11-16-2020 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
N O V E MB E R 16, 2020
7:00 P M
C all to Order
A ttendance Roll C all
Open F orum: Opportunity to address the H RA on items not on the A genda; dial phone number 612-861-0651. A s you
call in, 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 October 19, 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 deration of revisions to the Housi ng and Redevelopment A uthority's current S ubordination P olicy, last
updated in 2012.
S taff Report No. 36
B .C onsi deration of the adoption of a resolution approving a S ubordinati on A greement related to the C edar
P oint II apartments.
S taff Report No. 37
C .C onsi deration of the adoption of a resolution relating to the closing on the C edar P oint II apartment
property.
S taff Report No. 38
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 a resolution approving a C ontract for P rivate D evelopment with Lynk 65, L L C (formerly E nclave
D evelopment L L C ) for redevelopment of properties at 65th S treet and Lyndale Avenue and authorizing issuance
of a Tax Increment L imited Revenue Note.
S taff Report No. 39
5.C onsider the resolutions approving a modification to the Redevelopment Plan and approval of a Tax
Increment Financing Plan for the 2020-3 Tax Increment Finance District: Lynk 65, and; authorizing
an Internal Loan for Advance of Certain Costs in connection with the 2020-3 Tax Increment
Finance District: Lynk 65.
S taff Report No. 40
O T H E R B U SIN E S S
6.C onsideration of a resolution approving an A mended and Restated P reliminary Redevelopment A greement with
P enn Investments L L C for the development of 6501 P enn Avenue S outh and 6500 Oliver Avenue S outh.
S taff Report No. 41
H R A D IS C U S S IO N IT E MS
7.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
8.E xecutive D i rector's Report
C L AIMS
9.C laims
10.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
October 19, 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;
Present: and Erin Vrieze Daniels.
HRA Members
Absent: Pat Elliott.
Staff Present: John Stark, Executive Director; Julie Urban, Housing Manager; Myrt Link,
Community Development Accountant; and LaTonia DuBois, Administrative
Assistant.
Others Present: HRA Financial Consultant, Rebecca Kurtz; Ehlers.
OPEN FORUM
No Callers.
APPROVAL OF THE MINUTES
M/Regan Gonzalez S/Vrieze Daniels to approve the 1) Concurrent Housing and
Redevelopment and City Council work session of September 21, 2020; 2) Regular Housing and
Redevelopment Authority meeting of September 21, 2020; and 3) Special Housing and
Redevelopment Authority meeting of September 29, 2020.
Motion carried 3-0 Commissioner Sandahl was experiencing technical difficulties and was
not present for the vote.
Item #1 APPROVAL OF THE AGENDA
M/Vrieze Daniels, S/Regan Gonzalez to approve the agenda.
Motion carried 3-0 Commissioner Sandahl was experiencing technical difficulties and was
not present for the vote.
HRA Meeting Minutes -2- October 19, 2020
Item #2
CONSIDERATION OF THE ACCEPTANCE OF THE RICHFIELD HOUSING AND
REDEVELOPMENT AUTHORITY TAX INCREMENT FINANCING
DISTRICT STATUS UPDATE. (S.R. NO 34).
Community Development Accountant Link presented staff report No. 34.
HRA Financial Consultant Rebecca Kurtz; Ehlers, provided a summary of the Tax
Increment Financing status update and offered explanations for the three types of obligations, Tax
Increment Financing (TIF) Notes, Pooling, and highlighted a few TIF Districts.
Chair Supple clarified the obligations that would not be reviewed.
Chair Supple thanked Rebecca Kurtz for a thorough report.
Commissioner Vrieze Daniels also thanked Rebecca Kurtz for a thorough report. Inquired
pooling balances on a couple of Districts.
Rebecca explained the pooling on the newer Districts.
Executive Director Stark stated that the HRA has asked Ehlers for assistance in diving
deeper into pooling and resources available and that a memo would be distributed to the HRA in
November.
Chair Supple Inquired about pooling monitoring.
Rebecca Kurtz explained that pooling would be further explained in a November memo to
the HRA.
Commissioner Regan Gonzalez inquired about state policy around TIF.
Rebecca Kurtz stated legislature changes would allow TIF to be more flexible, but does not
anticipate any dramatic change with legislature in the near future. Special legislation could be
pursued. Ehlers is looking into further possible options.
Chair Supple inquired about the TIF map and the Cedar Corridor District splitting into
another District.
Rebecca Kurtz explained there are no plans to split the Cedar Corridor District into another
District.
Executive Director Stark explained why the Cedar Corridor District was established the way
it was and that the possibility of taking some parcels out of the current District sometime in the
future.
Chair Supple inquired about which projects a going forward without any TIF money.
Executive Director Stark explained the Novo and the Lunds projects are going forward
without any TIF.
Chair Supple inquired about the effects of decertifying Districts.
HRA Meeting Minutes -3- October 19, 2020
Rebecca Kurtz explained the impacts on the HRA when Districts are decertified.
Executive Director Stark explained that when Districts are decertified the tax capacity is
divided among the City, Hennepin County and Richfield Public Schools.
M/Sandahl, S/Vrieze Daniels to accept the Richfield Housing and Redevelopment Authority
annual Tax Increment Financing District Status Update.
Motion carried 4-0
Item #3
CONSIDER A RESOLUTION APPROVING AN AMENDMENT TO THE CONTRACT
FOR PRIVATE DEVELOPMENT WITH CPII DEVELOPMENT
LLC FOR THE CEDAR POINT II APARTMENT DEVELOPMENT PROJECT.
(S.R. NO. 35)
Housing Manager Urban presented staff report No. 35
M/Regan Gonzalez, S/Vrieze Daniels to adopt a resolution approving an amendment to the
Contract for Private Development with CPII Development LLC for the Cedar Point II apartment
development project.
Motion carried 4-0
Item #4
HRA DISCUSSION
None.
Item #5
EXECUTIVE DIRECTOR’S REPORT
None.
Item #8
CLAIMS
M/Sandahl, S/Vrieze Daniels that the following claims be approved:
U.S. BANK 10/19/2020
Section 8 Checks 132189-132272 $180,778.24
HRA Checks 33900-33913 $64,911.95
Total $245,690.19
Motion carried 4-0
HRA Meeting Minutes -4- October 19, 2020
Item #9
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:52 p.m.
Date Approved: November 16, 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. 36
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
11/16/2020
RE P O RT P RE PA RE D B Y: K ate A i tchi son/C eleste McD ermott, Housing S pecialists
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
11/12/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of r evisions to the Housing and Redevelopment Authority's current Subordination
Policy, last updated in 2012.
E X E C UT IV E S UM M ARY:
Staff is recommending some minor c hanges to the current Subordination Polic y (P olicy ) that governs the
Housing and Redevelopment Authority's (HRA ) interests when a homeowner refinanc es with an HRA lien on
the property.
Most of the HRA's loans carry a 30-year term. D uring the c ourse of those years, homeowners will typically
refinanc e at least onc e. The principal mortgage lender ty pic ally requires that its mortgage be in first position,
ahead of any other liens on the property. The subordination proc ess allows the new mortgage to be placed
ahead of the HRA's lien, under the conditions outlined in the Policy.
These changes will make the Subordination Polic y easier to understand and administer by inc luding more
detailed criteria in the form of a chart, and clarify the c onditions under which the E xecutive D irec tor will
consider an Administrative Exc eption and what conditions require full HRA consideration.
The proposed c larific ations conc ern the following criteria:
Loan to value ratios: providing scenarios where loan to value ratios above 80% c an be administratively
approved in situations where refinancing improves the applicant's financial situation and prevents
foreclosure, when the only inc rease is due to financing fees, and in cases of refinancing at the end of
a large home improvement project;
Cash-out/equity removal: allow up to $2,000 c ash-out by polic y and increase the cash out limit to
$15,000 with HRA Executive Director's approval, and;
I ncrease in debt amount: particularly for situations where applic ants rec ently c ompleted large home
improvement projects and are refinancing at the end of the project.
RE C O M M E ND E D AC T IO N:
By motion: Approve the proposed revisions to the Housing and Redevelopment Authority's
Subordination P olicy.
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's Subordination Policy was established in 2007 and last updated in 2012. At that point, the
Policy was revised to allow more flexibility to homeowners who were refinanc ing following the c rash of
the housing market in order to obtain a better interest rate or lower monthly pay ments.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The current P olicy, proposed Administrative Exceptions (approved by HRA E xecutive D irec tor), and
proposed c riteria for an HRA-level appeal are listed in the table below:
C R IT E R IA P OL IC Y AD MIN IS T R AT IV E
E X C E P T ION H R A Appeal
L oan to Value No greater than 80%Greater than 80% if:
A mount of increase
to mortgage is only
due to financing
charges (closing
costs), or;
New mortgage
improves the
homeowner’s abi lity
to make monthly
payments and avoi d
foreclosure and/or
financial hardship.
Homeowner is
refinancing a
c onstruc tion loan
after a documented
home improvement
projec t. Refinance
must be c ompleted
within one year of
projec t c ompletion.
Greater than 80%, if the
A dministrative E xception
cri teria do not apply
C ash-out/equity
removal
· Housing-related
expenses allowed
· Up to $2,000 in
cash-out allowed at
closing.
F or non-housing-related
cash out, must:
· Up to $15,000 i n
cash-out, depending on
use of funds, at the
discretion of the
E xecutive D irector
· Must meet all other
subordination criteria
of the existing P olicy.
· Non-housing related
expenses beyond
$15,000, or;
· D enied an
A dministrative
E xception
Increase in amount
of superior debt
C an increase no more
than 50%.
May increase more than
50%, when:
· S uperior debt is
unusually low and
sufficient equity
protection exists.
· Homeowner is
refinancing a
construction loan after
a documented home
improvement project.
Refinance must be
completed within 1
year of project
completion.
P roposed increase of
more than 50%, without
the exceptions made for
through an A dministrative
E xception.
C.C R IT IC AL T IMIN G ISSU E S:
None
D.F IN AN C IAL IMPAC T:
The Subordination Policy is in place to protect the HRA's financial interests while offering
homeowners the ability to refinanc e under c ertain conditions. The P olicy c ontinues to meet this
goal.
E.L E GAL C ON S ID E R AT ION :
None
ALT E R N AT IV E R E C O MME N D AT IO N(S):
1. Do not approve the proposed c hanges.
2. Modify and approve the proposed changes.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
None
AT TAC H ME N TS :
D escripti on Type
S ubordi nation P olicy - C hanges Redlined B ackup Materi al
S ubordi nation P olicy B ackup Materi al
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
SUBORDINATION & SATISFACTION POLICY
EFFECTIVE JUNE 2013NOVEMBER 2020
Subordinations
Richfield Housing and Redevelopment Authority (HRA) loan recipients requesting subordination of the
interest of the HRA in real property must submit a Subordination Request Form, the required supporting
documentation, and a processing fee. Forms are available on the City of Richfield website
(http://www.richfieldmn.gov/subordinations cityofrichfield.org/) or by calling the Community Development
Department at 612-861-9760. Requests will not be considered until all documents and the processing fee
have been received.
Required Documents
The following information must be submitted with the Subordination Request Form:
1. A typed letter dated and signed by the mortgagor or lender, stating the reason for
the requested subordination and the use of any equity being removed as part of
the loan transaction.
2. A copy of the current appraisal (dated within six months of application) or other
evidence of market value of the property that is acceptable to the HRA.
3. A copy of current title work (must indicate all debt against the property).
4. Explanation of any debts to be paid off or consolidated as part of the
subordination process, along with supporting documentation (if
applicable).remaining debts or liens with supporting documentation (i.e. most
recent mortgage bill).
5. Estimated closing costs/settlement statement, where applicable.
6. A copy of the mortgagor’s loan application.
7. Additional documentation may be required.
Evaluation Criteria
The Richfield HRA will subordinate its mortgage interest if all of the following conditions are met, to the
extent that they are applicable:
1. Closing costs are reasonable. Generally this shall mean that the sum of all
discount points, origination fees, and lender ancillary fees generally shall not
exceed 3% of the new first mortgage amount.
2. If the HRA believes that the payment terms of the refinance are within the
financial means of the borrower.
3. The total debt secured by the property, including the HRA lien and all superior
mortgages, does not exceed 80% of the documented market value of the
property.
4. Any equity being removed beyond the cost of the loan transaction will be used to
improve the property. A typed letter, dated and signed by the applicant, must be
submitted stating the use of any equity being removed.
5. The overall value of superior debt must not be increased by more than 50%.
6. If nNo more than one two subordination request has may be been approved by
the HRA in the pastper five year periods.
7. Property taxes, if not escrowed by the superior mortgage holder, must be current.
The HRA will not subordinate to reverse mortgages. In most cases, interest-only loans or loans with
interest-only options, revolving lines of credits or debt consolidation will not be allowed unless the HRA
determines that an acceptable reason warrants this type of loan.
The HRA may approve other subordination requests not meeting the conditions above on a case-by-case
basis that are clearly in the best interests of the HRA, where the security of the HRA loan remains
acceptable and denial of the request will cause or contribute to a documented hardship on the part of the
borrower.
As a condition of approval, the HRA may require the Borrower to receive financial counseling. While
many courses are available at no charge, the Borrower is responsible for any costs associated with the
counseling. The course must be approved by the HRA.
Appeal Process
In cases where a subordination request does not meet the Policy, the Executive Director may grant an
Administrative Exception per the criteria listed in the table below.
If an application is denied an Administrative Exception, the applicant may request an appeal in writing.
Appeals will be submitted by staff to the HRA at the next regularly scheduled meeting, provided the
request is made at least 10 days prior to that meeting. The HRA meets on the third Monday of each
month.
CRITERIA POLICY ADMINISTRATIVE
EXCEPTION HRA Appeal
Loan to Value No greater than 80% Greater than 80% if:
Amount of increase to
mortgage is only due
to financing charges
(closing costs), or;
New mortgage
improves the
homeowner’s ability
to make monthly
payments and avoid
foreclosure and/or
financial hardship.
Homeowner is
financing or
refinancing a
documented home
improvement project.
Refinance must be
completed within 1
year of project
completion.
Greater than 80%, if the
administrative exception
criteria do not apply
Cash-out/equity
removal
Housing-related
expenses allowed
Up to $2,000 in cash-
out allowed at
closing.
For non-housing-related
cash out:
Up to $15,000 in
cash-out, subject to
the approval of the
Executive Director
Must include
explanation of use of
funds
Must meet all other
subordination criteria
of the existing policy.
Non-housing related
expenses beyond
$15,000, or;
Denied an
Administrative
Exception
Increase in amount
of superior debt
Can increase no more
than 50%.
May increase more than
50%, when:
Superior debt is
unusually low and
sufficient equity
protection exists.
Homeowner is
financing or
refinancing a
documented home
improvement project.
Refinance must be
completed within 1
year of project
completion.
Proposed increase of
more than 50%, without
the exceptions made for
through an Administrative
Exception.
Fees
The fee for a subordination request is established by the HRA. If the subordination request is denied, the
fee will be returned with a letter explaining the reason(s) for denial. An additional fee is required for an
appeal to the HRA and is non-refundable.
Processing
Subordination requests will be processed by HRA staff, who will submit the request with a
recommendation for action, to the Executive Director. The Executive Director has the authority to grant a
subordination request when, based on his or her discretion, the subordination is reasonable based on the
criteria set forth in this Policy. The Executive Director may request review and final decision by the HRA.
Requests for subordination should be submitted 30 days prior to the date the agreement to subordinate is
needed. Exceptions may be made on a case-by-case basis.
Appeal Process
In cases where a subordination request does not meet the Policy, the Executive Director may grant an
administrative appeal under the following circumstances:
Loan-to-value (LTV) ratio is greater than 80%, but no greater than 85%; or
Equity being removed for anything other than property improvements does not exceed $5000; or
The amount of financing superior to the HRA lien does not increase more than the cost of
settlement charges related to the refinancing; or
The overall superior debt increases more than 50% but the value of superior debt is unusually low and/or
sufficient equity protection exists
If an application is denied, the applicant may request an appeal in writing. Appeals will be submitted by
staff to the HRA at the next regularly scheduled meeting, provided the request is m ade at least 10 days
prior to that meeting. The HRA meets on the third Monday of each month.
Satisfactions
When a loan made by the HRA is paid in full, a document satisfying the lien will be prepared by the HRA,
executed by the Executive Director or his or her delegate and delivered to the borrower for recording.
The borrower is responsible for the cost of recording the satisfaction.
More information can be found online at: http://www.richfieldmn.gov/subordinations
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
SUBORDINATION & SATISFACTION POLICY
EFFECTIVE NOVEMBER 2020
Subordinations
Richfield Housing and Redevelopment Authority (HRA) loan recipients requesting subordination of the
interest of the HRA in real property must submit a Subordination Request Form, the required supporting
documentation, and a processing fee. Forms are available on the City of Richfield website
(http://www.richfieldmn.gov/subordinations) or by calling the Community Development Department at 612-
861-9760. Requests will not be considered until all documents and the processing fee have been
received.
Required Documents
The following information must be submitted with the Subordination Request Form:
1. A typed letter dated and signed by the mortgagor or lender, stating the reason for
the requested subordination and the use of any equity being removed as part of
the loan transaction.
2. A copy of the current appraisal (dated within six months of application) or other
evidence of market value of the property that is acceptable to the HRA.
3. A copy of current title work (must indicate all debt against the property).
4. Explanation of any debts to be paid off or consolidated as part of the
subordination process, along with supporting documentation (if applicable).
5. Estimated closing costs/settlement statement, where applicable.
6. A copy of the mortgagor’s loan application.
7. Additional documentation may be required.
Evaluation Criteria
The Richfield HRA will subordinate its mortgage interest if all of the following conditions are met, to the
extent that they are applicable:
1. Closing costs are reasonable. Generally this shall mean that the sum of all
discount points, origination fees, and lender ancillary fees generally shall not
exceed 3% of the new first mortgage amount.
2. If the HRA believes that the payment terms of the refinance are within the
financial means of the borrower.
3. The total debt secured by the property, including the HRA lien and all superior
mortgages, does not exceed 80% of the documented market value of the
property.
4. Any equity being removed beyond the cost of the loan transaction will be used to
improve the property. A typed letter, dated and signed by the applicant, must be
submitted stating the use of any equity being removed.
5. The overall value of superior debt must not be increased by more than 50%.
6. No more than two subordination request may be approved by the HRA per five
year period.
7. Property taxes, if not escrowed by the superior mortgage holder, must be current.
The HRA will not subordinate to reverse mortgages. In most cases, interest-only loans or loans with
interest-only options, revolving lines of credits or debt consolidation will not be allowed unless the HRA
determines that an acceptable reason warrants this type of loan.
The HRA may approve other subordination requests not meeting the conditions above on a case-by-case
basis that are clearly in the best interests of the HRA, where the security of the HRA loan remains
acceptable and denial of the request will cause or contribute to a documented hardship on the part of the
borrower.
As a condition of approval, the HRA may require the Borrower to receive financial counseling. While
many courses are available at no charge, the Borrower is responsible for any costs associated with the
counseling. The course must be approved by the HRA.
Appeal Process
In cases where a subordination request does not meet the Policy, the Executive Director may grant an
Administrative Exception per the criteria listed in the table below.
If an application is denied an Administrative Exception, the applicant may request an appeal in writing.
Appeals will be submitted by staff to the HRA at the next regularly scheduled meeting, provided the
request is made at least 10 days prior to that meeting. The HRA meets on the third Monday of each
month.
CRITERIA POLICY ADMINISTRATIVE
EXCEPTION HRA Appeal
Loan to Value No greater than 80% Greater than 80% if:
Amount of increase to
mortgage is only due
to financing charges
(closing costs), or;
New mortgage
improves the
homeowner’s ability
to make monthly
payments and avoid
foreclosure and/or
financial hardship.
Homeowner is
financing or
refinancing a
documented home
improvement project.
Refinance must be
completed within 1
year of project
completion.
Greater than 80%, if the
administrative exception
criteria do not apply
Cash-out/equity
removal
Housing-related
expenses allowed
Up to $2,000 in cash-
out allowed at
closing.
For non-housing-related
cash out:
Up to $15,000 in
cash-out, subject to
the approval of the
Executive Director
Must include
explanation of use of
funds
Must meet all other
subordination criteria
of the existing policy.
Non-housing related
expenses beyond
$15,000, or;
Denied an
Administrative
Exception
Increase in amount
of superior debt
Can increase no more
than 50%.
May increase more than
50%, when:
Superior debt is
unusually low and
sufficient equity
protection exists.
Homeowner is
financing or
refinancing a
documented home
improvement project.
Refinance must be
completed within 1
year of project
completion.
Proposed increase of
more than 50%, without
the exceptions made for
through an Administrative
Exception.
Fees
The fee for a subordination request is established by the HRA. If the subordination request is denied, the
fee will be returned with a letter explaining the reason(s) for denial. An additional fee is required for an
appeal to the HRA and is non-refundable.
Processing
Subordination requests will be processed by HRA staff, who will submit the request with a
recommendation for action, to the Executive Director. The Executive Director has the authority to grant a
subordination request when, based on his or her discretion, the subordination is reasonable based on the
criteria set forth in this Policy. The Executive Director may request review and final decision by the HRA.
Requests for subordination should be submitted 30 days prior to the date the agreement to subordinate is
needed. Exceptions may be made on a case-by-case basis.
Satisfactions
When a loan made by the HRA is paid in full, a document satisfying the lien will be prepared by the HRA,
executed by the Executive Director or his or her delegate and delivered to the borrower for recording.
The borrower is responsible for the cost of recording the satisfaction.
More information can be found online at: http://www.richfieldmn.gov/subordinations
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
STAFF RE P ORT NO. 37
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
11/16/2020
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
11/12/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of the adoption of a resolution approving a Subordination Agr eement related to the
Cedar Point II apartments.
E X E C UT IV E S UM M ARY:
On September 17, 2018, the Housing and Redevelopment Authority (HRA) approved a Contract for Private
Development (Contract) with NHH Companies, LLC, now doing business as C P I I Development, L L C
(Developer), to redevelop a portion of the Cedar Point I I redevelopment area (63rd to 65th Street and 16th
Avenue to Richfield Parkway) with 218 market-rate apartment units. The number of units increased to 237 in
an amendment to the Contract approved by the HRA on Oc tober 19, 2020.
As part of the C ontrac t, the HRA agreed to sell the HRA-owned property located along Ric hfield Parkway to
the Developer. The Contract inc ludes a Right of Reverter (Reverter) provision and Right of Purchase and
Right of First Refusal Agreement (Agreement) to ensure that in the event of default by the Developer, the
HRA would have the right to regain title of the property.
The Developer plans to close on a portion of its construction financing this month in order to ac quire the
property from the HRA and begin site work. The lender is requesting a subordination of the Reverter and
Agreement in order to close on the property ac quisition and site work portion of the loan. Under the terms of
the Contract, the Developer may request that the HRA subordinate the Agreement to the construction and/or
permanent financ ing loan.
RE C O M M E ND E D AC T IO N:
By motion: Adopt a resolution approving a S ubordination Agreement related to construction financing
for the apartment component of the Cedar P oint II redevelopment project.
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 entered into a Contract to provide assistance to the apartment portion of the
redevelopment project on September 17, 2018. The Contract was amended on September 16,
2019, and Oc tober 19, 2020.
The D eveloper is seeking acquisition and site work funds from its construction lender in order to
acquire the HRA property for the development.
The lender is requiring that the HRA approve a subordination of the Reverter provided for in
Sec tion 9.4 and Right of Purchase and Right of First Refusal Agreement provided for in Section
9.9 of the Contract prior to issuing the loan.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Under the terms of the Contract, the D eveloper may request that the HRA subordinate the
Reverter and Agreement to the construc tion and/or permanent financing loan.
C.C R IT IC AL T IMIN G ISSU E S:
The D eveloper is antic ipating closing on a portion of their construc tion financ ing and the HRA's
property by November 30. Prior to making the loan, their lender is requiring a Subordination
Agreement from the HRA, subordinating the Reverter and Agreement to the construction loan.
D.F IN AN C IAL IMPAC T:
The A greement and Reverter will be subordinate to the c onstruction loan. I f the projec t were to
default on the C ontrac t, and the HRA had to employ the right to re-purc hase the land, the land
would revert to the HRA but be subject to the lien from the construc tion loan.
E.L E GAL C ON S ID E R AT ION :
The HRA retains its rights under the Contract.
The HRA Attorney will approve the final form to be exec uted by the HRA C hair and Exec utive
Director.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Deny the S ubordination Agreement request.
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
S ubordi nation A greement C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING SUBORDINATION AGREEMENT WITH BRIDGEWATER BANK
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, as amended by the First Amendment to Contract for Private
Development, dated September 16, 2019, between the Authority and the Developer, and as further amended
by the Second Amendment to Contract for Private Development, dated October 24, 2020 (collectively, the
“Development Agreement”); and
WHEREAS, pursuant to the Development Agreement, the Developer will acquire property within
the Cedar Avenue Tax Increment Financing 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 237 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, to provide financing for the Minimum Improvements, Bridgewater Bank (the
“Lender”) has agreed to provide the Developer with a mortgage loan in the amount of $2,175,000 (the
“Senior Loan”); and
WHEREAS, as a condition to providing the Senior Loan to the Developer, the Lender will require
that the Authority subordinate its rights under the Development Agreement, including 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 Loan (collectively, the “Senior
Loan Documents”); and
WHEREAS, there has been presented before the Board of Commissioners of the Authority a form of
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 Development Agreement
to the rights of the Lender under the Senior Loan Documents; 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 Development Agreement are hereby subordinated to the
rights of the Lender under the Senior Loan Documents.
2
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 16th day of November, 2020.
Mary Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
684596.v1
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (“Agreement”) is made and entered into this
___ day of November, 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 a mortgage loan to CPII Development LLC, a
Minnesota limited liability company (“Borrower”) in the amount of Two Million One Hundred
Seventy-Five Thousand and 00/100 Dollars ($2,175,000.00) (the “Senior Loan”), which 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 “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.
WHEREAS, Authority and NHH Companies L.L.C., a Minnesota limited liability
company (“Developer”) have entered into a Contract for Private Development dated September
17, 2018, as assigned and assumed by the Borrower pursuant to an Assignment of Contract for
Private Development, dated January 15, 2019, between the Authority, the Developer, and the
Borrower, as amended by the First Amendment to Contract for Private Development, September
16, 2019, between the Borrower and the Authority, and as further amended by the Second
Amendment to Contract for private Development, dated October __, 2020 (the “Development
Contract”), between the Borrower and the Authority, 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”).
684596.v1 2
WHEREAS, Borrower is the successor in interest to the rights and obligations of the
Developer under the Development Contract as it relates to the Property as it has or is
concurrently herewith purchasing the Property from the Developer; and
WHEREAS, that as a condition of Bridgewater making the Senior Loan 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 Mortgage, and to the rights and
interest of the holder of the Senior Mortgage, as fully and with the same effect as if the Senior
Mortgage 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.
2. HRA Rights and Remedies. Notwithstanding the foregoing, except with respect
to the Authority’s right of reverter and its right of repurchase, nothing in this Agreement shall
limit the Authority’s ability to exercise its rights and remedies under the Development Contract.
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 Mortgage 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
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.
684596.v1 3
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 Loan
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]
684596.v1 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: __________________________________
Printed Name: _________________________
Its: Chair
By: __________________________________
Printed Name: _________________________
Its: Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this ______ day of _________, 2020, before me appeared __________________, 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 _________, 2020, before me appeared __________________, the
Executive Director of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, on behalf of the Authority.
Notary Public
684596.v1 5
BRIDGEWATER:
BRIDGEWATER BANK,
a Minnesota banking corporation
By:
Tyler Manning
Its: Vice President
STATE OF MINNESOTA)
) ss.
COUNTY OF __________)
On this ______ day of October, 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
684596.v1 6
EXHIBIT A
Legal Description
Lots 9 thru 14, Block 1 and Lots 9 thru 16, Block 2, Iverson's Second Addition, Hennepin
County, Minnesota
Abstract Property
[CONFIRM LEGAL DESCRIPTION]
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.C.
STAFF RE P ORT NO. 38
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
11/16/2020
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
11/12/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of the adoption of a resolution relating to the closing on the Cedar Point II apartment
property.
E X E C UT IV E S UM M ARY:
The Housing and Redevelopment Authority (HRA ) approved c ontrac ts for private development with two
separate legal development entities, c omprised of the exact same individuals as princ iples to those entities, to
develop apartments and townhomes in the Cedar Point I I redevelopment area (63rd to 65th Street and 16th
Avenue to Richfield Parkway).
The final plat for the projec t enc ompasses the entire development property, inc luding lots for both the
townhomes and the apartments, but was prepared and signed by Cedar Point I nvestments, L L C , the legal
owner of the townhome development. I n order to file the plat with Hennepin C ounty, C edar Point I nvestments
needs to be the owner of all the property. The development team is requesting that the HRA agree to sell the
apartment property to Cedar Point I nvestments, L L C , who will then sell the property to C P I I Development,
L L C, the legal owner of the apartment property. At the same time, a strip of property loc ated between the two
components, c urrently owned by Cedar Point I nvestments, LL C, will also be c onveyed to C P I I Development,
L L C.
RE C O M M E ND E D AC T IO N:
By motion: Adopt a resolution approving conveyance of the Cedar Point II apartment property to
Cedar Point Investments L L C, for platting pur poses.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
On A ugust 20, 2018, the HRA approved a contract for private development (Townhome Contract)
with NHH Companies, LLC, now doing business as Cedar Point I nvestments, LLC, to develop
townhomes in the C edar Point I I development area (63rd to 65th Street and 16th Avenue to
Richfield Parkway).
On September 17, 2018, the HRA approved a contract for private development (Apartment
Contract) with NHH Companies, LLC, now doing business as C P I I Development, L L C
(Developer), to develop apartments in the the Cedar Point I I redevelopment area.
On J uly 7, 2020, the City Council approved the final plat for the development, whic h inc ludes
property for both the townhomes and apartments.
On October 19, 2020, the HRA approved an amendment to the Apartment Contract inc reasing the
number of apartments to 237.
As part of the Apartment Contract, the HRA agreed to sell the HRA -owned property located along
Richfield Parkway to the Developer.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
NA
C.C R IT IC AL T IMIN G ISSU E S:
The HRA will c lose with Cedar Point I nvestments, L L C, the plat will be filed, and then Cedar Point
I nvestments, LLC, will c onvey the apartment property plus the additional strip of property located
between the two developments, to C P I I Development, L L C.
The deadline for closing on the apartments is November 30, 2020. A pproval of this resolution will
enable the Developer and HRA to meet this deadline.
D.F IN AN C IAL IMPAC T:
There is no impac t on the financial components of the Apartment C ontrac t. The HRA will be paid
$1.11 million for the apartment property at c losing.
E.L E GAL C ON S ID E R AT ION :
The HRA Attorney reviewed the proposed property c onveyance.
The terms of both c ontrac ts remain the same.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Deny the resolution.
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
F inal P lat B ackup Materi al
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING CONVEYANCE OF PROPERTY TO CEDAR POINT
INVESTMENTS, LLC FOR PLATTING PURPOSES
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, as amended by the First Amendment to Contract for Private
Development, dated September 16, 2019, between the Authority and the Developer, and as further amended
by the Second Amendment to Contract for Private Development, dated October 19, 2020 (collectively, the
“Development Agreement”); and
WHEREAS, pursuant to the Development Agreement, the Developer will acquire property within
the Cedar Avenue Tax Increment Financing 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 237 units; (ii) a parking ramp with
approximately 188 spaces; and (iii) necessary public infrastructure, including streets and utilities (the
“Minimum Improvements”); and
WHEREAS, on September 17, 2018, the Authority held a public hearing and approved the
conveyance of the Development Property to NHH, which assigned its interests in and obligations of the
Development Agreement to the Developer; and
WHEREAS, the plat for the property was prepared with the name of Cedar Point Investments, LLC
(an entity owned by the three members of the Developer) due to the fact that this entity owned a portion of
the property to be platted; and
WHEREAS, Developer has requested that the Authority agree to convey the Development Property
to Cedar Point Investments, LLC in order to record the plat and once the plat is recorded, Cedar Point
Investments, LLC will immediately convey the property to the Developer.
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 hereby approves the conveyance of the Development Property to Cedar Point
Investments, LLC, (an entity owned by the three members of the Developer), with the understanding that
Cedar Point Investments, LLC will immediately convey the property to the Developer once the plat is
recorded.
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.
2
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 16th day of November, 2020.
Mary Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-366 (JAE)
686474v1
N89°43'00"E 134.38
S00°16'58"W 1112.63S00°14'02"W75.07N89°43'01"E 134.44
OUTLOT DWesterly Line of Block 1,"IVERSON'S SECOND ADDITION"Found 1/2 InchOpen Iron PipeFound 1/2 InchOpen Iron Pipe
4 356
9 1087
17
18
16
15
12 11
13
14
OUTLOT CSW Corner of Block 1,"IVERSON'S SECOND ADDITION"NW Corner of Block 2,"IVERSON'S SECOND ADDITION"Vacated per Doc. No. N00°14'02"E92.14N08°13'32"E58.48S89°50'08"W 152.43
1
2
1
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N89°48'54"W 115.29
S89°48'54"E 115.2820.0020.00Drainage & Utility EasementOver All of OUTLOT B14.4038.758.2044.4453.3752.5252.5053.4734.7424.5724.5739.81
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34.81 24.57 24.57 31.33
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80.0080.00Drainage & Utility EasementOver All of OUTLOT CDrainage & Utility Easement
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144.51170.49S00°14'02"W 315.00OUTLOT B
10.00
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443.8718.61
N00°12'15"E
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25
26
242352.5039.81 24.57 24.57 33.11
19.7033.4728 27
2930
39.81 24.57 24.57 27.96
N89°48'54"W 122.06
S89°48'54"E 122.07OUTLOT F20.0020.00OUTLOT GOUTLOT HOUTLOT I
33
3432
31
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52.5052.5033.1224.5724.5739.81
39.81 24.57 24.57 33.1752.5052.5033.2124.5724.5739.81
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N00°16'58"E 962.538.25Drainage & Utility EasementPer Plat of RF64 TOWNHOMES19.00S89° 48'54"E 116.71
N89° 48'54"W 116.91
N89° 48'54"W 122.12
N89° 48'54"W 122.23N89° 48'54"W 120.36
52.5052.50C.R. DOC. NORF64NBearings are based on the westerly line of Block 1, "IVERSON'SSECOND ADDITION" having an assumed bearing of N00°11'06"EFound Iron Monument (see map for type)1/2 inch by 14 inch Iron Monument Set Marked "RLS 44565"KNOW ALL PERSONS BY THESE PRESENTS: That Cedar Point Investments, LLC, a Minnesota limited liability company, fee owner of thefollowing described property situated in the State of Minnesota, County of Hennepin, to wit:Lots 2 through 14, Block 1, and Lots 1 through 5 and 9 through 16, Block 2, "IVERSON'S SECOND ADDITION"AndAll that part of vacated East 64th Street as dedicated in "IVERSON'S SECOND ADDITION", according to the recorded plat thereof, Hennepin County, Minnesota, lying westerly of a line drawn from the northeast corner of Block 2, said "IVERSON'S SECOND ADDITION", to the southeast corner of 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.AndOUTLOT C, RF64 TOWNHOMES.Has caused the same to be surveyed and platted as RF64 and dedicate to the public for public use the public way, and the easements fordrainage and utility purposes as created by this plat.In witness whereof said Cedar Point Investments, LLC, a Minnesota limited liability company, has caused these presents to be signed by itsproper officer thisday of ,20.Signed: Cedar Point Investments, LLCBy:, Its: STATE OF ,COUNTY OFThis instrument was acknowledged before me thisday of , 20,by , its of Cedar Point Investments, LLC, a Minnesota limited liabilitycompany, on behalf of the company. Notary Signature Notary Printed NameMy Commission Expires: Notary Public County, SURVEYORS CERTIFICATEI Rory L. Synstelien do hereby certify that this plat was prepared by me or under my direct supervision; that I am a duly Licensed Land Surveyorin the State of Minnesota; that this plat is a correct representation of the boundary survey; that all mathematical data and labels are correctlydesignated on this plat; that all monuments depicted on this plat have been or will be set within one year; that all water boundaries and wetlands, as defined in Minnesota Statutes, Section 505.01, Subd. 3, as of the date of this certificate are shown and labeled on this plat; and allpublic ways are shown and labeled on this plat.Dated thisday of , 20.Rory L. Synstelien, Licensed Land SurveyorMinnesota License No. 44565STATE OF MINNESOTA,COUNTY OFThis instrument was acknowledged before me thisday of , 20, by Rory L. Synstelien. Notary Signature Notary Printed NameMy Commission Expires: Notary Public County, CITY COUNCIL, CITY OF RICHFIELD, MINNESOTAThis plat of RF64 was approved and accepted by the City Council of the City of Richfield, Minnesota at a regular meeting heldthis day of , 20, and said plat is in compliance with the provisions of MinnesotaStatutes, Section 505.03, Sub. 2.City Council, City of Richfield, Minnesotaby , Mayor by , ManagerRESIDENT AND REAL ESTATE SERVICES, Hennepin County, MinnesotaI hereby certify that taxes payable in 20and prior years have been paid for land described on this platdated this day of , 20.Mark V. Chapin, County Auditor By:DeputySURVEY DIVISION, Hennepin County, MinnesotaPursuant to Minnesota Statutes Section 383B.565 (1969), this plat has been approvedthisday of , 20.Chris F. Mavis, County Surveyor By: COUNTY RECORDER, Hennepin County, MinnesotaI hereby certify that the within plat of RF64 was recorded in this officethis day of , 20, at o'clock . m.Martin McCormick, County RecorderBy: Deputy100255002550SCALE IN FEET
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF RE P ORT NO. 39
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
11/16/2020
RE P O RT P RE PA RE D B Y: Melissa P oehlman, A sst. C ommunity D evelopment D irector
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
11/12/2020
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 a Contract for Private Development with Lynk 65, L L C (formerly
Enclave Development L LC) for redevelopment of properties at 65th Str eet and Lyndale Avenue and
authorizing issuance of a Tax Increment Limited R evenue N ote.
E X E C UT IV E S UM M ARY:
On September 24, 2019, representatives of E nc lave D evelopment, LLC, now, Lynk 65, L L C (D eveloper)
presented conc eptual plans for a mixed use development at the c orner of 65th S treet and Lyndale Avenue to
the Housing and Redevelopment Authority (HRA ), City C ounc il, and Planning C ommission. Based on
generally positive feedback received at that meeting, the HRA approved a Preliminary Development
Agreement (Preliminary Agreement) with the Developer on February 18, 2020. T his Preliminary
Agreement provided for the support and cooperation of the HRA as the Developer worked to
develop a financially feasible project that meets the goals of the City and HRA. Additionally, the
preliminary development agreement provided the time and financial support for HRA staff and
financial consultants (Ehlers) to quantify the potential public assistance available to cover any cost
"gap" that the Developer's feasibility analysis identified. T he original Preliminary Agreement was
subsequently extended due to the impact of the Coronavirus pandemic.
Sinc e the Preliminary Agreement was approved by the HRA in February, the Developer has worked with
HRA staff, Ehlers, and the HRA Attorney to develop a financ ially feasible projec t that would meet the goals of
the HRA and City C ounc il. These efforts have included:
Submittal of a revised pro forma for review;
Meet with existing tenants to explore opportunities for tenancy in the new building or reloc ation. Provide
existing tenants with ac cess to a commerc ial broker and a list of available and comparable space
nearby;
Submittal of preliminary plans (those presented in to policy makers in J uly ) for staff-level sketch plan
review. Revisions included walk-up units along 65th Street to address street-frontage c oncerns.
As both the D eveloper and the HRA have now met all of the obligations of the Preliminary Agreement, HRA
consideration of a C ontrac t for Private Development (Contract) is now being sought. This Contract was
drafted by HRA Legal C ounsel (J ulie Eddington of Kennedy and Graven) and has been reviewed and edited
by both HRA staff and the D eveloper. Among the provisions of the Contract are:
The Developer will make improvements totaling at least $37.71 million to include construction of a new
5-story mixed use building to inc lude 157 apartment units and approximately 8,000 square feet of
commercial space;
The Developer will pay and/or reimburse the HRA's up-front c osts to c reate this Contract, to establish
a Tax I nc rement Financ ing (TI F) Distric t and other administrative costs;
The development will include 10, 2-bedroom apartments that are affordable to households with incomes
of 60% or lower than the Area Median I nc ome (AMI ) for the life of the TI F Distric t (projec ted to be 17
years);
The HRA would withhold the first 10% of Tax I ncrement for reimbursement of its ongoing administrative
costs throughout the life of the District. The Developer would receive a diminishing perc entage of the
TI F over the life of the Distric t with the difference being "pooled" as a contribution the C ity's Housing
and Redevelopment Fund, as follows:
Years in whic h TI F Rec eived I ncrement to Developer I ncrement to HRA
Year 1 - 12 90%10%
Year 12.5 - 15 70%30%
Year 15.5 - 17 21%79%
The maximum TI F that would be available to the Developer is $5,723,074. S taff and the HRA's
Financial have conc luded that the development could not occ ur "But For" this level of assistance;
As a reminder, in a TI F Distric t, the property owner c ontinues to pay taxes on the pre-redevelopment
property values to all of the taxing jurisdictions (City, C ounty & School Distric t) as had been the case
prior to the establishment of a TI F Distric t. The property owner also pays normal property taxes on the
value of the new c onstruc tion; these "new" taxes c an be returned to the developer to reimburse them
for costs nec essary to make the project financially feasible while still meeting affordability
requirements.
RE C O M M E ND E D AC T IO N:
By motion: Appr ove a resolution approving a C ontract for Private Development with Lynk 65, L L C
and authorizing the issuance of a Tax Increment Limited R evenue Note.
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 1997-1998, a large sc ale visioning proc ess for the area bounded by 62nd and 67th Streets and
Pleasant Avenue and 35W took place. The resulting Lakes at Lyndale Master Plan (Plan)
envisioned a thriving urban downtown area made up of a variety of multi-family housing types,
commerc ial uses, and natural elements. The evolution of this area has c ontinued since the
adoption of that Plan.
I n 2011, the north half of this block was redeveloped into what is now Lyndale Plaza. I nvestment
and revitalization in this area has continued with the Ly ndale Station c ommercial development to
the south and the former Lyndale Garden Center to the west.
On September 24, 2019 representatives of Ly nk 65, L L C presented conc eptual plans for a mixed
use development to the City Counc il, HRA, and Planning Commission.
The HRA approved a Preliminary D evelopment Agreement with the D eveloper on February 18,
2020.
Revised c onceptual plans were presented to the C ity Council, HRA, and Planning Commission on
J uly 20, 2020.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The Preliminary Agreement between the D eveloper and the HRA was originally approved by the
HRA on February 18. That Preliminary Agreement states that "the parties [the HRA and the
Developer] will attempt in good faith to negotiate the terms of a contract for private development..."
I n a Redevelopment TI F District there are no statutory requirements related to affordability. The
HRA and City 's I nc lusionary Housing Polic y states that rental housing developments that receive
financial assistanc e must either:
Reserve 20% of the units for households earning 60% or less of the Area Median I ncome;
OR
Contribute 15% of the available Tax I nc rement generated to the Ric hfield Housing and
Redevelopment Fund.
The proposed agreement would provide 10 larger (2-bedroom) affordable units (6.4% of
total units) plus a 15% contribution to the C ity's Housing and Redevelopment Fund (in
addition to the 10% retained for administration of the Distric t). This contribution has present
value of $812,421.
C.C R IT IC AL T IMIN G ISSU E S:
This Agreement does not c onstitute approval of land use applications.
Land use approvals and building permits are required prior to construction.
Construction must c ommence by August 31, 2021 and be substantially c omplete by August 31,
2023.
D.F IN AN C IAL IMPAC T:
The C ontrac t c alls for the Developer to rec eive up to $5,723,074 in Tax I nc rement Financ ing
(TI F).
That TI F would be provided in the form of a "Pay -As-You-Go" Note and would not pose a
financial risk to the HRA (the risk would be to the Developer if the property failed to pay
adequate property taxes).
The development property would c ontinue to pay property taxes to all of the c urrent taxing
jurisdic tions (C ity, County and Sc hool D istrict) on the "base value" of the property.
The D eveloper would be obligated to reimburse the HRA for legal and financ ial c osts
associated with drafting this C ontrac t and with evaluating and establishing a TI F District.
Over the life of the District, the HRA will receive $691,716 in administrative funds and an
$812,421 c ontribution to the C ity's Housing and Redevelopment Fund.
E.L E GAL C ON S ID E R AT ION :
The HRA Attorney drafted the Agreement.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
1. Do not approve the Agreement.
2. Approve the A greement with modifications.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
Brian Bochman - Enclave Development / Ly nk 65, LLC
AT TAC H ME N TS :
D escripti on Type
Resolution Resolution L etter
D evelopment A greement C ontract/A greement
111 = 1 " " RC125-376-662582.v2
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH LYNK 65,
LLC AND AUTHORIZING THE ISSUANCE OF A TAX INCREMENT LIMITED REVENUE
NOTE
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the “Authority”) was created pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as
amended, and was authorized to transact business and exercise its powers by a resolution of the City Council
of the City of Richfield, Minnesota (the “City”); 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 2020-3 Tax Increment Financing
District: Lynk 65 (the “TIF District”), a redevelopment 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 November 24, 2020,
approving the modification of the Redevelopment Plan and the TIF Plan for the TIF District, in accordance
with the TIF Act; and
WHEREAS, Lynk 65, LLC, a North Dakota limited liability company (the “Developer”), intends to
acquire certain property from the Authority (the “Development Property”) and construct thereon
approximately 157 units of housing, with ten (10) affordable two-bedroom units, and approximately 8,000
square feet of retail space (the “Minimum Improvements”); and
WHEREAS, there has been presented before this Board of Commissioners of the Authority (the
“Board”) a Contract for Private Development (the “Development Agreement”) between the Authority and the
Developer, pursuant to which the Developer will agree to construct the Minimum Improvements, and the
Authority will agree to reimburse the Developer for certain public redevelopment costs associated with the
Minimum Improvements (the “Public Redevelopment Costs”); and
WHEREAS, pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue
and sell its bonds for the purpose of financing a portion of the Public Redevelopment Costs, and such bonds
shall be payable from all or any portion of revenues derived from the TIF District and pledged to the payment
of the bonds; and
WHEREAS, pursuant to the Development Agreement, the Authority has proposed to issue a Tax
Increment Limited Revenue Note to the Developer (the “TIF Note”) in the maximum principal amount of
$___________ to reimburse the Developer for the Public Redevelopment Costs; 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:
Section 1. The Development Agreement. The Development Agreement is hereby in all
respects authorized, approved, and confirmed, and the Chair and the Executive Director are hereby authorized
and directed to execute the Development Agreement for and on behalf of the Authority in substantially the
2
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.
Section 2. The TIF Note.
2.01. The Authority hereby approves and authorizes the Chair and Executive Director to execute
the TIF Note upon the Executive Director’s determination that the conditions for issuance of the TIF Note set
forth in Section 3.3 of the Development Agreement have been met. The TIF Note shall be sold to the
Developer with such terms provided in the Development Agreement. The Authority hereby delegates to the
Executive Director the determination of the date on which the TIF Note is to be delivered. The Authority
shall receive in exchange for the sale of the TIF Note the agreement of the Developer to pay or cause to be
paid the Public Redevelopment Costs.
2.02. The TIF Note shall be in substantially the form set forth in Exhibit B attached to the
Development Agreement, with the blanks to be properly filled in and the principal amount and payment
schedule adjusted as of the date of issue.
2.03. The TIF Note shall be issued as a single typewritten note numbered R-1. The TIF Note shall
be issuable only in fully registered form. Principal of the TIF Note shall be payable by check or draft issued
by the registrar described herein. Principal of the TIF Note shall be payable by mail to the owner of record
thereof as of the close of business on the fifteenth day of the month preceding the Payment Date (as defined
in the Development Agreement), whether or not such day is a business day.
2.04. The Authority hereby appoints the Executive Director of the Authority to perform the
functions of registrar, transfer agent and paying agent (the “Registrar”) for the TIF Note. The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as
follows:
(a) The Registrar shall keep at its office a bond register in which the Registrar shall provide for
the registration of ownership of the TIF Note and the registration of transfers and exchanges of the TIF Note.
(b) Upon surrender for transfer of the TIF Note duly endorsed by the registered owner thereof or
accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly
executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing,
the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new TIF
Note or Notes of a like aggregate principal amount and maturity, as requested by the transferor.
Notwithstanding the foregoing, the TIF Note shall not be transferred to any person other than an affiliate, or
other related entity, of the Developer unless the Authority has been provided with an investment letter in a
form substantially similar to the investment letter submitted by the Developer or a certificate of the transferor,
in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws. The Registrar may close the books for
registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such
Payment Date.
(c) Any TIF Note surrendered upon any transfer shall be promptly cancelled by the Registrar
and thereafter disposed of as directed by the Authority.
(d) If the TIF Note is presented to the Registrar for transfer, the Registrar may refuse to transfer
the same until it is satisfied that the endorsement on such TIF Note or separate instrument of transfer is
3
legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which
it, in its judgment, deems improper or unauthorized.
(e) The Authority and the Registrar may treat the person in whose name the TIF Note is at any
time registered in the bond register as the absolute owner of such TIF Note, whether the TIF Note shall be
overdue or not, for the purpose of receiving payment of, or on account of, the principal of such TIF Note and
for all other purposes, and all such payments so made to any such registered owner or upon the owner’s order
shall be valid and effectual to satisfy and discharge the liability of the Authority upon such TIF Note to the
extent of the sum or sums so paid.
(f) For every transfer or exchange of the TIF Note, the Registrar may impose a charge upon the
owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to
be paid with respect to such transfer or exchange.
(g) In case the TIF Note shall become mutilated or be lost, stolen, or destroyed, the Registrar
shall deliver a new TIF Note of like amount, maturity dates and tenor in exchange and substitution for and
upon cancellation of such mutilated TIF Note or in lieu of and in substitution for such TIF Note lost, stolen,
or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection
therewith; and, in the case of the TIF Note lost, stolen, or destroyed, upon filing with the Registrar of
evidence satisfactory to it that such TIF Note was lost, stolen, or destroyed, and of the ownership thereof, and
upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount
satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The TIF Note so
surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the
Authority. If the mutilated, lost, stolen, or destroyed TIF Note has already matured or been called for
redemption in accordance with its terms, it shall not be necessary to issue a new TIF Note prior to payment.
2.05. The TIF Note shall be prepared under the direction of the Executive Director and shall be
executed on behalf of the Authority by the signatures of its Chair and Executive Director. In case any officer
whose signature shall appear on the TIF Note shall cease to be such officer before the delivery of the TIF
Notes, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer
had remained in office until delivery. When the TIF Note has been so executed, it shall be delivered by the
Executive Director to the Developer in accordance with the Development Agreement.
Section 3. Security Provisions of the TIF Note.
3.01. The Authority hereby pledges to the payment of the principal of the TIF Note all Available
Tax Increment (as defined in the Development Agreement and as further described in the TIF Note).
Available Tax Increment shall be applied to payment of the principal of the TIF Note in accordance with the
terms of Development Agreement and the form of TIF Note.
3.02. Until the date the TIF Note is no longer outstanding and no principal thereof (to the extent
required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and
special “Bond Fund” for the TIF Note to be used for no purpose other than the payment of the principal of the
TIF Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax
Increment, subject to the terms of the Development Agreement. Any Available Tax Increment remaining in
either Bond Fund shall be transferred to the Authority’s account for the TIF District upon the payment of all
principal to be paid with respect to the TIF Note.
4
Section 4. Miscellaneous.
4.01. The Chair and the Executive Director are hereby authorized to execute and deliver to the
Developer any and all documents deemed necessary to carry out the intentions of this resolution and the
Development Agreement.
4.02. The officers of the Authority are hereby authorized and directed to prepare and furnish to the
Developer certified copies of all proceedings and records of the Authority, and such other affidavits,
certificates, and information as may be required to show the facts relating to the legality and marketability of
the TIF Note as the same appear from the books and records under their custody and control or as otherwise
known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished,
shall be deemed representations of the Authority as to the facts recited therein.
4.03. The approval of the Development Agreement is contingent upon the City’s approval of the
establishment of the TIF District and the related documents.
4.04. This resolution shall be effective upon full execution of the Development Agreement.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 16th day of November, 2020.
Mary Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-375 (JAE)
679388v1
DRAFT
November 11, 2020
CONTRACT
FOR
PRIVATE DEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
and
LYNK 65, LLC
Dated November 24, 2020
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street
Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
i
TABLE OF CONTENTS
Page
PREAMBLE ................................................................................................................................................... 1
ARTICLE I
Definitions
Section 1.1. Definitions ................................................................................................................................. 2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority .............................................................................................. 5
Section 2.2. Representations by the Developer ............................................................................................ 5
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Development Property ............................................................................................... 7
Section 3.2. Environmental Conditions ........................................................................................................ 7
Section 3.3. Issuance of Pay-As-You-Go TIF Note ..................................................................................... 7
Section 3.4. Termination of TIF District ....................................................................................................... 8
Section 3.5. Payment of Administrative Costs ............................................................................................. 8
Section 3.6. Records ...................................................................................................................................... 8
Section 3.7. Purpose of Assistance ............................................................................................................... 8
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements ................................................................................ 9
Section 4.2. Construction Plans .................................................................................................................... 9
Section 4.3. Commencement and Completion of Construction ................................................................. 10
Section 4.4. Certificate of Completion ........................................................................................................ 10
Section 4.5. Affordability Covenants .......................................................................................................... 10
Section 4.6. Affordable Housing Reporting ............................................................................................... 11
Section 4.7. Notice of Sale of Minimum Improvements ............................................................................ 11
ARTICLE V
Insurance
Section 5.1. Insurance ................................................................................................................................. 12
Section 5.2. Subordination .......................................................................................................................... 13
ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes .......................................................................................... 14
Section 6.2. Reduction of Taxes ................................................................................................................. 14
ii
Section 6.3. Qualifications .......................................................................................................................... 15
ARTICLE VII
Financing
Section 7.1. Mortgage Financing ................................................................................................................ 16
Section 7.2. Authority’s Option to Cure Default in Mortgage ................................................................... 16
Section 7.3. Modification; Subordination ................................................................................................... 16
Section 7.4. Termination ............................................................................................................................. 16
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development.......................................................................................... 17
Section 8.2. Prohibition Against Developer’s Transfer of Property and Assignment of
Agreement ............................................................................................................................... 17
Section 8.3. Release and Indemnification Covenants ................................................................................. 18
ARTICLE IX
Events of Default
Section 9.1. Events of Default ..................................................................................................................... 20
Section 9.2. Remedies on Default ............................................................................................................... 20
Section 9.3. Termination or Suspension of TIF Note ................................................................................. 21
Section 9.4. No Remedy Exclusive ............................................................................................................. 21
Section 9.5. No Additional Waiver Implied by One Waiver ...................................................................... 21
Section 9.6. Attorneys’ Fees and Costs....................................................................................................... 21
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable.............................. 22
Section 10.2. Equal Employment Opportunity ............................................................................................. 22
Section 10.3. Restrictions on Use ................................................................................................................. 22
Section 10.4. Provisions Not Merged With Deed ......................................................................................... 22
Section 10.5. Titles of Articles and Sections ................................................................................................ 22
Section 10.6. Notices and Demands ............................................................................................................. 22
Section 10.7. Counterparts ............................................................................................................................ 22
Section 10.8. Recording ................................................................................................................................ 23
Section 10.9. Amendment ............................................................................................................................. 23
Section 10.10. Preliminary Development Agreement .................................................................................... 23
Section 10.11. Termination ............................................................................................................................. 23
Section 10.12. Estoppel Certificates ............................................................................................................... 23
SIGNATURES ................................................................................................................................................ S-1
EXHIBIT A Development Property .......................................................................................................... A-1
EXHIBIT B Form of TIF Note .................................................................................................................. B-1
EXHIBIT C Form of Investment Letter .................................................................................................... C-1
EXHIBIT D Form of Certificate of Completion ...................................................................................... D-1
EXHIBIT E Form of Declaration of Restrictive Covenants ..................................................................... E-1
1
CONTRACT FOR PRIVATE DEVELOPMENT
THIS CONTRACT FOR PRIVATE DEVELOPMENT, made as of the ___ day of ________, 2020
(the “Agreement”), is 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 LYNK 65, LLC, a Minnesota limited liability company (the
“Developer”).
WITNESSETH:
WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001 through
469.047, as amended (the “HRA Act”), and was authorized to transact business and exercise its powers by a
resolution of the City Council of the City of Richfield, Minnesota (the “City”); and
WHEREAS, the Authority has undertaken a program to promote redevelopment and development of
land that is underused or underutilized within the City, and in this connection the Authority administers a
redevelopment project known as the Richfield Redevelopment Project (the “Redevelopment Project”)
pursuant to the HRA Act; and
WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or
interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private
enterprise; and
WHEREAS, within the Redevelopment Project, the Authority has created the 2020-3 Tax Increment
Financing District (the “TIF District”), a redevelopment district, in order to facilitate redevelopment of certain
property in the Redevelopment Project; and
WHEREAS, the Developer intends on acquiring certain property (the “Development Property”)
within the TIF District and construct thereon approximately 157 units of housing, with ten (10) affordable
two-bedroom units, and approximately 8,000 square feet of retail space (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 reimburse the Developer for a portion of the land acquisition costs, demolition and
remediation costs, certain site improvement costs, and other costs related to the Minimum Improvements that
may be reimbursed with tax increment; and
WHEREAS, the Authority believes that the development of the TIF District pursuant to this
Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the
health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of
the applicable State of Minnesota and local laws and requirements under which the Redevelopment Project
has been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the
context, the following terms have the following meanings:
“Agreement” means this Contract for Private Development, as the same may be from time to time
modified, amended, or supplemented.
“Authority” means the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
“Authority Representative” means the Executive Director of the Authority.
“Available Tax Increment” means, on each Payment Date, the Tax Increment attributable to the
Development Property and paid to the Authority by the County in the six (6) months preceding the Payment
Date after first deducting therefrom ten percent (10%) of the Tax Increment to be used to reimburse the
Authority for administrative expenses and, subject to Section 4.5 hereof. Available Tax Increment shall not
include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this
Agreement. For the first seventeen (17) years of the TIF District, the percentage of Tax Increment to be
provided to the Developer and the Authority will be allocated as follows:
Years in which Tax Increment Received Tax Increment to Developer Tax Increment to Authority
Year 1-12 (commencing August 1, 2023
and ending February 1, 2035)
90% 10%
Year 12.5-15.5 (commencing August 1,
2035 and ending February 1, 2038)
70% 30%
Year 16-17 (commencing August 1, 2038
and ending February 1, 2040)
21% 79%
“Board” means the Board of Commissioners of the Authority.
“Certificate of Completion” means the certification provided to the Developer pursuant to
Section 4.4 hereof and set forth in EXHIBIT D.
“City” means the City of Richfield, Minnesota.
“City Council” means the City Council of the City.
“Closing” has the meaning given such term in Section 3.2 hereof.
“Construction Plans” means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property, including the Minimum
Improvements, which (a) shall be as detailed as the plans, specifications, drawings and related documents
which are submitted to the appropriate building officials of the City; and (b) shall include at least the
following: (1) site plan, (2) foundation plan, (3) floor plan for each floor, (4) cross-sections of each (length
and width), (5) elevations (all sides, including a building materials schedule), (6) landscape and grading plan,
and (7) such other plans or supplements to the foregoing plans as the City may reasonably request to allow it
to ascertain the nature and quality of the proposed construction work.
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“County” means Hennepin County, Minnesota.
“Declaration of Restrictive Covenants” means the Declaration of Restrictive Covenants between the
Authority and the Developer in substantially the form set forth in EXHIBIT E.
“Developer” means Lynk 65, LLC, a Minnesota limited liability company, or its permitted
successors and assigns.
“Development Property” means the real property described in EXHIBIT A.
“Event of Default” means an action by the Developer listed in Article IX hereof.
“Holder” means the owner of a Mortgage.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
“Material Change” means a change in construction plans having a material adverse impact on the
generation of Tax Increment.
“Maturity Date” means the date that the TIF Note has been paid in full or terminated, whichever is
earlier.
“Minimum Improvements” means the demolition of blighted buildings on the Development Property
and the development of approximately 157 units of market rate housing and approximately 8,000 square feet
of retail space on the Development Property.
“Minimum Market Value” has the meaning set forth in Section 4.2(a)(vi) hereof.
“Mortgage” means any mortgage made by the Developer which is secured, in whole or in part, with
the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VII
hereof.
“Payment Date” means each February 1 and August 1 on which principal of and interest on the TIF
Note is paid.
“Project Area” means the real property located within the boundaries of the Redevelopment Project.
“Preliminary Development Agreement” means the Preliminary Development Agreement, dated
February 18, 2020, between the Authority and the Developer.
“Public Redevelopment Costs” means costs related to the development of the Minimum
Improvements and eligible to be reimbursed with Tax Increment, including but not limited to the costs of
land acquisition costs, demolition, environmental investigation and remediation costs, utility relocation, site
grading and excavation related to demolition and remediation, soil correction and shoring, construction of
parking structure, and public infrastructure.
“Redevelopment Plan” means the Redevelopment Plan for the Redevelopment Project approved and
adopted by the Board and the City Council.
“Redevelopment Project” means the Richfield Redevelopment Project.
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“State” means the State of Minnesota.
“Tax Increment” means that portion of the real property taxes which is paid with respect to the TIF
District and which is remitted to the Authority as tax increment pursuant to the TIF Act.
“Tax Official” means any County assessor, County auditor, County or State board of equalization,
the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or
the State Supreme Court.
“TIF Act” means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.1794, as amended.
“TIF District” means the 2020-3 Tax Increment District – Lynk 65, a redevelopment district within
the Redevelopment Project.
“TIF Note” means the Tax Increment Limited Revenue Note, substantially in the form attached
hereto as EXHIBIT B, to be delivered by the Authority to the Developer pursuant to Section 3.3(a) hereof.
“TIF Plan” means the Tax Increment Financing Plan for the TIF District, as approved by the City
Council of the City on November 24, 2020, as it may be amended and supplemented.
“Unavoidable Delays” means delays beyond the reasonable control of the party seeking to be
excused as a result thereof which are the direct result of strikes or other labor troubles; prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements; litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays; rioting; a declared state
of emergency or public health emergency or pandemic (including, without limitation, Covid-19), government
mandated quarantine, closures, or travel bans; disruption, breakdowns, delayed production of materials
needed to construct the Minimum Improvements; interruptions to transportation networks or delivery
systems, or the use of equipment, labor, or materials, including, without limitation, the closure of government
buildings, airports, harbors, railroads, or pipelines, or other infrastructure due to worldwide or regional
pandemic or other health related event disruptions; and any other cause not reasonably within the control of
such party and which by the exercise of due diligence such party is unable, wholly or in part, to prevent or
overcome or acts of any federal, state or local governmental unit (other than the Authority in exercising its
rights under this Agreement) which directly result in delays.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following representations
as the basis for the undertaking on its part herein contained:
(a) The Authority is a housing and redevelopment authority organized and existing under the
laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder, and execution of this Agreement has been duly, properly and validly
authorized by the Authority.
(b) The Authority proposes to assist in financing certain land acquisition costs, demolition and
remediation costs, and site improvement costs necessary to facilitate the construction of the Minimum
Improvements in accordance with the terms of this Agreement to further the objectives of the Redevelopment
Plan.
(c) The Authority finds that the Minimum Improvements are necessary to alleviate a shortage of
decent, safe, and sanitary housing and promote redevelopment of blighted properties in the City.
(d) The execution, delivery and performance of this Agreement and of any other documents or
instruments required pursuant to this Agreement by the Authority, and consummation of the transactions
contemplated therein and the fulfillment of the terms thereof, do not and will not conflict with or constitute a
breach of or default under any existing (i) indenture, mortgage, deed of trust or other agreement or instrument
to which the Authority is a party or by which the Authority or any of its property is or may be bound; or
(ii) legislative act, constitution or other proceedings establishing or relating to the establishment of the
Authority or its officers or its resolutions.
(e) There is not pending, nor to the best of the Authority’s knowledge is there threatened, any
suit, action or proceeding against the Authority before any court, arbitrator, administrative agency or other
governmental authority that materially and adversely affects the validity of any of the transactions
contemplated hereby, the ability of the Authority to perform its obligations hereunder, or the validity or
enforcement of this Agreement.
(f) No commissioner of the Board or officer of the Authority has either a direct or indirect
financial interest in this Agreement, nor will any commissioner or officer benefit financially from this
Agreement within the meaning of Section 469.009 of the HRA Act.
Section 2.2. Representations by the Developer. The Developer represents and warrants that:
(a) The Developer is a Minnesota limited liability company, duly organized and in good
standing under the laws of the State of Minnesota and is duly authorized to transact business within the State,
and has the power to enter into this Agreement.
(b) The Developer will construct, operate and maintain the Minimum Improvements in
accordance with the terms of this Agreement, the Redevelopment Plan, and all local, State, and federal laws
and regulations (including, but not limited to, environmental, zoning, building code, labor, and public health
laws and regulations).
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(c) The Developer has received no notice or communication from any local, State or federal
official that the activities of the Developer or the Authority in or on the Development Property may be or will
be in violation of any environmental law or regulation (other than those notices or communications of which
the Authority is aware). The Developer is aware of no facts the existence of which would cause it to be in
violation of or give any person a valid claim under any local, State, or federal environmental law, regulation,
or review procedure.
(d) The Developer will obtain, in a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all applicable local, State, and federal laws and
regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed.
(e) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is
prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing.
(f) The proposed development by the Developer hereunder would not occur but for the tax
increment financing assistance being provided by the Authority hereunder.
(g) The Developer shall promptly advise the Authority in writing of all litigation or claims
affecting any part of the Minimum Improvements and all written complaints and charges made by any
governmental authority materially affecting the Minimum Improvements or materially affecting Developer or
its business which may delay or require changes in construction of the Minimum Improvements.
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ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Development Property. An affiliate of the Developer has executed a purchase
agreement for the Development Property and will acquire the parcels comprising the Development Property
from a third party. The Authority has no obligation to acquire the Development Property.
Section 3.2. Environmental Conditions.
(a) The Developer acknowledges that the Authority makes no representations or warranties as to
the condition of the soils on the Development Property or the fitness of the Development Property for
construction of the Minimum Improvements or any other purpose for which the Developer may make use of
such property, and that the assistance provided to the Developer under this Agreement neither implies any
responsibility by the Authority for any contamination of the Development Property nor imposes any
obligation on such parties to participate in any cleanup of the Development Property.
(b) Without limiting its obligations under Section 8.3 hereof, the Developer further agrees that it
will indemnify, defend, and hold harmless the Authority and its governing body members, officers, and
employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants
existing on or in the Development Property, unless and to the extent that such hazardous wastes or pollutants
are present as a result of the actions or omissions of the indemnitees. Nothing in this Section will be
construed to limit or affect any limitations on liability of the Authority under State or federal law, including
without limitation Minnesota Statutes, Sections 466.04 and 604.02, as amended.
Section 3.3. Issuance of Pay-As-You-Go TIF Note.
(a) To reimburse the Developer for certain Public Redevelopment Costs, the Authority shall
issue and deliver and the Developer shall purchase the TIF Note in the principal amount of $5,723,074 in
substantially the form set forth in EXHIBIT B. The Authority and the Developer agree that the consideration
from the Developer for the purchase of the TIF Note shall consist of the Developer’s payment of the Public
Redevelopment Costs in at least the principal amount of the TIF Note.
The Authority shall deliver the TIF Note upon delivery by the Developer of an investment letter in
substantially the form attached hereto as EXHIBIT C, together with evidence reasonably satisfactory to the
Authority that the Developer has paid the Public Redevelopment Costs in at least the principal amount of the
TIF Note. The principal of and interest on the TIF Note shall be payable each Payment Date solely with
Available Tax Increment.
(b) The Developer understands and acknowledges that the Authority makes no representations
or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the TIF Note will
be sufficient to pay the principal of and interest on the TIF Note. Any estimates of Tax Increment prepared
by the Authority or its financial or municipal advisors in connection with the TIF District or this Agreement
are for the benefit of the Authority and are not intended as representations on which the Developer may rely.
(c) The Authority acknowledges that the Developer may assign the TIF Note to a lender that
provides part of the financing for the acquisition of the Development Property or the construction of the
Minimum Improvements. Pursuant to the terms of the TIF Note, the TIF Note may be assigned if the
assignee executes an investment letter in substantially the form set forth in EXHIBIT C.
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Section 3.4. Termination of TIF District. At any time following payment in full of the principal of
and interest on TIF Note, the Authority may use the remaining Tax Increment for any other authorized uses
set forth in the TIF Plan or may terminate the TIF District.
Section 3.5. Payment of Administrative Costs. Pursuant to the Preliminary Development
Agreement, the Developer has deposited with the Authority $7,000 to pay Administrative Costs related to the
Preliminary Development Agreement and will deposit with the Authority an additional $15,000 to pay
Administrative Costs. “Administrative Costs” are defined as out-of-pocket costs incurred by the Authority,
together with staff and consultant costs of the Authority, all attributable to or incurred in connection with the
negotiation and preparation of this Agreement, the TIF Plan, and other documents and agreements in
connection with the establishment of the TIF District and development of the Development Property, and not
previously paid by Developer. At the Developer’s request, but no more often than monthly, the Authority
will provide the Developer with a written report including invoices, time sheets or other comparable evidence
of expenditures for Administrative Costs and the outstanding balance of funds deposited. At any time the
deposit drops below $1,000, the Developer shall replenish the deposit to the full $15,000 within thirty (30)
days after receipt of written notice thereof from the Authority. If at any time the Authority determines that
the deposit is insufficient to pay Administrative Costs, the Developer is obligated to pay such shortfall within
fifteen (15) days after receipt of a written notice from the Authority containing evidence of the unpaid costs.
If Administrative Costs incurred, and reasonably anticipated to be incurred, are less than the deposit by the
Developer, the Authority shall return to the Developer any funds not anticipated to be needed.
Section 3.6. Records. The Authority and its representatives shall have the right at all reasonable
times after reasonable notice to inspect, examine and copy all books and records of Developer relating to the
Minimum Improvements and the costs for which the Developer has been reimbursed with Tax Increment.
Section 3.7. Purpose of Assistance. The parties agree and understand that the purpose of the
Authority’s financial assistance to the Developer is to facilitate redevelopment of blighted properties and the
development of housing and is not a “business subsidy” within the meaning of Minnesota Statutes, Sections
116J.993 to 116J.995, as amended.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. Following the Developer’s purchase of the
Development Property, the Developer agrees that it will construct the Minimum Improvements on the
Development Property substantially in accordance with the Construction Plans as approved pursuant to
Section 4.2 hereof, and at all times prior to the Maturity Date, the Developer will operate and maintain,
preserve, and keep the Minimum Improvements or cause such improvements to be maintained, preserved,
and kept with the appurtenances and every part and parcel thereof, in good repair and condition. The
Authority shall have no obligation to operate or maintain the Minimum Improvements.
Section 4.2. Construction Plans.
(a) Before commencement of construction of the Minimum Improvements, the Developer shall
submit the Construction Plans to the Authority. The Authority Representative will approve the Construction
Plans in writing if (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the
Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Construction
Plans conform to all applicable federal, State, and local laws, ordinances, rules and regulations; (iv) the
Construction Plans are adequate to provide for construction of the Minimum Improvements; (v) the
Construction Plans do not provide for expenditures in excess of the funds available to the Developer from all
sources (including Developer’s equity) for construction of the Minimum Improvements; (vi) the Construction
Plans provide for the construction of Minimum Improvements having an estimated market value of at least
$37,710,000 (the “Minimum Market Value”); and (vii) no uncured Event of Default has occurred. Approval
may be based upon a review by the City’s Building Official of the Construction Plans. No approval by the
Authority Representative shall relieve the Developer of the obligation to comply with the terms of this
Agreement or of the Redevelopment Plan, applicable federal, State, and local laws, ordinances, rules, and
regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the
Authority Representative shall constitute a waiver of an Event of Default. If approval of the Construction
Plans is requested by the Developer in writing at the time of submission, such Construction Plans shall be
deemed approved unless rejected in writing by the Authority Representative, in whole or in part. Such
rejections shall set forth in detail the reasons therefor, and shall be made within thirty (30) days after the date
of their receipt by the Authority. If the Authority Representative rejects any Construction Plans in whole or
in part, the Developer shall submit new or corrected Construction Plans within thirty (30) days after written
notification to the Developer of the rejection. The provisions of this Section relating to approval, rejection
and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have
been approved by the Authority. The Authority Representative’s approval shall not be unreasonably
withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the
Construction Plans (and the Minimum Improvements constructed in accordance with said plans) comply to
the Authority’s satisfaction with the provisions of this Agreement relating thereto.
(b) If the Developer desires to make any Material Change in the Construction Plans after their
approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval.
If the Construction Plans, as modified by the proposed change, conform to the requirements of this
Section 4.2 with respect to such previously approved Construction Plans, the Authority Representative shall
approve the proposed change and notify the Developer in writing of its approval. Such change in the
Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in
part, by written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such
rejection shall be made within thirty (30) days after receipt of the notice of such change. The Authority’s
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approval of any such change in the Construction Plans may be conditioned on amendment to provisions of
this Agreement if such amendments will mitigate the materiality of such proposed changes.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Developer will commence the construction of the Minimum Improvements by August 31, 2021, and
substantially complete construction of the Minimum Improvements by August 31, 2023. Construction is
considered to be commenced upon the beginning of physical improvements beyond grading. All work with
respect to the Minimum Improvements to be constructed or provided by the Developer on the Development
Property shall be in substantial conformity with the Construction Plans as submitted by the Developer and
approved by the Authority.
The Developer agrees for itself, its successors and assigns, and every successor in interest to the
Development Property, or any part thereof, that the Developer, and such successors and assigns, shall
promptly begin and diligently prosecute to completion the development of the Minimum Improvements.
Section 4.4. Certificate of Completion.
(a) Promptly after completion of the Minimum Improvements in accordance with those
provisions of this Agreement relating solely to the obligations of the Developer to construct the Minimum
Improvements (including the dates for beginning and completion thereof), the Authority Representative will
furnish the Developer with a Certificate of Completion (in recordable form) shown in EXHIBIT D hereof;
provided, however, that prior to the issuance of the Certificate of Completion, the Developer must provide the
Authority with evidence satisfactory to the Authority Representative that all contractors, subcontractors, and
project laborers have been paid.
(b) If the Authority Representative shall refuse or fail to provide any certification in accordance
with the provisions of this Section 4.4, the Authority Representative shall, within thirty (30) days after written
request by the Developer, provide the Developer with a written statement, indicating in adequate detail in
what respects the Developer has failed to complete the Minimum Improvements in accordance with the
provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the
opinion of the Authority, for the Developer to take or perform in order to obtain such certification.
(c) Regardless of whether a Certificate of Completion is issued by the Authority, the
construction of the Minimum Improvements shall be deemed to be complete upon issuance of a certificate of
occupancy by the City.
Section 4.5. Affordability Covenants. The Developer agrees that at all times from initial occupancy
of the Minimum Improvements constructed within the TIF District through the earlier of (i) the date that the
TIF District is decertified and (ii) the date that is seventeen (17) years after the commencement of the
Qualified Project Period (as defined in the Declaration) at least ten (10) two-bedroom units within the
Minimum Improvements shall be reserved for occupancy by individuals whose income is sixty percent (60%)
or less of the area’s median gross income constructed and satisfy the income requirements for a qualified
residential rental project as defined in Section 142(d) of the Internal Revenue Code. The Developer and the
Authority shall execute the Declaration of Restrictive Covenants in substantially the form set forth in
EXHIBIT E and record such agreement against the Development Property.
During the term of the Declaration, the Developer shall not adopt any policies specifically
prohibiting or excluding any rental to tenants holding certificates/vouchers under Section 8 of the United
Stated Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its successor
because of such prospective tenant’s status as such a certificate/voucher holder.
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Section 4.6. Affordable Housing Reporting. At least annually, no later than April 1 of each year
commencing on the April 1 first following the issuance of the Certificate of Completion, the Developer shall
provide a report to the Authority evidencing that the Developer complied with the income affordability
covenants set forth in Section 4.5 hereof during the previous calendar year. The income affordability
reporting shall be on the form entitled “Tenant Income Certification” from the Minnesota Housing Finance
Agency (MHFA HTC Form 14), or if unavailable, any similar form. The Authority may require the
Developer to provide additional information reasonably necessary to assess the accuracy of such certification.
Unless earlier excused by the Authority, the Developer shall send affordable housing reports to the Authority
until TIF District is decertified. If the Developer fails to provide the annual reporting required under this
Section, the Authority may withhold payments of Available Tax Increment under the TIF Note.
It is the intention of the parties hereto that if tax-exempt revenue obligations are issued by the City or
the Authority for the benefit of the Developer, the annual report required under this Section may be used to
satisfy the reporting requirements under a regulatory agreement between the City or the Authority, the
Developer, and the trustee for such tax-exempt revenue obligations.
Section 4.7. Notice of Sale of Minimum Improvements. In consideration of the financial
assistance provided to the Developer pursuant to Article III hereof, the Developer agrees to provide the
Authority with at least ninety (90) days’ notice of any sale of the Minimum Improvements.
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ARTICLE V
Insurance
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of constructing the
Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that
period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies
covering the following:
(i) builder’s risk insurance, written on the so-called “Builder’s Risk – Completed Value
Basis,” in an amount equal to one hundred percent (100%) of the insurable value of the Minimum
Improvements at the date of completion, and with coverage available in nonreporting form on the so-
called “all risk” form of policy; the interest of the Authority shall be protected in accordance with a
clause in form and content satisfactory to the Authority;
(ii) comprehensive general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations and contractual liability insurance) together with
a Protective Liability Policy with limits against bodily injury and property damage of not less than
$2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability
policy may be used); the Authority shall be listed as an additional insured on the policy; and
(iii) workers’ compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to the Maturity
Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time
at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows:
(i) insurance against loss and/or damage to the Minimum Improvements under a policy
or policies covering such risks as are ordinarily insured against by similar businesses;
(ii) comprehensive general public liability insurance, including personal injury liability
(with employee exclusion deleted), against liability for injuries to persons and/or property, in the
minimum amount for each occurrence and for each year of $2,000,000, and shall be endorsed to
show the Authority as an additional insured; and
(iii) such other insurance, including workers’ compensation insurance respecting all
employees, if any, of the Developer, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the Developer may
be self-insured with respect to all or any part of its liability for workers’ compensation.
(c) All insurance required in this Article V shall be taken out and maintained in responsible
insurance companies selected by the Developer which are authorized under the laws of the State to assume
the risks covered thereby. Upon request, the Developer will deposit annually with the Authority policies
evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that
such insurance is in force and effect. Unless otherwise provided in this Article V each policy shall contain a
provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided
below the amounts required herein without giving written notice to the Developer and the Authority at least
thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the
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Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the
coverage required herein, in which event the Developer shall deposit with the Authority a certificate or
certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements.
(d) The Developer agrees to notify the Authority immediately in the case of damage exceeding
$200,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from
fire or other casualty. In such event the Developer will forthwith repair, reconstruct and restore the Minimum
Improvements to substantially the same or an improved condition or value as it existed prior to the event
causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration,
the Developer will apply the net proceeds of any insurance relating to such damage received by the
Developer to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Developer for such purposes are
sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction,
and restoration shall be the property of the Developer.
(e) Notwithstanding anything to the contrary contained in this Agreement, in the event of
damage to the Minimum Improvements in excess of $200,000 and the Developer fails to complete any repair,
reconstruction or restoration of the Minimum Improvements within twenty-four (24) months from the date of
damage, the Authority may, at its option, terminate the TIF Note as provided in Section 9.3(b) hereof. If the
Authority terminates the TIF Note, such termination shall constitute the Authority’s sole remedy under this
Agreement as a result of the Developer’s failure to repair, reconstruct, or restore the Minimum
Improvements. Thereafter, the Authority shall have no further obligations to make any payments under the
TIF Note.
(f) The Developer and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V,
the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all
respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to
Article VII hereof.
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the Authority is
providing substantial aid and assistance in furtherance of the redevelopment through issuance of the TIF
Note. The Developer understands that the Tax Increments pledged to payment of the TIF Note are derived
from real estate taxes on the Development Property, which taxes must be promptly and timely paid. To that
end, the Developer agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute
to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real
estate taxes assessed against the Development Property and the Minimum Improvements. The Developer
acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Developer
or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to
pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be
entitled to recover its costs, expenses, and reasonable attorneys’ fees.
Section 6.2. Reduction of Taxes. The Developer agrees that after the date of certification of the TIF
District and prior to completion of the Minimum Improvements, it will not cause a reduction in the real
property taxes paid in respect of the Development Property through (a) willful destruction of the
Development Property or any part thereof (except for the demolition of structures required for construction of
the Minimum Improvements); or (b) willful refusal to reconstruct damaged or destroyed property pursuant to
Section 5.1 hereof.
The Developer also agrees that it will not, prior to the Maturity Date, (i) seek exemption from
property tax for the Development Property; (ii) convey or transfer or allow conveyance or transfer of the
Development Property to any entity that is exempt from payment of real property taxes under State law; or
(iii) seek or agree to any reduction of the assessor’s estimated market value to below the Minimum Market
Value.
The Developer may, at any time following the issuance of the Certificate of Completion, seek
through petition or other means to have the assessor’s estimated market value for the Development Property
reduced to not less than the Minimum Market Value. Such activity must be preceded by written notice from
the Developer to the Authority indicating its intention to do so.
Upon receiving such notice, or otherwise learning of the Developer’s intentions, the Authority may
suspend or reduce payments due under the TIF Note except for the portion of such payments from Available
Tax Increment based on the Minimum Market Value or the assessor’s estimated market value for the year in
which the Minimum Improvements have been completed, if less than Minimum Market Value, until the
actual amount of the reduction in market value is determined, whereupon the Authority will make the
suspended payments less any amount that the Authority is required to repay the County as a result of any
retroactive reduction in market value of the Development Property.
During the period that the payments are subject to suspension, the Authority may make partial
payments on the TIF Note, from the amounts subject to suspension, if it determines, in its sole and absolute
discretion, that the amount retained will be sufficient to cover any repayment which the County may require.
Upon resolution of the Developer’s tax petition, any Available Tax Increment deferred and withheld under
this Section shall be paid, without interest thereon, to the extent payable under the assessor’s final
determination of market value.
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The Authority’s suspension of payments on the TIF Note pursuant to this Section shall not be
considered a default under Section 9.1 hereof.
Section 6.3. Qualifications. Notwithstanding anything herein to the contrary, the parties
acknowledge and agree that upon a transfer of the Development Property to another person or entity, the
Developer will remain obligated under Sections 6.1 and 6.2 hereof, unless the Developer is released from
such obligations in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof.
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ARTICLE VII
Financing
Section 7.1. Mortgage Financing.
(a) Before commencement of construction of the Minimum Improvements, the Developer shall
submit to the Authority evidence of one or more commitments for financing which, together with committed
equity for such construction, is sufficient for payment of the Minimum Improvements. Such commitments
may be submitted as short-term financing, long-term mortgage financing, a bridge loan with a long-term
take-out financing commitment, or any combination of the foregoing.
(b) If the Authority finds that the financing is sufficiently committed and adequate in amount to
pay the costs specified in subsection (a) above, then the Authority shall notify the Developer in writing of its
approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given
within thirty (30) days from the date when the Authority is provided the evidence of financing. A failure by
the Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder.
If the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis
for the rejection. In any event the Developer shall submit adequate evidence of financing within thirty (30)
days after such rejection.
Section 7.2. Authority’s Option to Cure Default in Mortgage. In the event that any portion of the
Developer’s funds is provided through mortgage financing, and there occurs a default under any Mortgage
authorized pursuant to this Article VII, the Developer shall cause the Authority to receive copies of any
notice of default received by the Developer from the Holder of such Mortgage. Thereafter, the Authority
shall have the right, but not the obligation, to cure any such default on behalf of the Developer within such
cure periods as are available to the Developer under the Mortgage documents.
Section 7.3. Modification; Subordination. In order to facilitate the Developer obtaining financing
for the development of the Minimum Improvements, the Authority agrees to subordinate its rights under this
Agreement to the Holder of any Mortgage securing construction or permanent financing and/or to any lender
that takes an assignment of the TIF Note as part of the Developer’s financing, under terms and conditions
reasonably acceptable to the Authority. An agreement to subordinate this Agreement must be approved by
the Board.
Section 7.4. Termination. All the provisions of this Article VII shall terminate with respect to the
Minimum Improvements, upon delivery of the Certificate of Completion for the Minimum Improvements.
The Developer or any successor in interest to the Minimum Improvements or portion thereof, may sell or
engage in financing or any other transaction creating a mortgage or encumbrance or lien on the Minimum
Improvements or any portion thereof for which a Certificate of Completion has been obtained, without
obtaining prior written approval of the Authority; provided that such sale, financing or other transaction
creating a mortgage or encumbrance shall not be deemed as resulting in any subordination of the Authority’s
rights under this Agreement unless the Authority expressly consents to such a subordination. As described
more fully in the TIF Note, the TIF Note may be assigned as long as the assignee provides an executed
investment letter to the Authority.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Developer represents and agrees that its
purchase of the Development Property, and its other undertakings pursuant to this Agreement, are, and will
be used, for the purpose of development of the Development Property and not for speculation in land holding.
Section 8.2. Prohibition Against Developer’s Transfer of Property and Assignment of Agreement.
The Developer represents and agrees that prior to issuance of the Certificate of Completion for the Minimum
Improvements:
(a) Except only by way of security for, and only for, the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or any part
thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement,
and any other purpose authorized by this Agreement, the Developer has not made or created and will not
make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or
any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the
Development Property or any part thereof or any interest therein, or any contract or agreement to do any of
the same (except a lease to a residential occupant or a retail or commercial tenant), without the prior written
approval of the Authority unless the Developer remains liable and bound by this Agreement in which event
the Authority’s approval is not required. Any such transfer shall be subject to the provisions of this
Agreement.
(b) In the event the Developer, upon transfer or assignment of the Development Property seeks
to be released from its obligations under this Agreement, the Authority shall be entitled to require, except as
otherwise provided in this Agreement, as conditions to any such release that:
(i) Any proposed transferee shall have the qualifications and financial responsibility, in
the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer.
(ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and
in form recordable among the land records, shall, for itself and its successors and assigns, and
expressly for the benefit of the Authority, have expressly assumed all of the obligations of the
Developer under this Agreement and agreed to be subject to all the conditions and restrictions to
which the Developer is subject; provided, however, that the fact that any transferee of, or any other
successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for
whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the
extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority)
deprive the Authority of any rights or remedies or controls with respect to the Development Property
or any part thereof or the construction of the Minimum Improvements; it being the intent of the
parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and
excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no
transfer of, or change with respect to, ownership in the Development Property or any part thereof, or
any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall
operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or
remedies on controls provided in or resulting from this Agreement with respect to the Minimum
Improvements that the Authority would have had, had there been no such transfer or change. In the
absence of specific written agreement by the Authority to the contrary, no such transfer or approval
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by the Authority thereof shall be deemed to relieve the Developer or any other party bound in any
way by this Agreement or otherwise with respect to the construction of the Minimum Improvements,
from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the transfer
of any interest in this Agreement or the Development Property governed by this Article VIII, shall be
in a form reasonably satisfactory to the Authority.
In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation
under this Agreement.
After issuance of the Certificate of Completion for the Minimum Improvements, the Developer may
transfer or assign the Development Property or the Developer’s interest in this Agreement if it obtains the
prior written consent of the Authority (which consent will not be unreasonably withheld, conditioned or
delayed) and the transferee or assignee is bound by all the Developer’s obligations hereunder. The Developer
shall submit to the Authority written evidence of any such transfer or assignment, including the transferee or
assignee’s express assumption of the Developer’s obligations under this Agreement. If the Developer fails to
provide such evidence of transfer and assumption, the Developer shall remain bound by all its obligations
under this Agreement.
(c) Notwithstanding any provision in this Agreement to the contrary, the Developer has the right
to assign its rights and obligations under this Agreement to a related entity, subject only to the requirements
of Section 8.2(b)(iii).
Section 8.3. Release and Indemnification Covenants.
(a) The Developer releases from and covenants and agrees that the Authority and its governing
body members, officers, agents, servants and employees thereof shall not be liable for and agrees to
indemnify and hold harmless the Authority and its respective governing body members, officers, agents,
servants and employees thereof against any loss or damage to property or any injury to or death of any person
occurring at or about or resulting from any defect in the Minimum Improvements.
(b) Except for any willful misrepresentation, gross negligence or any willful or wanton
misconduct of the Authority, or its governing body members, officers, agents or employees, the Developer
agrees to protect and defend the Authority and its governing body members, officers, agents, servants and
employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim,
demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or
purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition,
construction, installation, ownership, maintenance and operation of the Minimum Improvements. As to any
willful misrepresentation, gross negligence or any willful or wanton misconduct of the Authority, or its
governing body members, officers, agents or employees, the Authority agrees to protect and defend the
Developer, its officers, agents, servants and employees and hold the same harmless from any such
proceedings.
(c) The Authority and its governing body members, officers, agents, servants and employees
thereof shall not be liable for any damage or injury to the persons or property of the Developer or its officers,
agents, servants or employees or any other person who may be about the Development Property or Minimum
Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority contained
herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the
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Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the
individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default. The following will be “Events of Default” under this Agreement and
the term “Event of Default” means, whenever it is used in this Agreement, any one or more of the following
events, after the non-defaulting party provides thirty (30) days’ written notice to the defaulting party of the
event, but only if the event has not been cured within said thirty (30) days or, if the event is by its nature
incurable within thirty (30) days, the defaulting party does not, within the thirty (30) day period, provide
assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will
be cured as soon as reasonably possible:
(a) failure by the Developer or the Authority to observe or perform any covenant, condition,
obligation, or agreement on its part to be observed or performed under this Agreement; or
(b) if the Developer:
(i) files any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United States
Bankruptcy Act or under any similar federal or State law;
(ii) makes an assignment for benefit of its creditors;
(iii) fails to pay real estate taxes on the Development Property or the Minimum
Improvements as they become due;
(iv) admits in writing its inability to pay its debts generally as they become due;
(v) is adjudicated a bankrupt or insolvent;
(vi) fails to comply with the Declaration; or
(vii) fails to comply with labor laws.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 hereof
occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thirty (30) days’
written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been
cured within said thirty (30) days or, if the Event of Default is by its nature incurable within thirty (30) days,
the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the
Event of Default will be cured and will be cured as soon as reasonably possible:
(a) suspend its performance under this Agreement until it receives assurances that the defaulting
party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate this Agreement, subject to the provisions of Section 9.3;
(c) upon a default by the Developer resulting from the Developer’s noncompliance with labor
laws, the Authority may determine not to issue the TIF Note, delay the issuance of the TIF Note until the
Developer is in compliance with labor laws, reduce the principal amount of the TIF Note issued or to be
issued, and/or terminate this Agreement;
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(d) upon a default by the Developer, other than as provided in subsection (c) above, the
Authority may suspend payments under the TIF Note or terminate the TIF Note and the TIF District, subject
to the provisions of Section 9.3 hereof; or
(e) take whatever action, including legal, equitable or administrative action, which may appear
necessary or desirable to collect any payments due under this Agreement, or to enforce performance and
observance of any obligation, agreement, or covenant under this Agreement.
Section 9.3. Termination or Suspension of TIF Note. After the Authority has issued its Certificate of
Completion for the Minimum Improvements, the Authority and the City may exercise its rights under
Section 9.2 hereof only for the following Events of Default:
(a) the Developer fails to pay real estate taxes or assessments on the Development Property or
any part thereof when due, and such taxes or assessments shall not have been paid, or provision satisfactory
to the Authority made for such payment, within thirty (30) days after written demand by the Authority to do
so;
(b) the Developer fails to comply with Developer’s obligation to operate and maintain, preserve,
and keep the Minimum Improvements or cause such improvements to be maintained, preserved, and kept
with the appurtenances and every part and parcel thereof, in good repair and condition, pursuant to
Sections 4.1 and 5.1 hereof; provided that, upon Developer’s failure to comply with Developer’s obligations
under Section 4.1 or 5.1 hereof, if uncured after thirty (30) days’ written notice to the Developer of such
failure, the Authority may only suspend payments under the TIF Note until such time as Developer complies
with said obligations; if the Developer fails to comply with said obligations for a period of eighteen (18)
months, the Authority may terminate the TIF Note and the TIF District; or
(c) if the Developer fails to provide the annual reports required by Section 4.7 hereof regarding
compliance with the income restrictions described in Section 4.5 hereof, the Authority may suspend
payments of Available Tax Increment under the TIF Note.
Section 9.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or the Developer is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement
or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to
give notice, other than the notices already required in Sections 9.2 and 9.3 hereof.
Section 9.5. No Additional Waiver Implied by One Waiver. In the event any agreement contained
in this Agreement should be breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 9.6. Attorneys’ Fees and Costs. Whenever any Event of Default occurs and if the Authority
employs attorneys or incur other expenses for the collection of payments due or to become due or for the
enforcement of performance or observance of any obligation or agreement on the part of the Developer under
this Agreement, and the Authority prevails in the action, the Developer agrees that it will, within ten (10)
days of written demand by the Authority, pay to the Authority the reasonable fees of the attorneys and the
other expenses so incurred by the Authority.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The
Authority and the Developer, to the best of their respective knowledge, represent and agree that no member,
official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement,
nor shall any such member, official, or employee participate in any decision relating to this Agreement which
affects his or her personal interests or the interests of any corporation, partnership, or association in which he
is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally
liable to the Developer, or any successor in interest, in the event of any default or breach by the Authority or
County or for any amount which may become due to the Developer or successor or on any obligations under
the terms of this Agreement.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and
assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement it
will comply with all applicable federal, State, and local equal employment and non-discrimination laws and
regulations.
Section 10.3. Restrictions on Use. The Developer agrees that, prior to the Maturity Date, the
Developer, and such successors and assigns, shall use the Development Property solely for the development
of housing with a retail/commercial component in accordance with the terms of this Agreement, including the
affordability requirements set forth in Section 4.5, and shall not discriminate upon the basis of race, color,
creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development
Property or any improvements erected or to be erected thereon, or any part thereof.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Development Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of
this Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under this Agreement by either party to the other shall be
sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt
requested, or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the Developer at 1
Second Street North, Suite 102, Fargo, ND 58102, Attn: Austin Morris; and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority at
6700 Portland Avenue South, Richfield, MN 55423, Attn: Community Development Director;
or at such other address with respect to either such party as that party may, from time to time, designate in
writing and forward to the other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
23
Section 10.8. Recording. The Authority may record a memorandum of this Agreement and any
amendments thereto with the County Recorder and/or Registrar of Titles of the County, as the case may be.
The Developer shall pay all costs for recording.
Section 10.9. Amendment. This Agreement may be amended only by written agreement approved
by the Authority and the Developer.
Section 10.10. Preliminary Development Agreement. On the date of this Agreement, the
Preliminary Development Agreement shall terminate.
Section 10.11. Termination. This Agreement terminates on the Maturity Date unless terminated
earlier; provided, however Sections 3.5 and 8.3 shall survive any rescission, termination or expiration of this
Agreement.
Section 10.12. Estoppel Certificates. Each party, respectively, agrees that at any time and from time
to time within 30 business days after receipt of a written request by the other party, to execute, acknowledge
and deliver to such party a statement in writing and in such form required by the requesting party, agrees that
at any time and from time to time within 30 business days after receipt of a written request by the other party,
to execute, acknowledge and deliver to such party a statement in writing and in such form as will enable it to
be recorded in the proper office for the recordation of deeds and other instruments certifying: (a) that this
Agreement is unmodified and in full force and effect or, if there have been modifications, that the same are in
full force and effect as modified and identifying the modifications; (b) that, to the best knowledge of the
party, no party is in default under any provisions of this Agreement or, if there has been a default, the nature
of such default; (c) that all work to be performed, under this Agreement or any related agreement has been
performed or, if not so performed, specifying the work to be performed; and (d) as to any other matter that the
requesting party, a prospective purchaser or assignee or a prospective mortgagee or other lender shall
reasonably request. It is intended that any such statement may be relied upon by any person, prospective
mortgagee of, or assignee of any mortgage, upon such interest. Any such statement on behalf of the
Authority may be executed by the Executive Director without Authority Board approval.
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S-1
IN WITNESS WHEREOF, the Authority has caused this Contract for Private Development to be
duly executed in its name and behalf and the Developer has caused this 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 day of __________, 2020, by Mary
Supple, the Chair of 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, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 2020, by John
Stark, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the
Authority.
Notary Public
S-2
Execution page of the Developer to the Contract for Private Development, dated the date and year first
written above.
LYNK 65, LLC
By
Its
STATE OF ___________ )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this day of __________, 2020, by
_________________________________, the _____________________________ of Lynk 65, LLC, a
Minnesota limited liability company, on behalf of the Developer.
Notary Public
A-1
EXHIBIT A
DEVELOPMENT PROPERTY
Lot 2, Block 2 of J N Hausers Addition, according to the plan thereof, Hennepin County, Minnesota
Lots 4, 5, 19, 20, and Lot 18 except the Northwesterly 25 feet of said Lot 18, Block 6, Lyndale Oaks
Addition, plus vacated alley between Lots 18 and 19, plus one-half of vacated alley North of Lot 5 and
Northeast of Lot 18, Hennepin County, Minnesota, subject to landscaping easements for sidewalk and for
other utility uses
Lot 3, Block 6 of Lyndale Oaks Addition, according to the plat thereof, Hennepin County, Minnesota
Lots 2, 4, 5, 18, except the Northwesterly 23 feet thereof, Lots 19 and 20, Block 2, J.N. Hauser’s Addition
and vacated alley between Lots 18 ad 19, Hennepin County, Minnesota, subject to landscaping easement for
sidewalk.
[confirm legal description]
B-1
EXHIBIT B
FORM OF TIF NOTE
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
No. R-1 $___________
TAX INCREMENT LIMITED REVENUE NOTE
SERIES ________
Date
Rate of Original Issue
3.75% __________, 20___
The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the
“Authority”), for value received, certifies that it is indebted and hereby promises to pay to Lynk 65, LLC, a
Minnesota limited liability company, or registered assigns (the “Owner”), the principal sum of $__________
and to pay interest thereon at the rate per annum set forth above, as and to the extent set forth herein.
Capitalized terms used herein that are otherwise not defined shall have the meanings provided in the Contract
for Private Development, dated _____________, 20___ (the “Agreement”), between the Authority and the
Owner.
1. Payments. Principal and interest (the “Payments”) shall be paid on August 1, 2023, and
each February 1 and August 1 thereafter (each a “Payment Date”) to and including _____________ 1, 20___,
in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued
interest, and then to unpaid principal.
Payments are payable by mail to the address of the Owner or such other address as the Owner may
designate upon thirty (30) days’ written notice to the Authority. Payments on this Note are payable in any
coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment
of public and private debts.
2. Interest. Interest at the rate stated above shall accrue on the unpaid principal, commencing
on the Date of Original Issue. Interest shall accrue on a simple basis and will not be added to principal.
Interest shall be computed on the basis of a year of three hundred sixty (360) days and charged for actual days
principal is unpaid.
3. Available Tax Increment. Payments on this Note are payable on each Payment Date in the
amount of and solely payable from “Available Tax Increment,” which will mean, on each Payment Date,
seventy-five percent (75%) of the Tax Increment attributable to the Development Property and paid to the
Authority by the County in the six (6) months preceding the Payment Date. The principal of and interest on
this Note shall be payable each Payment Date solely from Available Tax Increment. Available Tax
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Increment will not include any Tax Increment if, as of any Payment Date, there is an uncured Event of
Default under the Agreement.
The Authority shall have no obligation to pay principal of and interest on this Note on each Payment
Date from any source other than Available Tax Increment, and the failure of the Authority to pay the entire
amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as
long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The
Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain
after the payment of Available Tax Increment from the last payment of Tax Increment the Authority is
entitled to receive from the County with respect to the Development Property.
4. Optional Prepayment. The principal sum and all accrued interest payable under this Note is
prepayable in whole or in part at any time by the Authority without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise required to be made
under this Note.
5. Termination. At the Authority’s option, this Note shall terminate and the Authority’s
obligation to make any payments under this Note shall be discharged upon the occurrence of an Event of
Default on the part of the Developer, but only if the Event of Default has not been cured in accordance with
Section 9.2 of the Agreement.
6. Nature of Obligation. This Note is issued to aid in financing certain public development
costs and administrative costs of a Redevelopment Project undertaken by the Authority pursuant to
Minnesota Statutes, Sections 469.001 through 469.047, as amended, and is issued pursuant to an authorizing
resolution (the “Resolution”) duly adopted by the Board of Commissioners of the Authority on November
24, 2020, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Sections 469.174 through 469.1794, as amended. This Note is a limited
obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment
hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general
obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the
Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the
principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and
neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision
thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto.
7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by the
Authority or its financial or municipal advisors in connection with the TIF District or the Agreement are for
the benefit of the Authority, and are not intended as representations on which the Developer may rely.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND
INTEREST ON THIS NOTE.
8. Registration. This Note is issuable only as a fully registered note without coupons.
9. Transfer. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the
City Clerk of the City of Richfield. Upon surrender for transfer of the TIF Note, including any assignment or
exchange thereof, duly endorsed by the registered owner thereof or accompanied by a written instrument of
transfer, in form reasonably satisfactory to the Executive Director, as registrar (the “Registrar”), duly
executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing,
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and the payment by the Owner of any tax, fee, or governmental charge required to be paid by or to the
Authority with respect to such transfer or exchange, the Registrar shall authenticate and deliver, in the name
of the designated transferee or transferees, a new Note of the same aggregate principal amount, bearing
interest at the same rate and maturing on the same dates.
Notwithstanding the foregoing, the TIF Note shall not be transferred to any person other than an
affiliate, or other related entity, of the Owner unless the Authority has been provided with an investment letter
in a form substantially similar to the investment letter in Exhibit C attached to the Agreement or a certificate
of the transferor, in a form satisfactory to the Executive Director of the Authority, that such transfer is exempt
from registration and prospectus delivery requirements of federal and applicable state securities laws. The
Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding
each Payment Date and until such Payment Date.
The Owner may assign the TIF Note to a lender that provides all or part of the financing for the
acquisition of the Development Property or the construction of the Minimum Improvements. The Authority
hereby consents to such assignment, conditioned upon receipt of an investment letter from such lender in
substantially the form attached to the Agreement as Exhibit C, or other form reasonably acceptable to the
Executive Director of the Authority. The Authority also agrees that future assignments of the TIF Note may
be approved by the Executive Director of the Authority without action of the Board of Commissioners of the
Authority, upon the receipt of an investment letter in substantially the form of Exhibit C of the Agreement or
other investment letter reasonably acceptable to the Authority from such assignees.
This Note is issued pursuant to the Resolution and is entitled to the benefits thereof, which
Resolution is incorporated herein by reference.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order
to make this Note a valid and binding limited obligation of the Authority according to its terms, have been
done, do exist, have happened, and have been performed in due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota has caused this Note to be executed with the manual
signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
Executive Director Chair
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of the
Authority’s Executive Director, in the name of the person last listed below.
B-4
Date of Registration Registered Owner Signature of Executive Director
Lynk 65, LLC
Federal ID #_____________
C-1
EXHIBIT C
FORM OF INVESTMENT LETTER
To the Housing and Redevelopment Authority in and for the City of Richfield (the “Authority”)
Attention: Executive Director
Re: $__________ Tax Increment Limited Revenue Note, Series 20___
The undersigned, as Owner of $__________ in principal amount of the above-captioned Note (the
“Note”) pursuant to a resolution adopted by the Board of Commissioners of the Authority on November 16,
2020 (the “Resolution”), hereby represents to you and to Kennedy & Graven, Chartered, Minneapolis,
Minnesota, development counsel, as follows:
1. We understand and acknowledge that the TIF Note is delivered to the Owner as of this date
pursuant to the Resolution and the Contract for Private Development, dated November 24, 2020 (the
“Contract”), between the Authority and the Owner.
2. We understand that the TIF Note is payable as to principal and interest solely from Available
Tax Increment (as defined in the TIF Note).
3. We further understand that any estimates of Tax Increment prepared by the Authority or its
financial or municipal advisors in connection with the TIF District, the Contract or the TIF Note are for the
benefit of the Authority, and are not intended as representations on which the Owner may rely.
4. We have sufficient knowledge and experience in financial and business matters, including
purchase and ownership of municipal obligations, to be able to evaluate the risks and merits of the investment
represented by the purchase of the above-stated principal amount of the TIF Note.
5. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering statement containing material information with respect to the Authority and the TIF
Note has been issued or prepared by the Authority, and that, in due diligence, we have made our own inquiry
and analysis with respect to the Authority, the TIF Note and the security therefor, and other material factors
affecting the security and payment of the TIF Note.
6. We acknowledge that we have either been supplied with or have access to information,
including financial statements and other financial information, to which a reasonable investor would attach
significance in making investment decisions, and we have had the opportunity to ask questions and receive
answers from knowledgeable individuals concerning the Authority, the TIF Note and the security therefor,
and that as a reasonable investor we have been able to make our decision to purchase the above-stated
principal amount of the TIF Note.
7. We have been informed that the TIF Note (i) is not being registered or otherwise qualified
for sale under the “Blue Sky” laws and regulations of any state, or under federal securities laws or
regulations; (ii) will not be listed on any stock or other securities exchange; and (iii) will carry no rating from
any rating service.
8. We acknowledge that neither the Authority nor Kennedy & Graven, Chartered has made any
representations as to the status of interest on the TIF Note for state or federal income tax purposes.
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9. We represent to you that we are purchasing the TIF Note for our own accounts and not for
resale or other distribution thereof, except to the extent otherwise provided in the TIF Note, the Resolution, or
any other resolution adopted by the Authority.
10. All capitalized terms used herein have the meaning provided in the Contract unless the
context clearly requires otherwise.
11. The Owner’s federal tax identification number is __________________________.
12. We acknowledge receipt of the TIF Note as of the date hereof.
LYNK 65, LLC
By
Its
Dated: _________________, 20___
D-1
EXHIBIT D
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Lynk 65, LLC, a Minnesota limited liability company (the
“Developer”), has fully complied with its obligations under Articles III and IV of that document titled
“Contract for Private Development,” dated ________________, 2020, between the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota and the Developer (the “Agreement”),
recorded in the office of [County Recorder] [Registrar of Titles] of Hennepin County, Minnesota on
______________, 20___, as document number __________________, with respect to construction of the
Minimum Improvements in accordance with Article IV of the Agreement, and that the Developer is
released and forever discharged from its obligations with respect to construction of the Minimum
Improvements under Articles III and IV of the Agreement.
Dated: _______________, 20___.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 20__, by
_________________, the Executive Director of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
E-1
FORM OF DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS, made as of the _____ day of
_______________, 20___ (the “Declaration”), is by LYNK 65, LLC, a Minnesota limited liability company
(the “Developer”), in favor of 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”).
RECITALS:
WHEREAS, the Authority and the Developer entered into a Contract for Private Development,
dated November 24, 2020 (the “Contract”); and
WHEREAS, pursuant to the Contract, the Developer will construct a multifamily housing
development consisting of approximately 157 units of housing, including ten (10) affordable two-bedroom
units, and approximately 8,000 square feet of retail space (the “Project”) on real property legally described
in EXHIBIT A attached hereto (the “Development Property”), and to cause compliance with certain
affordability covenants described in Section 4.5 of the Contract; and
WHEREAS, Section 4.5 of the Contract requires that the Developer cause to be executed an
instrument in recordable form substantially reflecting the covenants set forth in Section 4.5 of the Contract;
and
WHEREAS, the Developer intends, declares, and covenants that the restrictive covenants set forth
herein will be and are covenants running with the Development Property for the term described herein and
binding upon all subsequent owners of the Development Property for the term described herein, and are not
merely personal covenants of the Developer; and
WHEREAS, capitalized terms in this Declaration have the meaning provided in the Contract unless
otherwise defined herein.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, and of
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Developer
agrees as follows:
1. Term of Restrictions.
(a) Occupancy and Rental Restrictions. The term of the Occupancy Restrictions set forth in
Section 3 hereof will commence on the date a certificate of occupancy is received from the City of Richfield,
Minnesota (the “City”) for all rental units on the Development Property (the “Rental Housing Units”). The
period from commencement to termination is the “Qualified Project Period.”
(b) Termination of Declaration. This Declaration will terminate upon the date that is seventeen
(17) years after the commencement of the Qualified Project Period.
(c) Removal from Real Estate Records. Upon termination of this Declaration, the Authority
will, upon request by the Developer or its assigns, file any document appropriate to remove this Declaration
from the real estate records of Hennepin County, Minnesota.
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2. Project Restrictions.
(a) the Developer represents, warrants, and covenants that:
(i) All leases of Rental Housing Units to Qualifying Tenants (as defined in
Section 3(a)(i) hereof) will contain clauses, among others, wherein each individual lessee:
(1) certifies the accuracy of the statements made in its application and
Eligibility Certification (as defined in Section 3(a)(ii) hereof); and
(2) agrees that the family income at the time the lease is executed will be
deemed substantial and material obligation of the lessee’s tenancy, that the lessee will
comply promptly with all requests for income and other information relevant to determining
low or moderate income status from the Developer or the Authority, and that the lessee’s
failure or refusal to comply with a request for information with respect thereto will be
deemed a violation of a substantial obligation of the lessee’s tenancy.
(ii) Following reasonable written notice from the Authority, the Developer will permit
any duly authorized representative of the Authority to inspect the books and records of the Developer
pertaining to the income of Qualifying Tenants residing in the Project.
3. Occupancy Restrictions.
(a) Tenant Income Provisions. The Developer represents, warrants, and covenants that:
(i) Qualifying Tenants. From the commencement of the Qualified Project Period, at
least ten (10) two-bedroom units of the Rental Housing Units will be occupied (or treated as
occupied as provided herein) or held vacant and available for occupancy by Qualifying Tenants.
Qualifying Tenants means those persons and families who are determined from time to time by the
Developer to have combined adjusted income that does not exceed sixty percent (60%) of the
Minneapolis-St. Paul metropolitan statistical area (the “Metro Area”) median income for the
applicable calendar year. For purposes of this definition, the occupants of a residential unit will not
be deemed to be Qualifying Tenants if all the occupants of such residential unit at any time are
“students,” as defined in Section 151(c)(4) of the Internal Revenue Code of 1986, as amended (the
“Code”), not entitled to an exemption under the Code. The determination of whether an individual
or family is of low or moderate income will be made at the time the tenancy commences and on an
ongoing basis thereafter, determined at least annually. If during their tenancy a Qualifying Tenant’s
income exceeds one hundred forty percent (140%) of the maximum income qualifying as low or
moderate income for a family of its size, the next available unit (determined in accordance with the
Code and applicable regulations) (the “Next Available Unit Rule”) must be leased to a Qualifying
Tenant or held vacant and available for occupancy by a Qualifying Tenant. If the Next Available
Unit Rule is violated, the Rental Housing Unit will not continue to be treated as a Qualifying Unit.
(ii) Certification of Tenant Eligibility. As a condition to initial and continuing
occupancy, each person who is intended to be a Qualifying Tenant will be required annually to sign
and deliver to the Developer a Certification of Tenant Eligibility substantially in the form attached
hereto as EXHIBIT B, or in any other form as may be approved by the Authority (the “Eligibility
Certification”), in which the prospective Qualifying Tenant certifies as to being a Qualifying Tenant.
In addition, the person will be required to provide whatever other information, documents, or
certifications are deemed necessary by the Authority to substantiate the Eligibility Certification, on
an ongoing annual basis, and to verify that the tenant continues to be a Qualifying Tenant within the
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meaning of Section 3(a) hereof. Eligibility Certifications will be maintained on file by the Developer
with respect to each Qualifying Tenant who resides in a Rental Housing Unit or resided therein
during the immediately preceding calendar year.
(iii) Lease. The form of lease to be utilized by the Developer in renting any Rental
Housing Units to any person who is intended to be a Qualifying Tenant will provide for termination
of the lease and consent by the person to immediate eviction for failure to qualify as a Qualifying
Tenant as a result of any material misrepresentation made by the person with respect to the Eligibility
Certification.
(iv) Annual Report. The Developer covenants and agrees that during the term of this
Declaration, it will prepare and submit to the Authority on or before April 1 of each year, a certificate
substantially in the form of EXHIBIT C hereto, executed by the Developer, (a) identifying the
tenancies and the dates of occupancy (or vacancy) for all Qualifying Tenants in the Project, including
the percentage of the Rental Housing Units which were occupied by Qualifying Tenants (or held
vacant and available for occupancy by Qualifying Tenants) at all times during the year preceding the
date of the certificate; (b) describing all transfers or other changes in ownership of the Project or any
interest therein; and (c) stating, that to the best knowledge of the person executing the certificate after
due inquiry, all the Rental Housing Units were rented or available for rental on a continuous basis
during the year to members of the general public and that the Developer was not otherwise in default
under this Declaration during the year.
(v) Notice of Non-Compliance. The Developer will immediately notify the Authority if
at any time during the term of this Declaration the Rental Housing Units are not occupied or
available for occupancy as required by the terms of this Declaration.
(b) Section 8 Housing. During the term of this Declaration, the Borrower shall not adopt any
policies specifically excluding rental to tenants holding Section 8 certificate/voucher holders.
4. Transfer Restrictions. The Developer covenants and agrees that the Developer will cause or
require as a condition precedent to any conveyance, transfer, assignment, or any other disposition of the
Project prior to the termination of the Rental Restrictions and Occupancy Restrictions provided herein (the
“Transfer”) that the transferee of the Project pursuant to the Transfer assume in writing, in a form acceptable
to the Authority, all duties and obligations of the Developer under this Declaration, including this Section 4,
in the event of a subsequent Transfer by the transferee prior to expiration of the Rental Restrictions and
Occupancy Restrictions provided herein (the “Assumption Agreement”). The Developer will deliver the
Assumption Agreement to the Authority prior to the Transfer.
5. Notice of Sale. In consideration of the financial assistance provided to the Developer
pursuant to Article IV of the Contract, the Developer agrees to provide the Authority with at least ninety (90)
days’ notice of any sale of the Project.
6. Enforcement.
(a) The Developer will permit, during normal business hours and upon reasonable written
notice, any duly authorized representative of the Authority to inspect any books and records of the Developer
regarding the Project with respect to the incomes of Qualifying Tenants.
(b) The Developer will submit any other information, documents or certifications requested by
the Authority which the Authority deems reasonably necessary to substantial the Developer’s continuing
compliance with the provisions specified in this Declaration.
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(c) The Developer acknowledges that the primary purpose for requiring compliance by the
Developer with the restrictions provided in this Declaration is to ensure compliance of the property with the
housing affordability covenants set forth in Section 4.5 of the Contract, and by reason thereof, the Developer,
in consideration for assistance provided by the Authority under the Contract that makes possible the
construction of the Project on the Development Property, hereby agrees and consents that the Authority will
be entitled, for any breach of the provisions of this Declaration, and in addition to all other remedies provided
by law or in equity, to enforce specific performance by the Developer of its obligations under this Declaration
in a state court of competent jurisdiction. The Developer hereby further specifically acknowledges that the
Authority cannot be adequately compensated by monetary damages in the event of any default hereunder.
(d) The Developer understands and acknowledges that, in addition to any remedy set forth
herein for failure to comply with the restrictions set forth in this Declaration, the Authority may exercise any
remedy available to it under Article IX of the Contract.
7. Indemnification. The Developer hereby indemnifies, and agrees to defend and hold
harmless the Authority and its members, officers, and agents from and against all liabilities, losses, damages,
costs, expenses (including attorneys’ fees and expenses), causes of action, suits, allegations, claims, demands,
and judgments of any nature arising from the consequences of a legal or administrative proceeding or action
brought against them, or any of them, on account of any failure by the Developer to comply with the terms of
this Declaration, or on account of any representation or warranty of the Developer contained herein being
untrue.
8. Agent of the Authority. The Authority will have the right to appoint an agent to carry out
any of its duties and obligations hereunder, and will inform the Developer of any agency appointment by
written notice.
9. Severability. The invalidity of any clause, part or provision of this Declaration will not
affect the validity of the remaining portions thereof.
10. Notices. All notices to be given pursuant to this Declaration must be in writing and will be
deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the
addresses set forth below, or to any other place as a party may from time to time designate in writing. The
Developer and the Authority may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates, or other communications are sent. The initial addresses for notices
and other communications are as follows:
To the Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, MN 55423
Attn: Community Development Director
To the Developer: Lynk 65, LLC
1 Second Street North, Suite 102
Fargo, ND 58102
Attn: Austin Morris
11. Governing Law. This Declaration is governed by the laws of the State of Minnesota and,
where applicable, the laws of the United States of America.
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12. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory
relief, is brought against the Developer to enforce the provisions of this Declaration, the Developer agrees to
pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in
connection with the action.
13. Declaration Binding. This Declaration and the covenants contained herein will run with the
real property comprising the Project and will bind the Developer and its successors and assigns and all
subsequent owners of the Project or any interest therein, and the benefits will inure to the Authority and its
successors and assigns for the term of this Declaration as provided in Section 1(b) hereof.
(The remainder of this page is intentionally left blank.)
E-6
IN WITNESS WHEREOF, the Developer has caused this Declaration of Restrictive Covenants to
be signed by its duly authorized representative as of the date and year first written above.
LYNK 65, LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this day of __________, 20___, by
_________________________________, the _____________________________ of Lynk 65, LLC, a
Minnesota limited liability company, on behalf of the Developer.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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This Declaration of Restrictive Covenants is acknowledged and consented to by:
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 day of __________, 20___, by
_____________________________, the Chair of 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, on
behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 20___, by
_____________________________, the Executive Director of the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of
Minnesota, on behalf of the Authority.
Notary Public
E-8
EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
Lot 2, Block 2 of J N Hausers Addition, Richfield MN
Lots 4, 5, 19, 20, and The Sely 43 feet of Lot 18, Incl That Part Of Adj Vac Alley Lying Sly and Swly Of A
Line Desc As Beg At Most Nly Ne Cor Of Lot __________________
Lot 3, Block 6 of Lyndale Oaks Addition, Richfield MN
[NEED TO CONFIRM ACCURACY OF LEGAL DESCRIPTION]
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EXHIBIT B TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATION OF TENANT ELIGIBILITY
Certification of Tenant Eligibility
(INCOME COMPUTATION AND CERTIFICATION)
Project: [Address], Richfield, Minnesota
Owner: ________________
Unit Type: ______ [1 BR] _____ [1 BR + Den] _____ [2 BR]
1. I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully,
frankly and personally each of the following questions for all persons (including minors) who are to occupy
the unit in the above apartment development for which application is made, all of whom are listed below:
Name of
Members of the
Household
Relationship
To Head of
Household
Age
Place of
Employment
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
Income Computation
2. The anticipated income of all the above persons during the 12-month period beginning this
date,
(a) including all wages and salaries, overtime pay, commissions, fees, tips and bonuses
before payroll deductions; net income from the operation of a business or profession or from the
rental of real or personal property (without deducting expenditures for business expansion or
amortization of capital indebtedness); interest and dividends; the full amount of periodic payments
received from social security, annuities, insurance policies, retirement funds, pensions, disability or
death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as
unemployment and disability compensation, worker’s compensation and severance pay; the
maximum amount of public assistance available to the above persons; periodic and determinable
allowances, such as alimony and child support payments and regular contributions and gifts received
from persons not residing in the dwelling; and all regular pay, special pay and allowances of a
member of the Armed Forces (whether or not living in the dwelling) who is the head of the
household or spouse; but
(b) excluding casual, sporadic or irregular gifts; amounts which are specifically for or in
reimbursement of medical expenses; lump sum additions to family assets, such as inheritances,
insurance payments (including payments under health and accident insurance and workmen’s
compensation), capital gains and settlement for personal or property losses; amounts of educational
scholarships paid directly to the student or the educational institution, and amounts paid by the
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government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in
either case only to the extent used for these types of purposes; special pay to a serviceman head of a
family who is away from home and exposed to hostile fire; relocation payments under Title II of the
Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; foster child care
payments; the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act
of 1964 which is in excess of the amount actually charged for the allotments; and payments received
pursuant to participation in ACTION volunteer programs, is as follows: $_____________.
3. If any of the persons described above (or whose income or contributions was included in
item 2) has any savings, bonds, equity in real property or other form of capital investment, provide:
(a) the total value of all such assets owned by all such persons: $____________;
(b) the amount of income expected to be derived from such assets in the 12 month
period commencing this date: $_______________; and
(c) the amount of such income which is included in income listed in item 2:
$__________.
4. (a) Will all of the persons listed in item 1 above be or have they been full-time students
during five calendar months of this calendar year at an educational institution (other than a
correspondence school) with regular faculty and students?
Yes _________________ No ________________
(b) Is any such person (other than nonresident aliens) married and eligible to file a joint
federal income tax return?
Yes _________________ No ________________
THE UNDERSIGNED HEREBY CERTIFY THAT THE INFORMATION SET FORTH ABOVE
IS TRUE AND CORRECT. THE UNDERSIGNED ACKNOWLEDGE THAT THE LEASE FOR THE
UNIT TO BE OCCUPIED BY THE UNDERSIGNED WILL BE CANCELLED UPON 10 DAYS
WRITTEN NOTICE IF ANY OF THE INFORMATION ABOVE IS NOT TRUE AND CORRECT.
Head of Household
Spouse
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FOR COMPLETION BY OWNER
(OR ITS MANAGER) ONLY
1. Calculation of Eligible Tenant Income:
(a) Enter amount entered for entire household in 2 above: $__________
(b) If the amount entered in 3(a) above is greater than $5,000, enter the greater of (i) the
amount entered in 3(b) less the amount entered in 3(c) or (ii) 10% of the amount entered in 3(a):
$__________
(c) TOTAL ELIGIBLE INCOME (Line 1(a) plus Line 1(b)): $__________
2. The amount entered in 1(c) is less than or equal to 60% of median income for the area in
which the Project is located, as defined in the Declaration. 60% is necessary for status as a “Qualifying
Tenant” under Section 3(a) of the Declaration.
3. Rent:
(a) The rent for the unit is $________________.
(b) The amount entered in 3(a) is less than or equal to the maximum rent permitted
under the Declaration.
4. Number of apartment unit assigned: ___________.
5. This apartment unit was ____ was not ____ last occupied for a period of at least
31 consecutive days by persons whose aggregate anticipated annual income as certified in the above manner
upon their initial occupancy of the apartment unit was less than or equal to 60% of Median Income in the
area.
6. Check as applicable: _______ Applicant qualifies as a Qualifying Tenant (tenants of at least
________ units must meet), or ____ Applicant otherwise qualifies to rent a unit.
THE UNDERSIGNED HEREBY CERTIFIES THAT HE/SHE HAS NO KNOWLEDGE OF ANY FACTS
WHICH WOULD CAUSE HIM/HER TO BELIEVE THAT ANY OF THE INFORMATION PROVIDED
BY THE TENANT MAY BE UNTRUE OR INCORRECT.
LYNK 65, LLC
By
Its
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EXHIBIT C TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Certificate of
Continuing Program Compliance
Date: ___________________
The following information with respect to the multifamily housing development located at
__________________, Richfield, Minnesota (the “Project”), is being provided by Lynk 65, LLC, a limited
liability company (the “Owner”), to the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (the “Authority”), pursuant to that certain Declaration of Restrictive Covenants, dated
___________, 20___ (the “Declaration”), with respect to the Project:
(A) The total number of residential units which are available for occupancy is
___________. The total number of these units occupied is _________________.
(B) The following residential units (identified by unit number) are currently occupied by
“Qualifying Tenants,” as the term is defined in the Declaration (for a total of ____units):
[1 BR Units]: _____________
[1 BR + Den Units]: _____________
[2 BR Units]: _____________
(C) The following residential units which are included in (B) above, have been re-
designated as units for Qualifying Tenants since _______________, 20___, the date on which the
last “Certificate of Continuing Program Compliance” was filed with the Authority by the Owner:
Unit
Number
Previous Designation
of Unit (if any)
Replacing
Unit Number
___________ _________________ _________________
___________ _________________ _________________
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(D) The following residential units are considered to be occupied by Qualifying Tenants
based on the information set forth below:
Unit
Number
Name of Tenant
Number of
Persons
Residing in
the Unit
Number of
Bedrooms
Total Adjusted
Gross Income
Date of Initial
Occupancy
Rent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
[etc.]
(E) The Owner has obtained a “Certification of Tenant Eligibility,” in the form provided
as EXHIBIT B to the Declaration, from each Tenant named in (D) above, and each such Certificate
is being maintained by the Owner in its records with respect to the Project. Attached hereto is the
most recent “Certification of Tenant Eligibility” for each Tenant named in (D) above who signed
such a Certification since ______________, 20___, the date on which the last “Certificate of
Continuing Program Compliance” was filed with the Authority by the Owner.
(F) In renting the residential units in the Project, the Owner has not given preference to
any particular group or class of persons (except for persons who qualify as Qualifying Tenants); and
none of the units listed in (D) above have been rented for occupancy entirely by students, no one of
which is entitled to file a joint return for federal income tax purposes. All of the residential units in
the Project have been rented pursuant to a written lease, and the term of each lease is at least twelve
(12) months.
(G) The information provided in this “Certificate of Continuing Program Compliance”
is accurate and complete, and no matters have come to the attention of the Owner which would
indicate that any of the information provided herein, or in any “Certification of Tenant Eligibility”
obtained from the Tenants named herein, is inaccurate or incomplete in any respect.
(H) The Project is in continuing compliance with the Declaration.
(I) The Owner certifies that as of the date hereof at least ______ of the residential
dwelling units in the Project are occupied or held open for occupancy by Qualifying Tenants, as
defined and provided in the Declaration.
E-14
(J) The rental levels for each Qualifying Tenant comply with the maximum permitted
under the Declaration.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the Owner, on
____________________, 20___.
LYNK 65, LLC
By
Its
RC125-375 (JAE)
676132v1
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #5.
STAFF RE P ORT NO. 40
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
11/16/2020
RE P O RT P RE PA RE D B Y: Melissa P oehlman, A sst. C ommunity D evelopment 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
11/12/2020
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 2020-3 Tax Incre me nt Finance District: Lynk 65, and;
authorizing an Internal Loan for Adv ance of Certain Costs in conne ction w ith the 2020-3 Tax
Increment Finance District: Ly nk 65.
E X E C UT IV E S UM M ARY:
Enc lave Development, LLC, now Lynk 65, LLC, (D eveloper) first presented preliminary plans for the
redevelopment of the northwest c orner of 65th S treet and Lyndale Avenue to the Housing and Redevelopment
Authority (HRA ), City C ounc il, and Planning C ommission at a work session in S eptember 2019. Based on
generally positive feedbac k, the HRA approved a preliminary agreement with the D eveloper on February 18,
2020 agreeing to explore the possibility of public assistance in the form of Tax I ncrement to aid in the
redevelopment of this prominent c orner in the City 's downtown. I n J uly, the D eveloper returned to a work
session to present revised plans for a 5-story mixed use building that included 157 rental apartments and
approximately 8,000 square feet of ground floor retail space. At the time, neither staff nor the Developer
could see a way to incorporate affordable units into the project and instead anticipated a proposal
that would "pool" Tax Increment Dollars into the Housing and Redevelopment Fund in order to
support housing development elsewhere in the community. However, after significant work by all
parties, the proposed development would include 10 affordable 2-bedroom units, and also contribute
to the Housing and Redevelopment Fund. T he City's current affordable stock is primarily comprised
of studios and one-bedroom units; this is project will provide a type of unit that is in short supply in
the community.
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 (Plan) for the 2020-3
Tax I ncrement Financ e (TI F) Distric t: Lynk 65. That Modific ation and Plan are contained in an attac hed
document whic h inc ludes the following:
The Modific ation to the existing Richfield Redevelopment Plan including a map update identify ing the
2020-3 Lynk 65 TI F Distric t (District) 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 Redevelopment Distric t (requiring that more than 50 percent of
the existing buildings are structurally substandard);
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;
$23,430,664 as the maximum TI F that c ould theoretic ally be collected in the D istrict over its 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 $5,723,074 to the D eveloper as a TI F Pay-As-You-Go Note to assist them in funding TI F
qualifying expenses, to be distributed as follows:
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.
15% of the TI F c ollected will be retained as a contribution to the City's Housing and Redevelopment
Fund.
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 2020-3 Tax
Increment Finance District: Lynk 65, and;
2. Adopt a resolution authorizing an internal loan for advance of cer tain costs in connection with
the 2020-3 Tax Increment Finance D istr ict: Lynk 65.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
On September 24, 2019 representatives of Lynk 65, LL C presented conceptual plans for
a mixed use development to the City Council, H R A, and Planning Commission.
The HRA approved a preliminary development agreement with the Developer on February 18,
2020.
Revised c onceptual plans were presented to the C ity Council, HRA, and Planning Commission on
J uly 20, 2020.
The C ity and HRA have established similar TI F Distric ts in the past to advanc e the redevelopment
of parc els that have been deemed "blighted."
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 whic h the C ity 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 November 24.
The D eveloper is hoping to begin their project in 2021 and still needs land use approvals. W ithout
the approval of these items, the Developer c annot move forward on other entitlements.
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 $5,723,074 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
consideration 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 Ly nk 65, L L C HRA Financ ial C onsultant Rebecc a Kurtz of E hlers I nc .
AT TAC H ME N TS :
D escripti on Type
Resolution - TIF P lan Resolution L etter
Resolution - Interfund L oan Resolution L etter
TIF P lan 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 2020-3 TAX INCREMENT FINANCE DISTRICT: LYNK 65
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 2020-3 Tax Increment Financing
District: Lynk 65 (the “TIF District”), a redevelopment 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 October 9, 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 October 23, 2020; and
WHEREAS, the City Council of the City (the “City Council”) will conduct a public hearing on
November 24, 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 16th day of November, 2020.
Mary Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-375 (JAE)
685096v1
111 = 1 " " 610849v1BE200-205
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 2020-3 TAX INCREMENT FINANCE DISTRICT: LYNK 65
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 2020-3 Tax Increment Financing
District: Lynk 65 (the “TIF District”), a redevelopment 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 November 24, 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 Authority’s General Fund; 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
$100,000, 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 16th day of November, 2020.
Mary Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-375 (JAE)
685098v1
MODIFICATION TO THE REDEVELOPMENT
PLAN
Richfield Redevelopment Project Area
- AND -
TAX INCREMENT FINANCING PLAN
Establishment of 2020-3 Tax Increment Financing District: Lynk65
(a redevelopment district)
Richfield Housing and Redevelopment Authority,
City of Richfield, Hennepin County, Minnesota
Public Hearing: November 24, 2020
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 2
Table of Contents
Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area ............. 3
Foreword ................................................................................................................................ 3
Tax Increment Financing Plan for 2020-3 Tax Increment Financing District: Lynk65 .................. 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 ......................................................... 6
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 ..................................................................... 9
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
Appendix D: Redevelopment Qualifications for the District ...................................................16
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 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 2020-3 Tax Increment Financing
District: Lynk65.
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
Richfield Housing and Redevelopment Authority. 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
2020-3 Tax Increment Financing District: Lynk65 4
Tax Increment Financing Plan for 2020-3 Tax
Increment Financing District: Lynk65
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
2020-3 Tax Increment Financing District: Lynk65 (the "District"), a redevelopment 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 City and HRA have certain statutory powers pursuant
to Minnesota Statutes ("M.S."), Sections , 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 three parcels of land and adjacent and internal rights-of-way.
The District is being created to facilitate the development of a mixed-use project including 157
units of apartments and approximately 8,000 square feet of commercial space in the City. The
HRA has entered into a preliminary agreement with the Enclave Development, LLC, as the
developer. Note that the entity has been updated to Lynk65 for the Contract for Redevelopment.
Development is anticipated to begin in the Spring 2021. 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
2020-3 Tax Increment Financing District: Lynk65 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.
Parcel number Address Owner
27.028.24.23.0074 6439 Lyndale HNC Properties
27.028.24.23.0053 415 - 64 1/2 St. W.HNC Properties
27.028.24.23.0010 6467 Lyndale HNC Properties
Please also see the map in Appendix A for further information on the location of the District.
The HRA may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the HRA only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed
public streets, utilities and facilities; carry out land acquisition, site improvements, clearance
and/or development to accomplish the uses and objectives set forth in this plan. The HRA may
acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order
to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there
is assurance of funding to finance the acquisition and related costs.
Classification of the District
The City and 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 redevelopment district pursuant to M.S., Section 469.174, Subd.
10(a)(1).
$ The District is a redevelopment district consisting of three parcels.
$ An inventory shows that parcels consisting of more than 70 percent of the area in the District
are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar
structures.
$ An inspection of the buildings located within the District found that more than 50 percent of
the buildings are structurally substandard as defined in the TIF Act. (See Appendix D).
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
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 6
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
tax increment in 2023, 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 2048, 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 2023. The Project Tax Capacity (PTC) listed is an estimate of values when
the projects within the District are completed.
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 7
Project estimated Tax Capacity upon completion 918,317
Original estimated Net Tax Capacity 39,890
Fiscal Disparities 16,695
Estimated Captured Tax Capacity 861,732
Original Local Tax Rate 136.6880%Pay 2020
Estimated Annual Tax Increment $1,177,885
Percent Retainted by the City 100%
Project Tax Capacity
Note: Tax capacity includes a 2.00% 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 $285,469.
Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search,
accompany its request for certification to the County Auditor or its notice of the District
enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the
District or area of enlargement for which building permits have been issued during the eighteen
(18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S.,
Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the
District by the net tax capacity of improvements for which a building permit was issued.
Sources of Revenue/Bonds to be Issued
The total estimated tax increment revenues for the District are shown in the table below:
SOURCES
Tax Increment 23,430,664$
Interest 2,343,066
TOTAL 25,773,730$
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of
tax increments. The HRA and City reserve the right to issue bonds or other incur 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 or City to
incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that
such action is in the best interest of the City.
The HRA or City may 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 $18,587,388. Such bonds may be
in the form of pay-as-you-go notes, revenue bonds or notes, general obligation bonds, or interfund
loans. This estimate of total bonded indebtedness is a cumulative statement of authority under
this TIF Plan as of the date of approval.
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 8
Uses of Funds
Currently under consideration for the District is a proposal to facilitate the development of a mixed-
use project including 157 units of apartments and approximately 8,000 square feet of commercial
space. The HRA has determined that it will be necessary to provide assistance to the project for
certain District costs, as described.
The HRA has studied the feasibility of the development or redevelopment of property in and
around the District. To facilitate the establishment and development or redevelopment of the
District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain
eligible expenses. The estimate of public costs and uses of funds associated with the District is
outlined in the following table.
USES
Land/Building Acquisition 4,300,000$
Site Improvements/Preparation 9,000,000
Affordable Housing 2,300,000
Utilities 100,000
Other Qualifying Improvements 544,322
Administrative Costs (up to 10%)2,343,066
PROJECT COSTS TOTAL 18,587,388$
Interest 7,186,342
PROJECT AND INTEREST COSTS TOTAL 25,773,730$
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. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax
increment paid by property within the District will be spent on activities related to development or
redevelopment outside of the District but within the boundaries of the Richfield Redevelopment
Project Area, (including administrative costs, which are considered to be spent outside of the
District) subject to the limitations as described in this TIF Plan.
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).
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 9
Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated
by the TIF Plan would occur without the creation of the District. However, the HRA and City have
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:
Entity
2019/Pay 2020
Total Net Tax
Capacity
Estimated
Captured Tax
Capacity (CTC)
upon
completion
Percent of CTC
to Entity Total
Hennepin County 1,941,694,561 861,732 0.0444%
City of Richfield 36,111,232 861,732 2.3863%
ISD No. 280 50,666,987 861,732 1.7008%
Impact on Tax Base
Entity Pay 2020
Extension Rate Percent of Total CTC Potential
Taxes
Hennepin County 41.0840%30.06% 861,732 $ 354,034
City of Richfield 54.7270%40.04% 861,732 471,600
ISD No. 280 32.6580%23.89% 861,732 281,425
Other 8.2190%6.01% 861,732 70,826
136.6880%100.00% $ 1,177,885
Impact on Tax Rates
The estimates listed above display the captured tax capacity when all construction is completed.
The tax rate used for calculations is the Pay 2020 rate. The total net capacity for the entities listed
above are based on Pay 2020 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 $23,430,664;
(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.
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 10
The probable impact of the District on fire protection is not expected to be significant.
Typically, new buildings generate few calls, if any, and are of superior construction.
The existing buildings, which will be eliminated by the new development, have public
safety concerns that include several unprotected old buildings with issues such as
access, hydrant locations, and converted structures. The City does not expect that
the proposed development, in and of itself, will 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 development in the
District is expected to contribute an estimated $390,145 in sanitary sewer (SAC) fees
and no anticipated increase in water (WAC) connection fees.
The probable impact of any District general obligation tax increment bonds on the
ability to issue debt for general fund purposes is expected to be minimal. It is not
anticipated that there will be any general obligation debt issued in relation to this
project, therefore there will be no impact on the City's ability to issue future debt or on
the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated
that the amount of tax increments over the life of the District that would be attributable
to school district levies, assuming the school district's share of the total local tax rate
for all taxing jurisdictions remained the same, is $5,598,140;
(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 $7,042,501;
(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.
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 11
(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
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
2020-3 Tax Increment Financing District: Lynk65 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
1900800900100011001200130018006005004003002005010012420030032440050062070072080090010001100130014001500160017001800100152419006001200000700140029002800270026002500220021002000300015001600Richfield Redevelopment Project Area
0 0.5 10.25 Miles ¯
Community Development Department2013
Legend
Emi TIFDistrict No.2020-02
Enclave TIFDistrict No.2020-03
Parcels
City Limits
The boundaries of the Richfield Redevelopment
Project Area area are coterminous with the
boundaries of the City of Richfield.
2020-3 Tax Increment Financing District: Lynk65
2020-2 Tax Increment Financing District: Emi
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 13
Appendix B: Estimated Cash Flow for the District
11/11/2020 Base Value Assumptions - Page 1
Lynk65 Development - 2% Inflation
City of Richfield, MN
Mixed Use Redevelopment including 157 apartment units and commercial space
ASSUMPTIONS AND RATES
DistrictType:Redevelopment
District Name/Number:TIF 2020-3
County District #:TBD Exempt Class Rate (Exempt)0.00%
First Year Construction or Inflation on Value 2021 Commercial Industrial Preferred Class Rate (C/I Pref.)
Existing District - Specify No. Years Remaining First $150,000 1.50%
Inflation Rate - Every Year:2.00%Over $150,000 2.00%
Interest Rate:3.75%Commercial Industrial Class Rate (C/I)2.00%
Present Value Date:1-Aug-22 Rental Housing Class Rate (Rental)1.25%
First Period Ending 1-Feb-23 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:2023 Over $162,000 0.25%
Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit)
Assumes Last Year of Tax Increment 2048 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
PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap.
27.028.24.23.0074 HNC Properties 6439 Lyndale 849,000 687,000 1,536,000 100%1,536,000 Pay 2021 C/I Pref.29,970 Rental 19,200 1
27.028.24.23.0053 HNC Properties 415 - 64 1/2 St. W.81,000 96,000 177,000 100%177,000 Pay 2021 C/I Pref.2,790 C/I Pref.2,790
27.028.24.23.0010 HNC Properties 6467 Lyndale 524,000 908,000 1,432,000 100%1,432,000 Pay 2021 C/I Pref.27,890 Rental 17,900
1,454,000 1,691,000 3,145,000 3,145,000 60,650 39,890
Note:
1. Base values are for pay 2021 based upon review of County website on October 19, 2020.
2. Located in SD #280 and WS #0.
Area/
Phase
Tax Rates
BASE VALUE INFORMATION (Original Tax Capacity)
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2020-3 TIF - Lynk65\Cashflow\TIF 11.11.2020 - TIF Plan Lynk65
11/11/2020 Base Value Assumptions - Page 2
Lynk65 Development - 2% Inflation
City of Richfield, MN
Mixed Use Redevelopment including 157 apartment units and commercial space
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 2021 2022 2023 2024 Payable
1 Commercial 200 200 8,000 1,600,000 C/I Pref.31,250 4 50%100%100%100%2024
1 Apartment 275,000 275,000 157 43,175,000 Rental 539,688 3,438 50%100%100%100%2024
TOTAL 44,775,000 570,938
Subtotal Residential 157 43,175,000 539,688
Subtotal Commercial/Ind.8,000 1,600,000 31,250
Note:
1. Market values are based upon estimates. Apartment value is the high end of a range ($230,000 to $275,000) provided by the County Assessor on 10/13/2020.
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
Commercial 31,250 10,990 20,261 27,694 15,655 11,557 2,376 57,281 7.16
Apartment 539,688 0 539,688 737,688 0 0 64,111 801,799 5,107.00
TOTAL 570,938 10,990 559,948 765,382 15,655 11,557 66,486 859,080
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 859,080 Current Market Value - Est.3,145,000
less State-wide Taxes (11,557)New Market Value - Est.44,775,000
less Fiscal Disp. Adj.(15,655) Difference 41,630,000
less Market Value Taxes (66,486)Present Value of Tax Increment 13,907,814
less Base Value Taxes (53,184) Difference 27,722,186
Annual Gross TIF 712,198 Value likely to occur without Tax Increment is less than:27,722,186
WHAT IS EXCLUDED FROM TIF?MARKET VALUE BUT / FOR ANALYSIS
TAX CALCULATIONS
PROJECT INFORMATION (Project Tax Capacity)
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2020-3 TIF - Lynk65\Cashflow\TIF 11.11.2020 - TIF Plan Lynk65
11/11/2020 Tax Increment Cashflow - Page 3
Lynk65 Development - 2% Inflation
City of Richfield, MN
Mixed Use Redevelopment including 157 apartment units and commercial space
TAX INCREMENT CASH FLOW
Project Original Fiscal Captured Local Annual Semi-Annual State Admin.Pooling Semi-Annual Semi-Annual PERIOD
% of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at at Net Tax Present ENDING Tax Payment
OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36%10%15%Increment Value Yrs.Year Date
- - - - - 02/01/23
100%285,469 (39,890) (4,514) 241,065 136.688%329,507 164,754 (593) (16,416) (24,624) 123,120 118,630 0.5 2023 08/01/23
100%285,469 (39,890) (4,514) 241,065 136.688%329,507 164,754 (593) (16,416) (24,624) 123,120 235,077 1 2023 02/01/24
100%570,938 (39,890) (10,008) 521,039 136.688%712,198 356,099 (1,282) (35,482) (53,223) 266,113 482,133 1.5 2024 08/01/24
100%570,938 (39,890) (10,008) 521,039 136.688%712,198 356,099 (1,282) (35,482) (53,223) 266,113 724,641 2 2024 02/01/25
100%582,356 (39,890) (10,228) 532,238 136.688%727,506 363,753 (1,310) (36,244) (54,366) 271,832 967,803 2.5 2025 08/01/25
100%582,356 (39,890) (10,228) 532,238 136.688%727,506 363,753 (1,310) (36,244) (54,366) 271,832 1,206,490 3 2025 02/01/26
100%594,003 (39,890) (10,452) 543,661 136.688%743,119 371,560 (1,338) (37,022) (55,533) 277,667 1,445,812 3.5 2026 08/01/26
100%594,003 (39,890) (10,452) 543,661 136.688%743,119 371,560 (1,338) (37,022) (55,533) 277,667 1,680,729 4 2026 02/01/27
100%605,883 (39,890) (10,681) 555,312 136.688%759,045 379,523 (1,366) (37,816) (56,723) 283,617 1,916,265 4.5 2027 08/01/27
100%605,883 (39,890) (10,681) 555,312 136.688%759,045 379,523 (1,366) (37,816) (56,723) 283,617 2,147,465 5 2027 02/01/28
100%618,001 (39,890) (10,914) 567,197 136.688%775,290 387,645 (1,396) (38,625) (57,937) 289,687 2,379,268 5.5 2028 08/01/28
100%618,001 (39,890) (10,914) 567,197 136.688%775,290 387,645 (1,396) (38,625) (57,937) 289,687 2,606,804 6 2028 02/01/29
100%630,361 (39,890) (11,152) 579,319 136.688%791,860 395,930 (1,425) (39,450) (59,176) 295,878 2,834,925 6.5 2029 08/01/29
100%630,361 (39,890) (11,152) 579,319 136.688%791,860 395,930 (1,425) (39,450) (59,176) 295,878 3,058,848 7 2029 02/01/30
100%642,968 (39,890) (11,395) 591,684 136.688%808,760 404,380 (1,456) (40,292) (60,439) 302,193 3,283,341 7.5 2030 08/01/30
100%642,968 (39,890) (11,395) 591,684 136.688%808,760 404,380 (1,456) (40,292) (60,439) 302,193 3,503,703 8 2030 02/01/31
100%655,828 (39,890) (11,642) 604,295 136.688%825,999 413,000 (1,487) (41,151) (61,727) 308,635 3,724,619 8.5 2031 08/01/31
100%655,828 (39,890) (11,642) 604,295 136.688%825,999 413,000 (1,487) (41,151) (61,727) 308,635 3,941,469 9 2031 02/01/32
100%668,944 (39,890) (11,895) 617,159 136.688%843,583 421,791 (1,518) (42,027) (63,041) 315,205 4,158,859 9.5 2032 08/01/32
100%668,944 (39,890) (11,895) 617,159 136.688%843,583 421,791 (1,518) (42,027) (63,041) 315,205 4,372,249 10 2032 02/01/33
100%682,323 (39,890) (12,152) 630,281 136.688%861,518 430,759 (1,551) (42,921) (64,381) 321,906 4,586,164 10.5 2033 08/01/33
100%682,323 (39,890) (12,152) 630,281 136.688%861,518 430,759 (1,551) (42,921) (64,381) 321,906 4,796,142 11 2033 02/01/34
100%695,970 (39,890) (12,415) 643,665 136.688%879,812 439,906 (1,584) (43,832) (65,748) 328,742 5,006,633 11.5 2034 08/01/34
100%695,970 (39,890) (12,415) 643,665 136.688%879,812 439,906 (1,584) (43,832) (65,748) 328,742 5,213,249 12 2034 02/01/35
100%709,889 (39,890) (12,683) 657,316 136.688%898,472 449,236 (1,617) (44,762) (67,143) 335,714 5,420,364 12.5 2035 08/01/35
100%709,889 (39,890) (12,683) 657,316 136.688%898,472 449,236 (1,617) (44,762) (67,143) 335,714 5,623,667 13 2035 02/01/36
100%724,087 (39,890) (12,956) 671,241 136.688%917,505 458,753 (1,652) (45,710) (68,565) 342,826 5,827,456 13.5 2036 08/01/36
100%724,087 (39,890) (12,956) 671,241 136.688%917,505 458,753 (1,652) (45,710) (68,565) 342,826 6,027,494 14 2036 02/01/37
100%738,569 (39,890) (13,235) 685,444 136.688%936,919 468,460 (1,686) (46,677) (70,016) 350,080 6,228,005 14.5 2037 08/01/37
100%738,569 (39,890) (13,235) 685,444 136.688%936,919 468,460 (1,686) (46,677) (70,016) 350,080 6,424,825 15 2037 02/01/38
100%753,340 (39,890) (13,519) 699,931 136.688%956,721 478,361 (1,722) (47,664) (71,496) 357,479 6,622,107 15.5 2038 08/01/38
100%753,340 (39,890) (13,519) 699,931 136.688%956,721 478,361 (1,722) (47,664) (71,496) 357,479 6,815,758 16 2038 02/01/39
100%768,407 (39,890) (13,809) 714,707 136.688%976,919 488,460 (1,758) (48,670) (73,005) 365,026 7,009,857 16.5 2039 08/01/39
100%768,407 (39,890) (13,809) 714,707 136.688%976,919 488,460 (1,758) (48,670) (73,005) 365,026 7,200,384 17 2039 02/01/40
100%783,775 (39,890) (14,105) 729,780 136.688%997,521 498,761 (1,796) (49,697) (74,545) 372,724 7,391,349 17.5 2040 08/01/40
100%783,775 (39,890) (14,105) 729,780 136.688%997,521 498,761 (1,796) (49,697) (74,545) 372,724 7,578,799 18 2040 02/01/41
100%799,450 (39,890) (14,407) 745,154 136.688%1,018,535 509,268 (1,833) (50,743) (76,115) 380,576 7,766,675 18.5 2041 08/01/41
100%799,450 (39,890) (14,407) 745,154 136.688%1,018,535 509,268 (1,833) (50,743) (76,115) 380,576 7,951,093 19 2041 02/01/42
100%815,439 (39,890) (14,715) 760,835 136.688%1,039,970 519,985 (1,872) (51,811) (77,717) 388,585 8,135,927 19.5 2042 08/01/42
100%815,439 (39,890) (14,715) 760,835 136.688%1,039,970 519,985 (1,872) (51,811) (77,717) 388,585 8,317,358 20 2042 02/01/43
100%831,748 (39,890) (15,028) 776,830 136.688%1,061,833 530,916 (1,911) (52,901) (79,351) 396,754 8,499,195 20.5 2043 08/01/43
100%831,748 (39,890) (15,028) 776,830 136.688%1,061,833 530,916 (1,911) (52,901) (79,351) 396,754 8,677,685 21 2043 02/01/44
100%848,383 (39,890) (15,349) 793,144 136.688%1,084,133 542,067 (1,951) (54,012) (81,017) 405,086 8,856,569 21.5 2044 08/01/44
100%848,383 (39,890) (15,349) 793,144 136.688%1,084,133 542,067 (1,951) (54,012) (81,017) 405,086 9,032,161 22 2044 02/01/45
100%865,351 (39,890) (15,675) 809,785 136.688%1,106,880 553,440 (1,992) (55,145) (82,717) 413,586 9,208,138 22.5 2045 08/01/45
100%865,351 (39,890) (15,675) 809,785 136.688%1,106,880 553,440 (1,992) (55,145) (82,717) 413,586 9,380,875 23 2045 02/01/46
100%882,658 (39,890) (16,008) 826,759 136.688%1,130,081 565,040 (2,034) (56,301) (84,451) 422,255 9,553,988 23.5 2046 08/01/46
100%882,658 (39,890) (16,008) 826,759 136.688%1,130,081 565,040 (2,034) (56,301) (84,451) 422,255 9,723,914 24 2046 02/01/47
100%900,311 (39,890) (16,348) 844,073 136.688%1,153,746 576,873 (2,077) (57,480) (86,219) 431,097 9,894,206 24.5 2047 08/01/47
100%900,311 (39,890) (16,348) 844,073 136.688%1,153,746 576,873 (2,077) (57,480) (86,219) 431,097 10,061,364 25 2047 02/01/48
100%918,317 (39,890) (16,695) 861,732 136.688%1,177,885 588,942 (2,120) (58,682) (88,023) 440,117 10,228,878 25.5 2048 08/01/48
100%918,317 (39,890) (16,695) 861,732 136.688%1,177,885 588,942 (2,120) (58,682) (88,023) 440,117 10,393,309 26 2048 02/01/49
Total 23,515,320 (84,655) (2,343,066) (3,514,600) 17,572,998
Present Value From 08/01/2022 Present Value Rate 3.75%13,907,814 (50,068) (1,385,775) (2,078,662) 10,393,309
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2020-3 TIF - Lynk65\Cashflow\TIF 11.11.2020 - TIF Plan Lynk65
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 14
Appendix C: Findings Including But/For Qualifications
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing
Plan (TIF Plan) for 2020-3 Tax Increment Financing District: Lynk65 (the “District”), as required
pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that 2020-3 Tax Increment Financing District: Lynk65 is a redevelopment district as
defined in M.S., Section 469.174, Subd. 10.
The District consists of three parcels and vacant right-of-way, with plans to redevelop the area
for the development of a mixed-use project including 157 units of apartments and
approximately 8,000 square feet of commercial space. Parcels consisting of 70 percent of the
area of the District are occupied by buildings, streets, utilities, paved or gravel parking lots or
other similar structures and more than 50 percent of the buildings in the District, not including
outbuildings, are structurally substandard to a degree requiring substantial renovation or
clearance. (See Appendix D of the TIF Plan.)
2. Finding that the proposed development, in the opinion of the City Council, would not
reasonably be expected to occur solely through private investment within the reasonably
foreseeable future and that the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing would be less than the increase
in the market value estimated to result from the proposed development after subtracting the
present value of the projected tax increments for the maximum duration of 2020-3 Tax
Increment Financing District: Lynk65 permitted by the TIF Plan.
The proposed development, in the opinion of the City, would not reasonably be expected to
occur solely through private investment within the reasonably foreseeable future: This finding
is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's
objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently
occupied by a substandard building, the incompatible land uses at close proximity, and the
cost of financing the proposed improvements, this project is feasible only through assistance,
in part, from tax increment financing. The developer was asked for and provided a letter and
a pro forma 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 District permitted by the TIF Plan: This finding is
justified on the grounds that the cost of site and public improvements and utilities add to the
total redevelopment cost. Historically, construction costs, site and public improvements costs
in this area have made redevelopment infeasible without tax increment assistance. The City
reasonably determines that no other redevelopment of similar scope is anticipated on this site
without substantially similar assistance being provided to the development.
Therefore, the City concludes as follows:
a. The City's estimate of the amount by which the market value of the entire District will
increase without the use of tax increment financing is $0.
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 15
b. If the proposed development occurs, the total increase in market value will be
$41,630,000.
c. The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $13,907,814.
d. Even if some development other than the proposed development were to occur, the
Council finds that no alternative would occur that would produce a market value
increase greater than $27,722,186 (the amount in clause b less the amount in clause
c) without tax increment assistance.
3. Finding that the TIF Plan for the District conforms to the general plan for the development or
redevelopment of the municipality as a whole.
The 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 2020-3 Tax Increment Financing District: Lynk65 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.
The project to be assisted by the District will result in an increase in the availability of safe and
decent life-cycle housing, the renovation of substandard properties, increased tax base of the
State and add a high-quality development to the City.
Richfield Housing and Redevelopment Authority
2020-3 Tax Increment Financing District: Lynk65 16
Appendix D: Redevelopment Qualifications for the District
REPORT OF INSPECTION PROCEDURES AND RESULTS FOR
DETERMINING QUALIFICATIONS OF A
TAX INCREMENT FINANCING DISTRICT AS A REDEVELOPMENT DISTRICT
6467 LYNDALE AVENUE SOUTH
REDEVELOPMENT TIF DISTRICT
RICHFIELD, MINNESOTA
November 4, 2020
Prepared for the CITY OF RICHFIELD
Prepared by:
LHB, Inc.
701 Washington Avenue North, Suite 200
Minneapolis, Minnesota 55401
LHB Project No. 200663
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 9 Final Report
Table of Contents
Part 1: Executive Summary ......................................................................................................................................2
Purpose of the Evaluation ........................................................................................................................................................ 2
Scope of Work ......................................................................................................................................................................... 2
Conclusion ............................................................................................................................................................................... 3
Part 2: Minnesota Statute 469.174, Subdivision 10 Requirements .......................................................................3
Interior Inspection .................................................................................................................................................................... 3
Exterior Inspection and Other Means ...................................................................................................................................... 3
Documentation ......................................................................................................................................................................... 3
Qualification Requirements ...................................................................................................................................................... 3
1. Coverage Test .................................................................................................................................................................... 3
2. Condition of Buildings Test ................................................................................................................................................. 4
3. Distribution of Substandard Buildings ................................................................................................................................. 5
Part 3: Procedures Followed ....................................................................................................................................5
Part 4: Findings .........................................................................................................................................................5
1. Coverage Test ..................................................................................................................................................................... 5
2. Condition of Building Test .................................................................................................................................................... 6
3. Distribution of Substandard Structures ................................................................................................................................ 8
Part 5: Team Credentials ..........................................................................................................................................9
Appendices ................................................................................................................................................................9
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports
APPENDIX C Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 2 of 9 Final Report
Part 1: Executive Summary
Purpose of the Evaluation
LHB was hired by the City of Richfield to inspect and evaluate the properties within a Tax Increment Financing
Redevelopment District (“TIF District”) proposed to be established by the City. The proposed TIF District is located near the
northeast intersection of Lyndale Avenue South and 65th Street West (Diagram 1). The purpose of LHB’s work is to determine
whether the proposed TIF District meets the statutory requirements for coverage, and whether three (3) buildings on three (3)
parcels, located within the proposed TIF District, meet the qualifications required for a Redevelopment District.
Diagram 1: Proposed TIF District
Scope of Work
The proposed TIF District consists of three (3) parcels with three (3) buildings. Three (3) buildings were inspected on October
1, 2020. Building Code and Condition Deficiency reports for the buildings that were inspected and found substandard are
located in Appendix B.
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LHB Project No. 200663 Page 3 of 9 Final Report
Conclusion
After inspecting and evaluating the properties within the proposed TIF District and applying current statutory criteria for a
Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10, it is our professional opinion that the
proposed TIF District qualifies as a Redevelopment District because:
• The proposed TIF District has a coverage calculation of 100 percent which is above the 70 percent requirement.
• 100 percent of the buildings are structurally substandard which is above the 50 percent requirement.
• The substandard buildings are reasonably distributed.
The remainder of this report describes our process and findings in detail.
Part 2: Minnesota Statute 469.174, Subdivision 10
Requirements
The properties were inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174,
Subdivision 10(c), which states:
Interior Inspection
“The municipality may not make such determination [that the building is structurally substandard] without an interior
inspection of the property...”
Exterior Inspection and Other Means
“An interior inspection of the property is not required, if the municipality finds that
(1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain
permission from the party that owns or controls the property; and
(2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard.”
Documentation
“Written documentation of the findings and reasons why an interior inspection was not conducted must be made and
retained under section 469.175, subdivision 3(1).”
Qualification Requirements
Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires three tests for occupied parcels:
1. COVERAGE TEST
a. Minnesota Statutes, Section 469.174, Subdivision 10(a)(1) states:
“parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or
gravel parking lots…”
b. The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Section
469.174, Subdivision 10(e), which states:
“For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots,
or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or
gravel parking lots, or other similar structures.”
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2. CONDITION OF BUILDINGS TEST
a. Minnesota Statutes, Section 469.174, Subdivision 10(a) states:
“…and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree
requiring substantial renovation or clearance;”
b. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states:
“For purposes of this subdivision, ‘structurally substandard’ shall mean containing defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate
egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total
significance to justify substantial renovation or clearance.”
i. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section
469.174, Subdivision 10(b) defined as “structurally substandard”, due to concerns expressed by the State of
Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001.
c. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set
forth in Subdivision 10(c) which states:
“A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new
structure of the same square footage and type on the site. The municipality may find that a building is not disqualified
as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the
size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar
reliable evidence.”
“Items of evidence that support such a conclusion [that the building is not disqualified] include recent fire or police
inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar
reliable evidence.”
i. LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes,
Section 469.174, Subdivision 10(c)) for the following reasons:
1) The Minnesota energy code is one of ten building code areas highlighted by the Minnesota Department of
Labor and Industry website where minimum construction standards are required by law.
2) Chapter 13 of the 2015 Minnesota Building Code states, “Buildings shall be designed and constructed in
accordance with the International Energy Conservation Code.” Furthermore, Minnesota Rules, Chapter
1305.0021 Subpart 9 states, “References to the International Energy Conservation Code in this code mean
the Minnesota Energy Code…”
3) Chapter 11 of the 2015 Minnesota Residential Code incorporates Minnesota Rules, Chapters, 1322 and
1323 Minnesota Energy Code.
4) The Senior Building Code Representative for the Construction Codes and Licensing Division of the
Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced
throughout the State of Minnesota.
5) In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota
Department of Administration confirmed that the construction cost of new buildings complying with the
Minnesota Energy Code is higher than buildings built prior to the enactment of the code.
6) Proper TIF analysis requires a comparison between the replacement value of a new building built under
current code standards with the repairs that would be necessary to bring the existing building up to current
code standards. In order for an equal comparison to be made, all applicable code chapters should be
applied to both scenarios. Since current construction estimating software automatically applies the
construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be
identified in the existing structures.
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LHB Project No. 200663 Page 5 of 9 Final Report
3. DISTRIBUTION OF SUBSTANDARD BUILDINGS
a. Minnesota Statutes, Section 469.174, Subdivision 10, defines a Redevelopment District and requires one or more of
the following conditions “reasonably distributed throughout the district.”:
“(1) Parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or
gravel parking lots, or other similar structures and more than 50 percent of the buildings, not including outbuildings,
are structurally substandard to a degree requiring substantial renovation or clearance;
(2) the property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail
storage facilities, or excessive or vacated railroad rights-of-way;
(3) tank facilities, or property whose immediately previous use was for tank facilities…”
b. Our interpretation of the distribution requirement is that the substandard buildings must be reasonably distributed
throughout the district as compared to the location of all buildings in the district. For example, if all of the buildings in
a district are located on one half of the area of the district, with the other half occupied by parking lots (meeting the
required 70 percent coverage for the district), we would evaluate the distribution of the substandard buildings
compared with only the half of the district where the buildings are located. If all of the buildings in a district are
located evenly throughout the entire area of the district, the substandard buildings must be reasonably distributed
throughout the entire area of the district. We believe this is consistent with the opinion expressed by the State of
Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001.
Part 3: Procedures Followed
LHB inspected three (3) of the three (3) buildings during the day of October 1, 2020.
Part 4: Findings
1. Coverage Test
a. The total square foot area of the parcel in the proposed TIF District was obtained from City records, GIS mapping
and site verification.
b. The total square foot area of buildings and site improvements on the parcels in the proposed TIF District was
obtained from City records, GIS mapping and site verification.
c. The percentage of coverage for each parcel in the proposed TIF District was computed to determine if the 15 percent
minimum requirement was met. The total square footage of parcels meeting the 15 percent requirement was divided
into the total square footage of the entire district to determine if the 70 percent requirement was met.
FINDING
The proposed TIF District met the coverage test under Minnesota Statutes, Section 469.174, Subdivision 10(e),
which resulted in parcels consisting of 100 percent of the area of the proposed TIF District being occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar structures (Diagram 2). This exceeds the 70
percent area coverage requirement for the proposed TIF District under Minnesota Statutes, Section 469.174,
Subdivision (a) (1).
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 6 of 9 Final Report
Diagram 2 – Coverage Diagram
Shaded area depicts a parcel more than 15 percent occupied by buildings, streets, utilities,
paved or gravel parking lots or other similar structures
2. Condition of Building Test
a. BUILDING INSPECTION
i. The first step in the evaluation process is the building inspection. After an initial walk-thru, the inspector makes a
judgment whether or not a building “appears” to have enough defects or deficiencies of sufficient total
significance to justify substantial renovation or clearance. If it does, the inspector documents with notes and
photographs code and non-code deficiencies in the building.
b. REPLACEMENT COST
i. The second step in evaluating a building to determine if it is substandard to a degree requiring substantial
renovation or clearance is to determine its replacement cost. This is the cost of constructing a new structure of
the same square footage and type on site. Replacement costs were researched using R.S. Means Cost Works
square foot models for 2020.
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 7 of 9 Final Report
ii. A replacement cost was calculated by first establishing building use (office, retail, residential, etc.), building
construction type (wood, concrete, masonry, etc.), and building size to obtain the appropriate median
replacement cost, which factors in the costs of construction in Richfield, Minnesota.
iii. Replacement cost includes labor, materials, and the contractor’s overhead and profit. Replacement costs do not
include architectural fees, legal fees or other “soft” costs not directly related to construction activities.
Replacement cost for each building is tabulated in Appendix A. c. CODE DEFICIENCIES
i. The next step in evaluating a building is to determine what code deficiencies exist with respect to such building.
Code deficiencies are those conditions for a building which are not in compliance with current building codes
applicable to new buildings in the State of Minnesota.
ii. Minnesota Statutes, Section 469.174, Subdivision 10(c), specifically provides that a building cannot be
considered structurally substandard if its code deficiencies are not at least 15 percent of the replacement cost of
the building. As a result, it was necessary to determine the extent of code deficiencies for each building in the
proposed TIF District.
iii. The evaluation was made by reviewing all available information with respect to such buildings contained in City
Building Inspection records and making interior and exterior inspections of the buildings. LHB utilizes the current
Minnesota State Building Code as the official code for our evaluations. The Minnesota State Building Code is
actually a series of provisional codes written specifically for Minnesota only requirements, adoption of several
international codes, and amendments to the adopted international codes.
iv. After identifying the code deficiencies in each building, we used R.S. Means Cost Works 2020; Unit and
Assembly Costs to determine the cost of correcting the identified deficiencies. We were then able to compare
the correction costs with the replacement cost of each building to determine if the costs for correcting code
deficiencies meet the required 15 percent threshold.
FINDING
Three (3) out of three (3) buildings (100 percent) in the proposed TIF District contained code deficiencies exceeding
the 15 percent threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c). Building Code,
Condition Deficiency and Context Analysis reports for the buildings in the proposed TIF District can be found in
Appendix B of this report.
d. SYSTEM CONDITION DEFICIENCIES
i. If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section 469.174,
Subdivision 10(c), then in order for such building to be “structurally substandard” under Minnesota Statutes,
Section 469.174, Subdivision 10(b), the building’s defects or deficiencies should be of sufficient total significance
to justify “substantial renovation or clearance.” Based on this definition, LHB re-evaluated each of the buildings
that met the code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), to
determine if the total deficiencies warranted “substantial renovation or clearance” based on the criteria we
outlined above.
ii. System condition deficiencies are a measurement of defects or substantial deterioration in site elements,
structure, exterior envelope, mechanical and electrical components, fire protection and emergency systems,
interior partitions, ceilings, floors and doors.
iii. The evaluation of system condition deficiencies was made by reviewing all available information contained in
City records, and making interior and exterior inspections of the buildings. LHB only identified system condition
deficiencies that were visible upon our inspection of the building or contained in City records. We did not
consider the amount of “service life” used up for a particular component unless it was an obvious part of that
component’s deficiencies.
iv. After identifying the system condition deficiencies in each building, we used our professional judgment to
determine if the list of defects or deficiencies is of sufficient total significance to justify “substantial renovation or
clearance.”
FINDING
In our professional opinion, three (3) out of three (3) buildings (100 percent) in the proposed TIF District are
structurally substandard to a degree requiring substantial renovation or clearance, because of defects in structural
elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 8 of 9 Final Report
including adequate egress, layout and condition of interior partitions, or similar factors which defects or deficiencies
are of sufficient total significance to justify substantial renovation or clearance. This exceeds the 50 percent
requirement of Subdivision 10a(1).
3. Distribution of Substandard Structures
a. Much of this report has focused on the condition of individual buildings as they relate to requirements identified by
Minnesota Statutes, Section 469.174, Subdivision 10. It is also important to look at the distribution of substandard
buildings throughout the geographic area of the proposed TIF District (Diagram 3).
FINDING
The parcels with substandard buildings are reasonably distributed compared to all parcels that contain buildings.
Diagram 3 – Substandard Buildings
Shaded green area depicts parcels with buildings.
Shaded orange area depicts substandard buildings.
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 9 of 9 Final Report
Part 5: Team Credentials
Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst
Michael has 32 years of experience as project principal, project manager, project designer and project architect on planning,
urban design, educational, commercial and governmental projects. He has become an expert on Tax Increment Finance
District analysis assisting over 100 cities with strategic planning for TIF Districts. He is an Architectural Principal at LHB and
currently leads the Minneapolis office.
Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, earning Masters degrees in City
Planning and Real Estate Development from MIT. He has served on more than 50 committees, boards and community task
forces, including a term as a City Council President and as Chair of a Metropolitan Planning Organization. Most recently, he
served as Chair of the Edina, Minnesota planning commission and is currently a member of the Edina city council. Michael
has also managed and designed several award-winning architectural projects, and was one of four architects in the Country to
receive the AIA Young Architects Citation in 1997.
Philip Waugh – Project Manager/TIF Analyst
Philip is a project manager with 13 years of experience in historic preservation, building investigations, material research, and
construction methods. He previously worked as a historic preservationist and also served as the preservation specialist at the
St. Paul Heritage Preservation Commission. Currently, Phil sits on the Board of Directors for the Preservation Alliance of
Minnesota. His current responsibilities include project management of historic preservation projects, performing building
condition surveys and analysis, TIF analysis, writing preservation specifications, historic design reviews, writing Historic
Preservation Tax Credit applications, preservation planning, and grant writing.
Phil Fisher – Inspector
For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White Bear Lake Area Schools. At
the University of Minnesota he earned his Bachelor of Science in Industrial Technology. He is a Certified Playground Safety
Inspector, Certified Plant Engineer, and is trained in Minnesota Enterprise Real Properties (MERP) Facility Condition
Assessment (FCA). His FCA training was recently applied to the Minnesota Department of Natural Resources Facilities
Condition Assessment project involving over 2,000 buildings.
Appendices
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports
APPENDIX C Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
APPENDIX A
Property Condition Assessment Summary Sheet
6467 Lyndale Avenue South Redevelopment TIF DistrictProperty Condition Assessment Summary SheetRichfield, MinnesotaTIF Map No.PID # Property AddressImproved or VacantSurvey Method UsedSite Area(S.F.)Coverage Area of Improvements(S.F.)Coverage Percent of ImprovementsCoverageQuantity(S.F.)No. of BuildingsBuildingReplacementCost15% of Replacement CostBuilding Code DeficienciesNo. of Buildings Exceeding 15% CriteriaNo. of buildings determined substandardA2702824230074 6439 Lyndale Ave S Improved Interior/Exterior 49,930 48,817 97.8% 49,930 1 $2,413,806 $362,071 $636,755 1 1B2702824230010 6467 Lyndale Ave S Improved Interior/Exterior 30,815 30,059 97.5% 30,815 1 $1,851,131 $277,670 $461,650 1 1C2702824230053 415 64 1/2 St W Improved Interior/Exterior 9,373 2,328 24.8% 9,373 1 $144,843 $21,726 $27,946 1 1TOTALS 90,118 90,118 3 3 3100.0% 100.0%M:\20Proj\200663\300 Design\Reports\Final Report\[200663 Richfield Lyndale Redevelopment TIF Summary Sheet.xlsx]Property Info100.0%Total Coverage Percent:Percent of buildings exceeding 15 percent code deficiency threshold: Percent of buildings determined substandard: LHB Project Number 200636Page 1 of 1Property Condition Assessment Summary Sheet
APPENDIX B
Building Code, Condition Deficiency and Context Analysis Reports
6467 Lyndale Avenue South Redevelopment TIF District Page 1 of 2 Building Report
LHB Project No. 200663 Parcel A – Strip Mall
6467 Lyndale Avenue South Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
Parcel A Strip Mall
Address: 6439 Lyndale Ave S, Richfield, Minnesota 55423
Parcel ID: 2702824230074
Inspection Date(s) & Time(s): October 1, 2020 1:00 PM
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15% of replacement cost, NOT
including energy code deficiencies.
Estimated Replacement Cost: $2,413,806
Estimated Cost to Correct Building Code Deficiencies: $636,755
Percentage of Replacement Cost for Building Code Deficiencies: 26.38%
DEFECTS IN STRUCTURAL ELEMENTS
1. None observed
COMBINATION OF DEFICIENCIES
1. Essential Utilities and Facilities
a. There is no ADA code compliant route into the building.
b. There is no ADA code compliant route to all levels of the building.
c. Restrooms are not ADA code compliant.
2. Light and Ventilation
a. HVAC system does not comply with code.
b. Lighting system does not comply with code.
3. Fire Protection/Adequate Egress
a. Exterior stairways are not code compliant.
b. Interior stairways are not code compliant.
c. Thresholds do not comply with code.
d. Door hardware is not code compliant.
e. Glass doors do not have code required 10-inch kick plates.
f. Concrete sidewalks are damaged, creating an impediment to emergency egress, which is contrary to code.
g. Equipment spacing in the kitchen does not comply with code.
h. Smoke detectors are not code compliant.
i. Emergency lighting is not code compliant.
j. The emergency notification system is not code compliant.
k. The building sprinkler system is not code compliant.
6467 Lyndale Avenue South Redevelopment TIF District Page 2 of 2 Building Report
LHB Project No. 200663 Parcel A – Strip Mall
4. Layout and Condition of Interior Partitions/Materials
a. Ceiling tile is stained/missing and should be replaced.
b. Interior walls should be repaired/repainted.
c. Carpeting is damaged, creating an impediment to emergency egress, which is contrary to code.
5. Exterior Construction
a. Metal siding is damaged and should be repaired.
b. Exterior concrete block walls are cracked, allowing for water intrusion, contrary to code.
c. Wood siding should be repainted.
d. Windows do not comply with code.
e. Chimney is failing, allowing for water intrusion, contrary to code.
f. Roofing material has failed, allowing for water intrusion, contrary to code.
DESCRIPTION OF CODE DEFICIENCIES
1. An ADA code compliant route into the building should be created.
2. An ADA code required route to all levels should be created.
3. Restrooms are not ADA code compliant.
4. The HVAC system is not code compliant.
5. Lighting system does not comply with code.
6. Exterior stairways are not code compliant.
7. Interior stairways are not code compliant.
8. Thresholds do not comply with code.
9. Door hardware is not code compliant.
10. Glass doors need code required 10-inch kick plates.
11. Damaged sidewalks should be repaired to create a code required unimpeded means for emergency egress.
12. Equipment spacing in kitchen does not comply with code.
13. Smoke detectors are not code compliant.
14. Emergency lighting is not code compliant.
15. The emergency notification system is not code compliant.
16. The building sprinkler system is not code compliant.
17. Damaged carpeting is creating an impediment to emergency egress, contrary to code.
18. Exterior concrete block walls are cracked, allowing for water intrusion, contrary to code.
19. Windows do not comply with code.
20. Chimney is failing, allowing for water intrusion, contrary to code.
21. Roofing material is failing, allowing for water intrusion, contrary to code.
OVERVIEW OF DEFICIENCIES
This strip mall was built in 1948. Some of the building components are original and do not comply with current code. There is
no code compliant route into the building or to all levels of the structure. Restrooms are not code compliant. Interior walls
should be repaired/repainted. Ceiling tile is damaged and or missing and should be replaced. Exterior block walls are
cracked, allowing for water intrusion, contrary to code. Windows and roofing material have failed, allowing for water intrusion,
contrary to code. All life safety systems do not comply with code. Door hardware is not code compliant. Sidewalks and
carpeting are damaged, creating an impediment to emergency egress, which is contrary to code. Exterior and interior
stairways do not comply with code. The HVAC system does not comply with code. The lighting system does not comply with
code.
M:\20Proj\200663\300 Design\Reports\Building Reports\A -6439 Lyndale Ave S\6439 Lyndale Ave S Redevelopment District Substandard
Building.docx
6467 Lyndale Avenue South Redevelopment TIF District Page 1 of 2 Building Report
LHB Project No. 200663 Parcel B – Strip Mall
6467 Lyndale Avenue South Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
Parcel B Strip Mall
Address: 6467 Lyndale Ave S, Richfield, Minnesota 55423
Parcel ID: 2702824230010
Inspection Date(s) & Time(s): October 1, 2020 1:30 PM
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15% of replacement cost, NOT
including energy code deficiencies.
Estimated Replacement Cost: $1,851,131
Estimated Cost to Correct Building Code Deficiencies: $461,650
Percentage of Replacement Cost for Building Code Deficiencies: 24.94%
DEFECTS IN STRUCTURAL ELEMENTS
1. Steel lintels should be protected from rusting per code.
COMBINATION OF DEFICIENCIES
1. Essential Utilities and Facilities
a. There is no ADA code compliant route to all levels of the building.
b. Restrooms are not ADA code compliant.
2. Light and Ventilation
a. HVAC system does not comply with code.
b. Lighting system does not comply with code.
3. Fire Protection/Adequate Egress
a. Interior stairways are not code compliant.
b. Thresholds do not comply with code.
c. Door hardware is not code compliant.
d. Glass doors do not have code required 10-inch kick plates.
e. Smoke detectors are not code compliant.
f. Emergency lighting is not code compliant.
g. The emergency notification system is not code compliant.
h. The building sprinkler system is not code compliant.
4. Layout and Condition of Interior Partitions/Materials
a. Ceiling tile is stained/missing and should be replaced.
b. Interior walls should be repaired/repainted.
c. Carpeting is damaged, creating an impediment to emergency egress, which is contrary to code.
d. The freight elevator does not comply with code.
6467 Lyndale Avenue South Redevelopment TIF District Page 2 of 2 Building Report
LHB Project No. 200663 Parcel B – Strip Mall
5. Exterior Construction
a. Exterior brick walls are cracked/damaged, allowing for water intrusion, contrary to code.
b. Windows do not comply with code.
c. Roofing material has failed, allowing for water intrusion, contrary to code.
DESCRIPTION OF CODE DEFICIENCIES
1. An ADA code required route to all levels should be created.
2. Restrooms are not ADA code compliant.
3. The HVAC system is not code compliant.
4. Lighting system does not comply with code.
5. Interior stairways are not code compliant.
6. Thresholds do not comply with code.
7. Door hardware is not code compliant.
8. Glass doors need code required 10-inch kick plates.
9. Smoke detectors are not code compliant.
10. Emergency lighting is not code compliant.
11. The emergency notification system is not code compliant.
12. The building sprinkler system is not code compliant.
13. Damaged carpeting is creating an impediment to emergency egress, contrary to code.
14. Freight elevator does not comply with code.
15. Exterior concrete brick walls are cracked, allowing for water intrusion, contrary to code.
16. Windows do not comply with code.
17. Roofing material is failing, allowing for water intrusion, contrary to code.
OVERVIEW OF DEFICIENCIES
Public records indicate this strip mall was built in 1946. Some of the building components are original and do not comply with
current code. There is no code compliant route to all levels of the structure. Restrooms are not code compliant. Interior walls
should be repaired/repainted. Ceiling tile is damaged and or missing and should be replaced. Exterior brick walls are
cracked, allowing for water intrusion, contrary to code. Windows and roofing material have failed, allowing for water intrusion,
contrary to code. All life safety systems do not comply with code. Door hardware and thresholds are not code compliant.
Carpeting is damaged, creating an impediment to emergency egress, which is contrary to code. Interior stairways do not
comply with code. The HVAC system does not comply with code. The lighting system does not comply with code.
M:\20Proj\200663\300 Design\Reports\Building Reports\B -6467 Lyndale Ave S\6467 Lyndale Ave S Building Report.docx
6467 Lyndale Avenue South Redevelopment TIF District Page 1 of 2 Building Report
LHB Project No. 200663 Parcel C – Residential Dwelling
6467 Lyndale Avenue South Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
Parcel C Residential Dwelling
Address: 416 64 ½ Street W, Richfield, Minnesota 55423
Parcel ID: 2702824230053
Inspection Date(s) & Time(s): October 1, 2020 1:55 PM
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15% of replacement cost, NOT
including energy code deficiencies.
Estimated Replacement Cost: $144,843
Estimated Cost to Correct Building Code Deficiencies: $27,946
Percentage of Replacement Cost for Building Code Deficiencies: 19.29%
DEFECTS IN STRUCTURAL ELEMENTS
1. None observed.
COMBINATION OF DEFICIENCIES
1. Essential Utilities and Facilities
a. Bathroom fixtures do not comply with code for proper spacing.
2. Light and Ventilation
a. HVAC system does not comply with code.
3. Fire Protection/Adequate Egress
a. Kitchen outlets do not have code required Ground Fault Circuit Interrupters.
b. Smoke detectors do not comply with code.
c. Carbon monoxide detectors are not code compliant.
d. There are no code required Arc Fault Circuit Interrupters in the building.
4. Layout and Condition of Interior Partitions/Materials
a. Laminate flooring is damaged and should be replaced.
b. Basement stairway does not comply with code.
c. Walls and ceilings should be repaired/repainted.
6467 Lyndale Avenue South Redevelopment TIF District Page 2 of 2 Building Report
LHB Project No. 200663 Parcel C – Residential Dwelling
5. Exterior Construction
a. Vinyl siding is damaged from excessive heat.
b. Roofing material is failing, allowing for water intrusion, contrary to code.
c. Downspouts need to be reattached.
d. Windows are failing, allowing for water intrusion, contrary to code.
e. Concrete steps do not comply with code.
f. Threshold on back door is rotting and should be replaced.
g. E.I.F.S. is damaged and should be repaired.
DESCRIPTION OF CODE DEFICIENCIES
1. The HVAC system is not code compliant.
2. The kitchen outlets should have code required GFCI’s installed.
3. Smoke detectors are not code compliant.
4. There are no code required AFCI’s in the building.
5. The carbon monoxide detectors are not code compliant.
6. Bathroom fixture spacing is not code compliant.
7. Basement stairway is not code compliant.
8. Roofing material is failing, allowing for water intrusion, contrary to code.
9. The windows are failing, allowing for water intrusion, contrary to code.
10. Concrete steps do not comply with code.
OVERVIEW OF DEFICIENCIES
This two-bedroom residential dwelling has concrete stairways leading into the building that are damaged and do not comply
with code. The exterior vinyl siding is damaged by the side door from excessive heat and should be repaired. The windows
are failing, allowing for water intrusion, contrary to code. The roofing material is failing, allowing for water intrusion, contrary to
code. The side entrance threshold is damaged and should be replaced. The interior composite flooring is damaged and
should be repaired. The kitchen does not have a code required GFCI. The bathroom fixture spacing does not comply with
code. The smoke detectors do not comply with code. The carbon monoxide detectors do not comply with code. There are no
code required Arc Fault Circuit Interrupters in the building. The basement stairway is not code compliant. The HVAC system
is not code compliant.
M:\20Proj\200663\300 Design\Reports\Building Reports\C -415 64.5st W\415 64.5 St W Redevelopment District Substandard Building.docx
APPENDIX C
Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
6467 Lyndale Avenue South Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:10/2/2020
Estimate Name:6439 Lyndale Ave S
Building Type:Store, Retail with Concrete Block & Metal Studs / Steel Joists
Location:RICHFIELD, MN
Story Count:1
Story Height (L.F.):14.00
Floor Area (S.F.):15500
Labor Type:OPN
Basement Included:Yes
Data Release:Year 2019
Cost Per Square Foot:$155.73
Building Cost:$2,413,805.59
QTY
% of
Total
Cost
Per S.F. Cost
A Substructure ###### $24.69 $382,650.83
A1010 Standard Foundations $4.82 $74,712.46
A10101102700 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6
KSF, 12" deep x 24" wide
600 $1.63 $25,262.76
A10102107410 Spread footings, 3000 PSI concrete, load 100K, soil bearing capacity 6
KSF, 4' - 6" square x 15" deep
116.76 $3.19 $49,449.70
A1030 Slab on Grade $5.73 $88,757.96
A10301202240 Slab on grade, 4" thick, non industrial, reinforced 15500 $5.73 $88,757.96
A2010 Basement Excavation $3.97 $61,513.61
A20101104620 Excavate and fill, 10,000 SF, 8' deep, sand, gravel, or common earth, on
site storage
15500 $3.97 $61,513.61
A2020 Basement Walls $10.17 $157,666.80
A20201107260 Foundation wall, CIP, 12' wall height, pumped, .444 CY/LF, 21.59 PLF, 12"
thick
600 $10.17 $157,666.80
B Shell ###### $54.45 $843,925.95
B1010 Floor Construction $21.46 $332,612.00
B10102030860 Cast-in-place concrete column, 12" square, tied, 200K load, 12' story
height, 142 lbs/LF, 4000PSI
1401.1 $7.20 $111,648.65
B10102221720 Flat slab, concrete, with drop panels, 6" slab/2.5" panel, 12" column,
15'x15' bay, 75 PSF superimposed load, 153 PSF total load
15500 $14.26 $220,963.35
B1020 Roof Construction $9.96 $154,309.17
B10201123300 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay,
20" deep, 40 PSF superimposed load, 60 PSF total load
15500 $8.27 $128,109.21
B10201123400 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay,
20" deep, 40 PSF superimposed load, 60 PSF total load, add for column
15500 $1.69 $26,199.96
B2010 Exterior Walls $11.51 $178,340.00
B20101014200 Concrete wall, reinforced, 8' high, 8" thick, plain finish, 5000 PSI 7400 $11.51 $178,340.00
B2020 Exterior Windows $2.03 $31,443.46
B20202101100 Aluminum flush tube frame, for 1/4"glass,1-3/4"x4", 5'x6' opening, no
intermediate horizontals
84 $0.16 $2,410.67
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary
significantly.
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 3
Replacement Cost Report
Parcel A - Strip Mall
B20202201000 Glazing panel, insulating, 1/2" thick, 2 lites 1/8" float glass, clear 1176 $1.87 $29,032.79
B2030 Exterior Doors $1.76 $27,205.35
B20301106700 Door, aluminum & glass, without transom, bronze finish, hardware, 3'-0" x
7'-0" opening
5.81 $1.38 $21,465.48
B20302203450 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0" x 7'-
0" opening
1.94 $0.37 $5,739.87
B3010 Roof Coverings $7.67 $118,814.19
B30101203400 Roofing, single ply membrane, EPDM, 60 mils, loosely laid, stone ballast 15500 $1.79 $27,707.80
B30103202700 Insulation, rigid, roof deck, extruded polystyrene, 40 PSI compressive
strength, 4" thick, R20
15500 $4.30 $66,665.97
B30104201400 Roof edges, aluminum, duranodic, .050" thick, 6" face 600 $1.10 $17,121.00
B30106305100 Gravel stop, aluminum, extruded, 4", mill finish, .050" thick 600 $0.47 $7,319.42
B3020 Roof Openings $0.08 $1,201.78
B30202100300 Roof hatch, with curb, 1" fiberglass insulation, 2'-6" x 3'-0", galvanized
steel, 165 lbs
1 $0.08 $1,201.78
C Interiors ###### $17.18 $266,367.16
C1010 Partitions $1.52 $23,484.46
C10101265400 Metal partition, 5/8"fire rated gypsum board face, no base,3 -5/8" @ 24"
OC framing, same opposite face, no insulation
2583.3 $0.75 $11,547.73
C10101280700 Gypsum board, 1 face only, exterior sheathing, fire resistant, 5/8"7140 $0.47 $7,231.61
C10101280960 Add for the following: taping and finishing 7140 $0.30 $4,705.12
C1020 Interior Doors $1.09 $16,961.76
C10201022600 Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, 3'-
0" x 7'-0" x 1-3/8"
13.56 $1.09 $16,961.76
C1030 Fittings $0.20 $3,089.21
C10301100460 Toilet partitions, cubicles, ceiling hung, stainless steel 1.94 $0.20 $3,089.21
C2010 Stair Construction $2.74 $42,502.12
C20101100620 Stairs, CIP concrete, w/landing, 24 risers, with nosing 4 $2.74 $42,502.12
C3010 Wall Finishes $0.95 $14,784.96
C30102300140 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer
& 2 coats
4650 $0.27 $4,196.30
C30102300140 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer
& 2 coats
7140 $0.42 $6,443.35
C30102301940 Ceramic tile, thin set, 4-1/4" x 4-1/4"516.67 $0.27 $4,145.31
C3020 Floor Finishes $3.04 $47,127.75
C30204101600 Vinyl, composition tile, maximum 15500 $3.04 $47,127.75
C3030 Ceiling Finishes $7.64 $118,416.90
C30302107400 Acoustic ceilings, 3/4"mineral fiber, 12" x 12" tile, concealed 2" bar &
channel grid, suspended support
15500 $7.64 $118,416.90
D Services ###### $39.10 $606,017.44
D1010 Elevators and Lifts $4.80 $74,449.60
D10101102200 Hydraulic, passenger elevator, 3000 lb, 2 floors, 100 FPM 1 $4.80 $74,449.60
D2010 Plumbing Fixtures $2.04 $31,659.89
D20101102000 Water closet, vitreous china, tank type, 2 piece close coupled 3.88 $0.36 $5,641.01
D20102102000 Urinal, vitreous china, wall hung 1 $0.09 $1,390.40
D20103101560 Lavatory w/trim, vanity top, PE on CI, 20" x 18"3.88 $0.33 $5,059.39
D20104404340 Service sink w/trim, PE on CI,wall hung w/rim guard, 24" x 20"3.88 $0.95 $14,746.70
D20108201880 Water cooler, electric, wall hung, dual height, 14.3 GPH 1.94 $0.31 $4,822.39
D2020 Domestic Water Distribution $1.82 $28,206.55
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 2 of 3
Replacement Cost Report
Parcel A - Strip Mall
D20202502220 Gas fired water heater, commercial, 100< F rise, 500 MBH input, 480 GPH 1 $1.82 $28,206.55
D2040 Rain Water Drainage $1.59 $24,701.77
D20402104200 Roof drain, CI, soil,single hub, 4" diam, 10' high 9.69 $1.45 $22,407.19
D20402104240 Roof drain, CI, soil,single hub, 4" diam, for each additional foot add 38.75 $0.15 $2,294.58
D3050 Terminal & Package Units $8.72 $135,191.47
D30501502560 Rooftop, single zone, air conditioner, department stores, 10,000 SF, 29.17 15500 $8.72 $135,191.47
D4010 Sprinklers $4.74 $73,413.74
D40104101080 Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 10,000 SF 15500 $4.74 $73,413.74
D4020 Standpipes $1.17 $18,065.69
D40203101540 Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor 1.94 $1.17 $18,065.69
D5010 Electrical Service/Distribution $1.48 $22,877.30
D50101200320 Overhead service installation, includes breakers, metering, 20' conduit &
wire, 3 phase, 4 wire, 120/208 V, 400 A
1 $0.38 $5,921.50
D50102300320 Feeder installation 600 V, including RGS conduit and XHHW wire, 400 A 50 $0.31 $4,801.00
D50102400200 Switchgear installation, incl switchboard, panels & circuit breaker, 120/208
V, 3 phase, 400 A
1 $0.78 $12,154.80
D5020 Lighting and Branch Wiring $10.95 $169,679.62
D50201100440 Receptacles incl plate, box, conduit, wire, 8 per 1000 SF, .9 watts per SF 15500 $2.85 $44,214.06
D50201350360 Miscellaneous power, 1.5 watts 15500 $0.40 $6,211.16
D50201400280 Central air conditioning power, 4 watts 20150 $0.81 $12,505.90
D50202100520 Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40 FC, 10
fixtures @32watt per 1000 SF
19375 $6.89 $106,748.50
D5030 Communications and Security $1.79 $27,771.81
D50309100452 Communication and alarm systems, fire detection, addressable, 25
detectors, includes outlets, boxes, conduit and wire
0.7 $0.98 $15,160.23
D50309100460 Fire alarm command center, addressable without voice, excl. wire & 1.94 $0.81 $12,611.58
E Equipment & Furnishings 0.00% $0.00 $0.00
E1090 Other Equipment $0.00 $0.00
F Special Construction 0.00% $0.00 $0.00
G Building Sitework 0.00% $0.00 $0.00
100% $135.42 $2,098,961.38
15.0 % $20.31 $314,844.21
0.0 % $0.00 $0.00
0.0 % $0.00 $0.00
Total Building Cost $155.73 $2,413,805.59
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
SubTotal
User Fees
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 3 of 3
Replacement Cost Report
Parcel A - Strip Mall
6467 Lyndale Avenue South Redevelopment TIF District
Code Deficiency Cost Report
Parcel A - 6439 Lyndale Ave S, Richfield, Minnesota 55423 Strip Mall
Parcel ID 2702824230074
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Accessibility Items
Accessible Routes
Create a code required accessible route into the building.1,500.00$ Lump 1 1,500.00$
Create a code required accessible route to all levels of the building.4.80$ SF 15,500 74,400.00$
Restrooms
Create code required accessible restrooms 1.93$ SF 15,500 29,915.00$
Structural Elements
Concrete Block Walls
Repair cracked concrete block walls to prevent water intrusion per code 1,500.00$ Lump 1 1,500.00$
Exiting
Stairways
Modify exterior stairways to comply with code 2,500.00$ Lump 1 2,500.00$
Modify interior stairways to comply with code 25,000.00$ Lump 1 25,000.00$
Thresholds
Modify thresholds to comply with code for maximum height 500.00$ Lump 1 500.00$
Door Hardware
Install code compliant door hardware 250.00$ EA 25 6,250.00$
Glass Doors
Install code required 10-inch kick plates on glass doors 100.00$ EA 24 2,400.00$
Sidewalks
Repair damaged sidewalks to create an unimpeded means for
emergency egress per code 1,500.00$ Lump 1 1,500.00$
Equipment Spacing
Modify equipment spacing in kitchen to comply with code for
emergency egress 50.00$ Lump 1 50.00$
Carpeting
Replace damaged carpeting to create an unimpeded means for
emergency egress per code 3.04$ SF 5,000 15,200.00$
Fire Protection
Smoke Detectors
Install code compliant smoke detectors 0.98$ SF 15,500 15,190.00$
Emergency Lighting
Install code compliant emergency lighting 0.75$ SF 15,500 11,625.00$
Emergency Notification System
Install code compliant emergency notification system 0.81$ SF 15,500 12,555.00$
Building Sprinkler System
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 2
Code Deficiency Cost Report
Parcel A - Strip Mall
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Install code compliant building sprinkler system 2.00$ SF 15,500 31,000.00$
Exterior Construction
Windows
Install code compliant windows 2.03$ SF 15,500 31,465.00$
Chimney
Repair chimney to prevent water intrusion per code 500.00$ Lump 1 500.00$
Roof Construction
Roofing Material
Remove failed roofing material 0.75$ SF 15,500 11,625.00$
Install roofing material to prevent water intrusion per code 7.75$ SF 15,500 120,125.00$
Mechanical- Electrical
Mechanical
Install code compliant HVAC system 8.72$ SF 15,500 135,160.00$
Electrical
Install code compliant electrical lighting 6.89$ SF 15,500 106,795.00$
Total Code Improvements 636,755$
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 2 of 2
Code Deficiency Cost Report
Parcel A - Strip Mall
6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 1 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 2 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 3 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 4 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 5 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 6 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 7 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 8 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 9 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel A - Strip Mall - 6439 Lyndale Avenue South
Page 10 of 10
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6467 Lyndale Avenue South Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:10/2/2020
Estimate Name:6467 Lyndale Ave S
Building Type:Store, Retail with Concrete Block & Metal Studs / Steel Joists
Location:RICHFIELD, MN
Story Count:1
Story Height (L.F.):14.00
Floor Area (S.F.):10000
Labor Type:OPN
Basement Included:Yes
Data Release:Year 2019
Cost Per Square Foot:$185.11
Building Cost:$1,851,131.62
QTY
% of
Total
Cost
Per S.F. Cost
A Substructure ###### $33.62 $336,166.82
A1010 Standard Foundations $7.76 $77,608.95
A10101102700 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6
KSF, 12" deep x 24" wide
615 $2.59 $25,894.33
A10102107410 Spread footings, 3000 PSI concrete, load 100K, soil bearing capacity 6
KSF, 4' - 6" square x 15" deep
122.11 $5.17 $51,714.62
A1030 Slab on Grade $5.73 $57,263.20
A10301202240 Slab on grade, 4" thick, non industrial, reinforced 10000 $5.73 $57,263.20
A2010 Basement Excavation $3.97 $39,686.20
A20101104620 Excavate and fill, 10,000 SF, 8' deep, sand, gravel, or common earth, on
site storage
10000 $3.97 $39,686.20
A2020 Basement Walls $16.16 $161,608.47
A20201107260 Foundation wall, CIP, 12' wall height, pumped, .444 CY/LF, 21.59 PLF,
12" thick
615 $16.16 $161,608.47
B Shell ###### $67.11 $671,100.62
B1010 Floor Construction $25.93 $259,319.43
B10102030860 Cast-in-place concrete column, 12" square, tied, 200K load, 12' story
height, 142 lbs/LF, 4000PSI
1465.3 $11.68 $116,762.43
B10102221720 Flat slab, concrete, with drop panels, 6" slab/2.5" panel, 12" column,
15'x15' bay, 75 PSF superimposed load, 153 PSF total load
10000 $14.26 $142,557.00
B1020 Roof Construction $9.96 $99,554.30
B10201123300 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay,
20" deep, 40 PSF superimposed load, 60 PSF total load
10000 $8.27 $82,651.10
B10201123400 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay,
20" deep, 40 PSF superimposed load, 60 PSF total load, add for column
10000 $1.69 $16,903.20
B2010 Exterior Walls $17.53 $175,306.00
B20101014000 Concrete wall, reinforced, 8' high, 8" thick, plain finish, 3000 PSI 7400 $17.53 $175,306.00
B2020 Exterior Windows $3.22 $32,229.55
B20202101100 Aluminum flush tube frame, for 1/4"glass,1-3/4"x4", 5'x6' opening, no
intermediate horizontals
86.1 $0.25 $2,470.94
B20202201000 Glazing panel, insulating, 1/2" thick, 2 lites 1/8" float glass, clear 1205.4 $2.98 $29,758.61
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary
significantly.
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 3
Replacement Cost Report
Parcel B - Strip Mall
B2030 Exterior Doors $1.76 $17,551.83
B20301106700 Door, aluminum & glass, without transom, bronze finish, hardware, 3'-0" x
7'-0" opening
3.75 $1.38 $13,848.69
B20302203450 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0" x 7'-
0" opening
1.25 $0.37 $3,703.14
B3010 Roof Coverings $8.59 $85,937.73
B30101203400 Roofing, single ply membrane, EPDM, 60 mils, loosely laid, stone ballast 10000 $1.79 $17,876.00
B30103202700 Insulation, rigid, roof deck, extruded polystyrene, 40 PSI compressive
strength, 4" thick, R20
10000 $4.30 $43,010.30
B30104201400 Roof edges, aluminum, duranodic, .050" thick, 6" face 615 $1.75 $17,549.03
B30106305100 Gravel stop, aluminum, extruded, 4", mill finish, .050" thick 615 $0.75 $7,502.40
B3020 Roof Openings $0.12 $1,201.78
B30202100300 Roof hatch, with curb, 1" fiberglass insulation, 2'-6" x 3'-0", galvanized
steel, 165 lbs
1 $0.12 $1,201.78
C Interiors ###### $16.64 $166,395.74
C1010 Partitions $1.97 $19,685.30
C10101265400 Metal partition, 5/8"fire rated gypsum board face, no base,3 -5/8" @ 24"
OC framing, same opposite face, no insulation
1666.7 $0.75 $7,450.15
C10101280700 Gypsum board, 1 face only, exterior sheathing, fire resistant, 5/8"7318.5 $0.74 $7,412.40
C10101280960 Add for the following: taping and finishing 7318.5 $0.48 $4,822.75
C1020 Interior Doors $1.09 $10,943.07
C10201022600 Door, single leaf, kd steel frame, hollow metal, commercial quality, flush,
3'-0" x 7'-0" x 1-3/8"
8.75 $1.09 $10,943.07
C1030 Fittings $0.20 $1,993.04
C10301100460 Toilet partitions, cubicles, ceiling hung, stainless steel 1.25 $0.20 $1,993.04
C2010 Stair Construction $1.50 $14,985.22
C20101100580 Stairs, CIP concrete, w/landing, 16 risers, with nosing 2 $1.50 $14,985.22
C3010 Wall Finishes $1.20 $11,986.11
C30102300140 Painting, interior on plaster and drywall, walls & ceilings, roller work,
primer & 2 coats
3000 $0.27 $2,707.29
C30102300140 Painting, interior on plaster and drywall, walls & ceilings, roller work,
primer & 2 coats
7318.5 $0.66 $6,604.43
C30102301940 Ceramic tile, thin set, 4-1/4" x 4-1/4"333.33 $0.27 $2,674.39
C3020 Floor Finishes $3.04 $30,405.00
C30204101600 Vinyl, composition tile, maximum 10000 $3.04 $30,405.00
C3030 Ceiling Finishes $7.64 $76,398.00
C30302107400 Acoustic ceilings, 3/4"mineral fiber, 12" x 12" tile, concealed 2" bar &
channel grid, suspended support
10000 $7.64 $76,398.00
D Services ###### $43.60 $436,016.49
D1010 Elevators and Lifts $7.44 $74,449.60
D10101102200 Hydraulic, passenger elevator, 3000 lb, 2 floors, 100 FPM 1 $7.44 $74,449.60
D2010 Plumbing Fixtures $2.09 $20,919.11
D20101102000 Water closet, vitreous china, tank type, 2 piece close coupled 2.5 $0.36 $3,639.36
D20102102000 Urinal, vitreous china, wall hung 1 $0.14 $1,390.40
D20103101560 Lavatory w/trim, vanity top, PE on CI, 20" x 18"2.5 $0.33 $3,264.13
D20104404340 Service sink w/trim, PE on CI,wall hung w/rim guard, 24" x 20"2.5 $0.95 $9,514.00
D20108201880 Water cooler, electric, wall hung, dual height, 14.3 GPH 1.25 $0.31 $3,111.22
D2020 Domestic Water Distribution $2.82 $28,206.55
D20202502220 Gas fired water heater, commercial, 100< F rise, 500 MBH input, 480 GPH 1 $2.82 $28,206.55
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 2 of 3
Replacement Cost Report
Parcel B - Strip Mall
D2040 Rain Water Drainage $1.59 $15,936.63
D20402104200 Roof drain, CI, soil,single hub, 4" diam, 10' high 6.25 $1.45 $14,456.25
D20402104240 Roof drain, CI, soil,single hub, 4" diam, for each additional foot add 25 $0.15 $1,480.38
D3050 Terminal & Package Units $8.72 $87,220.30
D30501502560 Rooftop, single zone, air conditioner, department stores, 10,000 SF, 29.17 10000 $8.72 $87,220.30
D4010 Sprinklers $4.74 $47,363.70
D40104101080 Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 10,000 SF 10000 $4.74 $47,363.70
D4020 Standpipes $1.17 $11,655.28
D40203101540 Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor 1.25 $1.17 $11,655.28
D5010 Electrical Service/Distribution $2.29 $22,877.30
D50101200320 Overhead service installation, includes breakers, metering, 20' conduit &
wire, 3 phase, 4 wire, 120/208 V, 400 A
1 $0.59 $5,921.50
D50102300320 Feeder installation 600 V, including RGS conduit and XHHW wire, 400 A 50 $0.48 $4,801.00
D50102400200 Switchgear installation, incl switchboard, panels & circuit breaker, 120/208
V, 3 phase, 400 A
1 $1.22 $12,154.80
D5020 Lighting and Branch Wiring $10.95 $109,470.72
D50201100440 Receptacles incl plate, box, conduit, wire, 8 per 1000 SF, .9 watts per SF 10000 $2.85 $28,525.20
D50201350360 Miscellaneous power, 1.5 watts 10000 $0.40 $4,007.20
D50201400280 Central air conditioning power, 4 watts 13000 $0.81 $8,068.32
D50202100520 Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40 FC, 10
fixtures @32watt per 1000 SF
12500 $6.89 $68,870.00
D5030 Communications and Security $1.79 $17,917.30
D50309100452 Communication and alarm systems, fire detection, addressable, 25
detectors, includes outlets, boxes, conduit and wire
0.45 $0.98 $9,780.80
D50309100460 Fire alarm command center, addressable without voice, excl. wire & 1.25 $0.81 $8,136.50
E Equipment & Furnishings 0.00% $0.00 $0.00
E1090 Other Equipment $0.00 $0.00
F Special Construction 0.00% $0.00 $0.00
G Building Sitework 0.00% $0.00 $0.00
100% $160.97 $1,609,679.67
15.0 % $24.15 $241,451.95
0.0 % $0.00 $0.00
0.0 % $0.00 $0.00
Total Building Cost $185.11 $1,851,131.62
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
SubTotal
User Fees
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 3 of 3
Replacement Cost Report
Parcel B - Strip Mall
6467 Lyndale Avenue South Redevelopment TIF District
Code Deficiency Cost Report
Parcel B - 6467 Lyndale Ave S, Richfield, Minnesota 55423 Strip Mall
Parcel ID 2702824230010
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Accessibility Items
Accessible Routes
Create a code required accessible route to all levels of the building.7.44$ SF 10,000 74,400.00$
Restrooms
Create code required accessible restrooms 1.03$ SF 10,000 10,300.00$
Freight Elevator
Correct code issues on freight elevator 5,000.00$ Lump 1 5,000.00$
Structural Elements
Steel Lintels
Protect steel lintels from rusting per code 250.00$ Lump 1 250.00$
Brick Walls
Repair damaged brick walls to prevent water intrusion per code 1,000.00$ Lump 1 1,000.00$
Exiting
Stairways
Modify interior stairways to comply with code 20,000.00$ Lump 1 20,000.00$
Thresholds
Modify thresholds to comply with code for maximum height 500.00$ Lump 1 500.00$
Door Hardware
Install code compliant door hardware 250.00$ EA 20 5,000.00$
Glass Doors
Install code required 10-inch kick plates on glass doors 100.00$ EA 16 1,600.00$
Carpeting
Replace damaged carpeting to create an unimpeded means for
emergency egress per code 3.04$ SF 5,000 15,200.00$
Fire Protection
Smoke Detectors
Install code compliant smoke detectors 0.98$ SF 10,000 9,800.00$
Emergency Lighting
Install code compliant emergency lighting 0.75$ SF 10,000 7,500.00$
Emergency Notification System
Install code compliant emergency notification system 0.81$ SF 10,000 8,100.00$
Building Sprinkler System
Install code compliant building sprinkler system 2.00$ SF 10,000 20,000.00$
Exterior Construction
Windows
Install code compliant windows 3.23$ SF 10,000 32,300.00$
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 2
Code Deficiency Cost Report
Parcel B - Strip Mall
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Roof Construction
Roofing Material
Remove failed roofing material 0.75$ SF 10,000 7,500.00$
Install roofing material to prevent water intrusion per code 8.71$ SF 10,000 87,100.00$
Mechanical- Electrical
Mechanical
Install code compliant HVAC system 8.72$ SF 10,000 87,200.00$
Electrical
Install code compliant electrical lighting 6.89$ SF 10,000 68,900.00$
Total Code Improvements 461,650$
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 2 of 2
Code Deficiency Cost Report
Parcel B - Strip Mall
6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel B - Strip Mall - 6467 Lyndale Ave S
Page 1 of 3
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel B - Strip Mall - 6467 Lyndale Ave S
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel B - Strip Mall - 6467 Lyndale Ave S
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6467 Lyndale Avenue South Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:10/5/2020
Estimate Name:415 64 1/2 St West
Building Type:Economy 1 Story with Wood Siding - Wood Frame
Location:RICHFIELD, MN
Story Count:1
Story Height (L.F.):8.00
Floor Area (S.F.):900
Labor Type:RES
Basement:Finished
Data Release:Year 2019
Cost Per Square Foot:$160.94
Building Cost:$144,843.68
% of
Total
Cost Per
S.F. Cost
01 Site Work 2.37% $3.32 $2,990.39
0104034 Footing excavation, building, 26' x 46', 4' deep $3.32 $2,990.39
02 Foundation 20.16% $28.22 $25,395.26
0204030 Footing systems, 10" thick by 20" wide footing $3.16 $2,841.27
0208034 Block wall systems, 8" wall, grouted, full height $11.05 $9,943.86
0208034 Block wall systems, 8" wall, grouted, full height $9.67 $8,700.88
0220034 Floor slab systems, 4" thick slab $4.34 $3,909.25
03 Framing 14.65% $20.50 $18,452.56
0302106 Floor framing, wood joists, #2 or better, pine, 2" x 8", 16" OC $2.07 $1,861.82
0302112 Floor framing, bridging, wood 1" x 3", joists 16" OC $0.40 $357.90
0302119 Box sills, #2 or better pine, 2" x 8" $0.31 $279.87
0302123 Girders, including lally columns, 3 pieces spiked together, 2" x 8" $1.68 $1,511.97
0308026 Exterior wall framing systems, 2" x 4", 16" OC $0.49 $442.99
0308026 Exterior wall framing systems, 2" x 4", 16" OC $5.20 $4,675.63
0316042 Truss roof framing systems, 24" OC, 4/12 pitch, 1' overhang, 26' span $7.21 $6,485.76
0348026 Partition framing systems, 2" x 4", 16" OC $3.15 $2,836.62
04 Exterior Walls 14.75% $20.64 $18,574.40
0416042 Metal & plastic siding systems, vinyl clapboard siding, 8" wide, white $6.79 $6,111.00
0420043 Non-rigid insul, batts, fbgls, kraft faced, 3-1/2" thick, R13, 15" W $0.84 $755.45
0420051 Non-rigid insul, batts, fbgls, kraft faced, 12" thick, R38, 23" wide $1.57 $1,416.82
0440026 Sliding window systems, builder's quality wood window, 3' x 2' $7.28 $6,552.15
0452046 Door systems, solid core birch, flush, 3' x 6'-8" $3.19 $2,874.96
0460025 Storm door, al, combination, storm & screen, anodized, 3'-0" x 6'-8" $0.96 $864.02
05 Roofing 3.91% $5.48 $4,930.73
0504034 Gable end roofing, asphalt, roof shingles, class A $5.48 $4,930.73
06 Interiors 27.56% $38.57 $34,716.41
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary
significantly.
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 2
Replacement Cost Report
Parcel C - Residential Dwelling
0604026 Wall system, 1/2" drywall, taped & finished $9.19 $8,267.38
0604026 Wall system, 1/2" drywall, taped & finished $3.42 $3,074.07
0608026 1/2" gypsum wallboard, taped & finished ceilings $2.75 $2,476.49
0618034 Suspended ceiling 2' x 4' grid, film faced fiberglass, 5/8" thick $5.30 $4,765.70
0620026 Lauan, flush door, hollow core, interior $7.45 $6,704.10
0660017 Carpet, Olefin, 15 oz $2.07 $1,867.26
0660027 Padding, sponge rubber cushion, minimum $0.77 $693.15
0660038 Underlayment plywood, 1/2" thick $2.11 $1,901.85
0664008 Resilient flooring, asphalt tile on wood subflr, 1/8" thk, group B $3.13 $2,817.00
0664048 Resilient flooring, sleepers, treated, 16" OC, 1" x 3" $1.08 $968.36
0690137 Basement stairs, open risers $1.31 $1,181.05
07 Specialties 4.71% $6.59 $5,932.70
0708026 Kitchen, economy grade $3.17 $2,851.72
0712035 Sinks, stainless steel, single bowl 16" x 20" $1.89 $1,703.51
0712039 Water heater, electric, 30 gallon $1.53 $1,377.47
08 Mechanical 7.87% $11.02 $9,916.92
0812046 Three fixture bathroom with wall hung lavatory $5.30 $4,766.85
0860101 Furnace, gas heating only, 100 MBH, area to 1200 SF $1.33 $1,196.44
0860109 Intermittent pilot, 100 MBH furnace $0.31 $282.15
0860111 Supply duct, rectangular, area to 1200 SF, rigid fiberglass $0.85 $767.95
0860121 Return duct, sheet metal galvanized, to 1500 SF $1.02 $921.94
0860123 Lateral ducts, flexible round 6" insulated, to 1200 SF $0.91 $820.12
0860135 Register elbows, to 1500 SF $0.52 $469.85
0860137 Floor registers, enameled steel w/damper, to 1500 SF $0.34 $303.36
0860139 Return air grille, area to 1500 SF 12" x 12" $0.10 $87.43
0860143 Thermostat, manual, 1 set back $0.14 $125.58
0860147 Plenum, heating only, 100 MBH $0.19 $175.25
09 Electrical 4.00% $5.60 $5,041.66
0910036 100 amp electric service $1.36 $1,226.27
0930018 Duplex receptacles using non-metallic sheathed cable $1.70 $1,528.62
0935112 Wiring device systems, economy to 1200 S.F. $2.00 $1,804.14
0945112 Light fixture systems, economy to 1200 S.F. $0.54 $482.63
100% $139.95 $125,951.03
15.0 % $20.99 $18,892.65
0.0 % $0.00 $0.00
0.0 % $0.00 $0.00
Total Building Cost $160.94 $144,843.68
User Fees
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
SubTotal
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 2 of 2
Replacement Cost Report
Parcel C - Residential Dwelling
6467 Lyndale Avenue South Redevelopment TIF District
Code Deficiency Cost Report
Parcel C - 415 64 1/2 Street W, Richfield, Minnesota 55423 Residential Dwelling
Parcel ID 2702824230053
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Accessibility Items
Bathroom
Modify fixture spacing to comply with code 5.30$ SF 900 4,770.00$
Structural Elements
-$
Exiting
Stairway
Basement stairway does not comply with code 1.31$ SF 900 1,179.00$
Replace concrete steps to comply with code 2,500.00$ Lump 1 2,500.00$
Fire Protection
Smoke Detectors
Install code compliant smoke detectors 150.00$ EA 3 450.00$
Carbon Monoxide Detectors
Install code compliant carbon monoxide detectors 150.00$ EA 2 300.00$
Arc Fault Circuit Interrupters
Install code required AFCI's 150.00$ EA 8 1,200.00$
Ground Fault Circuit Interrupters
Install code required GFCI's in kitchen 150.00$ EA 1 150.00$
Exterior Construction
Windows
Install code compliant windows to prevent water intrusion per code 7.28$ SF 900 6,552.00$
Roof Construction
Roofing Material
Remove failed roofing material 0.50$ SF 900 450.00$
Install roofing material to prevent water intrusion per code 5.84$ SF 900 5,256.00$
Mechanical- Electrical
Mechanical
Install code compliant HVAC system 5.71$ SF 900 5,139.00$
Total Code Improvements 27,946$
6467 Lyndale Avenue South Redevelopment TIF District
LHB Project No. 200663 Page 1 of 1
Code Deficiency Cost Report
Parcel C - Residential Dwelling
6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel C - Residential Dwelling - 415 64 1/2 St W
Page 1 of 4
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Photos: Parcel C - Residential Dwelling - 415 64 1/2 St W
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Photos: Parcel C - Residential Dwelling - 415 64 1/2 St W
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6467 Lyndale Avenue South Redevelopment TIF District
Photos: Parcel C - Residential Dwelling - 415 64 1/2 St W
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AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #6.
STAFF RE P ORT NO. 41
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
11/16/2020
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
11/12/2020
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of a resolution approving an Amended and Restated Preliminary R edevelopment
Agreement with P enn Investments L L C for the development of 6501 Penn Avenue South and 6500
O liver Avenue South.
E X E C UT IV E S UM M ARY:
On J anuary 21, 2020, the Housing and Redevelopment Authority (HRA) approved a Preliminary
Redevelopment A greement with the development team of NHH Properties and Boisclair Corporation, doing
business as P enn I nvestments LLC (Developer), for redevelopment of the HRA -owned property at 6501
Penn Avenue South and 6500 Oliver Avenue S outh.
The onset of the C OV I D-19 pandemic delayed progress of the project development. I n addition, the
Developer explored several possible scenarios for providing more deeply affordable units and/or housing for
people with disabilities in the project, and the funding timelines for developing that ty pe of housing couldn't be
met in 2020.
The Amended and Restated Preliminary Redevelopment Agreement (Agreement) moves the deadlines to
2021 to coincide with deadlines needed to be met in order to apply for federal tax credits for the project. I n
addition, the proposed conc ept plan changes as follows:
Up to 69 apartment units would be constructed in a first phase. Tax credit funding would be pursued,
which would restric t rents and incomes for all units. A mix of incomes limits between 30% and 80%
would be explored, and ten units of supportive housing for people with disabilities and/or people leaving
shelters proposed.
The proposed first-floor c ommercial spac e would be replac ed with lobby office, bike storage,
community room and housing units.
Several aspects of the existing Agreement remain and include:
The Developer will provide preliminary plans for sketc h plan review and will seek neighborhood
feedbac k.
The Developer will explore applying for grants and tax c redits, and the HRA agrees to c ooperate with
those applic ations.
Due to the high cost of land assembly, structured parking, affordable housing and other subsurface
construc tion c osts, the Developer has determined that they would likely require some degree of public
financial assistance to make the projec t feasible. A Redevelopment or Housing Tax I ncrement
Financing (TI F) D istrict are both possible tools that will be explored.
The Developer will explore future phases of the projec t.
The HRA will extend right-of-entry to the property for the Developer to ac cess the property for survey,
geotechnical and marketing purposes.
The Agreement also encompasses the HRA-owned property at 6500 Oliver Avenue South. This is a
remnant parc el from a previous County road project. The Developer owns 6504 Oliver Avenue South
and has developed a conc ept plan that would inc lude both Oliver Avenue properties.
RE C O M M E ND E D AC T IO N:
By motion: Approve a resolution adopting an Amended and Restated P reliminary Redevelopment
Agreement with P enn Investments L L C for the redevelopment of 6501 P enn Avenue South and 6500
O liver Avenue South.
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 property at 6501 Penn Avenue South had been a Bumper to B umper auto parts store for
many y ears and had been for sale off and on couple of years. I n 2018, the owner reached out to
staff about purc hasing the property, and the HRA purchased it in J anuary 2019.
Penn I nvestments presented a proposal for the property to joint work sessions of the
Richfield City Council, HRA and Planning Commission on September 16 and November
18, 2019. Significant feedback was provided by policymakers at the two sessions, which
will be used to further refine the Developer's proposal.
T he HRA approved a Preliminary Redevelopment Agreement with Penn Investments
L LC on January 21, 2020.
An additional work session on project affordability options was held with the HRA on
February 18, 2020, and a second session held with both H R A and Council on June 15,
2020. A majority of policymakers expressed support for further exploring both deeper
affordability and possible units for people with disabilities.
T he Developer owns 6504 Oliver Avenue South, an adjacent single-family property, and
has discussed the project with the other adjacent single family homeowners and the
owner of the adjacent duplex.
T he HRA owns a remnant parcel (30 feet by 133 feet) at 6500 Oliver Avenue South,
adjacent to the parcel owned by the Developer.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The property is zoned and guided for Mixed Use with the Penn Avenue Overlay. The goal of the
Penn Avenue Corridor D istrict is to provide for a balanced mix of commercial, offic e and
residential uses that together create a c ohesive and pedestrian-friendly area.
The C ity's Comprehensive P lan and Housing Visioning statement encourage the development of a
full range of housing c hoices.
The C ity's I nclusionary Housing P olicy requires the inclusion of at least 20% of units affordable at
60% of the Area Median I nc ome for all projects rec eiving c ity financial assistance. The concept
being explored by the Developer would exc eed this requirement.
C.C R IT IC AL T IMIN G ISSU E S:
The A greement is effective through J uly 31, 2021, and sets an interim deadline of J anuary 31,
2021, for the following steps: sketc h plan review, financial analysis, neighborhood meeting. The
deadlines are based on funding deadlines for various outside funding sources.
Tax c redit applic ations are due in J uly of 2021, and significant plans and approvals are needed
before application c an be made for funding. Tax credit awards would be made at the end of 2021.
The proposed deadline for the Agreement is J uly 31, 2021, consistent with the funding award
deadline (although a Contract for P rivate Development will likely be in plac e well before that
deadline).
D.F IN AN C IAL IMPAC T:
The A greement c alls for the Developer to reimburse the HRA for $2,000 in staff costs and submit
a deposit of $5,000 to pay other administrative costs incurred in meeting the terms of the
Agreement.
E.L E GAL C ON S ID E R AT ION :
The HRA Attorney drafted the Amended and Restated Preliminary Redevelopment Agreement
with input from HRA staff and the D eveloper.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
1. Approve the A mended and Restated Preliminary Redevelopment Agreement with changes.
2. Decide not to approve the Amended and Restated Preliminary Redevelopment Agreement and allow the
original Agreement with Penn I nvestments L L C to expire.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
Representatives from the development team.
AT TAC H ME N TS :
D escripti on Type
Resolution Resolution L etter
A mended and Restated P reliminary Redevelopment
A greement C ontract/A greement
C oncept P lan B ackup Materi al
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING THE EXECUTION AND DELIVERY OF AN AMENDED AND
RESTATED PRELIMINARY REDEVELOPMENT AGREEMENT WITH PENN
INVESTMENTS LLC
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) owns certain real property located 6500 Oliver Avenue South and 6501
Penn Avenue South (the “Redevelopment Property”) in the City of Richfield, Minnesota (the “City”);
and
WHEREAS, the Authority and Penn Investments LLC, a Minnesota limited liability company
(the “Redeveloper”), entered into a Preliminary Redevelopment Agreement, dated January 21, 2020
(the “Original Preliminary Redevelopment Agreement”), which set forth the Redeveloper’s intentions
to acquire the Redevelopment Property, demolish the blighted buildings thereon, and construct a
building with approximately up to 69 market-rate and affordable housing units, commercial space,
lobby, office space, bike entrance, storage space, and community room (the “Project”); and
WHEREAS, the Authority and the Redeveloper have determined a need to extend the deadlines
provided in the Original Preliminary Redevelopment Agreement and to revise the scope of the Project
to include a lobby, office space, bike entrance, storage space, and community room; and
WHEREAS, the Board of Commissioners of the Authority (the “Board”) has been presented
with a form of Amended and Restated Preliminary Redevelopment Agreement (the “Amended and
Restated Preliminary Redevelopment Agreement”) between the Authority and the Redeveloper, which
sets forth the modified deadlines and Project description; and
WHEREAS, the Board has reviewed the Amended and Restated Preliminary Redevelopment
Agreement and finds that the execution thereof by the Authority and performance of the Authority’s
obligations thereunder are in the best interest of the City and its residents; 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 Amended and Restated Preliminary Redevelopment Agreement presented to the
Authority and on file with the Executive Director is hereby in all respects approved, subject to
modifications that do not alter the substance of the transaction and that are approved by the Chair and
Executive Director; provided that execution of such document by such officials shall be conclusive
evidence of approval.
2. The Chair and Executive Director are hereby authorized to execute the Amended and
Restated Preliminary Redevelopment Agreement on behalf of the Authority and to carry out on the
Authority’s obligations thereunder.
2
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 16th day of November, 2020.
Mary Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
RC125-368 (JAE)
685672v1
AMENDED AND RESTATED
PRELIMINARY REDEVELOPMENT AGREEMENT
THIS AMENDED AND RESTATED PRELIMINARY REDEVELOPMENT AGREEMENT,
made as of the _____ day of __________, 2020 (the “Agreement”), is between the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate
and politic (the “HRA”), and Penn Investments LLC, a Minnesota limited liability company, or one of its
wholly owned affiliates (the “Redeveloper”), and amends and restates the Preliminary Redevelopment
Agreement, dated January 21, 2020, between the HRA and the Redeveloper.
RECITALS
First: The Redeveloper and the HRA have been engaged in informal discussions regarding the
redevelopment of certain real property located at 6500 Oliver Avenue South and 6501 Penn
Avenue South in the City of Richfield, Minnesota (the “City”), which is legally described in
EXHIBIT A attached hereto (the “Redevelopment Property”);
Second: The Redeveloper proposes to purchase the Redevelopment Property from the HRA,
demolish the blighted buildings on the Redevelopment Property, and construct a multiphased
project including a building with up to 69 market-rate and affordable housing units, commercial
space, lobby, office space, bike entrance, storage space, and community room (the “Project”);
Third: In order to assist the Redeveloper with the Project, the HRA is considering the
establishment of a redevelopment tax increment financing district (the “TIF District”) that
includes the Redevelopment Property;
Fourth: Based on initial reviews of the proposal, it appears that the Project is potentially feasible;
however, further review is needed;
Fifth: The parties wish to cooperate in further analyzing the potential and feasibility of the
Project and are willing to proceed with such analysis as described in this Agreement;
Sixth: The parties acknowledge that the Redeveloper will expend substantial time and effort, and
incur substantial expense in pursuing the Project;
Seventh: The Redeveloper is willing to undertake the activities described in this Agreement only
with the reasonable assurance from the HRA that it will support and cooperate with the
Redeveloper in its efforts;
Eighth: The HRA and the Redeveloper have executed this Agreement to document their
understanding with respect to the proposed Project.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties
contained herein, each of them does hereby represent, covenant and agree with the other as follows:
2
1. Statement of Intent.
It is the intention of the parties that during the term of this agreement the following activities will
take place:
(a) Plan Review and Refinement. The Redeveloper will complete and provide a general
redevelopment plan, including parking layout and design, to the HRA for review and
comment. This submission shall be made on or before January 31, 2021 as an
application for sketch plan review. This review involves a staff review of the general
redevelopment plan by HRA staff. Following the sketch plan review, the Redeveloper
will undertake any additional studies or refinements to the general redevelopment plan
for the Project that are necessary to determine that the plan (i) complies with the City’s
land use requirements; and (ii) provides sufficient detail to permit the reviews described
in Section 1(d) below. Upon completion of the staff-level sketch plan review, either
party may request that the general redevelopment plan be brought before a work session
of the City Council of the City (the “City Council”) and/or the Board of Commissioners
of the HRA (the “HRA Board”).
(b) Financial Feasibility. The Redeveloper will provide to the HRA a financial feasibility
analysis of the Project, including a detailed sources and uses of all funding and all
expenditures expected for the construction of the Project and a Project pro forma, on or
before January 31, 2021. The financial feasibility analysis should specify what
financing will be obtained for the Project and from what sources and the amount of
equity to be contributed to the Project.
(c) Neighborhood Feedback. The Redeveloper agrees to conduct one or more meetings
with neighborhood residents to obtain feedback on the Project. Feedback from
neighborhood residents shall be provided to the HRA on or before January 31, 2021.
(d) HRA Analysis of Project. Following the receipt from the Redeveloper of the
information set forth in Section 1(a) through (c) hereof, the HRA’s fiscal consultant will
conduct a financial analysis of the Redeveloper and the Project. The purpose of the
HRA’s analysis is to determine the Redeveloper’s ability to finance the proposed
Project. The analysis will consider such factors as the Redeveloper’s capability to
arrange for financing, the anticipated level of assistance available to the Project from the
HRA or other sources, and the Redeveloper’s ability to provide equity to the Project.
(e) Acquisition of Redevelopment Property by Redeveloper. The HRA currently owns the
Redevelopment Property. The HRA understands that in order for the Project to proceed,
the Redeveloper must purchase the Redevelopment Property from the HRA. The HRA
Board must hold a duly noticed public hearing before conveying the Redevelopment
Property to the Redeveloper.
(f) Contract Negotiation. On or before March 1, 2021, the parties will attempt in good faith
to negotiate the terms of a contract for private redevelopment (the “Contract”) which
will provide the nature and timing of the Project and any private improvements to be
constructed and the form, the amount and conditions of any economic assistance to be
provided by the HRA for the Project. The Contract will contain such additional terms as
either party believes are necessary for the transaction.
3
(g) Right of Entry. The HRA will grant the Redeveloper a right to enter the Redevelopment
Property as necessary for surveying the Redevelopment Property, geotechnical and
environmental tests, marketing to potential commercial tenants, and other studies of the
Redevelopment Property. The HRA will also allow the Redeveloper to post a
development and/or marketing sign on the Redevelopment Property.
(h) Cooperation with Grant Applications. The Redeveloper plans to prepare applications for
various grants for the Project, including but not limited to LCDA, TOD and/or DEED
grants. The Redeveloper will provide the HRA with applications for TOD and DEED
grants by February 28, 2021. The Redeveloper will provide the HRA with applications
for LCDA by July 31, 2021. The HRA agrees to cooperate with the Redeveloper to
obtain the various grants, including supplying information for the grant applications and
requesting approval from the HRA Board if necessary.
(i) Redeveloper’s Compliance with City’s Inclusionary Housing Policy. Pursuant to the
City’s Inclusionary Housing policy, the Redeveloper understands that if a tax increment
financing district is established, the Redeveloper will be required to contribute fifteen
percent (15%) of the total tax increment financing received by the Redeveloper to the
HRA’s Housing and Redevelopment Fund, unless at least twenty percent (20%) of all
housing units of the Project are available at rates of sixty percent (60%) of AMI.
(j) Tax Increment District. The HRA has obtained a blight study for the Development
Property and will consider establishing a redevelopment tax increment district based on
the analysis described in Section 1(d).
(k) Tax Credit Application. The Redeveloper may apply for tax credits for the Project on or
before July 1, 2021.
(l) Future Phase of Project. The Redeveloper may in the future consider purchasing parcels
adjacent to the Redevelopment Property to construct an additional phase of the Project.
If the Redeveloper determines to move forward with an additional phase of the Project,
the HRA and the Redeveloper will work together to determine if subsidy is necessary
and available for the future phase.
(m) Future Phase; Relocation. For any future phase of the Project, the Developer is
responsible for complying with Minn. Stat. Sections 117.50 to 117.56 (the “Minnesota
Uniform Relocation Act”) and providing evidence of such compliance to the HRA.
2. Undertaking by Redeveloper.
During the term of this Agreement, the Redeveloper will undertake all of the activities necessary,
in the Redeveloper’s discretion, to accomplish the activities described in Section 1 of this
Agreement required to be performed by the Redeveloper.
4
3. Undertaking and Agreement by HRA.
The HRA agrees to cooperate with the Redeveloper in the Redeveloper’s undertakings and
agrees to utilize its best efforts, subject to the Redeveloper’s performance, to accomplish the
activities described in Section 1 of this Agreement, which includes an analysis of the financial
feasibility of the Project and the nature, area, and financial implications of any tax increment
financing district which might be established.
4. Term.
This Agreement is effective from the date hereof through July 31, 2021, unless extended with
approval of the HRA Board, provided, in the event either party, after consultation with the other
party, determines in good faith that the other party is not diligently pursuing the Project or its
obligations hereunder; or the Redeveloper determines, in good faith, that the Project is not
feasible, such determining party may terminate this Agreement upon thirty (30) days’ written
notice to the other. The HRA may also terminate this Agreement for failure of the Redeveloper
to provide additional funds pursuant to Section 5 below. The parties each waive any claim or
cause of action that they may have against the other party based upon the termination of this
Agreement by such other party. The parties may, by mutual written agreement, extend this
Agreement for such further periods as determined to be appropriate from time to time.
5. Administrative Costs of HRA.
The Redeveloper agrees and understands that it is responsible for and will pay to the HRA $2,000
in HRA staff costs, along with all out-of-pocket costs incurred by the HRA (including without
limitation reasonable attorney and fiscal consultant fees) in the negotiation and preparation of this
Agreement and other documents and agreements in connection with the activities and the Project
contemplated hereunder (collectively, the “Administrative Costs”). The Administrative Costs
shall be evidenced by invoices, statements or other reasonable written evidence of the costs
incurred by the HRA.
Upon execution of this Agreement, the Redeveloper will deliver a deposit to the HRA in the
amount of $5,000 (the “Deposit”) to pay Administrative Costs. If at any time the Deposit drops
below $1,000, the Redeveloper shall replenish the deposit to the full $5,000 within thirty (30)
days after receipt of written notice thereof from the HRA. The HRA shall provide invoices to the
Redeveloper for all payments deducted from the Deposit. If at any time the Deposit is
insufficient to pay invoices related to the Project, the HRA will ask for additional Deposits from
the Redeveloper. If the additional Deposit is not made within thirty (30) days following the date
of such request, the HRA may elect to either suspend its performance under this Agreement or
terminate this Agreement. Such suspension or termination will be effective on the date it is
given in writing, or on such later date specified in the notification. Any unexpended or
unencumbered portion of the Deposit shall be returned to the Redeveloper upon the expiration or
termination of this Agreement.
6. Termination of Agreement.
This Agreement may be terminated upon five (5) days’ written notice by a party to the other party
if:
5
(a) in the respective good faith judgment of any party, an impasse has been reached in the
negotiation or implementation of any material term or the completion or execution of any
material condition of this Agreement or the Contract; or
(b) a party fails to perform any of its obligations under this Agreement.
7. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the parties relative to the
proposed Project. Unless specifically described herein, no obligation shall be inferred or
construed.
(b) The redevelopment of the Redevelopment Property will be in accordance with the
Contract or other agreements which the parties shall, in good faith, attempt to negotiate
during the term of this Agreement.
(c) The Redeveloper understands that further and separate action, for which no obligation is
created hereunder, will be required before the HRA or the Redeveloper is obligated to
take various actions with respect to the Project. Those actions may include, without
limitation:
1) Creation of and approval of a modification of tax increment project plan and/or the
TIF District by the City Council of the City and the HRA Board;
2) Zoning and subdivision approvals to the extent any are required;
3) Construction of public improvements to serve the Project; and
4) Negotiation of and approval of the Contract by the HRA Board.
(d) The Redeveloper further understands that many of the actions which the HRA or the
City may be called upon to take require the reasonable discretion and in some instances
the legislative judgment of the HRA or the City, such actions may be made only
following established procedures; and the HRA may not, by agreement, agree in
advance to any specific decision in such matters.
(e) Notice or demand or other communication between or among the parties shall be sufficiently
given if sent by certified or registered mail, postage prepaid, return receipt requested or
delivered personally:
Penn Investments LLC
7455 France Avenue South, Suite 351
Edina, MN 55435
Attn: Adam Seraphine
Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, MN 55423
Attn: John Stark, Executive Director
S-1
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Preliminary
Redevelopment Agreement effective the date and year first above written.
HOUSING AND REDEVELOPMENT PENN INVESTMENTS LLC, a Minnesota
AUTHORITY IN AND FOR THE CITY OF limited liability company
RICHFIELD, MINNESOTA
By: _____________________________ By:
Mary Supple
Its: Chair Its:
By: _____________________________
John Stark
Its: Executive Director
A-1
EXHIBIT A
LEGAL DESCRIPTION OF THE REDEVELOPMENT PROPERTY
Par. 1: The West ½ of the South 109.6 feet of the North 767.2 feet of the North ¾ of the West ¼ of the
Southwest Quarter of the Northwest Quarter except the North 30 feet thereof;
Par. 2: The West ½ of the South 109.6 feet of the North 876.8 feet of the North ¾ of the West ¼ of the
Southwest Quarter of the Northwest Quarter;
All in Section 28, Township 28, Range 24, in the Village of Richfield, Hennepin County, Minnesota.
Par. 3 The South 109.6 feet of the North 767.2 feet of the North 3/4 of the West Quarter of the Southwest
Quarter of the Northwest Quarter of Section 28, Township 28, Range 24, except the South 50 feet of the
East 1/2 thereof and except that part of the West 1/2 lying South of the North 30 feet thereof, in the City
of Richfield, Hennepin County, Minnesota.
RC125-368 (JAE)
685503v2
4 Story Building
69 Units
Penn Ave65th St
Oliver AvePatio
Tot
Lot
Bus Stop Drop-off
Building
Entrance
3 Story
Roof
Slope to Garage
Bike Room
Entrance
kaas wilson architects
Boisclair Richfield AffordableSITE PLAN
2.0 03/12/20
1/32" = 1'-0"1 SD Site Plan
Schema 1 Legend
1BR
2BR
Amenity
Circulation
Core
1,479 ft²
Community Room
812 ft²
Core
1,350 ft²
Lobby/Offices
284 ft²
Stair
284 ft²
Stair
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
740 ft²
Bike Storage
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
1,024 ft²
Unit 2-0
1,024 ft²
Unit 2-0
kaas wilson architects
Boisclair Richfield AffordableFLOOR PLANS
3.0 03/12/20
3/64" = 1'-0"1 Level 1
GROSS AREA - TOTAL
Level Area
Level 4 18,234 ft²
Level 3 20,430 ft²
Level 2 20,430 ft²
Level 1 20,430 ft²
Level -1 20,430 ft²
Grand total 99,956 ft²
UNIT MIX - GROSS AREA
Name Count
Unit Gross
Area
Total Area %Main Floor
1BR
Unit 1-0 33 740 ft² 24,408 ft² 48%
2BR
Unit 2-0 20 1,024 ft² 20,482 ft² 29%
Unit 2-1 2 1,350 ft² 2,699 ft² 3%
Unit 2-2 14 1,063 ft² 14,875 ft² 20%
Grand total 69 62,465 ft²
PARKING
Level Type Count
Level -1 61
61
18,788 ft²
Garage
735 ft²
Core
466 ft²
Elec/Mech
Schema 1 Legend
Circulation
Core
Garage
Mech.
220 ft²
Stair
220 ft²
Stair
Slope to Penn Ave
kaas wilson architects
Boisclair Richfield AffordableFLOOR PLANS
3.1 08/24/20
3/64" = 1'-0"1 Level -1
PARKING
Level Type Count
Level -1 61
61
Schema 1 Legend
1BR
2BR
Amenity
Circulation
Core
812 ft²
Core
284 ft²
Stair
859 ft²
Fitness
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
491 ft²
Storage
284 ft²
Stair
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0 740 ft²
Unit 1-0
740 ft²
Unit 1-0
kaas wilson architects
Boisclair Richfield AffordableFLOOR PLANS
3.2 08/24/20
3/64" = 1'-0"1 Level 2
Schema 1 Legend
1BR
2BR
Circulation
Core
284 ft²
Stair
812 ft²
Core
284 ft²
Stair
1,350 ft²
Unit 2-1 1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
kaas wilson architects
Boisclair Richfield AffordableFLOOR PLANS
3.3 08/24/20
3/64" = 1'-0"1 Level 3
284 ft²
Stair
812 ft²
Core
284 ft²
Stair
1,350 ft²
Unit 2-1
1,063 ft²
Unit 2-2
1,063 ft²
Unit 2-2
Roof Below
Schema 1 Legend
1BR
2BR
Circulation
Core
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
1,024 ft²
Unit 2-0
740 ft²
Unit 1-0
1,024 ft²
Unit 2-0
kaas wilson architects
Boisclair Richfield AffordableFLOOR PLANS
3.4 08/27/20
3/64" = 1'-0"1 Level 4
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