02-19-2019 Complete AgendaR E G U LAR H O U S IN G AN D R E D E V E LO P ME N T AU TH O R ITY ME E TIN G
R IC H F IE L D MU N IC IPAL C E N TE R, C O U N C IL C H AMB E R S
F E B R U ARY 19, 2019
7:00 P M
C all to Order
Approval of the Minutes
A pproval of the minutes of the regular Housing and Redevelopment A uthority meeting of J anuary 15, 2019.
P R E S E N TATIO N S
1.2018 HRA /E D A Year in Review
AG E N D A APPR O VAL
2.A pproval of the A genda
3.Consent Calendar contains several separate items which are acted upon by the H R A in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further H R A action on these items is necessary. However, any H R A
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for H R A discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A .C onsideration of the adoption of a resolution approving an A ssumption A greement that assigns certain
rights and responsibilities related to the construction of 30 for-sale condominiums at the former Lyndale
Garden C enter site to L akeside at Lyndale Gardens L L C .
S taff Report No. 11
B .C onsideration of the adoption of a resolution approving an A ssignment and A ssumption A greement
(A mended and Restated C ontract for P rivate Redevelopment) to Woodlake C entre M OB , L L C , a
D elaware limited liability company and authorize the E xecutive D irector to execute an updated E stoppel
C ertificate.
S taff Report No. 12
4.C onsideration of items, if any, removed from C onsent C alendar
O T H E R B U S IN E S S
5.C onsideration of allocation of the HRA -owned property at 6412 B loomington Avenue S to either the affordable
New Home P rogram or the market-rate Richfield Rediscovered P rogram.
S taff Report No. 13
H R A D IS C U S S IO N ITE MS
6.HRA D iscussion Items
E X E C U T IV E D IR E C TO R R E P O R T
7.E xecutive D irector's Report
C LAIMS AN D PAYR O L LS
8.C laims and P ayrolls
9.A djournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96
hours in advance to the City Clerk at 612-861-9738.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
January 15, 2019
CALL TO ORDER
The meeting was called to order by Commissioner Mary Supple at 7:00 p.m. in the Council
Chambers.
HRA Members Mary Supple, Chair; Pat Elliott; Maria Regan Gonzalez; Sue Sandahl; and
Erin Vrieze Daniels.
Staff Present: John Stark, Executive Director; Chris Regis, Finance Director; Julie Urban,
Housing Manager; Elizabeth VanHoose, City Clerk; Kate Aitchison, Housing
Specialist.
OATH OF OFFICE OF RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY
COMMISSIONER, PAT ELLIOTT
OATH OF OFFICE OF RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY
COMMISSIONER, MARY S UPPLE
OATH OF OFFICE OF RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY
COMMISSIONER, MARIA REGAN GONZALEZ
City Clerk VanHoose administered the oath of office to Commissioners Elliott, Supple, and
Regan Gonzalez.
CONSIDERATION OF THE ELECTION OF OFFICERS AND DESIGNATION OF ASSISTANT
TO THE SECRETARY FOR THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
FOR 2019. (S.R. NO. 1)
Chair Supple opened nominations.
M/Sandahl, S/Elliott to elect Mary Supple to serve as Chairperson.
Motion carried 5-0.
M/Supple, S/Vrieze Daniels to elect Pat Elliott to serve as Vice Chairperson.
Motion carried 5-0.
M/Supple, S/Elliott to elect Erin Vrieze Daniels to serve as Secretary.
HRA Meeting Minutes -2- January 15, 2019
Motion carried 5-0.
M/Supple, S/Vrieze Daniels to elect Kate Aitchison to serve as assistant to the Secretary.
Motion carried 5-0.
APPROVAL OF THE MINUTES OF THE: (1) SPECIAL CONCURRENT CITY COUNCIL,
HOUSING AND REDEVELOPMENT AUTHORITY, AND PLANNING COMMISSION WORK
SESSION OF NOVEMBER 13, 2018; AND (2) REGULAR HOUSING AND REDEVELOPMENT
AUTHORITY MEETING OF NOVEMBER 19, 2018.
M/Elliott, S/Sandahl to approve the minutes of the: (1) Special concurrent City Council,
Housing and Redevelopment Authority, and Planning Commission work session of November 13,
2018; and (2) Regular Housing and Redevelopment Authority meeting of November 19, 2018.
Motion carried 5-0.
Item #1
APPROVAL OF THE AGENDA
M/Vrieze Daniels, S/Sandahl to approve the agenda.
Motion carried 5-0.
Item #2
CONSENT CALENDAR
Executive Director Stark presented the Consent Calendar:
A. Consideration of the adoption of resolutions designating official depositories for the
Housing and Redevelopment Authority for 2019, including the approval of collateral.
(S.R. No. 2)
RESOLUTION NO. 1318
RESOLUTION DESIGNATING U.S. BANK A DEPOSITORY OF
FUNDS OF THE HRA OF RICHFIELD FOR THE YEAR 2019
RESOLUTION NO. 1319
RESOLUTION DESIGNATING CERTAIN SAVING AND LOAN
ASSOCIATIONS, BANKS AND CREDIT UNIONS AS DEPOSITORIES
FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT
AUTHORITY OF RICHFIELD FUNDS IN 2019
RESOLUTION NO. 1320
RESOLUTION DESIGNATING CERTAIN FINANCIAL INSTITUTIONS
AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND
REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2019
HRA Meeting Minutes -3- January 15, 2019
B. Consideration of the approval of an amended Contract with the Center for Energy and
Environment to provide loan and remodeling advising services to Richfield homeowners
for 2019. (S.R. No. 3)
C. Consideration of the adoption of a resolution approving the Assignment and Assumption
of Contract between NHH Companies, LLC, CPII Development, LLC, and the Housing
and Redevelopment Authority. (S.R. No. 4)
RESOLUTION NO. 1321
RESOLUTION APPROVING ASSIGNMENT OF CONTRACT FOR
PRIVATE DEVELOPMENT
D. Consideration of the adoption of a resolution approving execution of a Right of Entry
Agreement with Cedar Point Investments, LLC, for the Cedar Point II properties own ed
by the Housing and Redevelopment Authority. (S.R. No. 5)
RESOLUTION NO. 1322
RESOLUTION APPROVING THE EXECUTION AND DELIVERY OF A
RIGHT OF ENTRY AGREEMENT WITH CEDAR POINT
INVESTMENTS LLC
E. Consideration of the adoption of a resolution approving collate ral assignment of the
Secondary Developer Tax Increment Financing Note to be issued by the Richfield
Housing and Redevelopment Authority for the benefit of the Secondary Developer.
(S.R. No. 6)
RESOLUTION NO. 1323
RESOLUTION APPROVING COLLATERAL ASSIGNMENT OF
SECONDARY DEVELOPER TIF NOTE
M/Regan Gonzalez, S/Elliott to approve the consent calendar.
Motion carried 5-0.
Item #3
CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM CONSENT CALENDAR
None.
Item #4
CONSIDERATION OF THE ADOPTION OF A RESOLUTION AUTHORIZING
ACCEPTANCE OF A DONATION OF $100,000 TO THE HOUSING AND
REDEVELOPMENT AUTHORITY FROM AFFORDABLE SUBURBAN HOUSING
AND APPROVAL OF PROGRAM GUIDELINES FOR DISTRIBUTING THE FUNDS
THROUGH AN AFFORDABLE APARTMENT IMPROVEMENT GRANT PROGRAM.
(S.R. NO. 7)
Housing Manager Julie Urban presented Staff Report 7, and provided some background
information regarding the organization, Affordable Suburban Housing (ASH), offering the funding.
Commissioner Elliott asked about the amount of funding per unit and how the grant money
and match funds will be used. Housing Manager Urban responded. Commissioner Elliott asked
about the number of buildings that may be eligible for use of these funds and how the program will
HRA Meeting Minutes -4- January 15, 2019
be marketed to landlords. Housing Manager Urban estimated that there are approximately 50
buildings in the community that may be eligible and that informati on will be sent out to eligible
landlords with eligible tenants. Commissioner Elliott stated his support for this program and
suggested this may be something the HRA may consider continuing in the future.
Commissioner Regan Gonzalez expressed her support for the program and gratitude for
the grant from ASH.
M/Sandahl, S/Vrieze Daniels to adopt a resolution authorizing acceptance of a donation of
$100,000 to the Housing and Redevelopment Authority from Affordable Suburban Housing for
funding of an Affordable Apartment Improvement Grant Program and approve guidelines for the
Affordable Apartment Improvement Grant Program, with guidelines amended to reduce the
requirement for eligibility from ten years to five years tenancy, with priority given to ren ters who
have lived in their unit for ten years or more .
RESOLUTION NO. 1324
RESOLUTION AUTHORIZING ACCEPTANCE OF A DONATION
RECEIVED BY THE HOUSING AND REDEVELOPMENT
AUTHORITY (HRA) AND TO AUTHORIZE THE HRA TO
ADMINISTER THE FUNDS IN ACCORDANCE WITH AFFORDABLE
APARTMENT IMPROVEMENT GRANTS PROGRAM GUIDELINES
Motion carried 5-0.
Item #5
CONSIDERATION OF THE ADOPTION OF A RESOLUTION AUTHORIZING THE
PURCHASE OF 6412 BLOOMINGTON AVENUE S. FOR FUTURE DEVELOPMENT
AS A SINGLE-FAMILY HOME. (S.R. NO. 8)
Housing Specialist Kate Aitchison presented Staff Report 8.
Commissioner Elliott stated that the home’s exterior looks well -preserved.
Commissioner Vrieze Daniels stated that she is typically conflicted about these situations
and removing these lower-cost houses, and appreciates the answers from staff regarding this
situation, and that she looks forward to the conversation next month.
M/Regan Gonzalez, S/Sandahl to adopt a resolution authorizing the purchase of 6412
Bloomington Avenue S for future development as a single-family home.
RESOLUTION NO. 1325
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 6412 BLOOMINGTON AVENUE
Commissioner Sandahl reflected that this is a very small home and that it will be a good to
see it redeveloped.
Motion carried 5-0.
Item #6
CONSIDERATION OF THE ADOPTION OF A RESOLUTION AMENDING THE
BYLAWS OF THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
TO REFLECT THE COMPOSITION OF MEMBERSHIP AS AUTHORIZED BY THE
HRA Meeting Minutes -5- January 15, 2019
MAYOR AND CITY COUNCIL OF THE CITY OF RICHFIELD. (S.R. NO. 9)
Executive Director John Stark presented Staff Report 9.
In addition to the changes outlined in the staff report, it is also recommended that the
language around the voting of the HRA members in Section 6 Manner of Voting shall be amended
from:
The voting on all questions coming before the Authority shall be by roll call and the yeas and nays
shall be entered upon the minutes of such meeting,
to now read:
The voting on all questions coming before the Authority shall b e by roll call made verbally and the
yeas and nays shall be entered upon the minutes of such meeting.
M/Vrieze Daniels, S/Sandahl to adopt a resolution amending the Bylaws of the Richfield Housing
and Redevelopment Authority to reflect the composition of membership as authorized by the Mayor
and City Council of the City of Richfield, with the amended Section 6 Manner of Voting to state:
“The voting on all questions coming before the Authority shall be made verbally and the yeas and
nays shall be entered upon the minutes of such meeting”.
RESOLUTION NO. 1326
RESOLUTION AMENDING THE BYLAWS OF THE HOUSING AND
REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD,
MINNESOTA
Motion carried 5-0.
Item #7
CONSIDERATION OF THE APPROVAL OF THE USE OF UP TO $180,000 FROM
THE HOUSING AND REDEVELOPMENT AUTHORITY'S CAPITAL
IMPROVEMENTS FUND TO ADVANCE PAYMENTS FOR THE HOUSING CHOICE
VOUCHER PROGRAM FOR THE MONTH OF MARCH (IF NECESSARY). (S.R. NO.
10)
Executive Director John Stark presented Staff Report 10.
Commissioner Vrieze Daniels expressed her support for this action. Chair Supple
expressed her agreement for the good of the tenants.
Commissioner Regan Gonzalez asked about how voucher-holders will receive
communications. Housing Manager Urban stated tha t letters will go out to voucher-holders and
landlords in the next few days to provide an update.
M/Sandahl, S/Regan Gonzalez to approve the use of up to $180,000 from the Housing and
Redevelopment Authority's Capital Improvements Fund to advance payments for the Housing
Choice Voucher Program for the month of March, if necessary.
Motion carried 5-0.
HRA Meeting Minutes -6- January 15, 2019
Item #8
HRA DISCUSSION ITEMS
None.
Item #5
EXECUTIVE DIRECTOR REPORT
Executive Director Stark updated the HRA on the acquisition of the property at 6501 Penn
Avenue and the next steps in the redevelopment process.
Executive Director Stark also shared the Local Government Innovation Award for the work
towards
Item #6
CLAIMS AND PAYROLLS
M/Sandahl, S/Vrieze Daniels that the following claims and payroll be approved:
U.S. BANK 12/17/18
Section 8 Checks: 130288 - 130366 $161,403.42
HRA Checks: 33559 - 33569 $78,528.44
TOTAL $239,931.86
U.S. BANK 01/15/19
Section 8 Checks: 130368 - 130453 $169,419.84
HRA Checks: 33570 - 33590 $62,565.19
TOTAL $231,985.03
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:33 p.m.
Date Approved: February 19, 2019
Mary B. Supple
HRA Chair
Kate Aitchison John Stark
Housing Specialist Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #3.A.
STAFF RE P ORT NO. 11
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
2/19/2019
RE P O RT P RE PA RE D B Y: Melissa P oehlman, A sst. C ommunity D evelopment D irector
O THE R D E PA RTM E NT RE V IE W: N/A
E X E C UTIV E D IRE C TO R RE V IE W: J ohn S tark, E xecutive D irector
2/12/2019
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 approving an Assumption Agreement that assigns certain
rights and responsibilities related to the construction of 30 for-sale condominiums at the former
Lyndale Garden Center site to Lakeside at Lyndale Gardens L LC.
E X E C UT IV E S UM M ARY:
On J uly 16, 2018, the Housing and Redevelopment Authority (HRA) approved an Amended and Restated
Contract for Private Development "Development Agreement") with Lyndale Gardens, LLC ("Master
Developer"). Under this agreement, the Master Developer agreed to construct or cause to be constructed 30
for-sale condominiums, 8 rental townhomes, a 66-unit multifamily building (including 7 affordable residential
units), and approximately 6,000 square feet of retail on the former Lyndale Garden Center property at
approximately 64th Street West and Lyndale Avenue South. Section 8.2 of that Development Agreement
allows the Master Developer to assign its rights and responsibilities to another entity so long as the Master
Developer remains liable and bound by the Development Agreement. Lakeside at Lyndale Gardens, L L C
("Lakeside") is an affiliate of the Master Developer and will be constructing the 30 for-sale condominiums.
The Assumption Agreement assigns the responsibilities related to this construction to Lakeside, but expressly
states that the Master Developer shall remain liable and bound by the Development Agreement for all other
obligations.
RE C O M M E ND E D AC T I O N:
By motion: Adopt a resolution approving an Assumption Agreement with Lyndale Gardens, LL C and
Lakeside at Lyndale Gardens, 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
Lyndale Gardens, L L C secured land-use approvals for the redevelopment of the north half of the
former Lyndale Garden Center site in J une 2018.
The HRA approved an Amended and Restated Contract for Private Development on J uly 16,
2018.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Section 8.2 of the Development Agreement allows the Master Developer to assign it rights and
obligations under the Development Agreement so long as the Master Developer remains liable and
bound by the Development Agreement.
C.C R IT IC AL T IMIN G IS S U E S:
Land use approvals will expire in J une 2019 unless substantial work has been completed.
Lakeside at Lyndale Gardens, LLC has been selected to construct the 30 for-sale condominiums.
D.F IN AN C IAL IMPAC T:
There will be no financial impact to the HRA as a result of this agreement.
E.L E GAL C ON S ID E R AT ION:
The Assumption Agreement was prepared by the HRA Attorney.
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:
Representative(s) of Lyndale Gardens, L L C
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
A ssumption A greement C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING ASSUMPTION AGREEMENT WITH LYNDALE GARDENS,
LLC AND LAKESIDE AT LYNDALE GARDENS LLC
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “Authority”) has entered into an Amended and Restated Contract for Private Development, dated
July 16, 2018 (the “Development Agreement”), between the Authority and Lyndale Gardens, LLC, a
Minnesota limited liability company (the “Master Developer”), pursuant to which the Master Developer
agreed to construct or cause to be constructed 30 for-sale condominiums (the “Condominiums”), 8 rental
townhomes, a 66-unit multifamily apartment building (including 7 affordable residential units), and
approximately 6,000 square feet of retail on property located within the City of Richfield, Minnesota; and
WHEREAS, pursuant to Section 8.2 of the Development Agreement, the Master Developer is
allowed to assign its rights and duties under the Development Agreement so long as the Master Developer
remains liable and bound by the Development Agreement; and
WHEREAS, Lakeside at Lyndale Gardens LLC, a Minnesota limited liability company
(“Lakeside”), is an affiliate of the Master Developer and has agreed to construct the Condominiums; and
WHEREAS, there has been presented before this Board of Commissioners of the Authority (the
“Board”) a form of Assumption Agreement (the “Assumption Agreement”) proposed to be entered into
between the Authority, the Master Developer, and Lakeside pursuant to which Lakeside will agree to be
responsible for the construction of the Condominiums and assume all obligations related to the
Condominiums under the Development Agreement, and the Master Developer will agree to remain liable and
bound for all obligations under the Development Agreement, including those related to the Condominiums;
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 that:
1. The Board hereby consents to the assumption by Lakeside of the obligations related to the
Condominiums under the Development Agreement.
2. The Assumption 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 Assumption
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.
3. The Chair and the Executive Director are hereby authorized to execute and deliver any and
all documents deemed necessary to carry out the intentions of this resolution.
2
553995v1 JAE RC125-360
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 19th day of February, 2019.
Mary B. Supple, Chair
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, made as of __________, 2019 (the “Agreement”), is by
and between LYNDALE GARDENS, LLC, a Minnesota limited liability company (the “Master
Developer”), LAKESIDE AT LYNDALE GARDENS LLC, a Minnesota limited liability company
(“Lakeside”), and the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA, a public body corporate and politic of the State of Minnesota (the
“Authority”).
RECITALS
The Master Developer and the Authority are parties to that certain Amended and Restated
Contract for Private Development, dated July 16, 2018 (the “Contract”), recorded on October 29, 2018 in
the Office of the Registrar of Titles, Hennepin County, as Document No. T05571096, pursuant to which
the Master Developer proposed to construct or cause to be constructed 30 for-sale condominiums, 8 rental
townhomes, a 66-unit multifamily apartment building (including 7 affordable residential units), and
approximately 6,000 square feet of retail.
Lakeside is an affiliate of the Master Developer and has agreed to construct the 30 for-sale
condominium units (the “Condominiums”) as required by the Contract.
Lakeside agrees to be responsible for the construction of the Condominiums and assume all
obligations related to the Condominiums under the Contract.
The Master Developer shall remain liable for all obligations under the Contract.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Definitions. All capitalized terms not defined herein shall have the meanings given such
terms in the Contract.
2. Assignment and Assumption of Contract. Section 8.2 of the Contract allows the Master
Developer to assign its rights and duties under the Contract to another entity without prior written
approval of the Authority so long as the Master Developer remains liable and bound by the Contract. The
Contract further allows the Master Developer to contract with a third party to construct the
Condominiums. The Master Developer and Lakeside hereby agree that Lakeside will assume all
obligations related to the Condominiums under the Contract. The Master Developer will remain liable
and bound by the Contract. The Authority acknowledges and consents to the assumption of obligations
related to the Condominiums under the Contract by Lakeside.
3. Covenants of Lakeside. Lakeside expressly assumes all of the obligations of the Master
Developer under the Contract with respect to the Condominiums and agrees to be subject to all the
conditions and restrictions to which the Master Developer is subject to under the Contract.
4. Not a Release. This Agreement does not release and discharge the Master Developer
from any obligations of the “Master Developer” under the Contract, even though a portion of those
obligations have been assumed by Lakeside.
2
551436v3 JAE RC125-360
5. Lakeside Address. For purposes of notice under the Contract, Lakeside’s address is:
Lakeside at Lyndale Gardens LLC
2213 W. 54th Street
Minneapolis, MN 55419
Attn: Colleen M. Carey
6. Governing Law. It is agreed that this Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Minnesota.
7. Entirety of Agreement. This Agreement shall constitute the entire agreement between the
parties and any prior understanding or representation of any kind preceding the date of this Agreement
shall not be binding upon either party except to the extent incorporated in this Agreement.
8. Modification. Any modification of this Agreement or additional obligation assumed by
either party in connection with this Agreement shall be binding only if placed in writing and signed by
each party or an authorized representative of each party.
9. Execution in Counterparts. This Agreement may be executed, acknowledged and
delivered in any number of counterparts and each of such counterparts shall constitute an original but all
of which together shall constitute one agreement.
(The remainder of this page is intentionally left blank.)
S-1
551436v3 JAE RC125-360
IN WITNESS WHEREOF, the Master Developer, Lakeside, and the Authority have caused this
Assumption Agreement to be executed as of the date and year first written above.
MASTER DEVELOPER:
LYNDALE GARDENS, LLC, a Minnesota limited
liability company
By:
Name: Colleen M. Carey
Its: Chief Manager
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _______, 2019, by
Colleen M. Carey, the Chief Manager of Lyndale Gardens, LLC, a Minnesota limited liability company,
on behalf of the Master Developer.
Notary Public
This instrument drafted by:
Kennedy & Graven, Chartered (JAE)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
612-337-9300
S-2
551436v3 JAE RC125-360
Execution page of Lakeside to the Assumption Agreement, dated as of the date and year first written
above.
LAKESIDE:
LAKESIDE AT LYNDALE GARDENS LLC, a
Minnesota limited liability company
By:
Name: Colleen M. Carey
Its: Chief Manager
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _____, 2019, by Colleen
M. Carey, the Chief Manager of Lakeside at Lyndale Gardens LLC, on behalf of Lakeside.
Notary Public
S-3
551436v3 JAE RC125-360
Execution page of the Authority to the Assumption Agreement, dated as of the date and year first written
above.
AUTHORITY:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By Mary B. Supple
Its Chair
By John Stark
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ________, 2019, 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 _____ day of ________, 2019, by
John Stark, the Executive Director of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, on behalf of the Authority.
Notary Public
A-1
551436v3 JAE RC125-360
EXHIBIT A
LEGAL DESCRIPTION
Lot 1, Block 1, Lyndale Gardens 2nd Addition.
AGENDA SECTION:Consent Calendar
AGENDA ITEM #3.B.
S TAFF REPORT NO. 12
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
2/19/2019
RE P O RT P RE PA RE D B Y: Myrt L ink, C ommunity D evelopment A ccountant
O THE R D E PA RTM E NT RE V IE W: N/A
E X E C UTIV E D IRE C TO R RE V IE W: J ohn S tark, E xecutive D irector
2/13/2019
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 approving an Assignment and Assumption Agreement
(Amended and Restated Contract for Private Redevelopment) to Woodlake Centre MO B, L LC, a
Delaware limited liability company and authorize the Executive Director to execute an updated
Estoppel Certificate.
E X E C UT IV E S UM M ARY:
The Urban Village Tax I ncrement Financing District was established in J uly 1999. I t is a Redevelopment
District that includes B MO Harris Bank, Mc Donald's, The Oaks on Pleasant, The Pines and other office/retail
space.
I n 2001, the Housing and Redevelopment Authority (HRA) entered into a Contract for Private Development
and agreed to provide tax increment assistance to the property and issue tax increment revenue notes to
reimburse development costs.
Woodlake Centre MOB, L L C is proposing to purchase a portion of the property and assume the Taxable Tax
I ncrement Financing Note Series 2001B.
The buyer of the property has also requested that the HRA also execute an estoppel certificate similar to
those that the HRA has provided with respect to this development in the past. The HRA attorney will review
any proposed estoppel certificate before it is executed by the Executive Director.
RE C O M M E ND E D AC T I O N:
By motion: Adopt a resolution approving an Assignment and Assumption Agreement (Amended and
Restated Contract for Private Redevelopment) to W oodlake Centre MO B, LL C, a Delaware limited
liability company and authorize the Executive Director to execute an updated Estoppel Certificate.
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 Urban Village Tax I ncrement District was established in J uly 1999.
On May, 21, 2001 the HRA entered into an Amended and Restated Contract for Private
Development with Richfield State Agency, I nc.
Two Pay-Go Notes were issued in 2001 and mature in 2026.
The Contract was amended in 2005 by the First Amendment to the Amended and Restated
Contract for Private Development, dated J anuary 25, 2005, between the HRA and M&I , as
successor by merger to the Richfield Agency, I nc.
I n 2005 a portion of the property subject to the Contract (the Woodlake Centre located at 6601-
6625 Lyndale Avenue) was purchased by Woodlake-V E F I V, LLC.
I n J anuary 2014 the HRA approved an Assignment and Assumption of Amended and Restated
Contract for Private Redevelopment, dated J anuary 31, 2014 from W oodlake-V E F I V, L L C to
W oodlake Partners, L L C.
On J anuary 31, 2014 W oodlake-V E F I V,LLC sold the Woodlake Centre to W oodlake Partners,
LLC.
I n March 2018, the HRA approved an Assignment and Second Amendment to Amended and
Restated Contract, dated March 19, 2018 between B MO Harris Bank N.A., Mc Donald's US A,
LLC, the HRA and W oodlake Partners, L L C.
I n March 2018 B MO Harris sold it's property to Mc Donald's.
W oodlake Centre MOB,L L C is proposing to purchase W oodlake Centre and assume the Tax
I ncrement Financing Note Series 2001B.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The HRA is required to approve Assignment and Assumption Agreements and transfers of Pay-
As-You-Go Notes.
C.C R IT IC AL T IMIN G IS S U E S:
W oodlake Centre MOB, LLC plans to close on this transaction by the end of February 2019.
D.F IN AN C IAL IMPAC T:
W oodlake Centre MOB, LLC will receive the Pay-Go tax increment on Tax I ncrement Financing
Note Series 2001B per the Assignment and Assumption Agreement.
The HRA will continue to receive a portion of the tax increment to pay administrative costs
associated with the district.
E.L E GAL C ON S ID E R AT ION:
HRA legal counsel drafted the resolution and Assignment and Assumption Agreement.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the Assignment and Assumption Agreement.
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
A ssignment & A ssumption A greement C ontract/A greement
Investment L etter B ackup Material
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING ASSIGNMENT AND ASSUMPTION AGREEMENT (AMENDED
AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT)
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “Authority”) has entered into an Amended and Restated Contract for Private Redevelopment, dated
May 21, 2001, as heretofore amended and assigned (the “Contract”), with Woodlake Partners, LLC, a
Delaware limited liability company, as the final successor in interest to Richfield State Agency (the
“Assignor”), related to the development of certain real property located in the City of Richfield, Minnesota
(the “City”); and
WHEREAS, the Assignor owns a portion of the real property legally described in the Contract (the
“VEF Property”) and the Minimum Improvements (as defined in the Contract”) constructed thereon
commonly known as Woodlake Centre, located at 66th Street and Lyndale Avenue in the City; and
WHEREAS, the Assignor has proposed to convey its fee simple interest in the VEF Property to
Woodlake Centre MOB, LLC, a Delaware limited liability company (the “Assignee”), and the Assignee has
agreed to acquire fee simple title to the VEF Property and assume the rights and benefits and certain of the
obligations and liabilities of the Assignor (as the Redeveloper) under the Contract which relate to the VEF
Property; and
WHEREAS, there has been presented before this Board of Commissioners of the Authority (the
“Board”) a form of Assignment and Assumption Agreement (Amended and Restated Contract for Private
Redevelopment) (the “Assignment and Assumption Agreement”) proposed to be entered into between the
Authority, the Assignor, and the Assignee, pursuant to which the Assignor will transfer and assign to the
Assignee all of the right, title, and interest, if any, of the Assignor in and to the Contract, the Assignee will
accept the assignment of all of the Assignor’s right, title and interest arising under the Contract with respect
to the VEF Property, and the Assignee will accept certain of the Assignor’s obligations and liabilities under
the Contract, as described therein;
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota that:
1. The Board hereby consents to the assignment to and assumption by the Assignee of the
Assignor’s right, title, and interest, if any, under the Contract and to the acceptance by the Assignee of certain
of the Assignor’s obligations and liabilities under the Contract.
2. The Board approves of the designation of the Assignee as a “Qualified Transferee” under the
terms of the Contract.
3. The Assignment and Assumption 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
Assignment and Assumption 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
554582v2 JAE RC125-182
4. The Chair and the Executive Director are hereby authorized to execute and deliver any and
all documents deemed necessary to carry out the intentions of this resolution.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 19th day of February, 2019.
Mary B. Supple, Chair
1
ASSIGNMENT AND ASSUMPTION AGREEMENT (AMENDED AND RESTATED
CONTRACT FOR PRIVATE REDEVELOPMENT)
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made as of this
______ day of _____________, 2019, by and between WOODLAKE PARTNERS, LLC, a Delaware
limited liability company (“Assignor”), Woodlake Centre MOB, LLC, a Delaware limited liability
company (“Assignee”), and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and
politic (“HRA”).
WITNESSETH:
A. The HRA and Richfield State Agency, Inc., a Minnesota corporation (“RSA”)
entered into that certain Amended and Restated Contract for Private Development dated May
21, 2001 (the “Amended and Restated Contract”) which Amended and Restated Contract affects
certain property referred to in the Amended and Restated Contract as the “Redevelopment
Property” and legally described in Exhibit A attached hereto and made a part hereof. The
Amended and Restated Contract was recorded on November 30, 2001 in the office of the
County Recorder for Hennepin County, Minnesota, as Document No. 7593401 and was filed on
January 26, 2005 in the office of the Registrar of Titles as Document No. 4070502. The
Amended and Restated Contract was further amended by that certain First Amendment to
Amended and Restated Contract for Private Redevelopment by and between HRA and M&I, as
successor in interest to RSA, dated January 25, 2005 and recorded May 4, 2005 in the office of
the County Recorder as Document No. 8576021 and filed January 26, 2005 in the office of the
Registrar of Titles as Document No. 4070504. The Amended and Restated Contract, as
amended, was further amended by the Assignment and Assumption of Amended and Restated
Contract for Private Redevelopment, dated January 25, 2005, from Marshall & Ilsley
Corporation to Woodlake-VEF IV, LLC (“VEF”), as further amended by the Assignment and
Assumption of Amended and Restated Contract for Private Redevelopment, dated January 31,
2014, from VEF to Woodlake Partners, LLC, and further amended by the Assignment and
Second Amendment to Amended and Restated Contract, dated March 19, 2018, between BMO
Harris Bank N.A., McDonald’s USA, LLC, the HRA, and Woodlake Partners, LLC, and
recorded August 22, 2018, in the office of the County Recorder as Document No. ________ and
filed August 22, 2018, in the office of the Registrar of Titles as Document No. T05554637. The
Amended and Restated Contract, as amended as described herein is referred to herein as the
“Contract.”
B. Capitalized terms used herein, to the extent not otherwise defined herein, shall
have the meaning ascribed to such terms in the Contract.
C. Assignor desires to convey fee simple title to the portion of the Redevelopment
Property legally described in Exhibit A attached hereto and made a part hereof and the
Minimum Improvements constructed thereon commonly known as “Woodlake Centre”, and
located at 66th Street and Lyndale Avenue in Richfield, Minnesota (collectively, the “VEF
Property”) to Assignee and Assignee desires to acquire fee simple title to the VEF Property.
D. As of the date of this Agreement, Assignor will own no real property that is part
of the Redevelopment Property.
2
E. Assignee desires to assume the rights and benefits, and certain of the obligations
and liabilities, of Assignor under the Contract, which relate to the VEF Property and which arise
and accrue from and after the date hereof, as set forth in this Agreement.
F. BMO Harris Bank N.A., as successor in interest to M&I is the owner and holder
of the Tax Exempt Note and accordingly is the Tax Exempt Note Holder under the Contract.
G. Assignor, with the consent of the Tax Exempt Note Holder and HRA, wishes to
be released from the Contract as of the date of this Agreement.
H. On the date hereof, the Assignor intends to assign the Housing and Redevelopment
Authority in and for the City of Richfield Taxable Tax Increment Revenue Note Series 2001B (the
“Taxable Note”), currently outstanding in the principal amount of $_______________ to the Assignee.
H. Under the terms and conditions of the purchase and sale agreement pursuant to
which the VEF Property was purchased, it was contemplated that Assignor and Assignee would
enter into this Agreement.
NOW, THEREFORE, in consideration of the premises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto do hereby agree as follows:
1. Assignment. Assignor hereby transfers and assigns to Assignee all right, title and interest
of Assignor in and to the Contract. TO HAVE AND TO HOLD all of the foregoing unto the Assignee, its
successors and assigns, from and after the date hereof, subject to the terms, covenants, conditions and
provisions contained herein.
2. Acceptance and Assumption. Assignee hereby accepts the assignment of all of
Assignor's right, title and interest arising under the Contract with respect to the VEF Property.
As of the date of this Agreement, subject to the limitations contained herein, Assignee also
accepts certain of the Assignor's obligations and liabilities under the Contract, but only as such
obligations and liabilities (a) relate to the VEF Property and (b) arise or accrue on or after the
date of this Agreement.
3. Qualified Transferee; Consent to Assignment; Release.
(a) Pursuant to Section 7(c) of the First Amendment, the Assignee represents that it
may be deemed to meet the qualifications required by Section 9.2(b)(i) of the Amended and
Restated Contract and Section 7(c) of the First Amendment to be a Qualified Transferee
because:
(i) the Assignee (or a property manager with which the transferee contracts)
has within the last five (5) years owned or managed property of similar size to the VEF
Property (but not necessarily the same use) in the greater Minneapolis/St. Paul area, or in
metropolitan areas similar in size;
(ii) the Assignee (or its parent or ownership constituents, in the aggregate)
has a tangible net worth of at least $5,000,000 computed in accordance with sound
business accounting principles (including the transferee's equity in the VEF Property and
goodwill as assets); and
3
(iii) within the last three years, the Assignee (or any owner of such transferee
owning more than 30% of the voting equity securities of the Assignee) has not been
subject to a lien of a judgment for an amount in excess of $500,000 arising out of:
(A) the failure to repay amounts borrowed by such entity or (B) obligations relating to
the ownership or management of real property.
(b) The Tax Exempt Note Holder, in reliance upon the representations of Assignee
set forth in Section 3(a) above, acknowledges and agrees that Assignee is a Qualified
Transferee. HRA has relied on the representations from Assignee that it is a Qualified
Transferee and has made no independent investigation regarding this assertion. HRA and the
Tax Exempt Note Holder do hereby consent to the conveyance of fee simple title to the VEF
Property by Assignor to Assignee. HRA and Tax Exempt Note Holder hereby acknowledge and
confirm that in accordance with Section 7(g) of the First Amendment, as of the date of this
Agreement, Assignor is released of its obligations under the Contract first arising after the date
of this Agreement.
4. Tax Petitions. At any time Assignee determines to file a petition with Hennepin
County to decrease the market value of the VEF Property, the Assignee shall provide notice to
the HRA at the following address:
Housing and Redevelopment Authority in and for the City of Richfield
6700 Portland Ave. South
Richfield, MN 55423
Attn: Community Development Director
Assignee has been provided with a copy of the HRA’s Policy Statement Regarding Tax
Petitions Filed within Tax Increment Districts and is aware of the HRA’s policy with respect to
withholding TIF when a tax petition is filed with Hennepin County.
5. Notice Address. For purposes of Section 11.5 of the Contract, the addresses of
the Assignee are:
VEF Property Owner:
c/o Ryan Companies US, Inc.
Attn: Mike Maney
533 South Third Street, Suite 100
Minneapolis, Minnesota 55415
With a copy to:
c/o Virtus Real Estate Capital
Attn: Matt Withey and Craig Davis
835 West 6th Street, Suite 1500
Austin, Texas 78703
Payment for the Series 2001B TIF Note shall be sent to:
[INSERT CONTACT INFO]
4
6. Indemnification. Assignor agrees to indemnify, defend and hold Assignee harmless from
and against any claims asserted against Assignee under, or in any way relating to, the Contract or Taxable
Note, and shall reimburse Assignee for any costs and expenses incurred in connection with such claims,
including reasonable attorneys' fees related to such claims, to the extent such claims arise out of the
failure of Assignor to comply with or to perform any obligation under the Contract or Taxable Note
accruing prior to the date hereof. Assignee agrees to indemnify, defend and hold Assignor harmless from
and against any claims asserted against Assignor under, or in any way relating to, the Contract or Taxable
Note, and shall reimburse Assignor for any costs and expenses incurred in connection with such claims,
including reasonable attorneys' fees related to such claims, to the extent such claims arise out of the
failure of Assignee to comply with or to perform any obligation under the Contract or Taxable Note
accruing on or after the date hereof.
7. Successors and Assigns; Amendments. This Agreement and the obligations of the
parties hereunder shall survive delivery of this Agreement and be binding upon and inure to the benefit of
the parties hereto, their respective legal representatives, successors and assigns and may not be modified
or amended except by written agreement signed by both parties.
8. Governing Law. This Agreement and all questions arising in connection herewith
shall be governed by and construed in accordance with the laws of the State of Minnesota.
9. Execution in Counterpart. This Agreement may be executed in counterparts, each of
which shall be deemed a duplicate original.
5
IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption
Agreement on the date and year first above written.
ASSIGNOR:
WOODLAKE PARTNERS, LLC,
a Delaware limited liability company
By: _____________________
Name:
Title:
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of __________, 2019, by
_____________________, the _________________ of Woodlake Partners, LLC, on behalf of the said
entity.
Notary Public
ASSIGNEE:
WOODLAKE CENTRE MOB, LLC,
a Delaware limited liability company
By: _____________________
Name:
Title:
STATE OF MINNESOTA )
) SS.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this _____ day of __________, 2019, by
_____________________, the _________________ of Woodlake Centre MOB, LLC, a Delaware limited
liability company, on behalf of the said entity.
Notary Public
6
Execution page of HRA to the Assignment and Assumption Agreement, dated as of the date and year
first written 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 _____ day of ___________, 2019,
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 _____ day of ________, 2019, by
John Stark, the Executive Director of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, on behalf of the Authority.
Notary Public
7
Exhibit A
Legal Description of Real Property
8
CONSENT OF TAX-EXEMPT NOTE HOLDER
The Tax-Exempt Note Holder acknowledges and consents to the terms of this Assignment and
Assumption Agreement.
TAX EXEMPT NOTE HOLDER:
BMO HARRIS BANK, N.A. a national banking
association
By:
Its: _______________________________________
STATE OF ____________ )
) SS
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of __________, 2019 by the
____________________________of BMO Harris Bank, N.A., on behalf of the bank.
Notary Public
554592v3 JAE RC125-182
[letterhead]
Housing and Redevelopment Authority of the City of Richfield
6700 Portland Avenue So.
Richfield, MN 55423
Re: The Housing and Redevelopment Authority in and for the City of Richfield Tax Increment
Revenue Note, Series 2001B issued in an original principal amount of $7,000,000 (the
“Note”)
Dear Ladies and Gentlemen:
On the date hereof, Woodlake Partners, LLC has assigned its interests in the above-referenced Note
to Woodlake Centre MOB, LLC. As holder of the Note, we confirm that:
1. We are an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”))
purchasing for our own account and not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof.
2. We have no present intention of selling, granting any participation in, or otherwise
distributing the Note.
3. We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Note, and we are
able to bear the economic risk of our investment.
4. In making our decision to acquire the Note, we have relied upon independent
investigations made by us and, to the extent we believed to be appropriate, by our
representatives, including our own professional, tax and other advisors, and we have
not relied upon any representation or warranty from the Issuer or any of its officers,
employees, agents, affiliates or representatives, with respect to the value of the Note.
5. The undersigned or its representatives have been given a full opportunity to examine
all documents and to ask questions of, and to receive answers from, the Issuer, the
Redeveloper and their representatives concerning the terms of the Note and such
other information as the undersigned desires in order to evaluate the acquisition of
and investment in the Note, and all such questions have been answered to the full
satisfaction of the undersigned.
6. The undersigned has evaluated the merits and risks of investment in the Note and
has determined that the Note is a suitable investment for us in light of our overall
financial condition and prospects.
554592v3 JAE RC125-182
7. We understand that the offer and sale of the Note has not been registered under the
Securities Act, and that the Note may not be offered or sold except as described
below. We agree and each subsequent holder of the Note by its acceptance thereof
will agree, not to offer, sell or otherwise transfer the Note, except (A) in accordance
with Rule 144A under the Securities Act to a “qualified institutional buyer” (as
defined therein), (B) to an “accredited investor” (as defined above) that is purchasing
for his own account or for the account of such an “accredited investor,” (C) pursuant
to the exemptions from registration provided by Rule 144 under the Securities Act, if
available, (D) pursuant to an effective registration statement under the Securities
Act, or (E) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control and to
compliance with applicable state securities laws. We further agree to provide to any
person purchasing the Note from us a notice advising such purchaser that resale of
the Note is restricted as stated herein.
8. No market for this Note exists and no market for the Note is intended to be
developed.
9. We understand that payments on the Note are subject to certain restrictions and
conditions set forth in the Amended and Restated Contract for Private
Redevelopment between the Issuer and Richfield State Agency, Inc. (“RSA”) dated
May 21, 2001, as amended by a First Amendment to Amended and Restated
Contract for Private Redevelopment between Issuer and Marshall & Ilsley
Corporation (as successor by merger to RSA) dated as of January 25, 2005,
Assignment and Assumption of Amended and Restated Contract for Private
Redevelopment, dated January 25, 2005, from Marshall & Ilsley Corporation to
Woodlake-VEF IV, LLC (“VEF”), as further amended by the Assignment and
Assumption of Amended and Restated Contract for Private Redevelopment, dated
January 31, 2014, from VEF to Woodlake Partners, LLC, as further amended by the
Assignment and Second Amendment to Amended and Restated Contract, dated
March 19, 2018, between BMO Harris Bank N.A., McDonald’s USA, LLC, the
HRA, and Woodlake Partners, LLC and as further amended by the Assignment and
Assumption Agreement (Amended and Restated Contract for Private
Redevelopment), dated ______, 2019, between Woodlake Partners, LLC, the HRA,
and Woodlake Centre MOB, LLC.
554592v3 JAE RC125-182
You are entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
WOODLAKE CENTRE MOB, LLC,
a Delaware limited liability company
By:
Name:
Title:
Address: Woodlake Centre MOB, LLC
c/o Ryan Companies US, Inc.
Attn: Mike Maney
533 South Third Street, Suite 100
Minneapolis, Minnesota 55415
With a copy to:
c/o Virtus Real Estate Capital
Attn: Matt Withey and Craig Davis
835 W. 6th Street, Suite 1500
Austin, Texas 78703
Dated as of _____________, 2019
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #5.
S TAFF RE PORT NO. 13
HOUS ING AND REDEV ELOPME NT AUT HORIT Y
MEET ING
2/19/2019
RE P ORT P RE PA RE D B Y: K ate A itchison, Housing S pecialist
OTHE R D E PA RTM E NT RE V IE W: N/A
E X E C UTIV E D IRE C TOR RE V IE W: J ohn S tark, E xecutive D irector
2/12/2019
IT E M F O R C O UNC I L C O NS ID E RAT I O N:
Consideration of allocation of the H R A-owned property at 6412 Bloomington Avenue S to either the
affordable New H ome Program or the market-rate Richfield R ediscovered Program.
E X E C UT I V E S UM M ARY:
I n J anuary 2019, the Ric hfield Housing and Redevelopment Authority (HRA) approved the ac quisition of the
substandard property located at 6412 Bloomington Avenue S for future use in either the New Home Program or
the Richfield Redisc overed Program. Redevelopment under either program is c urrently quite challenging due
to the increasing costs of land ac quisition, labor and materials.
I n addition, the recently passed I nclusionary Housing Policy (Policy ) adds additional c onsiderations when
pursuing development of the site. Under this Policy, "at least 20 perc ent of the units c onstructed in any three-
y ear period must meet the proscribed affordability requirements." Moving forward, the allocation of 6412
Bloomington Avenue S for the Richfield Redisc overed program would result in 18 percent of the new units
c onstructed in the 2018-2020 period being affordable. I f allocated to the New Home P rogram, the percent of new
units constructed under an affordable model during the same time period would rise to 27 percent.
W hile simple adherence to the Policy indicates the property should be used for the New Home P rogram, there
are significant barriers to development. The costs for constructing new, affordably -priced units are high, with
average subsidies ranging from $72,000 - $101,000 over the past five y ears. On this site, staff estimates the
subsidy required for development would range from $90,000 - $145,000. Additionally, while the HRA has strong
relationships with capable partners, there is no guarantee that our partners will have the capacity or
funding needed to pursue this development in the near future.
Subsidies for the Ric hfield Rediscovered program have historically been lower ($9,500-$63,300 over the past five
y ears), with strong demand for the program from residents and builders.
I n interpreting the I nc lusionary Housing Polic y, the HRA may consider one or more of the following options:
1. Limit the data to new unit units constructed, and halt any ac tivity on the Richfield Rediscovered program
until another ac quisition/development oc curs under the New Home Program.
2. I nclude extensively rehabilitated housing units that include partic ipation by qualified non-profit housing
providers as part of the scattered-site affordable housing requirement.
These units are sold to income-qualified buyers, just as in new-construc tion sc enarios.
There are long-term land mechanisms to ensure the home remains affordable for a long duration.
Three such units have been completed in the past five years.
I ncorporating these c ompleted units in the I nclusionary Housing P olicy totals would bring the
affordable ratio of new developments to 27 percent for the 2018-2020 time period. I n addition, staff
is hoping to partner with W HA HLT to develop another rehabbed unit in 2019, which would raise the
FurtherFurther
ratio to 33 percent.
3. Broaden the sc ope of homes accounted in the scattered-site affordable housing requirement to include
homes rec eiving programming like Down Pay ment Assistanc e or 2nd Mortgages to qualified households.
4. Exercise the right of the HRA under the I nclusionary Housing Policy to vary the application of the
I nclusionary Housing Policy in this c ase, based on current market conditions.
5. Adjust the I nc lusionary Housing Polic y 's reference to sc attered-site single family housing development.
Regardless of the allocation of this property to either program, staff will continue to pursue the ac quisition of
substandard properties for potential use by both programs.
RE C O M M E ND E D AC T I O N:
By motion: Allocate the H R A-owned property at 6412 Bloomington Avenue S to the New Home Progr am
(affordable) or the R ichfield Rediscovered (market rate) Program.
B AS I S O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON TE X T
I n evaluating the two programs, staff has considered the following Opportunities and Challenges:
Richfield R ediscovered New H ome
O pportunities:O pportunities:
•High demand for program, with more than 170
people on our notific ation list for more
information about upc oming opportunities.
•Need for long-term, affrodability in single-
family homes, especially given c urrent housing
prices.
•Need in c ommunity for additional modern,
“move-up” housing.
•S trong partnerships with Twin C ities Habitat for
Humanity (TC HF H) and the W est Hennepin
Affordable Housing Land Trust (W HA HLT).
•Can ac complish goals of program through New
Construction or Extensive Rehab.
Challenges Challenges:
•High-priced market makes it harder to ac quire
properties within budget.
•Large financ ial gaps to make affordable, new
construction very expensive
•Fewer substandard homes still available within
c ommunity for acquisition.
•Gaps usually filled via city funds
(C D B G) or other government funding
given to partner organizations
•E nsuring long-term affordability is difficult
when not working with preferred partners
•P artners have limited capac ity and timeline for
development is unc ertain.
I n the past five y ears, 17 homes have been constructed under the Ric hfield Rediscovered Program,
with three additional homes antic ipated in 2019.
I n the past five y ears, HRA subsidies for Richfield Redisc overed properties have ranged from
$9,500 - $63,300/unit.
Low subsidies are the result of the HRA acquiring large properties and subdividing for two new
homes, or purchasing very substandard and low-c ost homes.
I n the past five y ears, seven homes have been built under the New Home Program, with two
additional units anticipated in 2019.
I n the past five y ears, HRA subsidies for the New Home P rogram have ranged from $72,000 -
$101,000/unit.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The rec ently passed I nclusionary Housing Policy states: "with regards to “scattered-site single family
housing development,” at least 20 percent of the units c onstructed in any three-year period must meet the
proscribed affordability requirements."
The table below shows the c urrent new construction numbers under both the Richfield Rediscovered
Program (market-rate) and the New Home Program (affordable).
R R N H TOTA L A ffordable as % of total
2013-2015 15 2 17 12%
2014-2016 15 4 19 21%
2015-2017 12 7 19 37%
2016-2018 14 5 19 26%
2017-2019 11 4 15 27%
2018-2020 8 2 10 20%
W hen allocating the property at 6412 Bloomington Avenue S for the 2018-2020 time frame:
• To the Richfield Redisc overed Program: affordable ratio drops to 18%
• To the New Home Program: affordable ratio rises to 27%
I n interpreting the I nc lusionary Housing Polic y, the HRA may consider one or more of the following options:
1. Limit the data to new units construc ted, as represented in the above table, and halt any activity on the
Ric hfield Rediscovered program until another acquisition/development oc c urs under the New Home
Program.
2. I nclude extensively rehabilitated housing units that have sold to W HA HLT as part of the New Home
unit c ount.
These units are sold to income-qualified buyers, just as in new-construc tion sc enarios.
There is a long-term land holding lease with the land trust for 99 years of ensured affordability
(typically serving five to seven households).
Three units have been c ompleted in the past five years.
I ncorporating these c ompleted units in the I nclusionary Housing P olicy totals would bring the
Affordable Ratio of new developments to 27 percent for the 2018-2020 time period. I n addition,
staff is hoping to partner with W HA HLT to develop another until in 2019, which would raise the
ratio to 33 percent.
3. Broaden the data included under the New Home P rogram to include servic es like D own Payment
Assistance or 2nd Mortgages to qualified households.
4. Exercise the right of the HRA under the I nclusionary Housing Policy to vary the application of the
I nclusionary Housing Policy in this case, based on current market conditions.
5. Adjust the I nc lusionary Housing Polic y 's reference to sc attered-site single family housing
development.
C .C R ITIC AL T IMIN G IS SU E S:
I f the property is going to be used for Richfield Redisc overed, it will need to be promoted and readied
for sale.
Due to the popularity of the program, staff will issue a Request for P roposal (RF P), allowing
builder/buyer teams to submit design plans for the property to be evaluated by staff.
This process will typically add approximately two months to the process, prior to HRA-
authorization for the sale of the lot.
I f the property will be dedicated to the New Home Program, partner organizations will need to be
c ontac ted about the property in order to establish feasibility, timeline, funding sources, etc .
D .FIN AN C IAL IMPAC T:
The property at 6412 Bloomington Avenue S was recently acquired by the HRA for $115,000.
I f sold under the Ric hfield Rediscovered program, staff estimates a sale pric e of $50,000.
The overall subsidy would be approximately $65,000
I f sold under the New Home Program, the sale price of the lot would vary depending on which partner
was interested and able to work on the project. Each partner brings various resources and
requirements to the project. The timeline for development would be based on the c oordination of
schedules and funding sources for the projec t.
I f Twin Cities Habitat for Humanity was the partner, an anticipated sale pric e would be
estimated at $25,000.
The overall subsidy would be approximately $90,000.
I f work was undertaken with the W est Hennepin Affordable Housing Land Trust (W HA HLT),
the land would likely need to be sold for $1.00, with potential additional expenses also needing
to be covered.
The overall subsidy would be at least $115,000.
I f work was undertaken with another non-profit developer, the land would likely still need to be
sold for $1.00, with additional funding sources needed to c over the gap in development (gap
between the c ost for construc tion and the established affordable sale price).
The overall subsidy would be approximately $145,000.
E.LE GAL C ON S ID E R AT ION :
The property was deemed substandard during the acquisition process, and c an be utilized under
either program for redevelopment.
ALT ER N AT IV E R E C O MMEN D AT IO N(S):
Do not allocate the property at 6412 Bloomington Avenue S for a specific program at this time.
P R IN C IPAL PAR T IE S E X P E C T E D AT ME E T IN G:
None