08-20-2018 Complete AgendaSPEC IAL C O N C U R R E N T C IT Y C O U N C IL, H O U SIN G AN D R ED E V E LO PMEN T AU TH O R ITY, AN D
P LAN N IN G C O MMIS S IO N W O R K S E S S IO N
R IC H F IE L D MU N IC IPAL C E N TE R, B AR TH O LO ME W R O O M
AU G U S T 20, 2018
6:30 P M
C all to order
1.Housing proposal on P ortland Avenue between 66th and 67th S treets
A djournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at
least 96 hours in advance to the City Clerk at 612-861-9738.
CITY OF RICHFIELD, MINNESOTA
Office of City Manager
August 16, 2018
Council Memorandum No. 64 HRA Memorandum No. 14
The Honorable Mayor Housing and Redevelopment
and Authority Commissioners
Members of the City Council City of Richfield
Subject: Portland Roundabout Remnant Parcel - Development Proposal
Council and Commissioner Members:
Following construction of the Portland Avenue roundabout in 2008, several remnant
parcels (6613 – 6625 Portland Avenue) remained and were identified for residential
development. At the August 20 work session, the Council and Commissioners will hear
a development proposal for the property from Interstate Development (developers of
Plaza 66).
Victoria Perbix from Interstate will present preliminary plans for a multi-family housing
development on the site.
Respectfully submitted,
Steven L. Devich
City Manager
SLD:mp
Email: Assistant City Manager
Planning Commissioners
Department Directors
R 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
AU G U S T 20, 2018
7:00 P M
C all to Order
Approval of the Minutes
A pproval of the minutes of the: (1) S pecial concurrent C ity C ouncil and Housing and Redevelopment A uthority meeting
of July 16, 2018; and (2) Regular Housing and Redevelopment A uthority meeting of July 16, 2018.
AG E N D A APPR O VAL
1.A pproval of the A genda
2.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 adoption of a resolution amending Resolution No. 1199 regarding an advance of
certain costs in connection with property located within the C edar Avenue Tax Increment F inancing D istrict.
S taff Report No. 28
B .C onsideration of the adoption of a resolution amending Resolution No. 1300 regarding an advance of
certain costs in connection with property located within Tax Increment F inancing D istrict 2018-1 (C edar
P oint II).
S taff Report No. 29
C .C ancellation of the public hearing regarding the sale of 6310 Irving Avenue to Neighborworks Home
P artners, L L C .
S taff Report No. 30
3.C onsideration of items, if any, removed from C onsent C alendar
P U B LIC H E AR IN G S
4.P ublic hearing and consideration of the adoption of a resolution authorizing the sale of 7300 P ortland Avenue to
Twin C ities Habitat for Humanity, Inc., and approval of a contract with Twin C ities Habitat for Humanity, Inc. for the
development of a single-family home.
S taff Report No. 31
5.P ublic hearing and consideration of the adoption of a resolution approving a C ontract for P rivate D evelopment
with NHH C ompanies, L L C for redevelopment of the C edar P oint II Housing area with up to 80 units of for-sale
townhomes.
S taff Report No. 32
6.C ontinue the public hearing on the sale of property and consideration of a C ontract for P rivate D evelopment with
NHH C ompanies, L L C for redevelopment of the C edar P oint II Housing area with 218 units of apartments to
S eptember 17, 2018.
S taff Report No. 33
O T H E R B U S IN E S S
7.C onsideration of the approval of an assignment of a Housing and Redevelopment A uthority Transformation Home
L oan at 6701 Washburn Avenue to E quihance P artners, L L C and the execution of all related documents by the
E xecutive D irector and B oard C hair.
S taff Report No. 34
8.C onsideration of the adoption of a resolution authorizing the purchase of real property located at 6501 P enn
Avenue, pending a finding of consistency by the Richfield P lanning C ommission.
S taff Report No. 35
9.C onsideration of the adoption of resolutions regarding the modification of the Redevelopment P lan for the
Richfield Redevelopment P roject A rea, the modification to the Tax Increment F inancing P lan for the C edar
Avenue Tax Increment F inancing D istrict, and the establishment of Tax Increment F inancing D istrict No. 2018-1.
S taff Report No. 36
10.C onsideration of the adoption of resolutions approving proposed property tax levy for payable 2019 for
certification to Hennepin C ounty.
S taff Report No. 37
H R A D IS C U S S IO N ITE MS
11.HRA D iscussion Items
E X E C U T IV E D IR E C TO R R E P O R T
12.E xecutive D irector's Report
C LAIMS AN D PAYR O L LS
13.C laims and P ayrolls
14.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
Special concurrent City Council and
Housing and Redevelopment Authority
Work Session
July 16, 2018
CALL TO ORDER
The work session was called to order by Chair Supple at 6:17 p.m. in the Bartholomew Room.
Council Members Pat Elliot; Mayor; Michael Howard; Maria Regan Gonzalez; and Simon
Present: Trautmann.
Council Members Edwina Garcia.
Absent:
HRA Members Mary Supple, Chair; Michael Howard, Sue Sandahl; Erin Vrieze Daniels; and
Present: Pat Elliot.
Staff Present: Steve Devich, City Manager; John Stark, Community Development Director;
Julie Urban, Housing Manager; Mary Tietjen, City Attorney; and Kate
Aitchison, Housing Specialist.
Item #1
NOAH UPDATE
Community Development Director John Stark and Housing Manager Julie Urban presented an
update on NOAH tools and strategies for preserving and strengthening the City’s naturally occurring
affordable rental housing.
Housing Manager Urban presented a draft Tenant Protection Ordinance and provided an
update on the development and implementation of that future ordinance.
Community Development Director John Stark presented a draft version of the Inclusionary
Housing Policy and provided an update on the development of that policy.
ADJOURNMENT
The work session was adjourned by unanimous consent at 7:02 p.m.
Special concurrent Council and HRA Work Session Minutes -2- July 16, 2018
Date Approved: August 20, 2018
_____________________________
Mary B. Supple
HRA Chair
_____________________________ ____________________________
Kate Aitchison Steven L. Devich
Housing Specialist Executive Director
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
July 16, 2018
CALL TO ORDER
The meeting was called to order by Chair Supple at 7:08 p.m.
HRA Members Mary Supple, Chair; Pat Elliott; Michael Howard; Sue Sandahl; and Erin
Present: Vrieze Daniels.
Staff Present: Steve Devich, Executive Director; John Stark, Community Development
Director; Melissa Poehlman, Community Development Assistant Director;
Julie Urban, Housing Manager; Julie Eddington, HRA Attorney; and Kate
Aitchison, Housing Specialist.
APPROVAL OF THE MINUTES OF THE REGULAR HRA MEETING OF JUNE 18, 2018
M/Vrieze Daniels, S/Sandahl to approve the minutes of the June 18, 2018 Housing and
Redevelopment Authority regular meeting.
Motion carried 5-0.
Item #1
APPROVAL OF THE AGENDA
Chair Supple requested the removal item #4 from the agenda.
M/Sandahl, S/Elliott to approve the agenda with the noted deletion.
Motion carried 5-0.
Item #2
CONSENT CALENDAR
Executive Director Devich presented the Consent agenda:
A. Consideration of the adoption of a resolution amending the funding source for an interfund
loan approved by Housing and Redevelopment Authority Resolution No. 1175 on January
22, 2014, and Resolution No. 1223 on February 16, 2016, for the 2014-1 Tax Increment
Financing District (former City Garage site). (S.R. No. 20)
B. Consideration of the adoption of a resolution consenting to the inclusion of certain
Housing and Redevelopment Authority property by NHH Properties, dba NHH Companies,
LLC with respect to land use approvals and a petition to vacate portions of 64th Street
adjacent to Housing and Redevelopment Authority property. (S.R. No. 21)
HRA Meeting Minutes -2- July 16, 2018
M/Elliott, S/Howard, to approve of the consent calendar agenda.
Motion carried 5-0.
Item #3 PUBLIC HEARING AND CONSIDERATION OF THE ADOPTION OF A
RESOLUTION AUTHORIZING THE SALE OF 7324 GIRARD AVENUE TO AARON
AND ASHLEY BUCHANAN, AND THE APPROVAL OF A CONTRACT FOR
PRIVATE DEVELOPMENT WITH AARON AND ASHLEY BUCHANAN FOR THE
CONSTRUCTION OF A SINGLE FAMILY HOME THROUGH THE RICHFIELD
REDISCOVERED PROGRAM.
Housing Specialist Aitchison presented Staff Report No. 23.
Art Felgate, resident of 7329 Girard Avenue stated he was concerned about the low sale price
of the home, in comparison to the assessed tax value of the property. He stated he approves of the
program, but wondered if the low sale price would impact his own property values.
Community Development Director Stark stated that each case is different and in this case
there were a lot of costs saved in selling to the city, and that the seller was willing to take the amount
offered by the city.
M/Howard, S/Sandahl to close the public hearing.
Motion carried 5-0.
M/Howard, S/Elliott to adopt a resolution authorizing the sale of 7324 Girard Avenue to Aaron
and Ashley Buchanan, and to approve a contract for Private Development with Aaron and Ashley
Buchanan for the construction of a single-family home through the Richfield Rediscovered Program,
contingent upon attorney review.
Commissioner Vrieze Daniels stated she agreed with Mr. Felgate and would be voting against
the proposal in consistency with her previous vote.
Chair Supple asked if any substantial changes were made to the contract. Housing Specialist
Aitchison stated the contract had been finalized.
Commissioner Sandahl stated that the impact of this program on a community that is fully built.
There is also an incentive to surrounding homeowners to improve their own properties.
Motion carried 4-1, with Commissioner Vrieze Daniels voting against the proposal.
Item #5 CONSIDERATION OF THE APPROVAL OF PROGRAM GUIDELINES FOR THE
FIRST TIME HOMEBUYER DOWNPAYMENT ASSISTANCE PROGRAM.
Housing Specialist Aitchison presented Staff Report No. 24.
Commissioner Howard stated that he thinks this is an excellent opportunity to move forward
with equity work. He asked how marketing of the program would be undertaken.
Housing Specialist Aitchison stated that city staff would be working with Minnesota Housing to
promote the program, along with Minnesota Housing’s programs, in a four -part mailing campaign,
along with other outreach events.
Housing Manager Urban stated that Minnesota Housing would also provide a script that would
help staff walk through the process of homeownership preparation with callers.
HRA Meeting Minutes -3- July 16, 2018
Chair Supple stated her support for this program, especially as it is able to help households of
color pursue homeownership opportunities, especially because Richfield’s disparity in homeownership
rates is one of the worst in the State. She also stated that she also appreciates that a lot of the work
for the program can be done ahead of time.
Chair Supple asked if there were any plans for substantial changes to the program guidelines.
Housing Specialist Aitchison replied that the guidelines were finalized.
M/Vrieze Daniels, S/Howard to approve the program guidelines for the First Time Homebuyer
Downpayment Assistance Program.
Motion carried 5-0.
Item #6
CONSIDERATION OF THE AUTHORIZATION OF FUNDING AND APPROVAL OF
LOAN DOCUMENTS FOR THE ACQUISITION OF PROPERTY LOCATED WITHIN
THE CEDAR POINT II HOUSING REDEVELOPMENT AREA BY NHH PROPERTIES
DBA NHH COMPANIES, LLC.
Housing Manager Urban presented Staff Report No. 25.
Commissioner Elliott stated he is excited to see the acquisitions moving forward for this
project. He asked the developer about the status of the project and the number of townhomes on the
project. Adam Seraphine, NHH Properties, responded that adding density to the project helped to
make the project feasible.
M/Elliott, S/Howard to authorize the funding and approval of loan documents for the acquisition
of property located within the Cedar Point II Housing Redevelopment Area by NHH Properties dba
NHH Companies, LLC.
Chair Supple clarified the role of the staff to provide funding to NHH Properties for acquisition.
Chair Supple also asked about the alterations to legal documents. Housing Manager Urban
responded that the HRA attorney will be granted authority to review documents on behalf of the HRA.
Motion carried 5-0.
Item #7
CONSIDERATION OF THE ADOPTION OF A RESOLUTION AUTHORIZING AN
INTERFUND LOAN IN THE AMOUNT OF $730,000 FOR ADVANCE OF CERTAIN
COSTS IN CONNECTION WITH PROPERTY LOCATED WITHIN TAX INCREMENT
FINANCING DISTRICT 2018-1 (CEDAR POINT II PROJECT)
Housing Manager Urban presented Staff Report No. 26.
M/Sandahl, S/Vrieze Daniels to adopt a resolution authorizing an interfund loan in the amount
of $730,000 for advance of certain costs in connection with property located with the Tax Increment
Financing District 2018-1.
Motion carried 5-0.
Item #8
CONSIDERATION OF THE ADOPTION OF A RESOLUTION APPROVING AN
AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT WITH
LYNDALE GARDENS, LLC FOR REMAINING LAND AT THE FORMER LYNDALE
GARDENS CENTER SITE.
Assistant Community Development Director Poehlman presented Staff Report No. 27.
Commissioner Vrieze Daniels stated she is excited to see the project moving forward.
HRA Meeting Minutes -4- July 16, 2018
Commissioner Howard asked if inclusionary housing policies will be incorporated in this
proposal. Assistant Community Development Director Poehlman stated that the policies have been
informally required for many years, and that this situation did incorporate the same requirements.
Chair Supple asked whether the units in the development will be accessible to persons with
disabilities. Colleen Carey, president with the Cornerstone Development Group, stated that there are
many elevators in the buildings, and that the units could be adapted to be accessible for a buyer that
needed accommodations.
Chair Supple asked about the timing of retail development. Colleen Carey responded that
commercial development is driven by market demand, but that she is working with a few different
prospective tenants for the retail space. Cornerstone Group is waiting for the right combination of
tenants for this space.
M/Supple, S/Vrieze Daniels to adopt a resolution approving an amended and restated
Contract for Private Development with Lyndale Gardens, LLC for remaining land at the former Lyndale
Gardens Center site.
Motion carried 5-0.
Item #9
EXECUTIVE DIRECTOR REPORT
Executive Director Devich had nothing to report.
It was noted that the groundbreaking for the Chamberlain development will be held on
Thursday, July 19th at 2:00 p.m.
Item #10
HRA DISCUSSION ITEMS
Commissioner Vrieze Daniels asked if there was an update on the property at 6626 2nd
Avenue. Housing Manager Urban stated that staff is conversing with the HRA attorney and has not
come to a decision about the Quiet Title Action.
Chair Supple stated the meeting for the Southdale Library redevelopment has been
rescheduled for Saturday, September 22nd. Preliminary concepts are to be shared, as per the
information found on the Hennepin County Library website.
Item #11
CLAIMS AND PAYROLL
M/Elliott, S/Sandahl that the following claims and payroll be approved:
U.S. BANK
Section 8 Checks: 129877-129960 $162,117.20
HRA Checks: 33474-33489 $ 40,860.12
TOTAL $202,947.32
Motion carried 5-0.
ADJOURNMENT
HRA Meeting Minutes -5- July 16, 2018
The meeting was adjourned by unanimous consent at 7:50 p.m.
Date Approved: August 20, 2018
Mary B. Supple
HRA Chair
Kate Aitchison Steven L. Devich
Housing Specialist Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
S TAFF REPORT NO. 28
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: Myrt L ink, C ommunity D evelopment A ccountant
D E PA RTME NT D IRE C TO R RE V IE W: Melissa P oehlman, A cting C ommunity D evelopment D irector
8/14/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of the adoption of a resolution amending Resolution No. 1199 regarding an advance of
certain costs in connection with property located within the Cedar Avenue Tax Increment Financing
District.
E X E C UT IV E S UM M ARY:
The Housing and Redevelopment Authority (HRA) approved an interfund loan for acquisition of property in
the Cedar Avenue Tax I ncrement Financing (TI F) District on March 16, 2015. Tax increment generated from
this District was to be used to pay back the loan.
The property that was acquired using this interfund loan is now in the new 2018-1 TI F District that is being
established.
The amended resolution moves the costs incurred to date from the Cedar Avenue District to the 2018-1
District and allows for any repayment to be made from the 2018-1 District.
The Office of the State Auditor requires an amendment to the resolution when any changes are made to an
interfund loan.
RE C O M M E ND E D AC T I O N:
By motion: Adopt a resolution amending Resolution No. 1199 regarding an advance of certain costs in
connection with property located within the Cedar Avenue Tax Increment Financing District.
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
Resolution No. 1199 that was authorized by the HRA on March 16, 2015 established an interfund
loan in an amount of $565,000 for the acquisition of property within the Cedar Avenue TI F
District.
The funding source for the interfund loan was the Development Account.
A total of $359,000 has been expended to date to purchase properties located at 6333 16th
Avenue S and 6401 16th Avenue S.
These two properties are located in the new 2018-1 TI F District that is being established.
All costs will be transferred from the Cedar Avenue TI F District to the 2018-1 TI F District and any
repayment will be made from increment generated by this District.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
I t is the HRA's policy to comply with the Office of the State Auditor's requirements.
C.C R IT IC AL T IMIN G IS S U E S:
None
D.F IN AN C IAL IMPAC T:
Available tax increment generated from the 2018-1 Tax I ncrement Financing District will be used
to pay the interfund loan.
E.L E GAL C ON S ID E R AT ION:
The resolution was drafted by HRA legal counsel.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the proposed change to move costs from the Cedar Avenue TI F District to the 2018-1
TI F District and also allow repayment from this District.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ____
RESOLUTION AMENDING RESOLUTION NO. 1199 REGARDING AN ADVANCE OF
CERTAIN COSTS IN CONNECTION WITH PROPERTY LOCATED WITHIN THE CEDAR
AVENUE TAX INCREMENT FINANCING DISTRICT (A REDEVELOPMENT DISTRICT)
BE IT RESOLVED By the Board of Commissioners of the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota (the “Authority”) as follows:
Section 1. Background.
1.01. Pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF
Act”) and Laws of Minnesota 2005, Chapter 152, Article 2, Section 25, as amended by Laws of
Minnesota 2017, 1st Special Session, Chapter 1, Article 6, Section 18, the City of Richfield, Minnesota
and the Authority established the Cedar Avenue Tax Increment Financing District (a redevelopment
district) (the “Cedar Avenue TIF District”) within the Richfield Redevelopment Project Area, which is
administered by the Authority.
1.02. Under Section 469.178, subdivision 7 of the TIF Act, the Authority is authorized to
advance or loan money from any fund from which such advances may be legally made (each such
advance being referred to as an “interfund loan”) in order to finance expenditures that are eligible to be
paid with tax increments under the TIF Act.
1.03. On March 16, 2015, the Board of Commissioners of the Authority adopted Resolution
No. 1199 (the “Original Interfund Loan Resolution”), which authorized an interfund loan in the amount of
$565,000 (the “Interfund Loan”) to finance the acquisition of property within the Cedar Avenue TIF
District for redevelopment purposes. The Authority expended $359,000 for the acquisition of land within
the Cedar Avenue TIF District.
1.04. Pursuant to the terms of the Original Interfund Loan Resolution, the Interfund Loan was
made from the Development Fund, or any other fund designated by the Authority, and any repayments of
the Interfund Loan were required to be payable to the Authority’s TIF Fund for the Cedar Avenue TIF
District.
1.05. The land acquired with the Interfund Loan has been removed from the Cedar Avenue TIF
District and placed in the Authority’s Tax Increment Financing District No. 2018-1 (a housing district)
(Cedar Point II Project) (“TIF District No. 2018-1”).
1.06. The Authority has determined to amend the terms of the Original Interfund Loan
Resolution so that any repayments of the Interfund Loan will now be made from tax increment derived
from TIF District No. 2018-1.
Section 2. Terms of Interfund Loan. The Interfund Loan shall be repaid in accordance with
the Original Interfund Loan Resolution. Commencing with the first Payment Date (as defined in the
Original Interfund Loan Resolution) following the adoption of this resolution, all repayments of the
Interfund Loan shall be made to the TIF Fund for TIF District No. 2018-1.
2
533986v1 JAE RC125-366
Section 3. Miscellaneous.
3.01. Authority staff and officials are hereby authorized and directed to execute any documents
and take any other actions necessary to carry out the intent of this resolution.
3.02. Unless otherwise amended by this resolution, the Original Interfund Loan Resolution
shall remain in full force and effect.
Section 4. Effective Date. This resolution is effective upon approval.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 20th day of August, 2018.
Mary Supple, Chair
ATTEST:
Erin Vrieze Daniels, Secretary
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
S TAFF REPORT NO. 29
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: Myrt L ink, C ommunity D evelopment A ccountant
D E PA RTME NT D IRE C TO R RE V IE W: Melissa P oehlman, A cting C ommunity D evelompent D irector
8/15/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of the adoption of a resolution amending Resolution No. 1300 regarding an advance of
certain costs in connection with property located within Tax Increment Financing District 2018-1
(Cedar Point II).
E X E C UT IV E S UM M ARY:
The Housing and Redevelopment Authority (HRA) approved Resolution No. 1300 on J uly 16, 2018,
authorizing an interfund loan for up to $630,000 for property acquisition and an additional $100,000 for
administrative costs for Tax I ncrement Financing (TI F) District 2018-1 that is being established.
The HRA has proposed to convey property to the NHH Companies L L C (Developer) for a purchase price of
$184,000. The amended resolution will add $184,000 to the existing interfund loan to fund the land write-down
on a temporary basis. Funds are available in the HRA Development Account for this amount.
The Office of the State Auditor requires an amendment to a resolution when changes are made to an
interfund loan.
RE C O M M E ND E D AC T I O N:
By motion: Adopt a resolution amending Resolution No. 1300 for an advance of certain costs in
connection with property located within Tax Increment Financing District 2018-1 (Cedar Point II).
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
On March 19, 2018, the Housing and Redevelopment Authority approved a Preliminary
Development Agreement with NHH Companies, LLC to redevelop the Cedar Point I I Housing
area.
I t is the intent for the HRA and Developer to enter into a Contract for Private Development
pursuant to which the Developer will construct and develop approximately 80 affordable owner-
occupied townhomes.
On J uly 16, 2018 the HRA approved an interfund loan in the amount $630,000 from the HRA
Development Account for property acquisition and $100,000 from the HRA General Fund for
administrative costs for TI F District 2018-1.
The HRA has proposed to convey property to the Developer for a purchase price of $184,000.
The total of the interfund needs to be amended to fund the land write-down of $184,000 on a
temporary basis. The total of the interfund loan will now be $914,000. The Development Account
is the funding source for $814,000 in property acquisition and the HRA is the funding source for
the $100,000 in administrative costs.
The $184,000 will be repaid by the Developer no later than the date that they sell at least eight
townhome units, plus 4.0% interest.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Under Minnesota Statutes, Section 469.178, Sub. 7, the HRA is authorized to advance or loan
money from the General Fund or any other fund from which such advances may be legally
authorized, in order to finance the qualified costs.
I t is the HRA's policy to comply with the Office of the State Auditor's requirements.
C.C R IT IC AL T IMIN G IS S U E S:
Funds need to be available before an anticipated September closing date.
D.F IN AN C IAL IMPAC T:
The Developer will pay back the $184,000 no later than the date that they sell at least eight
townhome units, plus interest in the amount of 4.0% per annum.
E.L E GAL C ON S ID E R AT ION:
The resolution was prepared by HRA legal counsel.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the amended interfund loan.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Representatives of NHH Companies L L C.
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ____
RESOLUTION AMENDING RESOLUTION NO. 1300 REGARDING AN FOR ADVANCE OF
CERTAIN COSTS IN CONNECTION WITH PROPERTY LOCATED WITHIN TAX
INCREMENT FINANCING DISTRICT NO. 2018-1 (A HOUSING DISTRICT) (CEDAR POINT
II PROJECT)
BE IT RESOLVED By the Board of Commissioners of the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota (the “Authority”) as follows:
Section 1. Background.
1.01. Pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the
“TIF Act”), the City of Richfield, Minnesota (the “City”) and the Authority intend to establish Tax
Increment Financing District No. 2018-1 (a housing district) (Cedar Point II Project) (the “TIF District”)
within the Richfield Redevelopment Project Area, which is administered by the Authority.
1.02. Under Section 469.178, subdivision 7 of the TIF Act, the Authority is authorized to
advance or loan money from any fund from which such advances may be legally made (each such
advance being referred to as an “interfund loan”) in order to finance expenditures that are eligible to be
paid with tax increments under the TIF Act.
1.03. The Authority has determined to advance funds in a maximum amount of $630,000 to
NHH Companies L.L.C., a Minnesota limited liability company (the “Developer”), in the form of a
forgivable loan to acquire various properties within the TIF District for the purpose of constructing
affordable housing (the “Land Loan”). It is the intent of the Authority and the Developer to enter into a
contract for private development pursuant to which the Developer will construct and develop
approximately 80 affordable owner-occupied townhomes (the “Project”) on certain property owned by the
Authority (the “Property”) within the TIF District. If the Developer commences construction of the
Project, the Authority will forgive all or a portion of the Land Loan and will instead reimburse itself with
tax increment derived from the TIF District.
1.04. On July 16, 2018, the Board of Commissioners of the Authority adopted Resolution
No. 1300 (the “Original Interfund Loan Resolution”), pursuant to which the Authority approved an
interfund loan in the amount of $630,000 to fund the Land Loan and an interfund loan in the amount of
$100,000 to pay for administrative costs of the TIF District (together, the “Original Interfund Loan”).
1.05. The Authority has proposed to convey the Property to the Developer for a purchase price
of $184,000 (the “Purchase Price”), with the Purchase Price to be paid no later than the date that the
Developer sells at least 8 townhome units, plus interest in the amount of 4.0% per annum.
1.06. In order to fund the land write-down in the amount of $184,000 on a temporary basis, the
has determined to amend the Original Interfund Loan Resolution in order to use funds available in the
amount of $184,000, which will constitute an additional interfund loan. Such additional interfund loan
shall be designated the “Additional Interfund Loan.”
1.07. The Original Interfund Loan and the Additional Interfund Loan shall be referred to herein
as the “Interfund Loan” and is made in the amount of $914,000. Any reimbursement for the Interfund
2
533977v2 JAE RC125-366
Loan is not subordinate to payments due and owing to the Developer under the tax increment pay as you
go note to be issued to the Developer.
1.08. The Authority intends to use tax increment revenues derived from the TIF District to
repay all or a portion of the Interfund Loan.
Section 2. Terms of Additional Interfund Loan.
2.01. The Additional Interfund Loan shall be made from the Authority fund described above,
or any other fund designated by the Authority, to the Authority’s TIF Fund for the TIF District.
2.02. The Additional Interfund Loan is repayable solely from and to the extent that Available
Tax Increment is available. “Available Tax Increment” means, on each Payment Date (as defined herein),
all of the tax increment generated in the preceding six (6) months with respect to the property within the TIF
District and remitted to the Authority by Hennepin County, Minnesota, all in accordance with the TIF Act.
Payments on the Additional Interfund Loan are on parity with the Original Interfund Loan and any other
outstanding or future interfund loans secured in whole or in part with Available Tax Increment.
2.03. Provided that there is Available Tax Increment to repay the Additional Interfund Loan,
principal and interest (the “Payments”) on the Additional Interfund Loan shall be paid semiannually on
February 1 and August 1 (each a “Payment Date”), commencing on the first Payment Date after the advance
of the Additional Interfund Loan. Payments shall continue until the earlier of (a) the date the principal and
accrued interest of the Additional Interfund Loan is paid in full, or (b) the date of last receipt of tax increment
from the TIF District. Payments on the Additional Interfund Loan will be made in the amount and only to the
extent of Available Tax Increment. Payments shall be applied first to accrued interest, and then to unpaid
principal. Interest accruing from the date of each expenditure to the first Payment Date will be compounded
semiannually on February 1 and August 1 of each year and added to principal, unless otherwise specified by
the Additional Interfund Loan form.
2.04. The Additional Interfund Loan shall bear interest at the Authority’s then current internal
rate of return on the principal amount advanced, accruing from the date of each initial expenditure;
provided, however that the interest rate shall not exceed the greater of the interest rates specified under
Minnesota Statutes, Section 270C.40 or Section 549.09 as of the date the advance is authorized. The
maximum interest rate in effect for calendar year 2018 is 4.0%.
2.05. The principal sum and all accrued interest payable under this resolution is prepayable in
whole or in part at any time by the Authority without premium or penalty.
2.06. This resolution is evidence of an internal borrowing by the Authority in accordance with
Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable from Available Tax
Increment pledged to the payment hereof under this resolution or any other sources of funds the Authority
may use to pay the Payments. The Additional Interfund Loan shall not be deemed to constitute a general
obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the
Authority and the City.
2.07. The Authority may from time to time amend the terms of this resolution to the extent
permitted by law, including without limitation amendment to the payment schedule and the interest rate;
provided that the interest rate may not be increased above the maximum specified in Section 469.178.
subdivision 7 of the TIF Act.
3
533977v2 JAE RC125-366
Section 3. Additional Interfund Loans Authorized.
3.01. The Additional Interfund Loan with the terms set forth in Section 2 hereof is hereby
approved.
3.02. Authority staff and officials are hereby authorized and directed to execute any documents
and take any other actions necessary to carry out the intent of this resolution.
3.03. Unless otherwise amended by this resolution, the Original Interfund Loan Resolution
shall remain in full force and effect.
Section 4. Effective Date. This resolution is effective upon approval.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 20th day of August, 2018.
Mary Supple, Chair
ATTEST:
Erin Vrieze Daniels, Secretary
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.C.
S TAFF REPORT NO. 30
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: K ate A itchison, Housing S pecialist
D E PA RTME NT D IRE C TO R RE V IE W: Melissa P oehlman, A cting C ommunity D evelompent D irector
8/14/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Cancellation of the public hearing regarding the sale of 6310 Irving Avenue to Neighborworks Home
Partners, L LC.
E X E C UT IV E S UM M ARY:
During the spring of 2018, staff had been working with Neighborworks Home Partners on the development of
a proposal for the construction of a new home at 6310 I rving Avenue. This property was purchased by the
Housing and Redevelopment Authority (HRA) in 2012 using Community Development Block Grant funding. A
new home was to be built on the property under the New Home program, to be sold to households earning
80% of the Area Median I ncome.
Due to a number of factors, the development gap became too large to be covered by HRA funds. No solutions
were found, and staff is exploring other courses of action for the property.
A legal notice was published on J uly 5 for a public hearing during the J uly 16 HRA meeting. A follow up
notice was sent to residents letting them know that the meeting would tentatively be rescheduled for August 20,
2018.
RE C O M M E ND E D AC T I O N:
By motion: Cancel the public hearing regarding the sale of 6310 Irving Avenue to Neighborworks Home
Partners, L LC.
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
During the spring of 2018, HRA staff made contact with Neighborworks Home Partners for the
development of a proposal for the property at 6310 I rving Avenue.
Due to a number of factors specific to this parcel, the development became too expensive to be
covered by HRA funds.
A legal notice was published on J uly 5th.
A courtesy mailing was mailed to neighbors on J uly 3rd.
On J uly 12, the HRA issued another courtesy mailing notifying neighbors that the item may be
rescheduled for the August 20 HRA meeting.
On J uly 16, the HRA continued the public hearing.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
None
C.C R IT IC AL T IMIN G IS S U E S:
None
D.F IN AN C IAL IMPAC T:
None
E.L E GAL C ON S ID E R AT ION:
The notice of a public hearing was published; therefore, the hearing should be officially cancelled.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
None
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A
AGENDA SECTION:PUBLIC HEARINGS
AGENDA ITEM #4.
S TAFF REPORT NO. 31
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
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: Melissa P oehlman, A cting C ommunity D evelompent D irector
8/14/2018
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
8/15/2018
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 adoption of a resolution authorizing the sale of 7300 Portland
Avenue to Twin Cities Habitat for Humanity, Inc., and approval of a contract with Twin Cities Habitat
for Humanity, Inc. for the development of a single-family home.
E X E C UT IV E S UM M ARY:
Twin Cities Habitat for Humanity (TC HF H) is proposing to purchase 7300 Portland Avenue from the Housing
& Redevelopment A uthority (HRA) to construct a new home to be sold to households with incomes no greater
than 60 percent of the Twin Cities Area Median I ncome (A MI ). The home will be a three-bedroom, two-bath,
1,684 square foot, two-story home with a detached two-car garage.
The HRA purc hased the substandard property in March 2018 under the New Home Program. The existing
structure was deemed substandard due to its small size (~800 square feet) and position on the lot. The
structure c urrently sits directly on the front property line rather than meeting setback requirements and the
narrow lot width makes market-rate new construction difficult. Under this proposal, TC HF H would demolish
the existing struc ture and c onstruc t a new home that would meet setbac k requirements and would relocate the
driveway access to East 73rd Street rather than Portland Avenue.
RE C O M M E ND E D AC T I O N:
Conduct and close the public hearing and by motion: Adopt a resolution authorizing the sale of 7300
Portland Avenue to Twin Cities Habitat for Humanity, Inc., and approve a contract with Twin Cities
Habitat for Humanity, Inc. for the development of a single-family home.
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
I n 2018, the HRA purchased the substandard property at 7300 Portland Avenue.
TC HFC is proposing to c onstruc t a two-story home of 1,684 square feet, three bedrooms, two
baths, and a two-car detached garage.
I n the past ten y ears, eleven new homes have been constructed under the New Home program for
affordable purchase and over 50 homes have been built since 1981.
TC HFH has the experience, capability, and financial security to develop the properties and has
previously constructed ten homes throughout the City.
The New Home Program allows homes to be sold to households earning up to 80 perc ent of A MI
($68,000 for a family of four); however, TC HFH’s policy and funding sourc es target households
whose income does not exceed 60 percent of the A MI .
TC HFH ac hieves long-term affordability with its projec ts by retaining the right to repurchase a
home it has developed and reselling it to income-qualified families.
A neighborhood meeting was held on August 6, 2018. Three neighbors attended and voiced their
support for the project.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The New Home Program implements the goal of the Comprehensive Plan to ensure sufficient
diversity in the housing stock to provide for a range of household sizes, income levels and needs.
The Program carries out the policies that support this goal including:
Promote the development of a balanced housing stock that is available to a range
of income levels.
Promote the development, management and maintenance of affordable housing in the City
through assistance programs, alternative funding sources, and the creation of partnerships
whose mission is to promote low to moderate income housing.
The proposed housing is consistent with the Housing Vision Statement that was accepted by the
City Council and HRA in J une 2013. The Statement calls for a full range and balance of housing
types in the community that match the choices of residents at every stage of their lives.
C.C R IT IC AL T IMIN G IS S U E S:
Closing would occur between September 2018 and March 2019.
Construction would begin in the Spring of 2019.
TC HFH hosted a neighborhood open house on August 6, 2018, to share plans and answer
questions.
D.F IN AN C IAL IMPAC T:
TC HFH is proposing to pay the HRA $40,000 for the property.
The property was purchased for $141,000 using Housing and Redevelopment funds in March
2018.
E.L E GAL C ON S ID E R AT ION:
Notice of the public hearing was published in the Sun Current on August 9, 2018.
Mailed notice was also sent as a courtesy to homeowners and occupants 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 resolution authorizing sale of the properties to Twin Cities Habitat for Humanity, I nc.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Chad Dipman, Twin Cities Habitat for Humanity
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
C ontract for development C ontract/A greement
S ite plan B ackup Material
House plan B ackup Material
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT
7300 PORTLAND AVENUE TO TWIN CITIES HABITAT FOR HUMANITY, INC. IN
ACCORDANCE WITH A CONTRACT FOR DEVELOPMENT
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in
furtherance of the New Home Program adopted by the HRA, said real property being
described as follows:
Address: 7300 Portland Avenue South
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 to sell real property within its area of
operation after public hearing; and
WHEREAS, a developer, Twin Cities Habitat for Humanity, Inc., has been
identified as the purchaser of the described property and in accordance with a
Development Agreement; and
WHEREAS, a public hearing has been held after proper public notice.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority in and for the City of Richfield:
1. A public hearing has been held 7300 Portland Avenue is authorized to be sold for
$40,000 to the Twin Cities Habitat for Humanity, Inc. in accordance with a
Development Agreement with the HRA.
2. The Chairperson and Executive Director are authorized to execute a Contract for
Private Development and other agreements as required to effectuate the sale to
Twin Cities Habitat for Humanity, Inc.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 20th day of August, 2018.
_____________________________
Mary B. Supple, Chair
ATTEST:
_______________________________
Erin Vrieze Daniels, Secretary
CONTRACT FOR DEVELOPMENT
Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
and
TWIN CITIES HABITAT FOR HUMANITY
at
7300 PORTLAND SOUTH, RICHFIELD MN. 55423
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
1
CONTRACT FOR DEVELOPMENT
THIS CONTRACT FOR DEVELOPMENT (the “Agreement”) is made and entered into
as of this ___ of ____________, 2018, by and between the Housing and Redevelopment Authority
in and for the City of Richfield, a body corporate and politic under the laws of the State of
Minnesota, having its principal office at 6700 Portland Avenue, Richfield, Minnesota (HRA), and
Twin Cities Habitat For Humanity, Inc. (TCHFH), a non-profit corporation under the laws of
Minnesota, having its principal office at 3001 Fourth Street SE, Minneapolis, MN 55414
(Developer).
WITNESSETH:
WHEREAS, the HRA has purchased the property at 7300 Portland Ave South, Richfield,
legally described as 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 (the “Property”),
for the purpose of providing affordable housing in the City; and
WHEREAS, the City of Richfield (the “City”) and the HRA have previously created and
established a New Home Program, pursuant to the authority granted in Minnesota Statutes, Sections
469.001 through 469.047; and
WHEREAS, the Developer has proposed the Improvements, as hereinafter defined, for the
Property which the HRA has determined will promote and carry out the objectives for which the
Property was purchased; will assist in carrying out the objectives of the New Home Program; and
will be in the vital best interests of the City, and the health, safety and welfare of its residents and in
accord with the public purposes and provisions of the applicable state and local laws and
requirements.
NOW, THEREFORE, in consideration of the mutual covenants and obligations of the
HRA and the Developer, each party does hereby represent, covenant and agree with the other as
follows:
ARTICLE I.
DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, the following terms have the meaning given
below unless the context clearly requires otherwise:
(a) City. The City of Richfield, Minnesota.
(b) Construction Plans. Collectively, the plans, drawings and related documents
related to the Improvements, which are listed on Exhibit A.
(c) Developer. Twin Cities Habitat For Humanity (TCHFH).
2
(d) Development. The Property and the Improvements to be constructed thereon
according to the Construction Plans approved by the HRA.
(e) Event of Default. Event of Default has the meaning given such term in Section 9.1.
(f) Holder. The term “holder” in reference to a Mortgage includes a lender, any insurer
or guarantor (other than the Developer) of any obligation or condition secured by such mortgage or
deed of trust.
(g) Housing and Redevelopment Authorities Act (HRA Act). Minnesota Statutes
Sections 469.001 through 469.047.
(h) HRA. The Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
(i) Improvements. Each and all of the structures and site improvements constructed or
renovated on the Property by the Developer, as specified in the Construction Plans approved by the
HRA.
(j) Mortgage. The term “mortgage” shall include the mortgages referenced in Article
VI of this Agreement and any deed of trust or other instrument creating an encumbrance or lien
upon the Property of any part thereof, as security for a loan.
(k) New Home Program. HRA program to encourage development of new housing
opportunities for low to moderate income buyers.
(l) Property. The real property legal described as:
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
having a street address of:
7300 Portland South, Richfield
(m) Qualified Buyer. A purchasing family (2 or more person household) whose income
does not exceed 80 percent of the metropolitan area median income.
(n) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles,
fire or other casualty to the Improvements, natural disasters, litigation commenced by third parties
which results in delays or acts of any federal, state or local government, except those contemplated
by this Agreement, which are beyond the control of the Developer.
Section 1.2 Exhibits. The following Exhibits are attached to and by reference made a part
of this Agreement:
3
A. List of Construction Plan Documents
B. Form of Quit Claim Deed
C. Form of Certificate of Completion
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 Developer. The Developer makes the following representations and
warranties as the basis for undertakings on its part herein contained:
(a) The Developer has the legal authority and power to enter into this Agreement, and
has duly authorized the execution, delivery and performance of this Agreement; and the
individual(s) who execute this Agreement on behalf of the Developer have the power and authority
to bind the Developer;
(b) The Developer has the necessary equity capital or will obtain commitments for
financing necessary for construction of the Improvements;
(c) The Developer will construct the Improvements in accordance with the terms of this
Agreement, the Construction Plans, and all local, state and federal laws and regulations;
(d) The Developer will obtain, in a timely manner, all required permits, licenses and
approvals, and will meet, in a timely manner, the requirements of all local, state and federal laws
and regulations which must be obtained or met before the Improvements may be constructed; and
(e) The plans for the Improvements have been prepared by a qualified draftsperson or
architect.
4
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, to carry out its
obligations hereunder, and the individuals who execute this Agreement on behalf of the HRA have
the power and authority to bind the HRA; and
(b) The HRA will, in a timely manner, subject to all notification requirements, review
and act upon all submittals and applications of the Developer and will cooperate with the efforts of
Developer to secure the granting of any permit, license, or other approval required to allow the
construction of the Improvements; provided, however, that nothing contained in this subparagraph
2.2(b) shall be construed to limit in any way the reasonable and legitimate exercise of the HRA ’s
discretion considering any submittal or application.
ARTICLE III.
ACQUISITION OF PROPERTY; CONVEYANCE TO DEVELOPER
Section 3.1 Sale of Property to Developer. The HRA is the fee owner of the Property.
The HRA agrees to sell the Property to the Developer and the Developer agrees to purchase the
Property from the HRA in an “as is” condition. The HRA agrees to convey the Property to the
Developer by Quit Claim Deed in the general form of Exhibit B. The purchase price for the Property
will be $40,000.00.
Section 3.2 Title and Examination. As soon as reasonably possible after execution of this
Agreement 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 Developer or to Developer’s
designated title service provider; and
(b) Developer shall obtain the title evidence determined necessary or desirable by
Developer or Developer’s lender, including but not limited to title searches, title examinations,
abstracting, a title insurance commitment or an attorney’s title opinion, at Developer’s selection and
cost, and provide a copy to the HRA.
The Developer 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 affect a cure; provided, however, that the
HRA 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.
Section 3.3 Well Disclosure. Seller does not know of any wells on the property.
5
Section 3.4 Closing. Closing on the Property will take place on or before March 1, 2019, or
such other date as may be agreed to by the parties in writing. At closing, the Developer will provide
the HRA with the purchase price of the property. If closing has not occurred by March 1, 2019,
either party may terminate this Agreement.
Section 3.5. Closing Costs. The Developer will pay: (a) the closing fees charged by its title
insurance company or other closing agent, if any, utilized to close the transaction for
Developer; and (b) the recording fees for the Contract for Private Development and the deed
transferring title to the Developer. The HRA will pay all other fees normally paid by sellers, including:
any transfer taxes, and any fees and charges related to the filing of any instrument required to make
title marketable. Each party shall pay its own attorney fees.
Section 3.6. Sewer and Water. HRA warrants that city water is available at the lot line
and city sewer is available at the curb.
Section 3.7. ISTS Disclosure. HRA is not aware of any individual sewage treatment
system on the property. Developer is responsible for all costs of removing any individual sewage
treatment system that may be discovered on the Property.
Section 3.8. Taxes and Special Assessment. Real estate taxes and installments of special
assessments will be prorated between the HRA and Developer as of the date of closing.
Section 3.9 Soil Conditions and Hazardous Wastes. The Developer acknowledges that
the HRA makes no representations or warranties as to the conditions of the soils on the Property, its
fitness for construction of the Improvements or any other purpose for which the Developer may
make use of the Property, or regarding the presence of hazardous wastes, pollution or contamination
on the Property. The HRA will allow reasonable access to the Property for the Developer to
conduct such tests regarding soil conditions and hazardous wastes as the Developer may desire.
Permission to enter the Property to conduct such tests must be given in writing under the terms and
conditions established by the HRA.
Section 3.10 Survey. The HRA will allow reasonable access to the Property for the
Developer to conduct a survey. Permission to enter the Property to conduct such tests must be given
in writing under the terms and conditions established by the HRA.
Section 3.11 Trees. All healthy trees will be saved and protected by the Developer during
construction, to the extent possible, except those that specifically interfere with the construction of
the Improvements. Trees requested to be removed must be identified by type on the site plan
provided by the Developer.
Section 3.12 Sale to Qualified Buyer; Covenant on Use. The Developer agrees to convey
the Property and Improvements to a Qualified Buyer within 180 days of issuance of a Certificate of
Occupancy or after that time as agreed upon by the parties. Prior to agreeing to sell the Property and
Improvements to a prospective buyer, the Developer shall provide the HRA with sufficient evidence
that the potential buyer is a Qualified Buyer. In addition, the Developer must obtain the HRA’s
prior approval of the terms and conditions of the purchase agreement with the Qualified Buyer, and
6
the agreement terms and conditions must be consistent with this Agreement. This Agreement
constitutes a covenant on the part of the Developer, its successors and assigns, to develop the
Property and Improvements for owner-occupied, single-family residential purposes as permitted by
the City.
ARTICLE IV.
DEMOLITION
Section 4.1. Demolition. The Developer shall demolish the structures on the Property
pursuant to the requirements of this Article IV.
Section 4.2. Local Permit Requirements and Related Submittals.
(a) The Developer shall obtain all permits required for demolition by the City, including
a plumbing permit (for water & sanitary sewer disconnects) and a demolition permit. Questions
about these permits, permit fees, and the scheduling process for the required inspections should be
directed to the Building Inspections Department at Richfield City Hall (612-861-9816).
(b) No less than two (2) days prior to commencing demolition, the Developer shall
provide to the City and the HRA a description of proposed dust and noise control measures for the
Property.
(c) Upon completion of the demolition, the Developer shall provide to the City and the
HRA: (i) copies of any permits required by government agencies other than the City, such as
transport or disposal permits; (b) copies of any test results required by government agencies other
than the City, including but not limited to testing required as part of the asbestos abatement process;
and (c) copies of all landfill records indicating receipt and acceptance of hazardous wastes by a
landfill licensed to accept hazardous wastes.
Section 4.3. Conditions on the Property During Demolition.
(a) The Developer will disconnect and abandon utilities serving the Property, including
water, sanitary sewer, electricity, gas and telecommunications; or arrange for disconnection and
abandonment of same. The Developer shall not begin demolition before field-verifying that
disconnection and abandonment has been completed.
(b) The Developer shall ensure that the buildings are vacated and use of the property is
discontinued prior to commencing demolition.
(c) The Developer shall provide all labor, materials, equipment, employee training,
compliance with all regulations, permits, notifications, licenses and agreement necessary to perform
the demolition.
7
(d) The demolition operations shall not at any time encroach on adjacent residential
properties. Where residents occupy the adjacent properties, the Developer shall stake and mark the
boundaries of the property to identify the limits of operations for its employees and subcontractors.
(e) Where adjacent buildings are occupied, the HRA requires the Developer to advise
the inhabitants as to when they will start work activities and of what hazards are involved. The
Developer shall also furnish the occupants of the adjoining properties a phone number where they
can reach the Developer in case of an emergency or problem.
(f) As directed by the City Inspector, a silt fence or other appropriate erosion control
measures shall be erected around the perimeter of the Property to prevent erosion and unwanted run-
off onto adjacent properties, streets, and alleys. Silt fences must conform to standards set by the
Minnesota Pollution Control Agency and the City.
(g) The use of explosives and on site burning during demolition are prohibited.
(h) The Developer shall provide water, electricity, communications and toilet facilities
on site as necessary to complete the work.
(i) The Developer shall provide and maintain uninterrupted vehicular access to the
Property, including temporary demolition facilities, storage and work areas, for not only persons and
equipment involved in the demolition but also emergency vehicles.
(j) The Developer shall keep fire hydrants and water control valves free from
obstruction and accessible for use.
(k) The Developer shall take all necessary safeguards to prevent damage or injury to
neighboring property.
(l) Prior to closing or rerouting existing traffic lanes or sidewalks in any public street
easement or right-of-way adjacent to streets, the Developer shall obtain written permission from the
City’s Engineer. Expenses related to lane closures, including but not limited to traffic barriers, signs
and similar equipment, as well as traffic control personnel, shall be the responsibility of the
Developer.
(m) The Developer may conduct demolition work on the Property from 7 a.m. to 7 p.m.
Monday through Friday and 9 a.m. to 5 p.m. on Saturdays. No work shall be conducted on Sundays
or legal holidays.
(n) The Developer shall not crush any materials on-site.
(o) The Developer shall maintain the Property in a safe and neat manner. Adjacent
properties, streets and right-of-ways shall be kept free of dirt and debris.
Section 4.4. Demolition.
8
(a) The Developer shall use water sprinkling, temporary enclosures and other suitable
methods to limit dust and dirt rising and scattering in air. The Developer shall comply with any and
all governing regulations pertaining to environmental protection. The Developer shall not use water
when it may create hazardous or objectionable conditions such as flooding or pollution.
(b) The Developer shall clean adjacent structures and improvements of dust, dirt and
debris caused by demolition operations and return adjacent areas to condition existing prior to start
of work.
(c) The Developer shall demolish buildings, other structures, improvements, and
landscaping completely and remove all debris from the Property. The Developer may use such
methods as required to complete the work subject to the limitations of governing regulations.
(d) The Developer shall proceed with demolition in a systematic manner, from top of
structures to ground, and will complete demolition work above each floor or tier before disturbing
supports on lower levels.
(e) After the Building has been removed from the Property, the Developer shall remove
all foundation walls and the basement floor slab, and shall remove all other at grade masonry,
concrete slabs, sidewalks, steps, and driveways from the Property. ALL ASPHALT, MASONRY,
AND NON-MASONRY MATERIAL MUST BE TRANSPORTED AWAY FROM THE SITE.
(f) Immediately upon the removal of the Building from its foundation, the Developer
shall furnish and erect on the Property a wood slat snow fence or an approved substitute, either one
being in good repair and reasonably acceptable to HRA. The fence shall be at least four feet in
height, shall completely enclose the open basement, and shall remain in place until the basement is
filled, at which time it shall be removed;
(g) The Developer shall locate demolition equipment throughout the building and
remove materials so as to not impose excessive loads to supporting walls, floor or framing.
(h) The Developer shall provide and maintain interior and exterior shoring, bracing or
other structural support to preserve structural stability and prevent movement, settlement or collapse
of the building.
(i) The Developer shall break up any concrete slabs-on-grade and remove from the
Property.
(j) The Developer shall demolish footings, foundation walls, tunnels and other below-
grade structures and remove from the Property.
(k) After removing all foundation walls and the basement floor slab, as provided above,
the Developer shall fill the basement to ground surface level with clean compactable soil. The
basement hole must be inspected by the City Inspector prior to filling, and any unauthorized debris
removed. The fill must not contain any hazardous substance or disposed building material.
9
(l) All sheds and other accessory structures, clothesline and other poles, and landscape
structures shall be removed from the Property.
(m) The Developer may not cut or remove a tree from the Property without prior
permission from the HRA. If any trees are cut or destroyed by the Developer without prior approval,
Contract will pay to the HRA damages of $200 per tree. Any such damages shall be deducted from the
Developer’s payment. Any trees approved by the HRA for removal and cut or felled in the moving
process shall be removed immediately, and the tree stumps may remain.
(n) The Developer shall provide a certificate of well abandonment if required.
Section 4.5. Debris and Disposal.
(a) The Developer shall maintain the Property free of extraneous debris.
(b) The Developer shall prohibit overloading of trucks to prevent spillage on access and
haul routes.
(c) The Developer shall maintain a sweeping and clean-up program to prevent
deposition, release and disbursal of soils and debris onto paved surfaces.
(d) The Developer shall move from the Property all debris, rubbish and other materials
resulting from demolition operations.
(e) The Developer shall transport materials from the Property and legally dispose of
them off-site in accordance with governing regulations.
ARTICLE V.
CONSTRUCTION OF IMPROVEMENTS
Section 5.1. Construction of Improvements. The Developer shall construct the
Improvements on the Property at the Developer’s cost in accordance with the Construction Plans,
and shall maintain, preserve and keep the Improvements in good repair and condition until sale of
the Property to a Qualified Buyer.
Section 5.2. Building Plans. The Developer agrees that the City of Richfield building
official may withhold issuance of a building permit for the Improvements unless the Construction
Plans are in conformity with this Agreement, and all local, state and federal regulations. The HRA
shall, within 25 days of receipt of Construction Plans submitted in application for a building permit,
review such Construction Plans to determine whether the foregoing requirements have been met. If
the HRA determines such Construction Plans to be deficient, it shall notify the Developer in writing
stating the deficiencies and the steps necessary for correction. Issuance of the building permit by the
10
City with the approval of the HRA shall be a conclusive determination that the Construction Plans
have been approved and shall satisfy the provisions of this Section 5.2.
Section 5.3 Schedule of Construction. Subject to Unavoidable Delays, construction of the
Improvements shall be completed prior to January 1, 2020. All construction shall be in conformity
with the approved Construction Plans. Periodically during construction the Developer shall make
reports in such detail as may reasonably be requested by the HRA concerning the actual progress of
construction. If at any time prior to completion of construction the HRA has cause to believe that
the Developer will be unable to complete construction of the Improvements in the time permitted by
this Section 5.3, it may notify the Developer and demand assurances from the Developer regarding
the Developer’s construction schedule. If such assurances are not forthcoming or are deemed by the
HRA at its sole discretion to be inadequate, the HRA may declare an Event of Default and may avail
itself of any of the remedies specified in Section 9.2 of this Agreement.
Section 5.4 Certificate of Completion. After notification by the Developer of completion
of construction of the Improvements, the HRA shall inspect the construction to determine whether
the Improvements have been completed in accordance with the Construction Plans and the terms of
this Agreement, including the date of the completion thereof. In the event that the HRA is satisfied
with the construction, the HRA shall furnish the Developer with a Certificate of Completion in the
form attached hereto as Exhibit C. Such certification by the HRA shall be a conclusive
determination of satisfaction and termination of the agreements and covenants in this Agreement
with respect to the obligation of the Developer to construct the Improvements.
The certification provided for in this Section 5.4 shall be in recordable form. If the HRA
shall refuse or fail to provide certification in accordance with the provisions of this Section 5.4, the
HRA shall within 15 days of such notification provide the Developer with a written statement,
indicating in adequate detail in what respects the Developer has failed to complete the
Improvements in accordance with the provisions of this Agreement necessary, in the opinion of the
HRA, for the Developer to take or perform in order to obtain such certification.
Section 5.5 Failure to Construct. In the event that construction of the Improvements is not
completed as provided in Section 5.3 of this Agreement, an Event of Default shall be deemed to
have occurred and the HRA may proceed with its remedies under Section 9.2.
ARTICLE VI.
INSURANCE
Section 6.1 Insurance. The Developer will provide and maintain or cause to be provided
and maintained at all times during the process of constructing the Improvements and, from time to
time at the request of the HRA, furnish the HRA with proof of payment of premiums on:
(a) Builder’s risk insurance, written on the so-called “Builder’s Risk -- Completed Value
Basis,” in an amount equal to 100% of the insurable value of the Improvements at the date of
completion, and with coverage available in non-reporting form on the so-called “all risk” form of
policy;
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(b) Comprehensive general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations and contractual liability insurance) together with
an Owner’s Contractor’s Policy with limits against bodily injury and property damage of not less
than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess
liability policy may be used); and
(c) Workers” compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (a) and (b) above shall be in form and
content satisfactory to the HRA and shall be placed with financially sound and reputable insurers
licensed to transact business in Minnesota. The policy of insurance delivered pursuant to clause (a)
above shall contain an agreement of the insurer to give not less than thirty (30) days advance notice
to the HRA in the event of cancellation of such policy or change affecting the coverage thereunder.
ARTICLE VII.
FINANCING
Section 7.1 Financing. Within 20 days of the date of execution of this Agreement, the
Developer shall submit to the HRA evidence of financing for the Improvements in compliance with
the provisions of Section 2.1(b) of this Agreement. If the HRA finds that the financing is adequate
in amount to provide for the construction of the Improvements, the HRA shall notify the Developer
of its approval.
If the HRA rejects the evidence of financing as inadequate, the Developer shall have 30 days
or such additional period of time as the Developer may reasonably require from the date of such
notification to submit evidence of financing satisfactory to the HRA. If the Developer fai ls to
submit such evidence or fails to use due diligence in pursuing financing, the HRA may terminate
this Agreement and both parties shall be released from any further obligation or liability hereunder,
except for the HRA’s remedies pursuant to Section 5.5 of this Agreement. Closing shall not take
place until the Developer has provided the HRA with acceptable evidence of financing for
construction of the Improvements.
Section 7.2 Limitation Upon Encumbrance of Property. Prior to the issuance of the
Certificate of Completion, neither the Developer nor any successor in interest to the Property or any
part thereof shall engage in any financing or any other transaction creating any Mortgage or other
encumbrance or lien upon the Property, whether by express agreement or operation of law, or suffer
any encumbrance of lien to be made on or attached to the Property other than the liens or
encumbrances attached for the purposes of obtaining funds to the extent necessary for making the
Improvements without the prior written approval of the HRA. The HRA shall not approve any
Mortgage which does not contain terms which conform to the terms of this Article VII and Section
9.2 of this Agreement.
Section 7.3 Subordination. In order to facilitate obtaining financing for the construction of
the Improvements by the Developer, the HRA may, in its sole and exclusive discretion, agree to
12
modify this Agreement in the manner and to the extent it deems reasonable, upon request by the
financial institution and the Developer.
ARTICLE VIII.
PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER
Section 8.1 Representation as to Redevelopment. The Developer represents and agrees
that its undertakings pursuant to the Agreement, are for the purpose of development of the Property
and not for speculation in land holding. The Developer 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 Developer are of particular concern to
the HRA. The Developer further recognizes that it is because of such qualifications and identity that
the HRA is entering into this Agreement, and, in so doing, is further willing to rely on the
representations and undertakings of the Developer for the faithful performance of all undertakings
and covenants agreed by the Developer to be performed.
Section 8.2 Prohibition Against Transfer of Property and Assignment of Agreement.
For the reasons set out in Section 8.1 of this Agreement, the Developer represents and agrees that
prior to the issuance of the Certificate of Completion by the HRA:
(a) Except only by way of security for, and only for the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Property, or any part thereof, to
perform its obligations with respect to the Development under this Agreement, and any other
purpose authorized by this Agreement, the Developer, except as so authorized, has not made or
created, and that it will not make or create, or suffer to be made or created, any total or partial sale,
assignment, conveyance, or any trust 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; and
(b) The HRA shall be entitled to require, except as otherwise provided in this
Agreement, as conditions to any such approval under this Section 8.2 that:
(i) Any proposed transferee shall have the qualifications and financial responsibility, as
determined by the HRA, necessary and adequate to fulfill the obligations undertaken in this
Agreement by the Developer or, in the event the transfer is of or relates to part of the
Property, such obligations to the extent that they relate to such part,
(ii) any proposed transferee, by instrument in writing satisfactory to the HRA and in form
recordable among the land records, shall for itself and its successor and assigns, and
specifically for the benefit of the HRA, have expressly assumed all of the obligations of the
Developer under this Agreement and agreed to be subject to such obligations, restrictions
and conditions or, in the event the transfer is of, or relates to part of the Property, such
obligations, conditions, and restrictions to the extent that they relate to such part; provided,
that the effect that any transferee of, or any other successor in interest whatsoever to, the
13
Property or any part thereof, shall, for whatever reason, not have assumed such obligations
or agree to do so, shall not, unless and only to the extent otherwise specifically provided in
the Agreement or agreed to in writing by the HRA, relieve or except such transferee or
successor from such obligations, conditions, or restrictions, or deprive or limit the HRA of
or with respect to any rights or remedies or controls with respect to the Property of the
construction of the Improvements; it being the intent of this Section 8.2, together with other
provisions of this Agreement, that to the fullest extent permitted by law and equity and
excepting only in the manner and to the extent specifically provided otherwise in the
Agreement no transfer of, or change with respect to, ownership in the Property or any part
thereof, or any interest therein, however consummated or occurring, whether voluntary or
involuntary, shall operate, legally or practically, to deprive or limit the HRA, or any rights or
remedies or controls provided in or resulting from this Agreement with respect to the
Property and the construction of the Improvements that the HRA would have had, had there
been no such transfer or change, and
(iii) There shall be submitted to the HRA for review all instruments and other legal
documents involved in effecting transfers described herein, and if approved by the HRA, its
approval shall be indicated to the Developer in writing.
In the absence of specific written agreement by the HRA to the contrary, no such transfer or
approval by the HRA thereof shall be deemed to relieve the Developer from any of its obligations
with respect thereto. The sale of the Development to a Qualified Buyer shall not be deemed to be a
transfer within the meaning of this Section 8.2.
Section 8.3 Approvals. Any approval required to be given by the HRA under this Article
VIII may be denied only in the event that the HRA reasonably determines that the ability of the
Developer to perform its obligations under this Agreement will be materially impaired by the action
for which approval is sought.
ARTICLE IX.
EVENTS OF DEFAULT
Section 9.1 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 Developer to pay when due the payments required to be paid or secured
under any provision of this Agreement;
(b) Subject to Section 10.7, failure by the Developer to complete the Improvements by
January 1, 2020, absent any Unavoidable Delay;
(c) Failure by the Developer 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;
14
(d) Failure by the Developer to close with a Qualified Buyer within 180 days of completion
or after that time as agreed upon by the parties.
(e) If the Developer shall admit in writing its inability to pay its debts generally as they
become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of its
creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial
part of the Property;
(f) If the Developer, 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 Developer, a receiver of the Developer or of the whole or substantially all of its property, or
approve a petition filed against the Developer seeking reorganization or arrangement of the
Developer under the federal bankruptcy laws, and such adjudication, order or decree shall not be
vacated or set aside or stayed within 60 days from the date of entry thereof; or
(g) 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 9.2 Remedies on Default. Whenever any Event of Default occurs, the HRA may,
in addition to any other remedies or rights given the HRA under this Agreement, take any one or
more of the following actions following written notice by the HRA to the Developer as provided in
Section 10.4 of this Agreement:
(a) suspend its performance under this Agreement until it receives assurances from the
Developer, deemed reasonably adequate by the HRA, that the Developer will cure its default and
continue its performance under this Agreement;
(b) cancel or rescind this Agreement;
(c) withhold the Certificate of Completion; or
(d) take whatever action at law or in equity may appear necessary or desirable to the HRA to
collect any payments due under this Agreement, or to enforce performance and observance of any
obligation, agreement, or covenant of the Developer under this Agreement; provided, however, that
any exercise by the HRA of its rights or remedies hereunder shall always be subject to and limited
by, and shall not defeat, render invalid or limit in any way (a) the lien of any Mortgage authorized
by this Agreement and (b) any rights or interest provided in this Agreement for the protection of the
Holders of a Mortgage; and provided further that should any Holder succeed by foreclosure of the
Mortgage or deed in lieu thereof to the Developer’s interest in the Property, it shall, notwithstanding
the foregoing, be obligated to perform the following obligations of the Developer only to the extent
that the same have not therefore been performed by the Developer: Sections 3.3 through 3.7;
Sections 5.1 through 5.5; Sections 6.1. Said Holder, upon foreclosure or taking of a deed in lieu,
shall have no obligations pursuant to this Agreement other than as specifically set forth in the
foregoing sentence.
15
Section 9.3 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 s hall
be construed to be a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the HRA or the Developer to
exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as
may be required in this Article IX.
Section 9.4 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 X.
ADDITIONAL PROVISIONS
Section 10.1 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
Developer, or any successor in interest, for any Event of Default by the HRA or for any amount
which may become due to the Developer or successor or on any obligations under the terms of this
Agreement.
Section 10.2 Non-Discrimination. The provisions of Minnesota Statutes Section 181.59,
which relate to civil rights and non-discrimination, and any affirmative action program of the City
shall be considered a part of this Agreement and binding on the Developer as though fully set forth
herein.
Section 10.3 Notice of Status and Conformance. At such time as all of the provisions of
this Agreement have been fully performed by the Developer, the HRA, upon not less than ten days
prior written notice by the Developer, agrees to execute, acknowledge and deliver, without charge to
the Developer or to any person designated by the Developer, a statement in writing in recordable
form certifying the extent to which this Agreement has been performed and the obligations
hereunder satisfied.
Section 10.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by either party to the
other shall be sufficiently given or delivered if it is sent by mail, postage prepared, return receipt
requested or delivered personally:
(a) As to the HRA:
Richfield HRA
16
Executive Director
6700 Portland Avenue South
Richfield, MN 55423
(b) As to the Developer:
Twin Cities Habitat For Humanity (TCHFH)
ATTN: Chad Dipman
3001 4th Street SE
Minneapolis, MN 55414
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 10.4.
Section 10.5 Provisions Not Merged With Deed. None of the provisions of this
Agreement is intended to or shall be merged by reason of any deed transferring any interest in the
Property and any such deed shall not be deemed to affect or impair the provisions and covenants of
this Agreement.
Section 10.6. Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, all of which shall constitute one and the same instrument.
Section 10.7. Extensions. Any extension to the Closing Date and/or extension of the
completion date of the Improvements set forth in Section 5.3 that exceeds 6 months from the date agreed
to in Section 3.4 and 5.3, 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 3.4 and
extend the completion date of the Improvements to a date less than 6 months from the completion date
set forth in Section 5.3.
IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly executed in its
name and behalf and its seal to be hereunto duly affixed and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By _______________________________________
Its Chairperson
By _______________________________________
Its Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __________ day of
____________________, 2018, by ______________, the Chairperson of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body
corporate and politic under the laws of Minnesota, on behalf of the HRA.
________________________________________________
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __________ day of
____________________, 2018, 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 Minnesota, on behalf of the public body corporate and politic.
________________________________________________
Notary Public
TWIN CITIES HABITAT FOR HUMANITY
By: ________________________________
Its: ___________________________________
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this _____day of _______________,
2018, by __________________________________________, the _______________________ of
Twin Cities Habitat for Humanity, a corporation under the laws of Minnesota, on behalf of the
corporation.
________________________________________________
Notary Public
1
EXHIBIT A
LIST OF CONSTRUCTION PLAN DOCUMENTS
Contract for Development, fully executed
Concept Plans
Site Plan
2
EXHIBIT B
FORM OF QUIT CLAIM DEED
STATE DEED TAX DUE HEREON: $_______
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 Twin Cities Habitat for Humanity, a non-profit corporation under
the laws of the State of Minnesota, Grantee, real property in Hennepin County, Minnesota,
described as follows:
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, 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 the terms and provisions of that certain Contract for Private Development
between Grantor and Grantee (the “Contract”, dated ______________, 2018, recorded
_______________, 2018, in the office of the Hennepin County Recorder as Document No.
______________. Specifically, pursuant to Section 3.12 of the Contract, the Grantee agrees to
convey the Property and Improvements to a Qualified Buyer (as that term is defined in the
Contract). The Grantee must obtain the Grantor’s prior approval of the terms and conditions of the
purchase agreement with the Qualified Buyer, and the agreement terms and conditions must be
consistent with the terms of the Contract.
(if more space is needed, continue on back)
together with all hereditaments and appurtenances.
A well disclosure certificate accompanies this document.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
Affix Deed Tax Stamp Here
By
Its Chairperson
By
Its Executive Director
3
NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RAK)
NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RAK)
STATE OF MINNESOTA
} ss.
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this ____ day of _______, 20__, by Mary B.
Supple, 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.
_______________________________________
SIGNATURE OF PERSON TAKING
ACKNOWLEDGMENT
STATE OF MINNESOTA
} ss.
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this ____________ day of _______, 20__, by
Steven L. Devich, 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.
_______________________________________
SIGNATURE OF PERSON TAKING
ACKNOWLEDGMENT
Check here if part or all of the land is Registered (Torrens)
Tax Statements for the real property described
in this instrument should be sent to (include
name and address of Grantee):
This instrument drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
4
EXHIBIT C
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that ____________________________, has fully and
completely complied with its obligations under Article V of 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. ____________________ with respect to
the construction of the approved construction plans at ________________________, legally
described as _____________________________ and is released and forever discharged from its
obligations to construct under such above-referenced Article.
DATED: ___________________
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY RICHFIELD
By __________________________________
Its Chairperson
By __________________________________
Its Executive Director
5
STATE OF MINNESOTA )
)SS
COUNTY OF HENNEPIN )
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, 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
STATE OF MINNESOTA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __________ day of
____________________, 20__, by Steven L. Devich, 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 Minnesota, on behalf of the public body corporate and politic.
________________________________________________
Notary Public
This instrument was drafted by:
Richfield Housing and Redevelopment Authority
6700 Portland Ave S
Richfield, MN 55423
AGENDA SECTION:PUBLIC HEARINGS
AGENDA ITEM #5.
S TAFF REPORT NO. 32
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: Julie Urban, Housing Manager
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
8/15/2018
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
8/15/2018
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 adoption of a resolution approving a Contract for Private
Development with N H H Companies, LL C for redevelopment of the Cedar Point II Housing area with up
to 80 units of for-sale townhomes.
E X E C UT IV E S UM M ARY:
The Richfield Housing and Redevelopment Authority (HRA) approved a Preliminary Development Agreement
(Agreement) with NHH Companies, L L C (Developer) on March 19, 2018, for the development of the Cedar
Point I I Housing area (63rd to 65th Streets, 16th Avenue to Richfield Parkway). The Agreement identified
several issues to be worked out and established milestones for the Developer to meet, including negotiating a
Contract for Private Development (Contract) with staff by August 20, 2018.
Since that time, the Developer has accomplished the following:
Submitted plans for sketch plan review.
Submitted land use plans.
Submitted financial pro formas.
Submitted grant applications to the Metropolitan Council and the Department of Employment and
Economic Development.
Reached out to all property owners located within the development area.
Negotiated purchase agreements with six of the remaining eleven property owners.
Closed on the acquisition of one property and scheduled to close on an additional four properties in
September and a fifth in October.
Further study of the financial components of the project has led the Developer to propose that two
separate Tax Increment Financing (T IF) Districts and therefore two separate Contracts be prepared
for the development.
T he Contract for the townhome portion of the development provides the following terms:
Minimum improvements of up to 80 units of owner-occupied housing and necessary public
infrastructure.
95% of the units will be affordable to households earning no more than 100% (1-2 person households)
or 115% of the Area Median I ncome (A MI ).
The Developer has identified a need for public assistance.
The public assistance that is identified in this Contract includes a TI F Note from the HRA of
approximately $2.4 million.
The HRA will issue up to three notes, corresponding to the timing of construction and sale of the
townhomes, which will take place over a period of 36 months.
30% of the annual increment will be paid to the HRA for administrative expenses and for interfund loans
that have been made to assist in the acquisition of properties.
I n the event that the Developer sells more than four units to non-income-qualified buyers, the TI F will
be reduced proportionately. The Developer can sell no more than 20% of the units to non-income
income-qualified buyers.
The TI F will be distributed "pay as you go," meaning that payments will only be made subject to
sufficient tax increment being generated on the property to meet the payment obligation.
The HRA will sell the four parcels it owns, located at 6315, 6333, 6401, and 6409 16th Avenue, to the
Developer for $184,000. This amount is based on an appraisal of the properties as vacant single family
lots.
The Developer will pay the HRA $84,000 at the time the Developer closes on the construction loan.
Final payment of $100,000 will be paid no later than the date the Developer sells at least eight
townhomes. I f that payment isn't made before December 1, 2019, the HRA can exercise the option to
receive the funds through increment.
The Developer would close on acquisition of the HRA lots in September, 2018.
The Developer will provide one to two pieces of public art within the project area (three to four pieces
within the entire development area will satisfy this requirement).
The terms of the Contract require construction of the townhomes to begin by December 31, 2019, and
be completed by J une 30, 2021.
RE C O M M E ND E D AC T I O N:
Conduct and close the public hearing and by motion: Adopt a resolution approving a Contract for
Private Development with N H H Companies, L LC for the Cedar Point II Housing area and selling H R A-
owned properties located within the development area to N H H Companies, LL C.
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
A 1999-2000 study commissioned by the City of Richfield and the Metropolitan Airports
Commission (MA C) concluded that many of the structures in this area, including all single-family
homes, were not capable of withstanding the negative impacts of low frequency noise. As a result
of the study, this area was identified as a Redevelopment Area in 2000.
I n 2004, the Minnesota Legislature approved the creation of a special Redevelopment TI F District
to provide a funding mechanism for redevelopment of the area.
During the economic downturn from 2007-2011, there was little interest in developing this area due
to weak market conditions.
Upon conclusion of the recession, HRA staff concentrated their development efforts on the Cedar
Point I I area. The challenge of property acquisitions and the significant financial gap in the
project made it difficult to find a developer and project that could succeed.
I n 2014, homes along 17th Avenue were purchased for the construction of Richfield Parkway from
63rd to 66th Streets leaving 14 fewer homes to be purchased in the development area.
I n 2015, the HRA signed a pre-development agreement with Boisclair Corporation to redevelop
the area with single family homes and townhomes. I n 2017, the HRA cancelled the agreement with
Boisclair due to slow progress in solving the acquisition and other development issues,
I n the Fall of 2017, NHH Properties and Boisclair Corporation approached the HRA and Council
with a new development team and plan for acquiring the remaining single family homes and
closing the financial gap.
I n March of 2018, the HRA signed a pre-development agreement with NHH Properties (dba NHH
Companies, L L C) to redevelop the area with 218 market-rate apartments and up to 80 townhomes
affordable to households earning 100/115% of the area median income.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
I n order for private redevelopment with public assistance to occur, a developer must have a
Contract with the HRA.
The proposed development is consistent with the City's Comprehensive Plan, including the Cedar
Corridor Master Plan.
The proposed development is consistent with the Housing Visioning Policy Statements.
C.C R IT IC AL T IMIN G IS S U E S:
The Developer would like to begin site work this Fall on the townhomes with primary construction
work occurring in 2019.
D.F IN AN C IAL IMPAC T:
The Developer has identified a need for public assistance to redevelop this site.
The Contract has been prepared and reviewed by the HRA's legal counsel and financial
consultant.
The HRA will withhold 11% of the available TI F to be used to pay the State Auditor and to
reimburse the HRA for administrative expenses.
The HRA will withhold 19% of the available TI F to repay HRA interfund loans.
The total amount of TI F generated is $3.48 million. The Contract provides up to $2.4 million in TI F
to the Developer.
The terms of the proposed Contract issuance of up to three Pay-As-You-Go TI F Notes.
Payments made on these Notes are subject to the generation of sufficient tax increment.
E.L E GAL C ON S ID E R AT ION:
HRA legal counsel drafted the proposed Contract in cooperation with staff and the Developer.
There are occasionally changes of an administrative or technical nature that are required of a
contract as more information becomes available; HRA legal counsel may be given authority to
make these changes without further HRA consideration.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Approve the Contract for Private Development with additional provisions or modifications.
Do not approve 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:
J ulie Eddington, HRA Legal Counsel ?? Representative(s) of NHH Companies, L L C
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
C ontract for private development C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT
WITH NHH COMPANIES L.L.C. WITH RESPECT TO A TOWNHOMES DEVELOPMENT AND
AUTHORIZING THE CONVEYANCE OF INTEREST IN CERTAIN LAND
WHEREAS, the City of Richfield, Minnesota (the “City”) and the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota (the “Authority”) have approved the creation of Tax
Increment Financing District No. 2018-1 (a housing district) (the “TIF District”) within the Richfield
Redevelopment Project in the City (the “Redevelopment Project”) and have adopted a tax increment
financing plan for the purpose of financing certain improvements within the Redevelopment Project; and
WHEREAS, NHH Companies L.L.C., a Minnesota limited liability company (the “Developer”), has
proposed to acquire 15 parcels of property (the “Development Property”) located within the TIF District,
including four properties owned by the Authority, which are legally described in EXHIBIT A attached hereto
(the “Authority Property”) and construct on the Development Property a development which will include
(i) approximately 80 owner-occupied affordable townhomes; and (ii) necessary public infrastructure,
including streets and utilities (the “Minimum Improvements”); and
WHEREAS, there has been presented before this Board of Commissioners of the Authority (the
“Board”) a Contract for Private Development (the “Development Agreement”) proposed to be entered into
between the Authority and the Developer, pursuant to which the Developer will agree to construct the
Minimum Improvements and the Authority will agree to reimburse the Developer for a portion of land
acquisition costs and certain site improvement costs related thereto with tax increment generated from the
Development Property; and
WHEREAS, on the date hereof, the Board conducted a duly noticed public hearing on the
conveyance of the Authority Property to the Developer in accordance with Minnesota Statutes,
Section 469.029, subdivision 2; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1. The Development Agreement is hereby in all respects authorized, approved, and confirmed,
and the Chair and the Executive Director are hereby authorized and directed to execute the Development
Agreement for and on behalf of the Authority in substantially the form now on file with the Community
Development Director but with such modifications as shall be deemed necessary, desirable, or appropriate,
the execution thereof to constitute conclusive evidence of their approval of any and all modifications therein.
2. The Board finds that the proposed conveyance of the Authority Property is in accordance
with the redevelopment plan approved for the Redevelopment Project.
3. The conveyance of the Authority’s right, title, and interest in the Authority Property to the
Developer described herein is hereby approved.
2
4. The Chair and the Executive Director are hereby authorized to execute and deliver to the
Developer any and all documents deemed necessary to carry out the intentions of this resolution and the
Development Agreement.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 20th day of August, 2018.
Mary Supple, Chair
ATTEST:
Erin Vrieze Daniels, Secretary
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533270v2 JAE RC125-366
EXHIBIT A
LEGAL DESCRIPTION OF THE AUTHORITY PROPERTY
Lots 3 and 6, Block 1, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin County,
Minnesota
Lots 1 and 2, Block 2, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin County,
Minnesota
Sixth Draft
August 15, 2018
CONTRACT
FOR
PRIVATE DEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
and
NHH COMPANIES L.L.C.
Dated: August 20, 2018
THIS INSTRUMENT WAS DRAFTED BY:
Kennedy & Graven, Chartered (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
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TABLE OF CONTENTS
Page
PREAMBLE ................................................................................................................................................... 1
ARTICLE I
Definitions
Section 1.1. Definitions ................................................................................................................................. 2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority .............................................................................................. 5
Section 2.2. Representations by the Developer ............................................................................................ 5
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Development Property ............................................................................................... 7
Section 3.2. Conveyance of HRA Property .................................................................................................. 7
Section 3.3. Acquisition of Remaining Developer Property ........................................................................ 8
Section 3.4. Hennepin County Grant ............................................................................................................ 9
Section 3.5. Relocation ................................................................................................................................. 9
Section 3.6. Issuance of Pay-As-You-Go TIF Note ..................................................................................... 9
Section 3.7. Termination of TIF District ..................................................................................................... 10
Section 3.8. Payment of Administrative Costs ........................................................................................... 10
Section 3.9. Reimbursement for Interfund Loans ....................................................................................... 10
Section 3.10. Records .................................................................................................................................... 10
Section 3.11. Purpose of Assistance ............................................................................................................. 11
Section 3.12. Public Art ................................................................................................................................ 11
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements ............................................................................................... 12
Section 4.2. Construction Plans .................................................................................................................. 12
Section 4.3. Commencement and Completion of Construction ................................................................. 13
Section 4.4. Certificate of Completion ........................................................................................................ 13
Section 4.5. Owner-Occupied Housing Affordability Covenants; Qualification of the
TIF District .............................................................................................................................. 13
Section 4.6. Disqualification of TIF District ............................................................................................... 14
Section 4.7. Affordable Housing Reporting ............................................................................................... 14
Section 4.8. Disqualified Owner-Occupied Housing Units; Reduction of TIF Notes ............................... 14
ARTICLE V
Insurance
Section 5.1. Insurance ................................................................................................................................. 15
Section 5.2. Subordination .......................................................................................................................... 16
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes .......................................................................................... 17
Section 6.2. Reduction of Taxes ................................................................................................................. 17
Section 6.3. Suspension or Reduction of Payments on TIF Notes ............................................................. 17
Section 6.4. Qualifications .......................................................................................................................... 17
ARTICLE VII
Financing
Section 7.1. Mortgage Financing ................................................................................................................ 18
Section 7.2. Authority’s Option to Cure Default in Mortgage ................................................................... 18
Section 7.3. Modification; Subordination ................................................................................................... 18
Section 7.4. Termination ............................................................................................................................. 18
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development.......................................................................................... 19
Section 8.2. Prohibition Against Developer’s Transfer of Property and Assignment of Agreement ........ 19
Section 8.3. Release and Indemnification Covenants ................................................................................. 20
ARTICLE IX
Events of Default
Section 9.1. Events of Default ..................................................................................................................... 22
Section 9.2. Remedies on Default ............................................................................................................... 22
Section 9.3. Termination or Suspension of TIF Notes ............................................................................... 23
Section 9.4. Revesting Title in Authority Upon Happening of Event Subsequent to
Conveyance to Developer ....................................................................................................... 23
Section 9.5. Resale of Reacquired Property; Disposition of Proceeds ...................................................... 23
Section 9.6. No Remedy Exclusive ............................................................................................................. 24
Section 9.7. No Additional Waiver Implied by One Waiver ...................................................................... 24
Section 9.8. Attorney Fees and Costs ......................................................................................................... 24
Section 9.9. Right of Purchase and Right of First Refusal Agreement ...................................................... 24
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable.............................. 26
Section 10.2. Equal Employment Opportunity ............................................................................................. 26
Section 10.3. Restrictions on Use ................................................................................................................. 26
Section 10.4. Provisions Not Merged With Deed ......................................................................................... 26
Section 10.5. Titles of Articles and Sections ................................................................................................ 26
Section 10.6. Notices and Demands ............................................................................................................. 26
Section 10.7. Counterparts ............................................................................................................................ 26
Section 10.8. Recording ................................................................................................................................ 27
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Section 10.9. Amendment ............................................................................................................................. 27
Section 10.10. Preliminary Development Agreement .................................................................................... 27
TESTIMONIUM ............................................................................................................................................. S-1
SIGNATURES ................................................................................................................................................ S-1
EXHIBIT A Development Property .......................................................................................................... A-1
EXHIBIT B Form of TIF Notes ................................................................................................................ B-1
EXHIBIT C Investment Letter .................................................................................................................. C-1
EXHIBIT D Certificate of Completion ...................................................................................................... D-1
EXHIBIT E Right of Purchase and Right of First Refusal Agreement .................................................... E-1
EXHIBIT F Owner-Occupied Housing Form ........................................................................................... F-1
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CONTRACT FOR PRIVATE DEVELOPMENT
THIS CONTRACT FOR PRIVATE DEVELOPMENT (the “Agreement”), made as of the 20th day
of August, 2018, between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State of
Minnesota (the “Authority”), and NHH COMPANIES L.L.C., a Minnesota limited liability company (the
“Developer”).
WITNESSETH:
WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001 through
469.047, as amended (the “HRA Act”) and was authorized to transact business and exercise its powers by a
resolution of the City Council of the City of Richfield (the “City”); and
WHEREAS, the Authority has undertaken a program to promote redevelopment and development of
land that is underused or underutilized within the City, and in this connection the Authority administers a
redevelopment project known as the Richfield Redevelopment Project (the “Redevelopment Project”)
pursuant to the HRA Act; and
WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or
interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private
enterprise and promote the development of affordable housing within the City; and
WHEREAS, the Authority plans to establish the Tax Increment Financing District No. 2018-1 (a
housing district) (the “TIF District”) within the Richfield Redevelopment Project pursuant to Minnesota
Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”) in order to facilitate redevelopment
of certain property in the Redevelopment Project and promote the development of affordable housing within
the City; and
WHEREAS, the Developer proposes to acquire at least 15 parcels of property within the TIF District
(the “Development Property”) and construct a development which will include (i) approximately 80 owner-
occupied affordable townhomes; and (ii) necessary public infrastructure, including streets and utilities (the
“Minimum Improvements”); and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan for the Redevelopment
Project and make the Minimum Improvements economically feasible for the Developer to construct, the
Authority is prepared to convey four of the parcels that make up the Development Property to the Developer
and reimburse the Developer for a portion of the land acquisition costs and certain site improvement costs
related to the Minimum Improvements; and
WHEREAS, the Authority believes that the development of the TIF District pursuant to this
Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the
health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of
the applicable State and local laws and requirements under which the Redevelopment Project has been
undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the
context:
“Agreement” means this Contract for Private Development, as the same may be from time to time
modified, amended, or supplemented.
“Apartments Project” means the development on property adjacent to the Development Property of
(i) multifamily housing with approximately 218 units; (ii) a parking ramp with approximately 184 spaces;
and (iii) necessary public infrastructure, including streets and utilities.
“Authority” means the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
“Authority Representative” means the Executive Director of the Authority.
“Available Tax Increment” means, on each Payment Date, the Tax Increment attributable to the
Development Property located in the TIF District and paid to the Authority by the County in the six months
preceding the Payment Date after first deducting therefrom thirty percent (30%) of the Tax Increment to be
used to reimburse the Authority for administrative expenses, to reimburse the Authority for interfund loans,
and for the promotion of redevelopment and affordable housing. Available Tax Increment shall not include
any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this Agreement.
“Board” means the Board of Commissioners of the Authority.
“Certificate of Completion” means the certification provided to the Developer pursuant to
Section 4.4 of this Agreement and set forth in EXHIBIT D.
“City” means the City of Richfield, Minnesota.
“Closing” has the meaning given such term in Section 3.2 hereof.
“Construction Plans” means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property, including the Minimum
Improvements, which (a) shall be as detailed as the plans, specifications, drawings and related documents
which are submitted to the appropriate building officials of the City, and (b) shall include at least the
following: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4) cross-sections of each (length
and width); (5) elevations (all sides, including a building materials schedule); (6) landscape and grading plan;
and (7) such other plans or supplements to the foregoing plans as the City may reasonably request to allow it
to ascertain the nature and quality of the proposed construction work.
“County” means Hennepin County, Minnesota.
“Developer” means NHH Companies L.L.C., a Minnesota limited liability company, or its permitted
successors and assigns.
“Developer Property” means the portion of the Development Property to be acquired by the
Developer from third parties other than the Authority, as described in EXHIBIT A attached hereto
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“Development Property” means the real property described in EXHIBIT A of this Agreement.
“Event of Default” means an action by the Developer listed in Article IX of this Agreement.
“Holder” means the owner of a Mortgage.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
“HRA Property” means the portion of the Development Property owned by the HRA, as described in
EXHIBIT A attached hereto.
“HRA Property Purchase Price” has the meaning given in Section 3.2(e) hereof.
“HRA Tax Increment” means, on each Payment Date, the Tax Increment attributable to the
Development Property located in the TIF District and paid to the Authority by the County in the six months
preceding the Payment Date after first deducting therefrom thirty percent (30%) of the Tax Increment to be
used to reimburse the Authority for administrative expenses, to reimburse the Authority for interfund loans,
and for the promotion of redevelopment and affordable housing. Available Tax Increment shall not include
any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this Agreement.
“Ineligible Unit” has the meaning given in Section 4.8 hereof.
“Interfund Loans” has the meaning given in Section 3.9. hereof.
“Material Change” means a change in construction plans that adversely affects generation of tax
increment or changes the number of units of Owner-Occupied Housing. A change in construction plans
caused by the Developer’s inability to obtain at least nine of the Developer Parcels will not be considered a
material change.
“Maturity Date” means the date that the TIF Notes have been paid in full or terminated, whichever is
earlier.
“Minimum Improvements” means the development on the Development Property of (i) the Owner-
Occupied Housing; (ii) two parking stalls per unit of Owner-Occupied Housing; and (ii) necessary public
infrastructure, including streets and utilities.
“Mortgage” means any mortgage made by the Developer which is secured, in whole or in part, with
the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VII of
this Agreement.
“Owner-Occupied Housing” means the approximately 80 affordable owner-occupied townhomes to
be constructed as part of the Minimum Improvements.
“Payment Date” means each February 1 and August 1.
“Project Area” means the real property located within the boundaries of the Redevelopment Project.
“Public Redevelopment Costs” means costs related to the development of the Minimum
Improvements and eligible to be reimbursed with Tax Increment, including but not limited to land acquisition
costs, site improvement costs, public infrastructure, and the costs of the housing structures.
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“PUD” means the planned unit development for the property that includes the Development
Property, as approved by the City Council.
“Redevelopment Plan” means the Redevelopment Plan for the Redevelopment Project approved and
adopted by the Board of the Authority and the City Council of the City.
“Redevelopment Project” means the Richfield Redevelopment Project.
“Right of Purchase and Right of First Refusal Agreement” means the Right of Purchase and Right of
First Refusal Agreement between the Authority and the Developer as described in Sections 3.2(h) and 9.9
hereof and substantially in the form set forth in EXHIBIT E.
“State” means the State of Minnesota.
“Tax Increment” means that portion of the real property taxes which is paid with respect to the TIF
District and which is remitted to the Authority as tax increment pursuant to the Tax Increment Act.
“Tax Increment Act” or “TIF Act” means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1794, as amended.
“Tax Increment Plan” means the Tax Increment Financing Plan for the Tax Increment District
No. 2018-1, as approved by the City Council of the City on August 20, 2018, as it may be amended and
supplemented.
“Tax Official” means any County assessor; County auditor; County or State board of equalization,
the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or
the State Supreme Court.
“TIF District” means the Tax Increment District No. 2018-1, a housing district established pursuant
to the TIF Act.
“TIF Notes” means the Tax Increment Limited Revenue Notes, substantially in the form contained in
EXHIBIT B, to be delivered by the Authority to the Developer pursuant to Section 3.6(b) hereof and payable
from Available Tax Increment received from the TIF District.
“Unavoidable Delays” means delays beyond the reasonable control of the party seeking to be
excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal,
state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which
directly result in delays.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following representations
as the basis for the undertaking on its part herein contained:
(a) The Authority is a housing and redevelopment authority organized and existing under the
laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder, and execution of this Agreement has been duly, properly and validly
authorized by the Authority.
(b) The Authority proposes to assist in financing certain land acquisition costs, site
improvement costs, and housing construction costs necessary to facilitate the construction of the Minimum
Improvements in accordance with the terms of this Agreement to further the objectives of the Redevelopment
Plan.
(c) The activities of the Authority are undertaken to foster the redevelopment of certain real
property which for a variety of reasons is presently underutilized, to eliminate current blighting factors and
prevent the emergence of further blight at a critical location in the City, to create increased tax base in the
City, to increase affordable owner-occupied housing opportunities in the City, and to stimulate further
development of the TIF District and Redevelopment Project as a whole.
(d) The execution, delivery and performance of this Agreement and of any other documents or
instruments required pursuant to this Agreement by the Authority, and consummation of the transactions
contemplated therein and the fulfillment of the terms thereof, do not and will not conflict with or constitute a
breach of or default under any existing (i) indenture, mortgage, deed of trust or other agreement or instrument
to which the Authority is a party or by which the Authority or any of its property is or may be bound; or
(ii) legislative act, constitution or other proceedings establishing or relating to the establishment of the
Authority or its officers or its resolutions.
(e) There is not pending, nor to the best of the Authority’s knowledge is there threatened, any
suit, action or proceeding against the Authority before any court, arbitrator, administrative agency or other
governmental authority that materially and adversely affects the validity of any of the transactions
contemplated hereby, the ability of the Authority to perform its obligations hereunder, or the validity or
enforcement of this Agreement.
(f) No commissioner of the Board of the Authority or officer of the Authority has either a direct
or indirect financial interest in this Agreement, nor will any commissioner or officer benefit financially form
the Agreement within the meaning of Minnesota Statutes, Section 469.009.
Section 2.2. Representations by the Developer. The Developer represents and warrants that:
(a) The Developer is a limited liability company duly organized and in good standing under the
laws of the State, is duly authorized to transact business within the State, and has the power to enter into this
Agreement.
(b) With the understanding the definition of the Minimum Improvements may change pursuant
to the provisions of this Agreement, the Developer will construct, operate and maintain the Minimum
Improvements in accordance with the terms of this Agreement, Redevelopment Plan and all local, state and
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federal laws and regulations (including, but not limited to, environmental, zoning, building code and public
health laws and regulations).
(c) The Developer has received no notice or communication from any local, state or federal
official that the activities of the Developer or the Authority in or on the Development Property may be or will
be in violation of any environmental law or regulation (other than those notices or communications of which
the Authority is aware). The Developer is aware of no facts the existence of which would cause it to be in
violation of or give any person a valid claim under any local, state or federal environmental law, regulation or
review procedure.
(d) Subject to the provisions of Section 3.3 and contingent upon obtaining approvals from local
governments in a timely fashion, if the Developer is able to purchase a sufficient number of the parcels
included in the Development Property which would allow the Developer to commence construction of the
Minimum Improvements, the Developer will use commercially reasonable efforts to obtain, in a timely
manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of
all applicable local, state and federal laws and regulations which must be obtained or met before the
Minimum Improvements may be lawfully constructed.
(e) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is
prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing.
(f) The proposed development by the Developer hereunder would not occur but for the tax
increment financing assistance being provided by the Authority hereunder.
(g) The Developer shall promptly advise the Authority in writing of all litigation or claims
affecting any part of the Minimum Improvements and all written complaints and charges made by any
governmental authority materially affecting the Minimum Improvements or materially affecting Developer or
its business which may delay or require changes in construction of the Minimum Improvements.
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ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Development Property. The Authority currently owns four of the 15 parcels
that make up the Development Property as more fully described in EXHIBIT A and shall convey the HRA
Property to the Developer pursuant to the provisions of Section 3.2 hereof. The Developer currently has
executed purchase contracts for six of the 15 parcels that make up the Development Property. In addition, the
HRA has provided a loan to the Developer to assist in purchasing three of the 15 parcels that make up the
Development Property.
Section 3.2. Conveyance of HRA Property.
(a) The Authority will convey the HRA Property to the Developer via a quit claim deed. The
conveyance of the HRA Property to the Developer is contingent on (i) the Board of the Authority holding a
public hearing and approving the sale of the HRA Property; (ii) the City Council of the City holding a public
hearing and approving the establishment of the TIF District and the TIF Plan; and (iii) the Board of the
Authority approving the establishment of the TIF District and the TIF Plan. The Authority will cause the
Board of the Authority and the City Council to hold such public hearings and consider such approvals no
later than December 31, 2018. The HRA Property will be conveyed “as-is” and “where-is.” Within 60 days
following execution of this Agreement, the Authority will provide the Developer with a commitment for title
insurance from a title insurance company (the “Title Company”) acceptable to Developer. The Developer
will be responsible for reimbursing the Authority for the cost of preparation of the commitment for title
insurance. The Developer shall pay for the cost of obtaining a policy of title insurance.
(b) Within 60 days after the Developer’s receipt of the title commitment, the Developer may
give the Authority written notice of any alleged defect(s) in the marketability of the Authority’s actual and/or
record title to the HRA Property, or any portion thereof (“Objections”) and request that the Authority make
the Authority’s title marketable or conforming. The Developer’s failure to object to defects in the
marketability of Authority’s title to the HRA Property, in writing, within the time period set forth above or at
any time prior to Closing, shall be deemed a waiver of the Developer’s right to require the Authority to cure
such defects. If the Developer notifies the Authority of Objections within the time period set forth above, the
Authority shall use good faith efforts to make the Authority’s actual and record title to the HRA Property
marketable. The Authority shall have up to 45 days from the Authority’s receipt of the Developer’s
Objections to use good faith efforts to make the Authority’s actual and record title to the HRA Property
marketable. In no event will the Authority be required to expend more than $1,000 in its good faith efforts to
make the Authority’s actual and record title to the HRA Property marketable. If the Authority makes the
Authority’s title marketable within the 45-day period, the Authority shall notify the Developer, in writing,
and the parties shall close pursuant to the terms of this Agreement. If the Authority is unable to make title
marketable within the 45-day period, the Developer may either: (i) terminate this Agreement by delivering
written notice of termination to the Authority; or (ii) notify the Authority that the Developer waives
Developer’s Objections. If the Developer waives the Developer’s Objections, the matters giving rise to such
Objections shall be deemed a permitted encumbrance and the parties shall otherwise perform their obligations
under this Agreement. The Authority shall have no obligation to take any action to clear defects in the title to
the HRA Property other than the good faith efforts described above.
(c) Without limitation, the Developer is responsible for satisfying itself as to matters such as
contamination, soils conditions and soil stability, and survey. The Authority shall have no obligation to cure
any defect or other matter regarding contamination, soils conditions and soil stability, and survey, but agrees
to cooperate, at no cost or expense to it, in any efforts by Developer to achieve such a cure.
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(d) On the date the HRA Property is conveyed to the Developer (the “Closing”), the Authority
will execute and deliver to the Developer the following, in form and content reasonably acceptable to the
Developer:
(i) A quit claim deed conveying the HRA Property to the Developer.
(ii) A non-foreign affidavit, properly executed, containing such information as is
required by Internal Revenue Code section 1445(b)(2) and its regulations.
(iii) A standard form Seller’s Affidavit.
(iv) A well certificate in the form required by law.
(v) Any affidavit and disclosures required by law pertaining to private sewage treatment
systems.
(vi) Any affidavits, certificates, or other documents that may be required under
applicable law and/or that are reasonably determined by Developer or the Title Company to be
necessary to transfer the HRA Property to Developer and to evidence that the Authority has duly
authorized the transactions contemplated hereby.
(e) The Developer acknowledges that the Authority will be conveying the HRA Property to the
Developer for a purchase price of $184,000 (the “HRA Property Purchase Price”) and the Developer shall
pay $84,000 of the HRA Property Purchase Price to the Authority on the date of the Developer’s closing on
the construction financing. The remainder of the HRA Property Purchase Price ($100,000) will be paid by
the Developer to the Authority no later than the date that the Developer sells at least eight (8) townhome
units, plus interest in the amount of 4.0% per annum. If the Developer does not pay the full amount of the
HRA Property Purchase Price on or before December 1, 2019, the Authority shall have the option to receive
all Available Tax Increment on each Payment Date until the remainder of the HRA Property Purchase Price
is paid, plus interest in the amount of 4.0% per annum.
(f) The Closing will not take place until the Developer has applied for all necessary land use
approvals from the City (including final approval of the PUD) and has acquired the rights to purchase or
purchased at least six contiguous parcels and either the northernmost parcel or the southernmost parcel within
the Developer Property, in order to construct the Minimum Improvements, as described in Section 3.3 hereof.
(g) Subject to Section 3.3 hereof, in the event that the Closing has not taken place by
December 31, 2018, and unless extended by mutual agreement of the parties, this Agreement shall terminate
and be of no further force and effect, and the parties will be relieved of any further obligations hereunder.
(h) The Developer shall grant the Authority the right to repurchase the HRA Property and
purchase the Developer Property pursuant to the Right of Purchase and Right of First Refusal Agreement as
described in Section 9.9 hereof and EXHIBIT E.
Section 3.3. Acquisition of Remaining Developer Property.
(a) The Developer will make its best efforts to acquire the rights to purchase or purchase the
eleven (11) parcels that make up the Developer Property. If the Developer is unable to acquire the rights to
purchase or purchase all of the remaining parcels of the Developer Property but has acquired the rights to
purchase or purchased at least eight (8) of the remaining parcels, the deadline for Closing set forth in Section
3.2(g) of this Agreement may be postponed for up to 90 days by mutual agreement of the Developer and the
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Authorized Representative of the Authority. If the Developer wants to move forward with purchasing the
HRA Property but is unable to acquire the rights to purchase or purchase the remaining parcels of the
Developer Property, the Developer shall submit to the Authority a redesign of the layout of the Minimum
Improvements with the number of units the Developer is able to construct. The Authority has no obligation
to acquire any portion of the Developer Property, and has played no role in the Developer’s acquisition
activities.
(b) If the Developer proceeds with a redesigned version of the Minimum Improvements, and the
Developer does not develop all the properties in the TIF District, the Authority may withhold Available Tax
Increment from the parcels that the Developer did not use for the Minimum Improvements.
Section 3.4. Grants. The Authority and the Developer will work cooperatively to apply for grants
from the Department of Employment and Economic Development and the Metropolitan Council in the
amount of up to $1,700,000 for the costs of the public infrastructure needed for the Minimum Improvements.
Section 3.5. Relocation. For each parcel of the Development Property acquired by the Developer,
the Borrower is obligated to deliver to the Authority a certification describing in detail the relocation services,
payments, and benefits to be provided to the owner of such parcel.
Section 3.6. Issuance of Pay-As-You-Go TIF Notes.
(a) To reimburse the Developer for certain Public Redevelopment Costs incurred within the TIF
District, the Authority shall issue and deliver and the Developer shall purchase up to three TIF Notes in the
total principal amount of $2,400,000 in substantially the form set forth in EXHIBIT B. The Authority and the
Developer agree that the consideration from the Developer for the purchase of the TIF Notes shall consist of
the Developer’s payment of the Public Redevelopment Costs in at least the principal amount of the TIF
Notes.
The Authority shall deliver the TIF Notes in phases as follows:
Phase Maximum Amount When TIF Notes Issued
Phase I TIF Note $900,000 Construction of at least 32 Townhomes commenced
Phase II TIF Note $900,000 Construction of an additional 32 Townhomes commenced
Phase III TIF Note $600,000 Construction of final 16 Townhomes commenced
The delivery of each TIF Note is contingent upon delivery by the Developer of an investment letter
in substantially the form attached to this Agreement as EXHIBIT C, together with evidence reasonably
satisfactory to the Authority that the Developer has paid the Public Redevelopment Costs in at least the
principal amount of the TIF Note. The principal of and interest on the TIF Notes shall be payable each
Payment Date solely from Available Tax Increment derived from the TIF District. The Phase II TIF Note
and the Phase III TIF Note will be issued on a Payment Date. When more than one TIF Note is outstanding,
the principal of and interest on the TIF Note shall be paid with Available Tax Increment on a parity basis
based on the amount of principal outstanding for each TIF Note.
(b) The Developer understands and acknowledges that the Authority makes no representations
or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the TIF Notes
will be sufficient to pay the principal of and interest on the TIF Notes. Any estimates of Tax Increment
prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are
for the benefit of the Authority, and are not intended as representations on which the Developer may rely.
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(c) The Authority acknowledges that the Developer may assign the TIF Notes to one or more
lenders that provide part of the financing for the acquisition of the Development Property or the construction
of the Minimum Improvements. Pursuant to the terms of the TIF Notes, the TIF Notes may be assigned if the
assignee executes an investment letter in the form set forth in EXHIBIT C.
(d) The Developer understands and acknowledges that the principal amount of the TIF Notes
are subject to reduction pursuant to the provisions of Section 4.8 hereof.
Section 3.7. Termination of TIF District. At anytime following the reimbursement of the Authority
for the HRA Property Purchase Price and the payment in full of the principal of and interest on the TIF Notes,
the Authority may use the remaining Tax Increment derived from the TIF District for any other authorized
uses set forth in the Tax Increment Plan or may terminate the TIF District.
Section 3.8. Payment of Administrative Costs. Pursuant to a Preliminary Development Agreement,
dated March 19, 2018, between the Authority, the City, and the Developer, the Developer has deposited with
the Authority $15,000 to pay Administrative Costs. The Authority will use such deposit to pay
“Administrative Costs,” which term means out of pocket costs incurred by the Authority, together with staff
and consultant costs of the Authority, all attributable to or incurred in connection with the negotiation,
preparation or modification of this Agreement, the TIF Plan, and other documents and agreements in
connection with the establishment of the TIF District and development of the Development Property, and not
previously paid by Developer. At the Developer’s request, but no more often than monthly, the Authority
will provide the Developer with a written report including invoices, time sheets or other comparable evidence
of expenditures for Administrative Costs and the outstanding balance of funds deposited. At any time the
deposit drops below $5,000, the Developer shall replenish the deposit to the full $15,000 within 30 days after
receipt of written notice thereof from the HRA. If at any time the Authority determines that the deposit is
insufficient to pay Administrative Costs, the Developer is obligated to pay such shortfall within 15 days after
receipt of a written notice from the Authority containing evidence of the unpaid costs. If Administrative
Costs incurred, and reasonably anticipated to be incurred are less than the deposit by the Developer, the
Authority shall return to the Developer any funds not anticipated to be needed.
Section 3.9. Reimbursement for Interfund Loans. The Authority provided the Developer with a
forgivable loan in the amount of $630,000 in order to assist with the purchase of three (3) of the parcels that
make up the Developer Property. Pursuant to a Loan Agreement, dated August 1, 2018 (the “Loan
Agreement”), between the Authority and the Developer, the Authority has agreed to forgive the loan and
release the mortgage securing the loan for each parcel once certain conditions set forth in the Loan
Agreement are met. On July 16, 2018, the Board of the Authority approved Resolution No, 1300, an
interfund loan resolution (which was amended by Resolution No. ____ adopted by the Board of the Authority
on August 20, 2018) allowing the Authority to use available funds to make the loan of $630,000 to the
Developer to acquire property, to provide a land write-down to the Developer in the amount of $100,000 as
described in Section 3.2(e), and to use available funds to pay for costs related to the TIF District with the
intent of reimbursement itself for such costs with Tax Increment generated by the TIF District, with interest
in the amount of 4.0% per annum (the “2018 Land Interfund Loan”). In addition, on March 16, 2015, the
Board of the Authority approved Resolution 1199, an interfund loan resolution allowing the Authority to use
available funds to pay for costs related to the TIF District with the intent of reimbursing itself for such costs
with Tax Increment generated by the TIF District, with interest in the amount of 4.0% per annum (the
“Administrative and Land Interfund Loan, and with the 2018 Land Interfund Loan, the “Interfund Loans”).
The Administrative and Land Interfund Loan is outstanding in the amount of $359,000 for land acquisition.
The Authority intends to reimburse itself for the cost of the Interfund Loans with HRA Tax Increment
generated by the TIF District.
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Section 3.10. Records. The Authority and its representatives shall have the right at all reasonable
times after reasonable notice to inspect, examine and copy all books and records of Developer relating to the
Minimum Improvements and the costs for which the Developer has been reimbursed with Available Tax
Increment.
Section 3.11. Purpose of Assistance. The parties agree and understand that the purpose of the
Authority’s financial assistance to the Developer is to facilitate development of housing, and is not a
“business subsidy” within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995.
Section 3.12. Public Art. The Developer shall incorporate one or two pieces of public art within the
Minimum Improvements that are visible to the general public and are mutually agreeable to both the
Developer and the Authority. Examples of public art include a sculpture, a water fountain, or a mural.
Notwithstanding the foregoing, if three or four pieces of public art are installed in the Apartments Project or
the Townhomes Project, the requirements of this provision will be satisfied.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements. Following the conveyance of the HRA Property to the
Developer, the Developer agrees that it will construct the Minimum Improvements on the Development
Property substantially in accordance with the Construction Plans as approved pursuant to Section 4.2, and at
all times prior to the Maturity Date, will operate and maintain, preserve and keep the Minimum
Improvements or cause such improvements to be maintained, preserved and kept with the appurtenances and
every part and parcel thereof, in good repair and condition. The Authority shall have no obligation to operate
or maintain the Minimum Improvements.
Section 4.2. Construction Plans.
(a) Before commencement of construction of the Minimum Improvements, the Developer shall
submit the Construction Plans for the Minimum Improvements to the Authority. The Authority
Representative will approve the Construction Plans in writing if: (i) the Construction Plans are in material
compliance with the PUD and all other land use approvals received for the Minimum Improvements; (ii) the
Construction Plans conform to the terms and conditions of this Agreement; (iii) the Construction Plans
conform to the goals and objectives of the Redevelopment Plan, as modified; (iv) the Construction Plans
conform to all applicable federal, state and local laws, ordinances, rules and regulations; (v) the Construction
Plans are adequate to provide for construction of the Minimum Improvements; (vi) the Construction Plans do
not provide for expenditures in excess of the funds available to the Developer from all sources (including
Developer’s equity) for construction of the Minimum Improvements; and (vii) no uncured Event of Default
has occurred. Approval may be based upon a review by the City’s Building Official of the Construction
Plans. No approval by the Authority Representative shall relieve the Developer of the obligation to comply
with the terms of this Agreement or of the Redevelopment Plan, the PUD, applicable federal, state and local
laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith.
No approval by the Authority Representative shall constitute a waiver of an Event of Default. If approval of
the Construction Plans is requested by the Developer in writing at the time of submission, such Construction
Plans shall be deemed approved unless rejected in writing by the Authority Representative, in whole or in
part. Such rejections shall set forth in detail the reasons therefor, and shall be made within 30 days after the
date of their receipt by the Authority. If the Authority Representative rejects any Construction Plans in whole
or in part, the Developer shall submit new or corrected Construction Plans within 30 days after written
notification to the Developer of the rejection. The provisions of this Section relating to approval, rejection
and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have
been approved by the Authority. The Authority Representative’s approval shall not be unreasonably
withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the
Construction Plans (and the Minimum Improvements constructed in accordance with said plans) comply to
the Authority’s satisfaction with the provisions of this Agreement relating thereto.
(b) If the Developer desires to make any Material Change in the Construction Plans after their
approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval.
If the Construction Plans, as modified by the proposed change, conform to the requirements of this
Section 4.2 with respect to such previously approved Construction Plans, the Authority shall approve the
proposed change and notify the Developer in writing of its approval. Such change in the Construction Plans
shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written
notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such rejection shall be
made within 30 days after receipt of the notice of such change. The Authority’s approval of any such change
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in the Construction Plans may be conditioned on amendment to provisions of this Agreement if such
amendments will mitigate the materiality of such proposed changes.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Developer will commence construction of the Minimum Improvements on or before June 1, 2019, and be
substantially complete with the construction of the Minimum Improvements on or before December 31,
2021.
Construction is considered to be commenced upon the beginning of physical improvements beyond
grading. All work with respect to the Minimum Improvements to be constructed or provided by the
Developer on the Development Property shall be in substantial conformity with the Construction Plans as
submitted by the Developer and approved by the Authority.
The Developer agrees for itself, its successors and assigns, and every successor in interest to the
Development Property, or any part thereof, that the Developer, and such successors and assigns, shall
promptly begin and diligently prosecute to completion the development of the Minimum Improvements.
Section 4.4. Certificate of Completion.
(a) Promptly after completion of each the Minimum Improvements in accordance with those
provisions of the Agreement relating solely to the obligations of the Developer to construct the Minimum
Improvements, the Authority Representative will furnish the Developer with a Certificate of Completion
shown as EXHIBIT D.
(b) If the Authority Representative shall refuse or fail to provide any certification in accordance
with the provisions of this Section 4.4, the Authority Representative shall, within 30 days after written request
by the Developer, provide the Developer with a written statement, indicating in adequate detail in what
respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions
of the Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of
the Authority, for the Developer to take or perform in order to obtain such certification.
(c) Regardless of whether a Certificate of Completion is issued by the Authority, the
construction of the Minimum Improvements shall be deemed to be complete upon issuance of a certificate of
occupancy by the City.
Section 4.5. Owner-Occupied Housing Affordability Covenants; Qualification of the TIF District.
The Developer agrees that the Owner-Occupied Housing constructed within the TIF District is subject to the
following affordability covenants: In accordance with Section 469.1761, subdivision 2 of the TIF Act,
ninety-five percent (95%) of the units of Owner-Occupied Housing (76 units) must be initially purchased and
occupied by persons whose income is no greater than one hundred fifteen percent (115%) of median gross
income. If any units of Owner-Occupied Housing will be occupied by fewer than three (3) people, those
units must be initially purchased and occupied by persons whose income is no greater than one hundred
percent (100%) of median gross income. For the purposes of this Agreement, median gross income is the
greater of (i) the median gross income of the County; or (ii) the statewide median gross income, as
determined by the secretary of the United States Department of Housing and Urban Development for the
calendar year of each home sale. Prior to the sale of each home, the Developer must submit to the City the
application in substantially the form in EXHIBIT F attached hereto, showing that the purchaser meets the
income limits under this Section 4.6 (a “Qualified Purchaser”). The parties agree and understand that the
Developer will review applications and will certify to the City that each buyer of a unit of Owner-Occupied
Housing is a Qualified Purchaser using the form set forth in EXHIBIT F attached hereto.
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Section 4.6. Disqualification of TIF District. If the Authority or the City receives notice from the
State Department of Revenue, the State Auditor, any Tax Official or any court of competent jurisdiction that
the TIF District does not qualify as a “housing district,” such event shall be deemed an Event of Default
under this Agreement; provided, however, that the Authority may not exercise any remedy under this
Agreement so long as such determination is being contested and has not been finally adjudicated. In addition
to any remedies available to the Authority and the City under Article IX hereof, the Developer shall
indemnify, defend and hold harmless the Authority and the City for any damages or costs resulting therefrom.
Such indemnification and hold harmless will include the immediate payment to the Authority for any portion
of the value of the Authority Property not already reimbursed from tax increment.
Section 4.7. Affordable Housing Reporting. At least annually and until all units within the
Minimum Improvements have been sold to owner-occupants, no later than April 1 of each year commencing
on the April 1 first following the issuance of the Certificate of Completion, the Developer shall provide a
report to the Authority evidencing that the Developer complied with the income affordability covenants set
forth in Section 4.5 hereof during the previous calendar year.
Section 4.8. Disqualified Owner-Occupied Housing Units; Reduction of TIF Notes. If the
Developer sells more than four (4) units of Owner-Occupied Housing to persons who do not meet the income
restrictions set forth in Section 4.5, each such unit will be an “Ineligible Unit.” For each Ineligible Unit, the
Authority will remove the Ineligible unit from the TIF District. In addition, for each Ineligible Unit, the
Developer shall pay the Authority $7,875 to repay the Authority for the portion of the loan described in
Section 3.9 allocable to the Ineligible Unit and the principal amount of the TIF Notes will be reduced by
$30,000 for each Ineligible Unit. The reduction of the Notes shall be done on a pro rata basis based on the
amount of principal amount outstanding for each. The maximum number of Ineligible Units, including the
four (4) units of Owner-Occupied Housing described in this Section 4.8, shall be twenty percent (20%) of all
Owner-Occupied Housing units constructed.
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ARTICLE V
Insurance
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of constructing the
Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that
period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies
covering the following:
(i) Builder’s risk insurance, written on the so-called “Builder’s Risk – Completed
Value Basis,” in an amount equal to one hundred percent (100%) of the insurable value of the
Minimum Improvements at the date of completion, and with coverage available in nonreporting form
on the so-called “all risk” form of policy. The interest of the Authority shall be protected in
accordance with a clause in form and content satisfactory to the Authority;
(ii) General commercial liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations and contractual liability insurance) together with
a Protective Liability Policy with limits against bodily injury and property damage of not less than
$2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability
policy may be used). The Authority shall be listed as an additional insured on the policy; and
(iii) Workers’ compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements, the Developer shall
maintain, or cause to be maintained for each unit of the Minimum Improvements owned by the Developer, at
its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment
of premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a policy
or policies covering such risks as are ordinarily insured against by similar businesses.
(ii) Comprehensive general public liability insurance, including personal injury liability
(with employee exclusion deleted), against liability for injuries to persons and/or property, in the
minimum amount for each occurrence and for each year of $2,000,000, and shall be endorsed to
show the Authority as additional insured.
(iii) Such other insurance, including workers’ compensation insurance respecting all
employees, if any, of the Developer, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the Developer may
be self-insured with respect to all or any part of its liability for workers’ compensation.
(c) All insurance required in this Article V shall be taken out and maintained in responsible
insurance companies selected by the Developer which are authorized under the laws of the State to assume
the risks covered thereby. Upon request, the Developer will deposit annually with the Authority policies
evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that
such insurance is in force and effect. Unless otherwise provided in this Article V each policy shall contain a
provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided
below the amounts required herein without giving written notice to the Developer at least 30 days before the
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cancellation or modification becomes effective. If such a notice is received by Developer, will provide notice
to Authority. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella
policies, or a combination thereof, having the coverage required herein, in which event the Developer shall
deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage
in force upon the Minimum Improvements.
(d) For the portion of the Minimum Improvements that the Developer owns, the Developer
agrees to notify the Authority immediately in the case of damage exceeding $100,000 in amount to, or
destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In
such event the Developer will forthwith repair, reconstruct and restore the Minimum Improvements to
substantially the same or an improved condition or value as it existed prior to the event causing such damage
and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Developer will
apply the Net Proceeds of any insurance relating to such damage received by the Developer to the payment or
reimbursement of the costs thereof. The Developer has no duty to repair, reconstruct, or restore any portion
of the Minimum Improvements that is not owned by it.
The Developer shall complete the repair, reconstruction and restoration of the portion of the
Minimum Improvements owned by the Developer, whether or not the Net Proceeds of insurance received by
the Developer for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after
completion of such repairs, construction and restoration shall be the property of the Developer.
(e) Notwithstanding anything to the contrary contained in this Agreement, in the event of
damage to the Minimum Improvements in excess of $100,000 and the Developer fails to complete any repair,
reconstruction or restoration of the Minimum Improvements it owns within 18 months from the date of
damage, the Authority may, at its option, terminate the TIF Notes as provided in Section 9.3(b) hereof. If the
Authority terminates the TIF Notes, such termination shall constitute the Authority’s sole remedy under this
Agreement as a result of the Developer’s failure to repair, reconstruct or restore the Minimum Improvements.
Thereafter, the Authority shall have no further obligations to make any payments under the TIF Notes.
(f) The Developer and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon (i) the date on which any unit within the Owner-Occupied Housing is sold to a
member of the general public; and (ii), in the case of a rental, the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V,
the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all
respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to
Article VII of this Agreement.
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the Authority is
providing substantial aid and assistance in furtherance of the redevelopment through issuance of the TIF
Notes. The Developer understands that the Tax Increments pledged to payment of the TIF Notes are derived
from real estate taxes on the Development Property, which taxes must be promptly and timely paid. To that
end, the Developer agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute
to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real
estate taxes assessed against the Development Property and the Minimum Improvements until the Maturity
Date. The Developer acknowledges that this obligation creates a contractual right on behalf of the Authority
to sue the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or
interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the
Authority shall also be entitled to recover its costs, expenses, and reasonable attorney fees.
Section 6.2. Reduction of Taxes. The Developer agrees that after the date of certification of the Tax
Increment District and prior to completion of the Minimum Improvements, it will not cause a reduction in the
real property taxes paid in respect of the Development Property through: (A) willful destruction of the
Development Property or any part thereof (except for the demolition of structures required for construction of
the Minimum Improvements); or (B) willful refusal to reconstruct damaged or destroyed property pursuant to
Section 5.1 of this Agreement.
The Developer also agrees that it will not, during the period of time that it owns any portion of the
Minimum Improvements: (i) seek exemption from property tax for the Development Property; or (ii) convey
or transfer or allow conveyance or transfer of the Development Property to any entity that is exempt from
payment of real property taxes under State law.
Section 6.3. Suspension or Reduction of Payments on TIF Notes. The Developer or any owner of an
Owner-Occupied Housing unit may seek through petition or other means to have the County Assessor’s
estimated market value for all or a portion of the Development Property reduced. Upon receiving notice or
otherwise learning of the intent to seek a decrease in the market value of the Development Property, the
Authority may suspend or reduce payments due under the TIF Notes until the actual amount of the reduction
is determined, whereupon the Authority will make the suspended or reduced payments less any amount that
the Authority is required to repay the County as a result of any reduction in market value of the Development
Property. During the period that the payments are subject to suspension or reduction, the Authority may
make partial payments on the TIF Notes if it determines, in its sole and absolute discretion, that the amount
retained will be sufficient to cover any repayment which the County may require.
The Authority’s suspension or reduction of payments on one or both of the TIF Notes pursuant to
this Section shall not be considered a default under Section 9.1 hereof.
Section 6.4. Qualifications. Notwithstanding anything herein to the contrary, the parties
acknowledge and agree that upon Transfer of the Development Property to another person or entity, the
Developer will remain obligated under Sections 6.1 and 6.2 hereof until the Maturity Date, unless the
Developer is released from such obligations in accordance with the terms and conditions of Section 8.2(b) or
8.3 hereof. Sections 6.1, 6.2, and 6.3 shall not be applicable to individual units of Owner-Occupied housing
once each individual unit of Owner-Occupied Housing is old to a member of the general public.
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ARTICLE VII
Financing
Section 7.1. Mortgage Financing.
(a) Before commencement of construction of the Minimum Improvements, the Developer shall
submit to the Authority evidence of one or more commitments for financing which, together with committed
equity for such construction, is sufficient for payment of the Minimum Improvements. Such commitments
may be submitted as short-term financing, long-term mortgage financing, a bridge loan with a long-term
take-out financing commitment, or any combination of the foregoing.
(b) If the Authority finds that the financing is sufficiently committed and adequate in amount to
pay the costs specified in paragraph (a) then the Authority shall notify the Developer in writing of its
approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given
within 30 days from the date when the Authority is provided the evidence of financing. A failure by the
Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If
the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for
the rejection. In any event the Developer shall submit adequate evidence of financing within 30 days after
such rejection.
Section 7.2. Authority’s Option to Cure Default in Mortgage. In the event that any portion of the
Developer’s funds is provided through mortgage financing, and there occurs a default under any Mortgage
authorized pursuant to this Article VII, the Developer shall cause the Authority to receive copies of any
notice of default received by the Developer from the holder of such Mortgage. Thereafter, the Authority shall
have the right, but not the obligation, to cure any such default on behalf of the Developer within such cure
periods as are available to the Developer under the Mortgage documents.
Section 7.3. Modification; Subordination. In order to facilitate the Developer obtaining financing
for the development of the Minimum Improvements, the Authority agrees to subordinate its rights under this
Agreement to the Holder of any Mortgage securing construction or permanent financing, under terms and
conditions reasonably acceptable to the Authority and the entity requesting the subordination. An agreement
to subordinate this Agreement must be approved by the Board of the Authority.
Section 7.4. Termination. All the provisions of this Article VII (except the provisions of
Section 7.3) shall terminate with respect to the Minimum Improvements, upon delivery of the Certificate of
Completion for the Minimum Improvements. The Developer or any successor in interest to the Minimum
Improvements or portion thereof, may sell or engage in financing or any other transaction creating a
mortgage or encumbrance or lien on the Minimum Improvements or any portion thereof for which a
Certificate of Completion has been obtained, without obtaining prior written approval of the Authority as
described in Section 7.1, provided that such sale, financing or other transaction creating a mortgage or
encumbrance shall not be deemed as resulting in any subordination of the Authority’s rights under this
Agreement unless the Authority expressly consents to such a subordination pursuant to Section 7.3.
Subordination agreements approved by the Authority prior to the Certificate of Completion will not be
affected by the provisions of this Section.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Developer represents and agrees that its
purchase of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be
used, for the purpose of development of the Development Property and not for speculation in land holding.
Section 8.2. Prohibition Against Developer’s Transfer of Property and Assignment of Agreement.
The Developer represents and agrees that prior to issuance of the Certificate of Completion for the Minimum
Improvements:
(a) Except only by way of security for, and only for, the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or any part
thereof, to perform its obligations with respect to constructing the Minimum Improvements under this
Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and
will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or
lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the
Development Property or any part thereof or any interest therein, or any contract or agreement to do any of
the same (except a lease to a residential occupant), without the prior written approval of the Authority unless
the Developer remains liable and bound by this Agreement in which event the Authority’s approval is not
required. Any such transfer shall be subject to the provisions of this Agreement.
(b) In the event the Developer, upon transfer or assignment of all or any portion of the
Development Property seeks to be released from its obligations under this Agreement, the Authority shall be
entitled to require, except as otherwise provided in this Agreement, as conditions to any such release that:
(i) Any proposed transferee shall have the qualifications and financial responsibility, in
the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer.
(ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and
in form recordable among the land records, shall, for itself and its successors and assigns, and
expressly for the benefit of the Authority, have expressly assumed all of the obligations of the
Developer under this Agreement and agreed to be subject to all the conditions and restrictions to
which the Developer is subject; provided, however, that the fact that any transferee of, or any other
successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for
whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the
extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority)
deprive the Authority of any rights or remedies or controls with respect to the Development Property
or any part thereof or the construction of the Minimum Improvements; it being the intent of the
parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and
excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no
transfer of, or change with respect to, ownership in the Development Property or any part thereof, or
any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall
operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or
remedies on controls provided in or resulting from this Agreement with respect to the Minimum
Improvements that the Authority would have had, had there been no such transfer or change. In the
absence of specific written agreement by the Authority to the contrary, no such transfer or approval
by the Authority thereof shall be deemed to relieve the Developer or any other party bound in any
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way by this Agreement or otherwise with respect to the construction of the Minimum Improvements,
from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the transfer
of any interest in this Agreement or the Development Property governed by this Article VIII, shall be
in a form reasonably satisfactory to the Authority.
In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation
under this Agreement.
(c) The prohibition against transfer shall not be applicable to the sale of individual units of
Owner-Occupied Housing to the general public.
After issuance of the Certificate of Completion for the Minimum Improvements, the Developer may
transfer or assign the Development Property related to the completed Minimum Improvements or the
Developer’s interest in this Agreement related to the completed Minimum Improvements if it obtains the
prior written consent of the Authority (which consent will not be unreasonably withheld) and the transferee or
assignee is bound by all the Developer’s obligations hereunder with respect to the Minimum Improvements.
The Developer shall submit to the Authority written evidence of any such transfer or assignment, including
the transferee or assignee’s express assumption of the Developer’s obligations under this Agreement. If the
Developer fails to provide such evidence of transfer and assumption, the Developer shall remain bound by all
its obligations under this Agreement.
Section 8.3. Release and Indemnification Covenants.
(a) The Developer releases from and covenants and agrees that the Authority and its governing
body members, officers, agents, servants and employees thereof shall not be liable for and agrees to
indemnify and hold harmless the Authority and its respective governing body members, officers, agents,
servants and employees thereof against any loss or damage to property or any injury to or death of any person
occurring at or about or resulting from any defect in the Minimum Improvements.
(b) Except for any willful misrepresentation, gross negligence or any willful or wanton
misconduct of the Authority, or its board members, officers, agents or employees, the Developer agrees to
protect and defend the Authority and its governing body members, officers, agents, servants and employees
thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit,
action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from
this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation,
ownership, maintenance and operation of the Minimum Improvements; provided, however, this provision
will not apply to any claims arising from or related to the ownership, use, or enjoyment of any unit of Owner-
Occupied Housing after the Developer sells such unit to a member of the general public. As to any willful
misrepresentation, gross negligence or any willful or wanton misconduct of the Authority, or its board
members, officers, agents or employees, the Authority agrees to protect and defend the Developer, its
officers, agents, servants and employees and hold the same harmless from any such proceedings.
(c) The Authority and its governing body members, officers, agents, servants and employees
thereof shall not be liable for any damage or injury to the persons or property of the Developer or its officers,
agents, servants or employees or any other person who may be about the Development Property or Minimum
Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority contained
herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the
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Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the
individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default. The following will be “Events of Default” under this Agreement and
the term “Event of Default” means, whenever it is used in this Agreement, any one or more of the following
events, after the non-defaulting party provides 30 days’ written notice to the defaulting party of the event, but
only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30
days, the defaulting party does not, within the 30-day period, provide assurances reasonably satisfactory to
the party providing notice of default that the event will be cured and will be cured as soon as reasonably
possible:
(a) Failure by the Developer or the Authority to observe or perform any covenant, condition,
obligation, or agreement on its part to be observed or performed under this Agreement, or any covenant,
condition or agreement imposed as part of the City approval of the PUD; or
(b) The Developer:
(i) files any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United States
Bankruptcy Act or under any similar federal or State law;
(ii) makes an assignment for benefit of its creditors;
(iii) fails to pay real estate taxes on the Development Property or the Minimum
Improvements as they become due;
(iv) admits in writing its inability to pay its debts generally as they become due; or
(v) is adjudicated as bankrupt or insolvent; or
(c) Failure by the Developer to commence construction on the Apartments Project.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this
Agreement occurs and is continuing, the non-defaulting party may exercise its rights under this Section 9.2
after providing 30 days’ written notice to the defaulting party of the Event of Default, but only if the Event of
Default has not been cured within said 30 days or, if the Event of Default is by its nature incurable within 30
days, the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that
the Event of Default will be cured and will be cured as soon as reasonably possible:
(a) Suspend its performance under the Agreement until it receives assurances that the defaulting
party will cure its default and continue its performance under the Agreement.
(b) Cancel and rescind or terminate the Agreement, subject to the provisions of Section 9.3
hereof.
(c) Upon a default by the Developer, the Authority may suspend payments under the TIF Notes
or terminate the TIF Notes and the TIF District, subject to the provisions of Section 9.3 hereof.
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(d) Take whatever action, including legal, equitable or administrative action, which may appear
necessary or desirable to collect any payments due under this Agreement, or to enforce performance and
observance of any obligation, agreement, or covenant under this Agreement.
Section 9.3. Termination or Suspension of TIF Notes. After the Authority has issued its Certificate
of Completion for the Minimum Improvements, the Authority and the City may exercise its rights under
Section 9.2 for the completed Minimum Improvements only for the following Events of Default:
(a) the Developer fails to pay real estate taxes or assessments on the Development Property or
any part thereof when due, and such taxes or assessments shall not have been paid, or provision satisfactory
to the Authority made for such payment, within 18 months after written demand by the Authority to do so; or
(b) the Developer fails to comply with Developer’s obligation to operate and maintain, preserve
and keep the Minimum Improvements or cause such improvements to be maintained, preserved and kept with
the appurtenances and every part and parcel thereof, in good repair and condition, pursuant to Sections 4.1
and 5.1; provided that, upon Developer’s failure to comply with Developer’s obligations under Section 4.1 or
5.1, if uncured after 30 days’ written notice to the Developer of such failure, the Authority may only suspend
payments under the TIF Notes until such time as Developer complies with said obligations. If the Developer
fails to comply with said obligations for a period of 18 months, the Authority may terminate the TIF Notes
and the TIF District.
Section 9.4. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to
Developer. In the event that subsequent to conveyance of the HRA Property to the Developer, the Developer,
subject to Unavoidable Delays, fails to commence construction of the Minimum Improvements by the dates
specified in Section 4.3 hereof, and such failure to commence the Minimum Improvements is not cured
within 90 days after written notice from the Authority to the Developer to do so; then the Authority shall have
the right to re-enter and take possession of the HRA Property and to terminate and revest in the Authority the
HRA Property, it being the intent of this provision, together with other provisions of the Agreement, that the
conveyance of the HRA Property to the Developer shall be made upon, and that the deeds shall contain a
condition subsequent to the effect that in the event of any default on the part of the Developer in performance
of the obligations specified in this Section 9.4 and failure on the part of the Developer to remedy, end, or
abrogate such default within the period and in the manner stated in this Section, the Authority at its option
may declare a termination in favor of the Authority of the title, and of all the rights and interests in and to the
HRA Property and that such title and all rights and interests of the Developer, and any assigns or successors
in interest to and in the HRA Property, shall revert to the Authority, as applicable, but only if the events stated
in this Section have not been cured within the time periods provided above.
Section 9.5. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the
Authority of title to and/or possession of the HRA Property, the Authority shall, pursuant to their
responsibilities under law, use their best efforts to sell the HRA Property and in such manner as the Authority
to a qualified and responsible party or parties (as determined by the Authority) who will assume the
obligation of making or completing the Minimum Improvements or such other improvements in their stead as
shall be satisfactory to the Authority in accordance with the uses specified for the HRA Property in this
Agreement. During any time while the Authority has title to and/or possession of a parcel of property
obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering
such parcel. Upon resale of the HRA Property, the proceeds thereof shall be applied:
(a) First, to reimburse the Authority for all costs and expenses incurred by them, including but
not limited to salaries of personnel, in connection with the recapture, management, and resale of the HRA
Property (but less any income derived by the Authority from the property or part thereof in connection with
such management); all taxes, assessments, and water and sewer charges with respect to the HRA Property or
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part thereof (or, in the event the HRA Property is exempt from taxation or assessment or such charge during
the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes, assessments, or
charges (as determined by the Authority assessing official) as would have been payable if the HRA Property
were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens
existing on the HRA Property, or part thereof at the time of revesting of title thereto in the Authority, or to
discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations,
defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred
with respect to the making or completion of the subject improvements or any part thereof on the HRA
Property; and any amounts otherwise owing the Authority by the Developer and its successor or transferee;
and
(b) Second, to reimburse the Developer, its successor or transferee, up to the amount equal to
the portion of the HRA Property Purchase Price paid by the Developer under Section 3.2 and the amount
actually invested by it in making any of the subject improvements on the HRA Property or part thereof, less
any gains or income withdrawn or made by it from the Agreement or the HRA Property.
Any balance remaining after such reimbursements shall be retained by the Authority as its property.
Section 9.6. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or the Developer 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 Authority to exercise any remedy reserved to it, it shall not be necessary to
give notice, other than the notices already required in Sections 9.2 and 9.3 hereof.
Section 9.7. No Additional Waiver Implied by One Waiver. In the event any agreement contained
in this Agreement should be breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 9.8. Attorney Fees and Costs. Whenever any Event of Default occurs and if the Authority
employs attorneys or incur other expenses for the collection of payments due or to become due or for the
enforcement of performance or observance of any obligation or agreement on the part of the Developer under
this Agreement, and the Authority prevails in the action, the Developer agrees that it will, within ten days of
written demand by the Authority, pay to the Authority the reasonable fees of the attorneys and the other
expenses so incurred by the Authority.
Section 9.9. Right of Purchase and Right of First Refusal Agreement. Following the conveyance of
the HRA Property to the Developer, if the Developer, subject to Unavoidable Delays, fails to commence
construction of the Minimum Improvements by the dates specified in Section 4.3 hereof, and such failure to
commence is not cured within 90 days after written notice from the Authority to the Developer to do so, then
the Authority shall have the right to repurchase the HRA Property for the price the Developer paid for the
HRA Property (the HRA Property Purchase Price) or purchase all of the Development Property from the
Developer for the price the Developer paid for the Developer Property. In addition, prior to commencement
of construction of the Minimum Improvements, if the Developer determines to sell all or any part of the
Development Property within the Minimum Improvements, the Authority shall have the right to purchase the
portion of the Development Property to be sold to a third party by the Developer for the lower of (i) the price
the third party has agreed to pay for such property or (ii) the price the Developer paid for such property. To
memorialize the Authority’s right of purchase and right of first refusal, the Developer and the Authority shall
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enter into a Right of Purchase and Right of First Refusal Agreement in substantially the form set forth in
EXHIBIT E, which shall be recorded against the Development Property acquired by the Developer.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The
Authority and the Developer, to the best of their respective knowledge, represent and agree that no member,
official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement,
nor shall any such member, official, or employee participate in any decision relating to the Agreement which
affects his personal interests or the interests of any corporation, partnership, or association in which he is,
directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable
to the Developer, or any successor in interest, in the event of any default or breach by the Authority or
County or for any amount which may become due to the Developer or successor or on any obligations under
the terms of the Agreement.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and
assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it
will comply with all applicable federal, state and local equal employment and non-discrimination laws and
regulations.
Section 10.3. Restrictions on Use. The Developer agrees that, prior to the Maturity Date, the
Developer, and such successors and assigns, shall use the Development Property solely for the development
of affordable housing in accordance with the terms of this Agreement, and shall not discriminate upon the
basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the
Development Property or any improvements erected or to be erected thereon, or any part thereof.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Development Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of
the Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently
given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested,
or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the Developer at 7455
France Avenue South, Suite 351, Edina, Minnesota 55435, Attn: Adam Seraphine; and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority at
6700 Portland Ave. So., Richfield, MN 55423, Attn: Community Development Director;
or at such other address with respect to either such party as that party may, from time to time, designate in
writing and forward to the other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
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Section 10.8. Recording. The Authority may record a memorandum of this Agreement and any
amendments thereto with the County Recorder or the Registrar of Titles of the County, as the case may be.
The Developer shall pay all costs for recording.
Section 10.9. Amendment. This Agreement may be amended only by written agreement approved
by the Authority and the Developer.
Section 10.10. Preliminary Development Agreement. On the date of this Agreement, the
Preliminary Development Agreement, dated March 19, 2018, between the Authority, the City, and the
Developer shall terminate.
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IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name
and behalf and the Developer has caused this Agreement to be duly executed in its name and behalf as of the
date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
(SEAL)
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 2018, by Mary B.
Supple, the Chair of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota,
on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 2018, by Steven L.
Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota, on behalf of the Authority.
Notary Public
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NHH COMPANIES L.L.C.
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this _________________, 2018, by
________________, the _____________________________ of NHH Companies L.L.C., a Minnesota
limited liability company, on behalf of the Developer.
Notary Public
(Signature Page of Developer to the Contract for Private Development)
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EXHIBIT A
DEVELOPMENT PROPERTY
Development Property owned by HRA
Lots 3 and 6, Block 1, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin County,
Minnesota
Lots 1 and 2, Block 2, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin County,
Minnesota
Development Property to be acquired by Developer
Lots 2, 4, 5, 7, and 8, Block 1, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin
County, Minnesota
Lots 3, 4, 5, 6, 7, and 8, Block 2, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin
County, Minnesota
[to add legal description for two Mt. Calvery properties if purchased by Developer]
[Above legal description will be replaced with platted description upon final approval of the plat]
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EXHIBIT B
FORM OF TIF NOTES
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTIES OF HENNEPIN
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
No. R-1 $___________
TAX INCREMENT LIMITED REVENUE NOTE
SERIES ________
Date
Rate of Original Issue
__________% __________
The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the
“Authority”), for value received, certifies that it is indebted and hereby promises to pay to NHH Companies
L.L.C., or registered assigns (the “Owner”), the principal sum of $__________ and to pay interest thereon at
the rate of _____________ percent per annum, as and to the extent set forth herein.
1. Payments. Principal and interest (“Payments”) shall be paid on August 1, 2021, and each
February 1 and August 1 (each a “Payment Date”) and thereafter to and including February 1, 20___, in the
amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued
interest, and then to unpaid principal.
Payments are payable by mail to the address of the Owner or such other address as the Owner may
designate upon 30 days’ written notice to the Authority. Payments on this Note are payable in any coin or
currency of the United States of America which, on the Payment Date, is legal tender for the payment of
public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing
on the date of original issue. Interest shall accrue on a simple basis and will not be added to principal.
Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid.
3. Available Tax Increment. Subject to the provisions of Section 10 below, payments on this
Note are payable on each Payment Date in the amount of and solely payable from “Available Tax
Increment,” which will mean, on each Payment Date, seventy percent (70%) of the Tax Increment (as defined
in the Agreement) attributable to the Development Property (as defined in the Agreement) and paid to the
Authority by Hennepin County in the six months preceding the Payment Date, all as the terms are defined in
the Contract for Private Development, dated __________, 2018 (the “Agreement”), between the Authority
and Owner. The principal of and interest on this Note shall be payable each Payment Date solely from
Available Tax Increment. Available Tax Increment will not include any Tax Increment if, as of any Payment
Date, there is an uncured Event of Default under the Agreement.
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The Authority shall have no obligation to pay principal of and interest on this Note on each Payment
Date from any source other than Available Tax Increment, and the failure of the Authority to pay the entire
amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as
long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The
Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain
after the payment of Available Tax Increment from the last payment of Tax Increment the Authority is
entitled to receive from Hennepin County with respect to the Development Property.
4. Optional Prepayment. The principal sum and all accrued interest payable under this Note is
prepayable in whole or in part at any time by the Authority without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise required to be made
under this Note.
5. Termination. At the Authority’s option, this Note shall terminate and the Authority’s
obligation to make any payments under this Note shall be discharged upon the occurrence of an Event of
Default on the part of the Developer as defined in Section 9.1 of the Agreement, but only if the Event of
Default has not been cured and the Authority has the right to terminate the Note under Sections 9.2 and 9.3 of
the Agreement.
6. Nature of Obligation. This Note is issued to aid in financing certain public development
costs and administrative costs of a housing project undertaken by the Authority pursuant to Minnesota
Statutes, Sections 469.001 through 469.047, as amended, and is issued pursuant to an authorizing resolution
(the “Resolution”) duly adopted by the Authority on ______________, 2018, and pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Sections 469.174 through 469.1794, as amended. This Note is a limited obligation of the Authority which is
payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note
and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any
political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor
any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other
costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the
taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the
principal of or interest on this Note or other costs incident hereto.
7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by the
Authority or its financial advisors in connection with the TIF District or the Agreement are for the benefit of
the Authority, and are not intended as representations on which the Developer may rely.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND
INTEREST ON THIS NOTE.
8. Registration. This Note is issuable only as a fully registered note without coupons.
9. Transfer. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the
City Clerk of the City of Richfield. Upon surrender for transfer of the TIF Note, including any assignment or
exchange thereof, duly endorsed by the registered owner thereof or accompanied by a written instrument of
transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by
an attorney duly authorized by the registered owner in writing, and the payment by the Owner of any tax, fee,
or governmental charge required to be paid by or to the Authority with respect to such transfer or exchange,
B-3
529794v6 JAE RC125-366
the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new
Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same
dates.
Notwithstanding the foregoing, the TIF Note shall not be transferred to any person other than an
affiliate, or other related entity, of the Owner unless the Authority has been provided with an investment letter
in a form substantially similar to the investment letter in EXHIBIT C of the Agreement or a certificate of the
transferor, in a form satisfactory to the Executive Director of the Authority, that such transfer is exempt from
registration and prospectus delivery requirements of federal and applicable state securities laws. The
Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding
each Payment Date and until such Payment Date.
The Owner may assign the TIF Note to a lender that provides all or part of the financing for the
acquisition of the Development Property or the construction of the Minimum Improvements. The Authority
hereby consents to such assignment, conditioned upon receipt of an investment letter from such lender in
substantially the form attached in the Agreement as EXHIBIT C, or other form reasonably acceptable to the
Executive Director of the Authority. The Authority also agrees that future assignments of the TIF Note may
be approved by the Executive Director of the Authority without action of the Authority’s Board, upon the
receipt of an investment letter in substantially the form of EXHIBIT C of the Agreement or other investment
letter reasonably acceptable to the Authority from such assignees.
This Note is issued pursuant to a resolution of the Board of the Authority and is entitled to the
benefits thereof, which Resolution is incorporated herein by reference.
10. Parity Obligation. This Note is one of three TIF Notes issued in the total principal amount
of $2,400,000 and on a parity basis. When more than one TIF Note is outstanding, the principal of and
interest on this Note shall be paid with Available Tax Increment on a parity basis based on the amount of
principal outstanding for each TIF Note.
11. Principal Reduction. The principal of this Note is subject to reduction pursuant to the
provisions of Section 4.8 of the Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order
to make this Note a valid and binding limited obligation of the Authority according to its terms, have been
done, do exist, have happened, and have been performed in due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota, has caused this Note to be executed with the manual
signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
Executive Director Chair
B-4
529794v6 JAE RC125-366
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of the
Authority’s Executive Director, in the name of the person last listed below.
Date of Registration Registered Owner Signature of Executive Director
NHH Companies L.L.C.
Federal ID #_____________
529794v6 JAE RC125-366 C-1
EXHIBIT C
INVESTMENT LETTER
To the Housing and Redevelopment Authority in and for the City of Richfield (the “Authority”)
Attention: Executive Director
Re: $____ Tax Increment Limited Revenue Note, Series 20___
The undersigned, as Owner of $_____ in principal amount of the above captioned Note (the “Note”)
pursuant to a resolution of the Authority adopted on ___________, 2018 (the “Resolution”), hereby
represents to you and to Kennedy & Graven, Chartered, Minneapolis, Minnesota, development counsel, as
follows:
1. We understand and acknowledge that the TIF Note is delivered to the Owner as of this date
pursuant to the Resolution and the Contract for Private Development, dated __________, 2018 (the
“Contract”), between the Authority and the Owner.
2. We understand that the TIF Note is payable as to principal and interest solely from Available
Tax Increment (as defined in the TIF Note).
3. We further understand that any estimates of Tax Increment prepared by the Authority or its
financial advisors in connection with the TIF District, the Contract or the TIF Note are for the benefit of the
Authority, and are not intended as representations on which the Owner may rely.
4. We have sufficient knowledge and experience in financial and business matters, including
purchase and ownership of municipal obligations, to be able to evaluate the risks and merits of the investment
represented by the purchase of the above-stated principal amount of the TIF Note.
5. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering statement containing material information with respect to the Authority and the TIF
Note has been issued or prepared by the Authority, and that, in due diligence, we have made our own inquiry
and analysis with respect to the Authority, the TIF Note and the security therefor, and other material factors
affecting the security and payment of the TIF Note.
6. We acknowledge that we have either been supplied with or have access to information,
including financial statements and other financial information, to which a reasonable investor would attach
significance in making investment decisions, and we have had the opportunity to ask questions and receive
answers from knowledgeable individuals concerning the Authority, the TIF Note and the security therefor,
and that as a reasonable investor we have been able to make our decision to purchase the above-stated
principal amount of the TIF Note.
7. We have been informed that the TIF Note (i) is not being registered or otherwise qualified
for sale under the “Blue Sky” laws and regulations of any state, or under federal securities laws or
regulations, (ii) will not be listed on any stock or other securities exchange, and (iii) will carry no rating from
any rating service.
8. We acknowledge that neither the Authority nor Kennedy & Graven, Chartered has made any
representations as to the status of interest on the TIF Note for state or federal income tax purposes.
529794v6 JAE RC125-366 C-2
9. We represent to you that we are purchasing the TIF Note for our own accounts and not for
resale or other distribution thereof, except to the extent otherwise provided in the TIF Note, the Resolution, or
any other resolution adopted by the Authority.
10. All capitalized terms used herein have the meaning provided in the Contract unless the
context clearly requires otherwise.
11. The Owner’s federal tax identification number is: __________________________.
12. We acknowledge receipt of the TIF Note as of the date hereof.
(Remainder of this page intentionally left blank)
529794v6 JAE RC125-366 C-3
NHH COMPANIES L.L.C.
By
Its
Dated: __________________, 20___
529794v6 JAE RC125-366 D-1
EXHIBIT D
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that NHH Companies L.L.C., a Minnesota limited liability
company (the “Developer”), has fully complied with its obligations under Articles III and IV of that
document titled “Contract for Private Development,” dated ________________, 2018 (the “Agreement”),
between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and the
Developer, a memorandum of which was recorded in the Office of [County Recorder] [Registrar of Titles] of
Hennepin County, Minnesota on ______________________, as Document No.______________________,
with respect to construction of the Minimum Improvements in accordance with Article IV of the
Agreement, and that the Developer is released and forever discharged from its obligations with respect to
acquisition of the HRA Property (as defined in the Agreement) and construction of the Minimum
Improvements under Articles III and IV of the Agreement.
Dated: _______________, 20___.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 20__, by
_________________, the Executive Director of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Kennedy & Graven, Chartered (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
529794v6 JAE RC125-366 E-1
EXHIBIT E
RIGHT OF PURCHASE AND RIGHT OF FIRST REFUSAL AGREEMENT
THIS RIGHT OF PURCHASE AND RIGHT OF FIRST REFUSAL AGREEMENT (the
“Agreement”) is given as of this ___ day of ____________, 2018 (the “Effective Date”), by NHH
COMPANIES L.L.C., a Minnesota limited liability company (the “Developer”), to the HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public
body corporate and politic under the laws of the State of Minnesota (the “Authority”).
1. Contract for Private Development. The Developer and the Authority have entered into a Contract for
Private Development, dated __________, 2018 (the “Contract”), pursuant to which the Authority will convey
certain real property to the Developer as legally described in SCHEDULE A (the “HRA Property”) and the
Developer will obtain certain parcels adjacent to the HRA Property as legally described in SCHEDULE B
(the “Developer Property”). Pursuant to the Contract, the Developer has agreed to construct on the HRA
Property and the Developer Property (together, the “Development Property”) (i) approximately 80 affordable
owner-occupied townhomes; and (ii) necessary public infrastructure, including streets and utilities. All terms
capitalized herein and not defined herein shall have the meaning given such term in the Contract.
2. Grant. For valuable consideration, and subject to the conditions set forth below, the Developer
hereby grants to the Authority the right to purchase and the right of first refusal pursuant to the provisions of
this Agreement.
3. Right to Purchase. Following the conveyance of the HRA Property to the Developer, if the
Developer, subject to Unavoidable Delays, fails to commence construction of the Minimum Improvements
by the dates specified in Section 4.3 of the Contract, and such failure to commence is not cured within 90
days after written notice from the Authority to the Developer to do so, then the Authority shall have the right
to repurchase the HRA Property for the price the Developer paid for the HRA Property or purchase all of the
HRA Property and the Developer Property from the Developer for the price the Developer paid for such
property. The Authority shall have 60 days following the 90-day cure period set forth in this Section to notify
the Developer of its intent to repurchase the HRA Property or purchase all of the HRA Property and the
Developer Property. The Authority shall have 120 days to complete the purchase of the HRA Property
and/or the Developer Property.
4. Right of First Refusal. Prior to commencement of construction of the Minimum Improvements, if
the Developer determines to sell all or any part of the HRA Property and the Developer Property, the
Authority shall have the right to purchase the portion of the Development Property to be sold to a third party
by the Developer for the lower of (i) the price the third party has agreed to pay for such property or (ii) the
price the Developer paid for such property.
a. Notice of Acceptable Offer. If at any time or times during the term of this Agreement, the
Developer receives an offer acceptable to the Developer for the purchase of all or any part of the
HRA Property or the Developer Property, then the Developer shall forthwith forward a copy of such
offer (the “Acceptable Offer”) to the Authority.
b. Exercise by Authority. The Authority shall have a period of 30 days after receiving such
copy of the Acceptable Offer within which to notify the Developer that the Authority elects to
purchase the Property (or the portion thereof covered by the Acceptable Offer) (the “Sale Property”)
on the terms contained therein. Any such notice from the Authority shall be accompanied by any
earnest money required under the terms of the Acceptable Offer, which shall then constitute a
contract between the Developer and the Authority even though neither has signed it.
529794v6 JAE RC125-366 E-2
c. Waiver by Authority. If the Authority does not notify the Developer within the 30-day
period described in Section 6 of the Authority’s election to purchase such Sale Property, the
Developer shall be free to sell such Sale Property to the person who submitted the Acceptable Offer
(or to such person’s permitted assigns) on the terms specified therein, and the Authority shall upon
request execute and deliver an instrument in recordable form appropriate to evidence the Authority’s
relinquishment of its rights under this Agreement with respect to such transaction. Notwithstanding
any such relinquishment, the Authority’s rights under this Agreement shall remain in effect with
respect to any part of the Property not covered by the Acceptable Offer, and, if the transaction
contemplated by the Acceptable Offer fails for any reason to close, with respect to any subsequent
offer to purchase all or any part of the Property covered by such Acceptable Offer.
5. Contract Restrictions on Transfer of Property. If the Authority determines to waive its right to
purchase the Sale Property, the Developer remains obligated to comply with the requirements set forth in
Section 8.2 of the Contract related to transfers of the Development Property and the assignment of the
Contract.
6. Term. This Agreement shall commence on the date the HRA Property is conveyed to the Authority
and terminate on the earlier of: (i) the date the Developer obtains Certificates of Completion for the Minimum
Improvements; and (ii) upon sale of all of the HRA Property and the Developer Property pursuant to the
terms of an Acceptable Offer for which the Authority has been provided notice and has not exercised its right
to purchase such property in accordance with the provisions of this Agreement. Notwithstanding the
foregoing, for any portion of the HRA Property or the Developer Property that is sold pursuant to an
Acceptable Offer, this Agreement shall terminate with respect to such portion of HRA Property or the
Developer Property at the end of the 30-day period described in Section 4 if the Authority does not notify the
Developer of its election to purchase such portion of the Property. For any portion of the HRA Property or
the Developer Property for which the Developer has received a Certificate of Completion for the Minimum
Improvements to be constructed thereon this Agreement shall terminate with respect to such portion of HRA
Property or the Developer Property on the date of receipt of the Certificate of Completion.
7. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and
shall be deemed given upon personal delivery or on the second business day after mailing by registered or
certified United States mail, postage prepaid, to the appropriate party at its address stated below:
a. If to Developer: NHH Companies L.L.C.
7455 France Avenue South
Suite 351
Edina, Minnesota 55435
Attn: Adam Seraphine
b. If to Authority: Housing and Redevelopment Authority in and for the City of Richfield
6700 Portland Ave. South
Richfield, MN 55423
Attn: Community Development Director
Either party may change its address for notices by notice to the other party as provided above.
8. Binding Effect and Transferability. The provisions of this Agreement shall bind and benefit the
Developer and the Authority and their respective successors and assigns.
529794v6 JAE RC125-366 E-3
9. Assignment. The Authority may assign this Agreement only to a wholly owned subsidiary of the
Authority.
10. Miscellaneous. This Agreement may be executed in counterparts, all of which shall constitute an
original of this Agreement. This Agreement may be recorded by the Authority with the Hennepin County
Recorder’s Office and/or Hennepin County Registrar of Titles’ Office. All disputes related to this Agreement
shall be governed by Minnesota law without application to its internal choice of law statutes or doctrines. All
actions commenced relating to this Agreement shall only be brought before the courts located in Hennepin
County, Minnesota. In any action to enforce the terms of this Agreement, the prevailing party shall be
entitled to an award of all its reasonably expended costs and attorneys’ fees, including appeal and collection
costs and fees. The Developer shall execute and deliver to the Authority all documents reasonably necessary
to record this Agreement or to otherwise evidence the Authority’s rights as contained herein.
(The remainder of this page is intentionally left blank.)
529794v6 JAE RC125-366 E-4
IN WITNESS WHEREOF, the Authority and the Developer have executed this Agreement on the
date set forth in the Developer’s acknowledgement, intending it to take effect as of the date first mentioned
above.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
(SEAL)
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 2018, by Mary B.
Supple, the Chair of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota,
on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 2018, by Steven L.
Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota, on behalf of the Authority.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Kennedy & Graven, Chartered (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
529794v6 JAE RC125-366 E-5
Execution page of the Developer to this Agreement, dated as of the date and year first above written.
NHH COMPANIES L.L.C.
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this _________________, 2018, by
________________, the _____________________________ of NHH Companies L.L.C., a Minnesota
limited liability company, on behalf of the Developer.
Notary Public
529794v6 JAE RC125-366 E-6
SCHEDULE A TO RIGHT OF PURCHASE AND RIGHT OF FIRST REFUSAL AGREEMENT
HRA PROPERTY DESCRIPTION
Development Property owned by HRA
Lots 3 and 6, Block 1, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin County,
Minnesota
Lots 1 and 2, Block 2, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin County,
Minnesota
529794v6 JAE RC125-366 E-7
SCHEDULE B TO RIGHT OF PURCHASE AND RIGHT OF FIRST REFUSAL AGREEMENT
DEVELOPER PROPERTY DESCRIPTION
Developer Property to be acquired by Developer
Lots 2, 4, 5, 7, and 8, Block 1, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin
County, Minnesota
Lots 3, 4, 5, 6, 7, and 8, Block 2, Iverson’s Second Addition, according to the recorded plat thereof, Hennepin
County, Minnesota
[to add legal description for two Mt. Calvery properties if purchased by Developer]
529794v6 JAE RC125-366 F-1
EXHIBIT F
OWNER-OCCUPIED HOUSING FORM
PROPERTY INFORMATION
Legal description of property to be sold: Lot_____Block
Subdivision
Parcel Identification No.
Postal Address of Parcel
PURCHASER INFORMATION
Name of Purchaser
Current Address
Current Phone #
Number of family/household members:
Annual Household Income* $
*Annual Household Income must be supported by documentation (i.e. copy of most current 1040’s, etc.).
Failure to provide verification will constitute a “non-qualifying family”.
INCOME LIMIT INFORMATION
20____ Income Limits
Family Size Income
1
2
3
4
5
6
7
8
Does the Purchaser meet these limits and has appropriate documentation been submitted?
YES NO
If No, purchaser is not eligible to acquire the home. If Yes, the purchaser is eligible to acquire the property.
Signature of Purchaser(s) Date
529794v6 JAE RC125-366 F-2
Date
Signature of Seller Date
Reviewed and approved on behalf [HOUSING CONSULTANT]
By Date
AGENDA SECTION:PUBLIC HEARINGS
AGENDA ITEM #6.
S TAFF REPORT NO. 33
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: Julie Urban, Housing Manager
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
8/15/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Continue the public hearing on the sale of property and consideration of a Contract for Private
Development with N H H Companies, LL C for redevelopment of the Cedar Point II Housing area with
218 units of apartments to September 17, 2018.
E X E C UT IV E S UM M ARY:
The Richfield Housing and Redevelopment Authority (HRA) approved a Preliminary Development Agreement
(Agreement) with NHH Companies, L L C (Developer) on March 19, 2018, for the development of the Cedar
Point I I Housing area (63rd to 65th Streets, 16th Avenue to Richfield Parkway). The Agreement identified
several issues to be worked out and established milestones for the Developer to meet, including negotiating a
Contract for Private Development (Contract) with staff by August 20, 2018.
Since that time, the Developer has accomplished the following:
Submitted plans for sketch plan review.
Submitted land use plans.
Submitted financial pro formas.
Submitted grant applications to the Metropolitan Council and the Department of Employment and
Economic Development.
Reached out to all property owners located within the development area.
Negotiated purchase agreements with six of the remaining eleven property owners.
Closed on the acquisition of one property.
Further study of the financial components of the project has led the Developer to propose that two
separate Tax Increment Financing (T IF) Districts and therefore two separate Contracts be prepared
for the development.
Staff, in consultation with the Developer and the City's financial and legal consultants have
determined that consideration of the Contract for the apartments, and the public hearing on the land
sale, be continued until September 17, 2018, to allow further refinement of the contract's financial
details.
RE C O M M E ND E D AC T I O N:
By motion: Continue the public hearing to September 17, 2018.
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
A 1999-2000 study commissioned by the City of Richfield and the Metropolitan Airports
Commission (MA C) concluded that many of the structures in this area, including all single-family
homes, were not capable of withstanding the negative impacts of low frequency noise. As a result
of the study, this area was identified as a Redevelopment Area in 2000.
I n 2004, the Minnesota Legislature approved the creation of a special Redevelopment TI F District
to provide a funding mechanism for redevelopment of the area.
During the economic downturn from 2007-2011, there was little interest in developing this area due
to weak market conditions.
Upon conclusion of the recession, HRA staff concentrated their development efforts on the Cedar
Point I I area. The challenge of property acquisitions and the significant financial gap in the
project made it difficult to find a developer and project that could succeed.
I n 2014, homes along 17th Avenue were purchased for the construction of Richfield Parkway from
63rd to 66th Streets leaving 14 fewer homes to be purchased in the development area.
I n 2015, the HRA signed a pre-development agreement with Boisclair Corporation to redevelop
the area with single family homes and townhomes. I n 2017, the HRA cancelled the agreement with
Boisclair due to slow progress in solving the acquisition and other development issues,
I n the Fall of 2017, NHH Properties and Boisclair Corporation approached the HRA and Council
with a new development team and plan for acquiring the remaining single family homes and
closing the financial gap.
I n March of 2018, the HRA signed a pre-development agreement with NHH Properties (dba NHH
Companies, L L C) to redevelop the area with 218 market-rate apartments and up to 80 townhomes
affordable to households earning 100/115% of the area median income.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
I n order for private redevelopment with public assistance to occur, a developer must have a
Contract with the HRA.
C.C R IT IC AL T IMIN G IS S U E S:
The Developer would like to begin site work this Fall with primary construction work starting in the
Spring of 2019. Allowing an additional month to finalize the Contract will not delay this schedule.
D.F IN AN C IAL IMPAC T:
Further details on the financial impacts will be available on September 17.
E.L E GAL C ON S ID E R AT ION:
A draft of the Contract has been prepared. Further refinement of the Contract details is underway
and will be completed by the meeting on September 17.
The Preliminary Development Agreement allows the HRA to terminate the Agreement if a Contract
is not negotiated by August 20; however, a Contract for the townhome portion of the project is
before the HRA for review on August 20. I n addition, significant progress has been made in
preparing a Contract for the apartment portion of the Development, and all other milestones
established in the Agreement have been met. Staff recommends continuing to honor the
Preliminary Development Agreement in light of the significant progress made in moving this
project forward.
Notice of the public hearing for the sale of property was published; however, the hearing on the
sale of property should be continued until the details of the Contract are finalized.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Continue the public hearing and consideration to a different date.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
J ulie Eddington, HRA Legal Counsel Representative(s) of NHH Companies, LLC
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #7.
S TAFF REPORT NO. 34
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: K ate A itchison, Housing S pecialist
D E PA RTME NT D IRE C TO R RE V IE W: Melissa P oehlman, A cting C ommunity D evelopment D irector
8/14/2018
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
8/15/2018
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 an assignment of a Housing and Redevelopment Authority
Transformation Home Loan at 6701 Washburn Avenue to Equihance Partners, L LC and the execution
of all related documents by the Executive Director and Board Chair.
E X E C UT IV E S UM M ARY:
I n 1996, the Richfield Housing and Redevelopment Authority (HRA) issued a $14,060 Transformation Home
Loan to the owners (Homeowners) of the property at 6701 W ashburn Avenue. Foreclosure proceedings
began on this property in late 2017, and a Sheriff's Certificate was filed in J uly 2018. The final redemption
period for this property will end J anuary 18, 2019, at which point the bank will own the property.
During the redemption period, any lien holder may redeem the property for the price issued by the Sheriff's
Certificate. Following the redemption period, all liens will be removed from title and the bank will hold all rights
to the property. Any future purchase of the property from the bank will not include any repayment of the
HRA's lien.
Don Maietta, a realtor with Coldwell Banker Burnet, and chief manager of Equihance Partners L L C, is
proposing to buy the HRA's lien in order to take ownership of the property. Equihance Partners has offered
the HRA $2,800 for an assignment of the HRA's mortgage. The home will be rehabilitated and sold on the
ML S.
RE C O M M E ND E D AC T I O N:
By motion: Approve an assignment of a Housing and Redevelopment Authority lien against 6701
Washburn Avenue to Equihance Partners, L LC for $2,800 and the execution of all related documents
by the Executive Director and Board Chair.
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 Transformation Home Loan provides incentive loans to assist homeowners in their large-scale
remodeling projects. The loan issued is 15% of their project cost, with a maximum loan of $25,000.
The loan is interest-free, and requires no payments.
I n 1996, the Homeowners received a $14,060 Transformation Home Loan for the construction of
an addition and kitchen remodel.
Foreclosure proceedings began on the property in late 2017. A Sheriff's Certificate was filed on
J uly 18, 2018, and the redemption period will end on J anuary 18, 2019.
The Homeowner has indicated she is not attempting to redeem the property from foreclosure.
Equihance Partners, L L C, has experience rehabilitating and reselling homes in other
communities, and has provided a letter of reference from the City of North Saint Paul.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The HRA adopted the Mortgage Foreclosure Response Program Procedural Guidelines in 2007,
which include objectives of both protecting the HRA's mortgage interests and improving the
housing stock for future homeowners.
Neighborhoods in which there are one or more foreclosed or vacant homes have detrimental
impacts on the surrounding property values. The buyer is an investor who plans to make
improvements to the home and return it to an occupied status.
C.C R IT IC AL T IMIN G IS S U E S:
The foreclosure redemption period will expire on J anuary 18, 2019, after which time the bank will
obtain ownership and a buyer may purchase the property directly from the bank, without
requirements to satisfy other liens.
I t is unknown how long the bank would hold the property before selling it.
D.F IN AN C IAL IMPAC T:
The Sheriff's Certificate lists the price of the property at $230,298.30. The investor estimates a
payment of $247,830.32, including fees, taxes and other costs for the property (including a $2,800
payment for the HRA's lien).
Based on an exterior inspection of the property, the investor plans $62,729.40 worth of
rehabilitation work.
The estimated end sale price is $350,000.
As a lienholder, the HRA could redeem the mortgage itself; however, funds are not available for
this purchase, nor would it meet any of the HRA's current program objectives.
I f the mortgage is not assigned during the redemption period, the HRA will not receive any
repayment for its lien.
Below is a rough pro-forma submitted by the investor:
Price of Property (payoff of 1st and 2nd mortgages, taxes, fees, etc.) $248,630.32
Estimated Cost of Rehabilitation $ 62,729.40
Holding and Closing costs, etc. $ 16,505.00
TO TAL $327,864.72
Estimated Sale Price $350,000.00
P R O F IT $ 22,135.28
E.L E GAL C ON S ID E R AT ION:
The HRA attorney will review the assignment documents.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve a proposal made by Equihance Partners, L L C to purchase the HRA lien on 6701
W ashburn Avenue for $2,800.
Approve a proposal made by Equihance Partners, LLC to purchase the HRA lien at 6701 Washburn
Avenue for a different amount.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Don Maietta, Chief Manager, Equihance Partners, L L C.
AT TAC H ME N T S:
D escription Type
L etter from E quihance P artners L L C B ackup Material
P hoto of 6701 Washburn Avenue B ackup Material
L etter of Reference B ackup Material
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #8.
S TAFF REPORT NO. 35
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: Julie Urban, Housing Manager
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
8/15/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of the adoption of a resolution authorizing the purchase of real property located at 6501
Penn Avenue, pending a finding of consistency by the Richfield Planning Commission.
E X E C UT IV E S UM M ARY:
The property located at 6501 Penn Avenue has been listed for sale for the past year and half. There are two
buildings located on the 25,000 square foot property, one of which is occupied by a Bumper to Bumper Auto
Parts store and the other primarily vacant/for storage.
The property owner recently approached Housing and Redevelopment Authority (HRA) staff regarding
purchasing the property. I n J uly, staff made an offer (contingent on H R A approval) to purchase the
property for $480,700; which is 10% greater than its Assessed Market Value of $437,000. Staff
viewed this as a reasonable offer given that the Assessed Values, as determined by Hennepin
County, reflect the prior year's value and typically lag the real estate market. T he property was most
recently listed for sale at $595,000.
The property owner agreed to the price but asked for several changes to the HRA's purchase agreement,
including that it not be contingent upon HRA approval. Staff is asking the HRA to authorize staff to make an
offer to the owner contingent only upon the results of the environmental assessment.
I f purchased, staff would begin marketing the site for a commercial and/or multi-family residential use. An
analysis of the potential rehabilitation and reuse of the existing buildings is currently underway. I f determined
to be unusable, the buildings would be demolished.
RE C O M M E ND E D AC T I O N:
By motion: Adopt a resolution authorizing the purchase of real property located at 6501 Penn Avenue,
pending a finding of consistency by the Richfield Planning Commission.
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 has a history of purchasing underutilized properties along the City's commercial
corridors when the private market has proved unable to acquire, rehabilitate and occupy such
properties.
The owner has unofficial agreements with a business and two individuals to use one of the second
building's bays and for use of parking spaces. The owner has notified these individuals that the
property is for sale and that they will need to vacate the premises.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
I t has long been the goal of the City to see improvements along the Penn Avenue corridor.
Purchasing this property offers the HRA the opportunity to direct redevelopment in a way that
meets this goal.
The Agreement is contingent upon the HRA finding the results of an environmental assessment
acceptable.
C.C R IT IC AL T IMIN G IS S U E S:
The Planning Commission is scheduled to consider the consistency of this acquisition with the
Comprehensive Plan on August 27, 2018. The property is guided for Mixed Use.
The owner is asking to close on the property by October 15, 2018, and for an additional 60 days
beyond closing to complete moving out of the property.
D.F IN AN C IAL IMPAC T:
The HRA budget anticipates occasional acquisitions (and related demolitions) such as this, and
there is available funding.
The exact source of the funding will depend on the outcome of a "substandard and blight study."
I f, as expected, the property is determined to be "blighted and substandard", the property will be
acquired with funds from the HRA's Housing and Redevelopment Fund. Otherwise the funding
would come from the Development Account.
E.L E GAL C ON S ID E R AT ION:
HRA legal counsel drafted the Purchase Agreement related to this acquisition.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Deny approval of the resolution and do not pursue acquisition of this property.
Approve the resolution with modifications that address any concerns by HRA Commissioners.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
P urchase A greement C ontract/A greement
082018 6501 Penn Ave Acquisition.docx
HRA RESOLUTION NO. ________
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 6501 PENN AVENUE SOUTH
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 redevelopment and the City’s Comprehensive Plan, said property being
described as:
The South 189 2/10 feet of the North 876 8/10 feet of the West 1/8 of the Southwest
¼ of the Northwest 1/4, except highway
WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to
acquire real property within its area of operation; and
WHEREAS, HRA funds are 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 identified is approved not to exceed
$480,700, plus closing costs, not to exceed $25,000.
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 August, 2018.
_______________________
Mary Supple, Chair
ATTEST:
_______________________
Erin Vrieze Daniels, Secretary
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532219v3 JAE RC125-368
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of the 21st day
of August, 2018 (which shall be the reference date only of this Agreement), between Charles K. Haglund
and Yvonne H. Haglund, husband and wife (“Seller”), and the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of
Minnesota, its successors or assigns (“Purchaser”).
RECITALS
A. Seller is the owner of certain real property located 6501 Penn Avenue South in the City
of Richfield, Minnesota (“City”), County of Hennepin, and State of Minnesota, which is legally described
on the attached Exhibit A (the “Land”).
B. Seller desires to sell the Land and any and all improvements located thereon to Purchaser,
and Purchaser desires to purchase such Land and improvements under the terms and conditions provided
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the following terms and
conditions, the parties agree as follows:
1. SALE AND PURCHASE. Seller hereby agrees to sell to Purchaser, and Purchaser hereby
agrees to purchase from Seller, upon the terms and conditions set forth below, the following:
a. Fee simple title to the Land together with improvements constructed on the Land (the
“Improvements”); and
b. Seller’s interest, if any, in: (i) all easements, air rights, and other rights benefiting or
appurtenant to the Land; and (ii) all neighboring or contiguous alleys, streets, roads, and
utilities servicing, pertaining, or relating to the Land; and
c. Seller may take any or all of the fixtures located in the buildings on the Land.
All items described in subsections 1(a) through 1(b) above are collectively referred to in this Agreement
as the “Property.”
2. PURCHASE PRICE. The total purchase price to be paid by Purchaser to Seller for the Property
(the “Purchase Price”) shall be Four Hundred Eighty Thousand Seven Hundred and No/100
Dollars ($480,700.00).
The Purchase Price shall be payable as follows:
a. The “Effective Date” shall be the last date upon which this Agreement is executed by
both Purchaser and Seller.
b. The Purchase Price, plus or minus the prorations and credits provided in this
Agreement, shall be paid to Seller in immediately available funds via certified check
or wire transfer on the Closing Date (as defined in Section 8 hereof).
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532219v3 JAE RC125-368
3. CONTINGENCIES. Notwithstanding any other provision in this Agreement to the
contrary, the parties agree that the purchase of the Property is subject to the following
contingencies (collectively, the “Contingencies”) which must be accepted or waived on or
before 50 days after the Effective Date hereof (such 50 day period shall referred to as the “Due
Diligence Period”), unless a different period is expressly provided herein:
a. Title to the Property shall be acceptable to Purchaser, in its sole discretion (the “Title
Contingency”) within the time frames and terms and conditions contained in Paragraph 5.
b. The Property’s environmental condition shall be acceptable to Purchaser, in its sole
discretion. Copies of such environmental assessments shall be provided at no cost to
Seller for its use (the “Environmental Contingency”). Notwithstanding the foregoing,
Purchaser must conduct such review and other matters during the Due Diligence
Period and this Environmental Contingency shall expire on the expiration of the Due
Diligence Period.
c. Purchaser shall have the right during the Due Diligence Period to conduct such soil
tests/geotechnical analyses, building and property inspections, reviews,
environmental assessments (collectively, the “Physical Reports”), if any, as
Purchaser deems necessary and such Physical Reports and the testing/review
required therefore shall be subject to the terms and conditions contained in
Paragraph 7. The results of the same shall be satisfactory to Purchaser in its sole
discretion (the “Inspection Contingency”). Copies of any Physical Reports obtained
or commissioned by Purchaser with respect to the Property shall be provided at no
cost to Seller, but without any representation as to their accuracy or how the same
may be used. To facilitate Purchaser’s due diligence efforts, Seller agrees to deliver
copies of all records it has of the Property in its possession, if any, to Purchaser
within 10 days after the Effective Date hereof.
d. Seller shall remove all debris, personal property and hazardous materials from the
Property before the Closing Date.
Purchaser shall satisfy or waive the Contingencies set forth above on or before the expiration of
the Due Diligence Period and the Title Contingency in the time prescribed in Paragraph 6 or said
Contingencies shall be waived. If Purchaser is unable to satisfy the Contingencies and
determines not to waive the Contingencies, Purchaser may terminate this Agreement. If
Purchaser elects to terminate this Agreement, upon Seller’s receipt of Purchaser’s written notice
of termination, this Agreement shall be null and void, and neither party shall have any further
obligation to the other.
4. REPRESENTATIONS. The following representations are being made by Seller: (i) that Seller
owns fee simple marketable title to the Property; (ii) as of the Closing Date, there will be no
obligations or liabilities of any kind or nature whatsoever, including but not limited to any tax
liabilities, contract liabilities, or tort liabilities for which or to which Purchaser or the Property
will be liable or subject except for non-delinquent real estate tax obligations; (iii) subject to
matters beyond the control of the Seller and reasonable wear and tear, the Property shall be
substantially in the same condition on the Closing Date as it is as of the date first written above;
and (iv) Seller has not filed, voluntarily or involuntarily for bankruptcy relief within the last year
under the United States Bankruptcy Code or has any petition for bankruptcy or receivership been
filed against Seller within the last year. These representations shall survive the Closing
indefinitely.
3
532219v3 JAE RC125-368
5. EVIDENCE OF TITLE. Purchaser shall obtain a commitment for an owner’s policy of title
insurance (“Title Commitment”) for the Property within 30 days of the Effective Date. The cost
of obtaining such Title Commitment shall be paid by Purchaser. Purchaser shall be allowed
15 days after the date of receipt of the latter of the Title Commitment or the Survey to
examine the same and the making of any objections (the “Title Objections”); such objections
are to be made to Seller in writing or shall be deemed to have been waived. The Title
Objections may include requests for deletion of the survey, mechanic’s liens, and possession
standard exceptions and the request for special endorsements for such matters as Purchaser may
request. If any Title Objections are so made, Seller shall have 10 days from the date of
Seller’s receipt of the Title Objections (“Outside Seller Response Date”) to confirm in
writing to Purchaser whether it will be able to remove the Title Objections on or prior to the
Closing Date, and if not, which of the Title Objections Seller is unwilling to remove;
provided, however, that Seller must satisfy any mortgages, monetary liens, or other monetary
encumbrances on or prior to the Closing Date. Purchaser shall then have the right to either
waive those Title Objections which Seller is unwilling to remove, or to terminate this
Agreement on or before the earlier of i) five days after the Outside Seller Response Date; or
ii) the end of the Due Diligence Period pursuant to the Title Contingency described in Section
3(a) above. If Seller fails to remove those Title Objections which Seller agrees to remove on
or prior to the Closing Date, Purchaser shall have the option of:
a. Declaring this Agreement null and void by written notice to Seller; or
b. Waiving any defect in title and, in such event, proceeding to close the transaction
contemplated by this Agreement on the Closing Date.
As used in this Agreement, the term “Permitted Exceptions” shall mean (i) all matters
either shown on the Survey or listed in the Title Commitment to which Purchaser does
not raise a Title Objection within the Title Review Period or, having objected, waives as
provided above; (ii) ad valorem real estate taxes for the calendar year in which the
Closing occurs and subsequent calendar years, not yet due and payable; and
(iii) municipal or other governmental zoning laws, regulations and ordinances.
6. ACCESS TO PROPERTY. Seller hereby grants to Purchaser and its agents the right of
ingress and egress over, under, and through the Property for the purpose of surveying,
inspecting, and testing of the same and making other observations as Purchaser deems
necessary, all however, at Purchaser’s expense. This includes the right of Seller and its
agents to perform soil borings and an environmental assessment of the Property. Purchaser
shall reasonably repair any damage caused to the Property as a result of Purchaser’s activities
such that the Property is returned to substantially the same condition as it existed prior to
Purchaser’s activities. Purchaser shall ensure that any individual or entity conducting
examination of the Property on behalf of Purchaser is licensed and insured. Purchaser agrees
to indemnify and hold Seller harmless from all injury, death, or property damage or claim,
loss, expense, or lien of any kind whatsoever arising out of or in any way incidental to
Purchaser’s or its employees, contractors, agents and representatives presence on the
Property, however that in no event shall Purchaser be responsible for any conditions
discovered by Purchaser. Seller shall reasonably cooperate with Purchaser and its due
diligence efforts.
7. DESTRUCTION OR EMINENT DOMAIN. If, prior to the Closing Date, all or any
substantial part of the improvements on the Property should be destroyed by fire or any other
4
532219v3 JAE RC125-368
cause, or any insubstantial part of the Property shall be taken by eminent domain, either party
shall have the option of canceling this Agreement. If, prior to the Closing Date, all or any
substantial part of the Property should be taken, or proceedings are commenced in
condemnation with respect thereto, Purchaser shall have the option to terminate this
Agreement. Said options provided in this Paragraph, if exercised by Purchaser, must be
exercised in writing and delivered to Seller within the earlier of: (i) 10 days after a request by
Seller as to whether Purchaser intends to exercise this option; or (ii) the Closing Date. If
Purchaser so elects to cancel this Agreement in accordance herewith, this Agreement shall
thereafter be of no further force and effect.
8. CLOSING. The consummation of the transaction contemplated by this Agreement
(“Closing”) shall be held at the offices of the Purchaser, 6700 Portland Avenue South,
Richfield, Minnesota 55423 (or at such other location as the parties shall agree), on the
“Closing Date” which shall be no later than October 15, 2018 unless a later date is mutually
agreed to by Seller and Purchaser.
8.1. At Closing, Seller shall execute and/or deliver the following:
a. A warranty deed conveying the Property to Purchaser subject solely to the Permitted
Exceptions in recordable form duly executed and acknowledged by Seller and certifying
that no wells are located upon the Property or accompanied by a well disclosure
certificate;
b. Deliver possession of the Property;
c. Deliver a standard form Seller’s Affidavit as reasonably required by Purchaser;
d. Deliver an affidavit certifying that Seller is not a foreign person under§ 1445 of the
Internal Revenue Code;
e. Deliver a well disclosure certificate in the form attached hereto as Exhibit B or a
statement on the deed that Seller does not know of any well located on the Property, as
well as disclosure of any septic systems located on the property, in the form attached as
Exhibit C, or a statement that there are none;
f. Pay all pro-rations, fees and costs required of Seller under this Agreement;
g. Deliver the appropriate Federal Income Tax reporting form, if any is required;
h. Deliver a certificate reaffirming the representations made in Section 4 hereof;
i. Deliver any other documents as may be reasonably required by the Purchaser including,
but not limited to, evidence that all authorized signatures required to bind Seller have
been provided on all Closing documents;
j. Deliver closing statement pursuant to the terms and conditions of this Agreement; and
k. Deliver all other documents as may be reasonably required by the Purchaser to record
Seller’s Closing Documents and issue the Title Insurance Policy required by this
Agreement, possession of the Property with keys, and access cards to the Property’s
doors and locks.
5
532219v3 JAE RC125-368
8.2. At Closing, Purchaser shall execute and deliver the following:
a. Deliver cash or other immediately available funds in the amount required under the
closing statement agreed to by Purchaser and Seller;
b. Pay all pro-rations, fees, and costs required of Purchaser under this Agreement;
c. Deliver or file a Certificate of Real Estate Value;
d. Deliver evidence reasonably satisfactory to Seller that the signatories of this
Agreement have the full right, power, and authority to sign on behalf of Purchaser;
e. Deliver an executed closing statement pursuant to the terms and conditions of this
Agreement; and
f. Deliver any other documents as may be reasonably required by the Purchaser or by
Seller, including but not limited to evidence that all authorized signatures required to bind
Purchaser have been provided on all required Closing documents.
8.3. Real Estate Taxes and Special Assessments. General real estate taxes applicable to
the Property due and payable in the year of Closing shall be prorated between Seller and
Purchaser on a daily basis with Seller paying those allocable to the period prior to the date of
Closing and Purchaser being responsible for those allocable to the date of Closing and
thereafter. Any real estate taxes due and payable in the years prior to Closing, including any
deferred real estate taxes, penalties or interest shall be paid by Seller. Seller shall pay all
special assessments levied against the Property and due and owing as of the Closing Date.
Purchaser shall pay all special assessments pending or and due and owing after the Closing
Date.
8.4. Other Closing Costs. Seller shall pay all state or local transfer, conservation fees, or
deed taxes in connection with the Deed to be delivered by Seller to Purchaser. Seller shall
pay recording fees of instruments required to establish marketable title in Seller. Seller shall
pay the cost for preparation of the Commitment. Purchaser shall pay recording charges in
connection with the Deed, as well as the costs of any due diligence reports which Purchaser
may have ordered regarding environmental conditions, soils conditions, or other aspects of
the Property. Purchaser shall pay the cost of its title insurance premium and any policy
endorsements it desires. Purchaser and Seller shall equally split any closing charges. Seller
shall be responsible for satisfying, out of the Purchase Price or otherwise, all mortgages and
liens against the Property as of Closing. Each party shall be responsible for its own legal
counsel fees.
9. OPERATION PRIOR TO CLOSING. During the period from the date of Seller’s
acceptance of this Agreement through the Closing Date, Seller shall operate and maintain the
Property in the ordinary course of business in accordance with commercially reasonable
business practices and standards, including but not limited to maintaining adequate liability
insurance and insurance against loss by fire, windstorm, and other hazards, casualties, and
contingencies, including vandalism and malicious mischief. Seller shall bear the risk of loss
or damage caused by any perils through the Closing Date.
6
532219v3 JAE RC125-368
10. AUTHORITY. Each person executing this Agreement, by his or her execution hereof,
represents and warrants that he or she is fully authorized to do so, and that no further action
or consent on the part of the party for whom he or she is acting is required for the
effectiveness and enforceability of this Agreement against such party following such
execution.
11. BROKER’S FEES. Seller and Purchaser represent to each 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. Seller and Purchaser agree to indemnify,
defend, and hold the other party harmless against any and all claims of brokers, finders, or
the like, and against the claims of all third parties, claiming any right to commission or
compensation by or through acts of the indemnifying party or its partners, agents, or
affiliates in connection with this Agreement. The indemnifying party’s indemnity
obligations shall include all damages, losses, costs, liabilities, and expenses, including
reasonable attorneys’ fees and litigation costs, which may be incurred by the other party.
12. RELOCATION BENEFITS. Seller acknowledges that the Property has been listed for sale on
and off for several years and the Seller approached the Buyer to purchase the Property. Seller
further acknowledges that the Seller initiated negotiations with the Buyer for the transaction
contemplated by this Purchase Agreement, and that this transaction is not made under threat of
condemnation by the Buyer. Furthermore, the Buyer does not have the statutory authority to
take the Property by eminent domain. Therefore, Seller acknowledges that it is not being
displaced from the Property as a result of the transaction contemplated by this Agreement and
that Seller is not eligible for relocation assistance and benefits. The provisions of this paragraph
shall survive closing of the transaction contemplated by this Agreement.
13. TENANTS/USE OF PROPERTY BY OTHER PERSONS. Seller warrants that two parking
spaces on the Property are rented to a landscaping business and the landscaping business has been
told they will not be able to park on the Property on or after the Closing Date. Seller further
warrants that two individuals use the building on the Property to fix cars but do not have leases
and do not own or operate a lawful business. Seller warrants those two individuals have been
informed they will no longer be able to use the property on or after the Closing Date.
14. NOTICES. Any notice or election herein required or permitted to be given or served by
either party hereto upon the other shall be deemed given or served in accordance with the
provisions of this Agreement, if personally served; sent via telephonic facsimile; delivered
by nationally recognized overnight courier (Fed Ex, UPS, DHL, etc.); or if mailed by United
States registered or certified mail, postage prepaid, properly addressed as follows:
If to Seller: Charles and Yvonne Haglund
1608 131 ½ Street West
Burnsville, MN 55337
If to Purchaser: Housing and Redevelopment Authority
in and for the City of Richfield
6700 Portland Avenue South
Richfield, MN 55423
Attn: Julie Urban
7
532219v3 JAE RC125-368
with a copy to: Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Attn: Julie Eddington
Each mailed notice or communication shall be deemed to have been given to, or served upon,
the party to which it is addressed on the third date after the same is deposited in the United
States registered or certified mail, if postage prepaid, properly addressed in the manner above
provided, if sent by overnight mail it shall be deemed delivered the day after deposit with the
overnight courier, or on the date of delivery if by other means as allowed above, and if by
telephonic facsimile, with confirmation of successful transmission. The addresses to which
notices are to be mailed to either party hereto may be changed by such party by giving written
notice thereof to the other party in the manner above provided.
15. DEFAULT. In the event of a default by Seller hereunder, Purchaser may terminate this Purchase
Agreement, or, bring an action to compel the specific performance of this Agreement in a court of
law or equity. In the event of a default by Purchaser hereunder, Seller may terminate this
Agreement by providing 30 days written notice as provided by Minnesota Statutes.
16. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of
which will, for all purposes, be deemed to be an original, and all of which are identical. This
Agreement may further be evidenced by facsimile and email scanned signature pages.
17. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with
the laws of the state where the Property is located.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties
and there are no other covenants, agreements, promises, terms, provisions, conditions,
undertakings, understandings either oral or written, between them concerning the Property. No
subsequent alteration, amendment, change, deletion, or addition to this Agreement shall be
binding upon any of the parties hereto unless in writing and signed by both the party against
whom enforcement thereof is sought.
19. FURTHER ASSURANCES. Each party agrees that it will without further consideration execute
and deliver such other documents and take such other action, whether prior or subsequent to
Closing, as may be reasonably requested by the other party to consummate more effectively the
purposes or subject matter of this Agreement.
20. NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the benefit of Seller and
Purchaser only and are not for the benefit of any third party, and accordingly, no third party shall
have the right to enforce the provisions of this Agreement or of the documents to be executed and
delivered at Closing.
21. SEVERABILITY. In case any one or more of the provisions contained in this Agreement shall
for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall
be construed as if such invalid, illegal, or unenforceable provision had never been contained
herein.
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532219v3 JAE RC125-368
22. RULE OF CONSTRUCTION. The parties acknowledge that each party and its counsel has
reviewed and revised this Agreement, and the parties hereby agree that the normal rule of
construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments or exhibits hereto.
23. MISCELLANEOUS. All times specified in this Agreement shall be of the essence of this
Agreement. If any date set forth for the performance of any obligations by Seller or Purchaser or
for the delivery of any instrument or notice should be on a Saturday, Sunday or legal holiday, the
compliance with such obligations or delivery shall be deemed acceptable on the next business day
following such Saturday, Sunday or legal holiday. The term “legal holiday” means any state or
federal holiday on which financial institutions or post offices are generally closed in the state of
Minnesota.
24. WAIVER. The waiver by any party of a breach of any provision of this Agreement shall not be
deemed a continuing waiver or a waiver of any subsequent breach whether of the same or another
provision of this Agreement.
25. OCCUPANCY AGREEMENT. The Purchaser agrees to allow Seller to remain on the Property
after the Closing Date for up to 60 days pursuant to the Occupancy Agreement set forth in Exhibit
D.
26. ASSIGNMENT. The Purchase may assign this Agreement.
(The remainder of this page is intentionally left blank.)
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532219v3 JAE RC125-368
IN WITNESS WHEREOF, the parties have entered into and executed this Agreement as of the
date and year first written above.
SELLER: PURCHASER:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By: By:
Its: Its: Chair
Date: Date:
By:
Its: Executive Director
Date:
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532219v3 JAE RC125-368
EXHIBIT A
Legal Description of the Land
The South 189 2/10 feet of the North 876 8/10 feet of the West 1/8 of the Southwest ¼ of the Northwest
1/4, except highway
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532219v3 JAE RC125-368
EXHIBIT B
Well Disclosure
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EXHIBIT C
Sanitary Sewer Disclosure
EXHIBIT D
Occupancy Agreement
OCCUPANCY AGREEMENT
THIS AGREEMENT entered into this 1st day of August, 2018, by Charles K. Haglund and
Yvonne H. Haglund, husband and wife, married individuals (together, the "Occupant" or “Grantee”), and
the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body
corporate and politic under the laws of the State of Minnesota (the “Grantor”).
BACKGROUND
Grantee has, as of the date of this Agreement sold and conveyed to Grantor the following
described tract of land including improvement located thereon ("Property"):
[insert legal]
Although the sale and conveyance of the Property transferred to the Grantor the exclusive title
and right to possession, the parties have agreed that the Grantor will, subject to the terms and conditions
of this Agreement, grant to Grantee the right of occupancy of the Property.
RECITALS
NOW, THEREFORE, in consideration of the mutual covenants and stipulations hereinafter
contained, the parties hereto agree as follows:
(1) Grant of Occupancy. Grantor hereby grants and Grantee hereby accepts the right to
occupy the Property commencing on the date of this Agreement and terminating not later than 4:00 p.m.
on _____________, 201_.
(2) Grantee Acknowledgment. Grantee acknowledges that this grant of occupancy
constitutes the sole and exclusive right of Grantee to occupy the Property from and after the date of this
Agreement, and further acknowledges that absent further written agreement of the parties, Grantee shall
have no right to further occupy the Property upon and after the termination of this Agreement.
(3) Insurance. Grantee acknowledges that it is solely responsible for loss or damage to
personal property located on the property; and hereby indemnifies and holds harmless the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic
under the laws of the State of Minnesota, its officers, agents, and employees from any claims for loss or
damage to such personal property. Grantee certifies and understands that obtaining insurance coverage
for such personal property shall be Grantee's solely responsibility. Grantee acknowledges and
understands that any liability insurance obtained by Grantor with respect to property will in no way
ensure or protect Grantee from liability claims which may be made against Grantor.
(4) Liens and Encumbrances. Grantee agrees that during the term of this Agreement it shall
not permit or suffer any liens or encumbrances to be placed against the Property, nor shall it during such
term engage in any activity which could cause or result in the placement of any liens or encumbrances
against Property. Grantee also agrees to indemnify and hold Grantor harmless from any lien or
encumbrance placed upon the Property as a result of Grantee's violation of the provisions of this
paragraph 4.
(5) Modification or Alteration. Grantee agrees that, absent the specific written consent of
Grantor, it will not make any modifications, alterations, improvements to the Property during the term of
this Agreement.
(6) Repair and Maintenance. Grantee agrees that during the term of this Agreement it will, at
its sole cost and expense, keep the building and grounds, electrical, plumbing, heating, and air
conditioning systems, and all appliances, which have been sold to Grantor, in a reasonable state of repair
and appearance.
Grantee shall not, however, be required to repair conditions of any of the above-described items
which existed at the time the Property was purchased by Grantor.
(7) Removal of Property upon Termination. This grant of occupancy Agreement includes
the right of Grantee to continue to keep on the Property all items of personal property which have not
been sold to Grantor.
Grantee agrees that not later than the last day of this Agreement, it will have removed all such
items of personal property. Items not removed by such date shall be forfeited to Grantor.
(8) Final Utilities and Telephone Service. Grantee acknowledges that final utilities,
telephone service, both local and long distance, and any leased telephone equipment are the responsibility
of the Grantee. Grantee agrees to notify proper utility and telephone companies at least two weeks in
advance the date of final occupancy on the premises for final billing purposes. Grantee agrees that
payment of final utilities and telephone bills, local and long distance, are the responsibility of the Grantee.
(9) Exclusive Nature of Grant. The grant of occupancy given herein is exclusive to Grantee
and may not be assigned or transferred.
IN TESTIMONY WHEREOF, the parties hereto have set their hands as of the day and year first
above written.
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532219v3 JAE RC125-368
GRANTEE:
_____________________________________
Charles K. Haglund
_____________________________________
Yvonne H. Haglund
GRANTOR:
Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota
By: ________________________________
Its President
By: ________________________________
Its Executive Director
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #9.
S TAFF REPORT NO. 36
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: Julie Urban, Housing Manager
D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector
8/15/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of the adoption of resolutions regarding the modification of the Redevelopment Plan for
the Richfield Redevelopment Project Area, the modification to the Tax Increment Financing Plan for the
Cedar Avenue Tax Increment Financing District, and the establishment of Tax Increment Financing
District No. 2018-1.
E X E C UT IV E S UM M ARY:
I n March 2018, the Housing and Redevelopment Authority (HRA) entered into a preliminary development
agreement with NHH Companies, LLC to develop a multi-family housing project in the Cedar Point I I area
(bounded by 63rd Street to the north, Richfield Parkway to the east, 65th Street to the south, and 16th Avenue
to the west). The proposed development includes 218 market-rate apartments on Richfield Parkway and up to
80 for-sale townhomes along 16th Avenue.
The financial feasibility analysis indicates a substantial gap in the project. Significant acquisition costs for the
existing single-family homes on 16th Avenue; the high cost of structured parking, stormwater improvements,
and construction materials required to meet sound attenuation standards, and the desire to include affordable
townhome units necessitate the need for public assistance to bridge the gap.
The development currently sits within the Cedar Avenue Tax I ncrement Financing District (District) that was
established in 2005 and extended in 2017. Under the proposed modification, the east half of the site and the
proposed apartment development would remain in the existing District, and a new Housing Tax I ncrement
Financing (TI F) District would be established to cover the west half of the site and the proposed affordable
townhomes.
RE C O M M E ND E D AC T I O N:
By motion:
1. Adopt a resolution adopting a modification to the Tax Increment Financing Plan for the Cedar
Avenue Tax Increment Financing District within the Richfield Redevelopment Project Area.
2. Adopt a resolution adopting a modification to the Redevelopment Plan for the Richfield
Redevelopment Project Area and establishing Tax Increment Finance District No. 2018-1 therein
and the adoption of the Tax Increment Financing Plan therefor.
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
A 1999-2000 study commissioned by the City of Richfield and the Metropolitan Airports
Commission (MA C) concluded that many of the structures in this area, including all single-family
homes, were not capable of withstanding the negative impacts of low frequency noise. As a result
of the study, this area was identified as a Redevelopment Area in 2000.
I n 2004, the Minnesota Legislature approved the creation of a special Redevelopment TI F District
to provide a funding mechanism for redevelopment of the area.
During the economic downturn from 2007-2011, there was little interest in developing this area due
to weak market conditions.
Upon conclusion of the recession, HRA staff concentrated their development efforts on the Cedar
Point I I area. The challenge of property acquisitions and the significant financial gap in the
project made it difficult to find a developer and project that could succeed.
I n 2014, homes along 17th Avenue were purchased for the construction of Richfield Parkway from
63rd to 66th Streets leaving 14 fewer homes to be purchased in the development area.
I n 2015, the HRA signed a pre-development agreement with Boisclair Corporation to redevelop
the area with single family homes and townhomes. I n 2017, the HRA cancelled the agreement with
Boisclair due to slow progress in solving the acquisition and other development issues.
I n the Spring of 2017, the Legislature extended the Redevelopment TI F District for an additional
10 years to 2044.
I n the Fall of 2017, NHH Properties and Boisclair Corporation approached the HRA and Council
with a new development team and plan for acquiring the remaining single family homes and
closing the financial gap.
I n March of 2018, the HRA signed a pre-development agreement with NHH Properties (dba NHH
Companies, L L C) to redevelop the area with 218 market-rate apartments and up to 80 townhomes
affordable to households earning 100/115% of the area median income.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The project has considered a variety of ways to include a minimum of 20% affordable units. The
proposed plan to provide 100% market-rate apartments and 95% affordable townhome units is
being proposed. Establishment of a Housing TI F District will ensure that the affordable units will
be included in the project.
The 2008 Comprehensive Plan housing goals and policies include:
Maintain an appropriate mix of housing types in each neighborhood based on available
amenities, transportation resources, and adjacent land uses;
Promote the development of a balanced housing stock that is available to a range of income
levels;
Promote housing diversity to serve families at all stages of their life-cycle, and
Promote the development, management, and maintenance of affordable housing in the City
through assistance programs, alternative funding sources, and the creation of partnerships
whose mission is to promote low to moderate income housing.
The Cedar Corridor Master Plan, approved in 2004 and amended in 2016, calls for development
in the area that responds to the challenges of the area's proximity to the airport and provides a
diversity of housing types.
Richfield Affordable Housing Policy encourages the development of projects that:
Contain a mix of market-rate and affordable units, with a higher proportion of market-rate
units.
I nclude attributes such as townhome/row style housing
C.C R IT IC AL T IMIN G IS S U E S:
The City Council will hold a Public Hearing on August 21, 2018.
The Planning Commission found the modification of the existing district and the establishment of a
housing district to be consistent with Richfield's Comprehensive Plan on J uly 23, 2018.
D.F IN AN C IAL IMPAC T:
The estimated gross tax increment available through the existing Redevelopment TI F District is
approximately $9.2 million over the life of the District with a present value of $4.9 million.
The estimated gross tax increment available through the creation of a new Housing TI F District is
approximately $6.7 million over the life of the District with a present value of $3.5 million.
W ithout the TI F, this project would be unable to proceed.
E.L E GAL C ON S ID E R AT ION:
The City's financial advisor and HRA attorney have reviewed the required documents.
I n accordance with State Statute, Hennepin County, School Districts, and other taxing
jurisdictions received notice of the proposed Tax I ncrement Plan and other information on fiscal
impacts related to the modification/establishment of a Redevelopment Project Area and/or TI F
District at least 30 days prior to the hearing or agreed to waive the 30-day requirement.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the Modification and the TI F Plan.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
A representative from Ehlers, the City's Financial Consultant A representative from NHH Companies, L L C
AT TAC H ME N T S:
D escription Type
Resolution - HRA TIF P lan Resolution L etter
Resolution - HRA Modification Resolution L etter
S ummary of TIF P lan/Mod B ackup Material
TIF P lan - C edar Ave Mod 2018 B ackup Material
TIF P lan - Housing D istrict B ackup Material
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
CITY OF RICHFIELD
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. __________
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT
PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA,
ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 2018-1
THEREIN, AND ADOPTING A TAX INCREMENT FINANCING PLAN
THEREFOR.
WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Richfield
Housing and Redevelopment Authority (the "HRA") and the City of Richfield (the "City") that the HRA
adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for the
Richfield Redevelopment Project Area (the "Project Area") and establish Tax Increment Financing
District No. 2018-1 (the "District") and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor
(the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"),
all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to
469.047, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act"), all as reflected in the
Plans and presented for the Board's consideration; and
WHEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to
be prepared; and
WHEREAS, the HRA has performed all actions required by law to be performed prior to the
adoption of the Plans. The HRA has also requested the City Planning Commission to provide for review
of and written comment on Plans and that the Council schedule a public hearing on the Plans upon
published notice as required by law.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
1. The HRA hereby finds that the District is in the public interest and is a "housing district" under
Minnesota Statutes, Section 469.174, Subd. 11, and finds that the adoption of the proposed Plans
conform in all respects to the requirements of the Act, will help fulfill a need to develop an area
of the State of Minnesota for affordable and high quality housing, assist in the enhancement of
the tax base of the City and the State, thereby serving a public purpose.
2. The HRA further finds that the Plans will afford maximum opportunity, consistent with the sound
needs for the City as a whole, for the development or redevelopment of the Project Area by
private enterprise in that the intent is to provide only that public assistance necessary to make the
private developments financially feasible.
3. The boundaries of the Project Area are not being expanded.
4. The reasons and facts supporting the findings in this resolution are described in the Plans.
5. The HRA elects to calculate fiscal disparities for the District in accordance with Minnesota
Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution
would be taken from inside the District. It is not anticipated that the District will contain
commercial/industrial property. As a result, there should be no impact due to the fiscal disparities
provision on the District.
6. Conditioned upon the approval thereof by the City Council following its public hearing thereon,
the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and
shall be placed on file in the office of the Executive Director of the HRA.
7. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel
are authorized and directed to proceed with the implementation of the Plans and for this purpose
to negotiate, draft, prepare and present to this Board for its consideration all further plans,
resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not
constitute approval of any project or a Development Agreement with any developer.
8. Upon approval of the Plans by the City Council, the Executive Director of the HRA is authorized
and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the
Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a.
9. The Executive Director of the HRA is authorized and directed to forward a copy of the Plans to
the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the
District as described in the Plans, all in accordance with Minnesota Statutes 469.177.
Approved by the Board on August 20, 2018.
_______________________________
Mary Supple, Chair
ATTEST:
__________________________
Erin Vrieze Daniels, Secretary
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
CITY OF RICHFIELD
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. __________
RESOLUTION ADOPTING A MODIFICATION TO THE TAX INCREMENT
FINANCING PLAN FOR THE CEDAR AVENUE TAX INCREMENT
FINANCING DISTRICT WITHIN THE RICHFIELD REDEVELOPMENT
PROJECT AREA.
WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Richfield
Housing and Redevelopment Authority (the "HRA") and the City of Richfield (the "City") that the HRA
adopt a Modification to the Tax Increment Financing Plan (the "Modification") for Cedar Avenue Tax
Increment Financing District (the "District"), all pursuant to and in conformity with applicable law,
including Minnesota Statutes, Sections 469.001 to 469.047, and Sections 469.174 to 469.1799, inclusive,
as amended (the "Act"), all as reflected in the Modification and presented for the Board's consideration;
and
WHEREAS, the HRA has investigated the facts relating to the Modification and has caused the
Modification to be prepared; and
WHEREAS, the HRA has performed all actions required by law to be performed prior to the
adoption of the Modification. The HRA has also requested the City Planning Commission to provide for
review of and written comment on the Modification and that the Council schedule a public hearing on the
Modification upon published notice as required by law.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
1. The HRA hereby reaffirms that the District as modified herein is in the public interest
and is a "redevelopment district" as defined in the Laws of Minnesota 2005, Chapter 152, Article 2,
Section 25.
2. The HRA further finds that the Modification will afford maximum opportunity,
consistent with the sound needs for the City as a whole, for the development or redevelopment of the
project area by private enterprise in that the intent is to provide only that public assistance necessary to
make the private developments financially feasible.
3. Conditioned upon the approval thereof by the City Council following its public hearing
thereon, the Modification, as presented to the HRA on this date, are hereby approved, established and
adopted and shall be placed on file in the office of the Community Development Director.
4. Upon approval of the Modification by the City Council, the staff, the HRA's advisors and
legal counsel are authorized and directed to proceed with the implementation of the Modification and for
this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans,
resolutions, documents and contracts necessary for this purpose. Approval of the Modification does not
constitute approval of any project or a Development Agreement with any developer.
5. Upon approval of the Modification by the City Council, the Community Development
Director is authorized and directed to forward a copy of the Modification to the Minnesota Department of
Revenue and Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a.
6. The Community Development Director is authorized and directed to forward a copy of
the Modification to the Hennepin County Auditor all in accordance with Minnesota Statutes 469.177.
Approved by the Board of Commissioners of the Richfield Housing and Redevelopment
Authority this 20th day of August, 2018.
_______________________________
Mary Supple, Chair
ATTEST:
__________________________
Erin Vrieze Daniels, Secretary
Tax Increment Financing District 2018-1
and the Modification to the Cedar Avenue TIF District
City of Richfield
The following summary contains an overview of the basic elements of the Tax Increment Financing Plan for Tax
Increment Financing District 2018-1. More detailed information on each of these topics can be found in the Tax
Increment Financing Plan.
Proposed action: Establishment of Tax Increment Financing District No. 2018-1 (the “2018-1
District”) and the adoption of a Tax Increment Financing Plan (TIF Plan).
Modification of the Tax Increment Financing Plan for the Cedar Avenue Tax
Increment Financing District (the “Cedar Avenue TIF District”) to remove
parcels for inclusion in the new District.
Modification to the Redevelopment Plan for the Richfield Redevelopment
Project to include the establishment of Tax Increment Financing District
No.2018-1, which represents a continuation of the goals and objectives set forth
in the Redevelopment Plan for the Richfield Redevelopment Project.
Type of TIF District: Housing district
Parcel Numbers: 26.028.24.11.0033 26.028.24.11.0039 26.028.24.14.0009
26.028.24.11.0034 26.028.24.14.0004 26.028.24.14.0010
26.028.24.11.0035 26.028.24.14.0005 26.028.24.14.0011
26.028.24.11.0036 26.028.24.14.0006 26.028.24.14.0002
26.028.24.11.0037 26.028.24.14.0007 26.028.24.14.0003
26.028.24.11.0038 26.028.24.14.0008
*All the parcels listed are currently in the Cedar Avenue TIF District and will be
removed for inclusion in Tax Increment Financing District 2018-1.
Proposed
Development:
The 2018-1 District is being created to facilitate the development of 80 owner-
occupied townhomes for low- to moderate income persons in the City. See Appendix
A of the TIF Plan for a more detailed project description.
Maximum duration: The duration of the 2018-1 District will be 25 years from the date of receipt of the
first increment (26 years of increment). The City elects to receive the first tax
increment in 2021. It is estimated that the District, including any modifications of
the TIF Plan for subsequent phases or other changes, would terminate December 31,
2046, or when the TIF Plan is satisfied.
The Cedar Avenue TIF will terminate December 31, 2043, or when the TIF Plan is
satisfied.
Estimated annual tax
increment:
$673,146
Authorized uses: The TIF Plan contains a budget that authorizes the maximum amount that may be
expended:
Land/Building Acquisition ................................................. $4,275,000
Site Improvements/Preparation ............................................. $750,000
Utilities .................................................................................. $225,000
Other Qualifying Improvements ............................................ $554,779
Administrative Costs (up to 10%) ...................................... $1,144,713
Project Total Costs ........................................................... $6,959,492
Interest ................................................................................ $5,642,349
Project & Interest Total Costs ....................................... $12,591,841
See Subsection 2-10 of the TIF Plan for the full budget authorization.
Form of financing: The project is proposed to be financed by a pay-as-you-go note and interfund loan.
Administrative fee: Up to 10% of annual increment, if costs are justified.
Interfund Loan
Requirement:
If the City wants to pay for administrative expenditures from a tax increment fund,
it must pass a resolution authorizing a loan from another fund be within 60 days of
the issuance of the check or the reimbursement will not be allowed.
4 Year Activity Rule: After four years from the date of certification of the District one of the following
activities must have been commenced on each parcel in the District (§ 469.176 Subd.
6):
Demolition
Rehabilitation
Renovation
Other site preparation (not including utility services such as sewer and
water)
If the activity has not been started by approximately August 2022, no additional tax
increment may be taken from that parcel until the commencement of a qualifying
activity.
The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required pursuant
to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution.
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CEDAR CORRIDOR & 2018-1 HOUSING TIF DISTRICTS
0 0.5 10.25 MilesRichfield Redevelopment Project area boundary
Cedar Corridor TIF District Boundary2018-1 Housing TIF District Boundary
Appendix F
Findings for the District
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for
Tax Increment Financing District No. 2018-1, as required pursuant to Minnesota Statutes, Section
469.175, Subdivision 3 are as follows:
1. Finding that Tax Increment Financing District No. 2018-1 is a housing district as defined in
M.S., Section 469.174, Subd. 11.
TIF District No.2018-1 consists of 17 parcels. As proposed, the development will consist of 80
units of owner-occupied townhomes with at least 95% of the units purchased by persons at or
below 100% to 115% of area median income. Ninety-five percent of the units which will receive
tax increment assistance will meet income restrictions described in M.S. 469.1761. Appendices A
and E of the TIF Plan contains background for the above finding.
2. Finding that the proposed development, in the opinion of the City Council, would not reasonably
be expected to occur solely through private investment within the reasonably foreseeable future.
The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future: This finding is
supported by the fact that the development proposed in this plan is a housing district that meets
the City's objectives for development and redevelopment, but that due to the high costs of
building new housing in the City, the cost of financing the proposed public improvements, and
the insufficiency of affordable, owner-occupied housing to provide a sufficient financial return,
the project is feasible only through the assistance, in part, from tax increment financing. The
developer was asked for and provided a pro forma as justification that the developer would not
have gone forward without tax increment assistance.
3. Finding that the TIF Plan for Tax Increment Financing District No. 2018-1 conforms to the
general plan for the development or redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan on July 23, 2018 and found that the TIF Plan
conforms to the general development plan of the City.
4. Finding that the TIF Plan for Tax Increment Financing District No. 2018-1 will afford maximum
opportunity, consistent with the sound needs of the City as a whole, for the development or
redevelopment of Richfield Redevelopment Project Area by private enterprise.
Through the implementation of the TIF Plan, the HRA or City will provide an impetus for
residential development, which is desirable or necessary for increased population and an
increased need for life-cycle housing within the City.
Appendix F-1
As of August 13, 2018
Draft for City Council review
Modification to the
Tax Increment Financing Plan
for the
Cedar Avenue Tax Increment Financing District
(a redevelopment district)
within
the Richfield Redevelopment Project Area
Richfield Housing and Redevelopment Authority
City of Richfield
Hennepin County
State of Minnesota
Adopted: September 26, 2006
Modification No. 1 Adopted: November 28, 2017
Modification No. 2 Public Hearing: August 21, 2018
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
TABLE OF CONTENTS
(for reference purposes only)
SECTION I - TAX INCREMENT FINANCING PLAN
FOR THE CEDAR AVENUE TAX INCREMENT FINANCING DISTRICT ............ 1-1
Subsection 1-1. Foreword............................................... 1-1
Subsection 1-2. Statutory Authority........................................ 1-1
Subsection 1-3. Statement of Objectives ................................... 1-1
Subsection 1-4. Redevelopment Plan Overview .............................. 1-1
Subsection 1-5. Description of Property in the District and Property To Be Acquired . 1-2
Subsection 1-6. Classification of the District................................. 1-2
Subsection 1-7. Duration of the District..................................... 1-3
Subsection 1-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements ................ 1-3
Subsection 1-9. Sources of Revenue/Bonded Indebtedness .................... 1-4
Subsection 1-10. Uses of Funds ........................................... 1-5
Subsection 1-11. Fiscal Disparities Election.................................. 1-6
Subsection 1-12. Business Subsidies....................................... 1-7
Subsection 1-13. County Road Costs ....................................... 1-8
Subsection 1-14. Estimated Impact on Other Taxing Jurisdictions ................. 1-8
Subsection 1-15. Supporting Documentation ................................ 1-10
Subsection 1-16. Definition of Tax Increment Revenues ....................... 1-11
Subsection 1-17. Modifications to the District................................ 1-11
Subsection 1-18. Administrative Expenses .................................. 1-12
Subsection 1-19. Limitation of Increment ................................... 1-12
Subsection 1-20. Use of Tax Increment .................................... 1-13
Subsection 1-21. Excess Increments ...................................... 1-14
Subsection 1-22. Requirements for Agreements with the Developer .............. 1-14
Subsection 1-23. Assessment Agreements ................................. 1-14
Subsection 1-24. Administration of the District ............................... 1-14
Subsection 1-25. Annual Disclosure Requirements ........................... 1-15
Subsection 1-26. Reasonable Expectations ................................. 1-15
Subsection 1-27. Other Limitations on the Use of Tax Increment . ................ 1-15
Subsection 1-28. Summary.............................................. 1-16
APPENDIX A
PROJECT DESCRIPTION ................................................ A-1
APPENDIX B
MAP OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE DISTRICT
..................................................................... B-1
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT............. C-1
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT .............................. D-1
APPENDIX E
MINNESOTA BUSINESS ASSISTANCE FORM ............................... E-1
APPENDIX F
FINDINGS AND BUT/FOR QUALIFICATIONS ................................ F-1
APPENDIX G
PRIOR IMPROVEMENTS ................................................ G-1
APPENDIX H
LAWS OF MINNESOTA 2005 ................................................ H-1
SECTION I - TAX INCREMENT FINANCING PLAN
FOR THE CEDAR AVENUE TAX INCREMENT FINANCING DISTRICT
Subsection 1-1. Foreword
The Richfield Housing and Redevelopment Authority (the "HRA"), the City of Richfield (the "City"), staff
and consultants have prepared the following information to expedite the establishment of the Cedar Avenue
Tax Increment Financing District (the "District"), a redevelopment tax increment financing district, located
in the Richfield Redevelopment Project Area.
Subsection 1-2. Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota
Statutes ("M.S."), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to
469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing
public costs related to this project. The HRA and City derive further statutory authority by virtue of Laws
of Minnesota 2005, Chapter 152, Article 2, Section 25.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant
information is contained in the Modification to the Redevelopment Plan for the Richfield Redevelopment
Project Area.
(AS MODIFIED NOVEMBER 28, 2017)
Pursuant to Minnesota Laws 2017, First Special Session, Chapter 1, Article 6, Section 18 (the “Special
Law”), the duration of the District is being extended an additional ten years. A copy of the Special Law can
be found in Appendix I.
Subsection 1-3. Statement of Objectives
The District currently consists of 172 parcel(s) of land and adjacent and internal rights-of-way. The District
is being created to facilitate construction of approximately 350,000 sq. ft. of retail development, 600,000 sq.
ft. of office space and 600 housing units in the City of Richfield. Please see Appendix A for further project
information. Contracts for this have not been entered into at the time of preparation of this TIF Plan, but
development is likely to occur in 2007. This TIF Plan is expected to achieve many of the objectives outlined
in the Redevelopment Plan for the Richfield Redevelopment Project Area.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of the Richfield Redevelopment Project Area and the District.
(AS MODIFIED NOVEMBER 28, 2017)
The District is being modified in order to remove 31 parcels for inclusion in Tax Increment Financing District
No. 2017-1 (The Chamberlain) and to extend the duration of the District pursuant to the Special Law.
Contracts for redevelopment have not been entered into at the time of preparation of this Modification, but
development may occur in 2019. Please see Appendix A for further project information and background
information on the District.
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-1
(AS MODIFIED AUGUST 21, 2018)
The District is being modified in order to remove 17 parcels for inclusion in Tax Increment Financing
District No. 2018-1. Contracts for redevelopment have not been entered into at the time of preparation
of this Modification, but development may occur in 2018. Please see Appendix A for further project
information and background information on the District.
Subsection 1-4. Redevelopment Plan Overview
1. Property to be Acquired - Selected property located within the District may be acquired by
the HRA or City and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the HRA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The HRA or City may perform or provide for some or all necessary acquisition, construction,
relocation, demolition, and required utilities and public street work within the District.
Subsection 1-5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below. See the map in Appendix B for further information on the location of the District.
Parcel Numbers
*See Appendix C
The HRA or City may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the HRA or City only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to
accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift,
dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
Subsection 1-6. Classification of the District
The HRA and City, in determining the need to create a tax increment financing district in accordance with
Laws of Minnesota 2005, Chapter 152, Article 2, Section 25. Specifically, the enacted language is as follows:
Sec. 25. [CITY OF RICHFIELD; TAX INCREMENT FINANCING DISTRICT.]
Subdivision 1. [AUTHORIZATION.]
The City of Richfield may create a tax increment financing district consisting of an area lying west of
Trunk Highway 77 extending: to 16th Avenue between Crosstown Highway 62 and 66th Street; to 17th
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-2
Avenue between 66th and 69th Streets; and to 18th Avenue between 69th and 72nd Streets. The City or it's
Housing and Redevelopment Authority may be the authority for the purposes of Minnesota Statutes,
sections 469.174 to 469.179.
Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.]
The redevelopment tax increment district created pursuant to subdivision 1 is deemed to be a
redevelopment district and is subject to Minnesota Statutes, sections 469.174 to 469.179, except that:
(1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1,
paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the
designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10;
and
(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply.
[EFFECTIVE DATE.] This section received local approval by the City of Richfield on June 28, 2005 in
compliance with Minnesota Statutes, section 645.021.
Pursuant to M.S., Sections 469.176 Subd. 7, the District does not contain any parcel or part of a parcel that
qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in
any of the five calendar years before the filing of the request for certification of the District.
Subsection 1-7. Duration of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must
be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b, the duration of the District
will be 25 years after receipt of the first increment by the HRA or City (a total of 26 years of tax increment).
The date of receipt by the City of the first tax increment is expected to be 2008. Thus, it is estimated that the
District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate
after 2033, or when the TIF Plan is satisfied. If increment is received in 2009, the term of the District will
be 2034. The HRA or City reserves the right to decertify the District prior to the legally required date.
(AS MODIFIED NOVEMBER 28, 2017)
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must
be indicated within the TIF Plan. Section 469.176, Subd. 1b, provides that the duration of the District would
be 25 years after receipt of the first increment by the City (a total of 26 years of tax increment). Pursuant to
the Special Law, the duration of District is being extended an additional ten years (for a total of 35 years from
receipt of first increment). The date of receipt by the City of the first increment was in 2008. Thus, it is
estimated that the District, including any modifications of the TIF Plan for subsequent phases or other
changes, would terminate on December 31, 2043, or when the TIF Plan is satisfied. The City reserves the
right to decertify the District prior to the legally required date.
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-3
Subsection 1-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
in 2006 for taxes payable 2007.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2008) the amount by which the original value has increased or decreased as a result of:
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments, negotiated or court-ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no
value will be captured and no tax increment will be payable to the HRA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2007, assuming the
request for certification is made before June 30, 2007. The ONTC and the Original Local Tax Rate for the
District appear in the table below.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within the Richfield Redevelopment Project Area, upon
completion of the project, will annually approximate tax increment revenues as shown in the following table.
The HRA and City request 100 percent of the available increase in tax capacity for repayment of its
obligations and current expenditures, beginning in the tax year payable 2008. The Project Tax Capacity
(PTC) listed is an estimate of values when the project is completed.
WATERSHED DISTRICT NO. 0
Project Estimated Tax Capacity upon Completion (PTC) $4,159,167
Original Estimated Net Tax Capacity (ONTC) $524,969
Fiscal Disparities Reduction $862,825
Estimated Captured Tax Capacity (CTC) $2,771,373
Original Local Tax Rate 1.07715 Pay 2006
Estimated Annual Tax Increment (CTC x Local Tax Rate) $2,985,184
Percent Retained by the HRA 100%
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-4
WATERSHED DISTRICT NO. 3
Project Estimated Tax Capacity upon Completion (PTC) $831,833
Original Estimated Net Tax Capacity (ONTC) $143,105
Fiscal Disparities Reduction $163,557
Estimated Captured Tax Capacity (CTC) $525,171
Original Local Tax Rate 1.087870 Pay 2006
Estimated Annual Tax Increment (CTC x Local Tax Rate) $571,318
Percent Retained by the HRA 100%
Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City has reviewed the area to be included in the District has found building permits that were issued in
the past 18 months prior to the public hearing. Please see Appendix H for the building permits that were
issued.
Subsection 1-9. Sources of Revenue/Bonded Indebtedness
Public improvement costs, acquisition, relocation, utilities, parking facilities, streets and sidewalks, and site
preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual
collection of tax increments. The HRA or City reserves the right to use other sources of revenue legally ap-
plicable to the HRA or City and the TIF Plan, including, but not limited to, special assessments, general
property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contribu-
tions from the developer and investment income, to pay for the estimated public costs.
The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF
Plan. As presently proposed, the project will be financed by a bond issue/pay-as-you-go note/interfund
loan/transfer. Additional indebtedness may be required to finance other authorized activities. The total
principal amount of bonded indebtedness, including a general obligation (GO) TIF bond, or other
indebtedness related to the use of tax increment financing will not exceed $40,000,000 without a modification
to the TIF Plan pursuant to applicable statutory requirements. It is estimated that $200,000 in interfund loans
will be financed with tax increment revenues. It is estimated that $ 40,000,000 in bonded debt/loan proceeds
will be financed with tax increment revenues.
This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur
other debt only upon the determination that such action is in the best interest of the City. The HRA or City
may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the
HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a
developer.
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-5
The estimated sources of funds for the District are contained in the table below.
SOURCES OF FUNDS TOTAL
Tax Increment $88,000,000
PROJECT REVENUES $88,000,000
Interfund Loans $200,000
Bond Principal $10,000,000
TIF Note Principal $30,000,000
The other financing sources list above is included for purposes of OSA reporting for the TIF District. It is
not intended to be cumulative. Transfers are included in case money is moved from one fund to another
before an expenditure.
Subsection 1-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate construction of approximately 350,000
sq. ft. of retail development, 600,000 sq. ft. of office space and 600 housing units. The HRA and City have
determined that it will be necessary to provide assistance to the project for certain costs. The HRA has
studied the feasibility of the development or redevelopment of property in and around the District. To
facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the
use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs
and uses of funds associated with the District is outlined in the following table.
USES OF FUNDS TOTAL
Land/Building Acquisition $21,940,000
Site Improvements/Preparation $3,640,000
Public Utilities $3,640,000
Public Parking Facilities $3,640,000
Streets and Sidewalks $3,640,000
Interest $42,700,000
Administrative Costs (up to 10%) $8,800,000
PROJECT COSTS TOTAL $88,000,000
Interfund Loans $200,000
Bond Principal $10,000,000
TIF Note Principal $30,000,000
The other financing uses listed above is included for purposes of OSA reporting for the TIF District. It is not
intended to be cumulative. Transfers are included in case money is moved from one fund to another before
an expenditure. TIF is expected to be used for the project cos ts listed above, which is a not-to-exceed budget
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-6
rather than an expected budget of costs.
Pursuant to M.S., Section 469.175, Subd. 1 (5), it is estimated that the cost of improvements, including
administrative expenses which will be paid or financed with tax increments, will equal $88,000,000. For
purposes of OSA reporting forms, it is estimated that the cost of improvements, including financing which
will be paid for with tax increment will equal $128,200,000 as is presented in the budget above.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant
to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries of the Richfield Redevelopment Project Area, (including administrative costs, which are
considered to be spent outside of the District) subject to the limitations as described in this TIF Plan.
Subsection 1-11. Fiscal Disparities Election
Pursuant to M.S., Section 469.177, Subd. 3, the HRA or City may elect one of two methods to calculate fiscal
disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity shall be determined before the application of the fiscal disparity
provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal
disparity commercial-industrial net tax capacity increase between the original year and the
current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section
276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax
capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity
and no tax increment determination. Where the original tax capacity is less than the current tax
capacity, the difference between the original net tax capacity and the current net tax capacity
is the captured net tax capacity. This amount less any portion thereof which the authority has
designated, in its tax increment financing plan, to share with the local taxing districts is the
retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate
to the retained captured net tax capacity of the authority is the tax increment of the authority.
The HRA will choose to calculate fiscal disparities by clause b.
According to M.S., Section 469.177, Subd. 3:
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-7
Subsection 1-12. Business Subsidies
Pursuant to M.S. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than $25,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that
the assistance is equal to or less than 50% of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature.
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of $75,000 or less; and
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
The HRA will comply with M.S., Section 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
(AS MODIFIED NOVEMBER 28, 2017, TO INCLUDE LANGUAGE IN CURRENT LAW)
Pursuant to M.S., Section 116J.993, Subd. 3, the following two items related to what is considered a business
subsidy were increased from $75,000 to $150,000:
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-8
(1) A business subsidy of less than $150,000;
(21) Business loans and loan guarantees of $150,000 or less;
In addition, an additional form of financial assistance is not considered a business subsidy:
(23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to
valuation under Minnesota Rules, chapter 8100.
The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions in this Subsection.
Subsection 1-13. County Road Costs
Pursuant to M.S., Section 469.175, Subd. 1a, the county board may require the HRA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgement of the county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the HRA or City within forty-
five days of receipt of this TIF Plan. The HRA and City are aware that the county could claim that tax
increment should be used for county roads, even after the public hearing.
Subsection 1-14. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However, the HRA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
IMPACT ON TAX BASE
2005/2006Total Net Tax Capacity
Estimated CapturedTax Capacity (CTC)Upon Completion Percent of CTCto Entity Total
Hennepin County 1,229,390,982 3,314,080 0.2696%
City of Richfield 26,793,818 3,314,080 12.3688%
ISD No. 280 32,426,328 3,314,080 10.2203%
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-9
WATERSHED DISTRICT NO. 0
IMPACT ON TAX RATES
2005/2006Extension Rates Percentof Total CTC PotentialTaxes
Hennepin County 0.410160 38.08% 2,771,373 1,136,706
City of Richfield 0.404970 37.60% ??ERR
ISD No. 280 0.192040 17.83% ??ERR
Other 0.069980 6.50%??ERR
Total 1.077150 100.00%1,136,706
WATERSHED DISTRICT NO 3
IMPACT ON TAX RATES
2005/2006Extension Rates Percentof Total CTC PotentialTaxes
Hennepin County 0.410160 37.70% 525,171 215,404
City of Richfield 0.404970 37.23% 525,171 212,678
ISD No. 280 0.192040 17.65% 525,171 100,854
Other 0.080700 7.42%525,171 42,381
Total 1.087870 100.00%571,318
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual 2005/Pay 2006 rate. The total net capacity for the entities listed above are
based on actual Pay 2006 figures. The District will be certified under the actual 2006/Pay 2007 rates, which
were unavailable at the time this TIF Plan was prepared. The cashflows assume a 1% inflation rate.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be
generated over the life of the District is $88,000,000.
(2) Probable impact of the District on city provided services and ability to issue debt. While, an impact
on the District on police protection is expected, the degree of impact is uncertain. With new residents
and businesses, police calls for service may increase. New development will increase vehicular
traffic and additional overall demands to the call load. Even though call demand is expected to
increase, the City does not expect that the proposed development, in and of itself, will necessitate
new capital investment in equipment or require the City hire additional employees.
The probable impact of the District on fire protection should be negligible. An increase in service
calls can be expected due to the increase in the density of development; however, new buildings
typically generate few calls, if any, because of superior construction and fire sprinklers. None of the
existing buildings, which will be eliminated by the new development, have fire sprinkler systems.
The impact of the District on Parks should be insignificant. Recreational Services has two costs
associated with its operations: Program Costs and Capital Costs. Program costs are funded by user
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-10
fees. If more programs are added as a result of the District, the additional programs will be entirely
funded by user fees. If Capital Costs are needed for new facilities, the District and developments
within would be contributors. Therefore, it is anticipated that the District will have a negligible
impact on the Department’s existing infrastructure.
The District should benefit public infrastructure. There should be a net reduction in miles of public
streets and a corresponding reduction in public street lighting. This reduces the maintenance costs
for Public Works. Land parcels for development will generally be larger than existing land parcels.
While new development will be at increased densities, the number of water and sanitary sewer lines
will be reduced making for lower maintenance costs for the City. Also, the proposed development
densities can be accommodated with existing capacity of the water and sanitary sewer infrastructure.
The new development may require additional storm water treatment but this should be funded by the
developer(s).
Traffic resulting from the new development will increase over existing traffic volumes. However,
both East 66th Street and the Highway 77 interchange at 66th Street have been upgraded to
accommodate increased traffic volumes. The District will require a new north-south road that
extends from 67th Street south to 72 nd Street to serve the new development. The new road will likely
be located generally between the existing 17th and 18th Avenues, and will be designed as a parkway.
Financing for the new road will be folded into financing for the new private redevelopment.
The probable impact of any debt issuance within the District on the main operating fund of the city
is expected to be minimal. In addition, the ability of the City to issue future debt will not be affected
by the creation of this TIF District.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that the
amount of tax increments over the life of the District that would be attributable to school district
levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions
remained the same is $16,459,768;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of
tax increments over the life of the District that would be attributable to county levies, assuming the
county's share of the total local tax rate for all taxing jurisdictions remained the same is $35,154,860;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment districts and
impact on county or school district services. The county or school district must request additional
information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax
increment financing plan.
No requests for additional information from the county or school district regarding the proposed
development for the District have been received.
Subsection 1-15. Supporting Documentation
Pursuant to M.S. Section 469.175 Subd 1, clause 7 the TIF Plan must contain identification and description
of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause (b)(2)
and the findings are required in the resolution approving the District. Following is a list of reports and studies
on file at the City that support the Authority's findings:
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-11
(AS MODIFIED NOVEMBER 28, 2017)
• Cedar Avenue Corridor Redevelopment Concept Master Plan, JLG Architects, September 2004
• Acoustical Construction - Baseline Measurements, Orfield Laboratories, Inc., December 30, 2004
• Acoustical Construction Criteria, Orfield laboratories, Inc., January 13, 2005
• Acoustical Construction Criteria, Orfield Laboratories, Inc., May 18, 2005
• Roadway and Transit Assessment of Cedar Avenue Corridor Transit Oriented Development, WSB
& Associates, Inc., January 10, 2005
• Legislative Summary 2005, John Choi, Kennedy & Graven, Chartered
• House Research Summary 2005, Joel Michael, House Research
Subsection 1-16. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S.,
Section 469.177;
2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was
purchased by the Authority with tax increments;
3. Principal and interest received on loans or other advances made by the Authority with tax increments;
4. Interest or other investment earnings on or from tax increments;
5. Repayments or return of tax increments made to the Authority under agreements for districts for
which the request for certification was made after August 1, 1993; and
6. The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 1-17. Modifications to the District
In accordance with M.S., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the
requirements of M.S., Section 469.175, Subd. 4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the original TIF
Plan;
4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City;
5. Increase in the estimate of the cost of the project, including administrative expenses, that will be paid
or financed with tax increment from the District; or
6. Designation of additional property to be acquired by the HRA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Pursuant to M.S. Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not
be enlarged after five years following the date of certification of the original net tax capacity by the county
auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that
the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, paragraph (a), clauses (1) to
(5), must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the
only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the
parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-12
original net tax capacity or (B) the HRA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the
original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s)
eliminated from the District.
The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic
area of the District. Modifications to the District in the form of a budget modification or an expansion of the
boundaries will be recorded in the TIF Plan.
Subsection 1-18. Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
HRA or City, other than:
1. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
project;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
project; or
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178; or
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (1) to (3).
For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982,
administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants,
and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax
increment may be used to pay any authorized and documented administrative expenses for the District up
to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan
or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District,
whichever is less.
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District. The county may require payment of those
expenses by February 15 of the year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount
deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor
for the cost of financial reporting of tax increment financing information and the cost of examining and
auditing authorities' use of tax increment financing. This amount may be adjusted annually by the
Commissioner of Revenue.
Subsection 1-19. Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-13
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax increment
financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of
property or other site preparation, including qualified improvement of a street adjacent to a parcel
but not installation of utility service including sewer or water systems, has been commenced on a
parcel located within a tax increment financing district by the authority or by the owner of the parcel
in accordance with the tax increment financing plan, no additional tax increment may be taken from
that parcel and the original net tax capacity of that parcel shall be excluded from the original net
tax capacity of the tax increment financing district. If the authority or the owner of the parcel
subsequently commences demolition, rehabilitation or renovation or other site preparation on that
parcel including qualified improvement of a street adjacent to that parcel, in accordance with the
tax increment financing plan, the authority shall certify to the county auditor that the activity has
commenced and the county auditor shall certify the net tax capacity thereof as most recently certified
by the commissioner of revenue and add it to the original net tax capacity of the tax increment
financing district. The county auditor must enforce the provisions of this subdivision. The authority
must submit to the county auditor evidence that the required activity has taken place for each parcel
in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following
the year in which the parcel was certified as included in the district. For purposes of this subdivision,
qualified improvements of a street are limited to (1) construction or opening of a new street, (2)
relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street.
The HRA or City or a property owner must improve parcels within the District by approximately September,
2010 and report such actions to the County Auditor.
(AS MODIFIED NOVEMBER 28, 2017, TO INCLUDE LANGUAGE IN CURRENT LAW)
In 2009 M.S., Section 469.176, Subd. 6 was amended to include Subd 6(b) which reads:
For districts which were certified on or after January 1, 2005, and before April 20, 2009, the four-year period
under paragraph (a) is increased to six years.
This District was certified on May 21, 2007. Since it meets the requirement of the updated language in the
law, the new date by which qualifying activities must take place on or adjacent to any parcel in the District
is May 2013.
Subsection 1-20. Use of Tax Increment
The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
1. To pay the principal of and interest on bonds issued to finance a project;
2. To finance, or otherwise pay public redevelopment costs of the Richfield Redevelopment Project
Area pursuant to the M.S., Sections 469.001 to 469.047;
3. To pay for project costs as identified in the budget set forth in the TIF Plan;
4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4;
5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the
HRA or City or for the benefit of the Richfield Redevelopment Project Area by a developer;
6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-14
M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and
7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
through 469.165, and/or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment
Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an
amount as specified in a developer's agreement to reimburse the costs of land acquisition, public
improvements, demolition and relocation, site preparation, and administration. Remaining increment funds
will be used for HRA or City administration (up to 10 percent) and the costs of public improvement activities
outside the District.
Subsection 1-21. Excess Increments
Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the
following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The HRA or City must spend or return the excess increments under paragraph (c) within nine months after
the end of the year. In addition, the HRA or City may, subject to the limitations set forth herein, choose to
modify the TIF Plan in order to finance additional public costs in the Richfield Redevelopment Project Area
or the District.
Subsection 1-22. Requirements for Agreements with the Developer
The HRA or City will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the
development with City plans and ordinances. The HRA or City may also use the Agreements to address other
issues related to the development.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result
of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments
from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the HRA
or City concluded an agreement for the development or redevelopment of the property acquired and which
provides recourse for the HRA or City should the development or redevelopment not be completed.
Subsection 1-23. Assessment Agreements
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-15
Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the County Assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon which the improvements are
to be constructed and, so long as the minimum market value contained in the assessment agreement appears,
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Subsection 1-24. Administration of the District
Administration of the District will be handled by the Community Development Director.
Subsection 1-25. Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subd. 5, 6, and 6b the HRA or City must undertake financial reporting
for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor
on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement
shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
Subsection 1-26. Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value of the site that could reasonably be expected
to occur without the use of tax increment financing would be less than the increase in the market value
estimated to result from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the District permitted by the TIF Plan. In making said
determination, reliance has been placed upon written representation made by the developer to such effects
and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative
analysis of estimated market values both with and without establishment of the District and the use of tax
increments has been performed as described above. Such analysis is included with the cashflow in Appendix
D, and indicates that the increase in estimated market value of the proposed development (less the indicated
subtractions) exceeds the estimated market value of the site absent the establishment of the District and the
use of tax increments.
Subsection 1-27. Other Limitations on the Use of Tax Increment
1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Richfield
Redevelopment Project Area pursuant to the M.S., Sections 469.001 to 469.047. Tax increments may not
be used to circumvent existing levy limit law. No tax increment may be used for the acquisition,
construction, renovation, operation, or maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school district, or any other local unit of government
or the state or federal government. This provision does not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking structure.
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-16
2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 25 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside of the District.
3. Five Year Limitation on Commitment of Tax Increments. Pursuant to Laws of Minnesota 2005, Chapter
152, Article 2, Section 25 Subd 2:
(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply.
4. Redevelopment District. Pursuant to Laws of Minnesota 2005, Chapter 152, Article 2, Section 25 Subd
2:
(1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1,
paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the
designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10;
Subsection 1-28. Summary
The Richfield Housing and Redevelopment Authority is establishing the District to preserve and enhance the
tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for
the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota
55113, telephone (651) 697-8500.
Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-17
APPENDIX A
PROJECT DESCRIPTION
In 1996, the Minnesota State Legislature made a decision that the Minneapolis-St. Paul International airport
(MSP) would remain and expand at its current location. Expansion included the construction of a new
North/South Runway, and independent studies confirmed that the noise from this runway - believed to be the
closest that any similar runway has been built to an existing residential area in the country - would be
incompatible with the adjacent predominantly residential land uses. Based on decibel level studies, the City
identified a redevelopment area which essentially included land bounded by Highway 62 to the north,
Interstate 494 to the south, Highway 77 to the east, and 16th Avenue to the west. In 1999, a redevelopment
plan was created. (See Subsection 2-15).
Since that time, additional sound studies completed in 2000 revised the noise impact area to include land
bounded by Highway 62 to the north, 72nd Street to the south, Highway 77 to the east, and a jogged profile
from approximately 16th Avenue at the north end of the site to 18th Avenue at the south end. (See Subsection
2-15).
Expansion work at the Minneapolis-St. Paul Airport has presented tremendous challenges and opportunities
for the City of Richfield. The construction of a new north-south runway at the westernmost area of the airport
site and its resulting low-frequency noise levels have made it essential for the City to revision its eastern edge.
The existing land-use, essentially single family residential, is no longer an appropriate neighbor for the
airport. These challenges have given rise to opportunities for development that serve the future of the City
of Richfield and help to mitigate the problems caused by the airport expansion.
JLG Architects was contracted in 2004 to prepare a new land-use master plan based on these new parameters.
In 2005 WSB & Associates, Inc. prepared a Roadway and Transit Assessment that suggests the overall
proposed redevelopment is anticipated to consist of the following primary components:
• Approximately 350,000 square feet of new retail development
• Approximately 600,000 square feet of new office space
• Approximately 600 new housing units
After completing various financial feasability models it was determined that Tax Increment Financing was
needed to make the project feasible.
Also in 2005 the City of Richfield requested and received special Tax Increment Financing legislation for
this area. (See Subsection 2-6).
(AS MODIFIED NOVEMBER 28, 2017)
In 2006, the City and HRA established the Cedar Avenue TIF District as a result of decisions made by the
Minnesota State Legislature to keep the MSP airport in its current location, and as an effort of the City to be
proactive with its redevelopment efforts. The TIF District was established to encourage new commercial and
housing development instead of capital and people moving to newer developing communities.
The Financial Crisis of 2007-2008 marked the start of a recession that continued into 2009. During this period
and for several years following, development slowed or halted, and the type of development contemplated
for the area changed.
The Cedar Avenue TIF District received inflationary increment in the first year starting the term of the
APPENDIX A-1
District. Market values then declined and increment was not generated over the past eight years.
During this time the City and HRA considered multiple development proposals; however, for a variety of
reasons, none of the projects moved forward. In 2013, the City issued General Obligation Improvement
Bonds to acquire properties and construct Richfield Parkway (Series 2013A Bonds) in the north portion of
the District.
In 2017 the City of Richfield received special legislation to extend the term of the Cedar Avenue TIF District
(see Appendix I). The City and HRA have not entered into an agreement, but anticipate housing and retail
development in the District. It is anticipated that development may occur in 2019.
APPENDIX A-2
APPENDIX B
MAP OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE DISTRICT
APPENDIX B-1
71st 1/2
70th 1/2
LOGAN75th
VINCENTUPTONTHOMASWASHBURNXERXESI - 494
78th
77th
76th
OLIVERNEWTONMORGANSHERIDANRUSSELLQUEENPENN74th
72nd
73th
71st
69th
70th
DUPONTKNOXJAMESIRVINGHUMBOLDTGIRARDFREMONTEMERSONCOLFAXBRYANTALDRICHGARFIELDGRANDHARRIETLYNDALE62nd
67th
68th
66th
65th
64th
63rd SHERIDAN1700240031002300WASHBURNXERXESVINCENTUPTONTHOMASRUSSELLQUEENPENNOLIVERNEWTONMORGANLOGANDUPONTHUMBOLDTKNOXJAMESIRVINGGIRARDEMERSONFREMONTLYNDALECOLFAXBRYANTALDRICHGARFIELDHARRIETGRAND69th
71st
72nd
73th
74th
75th
78th
70th
76th
77th
COLUMBUS2nd1stSTEVENSPLEASANTPILLSBURYBLAISDELLWENTWORTHNICOLLET3rdCLINTON4th5thPORTLANDOAKLANDPARK10th11th12th13th14thELLIOTCHICAGO15th16th17th18thCEDARBLOOMINGTON62nd
63rd
64th
65th
67th
68th
66thCOLUMBUSPLEASANTPILLSBURYWENTWORTHBLAISDELLSTEVENSNICOLLET1st2nd5thCLINTON3rd4thOAKLANDPARKPORTLAND15th11thCHICAGOELLIOT10th13th12th14thBLOOMINGTON16th17thCEDAR18th
1900800900100011001200130018006005004003002005010012420030032440050062070072080090010001100130014001500160017001800100152419006001200000700140029002800270026002500220021002000300015001600´
07/13/0602,300 4,600 6,900 9,2001,150 Feet
RICHFIELD REDEVELOPMENT PROJECT AREA
Cedar Corridor Tax Increment Financing District
Redevelopment Project Area
Cedar Corridor Tax Increment Financing District
]72.17[
]94.96[]30.54[[82.16][33.89]]51.06[[25.31][53.64]
]26.75[[53.64][36.47]]
92.08[
[36.43]]78.64[
]82.211[
[74]
[134.34]
[388.25]]6.16[=C[38.6]C=[49.8]
]94.96[]30.54[[82.16][33.89]]51.06[[25.31]71st 1/2
70t h 1/2
LOGAN75th
VINCENTUPTONTHOMASWASHBURNXERXESI - 49 4
78th
77th
76th
OLIVERNEWTONMORGANSHERIDANRUSSELLQUEENPENN74th
72nd
73th
71st
69th
70th
DUPONTKNOXJAMESIRVINGHUMBOLDTGIRARDFREMONTEMERSONCOLFAXBRYANTALDRICHGARFIELDGRANDHARRIETLYNDALECROSS TOW N HW Y
62nd
67th
68th
66th
65th
64th
63rd SHERIDANWASHBURNXERXESVINCENTUPTONTHOMASRUSSELLQUEENPENNOLIVERNEWTONMORGANLOGANDUPONTHUMBOLDTKNOXJAMESIRVINGGIRARDEMERSONFREMONTLYNDALECOLFAXBRYANTALDRICHGARFIELDHARRIETGRAND69th
71st
72nd
73th
74th
75th
78th
70th
76th
77th
COLUMBUS2nd1stSTEVENSPLEASANTPILLSBURYBLAISDELLWENTWORTHNICOLLET3rdCLINTON4th5thPORTLANDOAKLANDPARK10th11th12th13th14thELLIOTCHICAGO15th16th17th18thCEDARBLOOMINGTONI-494
62nd
63rd
64th
65th
67th
68th
66thCOLUMBUSPLEASANTPILLSBURYWENTWORTHBLAISDELLSTEVENSNICOLLET1st2nd5thCLINTON3rd4thOAKLANDPARKPORTLAND15th11thCHICAGOELLIOT10th13th12th14thBLOOMINGTON16th17thCEDAR18th
19008009001000110012001300180060050040030020050100124200300324400500620700720800900100011001300140015001600170018001001524190060012000007001400290028002700260025002200210020003000150016001700240031002300´7-2018
CEDAR CORRIDOR, 2017-1 & 2018-1 HOUSING TIF DISTRICTS
0 0.5 10.25 MilesRichfield Redevelopment Project area boundary2017-1 Housing TIF District Boundary
Cedar Corridor TIF District Boundary2018-1 Housing TIF District Boundary
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below.
PARCEL ADDRESS
2502824320001 6733 CEDAR AVE S
2502824330054 6841 CEDAR AVE S
2502824330055 6839 CEDAR AVE S
2502824330056 6833 CEDAR AVE S
2502824330057 6829 CEDAR AVE S
2502824330058 6825 CEDAR AVE S
2502824330059 6821 CEDAR AVE S
2502824330060 6813 CEDAR AVE S
2502824330061 6809 CEDAR AVE S
2502824330062 6801 CEDAR AVE S
2602824110002 6300 18TH AVE S
2602824110033 6309 16TH AVE S
2602824110034 6315 16TH AVE S
2602824110035 6321 16TH AVE S
2602824110036 6327 16TH AVE S
2602824110037 6333 16TH AVE S
2602824110038 6339 16TH AVE S
2602824110039 6345 16TH AVE S
2602824110040 6344 17TH AVE S
2602824110041 6338 17TH AVE S
2602824110042 6332 17TH AVE S
2602824110043 6326 17TH AVE S
2602824110044 6320 17TH AVE S
2602824110045 6314 17TH AVE S
2602824110062 6309 18TH AVE S
2602824140001 6541 16TH AVE S
2602824140002 6509 16TH AVE S
2602824140003 6501 16TH AVE S
2602824140004 6401 16TH AVE S
2602824140005 6409 16TH AVE S
2602824140006 6415 16TH AVE S
2602824140007 6421 16TH AVE S
2602824140008 6427 16TH AVE S
2602824140009 6433 16TH AVE S
2602824140010 6439 16TH AVE S
2602824140011 6445 16TH AVE S
2602824140012 6444 17TH AVE S
2602824140013 6438 17TH AVE S
2602824140014 6432 17TH AVE S
2602824140015 6426 17TH AVE S
2602824140016 6420 17TH AVE S
2602824140017 6414 17TH AVE S
APPENDIX C-1
2602824140018 6408 17TH AVE S
2602824140019 6400 17TH AVE S
2602824140020 6500 17TH AVE S
2602824140021 6508 17TH AVE S
2602824140022 6514 17TH AVE S
2602824140023 6520 17TH AVE S
2602824140024 6526 17TH AVE S
2602824140025 6532 17TH AVE S
2602824140122 1620 66TH ST E
2602824140123 1614 66TH ST E
2602824410001 6607 18TH AVE S
2602824410002 660 CEDAR AVE S
2602824410063 6636 CEDAR AVE S
2602824410066 6614 18TH AVE S
2602824410067 6620 18TH AVE S
2602824410068 6626 18TH AVE S
2602824410069 6632 18TH AVE S
2602824410070 6638 18TH AVE S
2602824410071 6644 18TH AVE S
2602824410072 6645 17TH AVE S
2602824410073 6639 17TH AVE S
2602824410074 6633 17TH AVE S
2602824410075 6627 17TH AVE S
2602824410076 6621 17TH AVE S
2602824410077 6615 17TH AVE S
2602824410078 6609 17TH AVE S
2602824410079 6601 17TH AVE S
2602824410080 6700 18TH AVE S
2602824410081 6708 18TH AVE S
2602824410082 6714 18TH AVE S
2602824410083 6720 18TH AVE S
2602824410084 6726 18TH AVE S
2602824410085 6732 18TH AVE S
2602824410086 6738 18TH AVE S
2602824410087 6744 18TH AVE S
2602824410088 6745 17TH AVE S
2602824410089 6739 17TH AVE S
2602824410090 6733 17TH AVE S
2602824410091 6727 17TH AVE S
2602824410092 6721 17TH AVE S
2602824410093 6715 17TH AVE S
2602824410094 6709 17TH AVE S
2602824410095 6701 17TH AVE S
2602824410096 6700 CEDAR AVE S
2602824410097 6720 CEDAR AVE S
2602824410098 6730 CEDAR AVE S
2602824410099 6744 CEDAR AVE S
2602824410100 6745 18TH AVE S
2602824410101 6739 18TH AVE S
2602824410102 6733 18TH AVE S
APPENDIX C-2
2602824410103 6727 18TH AVE S
2602824410104 6721 18TH AVE S
2602824410105 6715 18TH AVE S
2602824410106 6709 18TH AVE S
2602824410107 6701 18TH AVE S
2602824410108 1717 66TH ST E
2602824440001 6800 CEDAR AVE S
2602824440002 6808 CEDAR AVE S
2602824440003 6814 CEDAR AVE S
2602824440004 6820 CEDAR AVE S
2602824440005 6826 CEDAR AVE S
2602824440006 6832 CEDAR AVE S
2602824440007 6838 CEDAR AVE S
2602824440008 6844 CEDAR AVE S
2602824440009 6845 18TH AVE S
2602824440010 6839 18TH AVE S
2602824440011 6833 18TH AVE S
2602824440012 6827 18TH AVE S
2602824440013 6821 18TH AVE S
2602824440014 6815 18TH AVE S
2602824440015 6809 18TH AVE S
2602824440016 6801 18TH AVE S
2602824440017 6800 18TH AVE S
2602824440018 6808 18TH AVE S
2602824440019 6814 18TH AVE S
2602824440020 6820 18TH AVE S
2602824440021 6826 18TH AVE S
2602824440022 6832 18TH AVE S
2602824440023 6838 18TH AVE S
2602824440024 6844 18TH AVE S
2602824440025 6845 17TH AVE S
2602824440026 6839 17TH AVE S
2602824440027 6833 17TH AVE S
2602824440028 6827 17TH AVE S
2602824440029 6821 17TH AVE S
2602824440030 6815 17TH AVE S
2602824440031 6809 17TH AVE S
2602824440032 6801 17TH AVE S
2602824440065 6900 CEDAR AVE S
2602824440066 6908 CEDAR AVE S
2602824440067 6914 CEDAR AVE S
2602824440068 6920 CEDAR AVE S
2602824440069 6924 CEDAR AVE S
2602824440070 6932 CEDAR AVE S
2602824440073 6945 18TH AVE S
2602824440074 6939 18TH AVE S
2602824440075 6933 18TH AVE S
2602824440076 6927 18TH AVE S
2602824440077 6921 18TH AVE S
2602824440078 6915 18TH AVE S
APPENDIX C-3
2602824440079 6909 18TH AVE S
2602824440080 6901 18TH AVE S
2602824440129 6938 CEDAR AVE S
3502824110001 6958 CEDAR AVE S
3502824110002 7001 18TH AVE S
3502824110003 7005 18TH AVE S
3502824110009 7000 CEDAR AVE S
3502824110010 7034 CEDAR AVE S
3502824110011 7040 CEDAR AVE S
3502824110012 7048 CEDAR AVE S
3502824110013 7100 CEDAR AVE S
3502824110014 7108 CEDAR AVE S
3502824110015 7116 CEDAR AVE S
3502824110016 7121 18TH AVE S
3502824110017 7115 18TH AVE S
3502824110018 7111 18TH AVE S
3502824110019 7105 18TH AVE S
3502824110020 7101 18TH AVE S
3502824110021 7049 18TH AVE S
3502824110022 7045 18TH AVE S
3502824110023 7039 18TH AVE S
3502824110024 7035 18TH AVE S
3502824110025 7033 18TH AVE S
3502824110026 7029 18TH AVE S
3502824110027 7025 18TH AVE S
3502824110123 7134 CEDAR AVE S
3502824110124 7145 18TH AVE S
3502824110125 7137 18TH AVE S
3502824110126 7131 18TH AVE S
3502824110127 7127 18TH AVE S
APPENDIX C-4
(AS MODIFIED NOVEMBER 28, 2017)
The following parcels are being removed from the District for inclusion in Tax Increment Financing
District No. 2017-1 (The Chamberlain):
Parcel Numbers Address Owner
26-028-24-41-0067 6620 18
th Ave S HRA
26-028-24-41-0068 6626 18
th Ave S HRA
26-028-24-41-0069 6632 18
th Ave S HRA
26-028-24-41-0070 6638 18
th Ave S HRA
26-028-24-41-0071 6644 18
th Ave S HRA
26-028-24-41-0072 6645 17
th Ave S HRA
26-028-24-41-0073 6639 17
th Ave S HRA
26-028-24-41-0074 6633 17
th Ave S HRA
26-028-24-41-0075 6627 17
th Ave S HRA
26-028-24-41-0076 6621 17
th Ave S HRA
26-028-24-41-0077 6615 17
th Ave S HRA
26-028-24-41-0080 6700 18
th Ave S HRA
26-028-24-41-0081 6708 18
th Ave S HRA
26-028-24-41-0082 6714 18
th Ave S HRA
26-028-24-41-0083 6720 18
th Ave S HRA
26-028-24-41-0084 6726 18
th Ave S HRA
26-028-24-41-0085 6732 18
th Ave S HRA
26-028-24-41-0086 6738 18
th Ave S HRA
26-028-24-41-0087 6744 18
th Ave S HRA
26-028-24-41-0096 6700 Cedar Ave S HRA
26-028-24-41-0097 6720 Cedar Ave S Cedar South Pointe LLC
26-028-24-41-0098 6730 Cedar Ave S Cedar South Pointe LLC
26-028-24-41-0099 6744 Cedar Ave S Cedar South Pointe LLC
26-028-24-41-0100 6745 18
th Ave S HRA
26-028-24-41-0101 6739 18
th Ave S HRA
APPENDIX C-5
26-028-24-41-0102 6733 18
th Ave S HRA
26-028-24-41-0103 6727 18
th Ave S HRA
26-028-24-41-0104 6721 18
th Ave S HRA
26-028-24-41-0105 6715 18
th Ave S Richfield Apartments LLC
26-028-24-41-0106 6709 18
th Ave S HRA
26-028-24-41-0107 6701 18
th Ave S HRA
The following are the parcels remaining in the District:
2502824320001 2502824330054 2502824330055 2502824330056 2502824330057
2502824330058 2502824330059 2502824330060 2502824330061 2502824330062
2602824110002 2602824110033 2602824110034 2602824110035 2602824110036
2602824110037 2602824110038 2602824110039 2602824110040 2602824110041
2602824110042 2602824110043 2602824110044 2602824110045 2602824110062
2602824140001 2602824140002 2602824140003 2602824140004 2602824140005
2602824140006 2602824140007 2602824140008 2602824140009 2602824140010
2602824140011 2602824140012 2602824140013 2602824140014 2602824140015
2602824140016 2602824140017 2602824140018 2602824140019 2602824140137
2602824140138 2602824140140 2602824140141 2602824410001 2602824410002
2602824410063 2602824410066 2602824410088 2602824410089 2602824410090
2602824410091 2602824410092 2602824410093 2602824410094 2602824410095
2602824410108 2602824440001 2602824440002 2602824440003 2602824440004
2602824440005 2602824440006 2602824440007 2602824440008 2602824440009
2602824440010 2602824440011 2602824440012 2602824440013 2602824440014
2602824440015 2602824440016 2602824440017 2602824440018 2602824440019
2602824440020 2602824440021 2602824440022 2602824440023 2602824440024
2602824440025 2602824440026 2602824440027 2602824440028 2602824440029
2602824440030 2602824440031 2602824440032 2602824440065 2602824440066
2602824440067 2602824440068 2602824440069 2602824440071 2602824440073
2602824440074 2602824440075 2602824440076 2602824440077 2602824440078
APPENDIX C-6
2602824440079 2602824440080 2602824440129 3502824110001 3502824110002
3502824110003 3502824110009 3502824110010 3502824110011 3502824110012
3502824110013 3502824110014 3502824110015 3502824110016 3502824110017
3502824110018 3502824110019 3502824110020 3502824110021 3502824110022
3502824110023 3502824110024 3502824110025 3502824110026 3502824110027
3502824110123 3502824110124 3502824110125 3502824110126 3502824110127
(AS MODIFIED AUGUST 21, 2018)
The following parcels are being removed from the District for inclusion in Tax Increment
Financing District No. 2018-1:
Parcel Numbers*Address Owner
26.028.24.11.0033 6309 - 16
th Ave. S. Dunn
26.028.24.11.0034 6315 - 16
th Ave. S. Richfield HRA
26.028.24.11.0035 6321 - 16
th Ave. S. Ramirez
26.028.24.11.0036 6327 - 16
th Ave. S. Kowal
26.028.24.11.0037 6333 - 16
th Ave. S. Richfield HRA
26.028.24.11.0038 6339 - 16
th Ave. S. Bolstad
26.028.24.11.0039 6345 - 16
th Ave. S. Robinson
26.028.24.14.0004 6401 - 16
th Ave. S. Richfield HRA
26.028.24.14.0005 6409 - 16
th Ave. S. Richfield HRA
26.028.24.14.0006 6415 - 16
th Ave. S. Ray
26.028.24.14.0007 6421 - 16
th Ave. S. Jones
26.028.24.14.0008 6427 - 16
th Ave. S. Garcia
26.028.24.14.0009 6433 - 16
th Ave. S. Secora
26.028.24.14.0010 6439 - 16
th Ave. S. Pina
26.028.24.14.0011 6445 - 16
th Ave. S. Soderberg
26.028.24.14.0003 6501 - 16
th Ave. S. Mt. Calvary
26.028.24.14.0002 6509 - 16
th Ave. S. Mt. Calvary
APPENDIX C-7
The following parcels remain in the District:
2502824320001 2502824330054 2502824330055 2502824330056 2502824330057
2502824330058 2502824330059 2502824330060 2502824330061 2502824330062
2602824110002 2602824110040 2602824110041 2602824110042 2602824110043
2602824110044 2602824110045 2602824110062 2602824140001 2602824140012
2602824140013 2602824140014 2602824140015 2602824140016 2602824140017
2602824140018 2602824140019 2602824140137 2602824140138 2602824140140
2602824140141 2602824410001 2602824410002 2602824410063 2602824410066
2602824410088 2602824410089 2602824410090 2602824410091 2602824410092
2602824410093 2602824410094 2602824410095 2602824410108 2602824440001
2602824440002 2602824440003 2602824440004 2602824440005 2602824440006
2602824440007 2602824440008 2602824440009 2602824440010 2602824440011
2602824440012 2602824440013 2602824440014 2602824440015 2602824440016
2602824440017 2602824440018 2602824440019 2602824440020 2602824440021
2602824440022 2602824440023 2602824440024 2602824440025 2602824440026
2602824440027 2602824440028 2602824440029 2602824440030 2602824440031
2602824440032 2602824440065 2602824440066 2602824440067 2602824440068
2602824440069 2602824440071 2602824440073 2602824440074 2602824440075
2602824440076 2602824440077 2602824440078 2602824440079 2602824440080
2602824440129 3502824110001 3502824110002 3502824110003 3502824110009
3502824110010 3502824110011 3502824110012 3502824110013 3502824110014
3502824110015 3502824110016 3502824110017 3502824110018 3502824110019
3502824110020 3502824110021 3502824110022 3502824110023 3502824110024
3502824110025 3502824110026 3502824110027 3502824110123 3502824110124
3502824110125 3502824110126 3502824110127
APPENDIX C-8
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT
APPENDIX C-9
9/18/2006 Page 1 of 11
CEDAR AVE TAX INCREMENT DISTRICT
CITY OF RICHFIELD
SUMMARY
T.I.F. CASH FLOW ASSUMPTIONS
District New Redevelopment District
County District #
Inflation Rate - Every _ Years 1.00%
Pay-As-You-Go Interest Rate: 6.50%
City Internal Loan Rate 4.00%
Note Issued Date (Present Value Date): 01-Feb-06
Local Tax Rate - Frozen 113.5680% Pay 2006
Fiscal Disparities Election Inside
Year District was certified 2006
Assumes First Tax Increment For District 2008
Year District was Modified N/A
Development located in modified area N/A
Assumes First Tax Increment For Dev 2009
Years of Tax Increment 26
Assumes Last Year of Tax Increment 2033
Fiscal Disparities Ratio 33.6177% Pay 2006
Fiscal Disparities Metro Wide Tax Rate 121.8020% Pay 2006
Local Tax Rate - Current 107.7150% Pay 2006
State Wide Property Tax Rate (Used for total taxes) 50.8270% Pay 2006
Market Value Tax Rate (used for total taxes) N/A Pay 2006
Commercial Industrial Class Rate 1.5%-2.0% Pay 2006
First 150,000 1.50%
Over 150,000 2.00%
Rental Class Rate 1.25% Pay 2006
Residential Class Rat - Under $500,000 1.00%
Over $500,000 1.25%
Note:
1. Tax estimates are based upon market value, construction costs and taxes per sq/ft.
2. Apartments/residential do not pay State-wide property tax or Fiscal Disparities
3. Assumes Fiscal Disparities is paid inside the district
Prepared by Ehlers TIF PLAN Run- 09-18-2006
9/18/2006 Page 2 of 11
CEDAR AVE TAX INCREMENT DISTRICT
CITY OF RICHFIELD
SUMMARY
TAX INCREMENT CASH FLOW
Base Project Fiscal Captured Semi-Annual State Admin. Housing Semi-Annual Semi-Annual PAYMENT DATE
PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor Net Tax Present PERIOD ENDING
Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 10.00% 15.00% Increment Value Yrs. Mth. Yr.
Present Value Date 01-Feb-06
0.0 1-Aug 2006 668,074 668,074 0 0.0 1-Feb 2006
0.0 1-Feb 2007 668,074 668,074 0 0 0 0 0 0 0 0 0.0 1-Aug 2006
0.0 1-Aug 2007 668,074 668,074 0 0 0 0 0 0 0 0 0.0 1-Feb 2007
0.0 1-Feb 2008 668,074 668,074 0 0 0 0 0 0 0 0 0.5 1-Aug 2007
0.5 1-Aug 2008 668,074 668,074 0 0 0 0 0 0 0 0 1.0 1-Feb 2008
1.0 1-Feb 2009 668,074 974,938 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 78,383 1.5 1-Aug 2008
1.5 1-Aug 2009 668,074 974,938 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 154,298 2.0 1-Feb 2009
2.0 1-Feb 2010 668,074 1,806,772 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 427,120 2.5 1-Aug 2009
2.5 1-Aug 2010 668,074 1,806,772 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 691,355 3.0 1-Feb 2010
3.0 1-Feb 2011 668,074 2,638,605 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,134,220 3.5 1-Aug 2010
3.5 1-Aug 2011 668,074 2,638,605 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,563,145 4.0 1-Feb 2011
4.0 1-Feb 2012 668,074 3,470,438 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,153,932 4.5 1-Aug 2011
4.5 1-Aug 2012 668,074 3,470,438 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,726,123 5.0 1-Feb 2012
5.0 1-Feb 2013 668,074 4,302,272 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 3,444,801 5.5 1-Aug 2012
5.5 1-Aug 2013 668,074 4,302,272 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 4,140,857 6.0 1-Feb 2013
6.0 1-Feb 2014 668,074 4,991,000 (1,103,879) 3,219,047 1,736,447 (6,251) (173,020) (259,529) 1,297,647 4,944,023 6.5 1-Aug 2013
6.5 1-Aug 2014 668,074 4,991,000 (1,103,879) 3,219,047 1,736,447 (6,251) (173,020) (259,529) 1,297,647 5,721,909 7.0 1-Feb 2014
7.0 1-Feb 2015 668,074 5,040,910 (1,116,623) 3,256,213 1,756,497 (6,323) (175,017) (262,526) 1,312,630 6,484,007 7.5 1-Aug 2014
7.5 1-Aug 2015 668,074 5,040,910 (1,116,623) 3,256,213 1,756,497 (6,323) (175,017) (262,526) 1,312,630 7,222,118 8.0 1-Feb 2015
8.0 1-Feb 2016 668,074 5,091,319 (1,129,495) 3,293,750 1,776,747 (6,396) (177,035) (265,553) 1,327,763 7,945,236 8.5 1-Aug 2015
8.5 1-Aug 2016 668,074 5,091,319 (1,129,495) 3,293,750 1,776,747 (6,396) (177,035) (265,553) 1,327,763 8,645,593 9.0 1-Feb 2016
9.0 1-Feb 2017 668,074 5,142,232 (1,142,496) 3,331,662 1,797,199 (6,470) (179,073) (268,609) 1,343,047 9,331,712 9.5 1-Aug 2016
9.5 1-Aug 2017 668,074 5,142,232 (1,142,496) 3,331,662 1,797,199 (6,470) (179,073) (268,609) 1,343,047 9,996,235 10.0 1-Feb 2017
10.0 1-Feb 2018 668,074 5,193,655 (1,155,626) 3,369,954 1,817,857 (6,544) (181,131) (271,697) 1,358,484 10,647,239 10.5 1-Aug 2017
10.5 1-Aug 2018 668,074 5,193,655 (1,155,626) 3,369,954 1,817,857 (6,544) (181,131) (271,697) 1,358,484 11,277,750 11.0 1-Feb 2018
11.0 1-Feb 2019 668,074 5,245,591 (1,168,888) 3,408,629 1,838,720 (6,619) (183,210) (274,815) 1,374,076 11,895,424 11.5 1-Aug 2018
11.5 1-Aug 2019 668,074 5,245,591 (1,168,888) 3,408,629 1,838,720 (6,619) (183,210) (274,815) 1,374,076 12,493,655 12.0 1-Feb 2019
12.0 1-Feb 2020 668,074 5,298,047 (1,182,283) 3,447,690 1,859,793 (6,695) (185,310) (277,965) 1,389,823 13,079,696 12.5 1-Aug 2019
12.5 1-Aug 2020 668,074 5,298,047 (1,182,283) 3,447,690 1,859,793 (6,695) (185,310) (277,965) 1,389,823 13,647,290 13.0 1-Feb 2020
13.0 1-Feb 2021 668,074 5,351,028 (1,195,811) 3,487,142 1,881,076 (6,772) (187,430) (281,146) 1,405,728 14,203,309 13.5 1-Aug 2020
13.5 1-Aug 2021 668,074 5,351,028 (1,195,811) 3,487,142 1,881,076 (6,772) (187,430) (281,146) 1,405,728 14,741,826 14.0 1-Feb 2021
14.0 1-Feb 2022 668,074 5,404,538 (1,209,475) 3,526,988 1,902,572 (6,849) (189,572) (284,358) 1,421,792 15,269,352 14.5 1-Aug 2021
14.5 1-Aug 2022 668,074 5,404,538 (1,209,475) 3,526,988 1,902,572 (6,849) (189,572) (284,358) 1,421,792 15,780,274 15.0 1-Feb 2022
15.0 1-Feb 2023 668,074 5,458,583 (1,223,276) 3,567,233 1,924,282 (6,927) (191,736) (287,603) 1,438,016 16,280,760 15.5 1-Aug 2022
15.5 1-Aug 2023 668,074 5,458,583 (1,223,276) 3,567,233 1,924,282 (6,927) (191,736) (287,603) 1,438,016 16,765,492 16.0 1-Feb 2023
16.0 1-Feb 2024 668,074 5,513,169 (1,237,214) 3,607,881 1,946,210 (7,006) (193,920) (290,881) 1,454,403 17,240,316 16.5 1-Aug 2023
16.5 1-Aug 2024 668,074 5,513,169 (1,237,214) 3,607,881 1,946,210 (7,006) (193,920) (290,881) 1,454,403 17,700,194 17.0 1-Feb 2024
17.0 1-Feb 2025 668,074 5,568,301 (1,251,292) 3,648,935 1,968,358 (7,086) (196,127) (294,191) 1,470,954 18,150,665 17.5 1-Aug 2024
17.5 1-Aug 2025 668,074 5,568,301 (1,251,292) 3,648,935 1,968,358 (7,086) (196,127) (294,191) 1,470,954 18,586,956 18.0 1-Feb 2025
18.0 1-Feb 2026 668,074 5,623,984 (1,265,511) 3,690,399 1,990,726 (7,167) (198,356) (297,534) 1,487,670 19,014,316 18.5 1-Aug 2025
18.5 1-Aug 2026 668,074 5,623,984 (1,265,511) 3,690,399 1,990,726 (7,167) (198,356) (297,534) 1,487,670 19,428,225 19.0 1-Feb 2026
19.0 1-Feb 2027 668,074 5,680,224 (1,279,871) 3,732,278 2,013,319 (7,248) (200,607) (300,911) 1,504,553 19,833,654 19.5 1-Aug 2026
19.5 1-Aug 2027 668,074 5,680,224 (1,279,871) 3,732,278 2,013,319 (7,248) (200,607) (300,911) 1,504,553 20,226,321 20.0 1-Feb 2027
20.0 1-Feb 2028 668,074 5,737,026 (1,294,376) 3,774,576 2,036,137 (7,330) (202,881) (304,321) 1,521,605 20,610,939 20.5 1-Aug 2027
20.5 1-Aug 2028 668,074 5,737,026 (1,294,376) 3,774,576 2,036,137 (7,330) (202,881) (304,321) 1,521,605 20,983,451 21.0 1-Feb 2028
21.0 1-Feb 2029 668,074 5,794,396 (1,309,025) 3,817,297 2,059,184 (7,413) (205,177) (307,766) 1,538,828 21,348,320 21.5 1-Aug 2028
21.5 1-Aug 2029 668,074 5,794,396 (1,309,025) 3,817,297 2,059,184 (7,413) (205,177) (307,766) 1,538,828 21,701,704 22.0 1-Feb 2029
22.0 1-Feb 2030 668,074 5,852,340 (1,323,821) 3,860,445 2,082,461 (7,497) (207,496) (311,245) 1,556,223 22,047,834 22.5 1-Aug 2029
22.5 1-Aug 2030 668,074 5,852,340 (1,323,821) 3,860,445 2,082,461 (7,497) (207,496) (311,245) 1,556,223 22,383,069 23.0 1-Feb 2030
23.0 1-Feb 2031 668,074 5,910,863 (1,338,765) 3,904,024 2,105,971 (7,581) (209,839) (314,758) 1,573,792 22,711,417 23.5 1-Aug 2030
23.5 1-Aug 2031 668,074 5,910,863 (1,338,765) 3,904,024 2,105,971 (7,581) (209,839) (314,758) 1,573,792 23,029,429 24.0 1-Feb 2031
24.0 1-Feb 2032 668,074 5,969,972 (1,353,858) 3,948,040 2,129,715 (7,667) (212,205) (318,307) 1,591,536 23,340,904 24.5 1-Aug 2031
24.5 1-Aug 2032 668,074 5,969,972 (1,353,858) 3,948,040 2,129,715 (7,667) (212,205) (318,307) 1,591,536 23,642,575 25.0 1-Feb 2032
25.0 1-Feb 2033 668,074 6,029,672 (1,369,103) 3,992,495 2,153,698 (7,753) (214,594) (321,892) 1,609,458 23,938,041 25.5 1-Aug 2032
25.5 1-Aug 2033 668,074 6,029,672 (1,369,103) 3,992,495 2,153,698 (7,753) (214,594) (321,892) 1,609,458 24,224,206 26.0 1-Feb 2033
Totals (54,332,949) 85,495,591 (307,645) (8,514,920) (12,772,380) 63,861,898
Present Value 45,943,843 (165,398) (6,624,506) (6,866,767) 24,224,206
NOTES:
1. State Auditor payment is based upon 1st half, pay 2006 actual and may increase over term of district
2. TIF run does not reflect potential reduction in Market Value Homestead Credit
3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value.
4. Inflation on tax rates cannot be captured.
5. TIF does not capture state wide property taxes or market value property taxes
Prepared by Ehlers TIF PLAN Run- 09-18-2006
9/18/2006 Page 3 of 11
CEDAR AVE TAX INCREMENT DISTRICT
CITY OF RICHFIELD
RETAIL
T.I.F. CASH FLOW ASSUMPTIONS
District New Redevelopment District
County District #
Inflation Rate - Every _ Years 1.00%
Pay-As-You-Go Interest Rate: 6.50%
City Internal Loan Rate 4.00%
Note Issued Date (Present Value Date): 01-Feb-06
Local Tax Rate - Frozen 107.71500% Pay 2006
Fiscal Disparities Election Inside
Year District was certified 2006
Assumes First Tax Increment For District 2008
Year District was Modified N/A
Development located in modified area N/A
Assumes First Tax Increment For Dev 2009
Years of Tax Increment 26
Assumes Last Year of Tax Increment 2033
Fiscal Disparities Ratio 33.6177% Pay 2006
Fiscal Disparities Metro Wide Tax Rate 121.8020% Pay 2006
Local Tax Rate - Current 107.7150% Pay 2006
State Wide Property Tax Rate (Used for total taxes) 50.8270% Pay 2006
Market Value Tax Rate (used for total taxes) N/A Pay 2006
Commercial Industrial Class Rate 1.5%-2.0% Pay 2006
First 150,000 1.50%
Over 150,000 2.00%
Rental Class Rate 1.25% Pay 2006
Residential Class Rat - Under $500,000 1.00%
Over $500,000 1.25%
BASE VALUE INFORMATION
Market Tax
Value Capacity
0 32,594,600 396,759
Comm Retail 158,333,333 61.29% 19,977,335 1.5%-2.0% 398,797
Housing 100,000,000 38.71% 12,617,265 1.00% 126,173
Total 258,333,333 100.00%32,594,600 524,969
PROJECT INFORMATION
Total Market Value Market Class New Date Date Date
PHASE Use Sq. Ft./Units Sq. Ft./Units Value Rate Tax Capacity Completed Asses Payable
1 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2007 2008 2009
Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2007 2008 2009
Housing 100 200,000.00 20,000,000 1.00% 200,000 2007 2008 2009
2 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2008 2009 2010
Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2008 2009 2010
Housing 100 200,000.00 20,000,000 1.00% 200,000 2008 2009 2010
3 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2009 2010 2011
Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2009 2010 2011
Housing 100 200,000.00 20,000,000 1.00% 200,000 2009 2010 2011
4 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2010 2011 2012
Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2010 2011 2012
Housing 100 200,000.00 20,000,000 1.00% 200,000 2010 2011 2012
5 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2011 2012 2013
Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2011 2012 2013
Housing 100 200,000.00 20,000,000 1.00% 200,000 2011 2012 2013
TOTAL 792,167 258,333,333 4,159,167
Note:
1. Tax estimates are based upon market value, construction costs and taxes per sq/ft.
2. Apartments/residential do not pay State-wide property tax or Fiscal Disparities
3. Assumes Fiscal Disparities is paid inside the district
Watershed
Prepared by Ehlers TIF PLAN Run- 09-18-2006
9/18/2006 Page 4 of 11
CEDAR AVE TAX INCREMENT DISTRICT
CITY OF RICHFIELD
RETAIL
TAX INCREMENT CASH FLOW
Base Project Fiscal Captured Semi-Annual State Admin. Housing Semi-Annual Semi-Annual PAYMENT DATE
PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor Net Tax Present PERIOD ENDING
Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 10.00% 15.00% Increment Value Yrs. Mth. Yr.
Present Value Date 01-Feb-06
0.0 1-Aug 2006 524,969 524,969 0.0 1-Feb 2006
0.0 1-Feb 2007 524,969 524,969 0 0 0 0 0 0 0 0 0.0 1-Aug 2006
0.0 1-Aug 2007 524,969 524,969 0 0 0 0 0 0 0 0 0.0 1-Feb 2007
0.0 1-Feb 2008 524,969 524,969 0 0 0 0 0 0 0 0 0.5 1-Aug 2007
0.5 1-Aug 2008 524,969 524,969 0 0 0 0 0 0 0 0 1.0 1-Feb 2008
1.0 1-Feb 2009 524,969 831,833 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 78,383 1.5 1-Aug 2008
1.5 1-Aug 2009 524,969 831,833 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 154,298 2.0 1-Feb 2009
2.0 1-Feb 2010 524,969 1,663,667 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 427,120 2.5 1-Aug 2009
2.5 1-Aug 2010 524,969 1,663,667 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 691,355 3.0 1-Feb 2010
3.0 1-Feb 2011 524,969 2,495,500 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,134,220 3.5 1-Aug 2010
3.5 1-Aug 2011 524,969 2,495,500 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,563,145 4.0 1-Feb 2011
4.0 1-Feb 2012 524,969 3,327,333 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,153,932 4.5 1-Aug 2011
4.5 1-Aug 2012 524,969 3,327,333 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,726,123 5.0 1-Feb 2012
5.0 1-Feb 2013 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 3,444,801 5.5 1-Aug 2012
5.5 1-Aug 2013 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 4,140,857 6.0 1-Feb 2013
6.0 1-Feb 2014 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 4,815,003 6.5 1-Aug 2013
6.5 1-Aug 2014 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 5,467,929 7.0 1-Feb 2014
7.0 1-Feb 2015 524,969 4,200,758 (938,593) 2,737,196 1,474,185 (5,307) (146,888) (220,332) 1,101,659 6,107,540 7.5 1-Aug 2014
7.5 1-Aug 2015 524,969 4,200,758 (938,593) 2,737,196 1,474,185 (5,307) (146,888) (220,332) 1,101,659 6,727,018 8.0 1-Feb 2015
8.0 1-Feb 2016 524,969 4,242,766 (949,320) 2,768,477 1,491,032 (5,368) (148,566) (222,850) 1,114,248 7,333,854 8.5 1-Aug 2015
8.5 1-Aug 2016 524,969 4,242,766 (949,320) 2,768,477 1,491,032 (5,368) (148,566) (222,850) 1,114,248 7,921,588 9.0 1-Feb 2016
9.0 1-Feb 2017 524,969 4,285,194 (960,154) 2,800,070 1,508,048 (5,429) (150,262) (225,393) 1,126,964 8,497,318 9.5 1-Aug 2016
9.5 1-Aug 2017 524,969 4,285,194 (960,154) 2,800,070 1,508,048 (5,429) (150,262) (225,393) 1,126,964 9,054,925 10.0 1-Feb 2017
10.0 1-Feb 2018 524,969 4,328,046 (971,096) 2,831,980 1,525,234 (5,491) (151,974) (227,961) 1,139,807 9,601,136 10.5 1-Aug 2017
10.5 1-Aug 2018 524,969 4,328,046 (971,096) 2,831,980 1,525,234 (5,491) (151,974) (227,961) 1,139,807 10,130,153 11.0 1-Feb 2018
11.0 1-Feb 2019 524,969 4,371,326 (982,148) 2,864,209 1,542,591 (5,553) (153,704) (230,556) 1,152,779 10,648,350 11.5 1-Aug 2018
11.5 1-Aug 2019 524,969 4,371,326 (982,148) 2,864,209 1,542,591 (5,553) (153,704) (230,556) 1,152,779 11,150,235 12.0 1-Feb 2019
12.0 1-Feb 2020 524,969 4,415,039 (993,310) 2,896,760 1,560,123 (5,616) (155,451) (233,176) 1,165,880 11,641,846 12.5 1-Aug 2019
12.5 1-Aug 2020 524,969 4,415,039 (993,310) 2,896,760 1,560,123 (5,616) (155,451) (233,176) 1,165,880 12,117,983 13.0 1-Feb 2020
13.0 1-Feb 2021 524,969 4,459,190 (1,004,583) 2,929,637 1,577,829 (5,680) (157,215) (235,822) 1,179,112 12,584,367 13.5 1-Aug 2020
13.5 1-Aug 2021 524,969 4,459,190 (1,004,583) 2,929,637 1,577,829 (5,680) (157,215) (235,822) 1,179,112 13,036,070 14.0 1-Feb 2021
14.0 1-Feb 2022 524,969 4,503,782 (1,015,970) 2,962,842 1,595,713 (5,745) (158,997) (238,495) 1,192,476 13,478,514 14.5 1-Aug 2021
14.5 1-Aug 2022 524,969 4,503,782 (1,015,970) 2,962,842 1,595,713 (5,745) (158,997) (238,495) 1,192,476 13,907,030 15.0 1-Feb 2022
15.0 1-Feb 2023 524,969 4,548,819 (1,027,470) 2,996,380 1,613,775 (5,810) (160,797) (241,195) 1,205,974 14,326,756 15.5 1-Aug 2022
15.5 1-Aug 2023 524,969 4,548,819 (1,027,470) 2,996,380 1,613,775 (5,810) (160,797) (241,195) 1,205,974 14,733,271 16.0 1-Feb 2023
16.0 1-Feb 2024 524,969 4,594,308 (1,039,086) 3,030,252 1,632,018 (5,875) (162,614) (243,921) 1,219,607 15,131,440 16.5 1-Aug 2023
16.5 1-Aug 2024 524,969 4,594,308 (1,039,086) 3,030,252 1,632,018 (5,875) (162,614) (243,921) 1,219,607 15,517,076 17.0 1-Feb 2024
17.0 1-Feb 2025 524,969 4,640,251 (1,050,817) 3,064,464 1,650,444 (5,942) (164,450) (246,675) 1,233,377 15,894,791 17.5 1-Aug 2024
17.5 1-Aug 2025 524,969 4,640,251 (1,050,817) 3,064,464 1,650,444 (5,942) (164,450) (246,675) 1,233,377 16,260,616 18.0 1-Feb 2025
18.0 1-Feb 2026 524,969 4,686,653 (1,062,666) 3,099,018 1,669,053 (6,009) (166,304) (249,457) 1,247,284 16,618,921 18.5 1-Aug 2025
18.5 1-Aug 2026 524,969 4,686,653 (1,062,666) 3,099,018 1,669,053 (6,009) (166,304) (249,457) 1,247,284 16,965,947 19.0 1-Feb 2026
19.0 1-Feb 2027 524,969 4,733,520 (1,074,633) 3,133,917 1,687,849 (6,076) (168,177) (252,266) 1,261,330 17,305,836 19.5 1-Aug 2026
19.5 1-Aug 2027 524,969 4,733,520 (1,074,633) 3,133,917 1,687,849 (6,076) (168,177) (252,266) 1,261,330 17,635,025 20.0 1-Feb 2027
20.0 1-Feb 2028 524,969 4,780,855 (1,086,720) 3,169,165 1,706,833 (6,145) (170,069) (255,103) 1,275,516 17,957,439 20.5 1-Aug 2027
20.5 1-Aug 2028 524,969 4,780,855 (1,086,720) 3,169,165 1,706,833 (6,145) (170,069) (255,103) 1,275,516 18,269,704 21.0 1-Feb 2028
21.0 1-Feb 2029 524,969 4,828,663 (1,098,928) 3,204,766 1,726,007 (6,214) (171,979) (257,969) 1,289,845 18,575,537 21.5 1-Aug 2028
21.5 1-Aug 2029 524,969 4,828,663 (1,098,928) 3,204,766 1,726,007 (6,214) (171,979) (257,969) 1,289,845 18,871,744 22.0 1-Feb 2029
22.0 1-Feb 2030 524,969 4,876,950 (1,111,258) 3,240,722 1,745,372 (6,283) (173,909) (260,863) 1,304,317 19,161,846 22.5 1-Aug 2029
22.5 1-Aug 2030 524,969 4,876,950 (1,111,258) 3,240,722 1,745,372 (6,283) (173,909) (260,863) 1,304,317 19,442,816 23.0 1-Feb 2030
23.0 1-Feb 2031 524,969 4,925,720 (1,123,711) 3,277,039 1,764,931 (6,354) (175,858) (263,787) 1,318,933 19,717,991 23.5 1-Aug 2030
23.5 1-Aug 2031 524,969 4,925,720 (1,123,711) 3,277,039 1,764,931 (6,354) (175,858) (263,787) 1,318,933 19,984,505 24.0 1-Feb 2031
24.0 1-Feb 2032 524,969 4,974,977 (1,136,289) 3,313,718 1,784,686 (6,425) (177,826) (266,739) 1,333,696 20,245,519 24.5 1-Aug 2031
24.5 1-Aug 2032 524,969 4,974,977 (1,136,289) 3,313,718 1,784,686 (6,425) (177,826) (266,739) 1,333,696 20,498,317 25.0 1-Feb 2032
25.0 1-Feb 2033 524,969 5,024,726 (1,148,993) 3,350,764 1,804,638 (6,497) (179,814) (269,721) 1,348,606 20,745,895 25.5 1-Aug 2032
25.5 1-Aug 2033 524,969 5,024,726 (1,148,993) 3,350,764 1,804,638 (6,497) (179,814) (269,721) 1,348,606 20,985,680 26.0 1-Feb 2033
Totals (46,439,011) 72,977,389 (262,579) (7,267,606) (10,901,409) 54,507,045
Present Value 39,555,053 (142,398) (5,762,797) (5,911,898) 20,985,680
NOTES:
1. State Auditor payment is based upon 1st half, pay 2006 actual and may increase over term of district
2. TIF run does not reflect potential reduction in Market Value Homestead Credit
3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value.
4. Inflation on tax rates cannot be captured.
5. TIF does not capture state wide property taxes or market value property taxes
Prepared by Ehlers TIF PLAN Run- 09-18-2006
9/18/2006 Page 5 of 11
CEDAR AVE TAX INCREMENT DISTRICT
CITY OF RICHFIELD
RETAIL
T.I.F. CASH FLOW ASSUMPTIONS
District New Redevelopment District
County District #
Inflation Rate - Every _ Years 1.00%
Pay-As-You-Go Interest Rate: 6.50%
City Internal Loan Rate 4.00%
Note Issued Date (Present Value Date): 01-Feb-06
Local Tax Rate - Frozen 108.7870% Pay 2006
Fiscal Disparities Election Inside
Year District was certified 2006
Assumes First Tax Increment For District 2008
Year District was Modified N/A
Development located in modified area N/A
Assumes First Tax Increment For Dev 2009
Years of Tax Increment 26
Assumes Last Year of Tax Increment 2033
Fiscal Disparities Ratio 33.6177% Pay 2006
Fiscal Disparities Metro Wide Tax Rate 121.8020% Pay 2006
Local Tax Rate - Current 107.7150% Pay 2006
State Wide Property Tax Rate (Used for total taxes) 50.8270% Pay 2006
Market Value Tax Rate (used for total taxes) N/A Pay 2006
Commercial Industrial Class Rate 1.5%-2.0% Pay 2006
First 150,000 1.50%
Over 150,000 2.00%
Rental Class Rate 1.25% Pay 2006
Residential Class Rat - Under $500,000 1.00%
Over $500,000 1.25%
BASE VALUE INFORMATION
Market Tax
Value Capacity
3 8,919,000 108,761
Comm Retail 31,666,667 61.29% 5,466,484 1.5%-2.0% 108,580
Housing 20,000,000 38.71% 3,452,516 1.00% 34,525
Total 51,666,667 100.00%8,919,000 143,105
PROJECT INFORMATION
Total Market Value Market Class New Date Date Date
PHASE Use Sq. Ft./Units Sq. Ft./Units Value Rate Tax Capacity Completed Asses Payable
6 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2012 2013 2014
Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2012 2013 2014
Housing 100 200,000.00 20,000,000 1.00% 200,000 2012 2013 2014
TOTAL 158,433 51,666,667 831,833
Note:
1. Tax estimates are based upon market value, construction costs and taxes per sq/ft.
2. Apartments/residential do not pay State-wide property tax or Fiscal Disparities
3. Assumes Fiscal Disparities is paid inside the district
Watershed
Prepared by Ehlers TIF PLAN Run- 09-18-2006
9/18/2006 Page 6 of 11
CEDAR AVE TAX INCREMENT DISTRICT
CITY OF RICHFIELD
RETAIL
TAX INCREMENT CASH FLOW
Base Project Fiscal Captured Semi-Annual State Admin. Housing Semi-Annual Semi-Annual PAYMENT DATE
PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor Net Tax Present PERIOD ENDING
Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 10.00% 15.00% Increment Value Yrs. Mth. Yr.
Present Value Date 01-Feb-06
0.0 1-Aug 2006 143,105 143,105 0.0 1-Feb 2006
0.0 1-Feb 2007 143,105 143,105 0 0 0 0 0 0 0 0 0.0 1-Aug 2006
0.0 1-Aug 2007 143,105 143,105 0 0 0 0 0 0 0 0 0.0 1-Feb 2007
0.0 1-Feb 2008 143,105 143,105 0 0 0 0 0 0 0 0 0.5 1-Aug 2007
0.5 1-Aug 2008 143,105 143,105 0 0 0 0 0 0 0 0 1.0 1-Feb 2008
1.0 1-Feb 2009 143,105 143,105 0 0 0 0 0 0 0 0 1.5 1-Aug 2008
1.5 1-Aug 2009 143,105 143,105 0 0 0 0 0 0 0 0 2.0 1-Feb 2009
2.0 1-Feb 2010 143,105 143,105 0 0 0 0 0 0 0 0 2.5 1-Aug 2009
2.5 1-Aug 2010 143,105 143,105 0 0 0 0 0 0 0 0 3.0 1-Feb 2010
3.0 1-Feb 2011 143,105 143,105 0 0 0 0 0 0 0 0 3.5 1-Aug 2010
3.5 1-Aug 2011 143,105 143,105 0 0 0 0 0 0 0 0 4.0 1-Feb 2011
4.0 1-Feb 2012 143,105 143,105 0 0 0 0 0 0 0 0 4.5 1-Aug 2011
4.5 1-Aug 2012 143,105 143,105 0 0 0 0 0 0 0 0 5.0 1-Feb 2012
5.0 1-Feb 2013 143,105 143,105 0 0 0 0 0 0 0 0 5.5 1-Aug 2012
5.5 1-Aug 2013 143,105 143,105 0 0 0 0 0 0 0 0 6.0 1-Feb 2013
6.0 1-Feb 2014 143,105 831,833 (175,906) 512,823 278,942 (1,004) (27,794) (41,691) 208,453 129,020 6.5 1-Aug 2013
6.5 1-Aug 2014 143,105 831,833 (175,906) 512,823 278,942 (1,004) (27,794) (41,691) 208,453 253,980 7.0 1-Feb 2014
7.0 1-Feb 2015 143,105 840,152 (178,030) 519,017 282,311 (1,016) (28,130) (42,194) 210,971 376,467 7.5 1-Aug 2014
7.5 1-Aug 2015 143,105 840,152 (178,030) 519,017 282,311 (1,016) (28,130) (42,194) 210,971 495,099 8.0 1-Feb 2015
8.0 1-Feb 2016 143,105 848,553 (180,175) 525,273 285,714 (1,029) (28,469) (42,703) 213,514 611,382 8.5 1-Aug 2015
8.5 1-Aug 2016 143,105 848,553 (180,175) 525,273 285,714 (1,029) (28,469) (42,703) 213,514 724,005 9.0 1-Feb 2016
9.0 1-Feb 2017 143,105 857,039 (182,342) 531,592 289,151 (1,041) (28,811) (43,217) 216,083 834,395 9.5 1-Aug 2016
9.5 1-Aug 2017 143,105 857,039 (182,342) 531,592 289,151 (1,041) (28,811) (43,217) 216,083 941,310 10.0 1-Feb 2017
10.0 1-Feb 2018 143,105 865,609 (184,530) 537,974 292,623 (1,053) (29,157) (43,735) 218,677 1,046,103 10.5 1-Aug 2017
10.5 1-Aug 2018 143,105 865,609 (184,530) 537,974 292,623 (1,053) (29,157) (43,735) 218,677 1,147,597 11.0 1-Feb 2018
11.0 1-Feb 2019 143,105 874,265 (186,741) 544,420 296,129 (1,066) (29,506) (44,259) 221,297 1,247,074 11.5 1-Aug 2018
11.5 1-Aug 2019 143,105 874,265 (186,741) 544,420 296,129 (1,066) (29,506) (44,259) 221,297 1,343,421 12.0 1-Feb 2019
12.0 1-Feb 2020 143,105 883,008 (188,973) 550,930 299,670 (1,079) (29,859) (44,789) 223,943 1,437,850 12.5 1-Aug 2019
12.5 1-Aug 2020 143,105 883,008 (188,973) 550,930 299,670 (1,079) (29,859) (44,789) 223,943 1,529,307 13.0 1-Feb 2020
13.0 1-Feb 2021 143,105 891,838 (191,228) 557,505 303,247 (1,092) (30,215) (45,323) 226,616 1,618,942 13.5 1-Aug 2020
13.5 1-Aug 2021 143,105 891,838 (191,228) 557,505 303,247 (1,092) (30,215) (45,323) 226,616 1,705,756 14.0 1-Feb 2021
14.0 1-Feb 2022 143,105 900,756 (193,505) 564,146 306,859 (1,105) (30,575) (45,863) 229,316 1,790,839 14.5 1-Aug 2021
14.5 1-Aug 2022 143,105 900,756 (193,505) 564,146 306,859 (1,105) (30,575) (45,863) 229,316 1,873,243 15.0 1-Feb 2022
15.0 1-Feb 2023 143,105 909,764 (195,805) 570,854 310,507 (1,118) (30,939) (46,408) 232,042 1,954,003 15.5 1-Aug 2022
15.5 1-Aug 2023 143,105 909,764 (195,805) 570,854 310,507 (1,118) (30,939) (46,408) 232,042 2,032,221 16.0 1-Feb 2023
16.0 1-Feb 2024 143,105 918,862 (198,128) 577,628 314,192 (1,131) (31,306) (46,959) 234,796 2,108,875 16.5 1-Aug 2023
16.5 1-Aug 2024 143,105 918,862 (198,128) 577,628 314,192 (1,131) (31,306) (46,959) 234,796 2,183,117 17.0 1-Feb 2024
17.0 1-Feb 2025 143,105 928,050 (200,475) 584,471 317,914 (1,144) (31,677) (47,515) 237,577 2,255,874 17.5 1-Aug 2024
17.5 1-Aug 2025 143,105 928,050 (200,475) 584,471 317,914 (1,144) (31,677) (47,515) 237,577 2,326,340 18.0 1-Feb 2025
18.0 1-Feb 2026 143,105 937,331 (202,844) 591,381 321,673 (1,158) (32,051) (48,077) 240,386 2,395,396 18.5 1-Aug 2025
18.5 1-Aug 2026 143,105 937,331 (202,844) 591,381 321,673 (1,158) (32,051) (48,077) 240,386 2,462,277 19.0 1-Feb 2026
19.0 1-Feb 2027 143,105 946,704 (205,238) 598,361 325,470 (1,172) (32,430) (48,645) 243,223 2,527,818 19.5 1-Aug 2026
19.5 1-Aug 2027 143,105 946,704 (205,238) 598,361 325,470 (1,172) (32,430) (48,645) 243,223 2,591,296 20.0 1-Feb 2027
20.0 1-Feb 2028 143,105 956,171 (207,655) 605,411 329,304 (1,185) (32,812) (49,218) 246,089 2,653,500 20.5 1-Aug 2027
20.5 1-Aug 2028 143,105 956,171 (207,655) 605,411 329,304 (1,185) (32,812) (49,218) 246,089 2,713,746 21.0 1-Feb 2028
21.0 1-Feb 2029 143,105 965,733 (210,097) 612,531 333,177 (1,199) (33,198) (49,797) 248,983 2,772,783 21.5 1-Aug 2028
21.5 1-Aug 2029 143,105 965,733 (210,097) 612,531 333,177 (1,199) (33,198) (49,797) 248,983 2,829,960 22.0 1-Feb 2029
22.0 1-Feb 2030 143,105 975,390 (212,563) 619,722 337,089 (1,214) (33,588) (50,381) 251,906 2,885,988 22.5 1-Aug 2029
22.5 1-Aug 2030 143,105 975,390 (212,563) 619,722 337,089 (1,214) (33,588) (50,381) 251,906 2,940,253 23.0 1-Feb 2030
23.0 1-Feb 2031 143,105 985,144 (215,054) 626,986 341,039 (1,228) (33,981) (50,972) 254,859 2,993,425 23.5 1-Aug 2030
23.5 1-Aug 2031 143,105 985,144 (215,054) 626,986 341,039 (1,228) (33,981) (50,972) 254,859 3,044,924 24.0 1-Feb 2031
24.0 1-Feb 2032 143,105 994,995 (217,569) 634,321 345,030 (1,242) (34,379) (51,568) 257,841 3,095,385 24.5 1-Aug 2031
24.5 1-Aug 2032 143,105 994,995 (217,569) 634,321 345,030 (1,242) (34,379) (51,568) 257,841 3,144,258 25.0 1-Feb 2032
25.0 1-Feb 2033 143,105 1,004,945 (220,110) 641,731 349,060 (1,257) (34,780) (52,170) 260,852 3,192,146 25.5 1-Aug 2032
25.5 1-Aug 2033 143,105 1,004,945 (220,110) 641,731 349,060 (1,257) (34,780) (52,170) 260,852 3,238,526 26.0 1-Feb 2033
Totals (7,893,938) 12,556,951 (45,066) (1,247,314) (1,870,971) 9,354,853
Present Value 6,388,790 (23,000) (861,709) (954,869) 3,238,526
NOTES:
1. State Auditor payment is based upon 1st half, pay 2006 actual and may increase over term of district
2. TIF run does not reflect potential reduction in Market Value Homestead Credit
3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value.
4. Inflation on tax rates cannot be captured.
5. TIF does not capture state wide property taxes or market value property taxes
Prepared by Ehlers TIF PLAN Run- 09-18-2006
APPENDIX E
MINNESOTA BUSINESS ASSISTANCE FORM
(MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT)
APPENDIX E-1
APPENDIX F
FINDINGS AND BUT/FOR QUALIFICATIONS
But-For Analysis
Current Market Value 41,513,600
New Market Value - Estimate 310,000,000
Difference 268,486,400
Present Value of Tax Increment 45,943,843
Difference 222,542,557
Value Likely to Occur Without TIF is Less Than: 222,542,557
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF
Plan) for the Cedar Avenue Tax Increment Financing District (District), as required pursuant to
Minnesota Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that the Cedar Avenue Tax Increment Financing District is a redevelopment district as
defined in the Laws of Minnesota 2005, Chapter 152, Article 2, Section 25.
Sec. 25. [CITY OF RICHFIELD; TAX INCREMENT FINANCING DISTRICT.]
Subdivision 1. [AUTHORIZATION.]
The City of Richfield may create a tax increment financing district consisting of an area lying west of
Trunk Highway 77 extending: to 16th Avenue between Crosstown Highway 62 and 66th Street; to 17th
Avenue between 66th and 69th Streets; and to 18th Avenue between 69th and 72nd Streets. The City or its
Housing and Redevelopment Authority may be the authority for the purposes of Minnesota Statutes,
sections 469.174 to 469.179.
Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.]
The redevelopment tax increment district created pursuant to subdivision 1 is deemed to be a
redevelopment district and is subject to Minnesota Statutes, sections 469.174 to 469.179, except that:
(1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1,
paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the
designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10;
and
(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply.
[EFFECTIVE DATE.] This section received local approval by the City of Richfield on June 28, 2005 in
compliance with Minnesota Statutes, section 645.021.
APPENDIX F-1
2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be
expected to occur solely through private investment within the reasonably foreseeable future and that
the increased market value of the site that could reasonably be expected to occur without the use of
tax increment financing would be less than the increase in the market value estimated to result from
the proposed development after subtracting the present value of the projected tax increments for the
maximum duration of the District permitted by the TIF Plan.
The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future: This finding is supported
by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for
redevelopment. Due to the high cost of redevelopment on the parcels because of their location in a
noise impacted area, and the cost of financing the proposed improvements, this project is feasible
only through assistance, in part, from tax increment financing.
The increased market value of the site that could reasonably be expected to occur without the use of
tax increment financing would be less than the increase in market value estimated to result from the
proposed development after subtracting the present value of the projected tax increments for the
maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds
that the cost of site improvements and utilities add to the total redevelopment cost. Historically, due
to the extra cost of sound mitigation and site improvements costs in this area have made
redevelopment infeasible without tax increment assistance. This is also the basis for the Special TIF
Statute by the State for this TIF District. Therefore, the City reasonably determines that no other
redevelopment of similar scope is anticipated on this site without substantially similar assistance
being provided to the development.
A comparative analysis of estimated market values both with and without establishment of the
District and the use of tax increments has been performed as described above. If all development
which is proposed to be assisted with tax increment were to occur in the District, the total increase
in market value would be up to $268,486,400. The present value of tax increments from the District
is estimated to be $47,049,903. It is the Council's finding that no development with a market value
of greater than $221,436,497 would occur without tax increment assistance in this district within 25
years. This finding is based upon evidence from general past experience with the high cost of
acquisition and public improvements in the general area of the District. (See Cashflow in Appendix
D of the TIF Plan.)
3. Finding that the TIF Plan for the District conforms to the general plan for the development or
redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the
general development plan of the City.
4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound
needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment
Project Area by private enterprise.
The project to be assisted by the District will result in increased employment in the City and the State
of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high
quality development to the City.
APPENDIX F-2
APPENDIX G
PRIOR IMPROVEMENTS
APPENDIX F-3
APPENDIX H
Laws of Minnesota 2005, Chapter 152, Article 2, Section 25
Sec. 25. [CITY OF RICHFIELD; TAX INCREMENT FINANCING DISTRICT.]
Subdivision 1. [AUTHORIZATION.] The city of Richfield may create a tax increment
financing district consisting of an area lying west of Trunk Highway 77 extending: to 16th
Avenue between Crosstown Highway 62 and 66th Street; to 17th Avenue between 66th and 69th
Streets; and to 18th Avenue between 69th and 72nd Streets. The city or its housing and
redevelopment authority may be the authority for the purposes of Minnesota Statutes, sections
469.174 to 469.179.
Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.] The redevelopment tax
increment district created pursuant to subdivision 1 is deemed to be a redevelopment district and
is subject to Minnesota Statutes, sections 469.174 to 469.179, except that:
(1) expenditures for activities as defined in Minnesota Statutes, section 469.1763,
subdivision 1, paragraph (b), anywhere in the district are deemed to be the costs of
correcting conditions that allow the designation of redevelopment districts pursuant to
Minnesota Statutes, section 469.174, subdivision 10; and
(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not
apply.
[EFFECTIVE DATE.] This section is effective upon local approval by the city of Richfield in
compliance with Minnesota Statutes, section 645.021.
APPENDIX H-1
APPENDIX I
2017 SPECIAL LEGISLATION
Minnesota Laws 2017, First Special Session, Chapter 1, Article 6, Section 18 is as follows:
Sec. 18. CITY OF RICHFIELD; EXTENSION OF CEDAR AVENUE TIF DISTRICT.
Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other law to the
contrary, the city of Richfield and the Housing and Redevelopment Authority in and for the city of
Richfield may elect to extend the duration limit of the redevelopment tax increment financing district
known as the Cedar Avenue Tax Increment Financing District established by Laws 2005, chapter 152,
article 2, section 25, by ten years.
EFFECTIVE DATE. This section is effective upon compliance by the governing bodies of the
city of Richfield, Hennepin County and Independent School District No. 280 with the requirements of
Minnesota Statutes, sections 469.1782, subdivision 2; and 645.021, subdivisions 2 and 3.
APPENDIX I-1
This document is in draft form for distribution to the County and the School District. The TIF
Plan contains the estimated fiscal and economic implications of the proposed TIF District. The
City and the HRA may make minor changes to this draft document prior to the public hearing.
As of August 13, 2018
Draft for City Council review
Modification to the Redevelopment Plan
for the Richfield Redevelopment Project Area
and the
Tax Increment Financing Plan
for the establishment of
Tax Increment Financing District No. 2018-1
(a housing district)
within
Richfield Redevelopment Project Area
Richfield Housing and Redevelopment Authority
City of Richfield
Hennepin County
State of Minnesota
Public Hearing: August 21, 2018
Adopted:
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
Table of Contents
(for reference purposes only)
Section 1 - Modification to the Redevelopment Plan
for Richfield Redevelopment Project Area .................................... 1-4
Foreword ............................................................. 1-4
Section 2 - Tax Increment Financing Plan
for Tax Increment Financing District No. 2018-1 ............................... 2-1
Subsection 2-1. Foreword............................................... 2-1
Subsection 2-2. Statutory Authority........................................ 2-1
Subsection 2-3. Statement of Objectives ................................... 2-1
Subsection 2-4. Redevelopment Plan Overview .............................. 2-1
Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2
Subsection 2-6. Classification of the District................................. 2-2
Subsection 2-7. Duration and First Year of Tax Increment of the District........... 2-3
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax
Capacity Value/Increment and Notification of Prior Planned Improvements ........ 2-3
Subsection 2-9. Sources of Revenue/Bonds to be Issued ...................... 2-5
Subsection 2-10. Uses of Funds ........................................... 2-5
Subsection 2-11. Fiscal Disparities Election.................................. 2-6
Subsection 2-12. Business Subsidies....................................... 2-6
Subsection 2-13. County Road Costs ....................................... 2-7
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions ................. 2-8
Subsection 2-15. Supporting Documentation ................................. 2-9
Subsection 2-16. Definition of Tax Increment Revenues ....................... 2-10
Subsection 2-17. Modifications to the District................................ 2-10
Subsection 2-18. Administrative Expenses .................................. 2-10
Subsection 2-19. Limitation of Increment ................................... 2-11
Subsection 2-20. Use of Tax Increment .................................... 2-12
Subsection 2-21. Excess Increments ...................................... 2-12
Subsection 2-22. Requirements for Agreements with the Developer .............. 2-13
Subsection 2-23. Assessment Agreements ................................. 2-13
Subsection 2-24. Administration of the District ............................... 2-13
Subsection 2-25. Annual Disclosure Requirements ........................... 2-13
Subsection 2-26. Reasonable Expectations ................................. 2-14
Subsection 2-27. Other Limitations on the Use of Tax Increment . ................ 2-14
Subsection 2-28. Summary.............................................. 2-14
Appendix A
Project Description ...................................................... A-1
Appendix B
Map(s) of Richfield Redevelopment Project Area and the District.................. B-1
Appendix C
Description of Property to be Included in the District ............................ C-1
Appendix D
Estimated Cash Flow for the District ........................................ D-1
Appendix E
Housing Qualifications for the District........................................... E-1
Appendix F
Findings for the District................................................... F-1
Section 1 - Modification to the Redevelopment Plan
for Richfield Redevelopment Project Area
Foreword
The following text represents a Modification to the Redevelopment Plan for Richfield Redevelopment Project
Area. This modification represents a continuation of the goals and objectives set forth in the
Redevelopment Plan for Richfield Redevelopment Project Area. Generally, the substantive changes include
the establishment of Tax Increment Financing District No. 2018-1.
For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project Area,
adopted June 14, 1993, is recommended. It is available from the Community Development Director or at
the City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans for the
Tax Increment Financing Districts located within Richfield Redevelopment Project Area.
Richfield Housing and Redevelopment Authority
Modification to the Redevelopment Plan for Richfield Redevelopment Project Area 1-4
Section 2 - Tax Increment Financing Plan
for Tax Increment Financing District No. 2018-1
Subsection 2-1. Foreword
The Richfield Housing and Redevelopment Authority (the "HRA"), the City of Richfield (the "City"), staff
and consultants have prepared the following information to expedite the establishment of Tax Increment
Financing District No. 2018-1 (the "District"), a housing tax increment financing district, located in the
Richfield Redevelopment Project Area.
Subsection 2-2. Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota
Statutes ("M.S."), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to
469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing
public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant
information is contained in the Modification to the Redevelopment Plan for Richfield Redevelopment Project
Area.
Subsection 2-3. Statement of Objectives
The District currently consists of 17 parcels of land and adjacent and internal rights-of-way. The District is
being created to facilitate the construction of approximately 80 owner occupied townhomes in the City.
Please see Appendix A for further District information. The HRA has not entered into an agreement but
anticipates entering into an agreement with NHH Properties , and development is likely to begin in the Fall
2018. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for
Richfield Redevelopment Project Area.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of the Richfield Redevelopment Project Area and the District.
Subsection 2-4. Redevelopment Plan Overview
1. Property to be Acquired - The HRA or City currently owns 4 parcels of property within the
District. The remaining property located within the District may be acquired by the HRA
or City and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the HRA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The HRA or City may perform or provide for some or all necessary acquisition,
construction, relocation, demolition, and required utilities and public street work within the
Richfield Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 2018-1 2-1
District.
Subsection 2-5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information
on the location of the District.
The HRA or City currently owns 4 parcels to be included in the District.
Subsection 2-6. Classification of the District
The HRA and City, in determining the need to create a tax increment financing district in accordance with
M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a
housing district pursuant to M.S., Section 469.174, Subd. 11 and M.S., Section 469.1761 as defined below:
M.S., Section 469.174, Subd.11:
"Housing district" means a type of tax increment financing district which consists of a project, or a
portion of a project, intended for occupancy, in part, by persons or families of low and moderate
income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National
Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act
of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or
the regulations promulgated under any of those acts, and that satisfies the requirements of M.S.,
Section 469.1761. Housing project means a project, or portion of a project, that meets all the
qualifications of a housing district under this subdivision, whether or not actually established as a
housing district.
M.S., Section 469.1761:
Subd. 1. Requirement imposed.
(a) In order for a tax increment financing district to qualify as a housing district:
(1) the income limitations provided in this section must be satisfied; and
(2) no more than 20 percent of the square footage of buildings that receive assistance from tax
increments may consist of commercial, retail, or other nonresidential uses.
(b) The requirements imposed by this section apply to property receiving assistance financed with
tax increments, including interest reduction, land transfers at less than the authority’s cost of
acquisition, utility service or connections, roads, parking facilities, or other subsidies. The
provisions of this section do not apply to districts located within a targeted area as defined in
Section 462C.02 Subd 9, clause (e).
(c) For purposes of the requirements of paragraph (a), the authority may elect to treat an addition
to an existing structure as a separate building if:
(1) construction of the addition begins more than three years after construction of the
existing structure was completed; and
Richfield Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 2018-1 2-2
(2) for an addition that does not meet the requirements of paragraph (a), clause (2),if it is
treated as a separate building, the addition was not contemplated by the tax increment
financing plan which includes the existing structure.
Subd. 2. Owner occupied housing.
For owner occupied residential property, 95 percent of the housing units must be initially
purchased and occupied by individuals whose family income is less than or equal to the
income requirements for qualified mortgage bond projects under section 143(f) of the
Internal Revenue Code.
Subd. 3. Rental property.
For residential rental property, the property must satisfy the income requirements for a
qualified residential rental project as defined in section 142(d) of the Internal Revenue
Code. The requirements of this subdivision apply for the duration of the tax increment
financing district.
Subd. 4. Noncompliance; enforcement.
Failure to comply with the requirements of this section is subject to M.S., Section 469.1771.
In meeting the statutory criteria the HRA and City rely on the following facts and findings:
• The District consists of 17 parcels.
• The development will consist of approximately 80 units of single family owner occupied housing
• At least 95% of the houses assisted with tax increment must be occupied with persons at 100% of median
income for a family of two or less and 115% of median income for families of three or more (rental
housing would have stricter income limitations). Median income under this provision is the greater of
the statewide median or the county median. For Hennepin County, the median income is $94,300 and
the statewide median is $69,500 (year 2018). Therefore, the family of three or more could earn up to
$108,445 (115% of $94,300) and still qualify to live in the homes. (See Appendix E).
Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that
qualified under the provisions of M.S., Sections 273.111, 273.112, or 273.114 or Chapter 473H for taxes
payable in any of the five calendar years before the filing of the request for certification of the District.
Subsection 2-7. Duration and First Year of Tax Increment of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax
increment of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b.,
the duration of the District will be 25 years after receipt of the first increment by the HRA (a total of 26 years
of tax increment). The HRA elects to receive the first tax increment in 2021, which is no later than four years
following the year of approval of the District. Thus, it is estimated that the District, including any
modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2046, or when
the TIF Plan is satisfied. The HRA reserves the right to decertify the District prior to the legally required
date.
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
Richfield Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 2018-1 2-3
in 2018 for taxes payable 2019.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2021) the amount by which the original value has increased or decreased as a result of:
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments, negotiated or court-ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no
value will be captured and no tax increment will be payable to the HRA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2019, assuming the
request for certification is made before June 30, 2019. The ONTC and the Original Local Tax Rate for the
District appear in the table below.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within Richfield Redevelopment Project Area, upon
completion of the projects within the District, will annually approximate tax increment revenues as shown
in the table below. The HRA and City request 100 percent of the available increase in tax capacity for
repayment of its obligations and current expenditures, beginning in the tax year payable 2021. The Project
Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed.
Project Estimated Tax Capacity upon Completion (PTC) $476,294
Original Estimated Net Tax Capacity (ONTC) $27,120
Estimated Captured Tax Capacity (CTC) $449,174
Original Local Tax Rate 1.49863 Pay 2018
Estimated Annual Tax Increment (CTC x Local Tax Rate) $673,146
Percent Retained by the HRA 100%
Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in thischart is the estimated tax capacity of the District in year 25. The tax capacity of the District in year one isestimated to be $36,079.
Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City is reviewing the area to be included in the District to determine if any building permits have
been issued during the 18 months immediately preceding approval of the TIF Plan by the City.
Richfield Housing and Redevelopment Authority
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Subsection 2-9. Sources of Revenue/Bonds to be Issued
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax
increments. The HRA or City reserves the right to incur bonds or other indebtedness as a result of the TIF
Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go note and
interfund loan. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan
Modification. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue
bonds or incur other debt only upon the determination that such action is in the best interest of the City.
The total estimated tax increment revenues for the District are shown in the table below:
SOURCES OF FUNDS TOTAL
Tax Increment $11,447,128
Interest $1,144,713
TOTAL $12,591,841
The HRA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments
from the District in a maximum principal amount of $12,591,841. Such bonds may be in the form of pay-as-
you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total
bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval.
Subsection 2-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate the construction of approximately 80
owner occupied townhomes. The HRA and City have determined that it will be necessary to provide
assistance to the project for certain District costs, as described. The HRA has studied the feasibility of the
development or redevelopment of property in and around the District. To facilitate the establishment and
development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to
pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with
the District is outlined in the following table.
USES OF TAX INCREMENT FUNDS TOTAL
Land/Building Acquisition $4,275,000
Site Improvements/Preparation $750,000
Utilities $225,000
Other Qualifying Improvements $554,779
Administrative Costs (up to 10%)$1,144,713
PROJECT COST TOTAL $6,949,492
Interest $5,642,349
PROJECT AND INTEREST COSTS TOTAL $12,591,841
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The total project cost, including financing costs (interest) listed in the table above does not exceed the total
projected tax increments for the District as shown in Subsection 2-9.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification, the budget above pursuant to the applicable statutory requirements. The HRA
may expend funds for qualified housing activities outside of the District boundaries.
Subsection 2-11. Fiscal Disparities Election
Pursuant to M.S., Section 469.177, Subd. 3, the City may elect one of two methods to calculate fiscal
disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause a, (outside the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity and the current net tax capacity shall be determined before the
application of the fiscal disparity provisions of Chapter 276A or 473F. Where the original net
tax capacity is equal to or greater than the current net tax capacity, there is no captured net tax
capacity and no tax increment determination. Where the original net tax capacity is less than
the current net tax capacity, the difference between the original net tax capacity and the current
net tax capacity is the captured net tax capacity. This amount less any portion thereof which the
authority has designated, in its tax increment financing plan, to share with the local taxing
districts is the retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the lesser of (A) the local taxing district tax rates or (B) the original local tax
rate to the retained captured net tax capacity of the authority is the tax increment of the
authority.
The City will choose to calculate fiscal disparities by clause a . It is not anticipated that the District will
contain commercial/industrial property. As a result, there should be no impact due to the fiscal
disparities provision on the District.
According to M.S., Section 469.177, Subd. 3:
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 2-12. Business Subsidies
Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than $150,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
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(3) Public improvements to buildings or lands owned by the state or local government that serve a public
purpose and do not principally benefit a single business or defined group of businesses at the time
the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that the
assistance is equal to or less than 50% of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature;
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of $150,000 or less;
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration; and
(23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to
valuation under Minnesota Rules, chapter 8100.
The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 2-13. County Road Costs
Pursuant to M.S., Section 469.175, Subd. 1a, the county board may require the HRA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgment of the county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the HRA or City within forty-
five days of receipt of this TIF Plan. In the opinion of the HRA and City and consultants, the proposed
development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan
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was not forwarded to the county 45 days prior to the public hearing. The HRA and City are aware that the
county could claim that tax increment should be used for county roads, even after the public hearing.
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However, the HRA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
IMPACT ON TAX BASE
2017/Pay 2018
Total Net
Tax Capacity
Estimated Captured
Tax Capacity (CTC)
Upon Completion
Percent of CTC
to Entity Total
Hennepin County 1,685,924,784 449,174 0.0266%
City of Richfield 30,001,418 449,174 1.4972%
Richfield Public School
District ISD No. 280
43,598,799 449,174 1.0302%
IMPACT ON TAX RATES
2017/Pay 2018
Extension Rates
Percent
of Total CTC
Potential
Taxes
Hennepin County 0.428080 28.56% 449,174 192,282
City of Richfield 0.593350 39.59% 449,174 266,517
Richfield Public School
District ISD No. 280
0.370500 24.72% 449,174 166,419
Other 0.106700 7.12%449,174 47,927
Total 1.498630 100.00%673,146
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual Pay 2018 rate. The total net capacity for the entities listed above are based
on actual Pay 2018 figures. The District will be certified under the actual Pay 2019 rates, which were
unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be
generated over the life of the District is $11,447,127;
(2) Probable impact of the District on city provided services and ability to issue debt. A minimal impact
of the District on police protection is expected. The City does track all calls for service including
property-type calls and crimes. With any addition of new residents or businesses, police calls for
service will be increased. New developments add an increase in traffic, and additional overall
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demands to the call load. The City believes there is a slight possibility that the proposed
development, in and of itself, will necessitate new capital investment in vehicles.
The probable impact of the District on fire protection is not expected to be significant. Typically new
buildings generate few calls, if any, and are of superior construction. The existing buildings are
several non-sprinkled single family homes that are being replaced by new, sprinklered town homes.
The impact of the District on public infrastructure is expected to be minimal. The development is
not expected to significantly impact any traffic movements in the area. The current infrastructure for
sanitary sewer, storm sewer and water will be able to handle the additional volume generated from
the proposed development. Based on the development plans, there are no additional costs associated
with street maintenance, sweeping, plowing, lighting and sidewalks. The development in the District
is expected to contribute an estimated $198,800 in sanitary sewer (SAC) and water (WAC)
connection fees.
The probable impact of any District general obligation tax increment bonds on the ability to issue
debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any
general obligation debt issued in relation to this project, therefore there will be no impact on the
City's ability to issue future debt or on the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that the
amount of tax increments over the life of the District that would be attributable to school district
levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions
remained the same, is $2,829,730;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of
tax increments over the life of the District that would be attributable to county levies, assuming the
county's share of the total local tax rate for all taxing jurisdictions remained the same, is $3,269,300;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment districts and
impact on county or school district services. The county or school district must request additional
information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax
increment financing plan.
No requests for additional information from the county or school district regarding the proposed
development for the District have been received.
Subsection 2-15. Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and
description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd.
3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of
reports and studies on file at the City that support the HRA and City's findings:
• Cedar Avenue Corridor Master Plan (2016)
• City of Richfield Comprehensive Plan (2007)
• Cedar Avenue Corridor Redevelopment Concept Master Plan (2004)
• Tax Increment Application from NHH Properties.
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Subsection 2-16. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S.,
Section 469.177;
2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was
purchased by the authority with tax increments;
3. Principal and interest received on loans or other advances made by the authority with tax increments;
4. Interest or other investment earnings on or from tax increments;
5. Repayments or return of tax increments made to the Authority under agreements for districts for
which the request for certification was made after August 1, 1993; and
6. The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 2-17. Modifications to the District
In accordance with M.S., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the
requirements of M.S., Section 469.175, Subd. 4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the original TIF
Plan;
4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City;
5. Increase in the estimate of the cost of the District, including administrative expenses, that will be paid
or financed with tax increment from the District; or
6. Designation of additional property to be acquired by the HRA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Pursuant to M.S. Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not
be enlarged after five years following the date of certification of the original net tax capacity by the county
auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the
addition to the district meets the criteria of M.S., Section 469.174, Subd. 11 must be documented. The
requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the
District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds
the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that,
notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than
the current net tax capacity of the parcel(s) eliminated from the District.
The HRA or City must notify the County Auditor of any modification to the District. Modifications to the
District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF
Plan.
Subsection 2-18. Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
HRA or City, other than:
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1. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
District;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
District;
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178; or
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (1) to (3).
For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay
any administrative expenses for District costs which exceed ten percent of total estimated tax increment
expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd.
25, clause (1), from the District, whichever is less.
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District and are not subject to the percentage limits
of M.S., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the
year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount
deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be
appropriated to the State Auditor for the cost of financial reporting of tax increment financing information
and the cost of examining and auditing authorities' use of tax increment financing. This amount may be
adjusted annually by the Commissioner of Revenue.
Subsection 2-19. Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax
increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation
or renovation of property or other site preparation, including qualified improvement of a
street adjacent to a parcel but not installation of utility service including sewer or water
systems, has been commenced on a parcel located within a tax increment financing district
by the authority or by the owner of the parcel in accordance with the tax increment financing
plan, no additional tax increment may be taken from that parcel, and the original net tax
capacity of that parcel shall be excluded from the original net tax capacity of the tax
increment financing district. If the authority or the owner of the parcel subsequently
commences demolition, rehabilitation or renovation or other site preparation on that parcel
including qualified improvement of a street adjacent to that parcel, in accordance with the
tax increment financing plan, the authority shall certify to the county auditor that the activity
has commenced and the county auditor shall certify the net tax capacity thereof as most
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recently certified by the commissioner of revenue and add it to the original net tax capacity
of the tax increment financing district. The county auditor must enforce the provisions of this
subdivision. The authority must submit to the county auditor evidence that the required
activity has taken place for each parcel in the district. The evidence for a parcel must be
submitted by February 1 of the fifth year following the year in which the parcel was certified
as included in the district. For purposes of this subdivision, qualified improvements of a
street are limited to (1) construction or opening of a new street, (2) relocation of a street,
and (3) substantial reconstruction or rebuilding of an existing street.
The HRA or City or a property owner must improve parcels within the District by approximately August
2022 and report such actions to the County Auditor.
Subsection 2-20. Use of Tax Increment
The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
1. To pay the principal of and interest on bonds issued to finance a project;
2. to finance, or otherwise pay public redevelopment costs of the Richfield Redevelopment Project
Area pursuant to M.S., Sections 469.001 to 469.047;
3. To pay for project costs as identified in the budget set forth in the TIF Plan;
4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4;
5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the
HRA or City or for the benefit of Richfield Redevelopment Project Area by a developer;
6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and
7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
through 469.165, and/or M.S., Sections 469.178.
Revenues derived from tax increment from a housing district must be used solely to finance the cost
of housing projects as defined in M.S., Sections 469.174, Subd. 11 and 469.1761. The cost of public
improvements directly related to the housing projects and the allocated administrative expenses of the
HRA or City may be included in the cost of a housing project.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment
Fund of said District. The HRA or City will pay to the developer annually an amount not to exceed an
amount as specified in a developer's agreement to reimburse the costs of land acquisition, public
improvements, demolition and relocation, site preparation, and administration. Remaining increment funds
will be used for HRA or City administration (up to 10 percent) and for the costs of public improvement
activities outside the District.
Subsection 2-21. Excess Increments
Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the
following:
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1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The HRA or City must spend or return the excess increments under paragraph (c) within nine months after
the end of the year. In addition, the HRA or City may, subject to the limitations set forth herein, choose to
modify the TIF Plan in order to finance additional public costs in Richfield Redevelopment Project Area or
the District.
Subsection 2-22. Requirements for Agreements with the Developer
The HRA or City will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the
development with City plans and ordinances. The HRA or City may also use the Agreements to address other
issues related to the development.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be
acquired in the project area as set forth in the TIF Plan shall at any time be owned by the HRA or City as a
result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax
increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the
acreage, the HRA or City concluded an agreement for the development of the property acquired and which
provides recourse for the HRA or City should the development not be completed.
Subsection 2-23. Assessment Agreements
Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the County Assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon which the improvements are
to be constructed and, so long as the minimum market value contained in the assessment agreement appears,
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Subsection 2-24. Administration of the District
Administration of the District will be handled by the Community Development Director.
Subsection 2-25. Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the HRA or City must undertake financial reporting
for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor
on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement
shall be published in a newspaper of general circulation in the City on or before August 15.
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If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the
distribution of tax increment from the District.
Subsection 2-26. Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing would be less than the increase in the market
value estimated to result from the proposed development after subtracting the present value of the projected
tax increments for the maximum duration of the District permitted by the TIF Plan. In making said
determination, reliance has been placed upon written representation made by the developer to such effects
and upon HRA and City staff awareness of the feasibility of developing the project site(s) within the District.
A comparative analysis of estimated market values both with and without establishment of the District and
the use of tax increments has been performed as described above. Such analysis is included with the cashflow
in Appendix D, and indicates that the increase in estimated market value of the proposed development (less
the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the
District and the use of tax increments.
Subsection 2-27. Other Limitations on the Use of Tax Increment
1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the
Richfield Redevelopment Project Area pursuant to M.S., Sections 469.001 to 469.047. Tax increments
may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition,
construction, renovation, operation, or maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school district, or any other local unit of government
or the state or federal government. This provision does not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking structure.
2. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Pursuant to M.S., Section
469.1763, (1) At least 80% of revenues derived from tax increments paid by properties in the District
must be expended on Public Costs incurred within said district, and up to 20% of said tax increments may
be spent on public costs incurred outside of the District but within Richfield Redevelopment Project
Area; provided that in the case of a housing district, a housing project, as defined in M.S., Section
469.174, Subd. 11, is deemed to be an activity in the District, even if the expenditure occurred after five
years.
Subsection 2-28. Summary
The Richfield Housing and Redevelopment Authority is establishing the District to provide an impetus for
residential development and provide safe and decent life cycle housing in the City. The TIF Plan for the
District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-
1105, telephone (651) 697-8500.
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Appendix A
Project Description
Tax Increment Financing District No. 2018-1 is being established to facilitate the development of
approximately 80 units of owner-occupied townhomes in the City. At least 95% of the units will be purchased
by persons at or below 100% to 115% of area median income. Construction is anticipated to begin in the Fall
2018.
Parcels are being removed from the Cedar Avenue Tax Increment Financing District for establishment of TIF
District 2018-1.
The HRA anticipates issuing a Pay-as-you-go Note to the developer to assist with acquisition and demolition
of property and other qualified costs.
Appendix A-1
Appendix B
Map of the Richfield Redevelopment Project Area and the District
Appendix B-1
]72.17[
]94.96[]30.54[[82.16][33.89]]51.06[[25.31][53.64]
]26.75[[53.64][36.47]]
92.08[
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CEDAR CORRIDOR, 2017-1 & 2018-1 HOUSING TIF DISTRICTS
0 0.5 10.25 MilesRichfield Redevelopment Project area boundary2017-1 Housing TIF District Boundary
Cedar Corridor TIF District Boundary2018-1 Housing TIF District Boundary
Appendix C
Description of Property to be Included in the District
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below.
Parcel Numbers*Address Owner
26.028.24.11.0033 6309 - 16
th Ave. S. Dunn
26.028.24.11.0034 6315 - 16
th Ave. S. Richfield HRA
26.028.24.11.0035 6321 - 16
th Ave. S. Ramirez
26.028.24.11.0036 6327 - 16
th Ave. S. Kowal
26.028.24.11.0037 6333 - 16
th Ave. S. Richfield HRA
26.028.24.11.0038 6339 - 16
th Ave. S. Bolstad
26.028.24.11.0039 6345 - 16
th Ave. S. Robinson
26.028.24.14.0004 6401 - 16
th Ave. S. Richfield HRA
26.028.24.14.0005 6409 - 16
th Ave. S. Richfield HRA
26.028.24.14.0006 6415 - 16
th Ave. S. Ray
26.028.24.14.0007 6421 - 16
th Ave. S. Jones
26.028.24.14.0008 6427 - 16
th Ave. S. Garcia
26.028.24.14.0009 6433 - 16
th Ave. S. Secora
26.028.24.14.0010 6439 - 16
th Ave. S. Pina
26.028.24.14.0011 6445 - 16
th Ave. S. Soderberg
26.028.24.14.0003 6501 - 16
th Ave. S. Mt. Calvary
26.028.24.14.0002 6509 - 16
th Ave. S. Mt. Calvary
*All of the parcels are currently in the Cedar Avenue Tax Increment Financing District and will be removed
for inclusion in the District.
Appendix C-1
Appendix D
Estimated Cash Flow for the District
Appendix D-1
7/10/2018Base Value Assumptions - Page 1Cedar Point - 3% InflationCity of Richfield, MN 80 For Sale Townhomes -- New Housing TIF District. Assumptions include church property ASSUMPTIONS AND RATESDistrictType: HousingDistrict Name/Number: TIF 2018-1County District #: TBDExempt Class Rate (Exempt) 0.00%First Year Construction or Inflation on Value 2019Commercial Industrial Preferred Class Rate (C/I Pref.)Existing District - Specify No. Years RemainingFirst $150,000 1.50%Inflation Rate - Every Year:3.00%Over $150,000 2.00%Interest Rate:5.00%Commercial Industrial Class Rate (C/I) 2.00%Present Value Date:1-Aug-19Rental Housing Class Rate (Rental) 1.25%First Period Ending 1-Feb-20Affordable Rental Housing Class Rate (Aff. Rental)Tax Year District was Certified:Pay 2019First $121,000 0.75%Cashflow Assumes First Tax Increment For Development: 2021 Over $121,000 0.25%Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit)Assumes Last Year of Tax Increment 2046 First $500,000 1.00%Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25%Incremental or Total Fiscal DisparitiesIncrementalHomestead Residential Class Rate (Hmstd. Res.)Fiscal Disparities Contribution Ratio 34.6683% Pay 2018 First $500,000 1.00%Fiscal Disparities Metro-Wide Tax Rate 145.0950% Pay 2018 Over $500,000 1.25%Maximum/Frozen Local Tax Rate: 149.860% Pay 2018Agricultural Non-Homestead 1.00%Current Local Tax Rate: (Use lesser of Current or Max.) 149.860%Pay 2018State-wide Tax Rate (Comm./Ind. only used for total taxes) 43.8650% Pay 2018Market Value Tax Rate (Used for total taxes) 0.17401% Pay 2018Building Total Percentage Tax Year Property Current Class AfterLand Market Market Of Value Used Original Original Tax Original After ConversionMap ID PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap.26.028.24.11.0033Dunn 6309 - 16th Ave. S67,000 125,000 192,000 100% 192,000 Pay 2019 Hmstd. Res. 1,920 Hmstd. Res. 1,920 26.028.24.11.0034HRA 6315 - 16th Ave. S. 67,000 67,000 100% 67,000 Pay 2019 Exempt - Hmstd. Res. 670 26.028.24.11.0035Ramirez 6321 - 16th Ave. S. 67,000 125,000 192,000 100% 192,000 Pay 2019 Hmstd. Res. 1,920 Hmstd. Res. 1,920 26.028.24.11.0036Kowal 6327 - 16th Ave. S. 67,000 115,000 182,000 100% 182,000 Pay 2019 Hmstd. Res. 1,820 Hmstd. Res. 1,820 26.028.24.11.0037HRA 6333 - 16th Ave. S. 67,000 67,000 100% 67,000 Pay 2019 Exempt - Hmstd. Res. 670 26.028.24.11.0038Bolstad 6339 - 16th Ave. S. 67,000 119,000 186,000 100% 186,000 Pay 2019 Hmstd. Res. 1,860 Hmstd. Res. 1,860 26.028.24.11.0039Robinson 6345 - 16th Ave. S. 67,000 132,000 199,000 100% 199,000 Pay 2019 Hmstd. Res. 1,990 Hmstd. Res. 1,990 26.028.24.14.0004HRA 6401 - 16th Ave. S. 67,000 67,000 100% 67,000 Pay 2019 Exempt - Hmstd. Res. 670 26.028.24.14.0005HRA 6409 - 16th Ave. S. 67,000 67,000 100% 67,000 Pay 2019 Exempt - Hmstd. Res. 670 26.028.24.14.0006Ray 6415 - 16th Ave. S. 67,000 123,000 190,000 100% 190,000 Pay 2019 Hmstd. Res. 1,900 Hmstd. Res. 1,900 26.028.24.14.0007Jones 6421 - 16th Ave. S. 67,000 115,000 182,000 100% 182,000 Pay 2019 Hmstd. Res. 1,820 Hmstd. Res. 1,820 26.028.24.14.0008Garcia 6427 - 16th Ave. S. 67,000 153,000 220,000 100% 220,000 Pay 2019 Hmstd. Res. 2,200 Hmstd. Res. 2,200 26.028.24.14.0009Secora 6433 - 16th Ave. S. 67,000 131,000 198,000 100% 198,000 Pay 2019 Hmstd. Res. 1,980 Hmstd. Res. 1,980 26.028.24.14.0010Pina 6439 - 16th Ave. S. 67,000 168,000 235,000 100% 235,000 Pay 2019 Hmstd. Res. 2,350 Hmstd. Res. 2,350 26.028.24.14.0011Soderberg 6445 - 16th Ave. S. 67,000 142,000 209,000 100% 209,000 Pay 2019 Hmstd. Res. 2,090 Hmstd. Res. 2,090 26.028.24.14.0003Mt. Clavary 6501 - 16th Ave. S. 67,000 125,000 192,000 100% 192,000 Pay 2019 Exempt - Hmstd. Res. 1,920 126.028.24.14.0002Mt. Clavary 6509 - 16th Ave. S. 67,000 67,000 100% 67,000 Pay 2019 Exempt - Hmstd. Res. 670 11,139,000 1,573,000 2,712,0002,712,000 21,850 27,120Note:1. Base values are preliminary for pay 2019 based upon review of County website on May 4, 2018. Tax exempt land value is estimate based on surrounding property. Area/ PhaseTax Rates BASE VALUE INFORMATION (Original Tax Capacity)Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2018-1 TIF - Cedar Point Towhomes\TIF Plan Documents\TIF cashflow - PLAN
7/10/2018Base Value Assumptions - Page 2Cedar Point - 3% InflationCity of Richfield, MN 80 For Sale Townhomes -- New Housing TIF District. Assumptions include church property Estimated Taxable Total Taxable PropertyPercentage Percentage Percentage Percentage First YearMarket Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full TaxesArea/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./UnitsValue Class Tax CapacityCapacity/Unit 2019 2020 2021 2022 Payable1 Townhome 310,000 300,660 8 2,405,280 Hmstd. Res. 24,053 3,007 100% 100% 100% 100% 20212 Townhome 310,000 300,660 16 4,810,560 Hmstd. Res. 48,106 3,007 25% 100% 100% 100% 20223 Townhome 310,000 300,660 16 4,810,560 Hmstd. Res. 48,106 3,007 0% 50% 100% 100% 20234 Townhome 310,000 300,660 16 4,810,560 Hmstd. Res. 48,106 3,007 0% 0% 100% 100% 20235 Townhome 310,000 300,660 16 4,810,560 Hmstd. Res. 48,106 3,007 0% 0% 0% 100% 20246 Townhome 310,000 300,660 8 2,405,280 Hmstd. Res. 24,053 3,007 0% 0% 0% 100% 2024TOTAL24,052,800 240,528 Subtotal Residential 80 24,052,800 240,528 Subtotal Commercial/Ind. 0 0 0 Note:1. Market values are based upon estimates from developer discussion on May 3, 2018. Total Fiscal Local Local Fiscal State-wide MarketTax Disparities Tax PropertyDisparities PropertyValue Total Taxes PerNew UseCapacityTax CapacityCapacityTaxes Taxes Taxes Taxes Taxes Sq. Ft./UnitTownhome 24,053 0 24,053 36,046 0 0 4,185 40,231 5,028.87Townhome 48,106 0 48,106 72,091 0 0 8,371 80,462 5,028.87Townhome 48,106 0 48,106 72,091 0 0 8,371 80,462 5,028.87Townhome 48,106 0 48,106 72,091 0 0 8,371 80,462 5,028.87Townhome 48,106 0 48,106 72,091 0 0 8,371 80,462 5,028.87Townhome 24,053 0 24,053 36,046 0 0 4,185 40,231 5,028.87TOTAL 240,528 0 240,528 360,455 0 0 41,854 402,310Note: 1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors which cannot be predicted.Total Property Taxes 402,310Current Market Value - Est. 2,712,000less State-wide Taxes 0New Market Value - Est. 24,052,800less Fiscal Disp. Adj. 0 Difference 21,340,800less Market Value Taxes (41,854)Present Value of Tax Increment 5,196,548less Base Value Taxes (40,642) Difference 16,144,252Annual Gross TIF 319,813Value likely to occur without Tax Increment is less than:16,144,252 WHAT IS EXCLUDED FROM TIF? MARKET VALUE BUT / FOR ANALYSISTAX CALCULATIONSPROJECT INFORMATION (Project Tax Capacity)Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2018-1 TIF - Cedar Point Towhomes\TIF Plan Documents\TIF cashflow - PLAN
7/10/2018Tax Increment Cashflow - Page 3Cedar Point - 3% InflationCity of Richfield, MN 80 For Sale Townhomes -- New Housing TIF District. Assumptions include church property TAX INCREMENT CASH FLOWProject Original Fiscal Captured Local Annual Semi-Annual State Admin. Semi-Annual Semi-Annual PERIOD% of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax PaymentOTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36% 10% Increment Value Yrs. Year Date- - - - 02/01/20- - - - 08/01/20- - - - 02/01/21100% 36,079 (27,120) - 8,959 149.860%13,426 6,713 (24) (669) 6,020 5,454 0.5 202108/01/21100% 36,079 (27,120) - 8,959 149.860%13,426 6,713 (24) (669) 6,020 10,775 1 202102/01/22100% 96,933 (27,120) - 69,813 149.860%104,621 52,311 (188) (5,212) 46,910 51,225 1.5 202208/01/22100% 96,933 (27,120) - 69,813 149.860%104,621 52,311 (188) (5,212) 46,910 90,689 2 202202/01/23100% 171,278 (27,120) - 144,158 149.860%216,035 108,017 (389) (10,763) 96,866 170,191 2.5 2023 08/01/23100% 171,278 (27,120) - 144,158 149.860%216,035 108,017 (389) (10,763) 96,866 247,754 3 2023 02/01/24100% 248,574 (27,120) - 221,454 149.860%331,871 165,936 (597) (16,534) 148,805 364,000 3.5 2024 08/01/24100% 248,574 (27,120) - 221,454 149.860%331,871 165,936 (597) (16,534) 148,805 477,411 4 2024 02/01/25100% 256,032 (27,120) - 228,912 149.860%343,047 171,523 (617) (17,091) 153,815 591,781 4.5 2025 08/01/25100% 256,032 (27,120) - 228,912 149.860%343,047 171,523 (617) (17,091) 153,815 703,362 5 2025 02/01/26100% 263,712 (27,120) - 236,592 149.860%354,558 177,279 (638) (17,664) 158,976 815,874 5.5 2026 08/01/26100% 263,712 (27,120) - 236,592 149.860%354,558 177,279 (638) (17,664) 158,976 925,642 6 2026 02/01/27100% 271,624 (27,120) - 244,504 149.860%366,413 183,207 (660) (18,255) 164,292 1,036,313 6.5 2027 08/01/27100% 271,624 (27,120) - 244,504 149.860%366,413 183,207 (660) (18,255) 164,292 1,144,285 7 2027 02/01/28100% 279,773 (27,120) - 252,653 149.860%378,625 189,313 (682) (18,863) 169,768 1,253,135 7.5 2028 08/01/28100% 279,773 (27,120) - 252,653 149.860%378,625 189,313 (682) (18,863) 169,768 1,359,329 8 2028 02/01/29100% 288,166 (27,120) - 261,046 149.860%391,203 195,602 (704) (19,490) 175,408 1,466,375 8.5 2029 08/01/29100% 288,166 (27,120) - 261,046 149.860%391,203 195,602 (704) (19,490) 175,408 1,570,811 9 2029 02/01/30100% 296,811 (27,120) - 269,691 149.860%404,159 202,079 (727) (20,135) 181,217 1,676,073 9.5 2030 08/01/30100% 296,811 (27,120) - 269,691 149.860%404,159 202,079 (727) (20,135) 181,217 1,778,768 10 2030 02/01/31100% 305,715 (27,120) - 278,595 149.860%417,503 208,751 (752) (20,800) 187,200 1,882,266 10.5 2031 08/01/31100% 305,715 (27,120) - 278,595 149.860%417,503 208,751 (752) (20,800) 187,200 1,983,240 11 2031 02/01/32100% 314,887 (27,120) - 287,767 149.860%431,247 215,623 (776) (21,485) 193,362 2,084,994 11.5 2032 08/01/32100% 314,887 (27,120) - 287,767 149.860%431,247 215,623 (776) (21,485) 193,362 2,184,266 12 2032 02/01/33100% 324,333 (27,120) - 297,213 149.860%445,404 222,702 (802) (22,190) 199,710 2,284,297 12.5 2033 08/01/33100% 324,333 (27,120) - 297,213 149.860%445,404 222,702 (802) (22,190) 199,710 2,381,887 13 2033 02/01/34100% 334,063 (27,120) - 306,943 149.860%459,985 229,992 (828) (22,916) 206,248 2,480,214 13.5 2034 08/01/34100% 334,063 (27,120) - 306,943 149.860%459,985 229,992 (828) (22,916) 206,248 2,576,143 14 2034 02/01/35100% 344,085 (27,120) - 316,965 149.860%475,004 237,502 (855) (23,665) 212,982 2,672,788 14.5 2035 08/01/35100% 344,085 (27,120) - 316,965 149.860%475,004 237,502 (855) (23,665) 212,982 2,767,076 15 2035 02/01/36100% 354,408 (27,120) - 327,288 149.860%490,473 245,237 (883) (24,435) 219,918 2,862,060 15.5 2036 08/01/36100% 354,408 (27,120) - 327,288 149.860%490,473 245,237 (883) (24,435) 219,918 2,954,727 16 2036 02/01/37100% 365,040 (27,120) - 337,920 149.860%506,407 253,203 (912) (25,229) 227,063 3,048,071 16.5 2037 08/01/37100% 365,040 (27,120) - 337,920 149.860%506,407 253,203 (912) (25,229) 227,063 3,139,139 17 2037 02/01/38100% 375,991 (27,120) - 348,871 149.860%522,818 261,409 (941) (26,047) 234,421 3,230,864 17.5 2038 08/01/38100% 375,991 (27,120) - 348,871 149.860%522,818 261,409 (941) (26,047) 234,421 3,320,352 18 2038 02/01/39100% 387,271 (27,120) - 360,151 149.860%539,722 269,861 (971) (26,889) 242,000 3,410,481 18.5 2039 08/01/39100% 387,271 (27,120) - 360,151 149.860%539,722 269,861 (971) (26,889) 242,000 3,498,411 19 2039 02/01/40100% 398,889 (27,120) - 371,769 149.860%557,133 278,566 (1,003) (27,756) 249,807 3,586,964 19.5 2040 08/01/40100% 398,889 (27,120) - 371,769 149.860%557,133 278,566 (1,003) (27,756) 249,807 3,673,357 20 2040 02/01/41100% 410,855 (27,120) - 383,735 149.860%575,066 287,533 (1,035) (28,650) 257,848 3,760,356 20.5 2041 08/01/41100% 410,855 (27,120) - 383,735 149.860%575,066 287,533 (1,035) (28,650) 257,848 3,845,233 21 2041 02/01/42100% 423,181 (27,120) - 396,061 149.860%593,537 296,769 (1,068) (29,570) 266,130 3,930,699 21.5 2042 08/01/42100% 423,181 (27,120) - 396,061 149.860%593,537 296,769 (1,068) (29,570) 266,130 4,014,081 22 2042 02/01/43100% 435,877 (27,120) - 408,757 149.860%612,563 306,281 (1,068) (30,521) 274,692 4,098,047 22.5 2043 08/01/43100% 435,877 (27,120) - 408,757 149.860%612,563 306,281 (1,103) (30,518) 274,661 4,179,955 23 2043 02/01/44100% 448,953 (27,120) - 421,833 149.860%632,159 316,079 (1,138) (31,494) 283,447 4,262,422 23.5 2044 08/01/44100% 448,953 (27,120) - 421,833 149.860%632,159 316,079 (1,138) (31,494) 283,447 4,342,877 24 2044 02/01/45100% 462,421 (27,120) - 435,301 149.860%652,343 326,171 (1,174) (32,500) 292,497 4,423,876 24.5 2045 08/01/45100% 462,421 (27,120) - 435,301 149.860%652,343 326,171 (1,174) (32,500) 292,497 4,502,900 25 2045 02/01/46100% 476,294 (27,120) - 449,174 149.860%673,132 336,566 (1,212) (33,535) 301,819 4,582,453 25.5 2046 08/01/46100% 476,294 (27,120) - 449,174 149.860%673,132 336,566 (1,212) (33,535) 301,819 4,660,066 26 2046 02/01/47 Total11,488,452 (41,324) (1,144,713) 10,302,415 Present Value From 08/01/2019 Present Value Rate 5.00%5,196,548 (18,697) (517,785) 4,660,066 Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2018-1 TIF - Cedar Point Towhomes\TIF Plan Documents\TIF cashflow - PLAN
Appendix E
Housing Qualifications for the District
Income Restrictions- Adjusted for Family Size
(Owner Occupied Housing District - Hennepin County)
No. of Persons 100% of Median Income 115% of Median Income
1-2 persons $94,300 N/A
3-4 persons N/A $108,445
Source: U.S. Department of Housing and Urban Development
*Please note: These numbers are adjusted annually. All income figures reported on this page are for 2018.
Appendix E-1
Appendix F
Findings for the District
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for
Tax Increment Financing District No. 2018-1, as required pursuant to Minnesota Statutes, Section
469.175, Subdivision 3 are as follows:
1. Finding that Tax Increment Financing District No. 2018-1 is a housing district as defined in
M.S., Section 469.174, Subd. 11.
TIF District No.2018-1 consists of 17 parcels. As proposed, the development will consist of 80
units of owner-occupied townhomes with at least 95% of the units purchased by persons at or
below 100% to 115% of area median income. Ninety-five percent of the units which will receive
tax increment assistance will meet income restrictions described in M.S. 469.1761. Appendices A
and E of the TIF Plan contains background for the above finding.
2. Finding that the proposed development, in the opinion of the City Council, would not reasonably
be expected to occur solely through private investment within the reasonably foreseeable future.
The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future: This finding is
supported by the fact that the development proposed in this plan is a housing district that meets
the City's objectives for development and redevelopment, but that due to the high costs of
building new housing in the City, the cost of financing the proposed public improvements, and
the insufficiency of affordable, owner-occupied housing to provide a sufficient financial return,
the project is feasible only through the assistance, in part, from tax increment financing. The
developer was asked for and provided a pro forma as justification that the developer would not
have gone forward without tax increment assistance.
3. Finding that the TIF Plan for Tax Increment Financing District No. 2018-1 conforms to the
general plan for the development or redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan on July 23, 2018 and found that the TIF Plan
conforms to the general development plan of the City.
4. Finding that the TIF Plan for Tax Increment Financing District No. 2018-1 will afford maximum
opportunity, consistent with the sound needs of the City as a whole, for the development or
redevelopment of Richfield Redevelopment Project Area by private enterprise.
Through the implementation of the TIF Plan, the HRA or City will provide an impetus for
residential development, which is desirable or necessary for increased population and an
increased need for life-cycle housing within the City.
Appendix F-1
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #10.
S TAFF REPORT NO. 37
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
8/20/2018
RE P O RT P RE PA RE D B Y: C hris Regis, F inance Manager
D E PA RTME NT D IRE C TO R RE V IE W: S teven L . D evich, E xecutive D irector
8/15/2018
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
8/15/2018
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of the adoption of resolutions approving proposed property tax levy for payable 2019 for
certification to Hennepin County.
E X E C UT IV E S UM M ARY:
The bylaws of the Richfield Housing and Redevelopment Authority (HRA) require that an annual budget be
submitted to the HRA Commissioners for approval. Accordingly, the 2019 Proposed Budget and Tax Levy and
2018 Revised Budget are presented for approval.
I n addition, Minnesota State Statutes require adoption of a preliminary tax levy from each taxing authority.
The proposed tax levy must be certified to the Hennepin County Auditor by October 1, 2018. Any
amendments to the proposed budget, which would increase the property tax levy, must be made prior to
October 1, 2018. No increases in the tax levy are permissible after that date, only reductions. Final
certification of the HRA tax levy is part of the City’s budget process.
The tax levy as proposed represents a 4.00% increase from the previous year ’s levy.
RE C O M M E ND E D AC T I O N:
By motion: Adopt resolutions approving the 2019 Proposed Housing and Redevelopment Authority
Budget and Tax Levy and 2018 Revised Housing and Redevelopment Authority Budget.
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
N/A
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Minnesota Statutes require adoption of a preliminary levy from each taxing authority.
The budget and accompanying proposed levy for 2019 are ready for consideration.
Even though a public hearing for the HRA tax levy is not required by State Statute, this does not
preclude the HRA from opening this item up for public discussion if the HRA desires to do so.
C.C R IT IC AL T IMIN G IS S U E S:
As required by State Statutes, each taxing authority must certify its proposed tax levy for the
payable year 2019 to the County Auditor on or before October 1, 2018.
D.F IN AN C IAL IMPAC T:
The Proposed 2019 HRA levy represents a 4.00% increase from the previous year ’s levy. This
equates to a $22,876 increase.
The levy is approximately $8,893 less than the maximum HRA levy established by law of the
.0185% of the City’s total taxable market value net of market value exclusion.
The HRA may decide to levy an additional amount up to the maximum allowed by law if they
choose to do so.
E.L E GAL C ON S ID E R AT ION:
N/A
ALTE R N AT IV E R E C O MME N D ATIO N(S):
The HRA could adopt a preliminary levy less than the one proposed herein. However, that would not
provide for programs that are recommended in the 2019 Proposed/2018 Revised budget.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
Resolution - 2019 HRA B udget and Tax L evy Resolution L etter
Resolution - Revision of 2018 HRA B udget Resolution L etter
HRA RESOLUTION NO.
RESOLUTION APPROVING PROPOSED 2019 HOUSING AND REDEVELOPMENT
AUTHORITY BUDGET AND CERTIFYING THE 2019 TAX LEVY
BE IT RESOLVED by the Housing and Redevelopment Authority of the City of
Richfield, Minnesota as follows:
Section 1. The budget for the Housing and Redevelopment Authority
General Fund of Richfield for the year 2019 in the amount of
$515,240 is hereby ratified.
Section 2. The estimated gross revenue of the Housing and Redevelopment
Authority General Fund of Richfield from all sources, including
general ad valorem tax levies as hereinafter set forth for the year
2019, and as the same are more fully detailed in the Executive
Director’s official copy of the budget for the year 2019, in the
amount of $610,330 is hereby approved.
Section 3. There is hereby levied upon all taxable property in the City of
Richfield an ad valorem tax in 2018, payable in 2019 for the
following purposes:
Housing and Redevelopment Authority $594,781
Section 4. A certified copy of this resolution shall be transmitted to the County
Auditor.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 20th day of August, 2018.
Mary Supple, Chair
ATTEST:
Erin Vrieze Daniels, Secretary
RESOLUTION NO.
RESOLUTION AUTHORIZING REVISION OF THE 2018 BUDGET OF THE
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD
WHEREAS, Resolution No. 1265 appropriated funds for personal services and
other expenses and capital outlay for the Housing and Redevelopment Authority for the
year 2017, and
WHEREAS, The Executive Director has requested a revision of the 2018 budget as
detailed in the 2019 budget document.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority of Richfield, Minnesota as follows:
Section 1. That the 2018 appropriation for the Housing and Redevelopment
Authority General Fund is revised as follows:
$38,200 increase
Section 2. Estimated 2018 gross revenue of the Housing and Redevelopment
Authority General Fund from all sources, as the same is more fully
detailed in the Executive Director’s official copy of the 2019 budget
document, are hereby revised as follows:
$7,770 increase
Section 3. That the Executive Director bring into effect the provisions of this
resolution.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 20th day of August, 2018.
Mary Supple, Chair
ATTEST:
Erin Vrieze Daniels, Secretary