09-21-2020 HRA Complete AgendaR E G U L AR H O U S IN G AN D R E D E V E LO P ME N T AU T H O R IT Y MEET IN G
V IR T U AL ME E TIN G H EL D V IA W E B E X
S E P T E MB E R 21, 2020
7:00 P M
C all to Order
A ttendance Roll C all
Open F orum: Opportunity for C itizens to address the HRA on items not on the A genda; dial phone number 612-861-
0651. A s you call i n, a moderator will assist you.
Approval of the Minutes
A pproval of the mi nutes of the Regular Housing and Redevelopment A uthority meeting of A ugust 17, 2020.
AG E N D A AP P R O VAL
1.A pproval of the A genda
2.Consent C alendar 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 onsi der adoption of a resolution approvi ng C ollateral A ssignment of the Tax Increment F inancing Note
and S ubordination of the Right to Repurchase in the C ontract for P rivate D evelopment for the C edar P oint
II townhomes.
S taff Report No. 28
B .C onsi deration of a Grant C ompliance A greement with C edar P oint Investments, L L C regarding a
C ommuni ty Homeownership Impact F und Award for RF 64 townhomes.
S taff Report No. 29
C .C onsi der an adjustment to the payment standard for the S ection 8 Housi ng C hoice Voucher P rogram.
S taff Report No. 30
3.C onsideration of items, if any, removed from C onsent C alendar
R E S O L U T IO N S
4.C onsider the resolutions approving a modification to the Redevelopment Plan and approval of a Tax
Increment Financing Plan for the 2020-1 Tax Increment Finance District (Henley II), and;
authorizing an Internal Loan for Advance of Certain Costs in connection with the 2020-1 Tax
Increment Finance District (Henley II).
S taff Report No. 31
O T H E R B U SIN E S S
5.C onsider a resolution approving an A mendment to the C ontract for P rivate D evelopment for C P II D evelopment
L L C .
S taff Report No. 32
H R A D IS C U S S IO N IT E MS
6.H R A D iscussion Items
E X E C U T IV E D IR EC TO R R E P O R T
7.E xecutive D i rector's Report
C L AIMS AN D PAYR O LL S
8.C laims
9.A djournment
Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96
hours in advance to the C ity Clerk at 612-861-9738.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
August 17, 2020
CALL TO ORDER
The meeting was called to order by Chair Supple at 7:00 p.m. via Webex.
HRA Members Mary Supple, Chair; Sue Sandahl; Maria Regan Gonzalez; Pat Elliott
Present: and Erin Vrieze Daniels.
HRA Members
Absent: None.
Staff Present: John Stark, Executive Director; Julie Urban, Housing Manager; Myrt Link,
Community Development Accountant and LaTonia DuBois, Administrative
Assistant.
OPEN FORUM
Administrative Assistant DuBois announced live comment is now available and provided the
phone number along with instructions for submitting comments prior to the meetings. There were
no speakers.
APPROVAL OF THE MINUTES
M/Sandahl, S/Elliott to approve the minutes of the 1) Concurrent City Council and Housing
and Redevelopment Authority Work Session of June 15, 2020; 2) Concurrent City Council, Housing
and Redevelopment Authority and Planning Commission Work Session of July 20, 2020; and 3) the
regular Housing and Redevelopment Authority meeting of July 20, 2020.
Motion carried 5-0
Item #1 APPROVAL OF THE AGENDA
M/Sandahl, S/Regan Gonzalez to approve the agenda.
Motion carried 5-0
HRA Meeting Minutes -2- August 17, 2020
Item #2
HRA AND EDA BUDGET PRESENTATION
Executive Director Stark reviewed the 2020-2021 HRA Budget presentation.
Commissioner Elliott inquired about the restrictive HRA Funds and why legislature hasn’t
looked at these funds to find a way to make them available.
Executive Director Stark explained that proposals have been submitted to legislature and
ongoing efforts are being made. Staff will come back to the HRA after further consultation.
Chair Supple expressed appreciation for the Affordable Housing Trust Fund and the
expansion of the First Time Homebuyer program. Chair Supple also stated appreciation for change
of focus to look at everything (City Council, HRA and EDA) holistically and the COVID Care
packages are a really good idea.
Commissioner Sandahl expressed concerns about not setting the tax levy to the full amount
because the money could be used for programing or low income housing.
Item #3
CONSIDERATION OF RESOLUTIONS APPROVING 2021 PROPOSED HOUSING
AND REDEVELOPMENT AUTHORITY BUDGET AND TAX LEVY AND 2020
REVISED HOUSING AND REDEVELOPMENT AUTHORITY BUDGET. (S.R. NO.
27)
M/Vrieze Daniels, S/Regan Gonzalez to adopt resolutions approving the 2021 proposed
Housing and Redevelopment Authority Budget and Tax Levy and 2020 Revised Housing and
Redevelopment Authority Budget.
Motion Carried 5-0
RESOLUTION NO. 1366
RESOLUTION APPROVING PROPOSED 2021 HOUSING AND REDEVELOPMENT
AUTHORITY BUDGET AND CERTIFYING THE 2021 TAX LEVY
RESOLUTION NO. 1367
RESOLUTION AUTHORIZING REVISION OF THE 2020 BUDGET OF THE
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD
Item #4
HRA DISCUSSION
Housing Manager Urban provided an update on the VEAP rent assistance fund awarded by
the state through the COVID-19 relief fund and plans to get information out to the community.
Chair Supple offered her apologies for not opening up the public comment line after the
budget presentation and opened the meeting for public comment.
Administrative Assistant DuBois provided instructions to call in for live public comment.
There were no callers.
HRA Meeting Minutes -3- August 17, 2020
Item #5
EXECUTIVE DIRECTOR’S REPOERT
Executive Director Stark discussed efforts to update the Inclusionary Housing Policy and
plans for community engagement proposals. Announced an upcoming joint work session
scheduled with City Council and the HRA to review the community engagement plan.
Item #9
CLAIMS
M/Vrieze Daniels, S/Regan Gonzalez that the following claims be approved:
U.S. BANK 8/17/2020
Section 8 Checks 132031-132109 $177,697.20
HRA Checks 33874-33883 $96,729.17
Total $274,426.37
Motion carried 5-0
Item #10
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:47 p.m.
Date Approved: September 21, 2020
Mary B. Supple
HRA Chair
LaTonia DuBois John Stark
Administrative Assistant Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF RE P ORT NO. 28
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
9/21/2020
RE P O RT P RE PA RE D B Y: Julie Urban, Housing & Redevelopment Manager
O TH E R D E PA RTM E NT RE V IE W: N/A
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
9/15/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consider adoption of a resolution approving C ollateral Assignment of the Tax Increment Financing
Note and Subordination of the Right to Repur chase in the Contract for Pr ivate Development for the
Cedar Point II townhomes.
E X E C UT IV E S UM M ARY:
I n 2018, the Housing and Redevelopment Authority (HRA) and NHH Companies, LLC now doing business
as Cedar Point I nvestments, L L C (Developer), entered into a C ontrac t for Private D evelopment (Contract)
for the development of the Cedar Point I I area with up to 80 townhomes. Construc tion is underway and is at a
point where additional construction financing is needed. Bridgewater Bank (Lender) is requesting several
items from the HRA in order to c lose on the c onstruc tion loan.
As part of the C ontrac t, the HRA agreed to provide Tax I ncrement Financing (TI F) to the project in the form
of up to three TI F Notes, depending on the total number of units c onstructed. The Lender is requiring the
Developer to assign all of its interest in the TI F Notes to secure the loan. T he collateral assignment of the
Developer's interest in the T IF Notes provides that when the T IF Notes are issued, the T IF Note
payments will go directly to the Lender.
T he Lender is also asking that the HRA agree to subordinate the Right to Repurchase Provision
(Provision) in the Contract to the construction loan. T he HRA sold four HRA-owned properties in
the project area to the Developer. A condition of that sale was that the HRA has the right to
repurchase those properties in the event that construction doesn't proceed on them. Two of the four
parcels are located in an area where construction has started, so the need to repurchase them is no
longer needed. T he Lender is asking the HRA to subordinate this Provision for the remaining two
parcels. In exchange, the Lender will give the HRA the first opportunity to repurchase the two
properties, at a mutually agreed-upon value, in the event of foreclosure.
RE C O M M E ND E D AC T IO N:
By motion: Adopt a resolution approving the following:
1. Collateral Assignment of Interest in Revenue N ote between Cedar Point Investments, L L C and
Bridgewater B ank for three Tax Increment Financing N otes.
2. Subordination of the R ight to Repurchase pr ovision in the Contract for Pr ivate Development to the
construction loan.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
The C edar Point I I development area (16th Avenue to Richfield P arkway, 63rd Street to 65th
Street) has been identified for redevelopment as multi-family housing in the C edar Corridor
Master Plan since 2004.
The HRA adopted an amended Contract for Private Development with NHH C ompanies, L L C, on
September 17, 2018, for the development of the western half of the Cedar Point I I area with up to
80 affordable townhome units. The D eveloper currently owns property that will allow up to 64
townhome units to be constructed.
Construction on the first eight townhome units was c ompleted in May. Construction on the next 16
units began in J uly.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Sec tion 3.6(c) of the Agreement allows for the assignment of the TI F Notes to a lender that
provides financing for the construc tion of the improvements.
Sec tion 7.3 of the Agreement allows for the subordination of the Contract terms to the holder of
any mortgage securing c onstruction, acquisition or permanent financ ing.
C.C R IT IC AL T IMIN G ISSU E S:
The D eveloper is planning to close on additional construction financ ing for the remaining phases
of townhome c onstruc tion in October. The Lender is requiring an assignment of the TI F Note and
a subordination of the Contract in order to close on the additional funds.
The first TI F Note can be issued once c onstruc tion has begun on 32 townhomes and qualified
costs are submitted. The Developer anticipates that will oc cur in Oc tober or November.
D.F IN AN C IAL IMPAC T:
Bridgewater Bank is lending the Developer money for the c onstruction of the townhomes. The
loan is being secured, in part, by the TI F Notes that will be issued to the project. The
Development Agreement provides for a $900,000 TI F Note upon c ommenc ement of construction
on the first 32 townhomes, an additional $900,000 Note once construction begins on the next 32
townhomes, and up to a $600,000 Note c ould be issued if additional townhomes are constructed.
E.L E GAL C ON S ID E R AT ION :
The HRA Attorney reviewed the Assumption and Subordination Agreements.
Under the terms of the Subordination, the HRA retains its rights under the C ontrac t.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Do not approve the Agreements.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
N/A
AT TAC H ME N TS :
D escripti on Type
Resolution Resolution L etter
A ssignment P hase 1 C ontract/A greement
A ssignment P hase 2 C ontract/A greement
A ssignment P hase 3 C ontract/A greement
S ubordi nation C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING A SUBORDINATION AGREEMENT WITH BRIDGEWATER
BANK AND ASSIGNMENTS OF TAX INCREMENT REVENUES NOTES
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “Authority”) and the City of Richfield, Minnesota (the “City”) established the Tax Increment Financing
District No. 2018-1 (a housing district) (the “TIF District”) within the Richfield Redevelopment Project in the
City; and
WHEREAS, the Authority entered into a Contract for Private Development, dated
September 17, 2018 (the “Original Agreement”), with Cedar Point Investments LLC, a Minnesota limited
liability company (the “Developer”), pursuant to which the Developer agreed to acquire certain real property
(the “Development Property”) and construct thereon a townhome development, including (i) up to 80
townhomes; (ii) two parking stalls for each townhome constructed; and (iii) necessary public infrastructure,
including street and utilities (the “Minimum Improvements”); and
WHEREAS, to make the Minimum Improvements economically feasible, the Authority agreed to
reimburse the Developer for costs related to the Minimum Improvements, including land acquisition costs,
certain site improvement costs, and the costs of constructing housing, with tax increment revenue generated
from property within the TIF District; and
WHEREAS, the Authority intends to issue to the Developer up to three tax increment revenue notes
(collectively, the “TIF Notes”) in the maximum aggregate principal amount of $2,400,000, subject to
modification as set forth in the Original Agreement, upon completion of the phases of the Minimum
Improvements described therein; and
WHEREAS, to provide financing for the Minimum Improvements, Bridgewater Bank (the
“Lender”) has agreed to provide the Developer with the following loans: (i) a land loan in the amount of
$1,635,000 (the “First Senior Loan”); (ii) a revolving construction loan of up to the amount of $4,050,000
(the “Second Senior Loan”); and (iii) a TIF bridge loan in the amount of $1,440,000 (the “Third Senior
Loan,” and collectively with the First Senior Loan and the Second Senior Loan, the “Senior Loans”); and
WHEREAS, as a condition to providing the Senior Loans to the Developer, the Lender will require
that the Authority subordinate certain of its rights under the Original Agreement with respect to the
Authority’s right of reverter and right of repurchase of the Development Property (the “Authority’s Rights”)
to the rights of the Lender under the loan documents prepared in connection with the Senior Loans
(collectively, the “Senior Loan Documents”); and
WHEREAS, as a condition to providing the Senior Loans to the Developer, the Lender will require
that the Developer assign its rights to and interest in the TIF Notes; and
WHEREAS, there have been presented before the Board of Commissioners of the Authority forms
of the following documents (collectively, the “Authority Documents”): (i) a Subordination Agreement (the
“Subordination Agreement”) between the Authority and the Lender, pursuant to which the Authority will
subordinate the Authority’s Rights under the Original Agreement, as amended by the First Amendment to
Agreement (as amended, the “Agreement”), to the rights of the Lender under the Senior Loan Documents;
2
(ii) a Consent to Assignment of Payments under Tax Increment Revenue Note with respect to the Phase I TIF
Note (as defined in the Agreement) (the “Consent to Phase I TIF Note Assignment”); (iii) a Consent to
Assignment of Payments under Tax Increment Revenue Note with respect to the Phase II TIF Note (as
defined in the Agreement) (the “Consent to Phase II TIF Note Assignment”); and (iv) a Consent to
Assignment of Payments under Tax Increment Revenue Note with respect to the Phase III TIF Note (as
defined in the Agreement) (the “Consent to Phase III TIF Note Assignment”); and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1. The Authority’s Rights under the Agreement are hereby subordinated to the rights of the
Lender under the Senior Loan Documents.
2. The Authority Documents are hereby in all respects authorized, approved, and confirmed,
and the Chair and the Executive Director are hereby authorized and directed to execute the Authority
Documents for and on behalf of the Authority in substantially the forms now on file with the Executive
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 all
additional 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 21st day of September, 2020.
Mary B. Supple, Chair
Maria Regan Gonzalez, Secretary
RC125-366 (JAE)
674631v1
2115929.v2
COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
THIS COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
(“Assignment”) is made as of the ____ day of September, 2020, by and between CEDAR
POINT INVESTMENTS, LLC, a Minnesota limited liability company (hereinafter referred to as
“Assignor” or “Borrower”), and BRIDGEWATER BANK, a Minnesota banking corporation
(hereinafter referred to as “Lender”).
RECITALS
On even date herewith, Lender agreed to advance up to the amount of $1,440,000.00 (the
“Loan”) to Borrower pursuant to that certain Loan Agreement by and between Borrower and
Lender of even date herewith (the “Loan Agreement”). The Loan is evidenced by a Promissory
Note from Borrower to Lender of even date herewith in the principal amount of the Loan (the
“Promissory Note”). Borrower is using the proceeds of the Loan as and for a portion of the
construction costs in connection with the construction of improvements for townhomes located
in the City of Richfield, County of Hennepin, State of Minnesota. The Promissory Note shall be
secured by a Combination Mortgage, Security Agreement, Fixture Filing and Assignment of
Leases and Rents (“Mortgage”) upon certain real property located in the City of Richfield,
County of Hennepin, State of Minnesota, as more particularly described in the Mortgage (the
“Property”), a Collateral Assignment of the TIF Note (as later defined), a Collateral Assignment
in connection with the Phase II TIF Note, a Collateral Assignment in connection with the Phase
III TIF Note, and a Pledge of Deposit Account, all executed by the Borrower in favor of the
Lender of even date herewith. The Loan Agreement, Promissory Note, Mortgage and other
collateral documents (along with any extensions, modifications or renewals thereof) described in
or accompanying the Loan Agreement are hereinafter sometimes collectively referred to as the
“Loan Documents”. Unless otherwise defined herein, terms are used herein with the same
meanings as defined in the Loan Agreement. In the event of any conflict between the terms
hereof and the Loan Agreement, the terms and conditions of the Loan Agreement shall control.
As a condition to granting the Loan on the date hereof, Lender has requested Borrower to cause
the execution and delivery of this Assignment.
NOW, THEREFORE, in consideration of the Loan and intending to be legally bound,
Assignor does hereby covenant, agree, warrant, represent, assign, set over and transfer, to the
extent assignable and transferable, as set forth herein:
1. A Tax Increment Revenue Note in connection with Phase I of the Property that
will be issued after the date hereof and pursuant to the terms of a Contract for Private
Development by and between the HRA (hereinafter defined) and Borrower dated September 17,
2018 (the “Development Agreement”), by the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota (the “HRA”) in favor of Borrower, in the original principal
amount of $900,000.00 (the “TIF Note”) shall be the subject of this Assignment. On or after the
issuance date of the TIF Note, Borrower shall promptly deliver the original TIF Note to the
Lender. If the TIF Note is not issued and delivered to the Lender, as provided in this Section 1,
by no later than _______, _____, subject to extension in the event of delay by the HRA, which
delay shall be approved by Lender in its reasonable discretion, then it shall be an Event of
2
Default hereunder and Lender shall be entitled to all rights and remedies available to it pursuant
to Section 6 herein.
2. Assignor hereby assigns, transfers and sets over unto Lender all of its current and
future right, title and interest, if any, in and to the TIF Note and all rights and benefits therefrom,
including without limitation rights to payments as set forth in Section 3 below, as security for the
full, timely and faithful repayment by the Borrower of the Loan, and performance by the
Borrower of its obligations under the Loan Documents. As further security to the Lender,
Assignor hereby assigns, transfers and sets over onto Lender, a first security interest in all of its
right, title and interest pursuant to Section 3.6 and Exhibit B of the Development Agreement and
all other provisions and terms of the Development Agreement as they relate to the TIF Note,
including the specimen TIF Note contained on Exhibit B attached to the Development
Agreement, as security for the full, timely and faithful repayment by the Borrower of the Loan,
and performance by Borrower of its obligations under the Loan Documents. Borrower hereby
agrees to execute such additional documentation as required by Lender in order to give full force
and effect to such assignment to Lender of the TIF Note and relevant portions of the
Development Agreement.
3. Commencing on the date hereof, and continuing until the Promissory Note is paid
in full or September ___, 2023 (the “Maturity Date”) or payment in full of the TIF Note,
whichever shall first occur, all payments made by the HRA under the TIF Note, shall be
deposited by the Borrower into the Account (as defined in that certain Pledge of Deposit
Account of even date herewith, whereby Borrower pledged the Account to Lender (“Pledge”))
held by the Borrower at the Lender. Lender shall automatically be authorized to apply monies
from the payments under the TIF Note deposited in the Account (as defined in the Pledge)
against the Promissory Note as and when due pursuant to the terms of the Promissory Note. The
affidavit or written statement of an officer, agent or attorney of Lender stating that Lender is
exercising its right to payments under the TIF Note or this Assignment shall constitute
conclusive evidence thereof, and the HRA or other persons are authorized and directed to rely
thereon.
4. Assignor agrees to faithfully observe and perform all of the obligations and
agreements imposed upon it under the TIF Note and Development Agreement, subject to
Assignor’s right to reasonably contest observance/performance.
5. Lender will not be deemed in any manner to have assumed any of the obligations
related to the TIF Note or the Development Agreement, nor shall Lender be liable to the HRA by
reason of any default by any party under the TIF Note or the Development Agreement.
Borrower agrees to indemnify and to hold Lender harmless of and from any and all liability, loss
or damage which it may or might incur by reason of any claims or demands against it based on
its alleged assumption of Assignor’s duty and obligation to perform and discharge the terms,
covenants and agreements in the TIF Note or Development Agreement.
6. After the occurrence of an Event of Default (as defined in the Loan Agreement):
a. Lender may elect to exercise any and all of Assignor’s rights and remedies
under the TIF Note or such rights assigned hereunder to Lender under the Development
3
Agreement regarding the TIF Note, without any interference or objection from Assignor,
and Assignor shall cooperate in causing the HRA to comply with all the terms and
conditions of the TIF Note or the Development Agreement.
b. Lender may exercise Assignor’s rights under the TIF Note or such rights
assigned hereunder to Lender under the Development Agreement regarding the TIF Note,
and perform all acts in the same manner and to the same extent as Assignor might do. In
connection with any and all of the foregoing powers, and without limiting the same,
Lender may amend the terms of and make concessions to the HRA.
c. Lender may exercise any remedies provided to it in the Loan Agreement
or Loan Documents.
7. All of the foregoing powers herein granted to Lender shall be liberally construed.
Lender need not expend its own funds in the exercise of such power, but if it does, such amounts
shall be considered as advances for and on behalf of Borrower secured by this Assignment and
evidenced by the Promissory Note and secured by other Loan Documents. Any amounts so
advanced shall bear interest at the then current rate prescribed in the Promissory Note.
8. Nothing herein contained shall be construed as constituting a waiver or
suspension by Lender of its right to enforce payment of the debts under the terms of the
Promissory Note, the Loan Agreement or other Loan Documents. Lender is not the agent,
partner or joint venturer of the Borrower, the Assignor, any Guarantor or the HRA.
9. This Assignment may be enforced from time to time by Lender at its discretion,
with or without order of any court, as Lender shall determine. Lender may also, at any time,
cease to enforce this Assignment. Any failure on the part of the Lender promptly to exercise any
option hereby given or reserved shall not prevent the exercise of any such option at any time
thereafter. Lender may pursue and enforce any remedy or remedies accorded it herein
independently of, in conjunction or concurrently with, or subsequent to its pursuit and
enforcement of any remedy or remedies which it may have under the Promissory Note, the Loan
Agreement and/or other Loan Documents.
10. Assignor warrants and represents to Lender that:
a. It has the right to exercise and deliver this Assignment. The execution of
this Assignment and performance and observance of its terms hereof have been duly
authorized by necessary company action and do not contravene or violate any provision
of Assignor’s organizational documents.
b. the outstanding principal balance on the TIF Note as of the date of
issuance shall be $900,000.00, together with interest at _____% per annum from and
after the date of issuance.
c. It has made no prior assignments of the TIF Note.
d. To Assignor’s knowledge, the Development Agreement is in full force and
effect on the date hereof, subject to no defenses, setoffs or counterclaims whatsoever.
4
e. To Assignor’s knowledge, there exists no event, condition or occurrence
which constitutes, or which with notice and/or the passage of time would constitute, a
breach of or default under any terms or conditions of any of the TIF Note or the
Development Agreement. Assignor also hereby covenants and agrees not to do any act
which would destroy or impair the security to the Lender of this Assignment.
f. Assignor has filed all tax returns required to be filed and either paid all
taxes shown thereon to be due, including interest and penalties, which are not being
contested in good faith and by appropriate proceedings, and Assignor has no knowledge
of any objections or claims for additional taxes in respect to federal tax or excise profit
tax returns for prior years.
11. When the context so requires, the singular shall include the plural and conversely,
and use of any gender shall include all genders.
12. This Assignment shall be governed by and be construed in accordance with the
laws of the State of Minnesota. Whenever possible, each provision of this Assignment shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Assignment shall be prohibited by or be invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Assignment.
13. Any notices required or contemplated hereunder shall be effective upon two (2)
business days after placing thereof in the United States mail, certified mail and with return
receipt requested, postage prepaid, and addressed as follows:
If to Assignor at: Cedar Point Investments, LLC
7455 France Avenue South, Suite 351
Edina, MN 55435
Attn: Adam Seraphine
If to Lender at: Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, MN 55416
Attn: Tyler Manning
With a copy to: Michelle R. Jester, Esq.
Messerli & Kramer P.A.
1400 Fifth Street Towers
100 South Fifth Street
Minneapolis, MN 55402
or to such other address specified in writing by one party to the other upon ten (10) days advance
written notice in accordance herewith.
[SIGNATURE PAGE TO FOLLOW]
5
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed as of
the day and year first above written.
CEDAR POINT INVESTMENTS, LLC,
a Minnesota limited liability company
By:
Lori Boisclair
Its: Chief Manager
6
CONSENT TO ASSIGNMENT OF PAYMENTS UNDER
TAX INCREMENT REVENUE NOTE
The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “HRA”), will issue its Phase I Tax Increment Revenue Note in the principal amount of
$900,000.00 (the “TIF Note”) upon satisfaction of the conditions set forth in the Contract for
Private Development by and between the HRA and Cedar Point Investments, LLC, a Minnesota
limited liability company (“Cedar”), dated September 17, 2018 (the “Development
Agreement”), and specifically in Section 3.6 of the Development Agreement. The HRA has
received a Collateral Assignment of Interest in Revenue Note which assigns as collateral to
Bridgewater Bank, a Minnesota banking corporation (“Bridgewater”), all Cedar’s interests in
the payments of Available Tax Increments (as defined in the Development Agreement) under the
TIF Note and Cedar’s rights pursuant to Section 3.6 and Exhibit B of the Development
Agreement and other sections related to causing the issuance of the TIF Note. The issuance of
the Phase I TIF Note is contingent on Cedar’ construction of at least 32 townhomes, the HRA
receiving evidence of eligible costs to be reimbursed by Tax Increments in the amount of
$900,000.00, and the HRA receiving executed investment letters from both Cedar and
Bridgewater. The HRA consents to such assignment pursuant to the terms of the Development
Agreement and the TIF Note.
Until further notified, the HRA shall make all payments under the TIF Note to
Bridgewater Bank at the following address:
Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, MN 55416
Attn: Tyler Manning
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By:
Mary B. Supple
Its: Chair
By:
John Stark
Its: Executive Director
2115971.v2
COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
THIS COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
(“Assignment”) is made as of the ____ day of September, 2020, by and between CEDAR
POINT INVESTMENTS, LLC, a Minnesota limited liability company (hereinafter referred to as
“Assignor” or “Borrower”), and BRIDGEWATER BANK, a Minnesota banking corporation
(hereinafter referred to as “Lender”).
RECITALS
On even date herewith, Lender agreed to advance up to the amount of $1,440,000.00 (the
“Loan”) to Borrower pursuant to that certain Loan Agreement by and between Borrower and
Lender of even date herewith (the “Loan Agreement”). The Loan is evidenced by a Promissory
Note from Borrower to Lender of even date herewith in the principal amount of the Loan (the
“Promissory Note”). Borrower is using the proceeds of the Loan as and for a portion of the
construction costs in connection with the construction of improvements for townhomes located
in the City of Richfield, County of Hennepin, State of Minnesota. The Promissory Note shall be
secured by a Combination Mortgage, Security Agreement, Fixture Filing and Assignment of
Leases and Rents (“Mortgage”) upon certain real property located in the City of Richfield,
County of Hennepin, State of Minnesota, as more particularly described in the Mortgage (the
“Property”), a Collateral Assignment of the TIF Note (as later defined), a Collateral Assignment
in connection with the Phase I TIF Note, a Collateral Assignment in connection with the Phase
III TIF Note, and a Pledge of Deposit Account, all executed by the Borrower in favor of the
Lender of even date herewith. The Loan Agreement, Promissory Note, Mortgage and other
collateral documents (along with any extensions, modifications or renewals thereof) described in
or accompanying the Loan Agreement are hereinafter sometimes collectively referred to as the
“Loan Documents”. Unless otherwise defined herein, terms are used herein with the same
meanings as defined in the Loan Agreement. In the event of any conflict between the terms
hereof and the Loan Agreement, the terms and conditions of the Loan Agreement shall control.
As a condition to granting the Loan on the date hereof, Lender has requested Borrower to cause
the execution and delivery of this Assignment.
NOW, THEREFORE, in consideration of the Loan and intending to be legally bound,
Assignor does hereby covenant, agree, warrant, represent, assign, set over and transfer, to the
extent assignable and transferable, as set forth herein:
1. A Tax Increment Revenue Note in connection with Phase II of the Property that
will be issued after the date hereof and pursuant to the terms of a Contract for Private
Development by and between the HRA (hereinafter defined) and Borrower dated September 17,
2018 (the “Development Agreement”), by the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota (the “HRA”) in favor of Borrower, in the original principal
amount of $900,000.00 (the “TIF Note”) shall be the subject of this Assignment. On or after the
issuance date of the TIF Note, Borrower shall promptly deliver the original TIF Note to the
Lender. If the TIF Note is not issued and delivered to the Lender, as provided in this Section 1,
by no later than _______, _____, subject to extension in the event of delay by the HRA, which
delay shall be approved by Lender in its reasonable discretion, then it shall be an Event of
2
Default hereunder and Lender shall be entitled to all rights and remedies available to it pursuant
to Section 6 herein.
2. Assignor hereby assigns, transfers and sets over unto Lender all of its current and
future right, title and interest, if any, in and to the TIF Note and all rights and benefits therefrom,
including without limitation rights to payments as set forth in Section 3 below, as security for the
full, timely and faithful repayment by the Borrower of the Loan, and performance by the
Borrower of its obligations under the Loan Documents. As further security to the Lender,
Assignor hereby assigns, transfers and sets over onto Lender, a first security interest in all of its
right, title and interest pursuant to Section 3.6 and Exhibit B of the Development Agreement and
all other provisions and terms of the Development Agreement as they relate to the TIF Note,
including the specimen TIF Note contained on Exhibit B attached to the Development
Agreement, as security for the full, timely and faithful repayment by the Borrower of the Loan,
and performance by Borrower of its obligations under the Loan Documents. Borrower hereby
agrees to execute such additional documentation as required by Lender in order to give full force
and effect to such assignment to Lender of the TIF Note and relevant portions of the
Development Agreement.
3. Commencing on the date hereof, and continuing until the Promissory Note is paid
in full or September ___, 2023 (the “Maturity Date”) or payment in full of the TIF Note,
whichever shall first occur, all payments made by the HRA under the TIF Note, shall be
deposited by the Borrower into the Account (as defined in that certain Pledge of Deposit
Account of even date herewith, whereby Borrower pledged the Account to Lender (“Pledge”))
held by the Borrower at the Lender. Lender shall automatically be authorized to apply monies
from the payments under the TIF Note deposited in the Account (as defined in the Pledge)
against the Promissory Note as and when due pursuant to the terms of the Promissory Note. The
affidavit or written statement of an officer, agent or attorney of Lender stating that Lender is
exercising its right to payments under the TIF Note or this Assignment shall constitute
conclusive evidence thereof, and the HRA or other persons are authorized and directed to rely
thereon.
4. Assignor agrees to faithfully observe and perform all of the obligations and
agreements imposed upon it under the TIF Note and Development Agreement, subject to
Assignor’s right to reasonably contest observance/performance.
5. Lender will not be deemed in any manner to have assumed any of the obligations
related to the TIF Note or the Development Agreement, nor shall Lender be liable to the HRA by
reason of any default by any party under the TIF Note or the Development Agreement.
Borrower agrees to indemnify and to hold Lender harmless of and from any and all liability, loss
or damage which it may or might incur by reason of any claims or demands against it based on
its alleged assumption of Assignor’s duty and obligation to perform and discharge the terms,
covenants and agreements in the TIF Note or Development Agreement.
6. After the occurrence of an Event of Default (as defined in the Loan Agreement):
a. Lender may elect to exercise any and all of Assignor’s rights and remedies
under the TIF Note or such rights assigned hereunder to Lender under the Development
3
Agreement regarding the TIF Note, without any interference or objection from Assignor,
and Assignor shall cooperate in causing the HRA to comply with all the terms and
conditions of the TIF Note or the Development Agreement.
b. Lender may exercise Assignor’s rights under the TIF Note or such rights
assigned hereunder to Lender under the Development Agreement regarding the TIF Note,
and perform all acts in the same manner and to the same extent as Assignor might do. In
connection with any and all of the foregoing powers, and without limiting the same,
Lender may amend the terms of and make concessions to the HRA.
c. Lender may exercise any remedies provided to it in the Loan Agreement
or Loan Documents.
7. All of the foregoing powers herein granted to Lender shall be liberally construed.
Lender need not expend its own funds in the exercise of such power, but if it does, such amounts
shall be considered as advances for and on behalf of Borrower secured by this Assignment and
evidenced by the Promissory Note and secured by other Loan Documents. Any amounts so
advanced shall bear interest at the then current rate prescribed in the Promissory Note.
8. Nothing herein contained shall be construed as constituting a waiver or
suspension by Lender of its right to enforce payment of the debts under the terms of the
Promissory Note, the Loan Agreement or other Loan Documents. Lender is not the agent,
partner or joint venturer of the Borrower, the Assignor, any Guarantor or the HRA.
9. This Assignment may be enforced from time to time by Lender at its discretion,
with or without order of any court, as Lender shall determine. Lender may also, at any time,
cease to enforce this Assignment. Any failure on the part of the Lender promptly to exercise any
option hereby given or reserved shall not prevent the exercise of any such option at any time
thereafter. Lender may pursue and enforce any remedy or remedies accorded it herein
independently of, in conjunction or concurrently with, or subsequent to its pursuit and
enforcement of any remedy or remedies which it may have under the Promissory Note, the Loan
Agreement and/or other Loan Documents.
10. Assignor warrants and represents to Lender that:
a. It has the right to exercise and deliver this Assignment. The execution of
this Assignment and performance and observance of its terms hereof have been duly
authorized by necessary company action and do not contravene or violate any provision
of Assignor’s organizational documents.
b. the outstanding principal balance on the TIF Note as of the date of
issuance shall be $900,000.00, together with interest at _____% per annum from and
after the date of issuance.
c. It has made no prior assignments of the TIF Note.
d. To Assignor’s knowledge, the Development Agreement is in full force and
effect on the date hereof, subject to no defenses, setoffs or counterclaims whatsoever.
4
e. To Assignor’s knowledge, there exists no event, condition or occurrence
which constitutes, or which with notice and/or the passage of time would constitute, a
breach of or default under any terms or conditions of any of the TIF Note or the
Development Agreement. Assignor also hereby covenants and agrees not to do any act
which would destroy or impair the security to the Lender of this Assignment.
f. Assignor has filed all tax returns required to be filed and either paid all
taxes shown thereon to be due, including interest and penalties, which are not being
contested in good faith and by appropriate proceedings, and Assignor has no knowledge
of any objections or claims for additional taxes in respect to federal tax or excise profit
tax returns for prior years.
11. When the context so requires, the singular shall include the plural and conversely,
and use of any gender shall include all genders.
12. This Assignment shall be governed by and be construed in accordance with the
laws of the State of Minnesota. Whenever possible, each provision of this Assignment shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Assignment shall be prohibited by or be invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Assignment.
13. Any notices required or contemplated hereunder shall be effective upon two (2)
business days after placing thereof in the United States mail, certified mail and with return
receipt requested, postage prepaid, and addressed as follows:
If to Assignor at: Cedar Point Investments, LLC
7455 France Avenue South, Suite 351
Edina, MN 55435
Attn: Adam Seraphine
If to Lender at: Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, MN 55416
Attn: Tyler Manning
With a copy to: Michelle R. Jester, Esq.
Messerli & Kramer P.A.
1400 Fifth Street Towers
100 South Fifth Street
Minneapolis, MN 55402
or to such other address specified in writing by one party to the other upon ten (10) days advance
written notice in accordance herewith.
[SIGNATURE PAGE TO FOLLOW]
5
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed as of
the day and year first above written.
CEDAR POINT INVESTMENTS, LLC,
a Minnesota limited liability company
By:
Lori Boisclair
Its: Chief Manager
6
CONSENT TO ASSIGNMENT OF PAYMENTS UNDER
TAX INCREMENT REVENUE NOTE
The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “HRA”), will issue its Phase II Tax Increment Revenue Note in the principal amount of
$900,000.00 (the “TIF Note”) upon satisfaction of the conditions set forth in the Contract for
Private Development by and between the HRA and Cedar Point Investments, LLC, a Minnesota
limited liability company (“Cedar”), dated September 17, 2018 (the “Development
Agreement”), and specifically in Section 3.6 of the Development Agreement. The HRA has
received a Collateral Assignment of Interest in Revenue Note which assigns as collateral to
Bridgewater Bank, a Minnesota banking corporation (“Bridgewater”), all Cedar’s interests in
the payments of Available Tax Increments (as defined in the Development Agreement) under the
TIF Note and Cedar’s rights pursuant to Section 3.6 and Exhibit B of the Development
Agreement and other sections related to causing the issuance of the TIF Note. The issuance of
the Phase II TIF Note is contingent on Cedar’ construction of at least 32 townhomes, the HRA
receiving evidence of eligible costs to be reimbursed by Tax Increments in the amount of
$900,000.00, and the HRA receiving executed investment letters from both Cedar and
Bridgewater. The HRA consents to such assignment pursuant to the terms of the Development
Agreement and the TIF Note.
Until further notified, the HRA shall make all payments under the TIF Note to
Bridgewater Bank at the following address:
Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, MN 55416
Attn: Tyler Manning
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By:
Mary B. Supple
Its: Chair
By:
John Stark
Its: Executive Director
2115973.v2
COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
THIS COLLATERAL ASSIGNMENT OF INTEREST IN REVENUE NOTE
(“Assignment”) is made as of the ____ day of September, 2020, by and between CEDAR
POINT INVESTMENTS, LLC, a Minnesota limited liability company (hereinafter referred to as
“Assignor” or “Borrower”), and BRIDGEWATER BANK, a Minnesota banking corporation
(hereinafter referred to as “Lender”).
RECITALS
On even date herewith, Lender agreed to advance up to the amount of $1,440,000.00 (the
“Loan”) to Borrower pursuant to that certain Loan Agreement by and between Borrower and
Lender of even date herewith (the “Loan Agreement”). The Loan is evidenced by a Promissory
Note from Borrower to Lender of even date herewith in the principal amount of the Loan (the
“Promissory Note”). Borrower is using the proceeds of the Loan as and for a portion of the
construction costs in connection with the construction of improvements for townhomes located
in the City of Richfield, County of Hennepin, State of Minnesota. The Promissory Note shall be
secured by a Combination Mortgage, Security Agreement, Fixture Filing and Assignment of
Leases and Rents (“Mortgage”) upon certain real property located in the City of Richfield,
County of Hennepin, State of Minnesota, as more particularly described in the Mortgage (the
“Property”), a Collateral Assignment of the TIF Note (as later defined), a Collateral Assignment
in connection with the Phase I TIF Note, a Collateral Assignment in connection with the Phase II
TIF Note, and a Pledge of Deposit Account, all executed by the Borrower in favor of the Lender
of even date herewith. The Loan Agreement, Promissory Note, Mortgage and other collateral
documents (along with any extensions, modifications or renewals thereof) described in or
accompanying the Loan Agreement are hereinafter sometimes collectively referred to as the
“Loan Documents”. Unless otherwise defined herein, terms are used herein with the same
meanings as defined in the Loan Agreement. In the event of any conflict between the terms
hereof and the Loan Agreement, the terms and conditions of the Loan Agreement shall control.
As a condition to granting the Loan on the date hereof, Lender has requested Borrower to cause
the execution and delivery of this Assignment.
NOW, THEREFORE, in consideration of the Loan and intending to be legally bound,
Assignor does hereby covenant, agree, warrant, represent, assign, set over and transfer, to the
extent assignable and transferable, as set forth herein:
1. A Tax Increment Revenue Note in connection with Phase III of the Property that
will be issued after the date hereof and pursuant to the terms of a Contract for Private
Development by and between the HRA (hereinafter defined) and Borrower dated September 17,
2018 (the “Development Agreement”), by the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota (the “HRA”) in favor of Borrower, in the original principal
amount of $600,000.00 (the “TIF Note”) shall be the subject of this Assignment. The Assignee
acknowledges that the amount of the TIF Note is subject to reduction pursuant to Section 3.6(e)
of the Development Agreement. On or after the issuance date of the TIF Note, Borrower shall
promptly deliver the original TIF Note to the Lender. If the TIF Note is not issued and delivered
to the Lender, as provided in this Section 1, by no later than _______, _____, subject to
2
extension in the event of delay by the HRA, which delay shall be approved by Lender in its
reasonable discretion, then it shall be an Event of Default hereunder and Lender shall be entitled
to all rights and remedies available to it pursuant to Section 6 herein.
2. Assignor hereby assigns, transfers and sets over unto Lender all of its current and
future right, title and interest, if any, in and to the TIF Note and all rights and benefits therefrom,
including without limitation rights to payments as set forth in Section 3 below, as security for the
full, timely and faithful repayment by the Borrower of the Loan, and performance by the
Borrower of its obligations under the Loan Documents. As further security to the Lender,
Assignor hereby assigns, transfers and sets over onto Lender, a first security interest in all of its
right, title and interest pursuant to Section 3.6 and Exhibit B of the Development Agreement and
all other provisions and terms of the Development Agreement as they relate to the TIF Note,
including the specimen TIF Note contained on Exhibit B attached to the Development
Agreement, as security for the full, timely and faithful repayment by the Borrower of the Loan,
and performance by Borrower of its obligations under the Loan Documents. Borrower hereby
agrees to execute such additional documentation as required by Lender in order to give full force
and effect to such assignment to Lender of the TIF Note and relevant portions of the
Development Agreement.
3. Commencing on the date hereof, and continuing until the Promissory Note is paid
in full or September ___, 2023 (the “Maturity Date”) or payment in full of the TIF Note,
whichever shall first occur, all payments made by the HRA under the TIF Note, shall be
deposited by the Borrower into the Account (as defined in that certain Pledge of Deposit
Account of even date herewith, whereby Borrower pledged the Account to Lender (“Pledge”))
held by the Borrower at the Lender. Lender shall automatically be authorized to apply monies
from the payments under the TIF Note deposited in the Account (as defined in the Pledge)
against the Promissory Note as and when due pursuant to the terms of the Promissory Note. The
affidavit or written statement of an officer, agent or attorney of Lender stating that Lender is
exercising its right to payments under the TIF Note or this Assignment shall constitute
conclusive evidence thereof, and the HRA or other persons are authorized and directed to rely
thereon.
4. Assignor agrees to faithfully observe and perform all of the obligations and
agreements imposed upon it under the TIF Note and Development Agreement, subject to
Assignor’s right to reasonably contest observance/performance.
5. Lender will not be deemed in any manner to have assumed any of the obligations
related to the TIF Note or the Development Agreement, nor shall Lender be liable to the HRA by
reason of any default by any party under the TIF Note or the Development Agreement.
Borrower agrees to indemnify and to hold Lender harmless of and from any and all liability, loss
or damage which it may or might incur by reason of any claims or demands against it based on
its alleged assumption of Assignor’s duty and obligation to perform and discharge the terms,
covenants and agreements in the TIF Note or Development Agreement.
6. After the occurrence of an Event of Default (as defined in the Loan Agreement):
3
a. Lender may elect to exercise any and all of Assignor’s rights and remedies
under the TIF Note or such rights assigned hereunder to Lender under the Development
Agreement regarding the TIF Note, without any interference or objection from Assignor,
and Assignor shall cooperate in causing the HRA to comply with all the terms and
conditions of the TIF Note or the Development Agreement.
b. Lender may exercise Assignor’s rights under the TIF Note or such rights
assigned hereunder to Lender under the Development Agreement regarding the TIF Note,
and perform all acts in the same manner and to the same extent as Assignor might do. In
connection with any and all of the foregoing powers, and without limiting the same,
Lender may amend the terms of and make concessions to the HRA.
c. Lender may exercise any remedies provided to it in the Loan Agreement
or Loan Documents.
7. All of the foregoing powers herein granted to Lender shall be liberally construed.
Lender need not expend its own funds in the exercise of such power, but if it does, such amounts
shall be considered as advances for and on behalf of Borrower secured by this Assignment and
evidenced by the Promissory Note and secured by other Loan Documents. Any amounts so
advanced shall bear interest at the then current rate prescribed in the Promissory Note.
8. Nothing herein contained shall be construed as constituting a waiver or
suspension by Lender of its right to enforce payment of the debts under the terms of the
Promissory Note, the Loan Agreement or other Loan Documents. Lender is not the agent,
partner or joint venturer of the Borrower, the Assignor, any Guarantor or the HRA.
9. This Assignment may be enforced from time to time by Lender at its discretion,
with or without order of any court, as Lender shall determine. Lender may also, at any time,
cease to enforce this Assignment. Any failure on the part of the Lender promptly to exercise any
option hereby given or reserved shall not prevent the exercise of any such option at any time
thereafter. Lender may pursue and enforce any remedy or remedies accorded it herein
independently of, in conjunction or concurrently with, or subsequent to its pursuit and
enforcement of any remedy or remedies which it may have under the Promissory Note, the Loan
Agreement and/or other Loan Documents.
10. Assignor warrants and represents to Lender that:
a. It has the right to exercise and deliver this Assignment. The execution of
this Assignment and performance and observance of its terms hereof have been duly
authorized by necessary company action and do not contravene or violate any provision
of Assignor’s organizational documents.
b. the outstanding principal balance on the TIF Note as of the date of
issuance shall be $600,000.00, together with interest at _____% per annum from and
after the date of issuance.
c. It has made no prior assignments of the TIF Note.
4
d. To Assignor’s knowledge, the Development Agreement is in full force and
effect on the date hereof, subject to no defenses, setoffs or counterclaims whatsoever.
e. To Assignor’s knowledge, there exists no event, condition or occurrence
which constitutes, or which with notice and/or the passage of time would constitute, a
breach of or default under any terms or conditions of any of the TIF Note or the
Development Agreement. Assignor also hereby covenants and agrees not to do any act
which would destroy or impair the security to the Lender of this Assignment.
f. Assignor has filed all tax returns required to be filed and either paid all
taxes shown thereon to be due, including interest and penalties, which are not being
contested in good faith and by appropriate proceedings, and Assignor has no knowledge
of any objections or claims for additional taxes in respect to federal tax or excise profit
tax returns for prior years.
11. When the context so requires, the singular shall include the plural and conversely,
and use of any gender shall include all genders.
12. This Assignment shall be governed by and be construed in accordance with the
laws of the State of Minnesota. Whenever possible, each provision of this Assignment shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Assignment shall be prohibited by or be invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Assignment.
13. Any notices required or contemplated hereunder shall be effective upon two (2)
business days after placing thereof in the United States mail, certified mail and with return
receipt requested, postage prepaid, and addressed as follows:
If to Assignor at: Cedar Point Investments, LLC
7455 France Avenue South, Suite 351
Edina, MN 55435
Attn: Adam Seraphine
If to Lender at: Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, MN 55416
Attn: Tyler Manning
With a copy to: Michelle R. Jester, Esq.
Messerli & Kramer P.A.
1400 Fifth Street Towers
100 South Fifth Street
Minneapolis, MN 55402
or to such other address specified in writing by one party to the other upon ten (10) days advance
written notice in accordance herewith.
5
[SIGNATURE PAGE TO FOLLOW]
6
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed as of
the day and year first above written.
CEDAR POINT INVESTMENTS, LLC,
a Minnesota limited liability company
By:
Lori Boisclair
Its: Chief Manager
7
CONSENT TO ASSIGNMENT OF PAYMENTS UNDER
TAX INCREMENT REVENUE NOTE
The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “HRA”), will issue its Phase III Tax Increment Revenue Note in the principal amount of
$600,000.00 (the “TIF Note”) upon satisfaction of the conditions set forth in the Contract for
Private Development by and between the HRA and Cedar Point Investments, LLC, a Minnesota
limited liability company (“Cedar”), dated September 17, 2018 (the “Development
Agreement”), and specifically in Section 3.6 of the Development Agreement. The HRA has
received a Collateral Assignment of Interest in Revenue Note which assigns as collateral to
Bridgewater Bank, a Minnesota banking corporation (“Bridgewater”), all Cedar’s interests in
the payments of Available Tax Increments (as defined in the Development Agreement) under the
TIF Note and Cedar’s rights pursuant to Section 3.6 and Exhibit B of the Development
Agreement and other sections related to causing the issuance of the TIF Note. The issuance of
the Phase III TIF Note is contingent on Cedar’s construction of the number of the townhomes
required to be constructed pursuant to Section 4.9 of the Development Agreement, the HRA
receiving evidence of eligible costs to be reimbursed by Tax Increments in the amount of
$600,000.00 (subject to reduction pursuant to Section 3.6(e) of the Development Agreement),
and the HRA receiving executed investment letters from both Cedar’s and Bridgewater. The
HRA consents to such assignment pursuant to the terms of the Development Agreement and the
TIF Note.
Until further notified, the HRA shall make all payments under the TIF Note to
Bridgewater Bank at the following address:
Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, MN 55416
Attn: Tyler Manning
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By:
Mary B. Supple
Its: Chair
By:
John Stark
Its: Executive Director
2122783.v3
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (“Agreement”) is made and entered into this
___ day of September, 2020, by and between HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body
corporate and politic under the laws of the State of Minnesota (the “Authority”) and
BRIDGEWATER BANK, a Minnesota banking corporation (“Bridgewater”).
RECITALS
WHEREAS, Bridgewater is making three mortgage loans to Cedar Point Investments
LLC, a Minnesota limited liability company (“Borrower”) as follows: (i) a land loan in the
amount of One Million Six Hundred Thirty-Five Thousand and 00/100 Dollars ($1,635,000.00)
(the “First Senior Loan”), which First Senior Loan is secured by a Combination Mortgage,
Security Agreement, Fixture Filing and Assignment of Leases and Rents granted by Borrower of
even date herewith, to be recorded with the Hennepin County Recorder’s Office (the “First
Senior Mortgage”) as a first mortgage lien against the fee simple interest in real property
located in the City of Richfield, County of Hennepin, State of Minnesota (the “Property”), as
legally described in Exhibit A attached hereto; (ii) a revolving construction loan of up to the
amount of Four Million Fifty Thousand and 00/100 Dollars ($4,050,000.00) (the “Second
Senior Loan”), which Second Senior Loan is secured by a Combination Mortgage, Security
Agreement, Fixture Filing and Assignment of Leases and Rents granted by Borrower of even
date herewith, to be recorded with the Hennepin County Recorder’s Office (the “Second Senior
Mortgage”) as a second mortgage lien against the Property; and (iii) a TIF bridge loan in the
amount of One Million Four Hundred Forty Thousand and 00/100 Dollars ($1,440,000.00) (the
“Third Senior Loan” together with the First Senior Loan and the Second Senior Loan
collectively, the “Senior Loans”), which Third Senior Loan is secured by a Combination
Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents granted by
Borrower of even date herewith, to be recorded with the Hennepin County Recorder’s Office
(the “Third Senior Mortgage” together with the First Senior Mortgage and Second Senior
Mortgage, collectively, the
“Senior Mortgages”) as a third mortgage lien against the Property.
WHEREAS, Authority and Borrower have entered into a Contract for Private
2
Development dated September 17, 2018 (the “Development Contract”), which provides for
certain obligations and rights of the Borrower and Authority in connection with the development
of the Property, specifically the Authority’s right of reverter contained in Section 9.4 of the
Development Contract and right of repurchase contained in Section 9.9 of the Development
Contract (the “Authority Rights”).
WHEREAS, that as a condition of Bridgewater making the Senior Loans as of the date
hereof, Authority must execute and deliver this Subordination Agreement agreeing to
subordinate the Authority Rights contained in the Development Contract with respect to the
Property, all as more fully set forth herein; and
NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by
each party hereto, it is hereby agreed as follows:
1. Subordination. The Authority Rights held by the Authority with respect to the
Property are hereby subjected and subordinated and shall remain in all respects and for all
purposes subject, subordinate, and junior to the lien of the Senior Mortgages, and to the rights
and interest of the holder of the Senior Mortgages, as fully and with the same effect as if the
Senior Mortgages had been duly executed, acknowledged, and recorded, and the indebtedness
secured thereby had been fully disbursed prior to the execution of the Development Contract
containing the Authority Rights. If Bridgewater forecloses one or more of the Senior Loans or
takes a deed in lieu of foreclosure with respect to the Property, such action will not constitute a
transfer under the Development Contract, including Section 8.2 contained therein. Except as set
forth in this Section 1, this Agreement does not limit the Authority’s ability to exercise its rights
and remedies set forth in the Development Agreement.
2. Foreclosure. If Bridgewater determines to foreclose on all or a portion of the
Property, Bridgewater will provide notice to the Authority of the foreclosure and provide the
Authority with sixty days following the completion of the foreclosure proceedings to purchase
the property at a price that represents the mutually agreed upon fair market value of the
foreclosed Property.
3. Successors and Assigns. This Agreement and each and every covenant,
agreement, and other provisions hereof shall be binding upon the parties hereto and their
respective successors and assigns, including without limitation each and every holder of the
Senior Mortgages or any other person having an interest therein and shall inure to the benefit of
the Bridgewater and its successors and assigns.
4. Choice of Law. This Agreement is made and executed under and in all respects is
to be governed and construed by the laws of the State of Minnesota.
5. Captions and Headings. The captions and headings of the various sections of this
Agreement are for convenience only and are not to be construed as confirming or limiting in any
way the scope or intent of the provisions hereof. Whenever the context requires or permits, the
3
singular shall include the plural, the plural shall include the singular, and the masculine,
feminine, and neuter shall be freely interchangeable.
6. Notices. Any notice which any party hereto may desire to may be required to
give to any other party shall be in writing and shall be deemed given two (2) business days after
mailing thereof by first class mail, or equivalent, to the addresses as set forth below, or to such
other places any party hereto may by notice in writing designate shall constitute service of notice
hereunder.
Bridgewater: Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
St. Louis Park, Minnesota 55416
Attn: Tyler Manning
Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, Minnesota 55423
Attn: Executive Director
7. Counterparts. Each of the executed counterparts of this Agreement shall be
original and all counterparts together shall constitute one and the same agreement.
8. Term. This Agreement shall continue in effect until the earlier of the Senior
Loans being paid in full or the date that neither of the Authority Rights are any longer in effect.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed as of the date first above written.
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 )
On this ______ day of September, 2020, before me appeared Mary 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 )
On this ______ day of September, 2020, before me appeared 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
5
BRIDGEWATER:
BRIDGEWATER BANK,
a Minnesota banking corporation
By:
Tyler Manning
Its: Vice President
STATE OF MINNESOTA)
) ss.
COUNTY OF __________)
On this ______ day of September, 2020, before me appeared Tyler Manning, the Vice
President of Bridgewater Bank, a Minnesota banking corporation, on behalf of the bank.
Notary Public
This instrument was drafted by:
MESSERLI & KRAMER P.A. (MRJ)
1400 Fifth Street Towers
100 South Fifth Street
Minneapolis, MN 55402-4218
(612) 672-3718
6
EXHIBIT A
Legal Description
Lots 2 through 8, Block 1 and Lots 1, 2, 3, 4, and 5, Block 2, "IVERSON'S SECOND
ADDITION", Hennepin County, Minnesota.
Together With:
All that part of vacated East 64th Street as dedicated in "IVERSON'S SECOND ADDITION",
according to the recorded plat thereof, Hennepin County, Minnesota, and lying westerly of a line
drawn from the northeast corner of Lot 1, Block 2, said "IVERSON'S SECOND ADDITION", to
the southeast corner of Lot 8, Block 1, said "IVERSON'S SECOND ADDITION"; and lying
easterly of a line drawn from the northwest corner of said Block 2, to the southwest corner of
said Block 1.
Abstract Property
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
STAFF RE P ORT NO. 29
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
9/21/2020
RE P O RT P RE PA RE D B Y: Julie Urban, Housing and Redevelopment Manager
O TH E R D E PA RTM E NT RE V IE W:
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
9/16/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of a Grant Compliance Agreement with Cedar Point Investments, LL C regarding a
Community Homeownership Impact Fund Award for R F64 townhomes.
E X E C UT IV E S UM M ARY:
The Housing and Redevelopment Authority (HRA ) was awarded a Community Homeownership I mpac t Fund
Award (Award) in the amount of $94,336 to provide deferred loans to income-qualified buyers of townhomes
located in the RF64 development.
The HRA signed a c ontrac t with Minnesota Housing that establishes the terms of the Award. Cedar Point
I nvestments, L L C (D eveloper) will market the funds and identify eligible buyers of RF64 townhomes who earn
up to 100% of the A rea Median I nc ome. The proposed Grant Compliance Agreement (Agreement) between
the HRA and the D eveloper referenc es the terms of the c ontrac t with Minnesota Housing and ensures that the
Developer meet the requirements as well.
RE C O M M E ND E D AC T IO N:
By motion: Approve a G rant C ompliance Agreement with C edar Point Investments, L L C regarding a
Community Homeownership Impact Fund Award for the R F64 development.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
I n November, 2019, the HRA was awarded $94,336 in I mpact Funds from Minnesota Housing to
provide deferred loans for income-qualified buy ers in the RF64 townhome development.
On September 18, 2018, the HRA entered into a C ontrac t for Private D evelopment with NHH
Properties, LLC, now doing business as Cedar Point I nvestments, L L C , to develop up to 80
townhomes in the C edar Point I I redevelopment area.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The HRA and Minnesota Housing have exec uted a contract that lays out the terms of the deferred loan.
The Grant C ompliance Agreement convey s those terms to Cedar Point I nvestments, L L C .
C.C R IT IC AL T IMIN G ISSU E S:
The Award expires December 1, 2021.
D.F IN AN C IAL IMPAC T:
The HRA was awarded $94,336 in deferred loan funds.
The HRA intends to work with the Developer to provide the proceeds of the award as deferred
loans to income-qualified townhome buy ers.
E.L E GAL C ON S ID E R AT ION :
The HRA A ttorney prepared the Agreement.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
1. Decide not to approve the Agreement.
2. Approve the A greement with changes.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
NA
AT TAC H ME N TS :
D escripti on Type
Resolution Resolution L etter
A greement C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING GRANT COMPLIANCE AGREEMENT WITH CEDAR POINT
INVESTMENTS LLC
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “Authority”) entered into a Contract for Private Development, dated September 17, 2018, with Cedar
Point Investments LLC, a Minnesota limited liability company (the “Developer”), pursuant to which the
Developer agreed to acquire certain real property and construct thereon a townhome development, including
(i) up to 80 townhomes; (ii) two parking stalls for each townhome constructed; and (iii) necessary public
infrastructure, including street and utilities (the “Minimum Improvements”); and the Authority agreed to
reimburse the Developer for costs related to the Minimum Improvements, including land acquisition costs,
certain site improvement costs, and the costs of constructing housing; and
WHEREAS, to assist the Developer in obtaining additional financing for the Minimum
Improvements, the Authority submitted an application to the Minnesota Housing Finance Agency for funds
available from the Community Homeownership Impact Fund; and
WHEREAS, the Authority was awarded and accepted a Minnesota Housing Finance Agency
Community Homeownership Impact Fund Deferred Loan in the amount of $94,336 from the Minnesota
Housing Finance Agency (the “CHIF Loan”); and
WHEREAS, pursuant to the Minnesota Housing Finance Agency Community Homeownership
Impact Fund Deferred Loan Contract (the “CHIF Loan Agreement”), proceeds of the CHIF Loan may be
used for financing the Affordability Gap (as defined in the CHIF Loan Agreement) and other purposes and
activities as more fully described in the CHIF Loan Agreement; and
WHEREAS, the Developer shall determine the income qualification of buyers and submit its
findings to the Authority for review; and
WHEREAS, the Authority intends to provide the proceeds of the CHIF Deferred Loan to eligible
buyers to finance the Affordability Gap; and
WHEREAS, there has been presented to the Board of Commissioners of the Authority a form of
Grant Compliance Agreement (the “Agreement”) between the Authority and the Developer pursuant to
which the Developer will agree to comply with all terms, conditions, and obligations of the Authority under
the CHIF Loan Agreement, including but not limited to providing income documentation to the Authority
verifying buyer eligibility; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1. The 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 Agreement for and on behalf of
the Authority in substantially the form now on file with the Executive 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
2. The Chair and the Executive Director are hereby authorized to execute and deliver all
additional 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 21st day of September, 2020.
Mary B. Supple, Chair
Maria Regan Gonzalez, Secretary
RC125-366 (JAE)
674622v1
1
GRANT COMPLIANCE AGREEMENT
This GRANT COMPLIANCE AGREEMENT (the “Agreement”) is made and entered into this
___ day of September, 2020, by and between the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a Minnesota public body corporate and politic (the “Authority”), and Cedar
Point Investments LLC, a Minnesota limited liability company (the “Developer”).
RECITALS
WHEREAS, the Authority and the Developer entered into a Contract for Private Development,
dated September 17, 2018 (the “Contract”); and
WHEREAS, pursuant to the Contract, the Developer agreed to acquire certain property and construct
a townhome development, including (i) up to 80 townhomes; (ii) two parking stalls for each townhome
constructed; and (iii) necessary public infrastructure, including street and utilities (the “Minimum
Improvements”), and the Authority agreed to reimburse the Developer for costs related to the Minimum
Improvements, including land acquisition costs, certain site improvement costs, and the costs of
constructing housing; and
WHEREAS, to assist the Developer in obtaining additional financing for the Minimum
Improvements, the Authority submitted an application to the Minnesota Housing Finance Agency for funds
available from the Community Homeownership Impact Fund; and
WHEREAS, the Authority was awarded and accepted a Minnesota Housing Finance Agency
Community Homeownership Impact Fund Deferred Loan in the amount of $94,336 from the Minnesota
Housing Finance Agency (the “CHIF Loan”); and
WHEREAS, pursuant to the Minnesota Housing Finance Agency Community Homeownership
Impact Fund Deferred Loan Contract (the “CHIF Loan Agreement”), proceeds of the CHIF Deferred Loan
may be used for financing the Affordability Gap (as defined in the CHIF Loan Agreement) and other
purposes and activities as more fully described in the CHIF Loan Agreement; and
WHEREAS, a copy of the CHIF Loan Agreement has been provided to the Developer; and
WHEREAS, the Developer shall determine the income qualification of buyers and submit its
findings to the Authority for review; and
WHEREAS, the Authority intends to provide the proceeds of the CHIF Deferred Loan to eligible
buyers to finance the Affordability Gap.
NOW, THEREFORE, IT IS HEREBY AGREED by and between the Authority, the City and the
Developer as follows:
1. The CHIF Loan Agreement is incorporated herein by reference..
2. The Developer has read the CHIF Loan Agreement and agrees to comply with all terms,
conditions, and obligations of the Authority under the CHIF Loan Agreement, including but not limited to
providing income documentation to the Authority verifying buyer eligibility.
3. The Developer agrees to fully indemnify the Authority for any liability incurred by the
Authority with respect to the CHIF Loan Agreement.
S-1
IN WITNESS WHEREOF, the parties have executed this Grant Compliance Agreement
effective the date and year first written above.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By
Mary B. Supple
Its Chair
By
John Stark
Its Executive Director
CEDAR POINT INVESTMENTS LLC
By
Name
Its
RC125-366 (JAE)
667289v2
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.C.
STAFF RE P ORT NO. 30
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
9/21/2020
RE P O RT P RE PA RE D B Y: Lynnette C hambers, Multifamily Housing C oordi nator
O TH E R D E PA RTM E NT RE V IE W:
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
9/16/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consider an adjustment to the payment standar d for the Section 8 Housing C hoice Voucher Program.
E X E C UT IV E S UM M ARY:
On an annual basis, the U.S. Department of Housing and Urban Development (HUD ) establishes a Fair
Market Rent (FMR) for the Twin Cities Metropolitan A rea, by bedroom size. I ndividual Housing and
Redevelopment A uthorities are allowed to select a payment standard within 90% to 110% of HUD's F MR. The
selec tion of the payment standard should ensure that a suffic ient supply of rental housing is available to
Sec tion 8 Housing C hoice Voucher Program (P rogram) partic ipants. HUD's newly published F MRs have
inc reased and the Housing and Redevelopment A uthority 's (HRA) c urrent pay ment standards do not fit within
the established parameters. To remain in complianc e with HUD regulations, the HRA must increase its
payment standards. The proposed pay ment standards will fall between 90% to 91% of the current F MRs.
The new payment standards are effective for December 1, 2020 for new move-ins and effective J anuary 1,
2021, for annual re-certific ations. The attached table lists the specific changes proposed. The last adjustment
made by the HRA was on December 1, 2019.
RE C O M M E ND E D AC T IO N:
By motion: Approve the proposed adjustment of the payment standard for the Section 8 Housing
Choice Voucher Pr ogram.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
The HRA last adjusted its payment standards in Oc tober 2019.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The HRA must approve increases in the pay ment standard for the Program in order to remain
compliant with HUD regulations that require payment standards to fall within 90-110% of HUD's
F MRs.
Sec tion 8 partic ipants will be able to c hoose from a larger selection of affordable housing units
and may rec eive some immediate rent relief on a c ase-by -case basis.
HUD provides suffic ient federal assistance to c over these adjustments in the payment standards
and has approved the inc rease.
W ithout an increase in the payment standard, many Sec tion 8 participants will be unable to find
housing and keep up with changing rents.
Potential changes in Federal law impact the financ ial resources available to the Program if the
HRA does not remain current with the F MR.
C.C R IT IC AL T IMIN G ISSU E S:
The new pay ment standards will be effective December 1, 2020.
D.F IN AN C IAL IMPAC T:
An inc rease in the pay ment standard will dec rease the rent burden for S ec tion 8 partic ipants.
HUD provides suffic ient funding to c over the increase.
E.L E GAL C ON S ID E R AT ION :
The c ontrac t between the HRA and HUD provides for F MR adjustments in ac cordanc e with
federal regulations.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Do not change the payment standard at this time; however, the HRA will not be in c ompliance with HUD
regulations.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
N/A
AT TAC H ME N TS :
D escripti on Type
P ayment S tandards B ackup Materi al
Proposed Payment Standards effective 12/1/2020
0 BDR 1 BDR 2 BDR 3 BDR 4 BDR 5 BDR
810 950 1180 1655 1945 2281
Current Payment Standards effective 12/1/2019
0 BDR 1 BDR 2 BDR 3 BDR 4 BDR 5 BDR
755 920 1140 1580 1840 1980
HUD FMR effective 10/1/2020
0 BDR 1 BDR 2 BDR 3 BDR 4 BDR
898 1054 1308 1838 2156
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF RE P ORT NO. 31
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
9/21/2020
RE P O RT P RE PA RE D B Y: John S tark, E xecutive D irector
O TH E R D E PA RTM E NT RE V IE W:
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
9/16/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consider the resolutions approving a modification to the Re de ve lopme nt Plan and approv al of a
Tax Increme nt Financing Plan for the 2020-1 Tax Incre me nt Finance District (Henle y I I), and;
authorizing an Internal Loan for Adv ance of Certain Costs in conne ction w ith the 2020-1 Tax
Increment Finance District (He nley I I).
E X E C UT IV E S UM M ARY:
The Ric hfield Housing and Redevelopment Authority (HRA) and the City of Richfield have been in
disc ussions with Northbay Companies (Developer) sinc e 2019 related to their redevelopment proposal
at 65th Street and Lyndale Avenue. T hat proposal, as it stands now, includes the rehabilitation of
the existing 22-unit apartment building at 6345 Lyndale Avenue and the construction of 82 new
multifamily units. T he project would include at least 20% of the units being made available to
households earning 50% or less than the Area Median Income; with at least 5 of those units being in
the newly constructed portion of the development.
A summary of the actions that the City and/or HRA have taken includes the following:
A joint work session of the Richfield HRA , City C ounc il and Planning Commission on November 26,
2019 at which the conc ept was generally supported;
An HRA approval of a Preliminary Development Agreement on J anuary 21, 2020 that included a
commitment by the HRA to examine the appropriateness and potential amount of available Tax
I ncrement Financing (TI F);
A City Council approval of various land-use applic ations (inc luding a C omprehensive Plan Amendment
and Rezoning) of the site on J uly 14, 2020, and;
An HRA approval of a final Contract for Private D evelopment (Contrac t) on J uly 20, 2020 whic h, in
part, approved the issuanc e of TI F and inc luded the provision, "the Authority [HRA] shall issue and
deliver... [a] TI F Note in the principal amount of $2,025,987" if c ertain c onditions set forth in the
Contrac t are met.
I n ac cordance with the C ontrac t for Private D evelopment, the HRA is now being asked to c onsider a
Modific ation to the Redevelopment Plan and approving a Tax I nc rement Financing P lan for the 2020-1 Tax
I nc rement Finance D istrict (Henley I I ). That Modification and Plan are contained in an attached doc ument
which includes the following:
The modification to the existing Richfield Redevelopment Plan including a map update identifying the
2020-1 (Henley I I ) TI F Distric t (Distric t) and a short text passage citing the new D istrict;
A summary of the HRA and City's Authority to create such a District,
A description of its classification as a Housing D istrict (requiring 20% affordable at 50% of the A MI );
An identific ation of the original Net Tax Capacity that the "base" taxes will be c alculated on - those
taxes will be distributed to all the local taxing jurisdictions (Hennepin County, Richfield Public Schools
and the City of Richfield) as was the case prior to the establishment of the TI F Distric t;
$9,650,610 as the maximum TI F and related interest that could theoretic ally be collec ted in the District
over it's maximum lifespan of 26 years;
The types of uses eligible for expenditure (inc luding ac quisition, affordable housing and other
qualifying improvements such as structured parking);
The "But-For" analysis conc luding that the resulting housing development "would not reasonably be
expected to occ ur solely through private investment."
W hile the TI F P lan identifies the maximum amount of Tax I ncrement that could be generated and the
maximum expenditure on certain eligible uses, it does not c ommit the use of those funds. That commitment in
contained in the approved Contract for Private Redevelopment which sets forth the following uses of TI F
funds:
Up to 90% of the TI F c ollected in an amount not to exc eed $2,025,987 to the D eveloper as a TI F Pay-
As-You-Go Note to assist them in funding TI F qualifying expenses, and ;
Up to 10% of the TI F c ollected to be retained by the Richfield HRA for reimbursement of expenses
(including staff c osts) in administering this D istrict.
As the HRA has already incurred such expenses related to administering this Distric t, the HRA is also being
asked to approve a resolution approving the use of up to $100,000 from its General Fund to advance the
payment of such expenses and the establishment of an I nterfund Loan allowing TI F proc eeds to be used to
repay this advanc ement of funds.
RE C O M M E ND E D AC T IO N:
By motion:
1. Adopt a resolution approving a modification to the Redevelopment P lan for the R ichfield
Redevelopment Project; and approving a Tax Increment Financing P lan for the 2020-1 Tax
Increment Finance District (Henley II), and;
2. Adopt a resolution authorizing an internal loan for advance of cer tain costs in connection with
the 2020-1 Tax Increment Finance D istr ict (Henley II).
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
The C ity and HRA have been engaged in discussions with this Developer in regards to the
proposed projec t for nearly a year and have already granted several approvals related to the
project.
The C ity and HRA have established similar Housing TI F Districts in the past to advance the
construction of new housing inclusive of at least 20% affordable housing.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The proposed Redevelopment Area Modification and TI F Plan describes the statutory authority by which
the City and HRA can create a TI F Distric t;
C.C R IT IC AL T IMIN G ISSU E S:
Notic e was placed in the loc al newspaper (the Ric hfield Sun-Current) forec asting that the City
Council would be considering this item on September 22.
The D eveloper is hoping to begin their project in 2020 and would only be able to do so upon
approval of these items.
D.F IN AN C IAL IMPAC T:
T he T IF Plan identifies the Original Net Tax Capacity that the "base" taxes will be
calculated on - those taxes will be distributed to all the local taxing jurisdictions (Hennepin
County, Richfield Public Schools and the City of Richfield) as was the case prior to the
establishment of the T IF District;
Acc ording to the TI F Plan, the HRA would be eligible to retain 10% of the TI F collec ted in the
Distric t to reimbuse its costs incurred in administering the District.
The C ontrac t for Private Development identifies up to $2,025,987 to the Developer as a TI F Pay-
As-You-Go Note; this "Pay-Go" Note obligates the HRA to make pay ment to the D eveloper only in
the event that the Developer has paid adequate taxes to provide the funding for such pay ment.
E.L E GAL C ON S ID E R AT ION :
HRA Legal C ounsel (J ulie Eddington of Kennedy & Graven), has reviewed the doc uments under
c onsideration and drafted the Resolutions that the HRA and City Council are considering.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Defer final consideration of the recommended items until a later date in order to obtain further information.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
Representatives of Northbay Companies; HRA Financial Consultant Rebecc a K urtz of Ehlers I nc.
AT TAC H ME N TS :
D escripti on Type
Resolution A pproving TIF P lan Resolution L etter
Resolution A pproving Interfund L oan Resolution L etter
TIF P lan and Redev A rea Mod E xhibit
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR
THE RICHFIELD REDEVELOPMENT PROJECT; AND APPROVING A TAX INCREMENT
FINANCING PLAN FOR THE 2020-1 TAX INCREMENT FINANCE DISTRICT: HENLEY II
WHEREAS, the City of Richfield, Minnesota (the “City”) and the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota (the “Authority”) have established, and the
Authority administers, the Richfield Redevelopment Project (the “Redevelopment Project”) located
within the City and have created a Redevelopment Plan (the “Redevelopment Plan”) therefor, pursuant to
Minnesota Statutes, Sections 469.001 through 469.047, as amended (the “HRA Act”); and
WHEREAS, within the Redevelopment Project the City and the Authority have created certain tax
increment financing districts pursuant to the HRA Act and Minnesota Statutes, Sections 469.174 through
469.1794, as amended (the “TIF Act”); and
WHEREAS, the City and the Authority have determined to modify the Redevelopment Plan and
approve a tax increment financing plan (the “TIF Plan”) relating to the creation of a new tax increment
financing district within the Redevelopment Project designated as the 2020-1 Tax Increment Financing
District: Henley II (the “TIF District”), a housing district, all as described in a plan document presented to
the Board of Commissioners of the Authority (the “Board”) on the date hereof; and
WHEREAS, pursuant to Section 469.175, subdivision 2a of the TIF Act, notice of the proposed
TIF District was provided to the county commissioner who represents the area included in the TIF District
on or about August 10, 2020; and
WHEREAS, pursuant to Section 469.175, subdivision 2 of the TIF Act, the proposed TIF Plan and
the estimates of the fiscal and economic implications of the TIF Plan were presented to the Clerk of the Board
of Education of Richfield Public Schools and to the Taxpayer Services Division Manager, as the County
Auditor, of Hennepin County, Minnesota (the “County”) on or about August 21, 2020; and
WHEREAS, the City Council of the City (the “City Council”) will conduct a public hearing on
September 22, 2020, relating to the approval of the modified Redevelopment Plan and the TIF Plan for the
TIF District, and all interested parties will have the opportunity to have their views heard at the public
hearing; and
WHEREAS, following the public hearing, the City Council will consider a resolution approving the
modified Redevelopment Plan and the TIF Plan for the TIF District; and
WHEREAS, the Board has reviewed the contents of the modified Redevelopment Plan and the TIF
Plan; 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:
2
1. The modified Redevelopment Plan is hereby approved.
2. The TIF Plan for the TIF District is hereby approved.
3. The Board hereby makes all the findings set forth in the TIF Plan, which document is
incorporated herein by reference.
4. The Board hereby transmits the modified Redevelopment Plan and the TIF Plan to the City
Council and recommends that the City Council approve the modified Redevelopment Plan and the TIF Plan
for the TIF District.
5. Upon approval of the modified Redevelopment Plan and the TIF Plan for the TIF District by
the City Council, Authority staff and consultants are authorized and directed to file a request for certification
of the TIF District with the Taxpayer Services Division Manager, as the County Auditor, of the County and
to file a copy of the modified Redevelopment Plan and the TIF Plan with the Minnesota Commissioner of
Revenue and the State Auditor as required by the TIF Act.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 21st day of September, 2020.
Mary B. Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-376 (JAE)
674344v3
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION AUTHORIZING INTERNAL LOAN FOR ADVANCE OF CERTAIN COSTS IN
CONNECTION WITH THE 2020-1 TAX INCREMENT FINANCE DISTRICT: HENLEY II
WHEREAS, the City of Richfield, Minnesota (the “City”) and the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota (the “Authority”) have established, and the
Authority administers, the Richfield Redevelopment Project (the “Redevelopment Project”) located
within the City and have created a Redevelopment Plan (the “Redevelopment Plan”) therefor, pursuant to
Minnesota Statutes, Sections 469.001 through 469.047, as amended; and
WHEREAS, on the date hereof, the Authority approved a modification of the Redevelopment Plan
and approved a tax increment financing plan (the “TIF Plan”) for the 2020-1 Tax Increment Financing
District: Henley II (the “TIF District”), a housing district to be established within the Redevelopment
Project, pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”);
and
WHEREAS, the City Council of the City is expected to adopt a resolution on September 22, 2020,
approving the modification of the Redevelopment Plan and the TIF Plan for the TIF District, in accordance
with the TIF Act; and
WHEREAS, the Authority may incur certain costs related to the TIF District, which costs may be
financed on a temporary basis from available Authority funds; and
WHEREAS, under Section 469.178, subdivision 7 of the TIF Act, the Authority is authorized to
advance or loan money from any fund from which such advances may be legally made in order to finance
expenditures that are eligible to be paid with tax increments under the TIF Act; and
WHEREAS, the Authority has determined to pay for certain administrative costs related to the
proposed TIF District (the “Qualified Costs”), which costs may be financed on a temporary basis from
Authority funds available for such purposes; and
WHEREAS, the Authority intends to reimburse itself for the Qualified Costs from tax increments
derived from the property within the TIF District (the “Interfund Loan”) in accordance with the terms of this
resolution; 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 Authority shall reimburse itself for the Qualified Costs in the amount of up to
$25,000, together with interest at the rate stated below. Interest accrues on the principal amount from the
date of each advance. The maximum rate of interest permitted to be charged is limited to the greater of
the rates specified under Minnesota Statutes, Section 270C.40 and Section 549.09 as of the date the loan
or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate
as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are from time
to time adjusted. The interest rate shall be 5.0% and will not fluctuate.
2
2. Principal and interest (the “Payments”) on the Interfund Loan shall be paid semiannually
on each February 1 and August 1 (each a “Payment Date”), commencing on the first Payment Date on
which the Authority has Available Tax Increment (defined below), or on any other dates determined by
the Executive Director of the Authority, through the date of last receipt of tax increment from the TIF
District.
3. Payments on this Interfund Loan are payable solely from “Available Tax Increment,”
which shall mean, on each Payment Date, tax increment available after other obligations have been paid,
or as determined by the Executive Director of the Authority, generated in the preceding six (6) months
with respect to the property within the TIF District and remitted to the Authority by Hennepin County,
Minnesota, all in accordance with the TIF Act. Payments on this Interfund Loan may be subordinated to
any outstanding or future bonds or notes issued by the Authority and secured in whole or in part with
Available Tax Increment. The Interfund Loan shall be paid prior to any pay-as-you-go notes or contracts
secured in whole or in part with Available Tax Increment, and any other outstanding or future interfund
loans secured in whole or in part with Available Tax Increment.
4. The principal sum and all accrued interest payable under this Interfund Loan are
prepayable in whole or in part at any time by the Authority without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise required to be made
under this Interfund Loan.
5. This Interfund Loan is evidence of an internal borrowing by the Authority in accordance
with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from
Available Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and
the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any
political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota
nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Interfund
Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and
credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the
payment of the principal of or interest on this Interfund Loan or other costs incident hereto. The
Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest
thereon, which may remain unpaid after the final Payment Date.
6. The Authority may at any time make a determination to forgive the outstanding principal
amount and accrued interest on the Interfund Loan to the extent permissible under law.
7. The Authority may from time to time amend the terms of this resolution to the extent
permitted by law, including without limitation amendment to the payment schedule and the interest rate;
provided, however, that the interest rate may not be increased above the maximum specified in
Section 469.178, subdivision 7 of the TIF Act.
8. This resolution is effective upon the approval of the modification of the Redevelopment
Plan and the approval of the TIF Plan for the TIF District by the City.
3
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 21st day of September, 2020.
Mary B. Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-376 (JAE)
674929v1
MODIFICATION TO THE REDEVELOPMENT
PLAN
Richfield Redevelopment Project Area
- AND -
TAX INCREMENT FINANCING PLAN
Establishment of 2020-1 Tax Increment Financing District:
Henley II
(a housing district)
Richfield Housing and Redevelopment Authority
City of Richfield, Hennepin County, Minnesota
Public Hearing: September 22, 2020
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 2
Table of Contents
Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area ............. 3
Foreword ................................................................................................................................ 3
Tax Increment Financing Plan for the 2020-1 Tax Increment Financing District: Henley II ......... 4
Foreword ................................................................................................................................ 4
Statutory Authority .................................................................................................................. 4
Statement of Objectives ......................................................................................................... 4
Redevelopment Plan Overview .............................................................................................. 4
Description of Property in the District and Property to be Acquired......................................... 5
Classification of the District .................................................................................................... 5
Duration and First Year of Tax Increment of the District ......................................................... 5
Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment
and Notification of Prior Planned Improvements ..................................................................... 6
Sources of Revenue/Bonds to be Issued ............................................................................... 7
Uses of Funds ........................................................................................................................ 8
Estimated Impact on Other Taxing Jurisdictions ..................................................................... 8
Supporting Documentation ....................................................................................................10
Administration of the District ..................................................................................................11
Appendix A: Map of the Richfield Redevelopment Project Area and the TIF District .............12
Appendix B: Estimated Cash Flow for the District .................................................................13
Appendix C: Findings Including But/For Qualifications .........................................................14
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 3
Modification to the Redevelopment Plan for the
Richfield Redevelopment Project Area
Foreword
The following text represents a Modification to the Redevelopment Plan for the Richfield
Redevelopment Project Area. This modification represents a continuation of the goals and
objectives set forth in the Redevelopment Plan for the Richfield Redevelopment Project Area.
Generally, the substantive changes include the establishment of the 2020-1 Tax Increment
Financing District: Henley II.
For further information, a review of the Redevelopment Plan for the Richfield Redevelopment
Project Area, is recommended. It is available from the Community Development Director at the
City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans
for the Tax Increment Financing Districts located within the Richfield Redevelopment Project
Area.
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 4
Tax Increment Financing Plan for the 2020-1 Tax
Increment Financing District: Henley II
Foreword
The Richfield Housing and Redevelopment Authority (the "HRA"), the City of Richfield (the “City”),
staff and consultants have prepared the following information to expedite the establishment of the
2020-1 Tax Increment Financing District: Henley II (the "District"), a housing tax increment
financing district, located in the Richfield Redevelopment Project Area.
Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development
or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant
to Minnesota Statutes ("M.S."), Sections 469.001 - 469.047, inclusive, as amended, and M.S.,
Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF
Act"), to assist in financing public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other
relevant information is contained in the Modification to the Redevelopment Plan for the Richfield
Redevelopment Project Area.
Statement of Objectives
The District currently consists of five parcels of land and adjacent and internal rights-of-way. The
District is being created to facilitate the development of 104 units of housing including the
construction of 82 units and the rehabilitation of 22 existing units in the City. Sixteen studio units
in the rehabilitated property at 6345 Lyndale and five studio units in the new construction portion
of the project will be reserved for persons with incomes at or below 50% of the median area
income. The HRA anticipates entering into an agreement with NorthBay as the developer.
Development is anticipated to begin the Fall 2020. This TIF Plan is expected to achieve many of
the objectives outlined in the Redevelopment Plan for the Richfield Redevelopment Project Area.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do
not preclude the undertaking of other qualified development or redevelopment activities. These
activities are anticipated to occur over the life of the Richfield Redevelopment Project Area and
the District.
Redevelopment Plan Overview
Pursuant to the Redevelopment Plan and authorizing state statutes, the HRA is authorized to
undertake the following activities in the District:
1. Property to be Acquired - Selected property located within the District may be
acquired by the HRA and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 5
pursuant to M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the
necessary legal requirements, the HRA may sell to a developer selected properties
that it may acquire within the District or may lease land or facilities to a developer.
4. The HRA may perform or provide for some or all necessary acquisition,
construction, relocation, demolition, and required utilities and public street work
within the District.
Description of Property in the District and Property to be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways
identified by the parcels listed below.
Please also see the map in Appendix A for further information on the location of the District.
Classification of the District
The HRA, in determining the need to create a tax increment financing district in accordance with
M.S., Sections 469.174 to 469.1794, as amended, inclusive, finds that the District, to be
established, is a housing district pursuant to M.S., Section 469.174, Subd. 11 and M.S., Section
469.1761.
▪ The District consists of five parcels
▪ The development will consist of 104 units of multi-family rental housing
▪ 20% of the units will be occupied by person with incomes less than 50% of median income
▪ No more that 20 percent of the square footage of the building that is receiving assistance
from tax increment consists of commercial, retail or other non-residential uses.
Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a
parcel that qualified under the provisions of M.S., Sections 273.111, 273.112, or 273.114 or
Chapter 473H for taxes payable in any of the five calendar years before the filing of the request
for certification of the District.
Duration and First Year of Tax Increment of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first
year of tax increment of the District must be indicated within the TIF Plan. Pursuant to M.S.,
Section 469.176, Subd. 1b., the duration of the District will be 25 years after receipt of the first
increment by the HRA (a total of 26 years of tax increment). The HRA elects to receive the first
Parcel number Address Owner
2702824220083 608 64th St. W.64th St LLC
2702824220082 602 64th St. W.64th St LLC
2702824220081 520 64th St. W.Rauth
2702824220080 514 64th St. W.Huntington
2702824220084 6345 Lyndale S.6345 Lyndale LLC
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 6
tax increment in 2022, which is no later than four years following the year of approval of the
District.
Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent
phases or other changes, would terminate after 2047, or when the TIF Plan is satisfied. The HRA
reserves the right to decertify the District prior to the legally required date.
Original Tax Capacity, Tax Rate and Estimated Captured Net Tax
Capacity Value/Increment and Notification of Prior Planned
Improvements
Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net
Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the
property by the assessor in 2020 for taxes payable 2021.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year
(beginning in the payment year 2022) the amount by which the original value has increased or
decreased as a result of:
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments, negotiated or court-ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the
ONTC, no value will be captured and no tax increment will be payable to the HRA.
The original local tax rate for the District will be the local tax rate for taxes payable 2021, assuming
the request for certification is made before June 30, 2021). The ONTC and the Original Local
Tax Rate for the District appear in the table below.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the
estimated Captured Net Tax Capacity (CTC) of the District, within the Richfield Redevelopment
Project Area, upon completion of the projects within the District, will annually approximate tax
increment revenues as shown in the table below. The HRA requests 100 percent of the available
increase in tax capacity for repayment of its obligations and current expenditures, beginning in
the tax year payable 2022. The Project Tax Capacity (PTC) listed is an estimate of values when
the projects within the District are completed.
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 7
Note: Tax capacity includes a 2.5% inflation factor for the duration of the District.
The tax capacity included in this chart is the estimated tax capacity of the District
in year 25. The tax capacity of the District in year one is estimated to be $58,094.
Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search,
accompany its request for certification to the County Auditor or its notice of the District
enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the
District or area of enlargement for which building permits have been issued during the eighteen
(18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S.,
Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the
District by the net tax capacity of improvements for which a building permit was issued.
The City has review the area to be included in the District and determined no building permits
have been issued during the 18 months immediately preceding approval of the TIF Plan by the
City.
Sources of Revenue/Bonds to be Issued
The total estimated tax increment revenues for the District are shown in the table below:
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of
tax increments. The HRA reserves the right to incur bonds or other indebtedness as a result of
the TIF Plan. As presently proposed, the projects within the District will be financed by pay-as-
you-go notes and interfund loans. Any refunding amounts will be deemed a budgeted cost without
a formal TIF Plan Modification. This provision does not obligate the HRA to incur debt. The HRA
will issue bonds or incur other debt only upon the determination that such action is in the best
interest of the City.
The HRA may issue bonds (as defined in the TIF Act) secured in whole or in part with tax
increments from the District in a maximum principal amount of $6,641,954. Such bonds may be
in the form of pay-as-you-go notes, revenue bonds or notes, general obligation bonds, or interfund
Project estimated Tax Capacity upon completion $420,303
Original estimated Net Tax Capacity $34,988
Fiscal Disparities $0
Estimated Captured Tax Capacity $385,315
Original Local Tax Rate 136.6880%Pay 2020
Estimated Annual Tax Increment $526,680
Percent Retainted by the City 100%
Project Tax Capacity
SOURCES
Tax Increment 9,650,610$
Interest 965,061
TOTAL 10,615,671$
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 8
loans. This estimate of total bonded indebtedness is a cumulative statement of authority under
this TIF Plan as of the date of approval.
Uses of Funds
Currently under consideration for the District is a proposal to facilitate the development of 104
units of housing including the construction of 82 units and the rehabilitation of 22 existing units.
The HRA has determined that it will be necessary to provide assistance to the project(s) for certain
District costs, as described.
The HRA has studied the feasibility of the development or redevelopment of property in and
around the District. To facilitate the establishment and development or redevelopment of the
District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain
eligible expenses. The estimate of public costs and uses of funds associated with the District is
outlined in the following table.
The total project cost, including financing costs (interest) listed in the table above does not exceed
the total projected tax increments for the District as shown in the Sources of Revenue section.
Estimated costs associated with the District are subject to change among categories without a
modification to this TIF Plan. The cost of all activities to be considered for tax increment financing
will not exceed, without formal modification, the budget above pursuant to the applicable statutory
requirements. The HRA may expend funds for qualified housing activities outside of the District
boundaries.
Fiscal Disparities Election
Pursuant to M.S., Section 469.177, Subd. 3, the HRA may elect one of two methods to calculate
fiscal disparities.
The HRA will choose to calculate fiscal disparities by clause b (inside).
Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated
USES
Land/Building Acquisition 3,000,000$
Site Improvements/Preparation -
Affordable Housing 1,000,000
Utilities -
Other Qualifying Improvements 1,715,952
Administrative Costs (up to 10%)926,002
PROJECT COSTS TOTAL 6,641,954$
Interest 3,973,717
PROJECT AND INTEREST COSTS TOTAL 10,615,671$
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 9
by the TIF Plan would occur without the creation of the District. However, the HRA has
determined that such development or redevelopment would not occur "but for" tax increment
financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated
fiscal impact of the District would be as follows if the "but for" test was not met:
The estimates listed above display the captured tax capacity when all construction is completed.
The tax rate used for calculations is the Pay 2019 rate. The total net capacity for the entities listed
above are based on Pay 2019 figures. The District will be certified under the Pay 2021 rates,
which were unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment
that will be generated over the life of the District is $9,650,610;
(2) Probable impact of the District on city provided services and ability to issue debt. An
impact of the District on police protection is expected. With any addition of new
residents or businesses, police calls for service will be increased. New developments
add an increase in traffic, and additional overall demands to the call load. The City
does not expect that the proposed development, in and of itself, will necessitate new
capital investment in vehicles or facilities.
The probable impact of the District on fire protection is not expected to be significant.
Typically, new buildings generate few calls, if any, and are of superior construction.
The City does not expect that the proposed development, in and of itself, will
Entity
2019/Pay 2020
Total Net Tax
Capacity
Estimated
Captured Tax
Capacity (CTC)
upon completion
Percent of
CTC to Entity
Total
Hennepin County 2,112,707,400 385,315 0.0182%
City of Richfield 42,574,771 385,315 0.9050%
ISD No. 280 57,397,386 385,315 0.6713%
Impact on Tax Base
Entity
Pay 2020
Extension
Rate
Percent of
Total CTC Potential
Taxes
Hennepin County 41.0840%30.06% 385,315 $ 158,303
City of Richfield 54.7270%40.04% 385,315 210,871
ISD No. 280 32.6580%23.89% 385,315 125,836
Other 8.2190%6.01% 385,315 31,669
136.6880%100.00% $ 526,680
Impact on Tax Rates
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 10
necessitate new capital investment in vehicles or facilities.
The impact of the District on public infrastructure is expected to be minimal. The
development is not expected to significantly impact any traffic movements in the area.
The current infrastructure for sanitary sewer, storm sewer and water will be able to
handle the additional volume generated from the proposed development. Based on
the development plans, there are no additional costs associated with street
maintenance, sweeping, plowing, lighting and sidewalks.
The probable impact of any District general obligation tax increment bonds on the
ability to issue debt for general fund purposes is expected to be minimal. It is not
anticipated that there will be any general obligation debt issued in relation to this
project, therefore there will be no impact on the City's ability to issue future debt or on
the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated
that the amount of tax increments over the life of the District that would be attributable
to school district levies, assuming the school district's share of the total local tax rate
for all taxing jurisdictions remained the same, is $2,305,759;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the
amount of tax increments over the life of the District that would be attributable to county
levies, assuming the county's share of the total local tax rate for all taxing jurisdictions
remained the same, is $2,900,662;
(5) Additional information requested by the county or school district. The City is not aware
of any standard questions in a county or school district written policy regarding tax
increment districts and impact on county or school district services. The county or school
district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b)
within 15 days after receipt of the tax increment financing plan.
No requests for additional information from the county or school district regarding the
proposed development for the District have been received.
Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification
and description of studies and analyses used to make the determination set forth in M.S. Section
469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the
District.
(i) In making said determination, reliance has been placed upon (1) written representation
made by the developer to such effects, (2) review of the developer’s proforma; and (3)
City staff awareness of the feasibility of developing the project site within the District,
which is further outlined in the City Council resolution approving the establishment of
the TIF District and Appendix C.
(ii) A comparative analysis of estimated market value both with and without establishment
of the TIF District and the use of tax increments has been performed. Such analysis is
included with the cashflow in Appendix B and indicates that the increase in estimated
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 11
market value of the proposed development (less the indicated subtractions) exceeds
the estimated market value of the site absent the establishment of the TIF District and
the use of tax increments.
Administration of the District
Administration of the District will be handled by the Community Development Director.
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 12
Appendix A: Map of the Richfield Redevelopment Project Area and
the TIF District
71st 1/2
70th 1/2
LOGAN75th
VINCENTUPTONTHOMASWASHBURNXERXESI - 494
78th
77th
76th
OLIVERNEWTONMORGANSHERIDANRUSSELLQUEENPENN74th
72nd
73th
71st
69th
70th
DUPONTKNOXJAMESIRVINGHUMBOLDTGIRARDFREMONTEMERSONCOLFAXBRYANTALDRICHGARFIELDGRANDHARRIETLYNDALE62nd
67th
68th
66th
65th
64th
63rd SHERIDAN1700240031002300WASHBURNXERXESVINCENTUPTONTHOMASRUSSELLQUEENPENNOLIVERNEWTONMORGANLOGANDUPONTHUMBOLDTKNOXJAMESIRVINGGIRARDEMERSONFREMONTLYNDALECOLFAXBRYANTALDRICHGARFIELDHARRIETGRAND69th
71st
72nd
73th
74th
75th
78th
70th
76th
77th
COLUMBUS2nd1stSTEVENSPLEASANTPILLSBURYBLAISDELLWENTWORTHNICOLLET3rdCLINTON4th5thPORTLANDOAKLANDPARK10th11th12th13th14thELLIOTCHICAGO15th16th17th18thCEDARBLOOMINGTON62nd
63rd
64th
65th
67th
68th
66thCOLUMBUSPLEASANTPILLSBURYWENTWORTHBLAISDELLSTEVENSNICOLLET1st2nd5thCLINTON3rd4thOAKLANDPARKPORTLAND15th11thCHICAGOELLIOT10th13th12th14thBLOOMINGTON16th17thCEDAR18th
1900800900100011001200130018006005004003002005010012420030032440050062070072080090010001100130014001500160017001800100152419006001200000700140029002800270026002500220021002000300015001600City of Richfield
0 0.5 10.25 Miles ¯
Community Development Department2013
Legend
TIF DistrictNo. 2020-1;Henley II
Parcels
City Limits
2020-1 Tax Increment Financing District:
Henley II
located within the Richfield Redevelopment Project Area
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 13
Appendix B: Estimated Cash Flow for the District
8/20/2020 Base Value Assumptions - Page 1
Henley II - 2.5% Inflation
City of Richfield, MN
82- unit New Multi-Family Development and 22-unit Multi-Family Rehab
ASSUMPTIONS AND RATES
DistrictType:Housing
District Name/Number:
County District #:Exempt Class Rate (Exempt)0.00%
First Year Construction or Inflation on Value 2020 Commercial Industrial Preferred Class Rate (C/I Pref.)
Existing District - Specify No. Years Remaining First $150,000 1.50%
Inflation Rate - Every Year:2.50%Over $150,000 2.00%
Interest Rate:4.25%Commercial Industrial Class Rate (C/I)2.00%
Present Value Date:1-Aug-21 Rental Housing Class Rate (Rental)1.25%
First Period Ending 1-Feb-22 Affordable Rental Housing Class Rate (Aff. Rental)
Tax Year District was Certified:Pay 2021 First $162,000 0.75%
Cashflow Assumes First Tax Increment For Development:2022 Over $162,000 0.25%
Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit)
Assumes Last Year of Tax Increment 2047 First $500,000 1.00%
Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25%
Incremental or Total Fiscal Disparities Incremental Homestead Residential Class Rate (Hmstd. Res.)
Fiscal Disparities Contribution Ratio 35.1664%Pay 2020 First $500,000 1.00%
Fiscal Disparities Metro-Wide Tax Rate 142.4540%Pay 2020 Over $500,000 1.25%
Maximum/Frozen Local Tax Rate: 136.688%Pay 2020 Agricultural Non-Homestead 1.00%
Current Local Tax Rate: (Use lesser of Current or Max.)136.688%Pay 2020
State-wide Tax Rate (Comm./Ind. only used for total taxes)38.8460%Pay 2020
Market Value Tax Rate (Used for total taxes)0.14849%Pay 2020
Building Total Percentage Tax Year Property Current Class After
Land Market Market Of Value Used Original Original Tax Original After Conversion
Map ID PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap.
1 2702824220083 64th St LLC 608 64th St. W.114,000 130,000 244,000 100%244,000 Pay 2021 Non-H Res. 1 Unit 2,440 Rental 3,050 1
2 2702824220082 64th St LLC 602 64th St. W.127,000 141,000 268,000 100%268,000 Pay 2021 Hmstd. Res.2,680 Rental 3,350 1
3 2702824220081 Rauth 520 64th St. W.127,000 140,000 267,000 100%267,000 Pay 2021 Hmstd. Res.2,670 Rental 3,338 1
4 2702824220080 Huntington 514 64th St. W.85,000 106,000 191,000 100%191,000 Pay 2021 Hmstd. Res.1,910 Rental 2,388 1
5 2702824220084 6345 Lyndale LLC 6345 Lyndale S.264,000 1,565,000 1,829,000 100%1,829,000 Pay 2021 Rental 22,863 Rental 22,863 1
717,000 2,082,000 2,799,000 2,799,000 32,563 34,988
Note:
1. Base values are for pay 2020 based upon review of County website on 8-13-20.
2. Located in SD #280 and WS #0
Tax Rates
BASE VALUE INFORMATION (Original Tax Capacity)
Area/
Phase
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8/20/2020 Base Value Assumptions - Page 2
Henley II - 2.5% Inflation
City of Richfield, MN
82- unit New Multi-Family Development and 22-unit Multi-Family Rehab
Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year
Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes
Area/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./Units Value Class Tax Capacity Capacity/Unit 2020 2021 2022 2023 Payable
1 Apartments 192,500 192,500 82 15,785,000 Rental 197,313 2,406 25%100%100%100%2023
1 Apartments 127,500 127,500 22 2,805,000 Rental 35,063 1,594 25%100%100%100%2023
TOTAL 18,590,000 232,375
Subtotal Residential 104 18,590,000 232,375
Subtotal Commercial/Ind.0 0 0
Note:
1. Market values are based upon estimates from County assessor 3-2-2020.
Total Fiscal Local Local Fiscal State-wide Market
Tax Disparities Tax Property Disparities Property Value Total Taxes Per
New Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq. Ft./Unit
Apartments 197,313 0 197,313 269,703 0 0 23,439 293,142 3,574.90
Apartments 35,063 0 35,063 47,926 0 0 4,165 52,091 2,367.79
TOTAL 232,375 0 232,375 317,629 0 0 27,604 345,233
Note:
1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors
which cannot be predicted.
Total Property Taxes 345,233
less State-wide Taxes 0
less Fiscal Disp. Adj.0
less Market Value Taxes (27,604)
less Base Value Taxes (47,824)
Annual Gross TIF 269,805
WHAT IS EXCLUDED FROM TIF?
TAX CALCULATIONS
PROJECT INFORMATION (Project Tax Capacity)
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8/20/2020 Tax Increment Cashflow - Page 3
Henley II - 2.5% Inflation
City of Richfield, MN
82- unit New Multi-Family Development and 22-unit Multi-Family Rehab
TAX INCREMENT CASH FLOW
Project Original Fiscal Captured Local Annual Semi-Annual State Admin.Semi-Annual Semi-Annual PERIOD
% of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax Payment
OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36%10%Increment Value Yrs.Year Date
- - - - 02/01/22
100%58,094 (34,988) - 23,106 136.688%31,583 15,792 (57) (1,573) 14,161 13,578 0.5 2022 08/01/22
100%58,094 (34,988) - 23,106 136.688%31,583 15,792 (57) (1,573) 14,161 26,874 1 2022 02/01/23
100%232,375 (34,988) - 197,388 136.688%269,805 134,903 (486) (13,442) 120,975 138,090 1.5 2023 08/01/23
100%232,375 (34,988) - 197,388 136.688%269,805 134,903 (486) (13,442) 120,975 246,992 2 2023 02/01/24
100%238,184 (34,988) - 203,197 136.688%277,746 138,873 (500) (13,837) 124,536 356,766 2.5 2024 08/01/24
100%238,184 (34,988) - 203,197 136.688%277,746 138,873 (500) (13,837) 124,536 464,257 3 2024 02/01/25
100%244,139 (34,988) - 209,151 136.688%285,885 142,942 (515) (14,243) 128,185 572,595 3.5 2025 08/01/25
100%244,139 (34,988) - 209,151 136.688%285,885 142,942 (515) (14,243) 128,185 678,679 4 2025 02/01/26
100%250,242 (34,988) - 215,255 136.688%294,228 147,114 (530) (14,658) 131,926 785,586 4.5 2026 08/01/26
100%250,242 (34,988) - 215,255 136.688%294,228 147,114 (530) (14,658) 131,926 890,270 5 2026 02/01/27
100%256,499 (34,988) - 221,511 136.688%302,779 151,389 (545) (15,084) 135,760 995,754 5.5 2027 08/01/27
100%256,499 (34,988) - 221,511 136.688%302,779 151,389 (545) (15,084) 135,760 1,099,043 6 2027 02/01/28
100%262,911 (34,988) - 227,923 136.688%311,544 155,772 (561) (15,521) 139,690 1,203,111 6.5 2028 08/01/28
100%262,911 (34,988) - 227,923 136.688%311,544 155,772 (561) (15,521) 139,690 1,305,013 7 2028 02/01/29
100%269,484 (34,988) - 234,496 136.688%320,528 160,264 (577) (15,969) 143,718 1,407,673 7.5 2029 08/01/29
100%269,484 (34,988) - 234,496 136.688%320,528 160,264 (577) (15,969) 143,718 1,508,196 8 2029 02/01/30
100%276,221 (34,988) - 241,233 136.688%329,737 164,869 (594) (16,427) 147,847 1,609,456 8.5 2030 08/01/30
100%276,221 (34,988) - 241,233 136.688%329,737 164,869 (594) (16,427) 147,847 1,708,609 9 2030 02/01/31
100%283,126 (34,988) - 248,139 136.688%339,176 169,588 (611) (16,898) 152,080 1,808,478 9.5 2031 08/01/31
100%283,126 (34,988) - 248,139 136.688%339,176 169,588 (611) (16,898) 152,080 1,906,268 10 2031 02/01/32
100%290,205 (34,988) - 255,217 136.688%348,851 174,426 (628) (17,380) 156,418 2,004,756 10.5 2032 08/01/32
100%290,205 (34,988) - 255,217 136.688%348,851 174,426 (628) (17,380) 156,418 2,101,194 11 2032 02/01/33
100%297,460 (34,988) - 262,472 136.688%358,768 179,384 (646) (17,874) 160,864 2,198,310 11.5 2033 08/01/33
100%297,460 (34,988) - 262,472 136.688%358,768 179,384 (646) (17,874) 160,864 2,293,405 12 2033 02/01/34
100%304,896 (34,988) - 269,909 136.688%368,933 184,466 (664) (18,380) 165,422 2,389,159 12.5 2034 08/01/34
100%304,896 (34,988) - 269,909 136.688%368,933 184,466 (664) (18,380) 165,422 2,482,922 13 2034 02/01/35
100%312,519 (34,988) - 277,531 136.688%379,352 189,676 (683) (18,899) 170,094 2,577,325 13.5 2035 08/01/35
100%312,519 (34,988) - 277,531 136.688%379,352 189,676 (683) (18,899) 170,094 2,669,765 14 2035 02/01/36
100%320,332 (34,988) - 285,344 136.688%390,031 195,016 (702) (19,431) 174,882 2,762,829 14.5 2036 08/01/36
100%320,332 (34,988) - 285,344 136.688%390,031 195,016 (702) (19,431) 174,882 2,853,957 15 2036 02/01/37
100%328,340 (34,988) - 293,352 136.688%400,977 200,489 (722) (19,977) 179,790 2,945,693 15.5 2037 08/01/37
100%328,340 (34,988) - 293,352 136.688%400,977 200,489 (722) (19,977) 179,790 3,035,521 16 2037 02/01/38
100%336,548 (34,988) - 301,561 136.688%412,197 206,099 (742) (20,536) 184,821 3,125,940 16.5 2038 08/01/38
100%336,548 (34,988) - 301,561 136.688%412,197 206,099 (742) (20,536) 184,821 3,214,478 17 2038 02/01/39
100%344,962 (34,988) - 309,974 136.688%423,698 211,849 (763) (21,109) 189,978 3,303,592 17.5 2039 08/01/39
100%344,962 (34,988) - 309,974 136.688%423,698 211,849 (763) (21,109) 189,978 3,390,852 18 2039 02/01/40
100%353,586 (34,988) - 318,599 136.688%435,486 217,743 (784) (21,696) 195,263 3,478,674 18.5 2040 08/01/40
100%353,586 (34,988) - 318,599 136.688%435,486 217,743 (784) (21,696) 195,263 3,564,668 19 2040 02/01/41
100%362,426 (34,988) - 327,438 136.688%447,569 223,784 (806) (22,298) 200,681 3,651,210 19.5 2041 08/01/41
100%362,426 (34,988) - 327,438 136.688%447,569 223,784 (806) (22,298) 200,681 3,735,950 20 2041 02/01/42
100%371,486 (34,988) - 336,499 136.688%459,954 229,977 (828) (22,915) 206,234 3,821,223 20.5 2042 08/01/42
100%371,486 (34,988) - 336,499 136.688%459,954 229,977 (828) (22,915) 206,234 3,904,722 21 2042 02/01/43
100%380,773 (34,988) - 345,786 136.688%472,648 236,324 (851) (23,547) 211,926 3,988,740 21.5 2043 08/01/43
100%380,773 (34,988) - 345,786 136.688%472,648 236,324 (851) (23,547) 211,926 4,071,010 22 2043 02/01/44
100%390,293 (34,988) - 355,305 136.688%485,660 242,830 (874) (24,196) 217,760 4,153,786 22.5 2044 08/01/44
100%390,293 (34,988) - 355,305 136.688%485,660 242,830 (874) (24,196) 217,760 4,234,840 23 2044 02/01/45
100%400,050 (34,988) - 365,063 136.688%498,997 249,498 (898) (24,860) 223,740 4,316,386 23.5 2045 08/01/45
100%400,050 (34,988) - 365,063 136.688%498,997 249,498 (898) (24,860) 223,740 4,396,235 24 2045 02/01/46
100%410,051 (34,988) - 375,064 136.688%512,667 256,334 (923) (25,541) 229,870 4,476,566 24.5 2046 08/01/46
100%410,051 (34,988) - 375,064 136.688%512,667 256,334 (923) (25,541) 229,870 4,555,224 25 2046 02/01/47
100%420,303 (34,988) - 385,315 136.688%526,680 263,340 (948) (26,239) 236,153 4,634,351 25.5 2047 08/01/47
100%420,303 (34,988) - 385,315 136.688%526,680 263,340 (948) (26,239) 236,153 4,711,832 26 2047 02/01/48
Total 9,685,478 (34,868) (965,061) 8,685,549
Present Value From 08/01/2021 Present Value Rate 4.25%5,254,284 (18,915) (523,537) 4,711,832
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Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 14
Appendix C: Findings Including But/For Qualifications
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing
Plan for 2020-1 Tax Increment Financing District: Henley II, as required pursuant to Minnesota
Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that 2020-1 Tax Increment Financing District: Henley II is a housing district as
defined in M.S., Section 469.174, Subd. 11.
The 2020-1 Tax Increment Financing District: Henley II consists of five parcels. The
development will consist of the development of 104 units of housing, including the
construction of 82 units and the rehabilitation of 22 existing units, all or a portion of which
will receive tax increment assistance and will meet income restrictions described in M.S.
469.1761. At least 20 percent of the units – 16 studio units in the rehabilitated property at
6345 Lyndale and five studio units in the new construction portion -- receiving assistance
will have incomes at or below 50 percent of area median income.
2. Finding that the proposed development, in the opinion of the City Council, would not
reasonably be expected to occur solely through private investment within the reasonably
foreseeable future.
The proposed development, in the opinion of the City, would not reasonably be expected
to occur solely through private investment within the reasonably foreseeable future: This
finding is supported by the fact that the development proposed in this plan is a housing
district that meets the City's objectives for development and redevelopment. The cost of
land acquisition, site and public improvements and developing affordable housing makes
this housing development infeasible without City assistance. Due to decreased rental
income from affordable units, there is insufficient cash flow to provide a sufficient rate of
return, pay operating expenses, and service the debt. This leaves a gap in the funding for
the project and makes this housing development feasible only through assistance, in part,
from tax increment financing. The developer was asked for and provided a letter and a
proforma as justification that the developer would not have gone forward without tax
increment assistance.
The increased market value of the site that could reasonably be expected to occur without
the use of tax increment financing would be less than the increase in market value
estimated to result from the proposed development after subtracting the present value of
the projected tax increments for the maximum duration of the TIF District permitted by the
TIF Plan: This finding is justified on the grounds that the cost of land acquisition, site and
public improvements and construction of affordable housing add to the total development
cost. Historically, the costs of site and public improvements as well as reduced rents
required for affordable workforce housing in the City have made development infeasible
without tax increment assistance. The City reasonably determines that no other
development of similar scope is anticipated on this site without substantially similar
assistance being provided to the development.
3. Finding that the TIF Plan for 2020-1 Tax Increment Financing District: Henley II conforms
to the general plan for the development or redevelopment of the municipality as a whole.
Richfield Housing and Redevelopment Authority
2020-1 Tax Increment Financing District: Henley II 15
The City Council reviewed the TIF Plan and found that the TIF Plan conforms to the
general development plan of the City.
4. Finding that the TIF Plan for 2020-1 Tax Increment Financing District: Henley II will afford
maximum opportunity, consistent with the sound needs of the City as a whole, for the
development or redevelopment of Richfield Redevelopment Project Area by private
enterprise.
Through the implementation of the TIF Plan, the City will provide an impetus for residential
development, which is desirable or necessary for increased population and an increased
need for life-cycle housing within the City.
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #5.
STAFF RE P ORT NO. 32
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
9/21/2020
RE P O RT P RE PA RE D B Y: Julie Urban, Housing & Redevelopment Manager
O TH E R D E PA RTM E NT RE V IE W:
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
9/16/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consider a resolution approving an Amendment to the Contract for Private Development for C P II
Development LL C .
E X E C UT IV E S UM M ARY:
The Housing and Redevelopment Authority (HRA ) approved a C ontrac t for Private D evelopment (Contract)
with NHH Companies, LLC, now doing business as C P I I Development LLC (Developer), on September 17,
2018. The Contract calls for the c onstruction of 218 market-rate apartments on HRA -owned property, located
on Ric hfield Parkway between 63rd and 65th S treets.
The Developer is proposing to increase the number of units from 218 to 237. C urrent rental market demand
and the decision to focus amenities in one building freed up spac e to allow for an increase in total units. The
number of studio and one bedroom apartments increases (23 and 2 units), and the number of two bedroom
units decreases (6 units). The proposed amendment to the Contract acknowledges this inc rease.
By planning standards, the c hange is c onsidered a minor amendment to the Planned Unit Development.
Review of that zoning amendment is c urrently underway and is dependent on HRA authorization as the
property owner.
The Developer and the HRA's Attorney are also in the proc ess of preparing for closing on the HRA-owned
property. The deadline for c losing is currently S eptember 30; however, the amendment also proposes an
additional extension to November, in the event of any last-minute delays.
T he Cedar Point II project, now known as RF64, includes the market rate apartments and 64
affordable ownership townhomes. Given the interdependence of the two projects, a financial
analysis of both the townhome and apartment components is currently underway to account for the
change in unit counts, construction timing, and increased construction costs. Additional changes to
the Contract regarding completion dates, the tax increment schedule, and the minimum market value
are likely once that analysis is complete. In addition, the Developer will be requesting an Assignment
of the Contract to a new entity, which includes the equity partner, Schafer Richardson.
RE C O M M E ND E D AC T IO N:
By motion: Adopt a resolution approving an Amendment to the Contract for P rivate D evelopment with
C P II Development LL C .
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
The HRA approved a Contract with NHH Companies, LLC for the Cedar Point Housing area on
September 17, 2018, for the development of 218 market-rate apartments.
The HRA approved an Assignment and Assumption of the Contract from NHH C ompanies, L L C
on J anuary 15, 2019 to C P I I Development LLC.
The HRA approved an extension to the C ontrac t property c losing deadline on September 16,
2019. Additional extensions were granted to the c losing deadline due to C OVI D-19 pandemic-
related delays.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The Cedar P oint I I housing area has been identified for redevelopment as multi-family housing since
2004 with the adoption of the Cedar Corridor Master Plan.
C.C R IT IC AL T IMIN G ISSU E S:
Construction plans are in process of being drafted and can be finalized once the increase
in number of units has been approved. Construction is expected to begin in early 2021.
T he deadline for closing on the apartment property is September 30. T he Amendment
would extend the deadline to November 17.
D.F IN AN C IAL IMPAC T:
The increase in unit count increases the projec t value, which makes the projec t more financ ially viable
and able to meet the tax increment obligations to both the Developer and the HRA.
E.L E GAL C ON S ID E R AT ION :
The HRA Attorney drafted the Amendment to the C ontrac t.
All other C ontrac t terms remain the same.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Dec ide not to approve the amended Contract.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
Representative of the D eveloper.
AT TAC H ME N TS :
D escripti on Type
Resolution Resolution L etter
A mendment C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING SECOND AMENDMENT TO CONTRACT FOR PRIVATE
DEVELOPMENT WITH CPII DEVELOPMENT LLC
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “Authority”) entered into a Contract for Private Development, dated September 17, 2018 (the “Original
Agreement”), with NHH Companies, L.L.C. (“NHH”), as assigned by NHH to CPII Development LLC, a
Minnesota limited liability company (the “Developer”), pursuant to an Assignment of Contract for Private
Development, dated January 15, 2019, and as amended by the First Amendment to Contract for Private
Development, dated September 16, 2019 (the “First Amendment,” and together with the Original Agreement,
the “Amended Agreement”), between the Authority and the Developer; and
WHEREAS, pursuant to the Amended Agreement, the Developer agreed to acquire property within
the Cedar Avenue Tax Increment Financing District (the “TIF District”), a redevelopment district within the
Richfield Redevelopment Project, from the Authority (the “Development Property”) and construct a
development which will include (i) multifamily housing with approximately 218 units; (ii) a parking ramp
with approximately 188 spaces; and (iii) necessary public infrastructure, including streets and utilities (the
“Minimum Improvements”); and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan for the Richfield
Redevelopment Project and make the Minimum Improvements economically feasible for the Developer to
construct, the Authority is prepared to convey the 14 parcels that make up the Development Property to the
Developer and reimburse the Developer for a portion of the land acquisition costs and certain site
improvement costs related to the Minimum Improvements; and
WHEREAS, due to business disruptions caused by COVID-19, the Authority agreed to extend the
closing date set forth in Section 3.2(g) of the Amended Agreement (the “Closing Date”) to July 3, 2020, or
such other date as mutually agreed upon by the Authority and the Developer; and
WHEREAS, the Developer has requested that the Authority further extend the Closing Date to
November 17, 2020, or such other date as mutually agreed upon by the Authority and the Developer; and
WHEREAS, the Developer also proposes to increase the unit count within the Minimum
Improvements from 218 units to 237 units; and
WHEREAS, there has been presented before this Board of Commissioners of the Authority a Second
Amendment to Contract for Private Development (the “Second Amendment to Agreement”) between the
Authority and the Developer, which sets forth the modifications to the Amended Agreement to extend the
Closing Date and increase the unit count within the Minimum Improvements; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1. The Second Amendment to 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
Second Amendment to Agreement for and on behalf of the Authority in substantially the form now on file
2
with the Executive Director but with such modifications as shall be deemed necessary, desirable, or
appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all
modifications therein.
2. The Chair and the Executive Director are hereby authorized to execute and deliver to the
Developer any and all documents deemed necessary to carry out the intentions of this resolution and the
Second Amendment to Agreement.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 21st day of September, 2020.
Mary B. Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-366 (JAE)
675214v1
111 = 1 " " RC125-366-675181.v2
SECOND AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
THIS SECOND AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT (the “Second
Amendment”), made as of the _____ day of ____________________, 2020, between the HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public
body corporate and politic under the laws of the State of Minnesota (the “Authority”), and CPII
DEVELOPMENT LLC, a Minnesota limited liability company (the “Developer”).
WITNESSETH:
WHEREAS, the Authority has established the Cedar Avenue Tax Increment Financing District (the
“TIF District”), a redevelopment district within the Richfield Redevelopment Project (the “Redevelopment
District”) in the City of Richfield, Minnesota, pursuant to Minnesota Statutes, Sections 469.174 to 469.1794,
as amended, and Laws of Minnesota 2005, Chapter 152, Article 2, Section 25, as amended by Laws of
Minnesota 2017, 1st Special Session, Chapter 1, Article 6, Section 18, in order to facilitate redevelopment of
certain property in the Redevelopment Project and promote the development of affordable housing within the
City; and
WHEREAS, the Authority entered into a Contract for Private Development, dated
September 17, 2018 (the “Original Agreement”), with NHH Companies, L.L.C. (“NHH”), as assigned by
NHH to the Developer pursuant to an Assignment of Contract for Private Development, dated
January 15, 2019, and as amended by the First Amendment to Contract for Private Development, dated
September 16, 2019 (the “First Amendment,” and together with the Original Agreement, the “Amended
Agreement”), between the Authority and the Developer; and
WHEREAS, pursuant to the Amended Agreement, the Developer agreed to acquire property within
the TIF District from the Authority (the “Development Property”), which is legally described in Exhibit A to
the Original Agreement, and construct a development which will include (i) multifamily housing with
approximately 218 units; (ii) a parking ramp with approximately 188 spaces; and (iii) necessary public
infrastructure, including streets and utilities (the “Minimum Improvements”); and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan for the Redevelopment
Project and make the Minimum Improvements economically feasible for the Developer to construct, the
Authority is prepared to convey the 14 parcels that make up the Development Property to the Developer and
reimburse the Developer for a portion of the land acquisition costs and certain site improvement costs related
to the Minimum Improvements; and
WHEREAS, due to business disruptions caused by COVID-19, the Authority agreed to extend the
closing date set forth in Section 3.2(g) of the Amended Agreement (the “Closing Date”) to July 3, 2020, or
such other date as mutually agreed upon by the Authority and the Developer; and
WHEREAS, the Developer has requested that the Authority further extend the Closing Date to
November 17, 2020, or such other date as mutually agreed upon by the Authority and the Developer; and
2
210 = 1 " " RC125-366-675181.v2 RC125-366-675181.v2 RC125-366-675181.v2
WHEREAS, the Developer also proposes to increase the unit count within the Minimum
Improvements from 218 units to 237 units; and
WHEREAS, the Authority and the Developer are entering into this Second Amendment to extend
the Closing Date and increase the unit count within the Minimum Improvements; and
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
Amendments
Section 1.1. Amendment to Section 1.1 of the Amended Agreement. The following definition set
forth in Section 1.1 of the Amended Agreement is hereby amended as follows (deleted language is stricken,
and new language is underlined):
“Minimum Improvements” means the development on the Development Property of
(i) multifamily housing with approximately 218 237 units; (ii) a parking ramp with approximately
188 spaces; and (iii) necessary public infrastructure, including streets and utilities, as required by the
Planned Unit Development.
Section 1.2. Amendment to Section 3.2(g) of the Amended Agreement. Section 3.2(g) of the
Amended Agreement is hereby amended as follows (deleted language is stricken, and new language is
underlined):
(g) In the event that the Closing has not taken place by March 31, 2020
November 16, 2020, and unless extended by mutual agreement of the parties, this Agreement shall
terminate and be of no further force and effect, and the parties will be relieved of any further
obligations hereunder. If the Developer applies for a building permit prior to March 31, 2020, the
Executive Director of the Authority may extend the Closing by three months.
ARTICLE II
Miscellaneous
Section 2.1. Definitions. Any capitalized terms used herein but not otherwise defined shall have the
meanings assigned to such terms in the Amended Agreement. Any references to the “Agreement” or “this
Agreement” in the Amended Agreement shall refer to the Original Agreement, as amended and
supplemented by the First Amendment and this Second Amendment, and as may be further amended and
supplemented.
Section 2.2. Effective Date. The amendments and supplements made to the Amended Agreement
by this Second Amendment shall be effective as of _______________, 2020.
Section 2.3. Confirmation of Amended Agreement. Except as specifically amended by this Second
Amendment, the Amended Agreement is hereby ratified and confirmed and remains in full force and effect.
120 = 1 " " RC125-366-675181.v2 RC125-366-675181.v2 RC125-366-675181.v2 S-1
IN WITNESS WHEREOF, the Authority has caused this Second Amendment to Contract for Private
Development to be duly executed in its name and behalf and the Developer has caused this Second
Amendment to Contract for Private Development to be duly executed in its name and behalf as of the date
and year first written above.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 2020, by Mary
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 _______________, 2020, 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
THIS INSTRUMENT DRAFTED BY:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, MN 55402-1299
220 = 1 " " RC125-366-675181.v2 RC125-366-675181.v2 RC125-366-675181.v2 S-2
Execution page of the Developer to the Second Amendment to Contract for Private Development, dated as of
the date and year first written above.
CPII DEVELOPMENT LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this _________________, 2020, by
________________, the _____________________________ of CPII Development LLC, a Minnesota
limited liability company, on behalf of the Developer.
Notary Public
RC125-366 (JAE)
675181v2