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11-16-09 agenda packetCITY OF RICHFIELD, MINNESOTA MONDAY, NOVEMBER 16, 2009 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA Call to order Roll call Approval of minutes of Regular HRA Meeting of October 19, 2009 Notes: 2. HRA approval of agenda 3. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of housing services agreement with West Hennepin Affordable Housing Land Trust for sale of houses through Neighborhood .Stabilization Program S.R. No. 46 B. Consideration of approval of property management agreement with Home Leasing & Management, Inc. for management of HRA-owned residential rental properties S.R. No. 47 Notes: 4. Public hearing regarding resolution authorizing sale of 6704 Pleasant Avenue to Habitat for Humanity, Inc. for development of single family home Staff Report No. 48 Notes: 5. Executive Director report 6. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. J HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting October 19, 2009 CALL TO ORDER The meeting was called to order by Chair Sandahl at 7:00 p.m. ROLL CALL HRA Members Present: Sue Sandahl, Chair; Joan Helmberger; Doris Rubenstein; and Steven Quam. HRA Members Absent: David Gepner. Staff Present: John Stark, Acting Executive Director; Karen Barton, Assistant Community Development Director; and Nancy Gibbs, City Clerk. Item #1 HRA APPROVAL OF MINUTES M/Rubenstein, S/Helmberger to approve the minutes of (1) Regular HRA Meeting of September 21, 2009. Motion carried 4-0. Item #2 HRA APPROVAL OF AGENDA M/Quam, S/Helmberger to approve the agenda. Motion carried 4-0. HRA Meeting -2- October 19, 2009 Item #3 PRESENTATION FROM. MICHAEL DEVELOPMENT AND ST. CROIX REAL ESTATE FOR REDEVELOPMENT OF WOODLAKE PLAZA SHOPPING CENTER S.R. NO. 40 Acting Executive Director Stark presented Staff Report No. 40. Terry McNellis, St. Croix Real Estate, and Michael Swenson, Michael Development, presented plans to redevelop Woodlake Plaza Shopping Center. Chair Sandahl asked what amenities the apartment units will have. Mr. Swenson responded that all units will have dishwashers, garbage disposals, microwaves, washers and dryers. There will also be a community room, exercise room, seating area, a lot of open green space, and the fourth floor units will have a nice view. Commissioner Rubenstein stated that she likes the idea of the three bedroom units. Commissioner Quam asked about the underground and surface parking lot details. Mr. McNellis responded that there will be 135 underground and 66 surface lot stalls fora 90 unit building which is well within zoning requirements. Mr. McNellis also stated that all units would be built to the same specifications and would have nine foot ceilings, custom cabinets, countertops, and islands. Commissioner Quam stated that this development could be a catalyst to the area with more housing than retail and could possibly help retail in the area. Chair Sandahl agreed with Commissioner Quam that this development provides alternative housing with more amenities. Item #4 CONSENT CALENDAR A. Consideration of approval resolution authorizing purchase of real property at 6220-15th Avenue through New Home Program S.R. No. 41 HRA RESOLUTION NO. 1059 RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6220 15TH AVENUE This resolution appears as HRA Resolution No. 1059. B. Consideration of approval of acquisition and services agreement with Greater Metropolitan Housing Corporation for acquisition, rehabilitation and sale of houses through Neighborhood Stabilization Program S.R. No. 42 C. Consideration of approval of proposal from Hoisington Koegler Group, Inc. to update marketing materials for Lakes at Lyndale master plan S.R. No. 43 HRA Meeting -3- October 19, 2009 M/Rubenstein, S/Helmberger to approve the Consent Calendar. Motion carried 4-0. Item #5 CONSIDERATION OF SUBORDINATION REQUEST OF HRA FORECLOSURE PURCHASE INCENTIVE PROGRAM LOAN AT 7336 DUPONT AVENUE S.R. NO. 44 Assistant Community Development Director Barton presented Staff Report No. 44. M/Sandahl, S/Helmberger to approve subordination request of HRA Foreclosure Purchase Incentive Program Loan at 7336 Dupont Avenue. Motion carried 4-0. Item #6 CONSIDERATION OF PROPOSED HOUSING AUDIT IMPLEMENTATION PLAN S.R. NO. 45 Assistant Community Development Director Barton presented Staff Report No. 45. Commissioner Quam asked about the process for architect selection. Assistant Community Development Director Barton explained the selection process. She also suggested possibly using architectural students from the University of Minnesota. M/Quam, S/Rubenstein to approve the Housing Audit Implementation Plan. Motion carried 4-0. Item #7 EXECUTIVE DIRECTOR REPORT Acting Executive Director Stark reported that staff had over 10,000 applicants seeking Section 8 vouchers on October 8 and 9. The housing program is reopened every five years and in 2005 staff received 2,500 applicants. Out of the 10,000 applicants a computer will select 500 names that will go forward in the process. Item #8 CLAIMS AND PAYROLL M/Quam, S/Rubenstein that the following claims and payrolls be approved: HRA Meeting -4- October 19, 2009 U.S. Bank 10-19-2009 Section 8 Checks: 117950 - 118090 HRA Checks: 30701 - 30715 TOTAL Motion carried 4-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 8:15 p.m. Date Approved: $ 187,085.20 $ 21, 844.23 $208,929.43 Suzanne. M.Sandahl Chair Nancy Gibbs City Clerk John Stark Acting Executive Director AGENDA ITEM # 3A REPORT # 46 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING NOVEMBER 16, 2009 REPORT PREPARED BY: JULIE URBAN, HOUSING SPECIALIST NAME, TrrtE REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a Housing Services Agreement with West Hennepin Affordable Housing Land Trust for the sale of houses through the Nei hborhood Stabilization Program. I. RECOMMENDED ACTION: By Motion: Approve and authorize execution of a Housing Services Agreement with West Hennepin Affordable Housing Land Trust for the sale of houses through the Neighborhood Stabilization Program. II. BACKGROUND In January, 2009 the Housing and Redevelopment Authority (HRA) was awarded $1,041,541 in Neighborhood Stabilization Program (NSP) funds and approved the use of $750,000 of the funds to directly purchase and rehabilitate up to four foreclosed homes located within a particular area in Richfield. The HRA is partnering with the Greater Metropolitan Housing Corporation (GMHC) to acquire and rehabilitate the properties. Two of the properties will be sold to households at or below 50 percent of the Area Median Income (AMI) and two to households at or below 120 percent of the AMI. Through the application process, the HRA identified the West Hennepin Affordable Housing Land Trust (WHAHLT) as a partner to sell the two houses to households at or below 50 percent of the AMI. 111609 WHAHLT NSP HSA.doc KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR Pending approval of the Housing Services Agreement with WHAHLT, the HRA/GMHC will acquire two foreclosed properties using NSP funds. Additional NSP funds will be used to pay for the rehabilitation of major systems such as the roof and mechanical systems. The houses will then be sold to WHAHLT for $1, and WHAHLT will make further cosmetic improvements utilizing their own funds. WHAHLT will, in turn, sell the fully-rehabilitated homes to qualified buyers at or below 50 percent of the AMI. III. BASIS OF RECOMMENDATION A. POLICY • The HRA has partnered with nonprofit developers to construct affordable homes since 1978. • The HRA has partnered with WHAHLT for previous projects, most recently at 7201 and 7205 Nicollet Avenue, to provide permanently affordable housing to qualified households. B. CRITICAL ISSUES • The Housing Services Agreement requires WHAHLT to meet NSP income requirements. . • NSP funds must be committed by September 20, 2010. • The Agreement with WHAHLT provides an efficient means to meet the affordability requirements of the NSP program. • WHAHLT provides long-term affordability by retaining ownership of the land in a land trust and selling only the structure. C. FINANCIAL • The City was awarded $750,000 in Federal NSP funds for the acquisition, rehabilitation, and re-sale of four foreclosed properties through the Minnesota Housing Finance Agency (MHFA). • Two of the properties acquired with NSP funds must be sold to households at or below 50 percent of the Area Median Income. • The properties will be sold to WHAHLT for $1, and WHAHLT will then sell the homes to qualified buyers at or below 50 percent of the Area Median Income. • NSP funds must be under contract prior to September 20, 2010. Failure to expend the NSP funds by September 20, 2010 will result in forfeiture of the funds. D. LEGAL • Legal counsel has reviewed the Housing Services Agreement. IV. ALTERNATIVE RECOMMENDATION~S~ • Do not approve the Housing Services Agreement. V. ATTACHMENTS • Housing Services Agreement VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A 3~~1 DRAFT HOUSING SERVICES AGREEMENT THIS AGREEMENT is made as of this day, the of 2009, by and between the. HOUSING AND REDEVELOPMENT AUTHORITY in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, 6700 Portland Avenue South, Richfield, Minnesota 55423 ("HRA"), and the WEST HENNEPIN AFFORDABLE HOUSING LAND TRUST, 5101 Thimsen Ave, Suite 200, Minnetonka, Minnesota 55345 ("Provider"). Recitals A. The Provider is anon-profit organization that provides affordable housing in the Minneapolis suburban area. B. The HRA applied for and received Neighborhood Stabilization Program ("NSP") funds from Hennepin County pursuant to the provisions contained in the Housing and Economic Recovery Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009. C. The HRA wishes to contract with the Provider to provide up to two affordable housing units as part of the HRA's implementation of its Neighborhood Stabilization Program Subrecipient Agreement with Hennepin County dated March 20, 2009 ("HRA NSP Agreement"). D. The HRA and the Provider wish to set forth in writing the terms and conditions of their agreement. follows: Therefore, in return for the mutual agreements set forth below, the parties agree as 1. TERM The term of this Agreement is from the date of execution by both parties through December 30, 2011, unless terminated earlier as provided below. This Agreement may be extended upon written request from the Provider and approval by the HRA. 2. SERVICES A. The Provider will purchase up to two properties for $1.00 (per property) from either the HRA or the Greater Metropolitan Housing Corporation. Then, the Provider will resell each dwelling unit, but not the land upon which the dwelling unit rests, to an eligible purchaser ("Dwelling Unit"). The Dwelling Unit shall be occupied only by a household that qualifies as Low Income, which is defined as a household with incomes no greater than fifty percent (50%) of area median income, as published from time to time by the United States Department of Housing and Urban Development ("HUD") for the twin cities metropolitan area ("Eligible Purchaser"). The Provider shall verify income from all sources from each household member prior to the initial and each subsequent resale of a Dwelling Unit to a household and shall calculate the household's annual income in accordance with 24 CFR § 5.609. 359621v2 MJM RC125-296 ~~-2 DRAFT B. The Provider will ensure compliance with the occupancy, income, fair return on investment, continued affordability, resale restrictions and other requirements of 24 CFR § 92.254 for the Effective Period, as defined in 24 CFR § 92.254 and as determined by the HRA. C. The Provider shall enter into a Ground Lease with each Eligible Purchaser and each Eligible Purchaser shall execute a Declaration to ensure that the conditions described in this Section will apply each Dwelling Unit purchased pursuant to this Agreement. The Provider shall properly record a memorandum of said Ground Lease and the Declaration in the Hennepin County, Minnesota, land records. 3. NON-ASSIGNMENT The Provider may not assign, subcontract, transfer, or pledge this Agreement and/or the services to be performed under it, whether in whole or in part, without the prior consent of the H RA. 4. RECORDS AND DATA PRACTICES A. The Provider will maintain such records as are deemed necessary by HUD, the Minnesota Housing Finance Agency, Hennepin County, and the Richfield HRA to ensure compliance with the HRA NSP Agreement and other related agreements and to ensure that services are provided as represented by the Provider. Pursuant to a request by the HRA, the Provider will produce such records. B. The Provider agrees to abide by the provisions of the Minnesota Government Data Practices Act and all other applicable State and Federal laws, rules, and regulations relating to data privacy and confidentiality, and as any of the same may be amended. 5. CONFLICT OF INTEREST No officer, director, employee, or agent of Provider may engage in a conflict of interest in providing the services required under this Agreement. A "conflict of interest" is defined as engaging on behalf of the Provider in any matter that affects the person's financial interests outside of the person's duties with the Provider, the financial interests of a member of the person's immediate family, or those of a business with which the person is associated, unless the effect on the personal, relative, or business is no greater than on other members of the same business classification, profession or occupation. "Immediate family" is defined as the following relatives of the person or the person's spouse: siblings, parents, step-parents, grandparents, children, step-children, grandchildren, aunts, uncles, and first cousins. No salaried officer or employee of the HRA and no commissioner of the HRA shall have a financial interest, direct or indirect, in this Agreement. The violation of this provision renders the Agreement void. Any federal regulations and applicable state statutes shall not be violated. The Provider shall execute the attached certifications regarding lobbying and debarment in conjunction with the execution of this Agreement, as provided in Exhibit A. 359621v2 MJM RC125-296 2 3 /~ ^3 DRAFT 6. SUSPENSION AND TERMINATION A. If the Provider materially fails to comply with any term of this Agreement, fails to maintain its non-profit corporate status with the Internal Revenue Service or the State of Minnesota, or administers the work in a manner that endangers the performance of this Agreement, then this constitutes noncompliance and a default. Unless Provider's default is excused by the HRA, the HRA may cancel this Agreement in its entirety. B. The HRA's failure to insist upon strict performance of any provision or to exercise any right under this Agreement cannot be deemed a relinquishment or waiver of the same. This will not constitute a general waiver or relinquishment throughout the entire term of the Agreement. C. This Agreement may be cancelled with or without cause by either party upon 90 days written notice. 7. INDEMNITY The Provider agrees to hold harmless, indemnify and defend the HRA, its elected officials, officers, agents, and employees against any and all claims, losses, or damages, including attorneys' fees, arising from, allegedly arising from, or related to, the provision of services under this Agreement by the Provider, its employees, agents, officers, or volunteer workers. 8. UNSPECIFIED SERVICES The HRA will honor no claim for services not specified in this Agreement. 9. AUDITS The books, records, documents, and accounting procedures and practices of the Provider or other parties relevant to this Agreement are subject to examination by the HRA for a period of six years after the effective date of this Agreement. 10. DISCRIMINATION In performance of this Agreement, the Provider shall not discriminate on the grounds of or because of race, color, creed, religion, national origin, sex, marital status, and status with regards to public assistance, disability, sexual orientation, or age against any employee of the Provider, any subcontractor of the Provider, or any applicant for employment. The Provider shall include a similar provision in all contracts with subcontractors to this Agreement. The Provider further agrees to comply with all aspects of the Minnesota Human Rights Act, Minnesota Statutes, Chapter 363A; Title VI of the Civil Rights Act of 1964; and the Americans with Disabilities Act of 1990. 359621v2 MJM RC125-296 3 3~ -y DRAFT 11. LIMITATION OF REMEDIES In the event of a breach of this Agreement by HRA, the Provider shall not be entitled to recover punitive, special or consequential damages or damages for loss of business. 12. INDEPENDENT CONTRACTOR Nothing in this Agreement is intended, nor may be construed, to create the relationship of partners or employer/employee between the parties. The Provider, its officers, agents, employees, and volunteers are, and will remain for all purposes and services under this Agreement, independent contractors. 13. NOTICES All communications, notices, and demands of any kind which either party may be required or may desire to give to or serve upon the other shall be made in writing, and such notice shall be deemed sufficiently given if and when it is addressed to the other party as provided below and either (a) delivered personally, (b) deposited in the United States mail, registered or certified, with postage prepaid, (c) deposited with an overnight delivery service for next day delivery, or (d) telecopied: a. If to the HRA: Richfield HRA ATTN: Housing Specialist 6700 Portland Ave S Richfield, MN 55423 b. If to WHAHLT: Executive Director West Hennepin Affordable Housing Land Trust 5101 Thimsen Avenue Suite 202 Minnetonka, MN 55345 14. ENTIRE AGREEMENT The entire agreement of the parties is contained in this document. This Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter of this Agreement. Any alterations, amendments, deletions or waivers of any provisions of this Agreement will be valid only when placed in writing. 15. MISCELLANEOUS This Agreement will be governed by, and construed in accordance with, the laws of the State of Minnesota. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together will constitute one and the same agreement. 359621v2 MJM RC125-296 4 3A-5r DRAFT (signature pages follow) WEST HENNEPIN AFFORDABLE HOUSING LAND TRUST By: Janet Lindbo Its Executive Director STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) HOUSING AND REDEVELOPMENT AUTHORITY, IN AND FOR THE CITY OF RICHFIELD By: Steven L. Devich Its Executive Director By: Suzanne M. Sandahl Its Chairperson The foregoing instrument was acknowledged before me this _ day of 2009, 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 the State of Minnesota. Notary Public STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of 2009, by Suzanne M. Sandahl, 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. Notary Public STATE OF MINNESOTA ) )SS 359621v2 MJM RC 125-296 5 3~ --G~ DRAFT COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 2009, by Janet Lindbo, the Executive Director of West Hennepin Affordable Housing Land Trust, a Minnesota non-profit corporation, on behalf of said corporation. Notary Public 359621v2 MJM RC125-296 6 ~~ -~ DRAFT EXHIBIT A CERTIFICATIONS REGARDING LOBBYING AND DEBARMENT CERTIFICATION REGARDING LOBBYING The Provider shall sign the following certification statement in accordance with the requirements of 24 CFR 570.611, 24 CFR 85.36, and 24 CFR 84.42: The undersigned hereby certifies, to the best of his or her knowledge and belief, that: (1) NO FEDERAL APPROPRIATED FUNDS HAVE BEEN PAID, OR WILL BE PAID, BY OR ON BEHALF OF THE UNDERSIGNED, TO ANY PERSON FOR INFLUENCING OR ATTEMPTING TO INFLUENCE AN OFFICER OR EMPLOYEE OF AN AGENCY, A MEMBER OF CONGRESS, AN OFFICER OR AN EMPLOYEE OF CONGRESS, OR AN EMPLOYEE OF A MEMBER OF CONGRESS IN CONNECTION WITH THE AWARDING OF ANY FEDERAL CONTRACT, THE MAKING OF ANY FEDERAL GRANT, THE MAKING OF ANY FEDERAL LOAN, THE ENTERING INTO OF ANY COOPERATIVE AGREEMENT, AND THE EXTENSION, CONTINUATION, RENEWAL, AMENDMENT, OR MODIFICATION OF ANY FEDERAL CONTRACT, GRANT, LOAN, OR COOPERATIVE AGREEMENT. (2) IF ANY FUNDS OTHER THAN FEDERAL APPROPRIATED FUNDS HAVE BEEN PAID OR WILL BE PAID TO ANY PERSON FOR INFLUENCING OR ATTEMPTING TO INFLUENCE AN OFFICER OR EMPLOYEE OF AN AGENCY, A MEMBER OF CONGRESS, AN OFFICER OR AN EMPLOYEE OF CONGRESS, OR AN EMPLOYED OF A MEMBER OF CONGRESS IN CONNECTION WITH THIS FEDERAL CONTRACT, GRANT, LOAN, OR COOPERATIVE AGREEMENT, THE UNDERSIGNED SHALL COMPLETE AND SUBMIT STANDARD FORM LLL, "DISCLOSURE FORM TO REPORT LOBBYING," IN ACCORDANCE WITH ITS INSTRUCTIONS. (3) THE UNDERSIGNED SHALL REQUIRE THAT THE LANGUAGE OF THIS CERTIFICATION BE INCLUDED IN THE AWARD DOCUMENTS ALL SUB- AWARDS AT ALL TIERS (INCLUDING SUB-CONTRACTS, SUB-GRANTS, AND CONTRACTS UNDER GRANTS, LOANS, AND COOPERATIVE AGREEMENTS) AND THAT ALL SUB-RECIPIENTS SHALL CERTIFY AND DISCLOSE ACCORDINGLY. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. IN WITNESS WHEREOF, I have set my hand this (date). BY: ~ ,Executive Director 359621v2 MJM RC125-296 7 ~~'~ DRAFT FOR: West Hennepin Affordable Housing Land Trust II. CERTIFICATION REGARDING DEBARMENT The Provider shall sign the following certification statement: Certification Regarding Debarment, Suspension, and Other Responsibility Matters Primary Covered Transactions This certification is required by the regulations implementing Executive Order 12549, Debarment and Suspension, 29 CFR Part 98, § 98.510, Participants' responsibilities. The regulations were published as Part VIII of the May 26, 1988 Federal Register (pages 191.60 - 19211). AS THE DULY AUTHORIZED REPRESENTATIVE OF THE APPLICANT, I CERTIFY, TO THE BEST OF MY KNOWLEDGE AND BELIEF, THAT NEITHER THE APPLICANT NOR ANY OF THE PRINCIPALS: (1) ARE .PRESENTLY DEBARRED, SUSPENDED, PROPOSED FOR DEBARMENT, DECLARED INELIGIBLE, OR VOLUNTARILY EXCLUDED FROM COVERED TRANSACTIONS BY ANY FEDERAL DEPARTMENT OR AGENCY. (2) HAS, WITHIN ATHREE-YEAR PERIOD PRECEDING THIS APPLICATION, BEEN CONVICTED OF, OR HAD A CIVIL JUDGMENT ENTERED AGAINST THEM FOR COMMISSION OF FRAUD OR OTHER CRIMINAL OFFENSE IN CONNECTION WITH OBTAINING, ATTEMPTING TO OBTAIN, OR PERFORMING A PUBLIC (FEDERAL, STATE OR LOCAL) TRANSACTION OR CONTRACT UNDER A PUBLIC TRANSACTION; VIOLATION OF FEDERAL OR STATE ANTITRUST STATUTES OR COMMISSION OF EMBEZZLEMENT, THEFT, FORGERY, BRIBERY, FALSIFICATION OR DESTRUCTION OR RECORDS, MAKING FALSE STATEMENTS, OR RECEIVING STOLEN PROPERTY. (3) IS PRESENTLY INDICTED FOR OR OTHERWISE CRIMINALLY OR CIVILLY CHARGED BY A GOVERNMENTAL ENTITY (FEDERAL, STATE OR LOCAL) WITH COMMISSION OF ANY OF THE OFFENSES ENUMERATED IN PARAGRAPH (2) (B) OF THIS CERTIFICATION, AND (4) HAS NOT, WITHIN ATHREE-YEAR PERIOD PRECEDING THIS APPLICATION, HAD ONE OR MORE PUBLIC TRANSACTIONS (FEDERAL, STATE OR LOCAL) TERMINATED FOR CAUSE OR DEFAULT. (5) WHERE THE APPLICANT IS UNABLE TO CERTIFY TO ANY OF THE STATEMENTS IN THIS CERTIFICATION, HE OR SHE SHALL ATTACH AN EXPLANATION TO THIS APPLICATION. (6) THE UNDERSIGNED SHALL REQUIRE THAT THE LANGUAGE OF THIS CERTIFICATION BE INCLUDED IN ALL SUBCONTRACT AWARDS PURSUANT TO THIS CONTRACT AND AGREES TO REQUIRE ANY SUCH SUB-CONTRACTORS TO SIGN A DEBARMENT CERTIFICATION. BY: ,Executive Director FOR: West Hennepin Affordable Housing Land Trust 359621v2 MJM RC125-296 $ AGENDA ITEM # 3B REPORT # LE] J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING NOVEMBER 16, 2009 REPORT PREPARED BY: 7ULIE URBAN, HOUSING SPECIALIST NAME, TITLE REPORT PRESENTER: DEPARTMENT DIRECTOR R REVIEWED BY EXECUTIVE ITEM FOR HRA CONSIDERATION: Consideration of a property management agreement with Home Leasing & Management, Inca for the mana ement of residential rental properties. I. RECOMMENDED ACTION: By Motion: Approve a property management agreement with Home Leasing & Management, Inc. for the management of Housing and Redevelopment Authority owned residential rental properties. III. BACKGROUND The Housing and Redevelopment Authority (HRA) currently owns a single family residential property at 6608 17th Avenue. Because of the property's location in the Cedar Avenue Corridor, the HRA will retain ownership and rent it until such time that the property is needed for a redevelopment project. A property manager is needed to lease and manage the property for the HRA. Staff is proposing to hire Home Leasing & Management, Inc. to manage the property for a flat fee of $150 per'month. Home Leasing & Management, Inc. specializes in leasing single family residential properties and currently manages properties for the City of Minnetonka. 111609 property management agreement KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR III. BASIS OF RECOMMENDATION A. POLICY • The property at 6608 17th Avenue was purchased in anticipation of the construction of the roundabout at 66th Street and 17th Avenue. The property was not ultimately needed for the road project. It is appropriate to rent the property until such time that the property is needed for a future redevelopment project. B. CRITICAL ISSUES • The HRA does not have adequate resources to manage the property directly. • Home Leasing & Management, Inc. has been managing single family rental properties for the City of Minnetonka for 15 years. Staff at the City of Minnetonka has been very satisfied with the company's performance. In addition, the company currently manages several privately-owned single family properties within Richfield. • The agreement allows Home Leasing & Management to sign a lease with a tenant for up to one year in length on behalf of the HRA. A longer term requires the HRA's consent. It is likely that the initial lease will be for more than one year in order to have the lease renewal due during the summer rather than winter months. In the future, the lease will be limited to one year in length so that the timing can meet the timing needs of any future redevelopment projects. • The agreement would also enable the HRA to use Home Leasing & Management's services for any future single family rental properties. C. FINANCIAL • Home Leasing & Management, Inc. charges a flat monthly rate of -$150 per property and 100 percent of the first month's rent in order to initially lease the premises. • Home Leasing & Management, Inc. will determine the final rent amount (estimated at $1,200) once an agreement is approved. • It is anticipated that the rental receipts will be more than adequate to cover the cost of the management fee and all regular maintenance and repairs required on the property. D. LEGAL • The HRA Attorney and the City's insurance agent have both reviewed the agreement. IV. ALTERNATIVE RECOMMENDATION(S) ~ • Decline to approve the agreement with F V. ATTACHMENTS ~ • Proaosed Agreement ome Leasing & Management, Inc. ~ VI. PRINCIPAL PARTIES EXPECTED AT MEETING ~ ~~, ~ i Home Leasing & Management, Inc. Page 1 of 2 Agreement THIS AGREEMENT made and entered into this 1st day of Dec. 2009, by and between HOME LEASING & MANAGEMENT INC. a Minnesota corporation, 3100 West Lake Street, #416 ; Minneapolis, Minnesota, 55416 (hereinafter "Agent") and; Housing and Redevelopment Authority in and for the City of Richfield of 6700 Portland Ave. So.. Richfield, Mn. 55423_ hereinafter "Owner"). WITNESSETH: WHEREAS, Owner is the owner of the real property located 6608 17th Ave. So, Richfield 55423 (hereinafter "premises"), which Owner wishes Agent to advertise and manage, on Owner's behalf; and WHEREAS, Agent is in the business of advertising, renting and managing similar properties, on behalf of other owners; NOW, THEREFORE., in consideration of their respective promises herein contained, the parties hereby agree as follows 1. Owner hereby hires and appoints Agent as Owner's exclusive agent to perform the services set forth in paragraph 2 hereof and hereby grants Agent the right to possession of the premises and the authority to perform services on Owner's behalf. 2. Agent hereby accepts said appointment and shall perform the following services (a) Use its best efforts to secure tenants for the Premises and to administer the provisions of Owner-approved leases entered into with such tenants. (b) Execute leases and renewals thereof for the Premises, at the rent approved by Owner. (c) Provide or cause to be provided, at Owner's expense, all ordinary care, maintenance and non-structural repairs at the Premises, Agent shall not enter into any agreement requiring an expenditure in excess of $ 500.00 for any one item other than emergency repairs, as hereinafter provided, without Owner's prior consent.. (d) Hire, discharge and supervise, at Owner's expense, all independent contractors and laborers necessary for said care, maintenance and repair, all of the same to be deemed contractors of Owner and not Agent. Agent shall not enter into an agreement with any of the same which provides for a payment in excess of $ 500.00 without Owner's prior consent. (e) Collect all rents for the Premises when due and, at Owner's expense, institute legal action for unpaid rent, other lease obligations, or possession of the premises. (f) Advertise the Premises for rent, at Agent's expense. (g) When advised of the need therefore. provide or cause to be provided emergency repairs, at Owner's expense. For purposes of this agreement, emergency repairs shall include any code work or other work required by order of government authority. (h) Render to Owner monthly statements setting forth gross rents received, expenses and charges incurred by Agent on behalf. of Owner and Agent's fees and commissions hereunder. Agent shall have the right to deduct from gross revenue received any amounts owed to Agent hereunder. (i) Agent shall collect all Security Deposit's and keep them in a Trust account currently at Norwest Bank. 3. Owner shall (a) Refer to Agent all inquiries regarding leasing of the Premises. (b) Be solely responsible for the payment of principal and interest installments on all mortgages, contracts for deed and other encumbrances covering the Premises, premiums for insurance covering the Premises and installments of real estate taxes and special assessments levied,against the Premises (c) Pay to Agent, on a quarterly basis (January, April, July, October) within ten (10) days following receipt of the monthly statement therefore, any excess in the expenses and charges incurred on Owner's behalf plus the following fees and commissions over gross rents collected by Agent. ~~~~ Page, 2 of 2 (1) A monthly management fee in the amount of ; flat rate :.$.150.00 per property. (2) A commission in an amount equal to, 100 % of one full months rent , (based on a minimum of $1200 rent per month) to initially lease or re-lease the Premises, whether on the same or different terms and conditions as any prior lease for the Premises. There will be no commission to re-new a lease with current Residents. Provided, however, Agent may , at its sole discretion, require payment in advance for any expense or charge to be incurred on Owner's behalf. (d) Not enter into a lease for the Premises or employ or hire another agent to lease the Premises during the term of this Agreement, or list the Premises for lease with another agent or broker during said term. 4. The parties hereby agree as follows (a) All leases entered into by Agent on Owner's behalf for the Premises shall be in writing on Agent's standard form lease, as approved by Owner and no lease shall be for a term in excess of two (2) year(s) without prior consent. (b) Owner shall carry, at its expense, public liability insurance covering the Premises, with reasonable limits of coverage, Upon Agent's request, Owner shall provide Agent with a certificate or other proper evidence of said coverage . (c) The term of this agreement shall extend until the end of the term of the initial lease for the Premises, and shall thereafter be automatically renewed for terms coincident with. each successive renewal or extension of said lease, provided, however, that either party may notify the other in writing not later than one month prior to the end of said initial term or any renewal or extension thereof of its or his intent to terminate this Agreement. If any said notice of termination is timely given, this Agreement shall terminate as of the end of said term. If the said initial term or any renewal or extension thereof is not renewed or extended, this Agreement shall remain in full force and effect only until either party notifies the other in writing of its or his intent to terminate, and this Agreement shall terminate upon the giving of such notice, If agent has leased or re-leased a unit before receiving such notice, agent is entilied to receive the commission fee specified in paragraph 3(c)(2) above. Additionally, either party may terminate this agreement without cause by giving the other party written notice of such termination 30 days in advance of the effective date. However, If owner terminates Agent before Agent has managed the property for 6 months, then. Owner shall pay Agent $100.00 early cancellation fee. Additionally, either party may terminate this agreement immediately for breach by the other party of its obligations hereunder, and such breaching party's failure to cure such breach following 10 days written notice of same. Upon termination hereof, neither party shall have any future. obligation to the other, except for accounts owing at the date of termination and for commission, as set forth in subparagraph (c) of paragraph 3 hereof. (d) Agent shall not be liable for any act or omission other than for its willful misconduct or for its negligence. Agent may perform any of its duties or obligations hereunder through its attorneys, agents or employees, and shall not be liable for their acts or omissions, unless Agent has been negligent in its appointment or supervision of said attorneys, agents or employees. (e) All notices required hereunder to be in writing shall be deemed given when mailed to the applicable party at its or his address first above given. Said address may be changed by proper written notice hereunder. (f) This Agreement contains the entire agreement and understanding between the parties, and any amendment hereof shall be in a writing, signed by the party against whom enforcement is sought. (g) No waiver of any term, condition or covenant hereof in any one instance shall be deemed a waiver of the same or of any other term, condition or covenant hereof in the same or any other instance. (h) This Agreement shall be binding upon the parties and their respective probate representatives, heirs, successors and assigns. (I) As the Cities Agent, Agent agrees to comply with the requirements of the Mn. Data Procedures Act. EQUAL OPPORTUNITY: During the performance of this contract, the Agent, shall not discriminate against any applicant because of .race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation,or age. AGENT TE: OWNER;-------------------------------------DATE;----------TITLE:---------------------------- AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING NOVEMBER 1$, 2~~9 4 48 REPORT PREPARED BY: JULIE URBAN, HOUSING SPECIALIST NAME, TITLE REPORT PRESENTER: INTERIM DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOF ITEM FOR HRA CONSIDERATION: Public hearing regarding the sale of 6704 Pleasant Avenue to Habitat for Humanity, Inc. for development of a single-famil home. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: Adopt the attached resolution authorizing .the sale of 6704 Pleasant Avenue and approval of a contract with Habitat for Humanity, Inc. for development of a sinale-family home. II. BACKGROUND In June 2008 the Housing and Redevelopment Authority (HRA) purchased the vacant lot at 6704 Pleasant Avenue for the future construction of an affordable new home. The lot had been part of the adjacent lot to the north, which was subdivided in 2006. Twin Cities Habitat for Humanity (TCHFH) recently approached the City looking for an opportunity to develop asingle-family home. TCHFH was awarded $25,000 in HOME funds through Hennepin County, which it could use to acquire property. Staff is proposing that the HRA sell 6704 Pleasant Avenue to TCHFH to build. an affordable single-family home for sale to a household at or-below 50 percent of the 111609 6704 Pleasant KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR area median income. To facilitate the affordability of the home, staff is recommending the lot be sold to TCHFH for $25,000. The HRA purchased the property in 2008 for $46,464 with money from the Housing and Redevelopment Fund. Appropriate for the site, TCHFH is proposing to construct a single story house in 2011 with four bedrooms, two baths and 1,493 square feet. A copy of the proposed plan is attached. III. BASIS OF RECOMMENDATION A. POLICY • The HRA has partnered with nonprofit developers to construct 44 affordable homes since 1978. • The HRA acquired the property to initiate an affordable housing opportunity. • TCHFH will sell the home to a qualified family whose income does not exceed 50 percent of the Twin Cities area median income and is a first time buyer. • The terms of the Development Agreement have been finalized and are in conformance with the program guidelines. B. CRITICAL ISSUES • TCHFH will construct the new home in 2011 and sell the home to a qualified buyer following completion of the home. • TCHFH has the experience, capability, and financial security to develop the property and has previously constructed nine homes throughout the City. • TCHFH achieves long=term affordability with its projects by retaining the right to repurchase a home it has developed and resell to income- qualified families. • The Development Agreement will be recorded against the property, which would be released by a Certificate of Completion upon construction completion. C. FINANCIAL • The sale price. of the property from the HRA to TCHFH is $25,000. • The HRA purchase the property in 2008 for $46,464. • Current assessed value of the lot is $79,000. • The HRA typically subsidizes the development of affordable new homes. • The sale proceeds would be returned to the Housing and Redevelopment Fund and would be available to be budgeted for future property acquisitions. D. LEGAL • Notice of public hearing on the sale of the property was published November 12, 2009 in the Sun-Current. • This agreement is a contract similar to ones used previously with TCHFH. The contract has been reviewed by legal counsel. IV. ALTERNATNE RECOMMENDATION(S~ • Do not approve the Development Agreement with TCHFH. V. ATTACHMENTS • Resolution • Contract for Development • Conceptual Plan VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Chad Dipman, Habitat for Humanity u-i HRA RESOLUTION NO. RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6704 PLEASANT AVENUE TO HABITAT FOR HUMANITY, INC. IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT WHEREAS, the Housing and Redevelopment Authority in and for the. City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the New Home Program adopted by the HRA, said real property being described as follows: Address Legal 6704 Pleasant Avenue Lot 2, Block 7, Lyndale Shores on Wood Lake, Hennepin County, .Minnesota WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a developer, 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: A public hearing has been held and 6704 Pleasant Avenue is authorized to be sold for $25,000 to 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 Habitat for Humanity, Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 16th day of November, 2009. Suzanne M. Sandahl, Chair ATTEST: Joan Helmberger, Secretary ;~-Z CONTRACT FOR DEVELOPMENT Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and TWIN CITIES HABITAT FOR HUMANITY at 6704 PLEASANT AVENUE SOUTH, RICHFIELD 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 ~-I-3 CONTRACT FOR DEVELOPMENT THIS AGREEMENT, made and entered into as of this of , 2009, 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), anon-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 6704 Pleasant Ave South, Richfield, legally described as Lot 2, Block 7, LYNDALE SHORES ON WOOD LAKE, Hennepin County (the Property), for the purpose of providing affordable housing in the City; 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) Cam. 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). (d) Development. The Property and the Improvements to be constructed thereon according to the Construction Plans approved by the HRA. (e) HRA. The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. (f~ Housing and Redevelopment Authorities Act (HRA Act). Minnesota Statutes Sections 469.001 through 469.047. 1 ~' ~' (g) 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. (h) Mortgage and Holder. The term "mortgage" shall include the mortgages referenced in Article VI of this Agreement and any deed of trust or other instrument creating an encumbrance or lien upon the Property of any part thereof, as security for a loan. The term "holder" in reference to a mortgage includes any insurer or guarantor (other than the Developer) of any obligation or condition secured by such mortgage or deed of trust. (i) New Home Program. HRA program to encourage development of new housing opportunities for low to moderate income buyers. (j) Qualified Buyer. A purchasing family (2 or more person household) whose income does not exceed 50 percent of the Twin Cities area median income, is a first time buyer, and is qualified to buy the Property for owner occupancy. (k) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles, fire or other casualty to the Improvements, litigation commenced by third parties which results in delays or acts of any federal, state or local government, except those contemplated by this Agreement, which are beyond the control of the Developer. Section 1.2 Exhibits. The following Exhibits .are attached to and by reference made a part of this Agreement: A. 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. 2 ~I- 5' 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. 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. 3 ~l" 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 according to the terms of this Agreement. 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 $25,000. Section 3.2 Title and Examination. The HRA will provide the Developer with an abstract of title or registered property abstract regarding the Property within 20 days of the date of execution of this Agreement. In the absence of an abstract of title or registered property abstract, the HRA will provide a title commitment and title insurance. The Developer shall have 10 days from the date of receipt of .the abstract, registered property abstract or commitment for title insurance to make written objection,to the condition of title. If the Developer fails to make timely objections in writing, all objections to title shall be deemed to be waived. The HRA shall have 30 days after receipt of Developer's written objections to clear title to the Property but the HRA shall have no obligation to clear title: If the HRA does not or cannot clear title to the Developer's satisfaction, the Developer may terminate this Agreement or proceed to closing. If the Developer proceeds to closing, all title objections will be deemed to be waived. The HRA .shall pay at closing all costs incurred by the HRA in extending the abstract of title or registered property abstract and correcting defects related thereto. At closing the HRA shall also pay the amount of the transfer tax (state deed tax and conservation fee) payable on the deed conveying the Property to the Developer and the amount of any transfer tax or recording fees for documents necessary to vest title in the HRA. Section 3.3 Well Disclosure. Seller does not know of any wells on the property. Section 3.4 Closing. Closing on the Property will take place on or before January 15, 2010, 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 12, 2010, either parry may terminate this Agreement. Section 3.5. Taxes and Special Assessment. The HRA shall pay all real estate taxes due and payable in the years prior to closing, if any. Real estate taxes due and payable in the year of closing shall be prorated between the HRA and the Developer as of the date of closing. The HRA shall pay at or prior to closing the balanceof all special assessmens levied prior to closing. The HRA shall provide for payment of all special assessments pending as of the date of this Agreement by escrowing an amount equal to two times the estimated amount of special assessments. Develoepr shall assume special assessments that become pending after the date of this Agreement, except that HRA shall at all times be responsible to pay special assessments, if any, for delinquent water bills, removal of diseased trees, snow removal, or other current servies provided to the Property by the assessing authority prior to closing. For purposes of this section, a "pending" assessment is any assessment for which an improvement hearing has been held and the project has been ordered. 4 4-~ Section 3.6 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 3.7 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 3.8 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 3.9 Sale to Oualified 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. The Developer must obtain the HRA'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 a housing services agreement to be executed by the HRA and Qualified Buyer. This Agreement constitutes a covenant on the part of the Developer, its successors and assigns, to use the Property and Improvements for owner- occupied, single-family residential purposes as permitted by the City. ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS Section 4.1. 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 4.2. 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 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 4.2. 5 y-~ Section 4.3 Schedule of Construction. Subject to Unavoidable Delays, construction of the Improvements shall be completed prior to 12/31/11. All construction shall be in conformity with the approved Construction Plans. Periodically during construction the Developer shall make reports in such detail as may reasonably be requested by the HRA concerning the actual progress of construction. If at any time prior to completion of construction the HRA has cause to believe that the Developer will be unable to complete construction of the Improvements in the time permitted by this Section 4.3, it may notify the Developer and demand assurances from the Developer regarding the Developer's construction schedule. If such assurances are not forthcoming or are deemed by the HRA at its sole discretion to be inadequate, the HRA may declare an Event of Default and may avail itself of any of the remedies specified in Section 8.2 of this Agreement. Section 4.4 Certificate of Completion. Promptly after notification by the Developer of completion of construction of the Improvements, the HRA shall inspect the construction 'to determine whether the Improvements have been completed in accordance with the Construction Plans and the terms of this Agreement, including the date 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 4.4 shall be in recordable form. If the HRA shall refuse or fail to provide certification in accordance with the provisions of this Section 4.4, the HRA shall within 15 days of such notification provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Improvements in 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 4.5 Failure to Construct. In the event that construction of the Improvements is not completed as provided in Section 4.3 of this Agreement, the Developer shall be liable to the HRA for the amount of the HRA's expenses as liquidated damages. As security for the obligations created in this Section 4.5 and in Section 3.2, this Agreement shall be recorded and survive closing. The security shall be retained by the HRA until the closing on the sale of the Property from the Developer to the Qualified Buyer. The provisions of this Section 4.5 shall not be construed to prejudice or limit any additional rights of the HRA under Article VIII of this Agreement. ARTICLE V. INSURANCE Section 5.1 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 6 completion, and with coverage available in non-reporting form on the so-called "all risk" form of policy; (b) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's 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 VI. FINANCING Section 6.1 Financing. Within 15 days of the date of execution of this Agreement, the Developer shall submit to the HRA evidence of financing for the Improvements in compliance with the provisions of Section 2.1(b) of this Agreement. If the HRA finds that the financing is adequate in amount to provide for the construction of the Improvements, the HRA shall notify the Developer of its approval. If the HRA rejects the evidence of financing as inadequate, the Developer shall have 30 days or such additional period of time as the Developer may reasonably require from the date of such notification to submit evidence of financing satisfactory to the H1ZA. If the Developer fails to submit such evidence. or fails to use due diligence in pursuing financing, the HRA may terminate this Agreement and both parties shall be released from any further obligation or liability hereunder, except for the HIZA's remedies pursuant to Section 4.5 of this Agreement. Section 6.2 Limitation Upon Encumbrance of Property. Prior to the issuance of the Certificate of Completion, neither the Developer nor any successor in interest to the Property or any part thereof shall engage in any financing or any other transaction creating any Mortgage or other encumbrance or lien upon the Property, whether by express agreement or operation of law, or suffer any 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 VI and Section 8.2 of this Agreement. 7 -/c~ Section 6.3 Subordination. In order to facilitate obtaining financing for the construction of the Improvements by the Developer, the HRA shall agree to modify this Agreement in the manner and to the extent it deems reasonable, upon request by the financial institution and the Developer. ARTICLE VII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1 Representation as to Redevelopment. The Developer represents and agrees that its undertakings pursuant to the Agreement, are for the purpose of development of the Property and not for speculation in 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 7.2 Prohibition Against Transfer of Property and Assignment of Agreement. For the reasons set out in Section 7.1 of this Agreement, the Developer represents and agrees that, except for associating with other individuals or entities, 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 7.2 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 Property or any part thereof, shall, for whatever reason, not have assumed such obligations or agree to do so, shall not, unless and 8 -fl 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 7.2, together with other provisions of this Agreement, that to the fullest extent permitted by law and equity and excepting only in the manner and to the extent specifically provided otherwise in the Agreement no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the HRA, 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. (iii) There shall be submitted to the HRA for review all instruments and other legal documents involved in effecting transfers described herein, and if approved by the HRA, its approval shall be indicated to the Developer in writing. In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA thereof shall be deemed to relieve the. Developer from any of its obligations with respect thereto. The sale of the Development to the Qualified Buyer shall not be deemed to be a transfer within the meaning of this Section 7.2. Section 7.3 Approvals. Any approval required to be given by the HRA under this Article VII may be denied only in the event that the 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 VIII. EVENTS OF DEFAULT Section 8.1 Events of Default Defined. The following shall be deemed Events of Default under this Agreement and the term shall mean, whenever it is used in this Agreement, unless the context otherwise provides, any one or more of the following events: (a) Failure by the Developer to pay when due the payments required to be paid or secured under any provision of this Agreement; (b) Failure by the Developer to complete the Improvements by 12/31/09 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; (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. 9 -!Z (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; (fj 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 of 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 awork-out agreement with the Mortgagee. Section 8.2 Remedies on Default. Whenever any Event of Default occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, take any one or more of the following actions following written notice by the HRA to the Developer as provided in Section 9.4 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 Mortgagee 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 4.1 through 4.5; Sections 5.1. Said Mortgagee, upon foreclosure or taking of a deed in lieu, shall have no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the HR.A 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 10 ~~13 exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.4 No Additional Waiver Implied by One Waiver. In the event of the occurrence of any Event of Default by either parry, which Event of Default is thereafter waived by the other party, such waiver shall be limited to the particular Event of Default so waived and shall not be deemed to waive any other concurrent, previous or subsequent Event of Default. ARTICLE IX. ADDITIONAL PROVISIONS Section 9.1 Conflict of Interests; Representatives Not Individually Liable. No HRA officer who is authorized to take part in any manner in making this Agreement in his or her official capacity shall voluntarily have a personal financial interest in this Agreement or benefit financially there from. No member, official, or employee of the HRA shall be personally liable to the Developer, or any successor in interest, for any Event of Default by the HRA or for any amount which may become due to the Developer or successor or on any obligations under the terms of this Agreement. Section 9.2 Non-Discrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and non-discrimination, and any affirmative action program of the City shall be considered a part of this Agreement and binding on the Developer as though fully set forth herein. Section 9.3 Notice of Status and Conformance. At such time as all of the provisions of this Agreement have been fully performed by the Developer, the HRA, upon not less than ten days prior written notice by the Developer, agrees to execute, acknowledge and deliver, without charge to the Developer or to any. person designated by the Developer, a statement in writing in recordable form certifying the extent to which this Agreement has been performed and the obligations hereunder satisfied. Section 9.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is sent by mail, postage prepared, return receipt requested or delivered personally: (a) As to the HRA: Richfield HRA Executive Director 6700 Portland Avenue South Richfield, MN 55423 11 4-i~{ (b) As to the Developer: Twin Cities Habitat For Humanity (TCHFH) ATTN: Alan Raymond 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 9.4. Section 9.5 Provisions Not Mer~.ed With Deed. Norie of the provisions of this Agreement is intended to or shall be merged by reason of any deed transferring any interest in the Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.6. Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly 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 COUNTY OF SS The foregoing instrument was acknowledged before me this day of 2009, by Suzanne M. Sandahl, 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 12 ~~ i5 STATE OF MINNESOTA COUNTY OF ) SS The foregoing instrument was acknowledged before me-this day of 2009, by Steven L. Devich, the Executive Director 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 TWIN CITIES HABITAT FOR HUMANITY By: Its: STATE OF MINNESOTA COUNTY OF SS The foregoing instrument was acknowledged before me this day of Minnesota, on behalf of the corporation. 20 by ,the of Twin Cities Habitat For Humanity, a corporation under the laws of Notary Public 13 `~ '' I EXHIBIT A LIST OF CONSTRUCTION PLAN DOCUMENTS • Contract for Development, fully executed • Concept Plans • Site Plan 14 ~^~~ EXHIBIT B FORM OF QUIT CLAIM DEED 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, anon-profit corporation under the laws of the State of Minnesota, Grantee, real property in Hennepin County, Minnesota, described as follows: Lot 3, Block 2, OAKLAND ADDITION, according to the map or plat thereof on file or of record in the office of the Hennepin County Recorder. This deed is subject to that certain Contract for Private Development between Grantor and Grantee, dated , 200_, recorded , 200_, in the office of the Hennepin County Recorder as Document No. (if more space is needed, continue on back) together with all hereditaments and appurtenances. A well disclosure certificate accompanies this document. Affix Deed Tax Stamp Here HOUSING AND REDEVELOPMENT A UTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Chairperson By Its Executive Director 15 ~~~~ STATE OF MINNESOTA COUNTY OF HENNEPIN } ss. The foregoing was acknowledged before me this day of , 200_, by Suzanne Sandahl, 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. NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RAK) STATE OF MINNESOTA COUNTY OF HENNEPIN } ss. SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT The foregoing was acknowledged before me this day of , 200_, 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. NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RAK) This instrument drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 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): Twin Cities Habitat for Humanity . 3001 4th Street SE Minneapolis, MN 55414 16 ~~ ~1 EXHIBIT C FORM OF CERTIFICATE OF COMPLETION The undersigned hereby certifies that ,has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development", 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 STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 200_, by and the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: Richfield Housing and Redevelopment Authority 6700 Portland Ave S Richfield, MN 55423 17 ~- ~. o "~:L:^4" _- _ T'r. J ~` RENDERING FOR MARKETING ONL Y RENDER/NG MAY NOT REFLECT ACTUAL CONSTRUCTED HOUSE 26'-0" -, i up r ENTRY BED ~ ~ ~ DN #1 STORAGE ~' BED#3 ' -- 10'-o"x9'-9° -~ ~ - BATH ~ 10' 4" x 9'-8" 10o sa_ FT_ ~ BATH. ~ ~ ~' ~ 97 SQ. FT. HALL ,_ - ~- ~~~ HALL ~ Q -------- LIN Q ' ~ .. PAN ~ ---if---, ~ --------- _ -~ i ii -- ~ ~---~ o KITCHEN ~ BEDROOM #2 _ o _ BED #4 4" x 11 9 10' 1z'-s° x 9'-9° T 124 SQ F N Z UTILITY - 121 SQ FT ~, . . ? -- __- - ROOM ' - .~ ' i , - ~. DINING ~~ ROOM = ------ UNFINISHED BASEMENT n ENTRY LIVING ROOM ~ ~= t- PORCH BASEMENT - ~' MAIN FL OOR 3001 4TH ST. SE LOWER LEVEL SO. FT. = 1092 MINNEAPOLIS, MN 55414-3301 SINGLE FAMILY DWELLING L OWER LEVEL FINISHED SO. FT. = 401 1 1 UPPER LEVEL SQ. FT. = 1092 Habitat of Humanity OFFICE: 612-331-4090 TOTAL FINISHED FAX: 612-331-1540 MODEL: 6R4-2 I SQUARE FOOTAGE = 1493