and the Builder.
ARTICLE VII.
PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER
Section 7.1. Representation as to Redevelopment. The Builder represents and agrees
that its undertakings pursuant to the Agreement, are for the purpose of development of the
Property and not for speculation in land holding. The Builder further recognizes that, in view of
the importance of the Development 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 qualification and identity of the Builder are of particular
concern to the HRA. The Builder 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 Builder for the faithful performance of all
undertakings and covenants agreed by the Builder 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 Builder represents and
agrees as follows:
(a) Except as specifically allowed by this section, Builder has not made or created,
and, prior to the issuance of the Certificate of Completion, Builder will not make or create, or
suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust in
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.
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(b) This provision shall not be deemed as preventing the Builder from entering into a
Purchase Agreement for the sale of the Property to a Homeowner.
(c) This provision does not prohibit conveyances that are only by way of security for,
and only for the purpose of obtaining financing necessary to enable the Builder 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. Any
Mortgage obtained by the Builder must be disclosed to the HRA, and must be subordinate to this
Agreement. The Builder must provide the HRA with an address for the holder of the Mortgage
for purposes of providing notices as may be required by this Agreement.
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:
(a) Failure by the Builder to pay when due the payments required to be paid or
secured under any provision of this Agreement;
(b) Failure by the Builder to observe and substantially perform any covenant,
condition, obligation or agreement on its part to be observed or performed hereunder, including
the time for such performance;
(c) If the Builder 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 Builder, on a petition in bankruptcy filed against it, be adjudicated as
bankrupt, or a court of competent jurisdiction shall enter an order or decree appointing, without
the consent of the Builder, a receiver of the Builder or of the whole or substantially all of its
property, or approve a petition filed against the Builder seeking reorganization or arrangement of
the Builder 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 Development is in default under any Mortgage and has not entered into a
work-out agreement with the holder of the Mortgage.
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
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one or more of the following actions following written notice by the HRA to the Builder as
provided in Section 9.3 of this Agreement:
(a) Suspend its performance under this Agreement until it receives assurances from the
Builder, deemed reasonably adequate by the HRA, that the Builder will cure its default and
continue its performance under this Agreement;
(b) Cancel or rescind this Agreement;
(c) Exercise its right under Section 8.3;
(d) Withdraw all funds in the escrow account established in Section 5.1;
(e) Withhold the Certificate of Completion; or
(f) Take whatever action at law or in equity may appear necessary or desirable to the
HRA to enforce performance and observance of any obligation, agreement, or covenant of the
Builder 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 interest provided in this Agreement for the protection of the holders of a Mortgage; and
provided further that should any holder of a Mortgage succeed by foreclosure of the Mortgage or
deed in lieu thereof to the Builder’s interest in the Property, it shall, notwithstanding the
foregoing, be obligated to perform the obligations of the Builder under this Agreement to the
extent that the same have not therefore been performed by the Builder.
Section 8.3. Revesting Interest in HRA Upon Happening of Event of Default
Subsequent to Conveyance of Property to Builder. In the event that subsequent to the closing
or the sale of the Property to the Builder and prior to the issuance of the Certificate of
Completion:
(a) The Builder fails to begin construction of the Improvements in conformity with
this Agreement, and such failure is not due to Unavoidable Delays;
(b) The Builder, after commencement of the construction of the Improvements,
defaults in or violates 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 Builder 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 supplier’s
or mechanic’s lien, or any other unauthorized encumbrance or lien to attach;
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(d) There is, in violation of Article VII of this Agreement, any transfer of the Property
or any part thereof; or
(e) The Builder fails to comply with any of its covenants under this Agreement,
then the HRA shall have the right upon 30 days’ written notice to Builder and the Builder’s
failure to cure within such 30 days period, to re-enter and take possession of the Property and to
terminate and revest in the HRA the interest of the Builder in the Property; provided, however,
that such revestiture of title shall be subject to the lien of any prior encumbrance permitted under
this Agreement, or any right of a Homeowner pursuant to a valid Purchase Agreement authorized
by 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 Builder 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.
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 there from. No member, official, or employee of the HRA shall be personally liable
to the Builder, or any successor in interest, for any Event of Default by the HRA or for any
amount which may become due to the Builder 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 Builder as though fully
set forth herein.
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Section 9.3. 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 prepared, return receipt
requested or delivered personally:
(a) As to the HRA:
Richfield HRA
Executive Director
6700 Portland Avenue South
Richfield, MN 55423
(b) As to the Builder:
Dustin Endres
Endres Custom Homes, Inc.
15561 Dunberry Way
Apple Valley, MN 55124
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 9.3.
Section 9.4. Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, all of which shall constitute one and the same instrument.
Section 9.5. Extensions. Any extension to the Closing Date and/or extension to
Construction Completion Date that exceeds 6 months from the date agreed to in Section 3.7 and 4.3,
respectively, must be approved by the HRA Board. HRA staff is authorized to extend the Closing
Date to a date less than 6 months from the Closing Date agreed to in Section 3.7 and extend the
Construction Completion Date to a date less than 6 months from the Construction Completion Date
agreed to in Section 4.3.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
[signature pages follow]
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Signature Page for HRA
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By _______________________________________
Its Chairperson
By _______________________________________
Its Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __________ day of
____________________, 20_____, by , the Chairperson 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 authority.
________________________________________________
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __________ day of
____________________, 20_____, by , 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 authority.
________________________________________________
Notary Public
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516120v2 CBR RC125-315
Signature Page for Builder
Endres Custom Homes, Inc.
By______________________________________
Its______________________________________
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __________ day of
____________________, 2018, by Dustin Endres, the President of Endres Custom Homes, Inc.,
a corporation under the laws of Minnesota, on behalf of the corporation.
________________________________________________
Notary Public
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EXHIBIT A
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that ____________________________, has fully and
completely complied with its obligations under that document entitled “Contract for Private
Development”, between the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota and ________________________ dated ___________________________,
filed ___________________________ as Document No. ____________________ (the
“Contract”) with respect to the construction of the approved construction plans at
________________________, legally described as _____________________________ and is
released and forever discharged from its obligations under such Contract.
DATED: ___________________
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
RICHFIELD
By: __________________________________
Its: Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 20__, by _________________________ the Executive Director of the
Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate
and politic under the laws of the State of Minnesota on behalf of the public body corporate and
politic.
________________________________
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
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EXHIBIT B
PROGRAM GUIDELINES – LOT SALE PROGRAM
RICHFIELD REDISCOVERED
PROGRAM GUIDELINES
LOT SALE PROGRAM
REVISED: March 20, 2017
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PROGRAM OBJECTIVES ............................................................................................................................ 3
DEFINITIONS................................................................................................................................................ 3
PROGRAM BASICS ..................................................................................................................................... 3
APPLICATION REQUIREMENTS ................................................................................................................ 4
ADDITIONAL REQUIREMENTS .................................................................................................................. 5
HOUSE DESIGN AND SITE DEVELOPMENT REQUIREMENTS .............................................................. 5
New House Standards ............................................................................................................................ 6
Site Standards ......................................................................................................................................... 6
Construction Requirements .................................................................................................................. 6
General Standards .................................................................................................................................. 7
Green Community Concepts ................................................................................................................. 8
CITY REVIEW PROCEDURE ....................................................................................................................... 8
LOT SALE TO BUILDER/BUYER ................................................................................................................ 9
PROGRAM MARKETING ............................................................................................................................. 9
DATA PRIVACY .......................................................................................................................................... 10
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This document has been developed as a guidance tool for program administration. It should not be interpreted as
constituting any contractual agreement or liability by the City or Housing and Redevelopment Authority (HRA). The
HRA may modify or divert from the guidelines where it deems appropriate.
I. Program Objectives
1. To remove substandard, functionally obsolete housing on scattered sites throughout the City and
replace with new, higher-valued housing.
2. To eliminate the blighting influence of substandard housing, thus improving residential neighborhoods.
3. To alleviate the shortage of housing choices for families.
4. To facilitate the construction of larger three- to four-bedroom, owner-occupied homes designed for
families.
5. To facilitate the construction of multi-unit, owner-occupied homes designed to expand family
opportunities or to serve elderly residents.
These objectives will be achieved through the sale of lots by the Housing and Redevelopment Authority to
Builder/Buyer teams for the development of newly constructed homes.
II. Definitions
Applicant: An individual who submits an application for a Richfield Rediscovered lot. The Applicant may be a
Builder or the end Buyer. If the Applicant is a Builder, an end Buyer should be identified. If the Applicant is the
Buyer, the Applicant must submit a signed contract between the Builder and the Buyer to build a home on the lot
identified in the application.
Buyer: An individual(s) who will build, own and occupy a new housing unit in Richfield.
The Buyer will occupy the property and not offer it for rent. The Buyer may not also function as the Builder on a
Richfield Rediscovered project. The Buyer and Builder must be unrelated separate legal entities. A speculative
project by a Buyer may be considered if all other program requirements can be met. However, neither the Buyer, the
Buyer’s Builder or Builder’s subcontractors, or the Builder’s realty agents may occupy or purchase the property.
Buyers, unless licensed in the trade specified, may not put any sweat equity into the construction of the foundation,
wall/roof framing, shingling, exterior work, electrical/plumbing/HVAC systems or interior carpentry.
A Buyer, and all members of his/her household, is limited to building a home through the program no more than
once every seven years.
Builder: Licensed Contractor who has signed a contract with the Buyer to build a home on the lot identified in the
application.
Contract for Private Development: A contract between the HRA and the Builder or Buyer that establishes the
conditions under which the lot will be sold and the proposed house will be developed.
Green Community Concepts Plan: A written plan indicating how the proposed development will incorporate green
building features and concepts. Priority will be given to projects that incorporate green building features.
HRA: Housing and Redevelopment Authority in and for the City of Richfield.
Lot List: A listing of available lots for sale. Information regarding the lot location, size and sale price is provided.
III. Program Basics
1. HRA publishes a list of available vacant lots for purchase including sale price and development criteria.
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2. Builder/Buyer team proposes a plan for a lot consistent with development criteria and program
requirements and makes an offer to purchase.
3. HRA may issue a Request for Proposals for a specific lot(s) with a specific submittal deadline. HRA
staff review all Proposals submitted by the deadline for consistency with development criteria and
program requirements. The Proposal that best meets the criteria and requirements is selected to develop
the lot.
4. HRA approves lot sale.
5. Lot is sold to Builder or Buyer.
6. Builder constructs new home.
7. Projects must be completed within one year of HRA approval of the project.
IV. Application Requirements
The following must be submitted for application to the program:
1. $550 application fee
An application fee must be paid at the time of application. This fee is non-refundable and is not
part of the lot price.
2. Application Form
3. Floor plans
The layout of all levels, including basement and unfinished space, must be provided.
4. Elevations
Elevations of all four sides of the house, including view of garage shall be provided. Colored
renderings may also be required.
5. Site plan
The site plan shall indicate the location of the new house, walkways and garage.
6. Landscaping plan
A landscaping plan must indicate the location and type of trees, shrubbery, flowers and
landscaping materials (e.g. rocks, mulch) and any existing trees to be preserved.
7. Detail of construction materials to be used on the project.
8. Green Community Concepts Plan
The plan should indicate what Green Community Concepts will be incorporated into the project.
9. Construction timeline
Construction must be completed with one year of the purchase of the property.
10. Signed contract with Builder
11. Purchase agreement
If the Builder plans to purchase the lot, the application must include a valid purchase agreement
between the Buyer and the Builder for the lot to be developed.
12. Financial capability statement
A statement from a financial institution indicating willingness to provide sufficient construction
capital to complete the project must be provided.
13. Builder References
a. Five previous customers
b. Three major suppliers, one being the construction supplier
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c. Building inspectors from two cities where the Builder has constructed new housing within the
past three years
14. Proof of Builder’s Comprehensive General Liability with Property Damage Protection.
15. Proof of sufficient worker’s compensation insurance coverage by the Builder.
16. Written warranty program
To be provided to the Buyer, which guarantees at a minimum, warranted repairs as required by
Minnesota State Statute.
V. Additional Program Requirements
1. The Applicant is expected to meet with an architectural/design consultant prior to submitting an application.
A two-hour consultation is available through the HRA at a cost of $25 to the applicant. See the City’s
website (www.cityofrichfield.org) for more information. This requirement may be waived if the applicant is
using an architect for the project.
2. The site will be sold to the Builder or Buyer at the fair market value as appears on the Lot List. The HRA
will not accept offers for less than the established sale price.
3. A Contract for Private Development is signed by the HRA and the Builder or the Buyer. The Contract is a
standard form which includes conditions for acquisition and development of the property. The Contract
will establish a minimum required end-value for the property based on construction estimates provided by
the applicant. The Builder or Buyer will be expected to agree to the terms of the Contract before the
application can be scheduled on the HRA agenda.
4. The lot can be sold to either the Builder or the Buyer. If the lot is sold to the Builder, the Builder will pay
cash for the lot at closing and submit a Letter of Credit or cash escrow for $10,000. The Letter of Credit
must be from a financial institution incorporated in the Twin Cities metropolitan area. The cash escrow will
be held in a non-interest bearing account. The Letter of Credit or cash escrow will be released once the
construction and landscape work are completed and a final Certificate of Occupancy is issued.
5. If the lot is sold to the Builder and the Builder fails to complete construction as approved by the HRA, the
Letter of Credit or cash escrow may be drawn upon by the HRA. In addition, the Contract for Private
Development will contain a reverter provision, which will enable the HRA to reclaim ownership of the
property in the event of a default in the Contract. In the event that the Builder fails to complete
construction, the HRA may exercise its rights under the reverter provision, as well as draw upon the Letter
of Credit or cash escrow.
6. If the lot is sold to the Buyer, the Buyer will pay cash for the lot at closing and a $10,000 mortgage in favor
of the HRA will be filed on the property. The mortgage will be in first position. The HRA may consider
subordinating its interest in appropriate cases.
7. If the lot is sold to the Buyer and the Buyer fails to complete construction as approved by the HRA, the
HRA may exercise its rights provided in the mortgage.
8. A Buyer, and all members of his/her household, is limited to purchasing no more than one lot every seven
years.
VI. House Design and Site Development Requirements
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The development of all sites shall meet the development criteria listed below, as reviewed and approved by the HRA.
To maximize the development of a given lot, the HRA reserves the right to explore all development options without
obligating the HRA to support any specific proposal, idea or solicitation.
Housing design is a critical element of the program. Siding materials, exterior façade presentation, roof, window,
siding and building line variability, finished landscape, interior space function and use are all important issues of
design to the HRA. The design requirements were created to ensure that the homes built on the HRA-sold lots blend
in with the surrounding neighborhood and respond to the specific concerns of the HRA.
All new houses built under the Richfield Rediscovered Program must meet the requirements of the City’s Zoning
Code and additional criteria, as listed in this document.
A. New House Standards
1. New dwelling must be owner-occupied.
2. Three finished bedrooms are required, at a minimum.
3. Two finished bathrooms are required, at a minimum.
4. Two-car garage is required, at a minimum.
5. A full basement is required, unless the selected design results in a split-level or a garden-level type of
basement. In the case of an “accessible” house, a basement may be omitted if it would otherwise prohibit
accessible design elements.
B. Site Standards
1. After construction, the site must be fully landscaped, including plantings around the foundation. The entire
grounds shall be landscaped and be aesthetically pleasing in all seasons. Land forms and plant materials
shall be used to define the site and blend neatly with adjoining properties. Specific lot line blending
requirements may be required, as appropriate, for specific sites.
At a minimum, the applicant must meet the “Landscaping and Screening Requirements” in the City’s
Zoning Code under Section 544.03, Subd. 4, General landscaping requirements and Subd. 5, Residential
sites. The code is available on the City’s website: http://www.ci.richfield.mn.us
To the greatest extent possible, existing trees should be preserved. Any trees removed must be replaced
(they do not have to be the same species or in the same location) and should be labeled on the required
landscape plan.
2. Utility meters shall be screened from street view and locations must be specified on plans.
3. Site drainage should be accommodated on the site so that water is directed away from the new home and
the neighboring properties. Neighboring properties must not be disturbed by the creation of drainage
swales. Specific storm water management requirements may be required, as appropriate, including the
addition of gutters or on-site management for specific sites. Construction and the finished structure must
not have a detrimental impact on storm water drainage patterns in the neighborhood.
4. All air conditioning units must be located in the rear yard of the house, or as approved by the HRA.
C. Construction Requirements
1. Existing trees identified on the landscape plan as being preserved, must be protected during construction.
A tree wrap with board reinforcements shall be used on trees directly adjacent to active grading and
construction areas. Damaged or destroyed trees must be replaced.
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2. The construction site, neighboring properties and adjacent public streets shall be kept free of construction
debris at all times.
3. No construction workers, construction equipment or construction material shall encroach upon neighboring
properties.
4. The property shall have a new sanitary service line installed to the City sanitary sewer main consisting of
schedule 40 PVC or equivalent. If there is an existing 6" sewer stub at the property line, it must be lined
with 4" schedule 40 PVC or equivalent to the City’s sanitary main, and it must include a "donut" at the end
with cement.
The line must be televised after installation to ensure the following:
1. There are no obstructions in the line.
2. The PVC liner is not protruding into the City’s sanitary sewer main line.
D. General Standards
1. The value of the new home must meet or exceed the minimum value specified in the Contract for Private
Redevelopment.
2. All homes in the Richfield Rediscovered Program must be stick-built or high-quality modular, new
construction.
3. Exterior materials (siding, soffit, doors and windows) should be low-maintenance and durable. Brick,
aluminum, vinyl and fiber cement siding are preferred. Natural cedar lap is acceptable if properly stained or
painted. Hardboard panels or hardboard lap siding are prohibited. Roof valleys must have metal valleys
and not be woven.
4. Unit height and mass of the new house shall be compatible with the scale of the surrounding homes in the
neighborhood.
5. Plans must present a balanced and pleasing distribution of wall, door and window areas from all views.
6. The dominance of the garage door must be minimized through placement, architectural detail, door design
and utilization and design of windows. Garages, where the garage door faces the street, shall not be located
closer to the front lot line than the foremost facade of the principal building facing the front property line.
Garage sidewalls that face the street should appear to contain habitable space. This can be accomplished by
incorporating windows and other design elements into the garage wall that are in character with the
remainder of the dwelling. For lots that have alley access, the garage should be oriented to access the alley.
7. All building plans must have been prepared in consultation with an architect or qualified draftsperson. All
requirements by the Building Inspections Division must be met.
8. All Richfield Rediscovered houses must meet or exceed Minnesota Energy Code requirements.
9. All new homes shall be built to provide high quality sound insulation. Recommendations for sound
insulation measures may be provided on a site-by-site basis. All construction must conform to sound
attenuation building standards as required by Zoning Ordinance Section 541.19 for properties located
within the 2007 60-62 DNL Contour and 2007 63 or greater DNL contours.
9. If a variance is required to construct the proposed development, the HRA may, at its sole discretion, choose
to reject the application.
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10. If the HRA accepts an application that needs a variance(s), sale of the property will be contingent upon the
applicant obtaining the necessary variance(s). The Applicant is responsible for applying for the variance(s)
at its own expense. The HRA, as owner of the property, will, however, cooperate with the application.
E. Green Community Concepts
Priority will be given to projects incorporating the green community concepts listed below. Any concepts
the applicant would like considered during the application process should be explained in a written plan
submitted with the application. A $5,000 rebate will be provided to the Applicant for projects that obtain
certification through LEED for Homes, Minnesota GreenStar or Minnesota Green Communities.
1. Protect and conserve water and soil. To reduce water consumption, consider the use of water-conserving
appliances, fixtures, and landscaping. Steps should be taken to minimize the loss of soil and sediment
during construction and occupancy to reduce storm-water sediment and air pollution.
2. Minimize energy consumption. Reduce energy consumption by taking advantage of natural heating, cooling
and day lighting, and by using energy-efficient appliances, equipment and lighting.
3. Enhance indoor environmental quality. Use non-toxic materials, ventilation and exhaust systems, and
moisture control products and systems.
4. Use environmentally-preferable materials and resources. Use locally-produced, salvaged and/or
manufactured materials, products with recycled content or from renewable sources, recyclable or reusable
materials, and low-VOC-emitting materials.
5. Reduce waste. Reduce and manage wastes generated during the construction process and operation of
buildings. If demolition occurs, sort and recycle leftover materials and debris.
VII. City Review Procedure
1. Applicant reviews proposed project with HRA staff before plans are finalized.
2. Applicant submits application, plans, and application fee at least 45 days prior to the HRA meeting.
3. An application is considered to be received when delivered personally to HRA staff in a pre-arranged
meeting. If more than one application is submitted for a lot within five-working days, all applications will
be reviewed, and the application that best meets the program guidelines will be selected. The application fee
will be returned to the Applicant whose proposal was not selected.Following this five-day period, the lot
will be considered reserved by the selected application and no additional applications will be accepted for
the proposed lot while the application is being processed.
4. If an application is determined to be incomplete, the applicant will have 30 days to submit a complete
application. If a complete application is not received within 30 days, the application will be rejected and
the lot will be made available for new applications.
5. HRA staff review application to ensure conformance with House Design and Site Development
Requirements.
6. HRA staff may reject or accept an application at its sole discretion.
7. HRA staff may choose to issue a Request for Proposals (RFP) for a lot. In this case, Staff issues an RFP,
giving a specific time period within which proposals may be submitted. HRA staff review all proposals for
consistency with development criteria and program requirements. The proposal that best meets the criteria
and requirements is selected to develop the lot. The applicant will have 30 days to submit a complete
application. If a complete application is not received within 30 days, the application will be rejected. Staff
may elect to award the lot to another submitted proposal or solicit additional proposals.
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8. The Builder or Buyer executes a Contract for Private Redevelopment.
9. An application is determined to be complete at least three weeks prior to the HRA meeting.
10. HRA staff publishes a legal notice of the public hearing and prepares a report and recommendation for the
HRA.
11. HRA reviews application, conducts a public hearing, and takes action at the HRA meeting.
12. If approved, the Contract for Private Redevelopment is executed by the HRA.
VIII. Lot Sale to Builder or Buyer
1. Upon approval of the application by the HRA, a closing will be scheduled between the HRA and the
Builder or Buyer.
2. The HRA will prepare all statements, affidavits, documents, and general release forms required for closing.
3. The Builder applies for a building permit prior to closing. The Builder is responsible for acquiring the
necessary building permits with the City of Richfield Building Inspections Division. If changes to the plans
are required by the Inspections Division, the applicant must notify HRA staff.
4. The Applicant provides evidence to HRA staff that all requirements to proceed with construction, as
determined in the Contract for Private Redevelopment, have been met.
5. The HRA conveys the property to the Builder or Buyer by Quit Claim Deed. The site will be sold to the
Builder or Buyer at the fair market value as appears on the Lot List.
6. At closing with the Builder, the Builder provides a Letter of Credit or cash escrow for $10,000 to the HRA.
7. At closing with the Buyer, the Buyer signs a mortgage and promissory note for $10,000 in favor of the
HRA.
8. Upon completion of the project, the Letter of Credit or cash escrow is released to the Builder or the Buyer’s
mortgage is released. A Certificate of Completion is executed by the HRA, releasing the obligations of the
Contract for Private Redevelopment.
IX. Program Marketing
Richfield Rediscovered program marketing is entirely at the discretion of the HRA. It may include the following:
1. Buyer Solicitation. The HRA may market the program to potential Buyers through promotional articles,
direct mail, the Internet, or other methods as deemed appropriate. Buyers may be any financially capable
individual or household, including first-time buyers, move-up buyers or empty-nesters.
2. Public Promotion.
a. The HRA will periodically provide information about the program through articles in city
publications, on the City’s web site, on the Community Cable channel, or via press releases to
promote community awareness.
b. A public open house may be held to provide an opportunity for residents and other interested
parties to collectively view the finished homes. The Parade of Homes Fall Showcase and Spring
Preview may also accomplish this.
c. Photos will be taken of finished homes and may be used to promote the program.
A program information package will be mailed to all interested participants. The information packet may include the
following:
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516120v2 CBR RC125-315
1. Lot List
2. Richfield Rediscovered Lot Sale Procedural Guidelines
3. Application Form
4. Sample Contract for Private Redevelopment
X. Data Privacy
The HRA is subject to Minnesota Statutes Chapter 13 (the “Minnesota Government Data Practices Act”). Under
the Minnesota Government Data Practices Act, the names and addresses of applicants for or recipients of
assistance under this program and the amount of assistance received under this program are public data. All other
financial information submitted to the HRA for purposes of the program application is considered private data.
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516120v2 CBR RC125-315
EXHIBIT C
QUIT CLAIM DEED
Deed Tax Due: $__________
ECRV ___________________
Date: ____________________
FOR VALUABLE CONSIDERATION, Housing and Redevelopment Authority in and for the
City of Richfield, a public body corporate and politic under the laws of the State of Minnesota,
Grantor, hereby conveys and quit claims to _____________________, a _______________
under the laws of the State of ____________, Grantee, real property in Hennepin County,
Minnesota, described as follows:
, according to the map or plat thereof on file or of record in the office of the Hennepin County
Recorder.
This deed is subject to that certain Contract for Private Development between Grantor and
Grantee, dated __________________, 20__ (the “Contract”), recorded in the office of the
Hennepin County Recorder/Registrar of Titles. The Contract provides that the Grantee’s rights
and interest in the real property described above are subject to the Grantor’s right to re-enter and
revest in Grantor title to the Property under conditions specified therein, including but not limited to
termination of the Grantor’s right to re-enter and revest upon issuance of a Certificate of
Completion as defined in the Contract.
together with all hereditaments and appurtenances.
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
By ____
______________________________
Its Chairperson
By
______________________________
Its Executive Director
C-2
516120v2 CBR RC125-315
STATE OF MINNESOTA
} ss.
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this ____ day of _______, 20__ by
_____________________, the Chairperson of the Housing and Redevelopment Authority in and
for the City of Richfield, a public body corporate and politic under the laws of Minnesota, on
behalf of the corporation, Grantor.
________________________________
NOTARY STAMP SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT
STATE OF MINNESOTA
} ss.
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this ____________ day of _______, 20__,
by ________________, the Executive Director, of Housing and Redevelopment Authority in and
for the City of Richfield, a public body corporate and politic under the laws of the State of
Minnesota, on behalf of the corporation, Grantor.
________________________________
NOTARY STAMP SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT
This instrument was drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
Tax Statements should be sent to:
D-1
516120v2 CBR RC125-315
EXHIBIT D
WELL DISCLOSURE
The Seller certifies that the seller does not know of any wells on the described real property.
A well disclosure certificate accompanies this document [form attached] or has been
electronically filed. (If electronically filed, insert WDC number: __________________).
The status and number of wells on the described real property have not changed since the last
previously filed well disclosure certificate.
D-2
516120v2 CBR RC125-315
D-3
516120v2 CBR RC125-315
D-4
516120v2 CBR RC125-315
D-5
516120v2 CBR RC125-315
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #6.
S TAFF REPORT NO. 7
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
2/20/2018
RE P O RT P RE PA RE D B Y: K ate A itchison/C eleste McD ermott, Housing S pecialists
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
2/14/2018
O THE R D E PA RTM E NT RE V IE W: N/A
C ITY MA NA G E R RE V IE W: S teven L . D evich, E xecutive D irector
2/14/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of a settlement of a Housing and Redevelopment Authority Deferred Loan at 6500
Woodlake Drive, Unit #405.
E X E C UT IV E S UM M ARY:
I n 2016, J oanne Dominquez (Homeowner) was issued a Richfield Rehabilitation Deferred Loan in the
amount of $18,463.49 for her condominium located at 6500 Woodlake Drive, Unit #405. The funds were used
to install new windows and complete repairs to the plumbing and electrical systems in her home. I n October of
2017, the Homeowner became too ill to remain living on her own and moved into an assisted living facility in
St. Paul. She now needs to sell her assets to pay for assisted living. She has a signed Purchase Agreement
for the sale of her condo for $68,000, which is less than the amount of debt owed against the property. She is
asking the Housing and Redevelopment Authority (HRA) to forgive a portion of its lien in order to complete the
sale and avoid foreclosure.
RE C O M M E ND E D AC T I O N:
By motion: Approve a proposal made by the representatives of the owner of 6500 Woodlake Drive,
#405 for a settlement of a $18,463.49 Deferred Loan in the amount of $1,800.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
Hennepin County, acting on behalf of the Richfield HRA, issued a Deferred Loan to the
Homeowner in 2016, for $18,463.49.
The funds were used to install new windows, complete minor repairs/updates to the
bathroom, plumbing, and electrical service.
I n October 2017, the Homeowner became ill and was no longer able to live independently in her
condo.
The Homeowner contacted a realtor and had the condo listed for sale on the Multiple Listing
Service (ML S).
The condo was listed for sale on December 1, 2017 for $74,900, and an offer was
accepted in early J anuary for $68,000.
This first short-sale offer was revoked due to the buyers changed circumstance. The condo
was immediately relisted.
A new purchase agreement was accepted on J anuary 12, 2018 for $68,000.
The condo continues to remain listed on the ML S, but no higher offers have been received.
I n addition to a short-sale settlement with her primary mortgage, the Homeowner also needs to pay
her monthly association dues, which have accreud while she pursues the sale of her condo.
The homeowner will need to use her remaining savings to settle her other debts at closing.
All lien-holders of the property are being asked for settlements of their liens. At this point the
Homeowners Association will be fully repaid.
D E BT AMO U N T
O W E D
S E T T L E M E N T A M O U N T
P R O P O S E D
Union Bank and Trust (prim ary
m ortgage)
$59,000.00 $54,969.30
Richfield HRA $18,463.49 $ 1,800.00
Northstar Capital (other judgem ents)$ 4,999.00 $ 2,500.00
Hom eowners A ssociation Dues 1,138.00 $ 1,138.00
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The Deferred Loan Program provides loans to Homeowners earning less than 80 percent of the
Twin Cities Area Median I ncome (A MI ) to make repairs and improvements that address health,
safety and/or property maintenance items. Most recipients of the Deferred Loan earn less than 50
percent of the Twin Cities A MI .
The entire loan amount is due and payable if the property is sold within the 30-year period,
regardless of the number of years remaining on the loan.
T he Deferred Loan Program is funded with federal Community Development Block Grant
(CDB G) funds. T here is no federal requirement that the money be repaid.
The Mortgage Foreclosure Response Program Procedural Guidelines state as follows: “Staff will
consider short sale offers and negotiate as high of repayment as possible. Action will be taken
quickly so as to not disrupt the short sale opportunity and cause the homeowner to enter into
foreclosure.”
Hennepin County, who administers the Deferred Loan for Richfield and other communities,
considers a 10% loan settlement to be a reasonable settlement in a short-sale situation.
The HRA has received eight requests for a short sale settlement in the past five years. The
following settlements have been reached:
Y E A R L I E N A M O U N T A M O U N T R E PAI D % R E C AP T U R E D
2017 $ 10,000 $ 2,000 20.0%
2016 $ 10,345 $ 1,000 9.7%
2014 $ 8,238 $ 500 6.1%
2014 $ 15,892 $ 2,384 15.0%
2013 $ 30,000 $26,094 87.0%
2013 $ 10,080 $ 5,040 50.0%
2012 $ 26,000 $ 2,600 10.0%
C.C R IT IC AL T IMIN G IS S U E S:
According to the signed Purchase Agreement and related documents, the sale needs to occur by
February 28, 2018.
To avoid accruing additional mortgage payments or homeowner association (HOA) fees, the sale
of the condo would ideally occur by February 28, 2018.
I f the sale does not occur by the end of February, the homeowner risks a further short sale or
foreclosure by being unable to pay her primary mortgage. This will extend the timeline
substantially, leaving the unit vacant for a longer duration.
D.F IN AN C IAL IMPAC T:
Any repaid funds would be returned to the Deferred Loan Program for future loan recipients.
The attached letter from the Homeowner describes the financial and personal difficulties she has
encountered that have led to the need to sell her home.
The HRA has a subordinated position to the primary lender. I f the property is foreclosed by the
lender, the HRA would likely receive nothing.
The loan was funded with C D B G funds. The HRA established the requirement that a borrower
must repay the loan at the sale of the property. There is no federal requirement to repay the funds.
E.L E GAL C ON S ID E R AT ION:
The HRA has the authority to negotiate a settlement or forgive the loan.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Deny the proposal for the settlement of a $18,463.49 Deferred Loan in the amount of $1,800.
Approve a settlement of the Deferred Loan for a different amount.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Lisa W old, Realtor - Lakes Area Realty
AT TAC H ME N T S:
D escription Type
Hardship L etter - 6500 Woodlake D r #405 B ackup Material