01-19-2021 HRA Complete AgendaREGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
VIRTUAL MEETING HELD VIA WEBEX
JANUARY 19, 2021
7:00 PM
Call to Order
Attendance Roll Call
Consider the election of officers and designation of assistant to the Secretary for the Richfield Housing and
Redevelopment Authority for 2021.
Staff Report No. 1
Open Forum: Opportunity to address the HRA on items not on the Agenda; dial phone number 612-861- 0651. As you
call in, a moderator will assist you.
Appr oval of t he M inut es
Approval of the minutes of the regular Housing and Redevelopment Authority meeting of December 21, 2020
AGENDA APPROVAL
1.Approval of the Agenda
2.Consent Calendar contains several separate items which are acted upon by the HRA in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further HRA action on these items is necessary. However, any HRA
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for HRA discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A.Consider resolutions designating official depositories for the Housing and Redevelopment Authority for
2021, including the approval of collateral.
Staff Report No. 2
B.Consideration of a resolution approving up to $13,500 in financial assistance for the West Hennepin
Affordable Housing Land Trust to mitigate hazardous materials at 7132 Columbus Avenue South under the
New Home Program.
Staff Report No. 3
3.Consideration of items, if any, removed from Consent Calendar
RESOLUTIONS
4.Consideration of the adoption of resolutions regarding the modification of the Redevelopment Plan for the
Richfield Redevelopment Project Area, the establishment of 2020-2 Tax Increment Financing District: Emi, and
establishment of an interfund loan for advance of certain costs in connection with the 2020-2 Tax Increment
Finance District: Emi.
S taff Report No. 4
5.C onsideration of the adoption of a resoluti on approving a C ontract for P rivate D evelopment with P L H &
A ssociates - 6605 1st, L L C and authorizi ng the i ssuance of a Tax Increment L imi ted Revenue Note related to the
construction of a 42-unit mixed use project at 101 66th S treet E ast.
S taff Report No. 5
O T H E R B U SIN E S S
6.D esignation of C ommunity D evelopment D irector J ohn S tark as the E xecuti ve D irector of the Richfield Housi ng
and Redevelopment A uthority for 2021.
S taff Report No. 6
7.C onsideration of an authorization of the E xecutive D irector to amend the P rofessi onal S ervices A greement wi th
Volunteers E nli sted to A ssist P eople for provi ding emergency rent assistance, as the need arises.
S taff Report No. 7
H R A D IS C U S S IO N IT E MS
8.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
9.E xecutive D i rector's Report
C L AIMS
10.C laims
11.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.
AGENDA SECTION:Call to Order
AGENDA ITEM #
STAFF REPORT NO. 1
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
1/19/2021
REPORT PREPARED BY: LaTonia DuBois, Administrative Assistant
OTHER DEPARTMENT REVIEW: N/A
EXECUTIVE DIRECTOR REVIEW: John Stark, Executive Director
1/13/2021
ITEM FOR COUNCIL CONSIDERATION:
Consider the election of officers and designation of assistant to the Secretary for the Richfield
Housing and Redevelopment Authority for 2021.
EXECUTIVE SUMMARY:
The Bylaws of the Richfield Housing and Redevelopment Authority (HRA) provide that the HRA hold an
annual meeting in January. The Bylaws further provide that the Chair, Vice Chair, and Secretary of the HRA
be elected at this meeting.
Officers for 2020 were:
Mary Supple, Chair
Pat Elliott, Vice Chair
Maria Regan Gonzalez, Secretary
Additionally, the Bylaws provide that the HRA may designate an assistant to the Secretary who shall keep the
records of the HRA, act as recorder of the meetings and record all votes, keep a record of the proceedings,
and perform all duties incidental to the office. It is recommended that the HRA designate Community
Development Administrative Assistant LaTonia DuBois as the assistant to the Secretary.
RECOMMENDED ACTION:
By motion: Elect officers for the Richfield Housing and Redevelopment Authority for 2021 and
designate Community Development Administrative Assistant LaTonia DuBois as the assistant to the
Secretary.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Provided in the Executive Summary.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
The HRA Bylaws provide for the election of officers.
C.CRITICAL TIMING ISSUES:
The HRA Bylaws require that an election of officers be held at the annual meeting in January.
D.FINANCIAL IMPACT:
N/A
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):
None
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
N/A
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
December 21, 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; Maria Regan Gonzalez; and Pat Elliott;
Present:
HRA Members Erin Vrieze Daniels; and Sue Sandahl
Absent:
Staff Present:John Stark, Executive Director; Melissa Poehlman, Assistant Community
Development Director; and LaTonia DuBois, Administrative Assistant.
OPEN FORUM
No Callers.
APPROVAL OF THE MINUTES
M/Elliott, S/Regan Gonzalez to approve the minutes of the Regular Housing and
Redevelopment Authority meeting of November 16, 2020.
Motion carried 3-0
Item #1 APPROVAL OF THE AGENDA
M/Regan Gonzalez, S/Elliott to approve the agenda.
Motion carried 3-0
Item #2 CONSIDERATION OF THE ADOPTION OF A RESOLUTION RELATED TO THE
SALE OF THE HENLEY APARTMENT PORTION OF THE LYNDALE GARDENS
DEVELOPMENT, APPROVING AN ASSIGNMENT AND ASSUMPTION
AGREEMENT AND A COLLATERAL ASSIGNMENT OF THE SECONDARY
DEVELOPER TAX INCREMENT FINANCING NOTE TO THE NEW BUYER AND
THEIR LENDER. (S.R. NO. 42)
HRA Meeting Minutes -2-December 21, 2020
Assistant Community Development Director Poehlman presented staff report No. 42
Commissioner Regan Gonzalez inquired about the reasoning for the sale of the
development.
Assistant Community Development Director Poehlman explained it was being sold to fund a
new development, formerly known as the Henley II.
RESOLUTION NO. 1381
APPROVING THE ASSIGNMENT OF CERTAIN DOCUMENTS IN CONNECTION WITH A
DEVELOPMENT WITHIN THE LYNDALE GARDENS TAX INCREMENT FINANCING
DISTRICT
M/Regan Gonzalez, S/Elliott to Adopt a resolution approving the assignment of certain
documents in connection with a development (The Henley Apartments) within the Lyndale Gardens
Tax Increment Financing District.
Motion carried 3-0
Item #3 CONSIDERATION OF A RESOLUTION APPROVING THE AMENDMENT
AND/OR ASSIGNMENT OF DOCUMENTS ASSOCIATED WITH THE
HENLEY II REDEVELOPMENT PROJECT. (S.R. NO 43)
Executive Director Stark presented staff report No. 43
RESOLUTION NO. 1382
APPROVING THE ASSIGNMENT OF CERTAIN DOCUMENTS IN CONNECTION WITH A
DEVELOPMENT LOCATED WITHIN THE 2020-1 TAX INCREMENT FINANCING DISTRICT –
HENLEY II
M/Regan Gonzalez, S/Elliott Adopt a resolution approving the assignment of certain
documents in connection with a development located within the 2020-1 Tax Increment Financing
District - Henley II.
Motion carried 3-0
Item #4 HRA DISCUSSION
None
Item #5 EXECUTIVE DIRECTOR’S REPORT
None
HRA Meeting Minutes -3-December 21, 2020
Item #6 CLAIMS
M/Regan Gonzalez, S/Elliott that the following claims be approved:
U.S. BANK 12/21/2020
Section 8 Checks 132350-132425 $171,176.68
HRA Checks 33927-33938 $70,929.76
Total $242,106.44
Motion carried 3-0
Item #7 ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:14 p.m.
Date Approved: January 19, 2021
HRA Chair
Assistant to the
Secretary
Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF RE P ORT NO. 2
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
1/19/2021
RE P O RT P RE PA RE D B Y: C hris Regis, F i nance 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, HRA E xecutive D irector
1/7/2021
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consider resolutions designating official depositories for the Housing and Redevelopment Authority
for 2021, including the approval of collater al.
E X E C UT IV E S UM M ARY:
I n compliance with Minnesota statutes, the Housing and Redevelopment Authority of Richfield (HRA) must
designate on an annual basis those financial institutions it does business with.
The following resolutions for the HRA Board’s c onsideration, designate U.S Bank/4M Fund as a depository
of HRA funds, and certain savings and loan associations, banks, c redit unions and c ertain financial
institutions as depositories for the investment of HRA funds.
RE C O M M E ND E D AC T IO N:
By motion: Adopt the attached resolutions designating official depositor ies, with the understanding
that the Housing and Redevelopment Author ity could not invest in any of the depositories beyond the
level of insurance coverage of the pledged collateral.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
N/A
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
I n ac cordanc e with Minnesota Statutes S ec tion 118A.01 - 118A.06, the HRA of Richfield must
designate financ ial institutions annually. The institutions must pledge the c ollateral over and above
the amount of federal insurance, as public depositories.
U.S. Bank ac ts as the banking institution in the HRA’s banking arrangement with the 4M Fund.
Monies rec eived, chec ks written, by the HRA, flow through U.S. B ank, however, at the end of
each business day, any proceeds remaining in HRA U.S. Bank ac counts are swept to the 4M
Fund to be invested. Therefore, at the end of the business day the HRA ac counts are zero, which
means the collateral requirements of Minnesota Statutes Section 118A.03 are not required.
Acc ordingly, U.S. Bank has met all other statutory requirements and should be c onsidered as a
depository for the HRA’s vendor acc ounts and all savings deposits.
The HRA must also designate annually, c ertain savings and loan assoc iations, banks, and credit
unions as official depositories for deposit and investment of certain HRA funds. W ith approval of
these offic ial depositories, the HRA will be able to invest funds in these institutions, not exceeding
the federal insurance of $250,000.
Finally, a designation must be made for certain financ ial institutions as depositories for the investment of
HRA funds for 2021. These institutions, such as investment brokerage firms, offer government securities
in the manner required by law. These financial institutions include RB C C apital Markets, Raymond
J ames & Associates, Northland Securities, Oppenheimer & Co., W ells Fargo I nstitutional Retirement
and Trust, and the 4M Fund.
C.C R IT IC AL T IMIN G ISSU E S:
N/A
D.F IN AN C IAL IMPAC T:
N/A
E.L E GAL C ON S ID E R AT ION :
The HRA is required by Minnesota S tatute 118A.01 - 118A.06, to designate as a depository of
funds, insured banks or thrift institutions. Any c ollateral so deposited is acc ompanied by an
assignment pledged to the HRA in the amount specified in the attac hed resolutions.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
None.
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
Resolution D esi gnating C ertain F inancial Insti tuti ons as
D epositori es Resolution L etter
Resolution D esi gnating C ertain S &L A ssoci ations, banks
& credit uni ons as depositories Resolution L etter
Resolution D esi gnating US B ank a deposi tory of funds Resolution L etter
RESOLUTION NO.
RESOLUTION DESIGNATING CERTAIN FINANCIAL
INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2021
WHEREAS, the Housing and Redevelopment Authority of Richfield has money
which is available for investment; and
WHEREAS, different financial institutions offer different rates of return on
investments; and
WHEREAS, the Housing and Redevelopment Authority of Richfield shall purchase
U. S. Treasury Bills, U. S. Treasury Notes and other such government securities in the
manner required by law from the institution offering the highest rate to the Housing and
Redevelopment Authority of Richfield providing greater flexibility in the investment
program and maximize interest income thereon.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority of Richfield, Minnesota, in accordance with Minnesota Statutes, Sections
118A.01 – 118A.06, as follows:
1. It is hereby found and determined that it is in the best interest of the proper
management of Housing and Redevelopment Authority of Richfield funds that
certain financial institutions be designated as additional depositories for
Housing and Redevelopment Authority of Richfield funds for 2021.
2. The following financial institutions designated as depositories for the Housing
and Redevelopment Authority of Richfield funds:
RBC Capital Markets. Raymond James & Assoc.
4M Fund Oppenheimer & Co.
Wells Fargo Institutional Retirement & Trust
Northland Securities, Inc.
3. The Finance Director is hereby authorized to deposit the Housing and
Redevelopment Authority of Richfield funds in any or all of the depositories
herein designated. Such deposits may be made and withdrawn from time to
time by the Finance Director’s judgment and as the interest of the Housing
and Redevelopment Authority of Richfield dictates.
4. The investment of funds and the reporting thereof pursuant to this resolution
shall be conducted in accordance with established policies regarding the
investment of these funds.
Adopted by the Housing and Redevelopment Authority of Richfield, Minnesota this 19th
day of January, 2021.
Chair
ATTEST:
Secretary
RESOLUTION NO.
RESOLUTION DESIGNATING CERTAIN SAVING AND LOAN ASSOCIATIONS,
BANKS
AND CREDIT UNIONS AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING
AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2021
BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield,
Minnesota:
WHEREAS, pursuant to Minnesota Statutes, Sections 118A.01 – 118A.06,
municipal funds may be deposited in any Savings and Loan Association, Bank or Credit
Union which has its deposits insured by the Federal Deposit Insurance Corporation
(FDIC), or National Credit Union Administration (NCUA); and
WHEREAS, the amount of said deposits may not exceed the FDIC/NCUA
insurance covering such deposits which insurance amount is presently $250,000; and
WHEREAS, the deposit of Housing and Redevelopment Authority funds in
Savings and Loan Associations and Banks would provide greater flexibility in the
Housing and Redevelopment Authority’s investment program and maximize interest
income thereon.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority of Richfield, Minnesota, as follows:
1. It is hereby found and determined that it is in the best interest of the proper
management of Housing and Redevelopment Authority funds that certain
Savings and Loan Association and Banks be designated as additional
depositories for Housing and Redevelopment Authority funds for 2021.
2. It is further found and determined that the purpose of such depository
designation is to facilitate the proper and advantageous investments of
Housing and Redevelopment Authority funds and that such designation is not
exclusive nor does it preclude the deposit of any Housing and
Redevelopment Authority funds in other officially designated depositories of
the Housing and Redevelopment Authority.
3. The Finance Director is hereby authorized to deposit Housing and
Redevelopment Authority funds in various depositories up to the amount of
$250,000, or such other amount as may be subsequently permitted by law,
such deposits to be in the form of demand accounts, payable to the Housing
and Redevelopment Authority of Richfield on the signatures of the Housing
and Redevelopment Authority Finance Director. Such deposits may be made
and withdrawn from time to time by the Finance Director as his best judgment
and the interests of the Housing and Redevelopment Authority dictates.
4. The investment of funds and the reporting thereof pursuant to this resolution
shall be conducted in accordance with established policies of the Housing
and Redevelopment Authority regarding the investment of Housing and
Redevelopment Authority funds.
Adopted by the Housing and Redevelopment Authority of Richfield, Minnesota this 19th
day of January, 2021.
Chair
ATTEST:
Secretary
RESOLUTION NO.
RESOLUTION DESIGNATING U.S. BANK
A DEPOSITORY OF FUNDS OF THE HRA OF RICHFIELD
FOR THE YEAR 2021
BE IT RESOLVED, by the Housing and Redevelopment Authority of Richfield as
follows:
That, in accordance with Minnesota Statutes, Section 118A.01- 118A.06, U.S.
Bank be, and hereby is designated a depository of the funds of the Housing and
Redevelopment Authority of Richfield, subject to modification and revocation at any time
by said Housing and Redevelopment Authority, and subject to the following terms and
conditions:
The said depository shall not be required to give bonds or other securities for
such deposits provided that the total sum thereof shall not at any time exceed in any
depository the sums for which its deposits are insured under the Acts of Congress of the
United States relating to insurance of bank deposits; but that in case such deposits in
any such depository shall at any time exceed such insured sum, said depository shall
immediately furnish bonds or other security for such excess according to law, approved
by the Housing and Redevelopment Authority of Richfield.
That said depository shall pay on demand all deposits therein; and shall pay all
time deposits, at or after the end of the period for which the same shall be deposited, on
demand.
BE IT FURTHER RESOLVED, that there shall be maintained a general account
in which shall be deposited all monies. The following officers or their facsimile
signatures shall sign checks on this account;
CHAIR
EXECUTIVE DIRECTOR
BE IT FURTHER RESOLVED, that all funds remaining in the account at the end
of each business day will be transferred from U.S. Bank to the 4M Fund where funds
deposited are invested and insured.
Adopted by the Housing and Redevelopment Authority of Richfield, Minnesota
this 19th day of January, 2021.
Chair
ATTEST:
Secretary
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
STAFF REPORT NO. 3
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
1/19/2021
REPORT PREPARED BY: Kate Aitchison, Housing Specialist
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: John Stark, Executive Director
1/13/2021
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution approving up to $13,500 in financial assistance for the West Hennepin
Affordable Housing Land Trust to mitigate hazardous materials at 7132 Columbus Avenue South under
the New Home Program.
EXECUTIVE SUMMARY:
In April 2020, the Housing and Redevelopment Authority (HRA) entered into an agreement with the West
Hennepin Affordable Housing Land Trust (WHAHLT) to acquire and remodel one Richfield home. Once
remodeled, the home would be placed into the land trust's affordable housing program and sold to income-
qualified households earning 80% AMI ($78,500 for a household of 4 people). The HRA pledged $80,000 in
funding towards the acquisition of the home.
WHAHLT has since purchased 7132 Columbus Avenue in Richfield and has begun the work to remodel the
home. Upon inspection, the home was found to have asbestos in the ceiling insulation, as well as disturbed
lead paint on the siding of the garage. These unexpected costs are not covered in WHAHLT's budget, and
they are asking the HRA to help defray the cost of remediation.
The estimated cost to remediate these hazardous materials is approximately $13,500. WHAHLT is also
requesting funding from another source that may be able to provide $3,000-$5,000 in funding. Based on the
results of that funding request, WHAHLT would ask the HRA to help fund the rest of the cost of remediation.
RECOMMENDED ACTION:
By motion: Adopt a resolution approving a first Amendment to the Development Agreement with West
Hennepin Affordable Housing Land Trust to provide a maximum of $13,500 in financial assistance to
remediate hazardous materials at 7132 Columbus Avenue South.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Under the New Home Program, the Richfield HRA has worked with WHAHLT since roughly 2005,
and has built or rehabilitated 14 homes through their program.
In the past 15 years, the HRA has offered assistance to WHAHLT by:
Selling or donating land for new construction.
Providing financial assistance for the acquisition and rehabilitation of an existing Richfield
home.
In April 2020, the HRA entered into a new Developer Agreement with WHAHLT to contribute
$80,000 in Housing and Redevelopment Funds for the rehabilitation of one home in Richfield
under the land trust program.
In 2019, the HRA provided approximately $31,000 in assistance to Habitat for Humanity to help
offset the unexpected soil contamination and remediation at 6310 Irving Avenue South. The HRA
fully funded the remediation costs.
In 2020, the HRA also provided $7,500 to Endres Custom Homes to help offset the cost of
unexpected soil contamination at 6812 Emerson Avenue South. The HRA provided 50% funding
for the remediation cost.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
Under the New Home Program, the HRA's contributions towards the work of WHAHLT and the
land trust model have long-term impacts on affordable housing in Richfield. This is achieved
because the land is perpetually owned by the land trust and is sold to income-qualified households
in the future.
Per the Developer Agreement, Section 1(C), WHAHLT must comply with all Lead based paint
notification, inspection, testing and abatement procedures, as established by the U.S. Department
of Housing and Urban Development and Hennepin County.
C.CRITICAL TIMING ISSUES:
Rehabilitation of the home is underway.
Notification of funding awards for hazardous materials is expected next month.
D.FINANCIAL IMPACT:
Funds will be drawn from either the Housing and Redevelopment Fund or the HRA's General
Fund.
E.LEGAL CONSIDERATION:
The attorney has drafted an Amendment to the Developer Agreement.
ALTERNATIVE RECOMMENDATION(S):
Do not authorize a contribution to hazardous materials mitigation for 7132 Columbus Avenue South.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A
ATTACHMENTS:
Description Type
Resolution Resolution Letter
2020 WHAHLT Developer Agreement Contract/Agreement
WHAHLT First Amendment to Developer Agreement Contract/Agreement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING FIRST AMENDMENT TO DEVELOPMENT AGREEMENT WITH
WEST HENNEPIN AFFORDABLE HOUSING LAND TRUST DBA HOMES WITHIN REACH
WHEREAS, in April 2020, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (the “Authority”) entered into a Development Agreement with West Hennepin
Affordable Housing Land Trust dba Homes Within Reach, a Minnesota nonprofit corporation (“WHAHLT”)
and provide it with pooled tax increment to purchase, rehabilitate, and resell one or more properties to
households earning at or below 80% of the area median income; and
WHEREAS, the Authority would like to amend the Development Agreement to provide additional
financial assistance to WHAHLT to assist with abating contamination on property purchased by WHAHLT
which will be resold to a household earning at or below 80% of the area median income; and
WHEREAS, there has been presented before the Board of Commissioners of the Authority a First
Amendment to Developer Agreement (the “First Amendment”) to be executed by the Authority and
WHAHLT, which sets forth the terms of the use of the Tax Increment to be provided to WHAHLT; 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 First Amendment is hereby in all respects authorized, approved, and confirmed, and the
Chair and the Executive Director are hereby authorized and directed to execute the First Amendment for and
on behalf of the Authority in substantially the form now on file with the Executive Director but with such
modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof to constitute
conclusive evidence of their approval of any and all modifications therein.
2. The Chair and the Executive Director are hereby authorized to execute and deliver any and
all documents deemed necessary to carry out the intentions of this resolution and the First Amendment.
3. This resolution shall be in full force and effect as of the date hereof.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 19th day of January, 2021.
Chair
Secretary
RC125-1(JAE)
697984v.1
1
DEVELOPER AGREEMENT
(West Hennepin Affordable Housing Land Trust dba Homes Within Reach)
THIS DEVELOPER AGREEMENT (the “Agreement”), made and entered into as of
this of April, 2020 (“Effective Date”), by and between the Housing and Redevelopment
Authority in and for the City of Richfield (“Authority” or “HRA”), a body corporate and politic
under the laws of the State of Minnesota, having its principal office at 6700 Portland Avenue,
Richfield, Minnesota (“HRA”) and the West Hennepin Affordable Housing Land Trust dba
Homes Within Reach, a nonprofit corporation under the laws of Minnesota, having its principal
office at 5101 Thimsen Ave, Suite 202, Minnetonka, MN 55345. (“Developer” or “WHAHLT”).
RECITALS
A.The HRA intends to provide WHAHLT with $80,000 in pooled tax increment (“Tax
Increment”) for the purposes of acquiring and rehabilitating homes in the City of Richfield
(the “City”) to be resold to people earning at or below 80% of the area median income.
B.The HRA desires WHAHLT to purchase, rehabilitate, and resell one or more properties
eligible to be purchased, rehabilitated and resold with Tax Increment (the “Eligible
Properties”) and WHAHLT has agreed to do so pursuant to the terms and conditions of this
Agreement.
C.The City and the HRA have previously established a New Home Program pursuant to the
authority granted in Minnesota Statutes, Sections 469.001 through 469.047.
D.WHAHLT will utilize the Community Land Trust model to purchase, rehabilitate, and
resell the property to an income-qualified buyer, and will retain ownership of the land to
ensure long-term affordability.
E.The grant of the Tax Increment to WHAHLT is for the purpose of providing affordable
housing within the City and to assist in carrying out the objectives of the New Home
Program, which are in the best interests of the City, and the health, safety and welfare of its
residents and in accord with the public purposes and provisions of the applicable state and
local laws and requirements.
F.In performing its obligations under this Agreement, WHAHLT must adhere to the
restrictions for the use of Tax Increment set forth in this Agreement.
AGREEMENT
1. Scope of Work.
A.Developer. The HRA hereby designates WHAHLT as a Developer to purchase,
rehabilitate, and resell Eligible Properties in accordance with the terms and conditions of this
Agreement.
2
B. Criteria. WHAHLT will identify Eligible Properties that they would like to acquire
under this Agreement. The HRA will provide written consent for the location of the home to be
acquired by WHAHLT. Prior to the acquisition of an Eligible Property, WHAHLT shall provide
the HRA with a Developer Pro Forma in the form set forth in EXHIBIT A.
C. Compliance with Required Programs. To the extent required by federal, state, and
local law and regulation, WHAHLT agrees to comply with the program requirements of:
1)Hennepin County Affirmative Action Policy and Commissioners’
Policies Against Discrimination;
2)Equal opportunity and discrimination provisions of all applicable
State and Federal laws, rules, and regulations;
3)Section 504 of the Rehabilitation Act of 1973, as amended;
4)Lead based paint notification, inspection, testing and abatement
procedures established in 24 CFR Part 35 as referenced in 24 CFR
570.608, including but not limited to the Lead Disclosure Rule and
HUD’s Lead Safe Housing Rule as set forth in Section 3.06 of the
Procedural Manual; and
5)Fair housing requirements of section 104(b) and section 109 of Title
I of the Housing and Community Development Act of 1974, as
amended, including Title VI of the Civil Rights Act of 1964, the
Fair Housing Act, and other applicable fair housing laws.
WHAHLT further agrees to provide HRA with a timely certification that the requirements listed in
this Section have been met.
D. Resale of Property. After WHAHLT completes the rehabilitation of an Eligible
Property, WHAHLT will market said Eligible Property and execute a purchase agreement with an
end buyer earning at or below 80% of the area median income.
F. Reports. WHAHLT shall provide HRA with a report of its activities on an
as-needed basis, including but not limited to reports related to the income of the end buyer of the
Eligible Property.
2. Term. This Agreement is effective as of the Effective Date and until December 31, 2020.
3. Acquisition, Relocation and Displacement. WHAHLT shall be responsible for carrying
out all acquisitions of real property necessary for implementation of this Agreement. WHAHLT
shall conduct all such acquisitions in its name and shall hold title to all real property purchased and
shall be responsible for preparation of all notices, appraisals, and documentation required in
conducting acquisition under the regulations of the Uniform Relocation Assistance and Real
Property Acquisition Act of 1970, as required under 49 CFR Part 24. WHAHLT shall also be
responsible for providing all relocation notices, counseling, and services required by said
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regulations. In addition, WHAHLT shall comply with the acquisition and relocation requirements
of the Minn. Stat. Sections 117.50 through 117.56 (the “Minnesota Relocation Act”).
4. Labor Standards, Employment and Contracting. WHAHLT shall notify the HRA prior to
initiating any rehabilitation activities, including advertising for contractual services, which will
include costs likely to be subject to the provisions of Federal Labor Standards and Equal
Employment Opportunity and related implementing regulations.
5. Documentation. WHAHLT must maintain the following records and reports relating to
Eligible Properties acquired pursuant to this Agreement: income documentation for buyer of
property financed with Tax Increment, appraisals, environmental reports, purchase agreements,
settlement statements, and deed document number/filing information per property. WHAHLT
shall submit copies of the foregoing documentation to HRA with respect to any Eligible Property
acquired pursuant to this Agreement prior to closing with the buyer. The HRA will issue a clear to
close once documentation has been submitted.
6. Proof of Eligible Tax Increment Costs. WHAHLT will provide a detailed accounting to
the HRA for expenditures paid with Tax Increment, which may include the purchase of property,
and the purchase of a home.
6. Suspension and Termination. If WHAHLT materially fails to comply with any term of this
Agreement after written notice and an opportunity to cure, this Agreement may be terminated. The
time period for said opportunity to cure will be dependent upon the relevant time period
requirements of the applicable law, regulation, program, or otherwise.
7. Notice. All communications, notices, and demands of any kind which either party may be
required or may desire to give to or serve upon the other shall be made in writing, and such notice
shall be deemed sufficiently given if and when it is addressed to then other party as provided below
and either (a) delivered personally, (b) deposited in the United States mail, registered or certified,
with postage prepaid, (c) deposited with an overnight delivery service for next day delivery, or (d)
telecopied:
To HRA:
To WHAHLT:
Richfield Housing and Redevelopment Authority
Attention: Executive Director
6700 Portland Avenue
Richfield, Minnesota 55423-2599
Fax: (612) 861-8974
West Hennepin Affordable Housing Land Trust
Attention: Janet Lindbo, Executive Director
5101 Thimsen Avenue
Suite 202
Minnetonka, MN 55345-4117
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8. Data Practices. WHAHLT agrees to abide by the provisions of the Minnesota Government
Data Practices Act and all other applicable State and Federal laws, rules, and regulations relating to
data privacy and confidentiality, and as any of the same may be amended.
9. Access to Records. HRA shall have the authority to review any and all procedures and all
materials, notices, and documents prepared by WHAHLT in implementation of this Agreement.
10. Indemnification. WHAHLT agrees to hold harmless, indemnify and defend HRA, its
elected officials, officers, agents, and employees against any and all claims, losses, or damages,
including attorneys’ fees, arising from, allegedly arising from, or related to, the provision of
services under this Agreement by WHAHLT, its employees, agents, officers, or volunteer
workers.
11. Independent Contractor. Nothing in this Agreement is intended, nor may be construed, to
create the relationship of partners or employer/employee between the parties. WHAHLT, its
officers, agents, employees, and volunteers are, and will remain for all purposes and services under
this Agreement, independent contractors.
12. Entire Agreement. The entire agreement of the parties is contained in this document. This
Agreement supersedes all previous written and oral agreements and negotiations between the
parties relating to the subject matter of this Agreement except as provided in paragraph 14 of this
Agreement.
13. Severability. The invalidity, illegality or enforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, all of which
shall remain in full force and effect.
14. Assignment of Agreement. The parties shall not assign this Agreement without the express
written consent of the other party.
15. Modification. No provision, term or clause of this Agreement shall be revised, modified,
amended or waived except by an instrument in writing signed by both parties.
16. Counterparts. This Agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original, all of which, when taken together, shall
constitute one agreement.
17. Headings. The titles to the sections and headings of various paragraphs of this Agreement
are placed for convenience of reference only and in case of conflict, the text of this Agreement,
rather than such titles or headings shall control.
18. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of each of the parties hereto.
19. Invalidity. If for any reason any portion or paragraph of this Agreement shall be declared
void and unenforceable by any court of law or equity, it shall only affect such particular portion or
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paragraph of this Agreement, and the balance of this Agreement shall remain in full force and
effect and shall be binding upon the parties hereto.
20. Governing Law. This Agreement shall be governed and construed in accordance with the
laws of the State of Minnesota.
21. Electronic Signatures. This Agreement may be executed with electronic signatures.
(Signature page follows)
S-1
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in
its name and behalf and WHAHLT has caused this Agreement to be duly executed in its name and
behalf as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
By ________________________________
Its Chairperson
By ________________________________
Its Executive Director
WEST HENNEPIN AFFORDABLE HOUSING LAND
TRUST
By ________________________________
Its Executive Director
S-1
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in
its name and behalf and WHAHLT has caused this Agreement to be duly executed in its name and
behalf as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
By________________________________
Its Chairperson
By _______________________________
Its Executive Director
WEST HENNEPIN AFFORDABLE HOUSING LAND
TRUST
By ________________________________
Its Executive Director
A-1
EXHIBIT A
DEVELOPER PRO FORMA
Sources & Uses - Preliminary
Name of Property:
Date:
Sources: Comments
Homebuyer Mortgage $
20__ AHIF $ Project Costs
20__ Richfield Tax Increment $ Land & Project Costs
20__ HOME $ Land
20__ MH Impact $ Project Costs
20__ Bond Proceeds $ Land
20__ Met Council $ Rehab
Total $
Uses:
Acquisition Costs $
Closing Costs $
Inspection/other $
Acquisition
costs $
Adm Fee $
Project Fee & HOME
Fee
Holding/Closing Costs/
LC/ Taxes $
Special Assessments
of $_______
Rehab Costs $
Total $
1
FIRST AMENDMNET TO
DEVELOPER AGREEMENT
(West Hennepin Affordable Housing Land Trust dba Homes Within Reach)
THIS FIRST AMENDMENT TO DEVELOPER AGREEMENT (the “First
Amendment”), made and entered into as of this of January, 2021, by and between the Housing
and Redevelopment Authority in and for the City of Richfield (“Authority” or “HRA”), a
body corporate and politic under the laws of the State of Minnesota, having its principal office at
6700 Portland Avenue, Richfield, Minnesota (“HRA”) and the West Hennepin Affordable
Housing Land Trust dba Homes Within Reach, a nonprofit corporation under the laws of
Minnesota, having its principal office at 5101 Thimsen Ave, Suite 202, Minnetonka, MN 55345.
(“Developer” or “WHAHLT”). This First Amendment amends the Development Agreement,
dated April 15, 2020 (the “Development Agreement”), between the HRA and the Developer.
RECITALS
A. The HRA and the Developer entered into the Development Agreement to provide
WHAHLT with $80,000 in pooled tax increment (“Tax Increment”) for the purposes of
acquiring and rehabilitating homes in the City of Richfield (the “City”) to be resold to
people earning at or below 80% of the area median income.
B. The Development Agreement directed WHAHLT to purchase, rehabilitate, and resell one
or more properties eligible to be purchased, and rehabilitated with the Tax Increment
assistance (the “Eligible Properties”) and resold.
C. At this time, the HRA would like to extend the Development Agreement and provide
additional financial assistance in a maximum amount of $13,500 to assist with abating
contamination discovered on an Eligible Property.
AMENDMENTS
Section 1.1. Agreement. The term “Agreement” shall mean the Development
Agreement, as amended by this First Amendment.
Section 1.2. Additional Assistance. The HRA shall provide WHAHLT with up to
$13,500 and WHAHLT shall use such funds to abate the contaminants found in the soil of an
Eligible Property located at 7132 Columbus Avenue, Richfield MN 55423.
Section 1.3. Term. This Agreement is effective as of the Effective Date (April 15,
2020) and shall terminate on June 30, 2021.
Section 1.4. Additional Tax Increment. WHAHLT accepts the additional Tax
Increment or general financial assistance and covenants to use such funds to abate the
contaminants found in the soil of an Eligible Property located at 7132 Columbus Avenue,
Richfield MN 55423.
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MISCELLANEOUS
Section 2.1. Definitions. Any capitalized terms used herein but not otherwise defined
shall have the meanings assigned to such terms in the Original Agreement. Any references to the
“Agreement” or “this Agreement” in the Original Agreement shall refer to the Original
Agreement, as amended and supplemented by this First Amendment.
Section 2.2. Effective Date. The amendments and supplements made to the Original
Agreement, as amended and supplemented by this First Amendment shall be effective as of
January 19, 2021.
Section 2.3. Confirmation of Agreement. Except as specifically amended by this First
Amendment, the Development Agreement is hereby ratified and confirmed and remains in full
force and effect.
(The remainder of this page is intentionally left blank.)
A-1
IN WITNESS WHEREOF, the Authority has caused this First Amendment to
Development Agreement to be duly executed in its name and behalf and WHAHLT has caused
this Agreement to be duly executed in its name and behalf as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
By ________________________________
Its Chairperson
By ________________________________
Its Executive Director
WEST HENNEPIN AFFORDABLE HOUSING LAND
TRUST
By ________________________________
Its Executive Director
RC125-1(JAE)
697972v.1
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF REPORT NO. 4
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
1/19/2021
REPORT PREPARED BY: Melissa Poehlman, Asst. Community Development Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: John Stark, Executive Director
1/13/2021
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the adoption of resolutions regarding the modification of the Redevelopment Plan for
the Richfield Redevelopment Project Area, the establishment of 2020-2 Tax Increment Financing
District: Emi, and establishment of an interfund loan for advance of certain costs in connection with
the 2020-2 Tax Increment Finance District: Emi.
EXECUTIVE SUMMARY:
PLH & Associates (Developer) has been working to redevelop the site at 101 66th Street East since 2016.
On June 15, 2020 the Developer presented a revised concept to the City Council and Housing and
Redevelopment Authority (HRA) that would reduce ground floor commercial space in favor of affordable
rental units, and asked that the HRA explore the use of Tax Increment Financing (TIF) to help make the
project financially feasible. Preliminary feedback was generally favorable and a Preliminary Development
Agreement was approved by the HRA on July 20. Revised land use plans were approved by the City Council
on October 13.
The project site has been independently evaluated by LHB Corporation, who has determined that the property
meets the statutory definition of a "blighted" site and thereby would qualify as a Redevelopment Tax Increment
District. While there is no statutory requirement for affordable housing in a Redevelopment TIF District, the
HRA's Inclusionary Housing Policy requires that developments receiving financial assistance either reserve
20% of the units for households earning 60% or less or area median income (AMI) or contribute 15% of the
available TIF to the Housing and Redevelopment Fund. As proposed, the development would reserve
20% of the units (proportionally allocated by unit type) as affordable.
Financial analysis of the project by Ehlers, Inc. has shown that the project is not financially feasible
without assistance. In accordance with the Contract for Private Development, the HRA is now being
asked to consider a Modification to the Redevelopment Plan and approval a Tax Increment
Financing Plan (Plan) for the 2020-2 TIF District: Emi. That Modification and Plan are contained in
an attached document which includes the following:
The Modification to the existing Richfield Redevelopment Plan including a map update identifying the
2020-2 Emi TIF District (District) and a short text passage citing the new District;
A summary of the HRA and City's Authority to create such a District,
A description of its classification as a Redevelopment District (requiring that more than 50 percent of
the existing buildings are structurally substandard);
An identification of 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 TIF District;
$5,815,545 as the maximum TIF that could theoretically be collected in the District over its maximum
lifespan of 26 years;
The types of uses eligible for expenditure (including acquisition, affordable housing and other
qualifying improvements such as structured parking);
The "But-For" analysis concluding that the resulting redevelopment "would not reasonably be expected
to occur solely through private investment."
While the TIF Plan identifies the maximum amount of Tax Increment that could be generated and the
maximum expenditure on certain eligible uses, it does not commit the use of those funds. That commitment is
contained in the approved Contract for Private Redevelopment which sets forth the following uses of TIF
funds:
90% of the available TIF (up to a maximum of $971,070) to the Developer as a TIF Pay-As-You-Go
Note to assist them in funding TIF qualifying expenses.
Under current assumptions and rates, this required amount of TIF could be provided to the developer
in as little as 12 years, after which time the District could be decertified.
10% of the TIF collected to be retained by the Richfield HRA for reimbursement of expenses
(including staff costs) in administering this District.
As the HRA has already incurred expenses related to administering this District, 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 Interfund Loan allowing TIF proceeds to be used to repay this
advancement of funds.
RECOMMENDED ACTION:
By motion:
1.Adopt a resolution approving a modification to the Redevelopment Plan for the Richfield
Redevelopment Project Area, establishing Tax Increment Finance District No. 2020-2: Emi
therein, and adopting the Tax Increment Financing Plan therefor.
2.Adopt a resolution authorizing an internal loan for advance of certain costs in connection with
the 2020-2 Tax Increment Finance District: Emi.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
June 26, 2018 - City Council approves land use applications for 31-unit mixed use development.
May 28, 2019 & May 12, 2020 - City Council approves extension of land use approvals.
June 15, 2020 - Revised plans with reduced commercial space and affordable units presented to
City Council and HRA.
July 14, 2020 - City Council approves application for Livable Communities Development Account
grant funds (not awarded).
July 20, 2020 - HRA approves Preliminary Development Agreement.
October 13, 2020 - City Council approves revised land use application for 42-unit mixed use
development.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
In accordance with the City's Inclusionary Housing Policy, the project will reserve 20% of the
units for households earning 60% or less of the Area Median Income.
The proposed Redevelopment Area Modification and TIF Plan describes the statutory authority
by which the City and HRA can create a TIF District.
C.CRITICAL TIMING ISSUES:
The City Council will hold a public hearing on January 26, 2020.
The Developer (and the neighborhood) is eager to demolish the existing structures. To ensure
compliance with statutory requirements for a Redevelopment TIF District, this cannot take place
until the TIF District has been approved.
D.F IN AN C IAL IMPAC T:
The TI F Plan identifies the Original Net Tax Capacity that the "base" taxes will be c alculated on -
those taxes will be distributed to all the loc al taxing jurisdic tions (Hennepin C ounty, Ric hfield
Public Sc hools and the City of Ric hfield) as was the case prior to the establishment of the TI F
Distric t;
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 $971,070 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 :
The C ity's financ ial advisor and HRA attorney have reviewed the required doc uments.
I n ac cordanc e with State Statute, Hennepin C ounty, Sc hool Distric ts, and other taxing
jurisdic tions received notice of the proposed Tax I nc rement Plan and other information on fiscal
impac ts related to the modification/establishment of a Redevelopment Project Area and/or TI F
Distric t at least 30 days prior to the hearing or agreed to waive the 30-day requirement.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Do not approve the Modific ation and the TI F Plan.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
Representative(s) of PLH & Assoc iates (Developer) Rebecc a Kurtz, Ehlers, 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 2020-2 TAX INCREMENT FINANCE DISTRICT: EMI
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 2020-2 Tax Increment Financing
District: Emi (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
January 26, 2021, 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 19th day of January, 2021.
Chair
ATTEST:
Secretary
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 2020-2 TAX INCREMENT FINANCE DISTRICT: EMI
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 2020-2 Tax Increment Financing
District: Emi (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 January 26, 2021,
approving the modification of the Redevelopment Plan and the TIF Plan for the TIF District, in accordance
with the TIF Act; and
WHEREAS, the Authority may incur certain costs related to the TIF District, which costs may be
financed on a temporary basis from available Authority funds; and
WHEREAS, under Section 469.178, subdivision 7 of the TIF Act, the Authority is authorized to
advance or loan money from any fund from which such advances may be legally made in order to finance
expenditures that are eligible to be paid with tax increments under the TIF Act; and
WHEREAS, the Authority has determined to pay for certain administrative costs related to the
proposed TIF District (the “Qualified Costs”), which costs may be financed on a temporary basis from funds
available in the Housing and Redevelopment General Fund 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.
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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.
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Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 19th day of January, 2021.
Mary B. Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
MODIFICATION TO THE
REDEVELOPMENT PLAN
Richfield Redevelopment Project Area
-AND -
TAX INCREMENT FINANCING PLAN
Establishment of 2020-2 Tax Increment Financing District: Emi
(a redevelopment district)
Richfield Housing and Redevelopment Authority
City of Richfield, Hennepin County, Minnesota
Public Hearing: January 26, 2021
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 2
Table of Contents
Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area ............. 3
Foreword ................................................................................................................................... 3
Tax Increment Financing Plan for the 2020-2 Tax Increment Financing District: Emi .................. 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
2020-2 Tax Increment Financing District: Emi 3
Modification to the Redevelopment Plan for the
Richfield Redevelopment Project Area
Foreword
The following text represents a Modification to the Redevelopment Plan for the Richfield
Redevelopment Project Area. This modification represents a continuation of the goals and
objectives set forth in the Redevelopment Plan for the Richfield Redevelopment Project Area.
Generally, the substantive changes include the establishment of the 2020-2 Tax Increment
Financing District: Emi.
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
2020-2 Tax Increment Financing District: Emi 4
Tax Increment Financing Plan for the 2020-2 Tax
Increment Financing District: Emi
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
2020-2 Tax Increment Financing District: Emi (the "District"), a redevelopment tax increment
financing district, located in the Richfield Redevelopment Project Area.
Statutory Authority
Within 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 469.001 - 469.047, inclusive, as amended, and M.S.,
Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF
Act"), to assist in financing public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other
relevant information is contained in the Modification to the Redevelopment Plan for the Richfield
Redevelopment Project Area.
Statement of Objectives
The District currently consists of one parcel of land and adjacent and internal rights-of-way. The
District is being created to facilitate the development of a mixed-use project including
approximately 42 units of apartments and 1,358 square feet of commercial space in the City. The
HRA has entered into a preliminary agreement with PLH & Associates – 6605 1st, LLC, as the
developer. 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 acti vities. 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
pursuant to M.S., Chapter 117 and other relevant state and federal laws.
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 5
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
27.028.24.42.0134 101-66th St. E PLH
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 one parcel.
$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 finds 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
for certification of the District.
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 6
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 o f 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 decline s 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
2020-2 Tax Increment Financing District: Emi 7
Project estimated Tax Capacity upon completion 241,211
Original estimated Net Tax Capacity 5,860
Fiscal Disparities 3,574
Estimated Captured Tax Capacity 231,777
Original Local Tax Rate 138.1810%Pay 2020
Estimated Annual Tax Increment $320,272
Percent Retainted by the City 100%
Project Tax Capacity
Note: Tax capacity includes a 3.00% 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 $115,204.
Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search,
accompany its request for certification to the County Auditor or its notice of the District
enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the
District or area of enlargement for which building permits have been issued during the eighteen
(18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S.,
Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capa city of the
District by the net tax capacity of improvements for which a building permit was issued.
The HRA has reviewed the area to be included in the District and found no parcels for which
building permits have been issued during the 18 months immediately preceding approval of the
TIF Plan by the City.
Sources of Revenue/Bonds to be Issued
The total estimated tax increment revenues for the District are shown in the table below:
SOURCES
Tax Increment 5,815,545$
Interest 581,554
TOTAL 6,397,099$
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 incur bonds or other indebtedness as a
result of the TIF Plan. As presently proposed, the projects within the District will be financed by
pay-as-you-go notes and interfund loans. Any refunding amounts will be deemed a budgeted
cost without a formal TIF Plan Modification. This provision does not obligate the HRA 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 $4,555,058. Such bonds may be
in the form of pay-as-you-go notes, revenue bonds or notes, general obligation bonds, or interfund
loans. This estimate of total bonded indebtedness is a cumulative statement of authority under
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 8
this TIF Plan as of the date of approval.
Uses of Funds
Currently under consideration for the District is a proposal to facilitate the development of a mixed-
use project including approximately 42 units of apartments and 1,358 square feet of commercial
space. The HRA has determined that it will be necessary to provide assistance to the project for
certain District costs, as described.
The HRA has studied the feasibility of the development or redevelopment of property in and
around the District. To facilitate the establishment and development or redevelopment of the
District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain
eligible expenses. The estimate of public costs and uses of funds associated with the District is
outlined in the following table.
USES
Land/Building Acquisition -$
Site Improvements/Preparation 2,000,000
Affordable Housing 873,000
Utilities 50,000
Other Qualifying Improvements 1,050,504
Administrative Costs (up to 10%)581,554
PROJECT COSTS TOTAL 4,555,058$
Interest 1,842,041
PROJECT AND INTEREST COSTS TOTAL 6,397,099$
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
2020-2 Tax Increment Financing District: Emi 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 1,941,694,561 231,777 0.0119%
City of Richfield 36,111,232 231,777 0.6418%
ISD No. 280 50,666,987 231,777 0.4575%
Impact on Tax Base
Entity Pay 2020
Extension Rate Percent of Total CTC Potential
Taxes
Hennepin County 41.0840%29.73%231,777 $ 95,223
City of Richfield 54.7270%39.61%231,777 126,845
ISD No. 280 32.6580%23.63%231,777 75,694
Other 9.7120%7.03%231,777 22,510
138.1810%100.00% $ 320,272
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 $5,815,545;
(2)Probable impact of the District on city provided services and ability to issue debt. An
impact of the District on police protection is expected. With any addition of new
residents or businesses, police calls for service will be increased. New developments
add an increase in traffic, and additional overall demands to the call load. The City
does not expect that the proposed development, in and of itself, will necessitate new
capital investment in vehicles or facilities.
The probable impact of the District on fire protection is not expected to be significant.
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 10
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 $104,370 in sanitary sewer (SAC) and
no additional fees anticipated for 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 $1,374,458;
(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 $1,729,079;
(5)Additional information requested by the county or school district. The City is not aware
of any standard questions in a county or school district written policy regarding tax
increment districts and impact on county or school district services. The county or school
district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b)
within 15 days after receipt of the tax increment financing plan.
No requests for additional information from the county or school district regarding the
proposed development for the District have been received.
Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification
and description of studies and analyses used to make the determination set forth in M.S. Section
469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the
District.
(i)In making said determination, reliance has been placed upon (1) written representation
made by the developer to such effects, (2) review of the developer’s proforma; and (3)
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 11
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
2020-2 Tax Increment Financing District: Emi 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
City of Richfield, Minnesota
0 0.5 10.25
Miles ¯
Community Development Department
2013
Legend
Emi TIF
District No.
2020-02
Enclave TIF
District 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: Enclave
2020-2 Tax Increment Financing District: Emi
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 13
Appendix B: Estimated Cash Flow for the District
10/23/2020 Base Value Assumptions - Page 1
Emi Development - 3% Inflation
City of Richfield, MN
Mixed Use Redevelopment including 42 apartment units and commercial space
ASSUMPTIONS AND RATES
DistrictType:Redevelopment
District Name/Number:TIF 2020-2
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:3.00%Over $150,000 2.00%
Interest Rate:4.00%Commercial Industrial Class Rate (C/I)2.00%
Present Value Date:1-Feb-23 Rental Housing Class Rate (Rental)1.25%
First Period Ending 1-Aug-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: 138.181%Pay 2020 Agricultural Non-Homestead 1.00%
Current Local Tax Rate: (Use lesser of Current or Max.)138.181%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.
27.028.24.42.0134 PLH 101-66th St. E 466,000 466,000 97%452,020 Pay 2021 C/I Pref.8,290 Rental 5,650 1
466,000 3%13,980 Pay 2021 C/I Pref.210 C/I Pref.210 1
466,000 0 932,000 466,000 8,500 5,860
Note:
1. Base values are for pay 2021 based upon review of County website.
2. Located in SD #280 and WS #3.
Area/
Phase
Tax Rates
BASE VALUE INFORMATION (Original Tax Capacity)
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10/23/2020 Base Value Assumptions - Page 2
Emi Development - 3% Inflation
City of Richfield, MN
Mixed Use Redevelopment including 42 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 Apartment 210,000 210,000 42 8,820,000 Rental 110,250 2,625 100%100%100%100%2023
1 Commercial 210 210 1,358 285,180 C/I Pref.4,954 4 100%100%100%100%2023
TOTAL 9,105,180 115,204
Subtotal Residential 42 8,820,000 110,250
Subtotal Commercial/Ind.1,358 285,180 4,954
Note:
1. Apartment market values are based upon estimates from the County assessor for other proposed multi-family developments. Range is $175,000 to $210,000/unit in September 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
Apartment 110,250 0 110,250 152,345 0 0 13,097 165,441 3,939.08
Commercial 4,954 1,742 3,212 4,438 2,482 1,342 423 8,684 6.40
TOTAL 115,204 1,742 113,462 156,782 2,482 1,342 13,520 174,126
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 174,126 Current Market Value - Est.466,000
less State-wide Taxes (1,342)New Market Value - Est.9,105,180
less Fiscal Disp. Adj.(2,482) Difference 8,639,180
less Market Value Taxes (13,520)Present Value of Tax Increment 3,371,628
less Base Value Taxes (7,995) Difference 5,267,552
Annual Gross TIF 148,787 Value likely to occur without Tax Increment is less than:5,267,552
WHAT IS EXCLUDED FROM TIF?MARKET VALUE BUT / FOR ANALYSIS
TAX CALCULATIONS
PROJECT INFORMATION (Project Tax Capacity)
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10/23/2020 Tax Increment Cashflow - Page 3
Emi Development - 3% Inflation
City of Richfield, MN
Mixed Use Redevelopment including 42 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
100%115,204 (5,860) (1,668) 107,675 138.181%148,787 74,393 (268) (7,413) (11,119) 55,594 54,504 0.5 ######08/01/23
100%115,204 (5,860) (1,668) 107,675 138.181%148,787 74,393 (268) (7,413) (11,119) 55,594 107,940 1 2023 02/01/24
100%118,660 (5,860) (1,721) 111,079 138.181%153,490 76,745 (276) (7,647) (11,470) 57,352 161,983 1.5 2024 08/01/24
100%118,660 (5,860) (1,721) 111,079 138.181%153,490 76,745 (276) (7,647) (11,470) 57,352 214,967 2 2024 02/01/25
100%122,219 (5,860) (1,774) 114,585 138.181%158,335 79,167 (285) (7,888) (11,832) 59,162 268,552 2.5 2025 08/01/25
100%122,219 (5,860) (1,774) 114,585 138.181%158,335 79,167 (285) (7,888) (11,832) 59,162 321,086 3 2025 02/01/26
100%125,886 (5,860) (1,830) 118,196 138.181%163,325 81,662 (294) (8,137) (12,205) 61,026 374,213 3.5 2026 08/01/26
100%125,886 (5,860) (1,830) 118,196 138.181%163,325 81,662 (294) (8,137) (12,205) 61,026 426,299 4 2026 02/01/27
100%129,663 (5,860) (1,887) 121,916 138.181%168,465 84,232 (303) (8,393) (12,589) 62,947 478,970 4.5 2027 08/01/27
100%129,663 (5,860) (1,887) 121,916 138.181%168,465 84,232 (303) (8,393) (12,589) 62,947 530,608 5 2027 02/01/28
100%133,553 (5,860) (1,946) 125,747 138.181%173,758 86,879 (313) (8,657) (12,985) 64,925 582,825 5.5 2028 08/01/28
100%133,553 (5,860) (1,946) 125,747 138.181%173,758 86,879 (313) (8,657) (12,985) 64,925 634,017 6 2028 02/01/29
100%137,559 (5,860) (2,006) 129,693 138.181%179,211 89,605 (323) (8,928) (13,392) 66,962 685,781 6.5 2029 08/01/29
100%137,559 (5,860) (2,006) 129,693 138.181%179,211 89,605 (323) (8,928) (13,392) 66,962 736,530 7 2029 02/01/30
100%141,686 (5,860) (2,069) 133,757 138.181%184,827 92,414 (333) (9,208) (13,812) 69,061 787,843 7.5 2030 08/01/30
100%141,686 (5,860) (2,069) 133,757 138.181%184,827 92,414 (333) (9,208) (13,812) 69,061 838,150 8 2030 02/01/31
100%145,936 (5,860) (2,133) 137,944 138.181%190,612 95,306 (343) (9,496) (14,244) 71,222 889,014 8.5 2031 08/01/31
100%145,936 (5,860) (2,133) 137,944 138.181%190,612 95,306 (343) (9,496) (14,244) 71,222 938,881 9 2031 02/01/32
100%150,315 (5,860) (2,199) 142,255 138.181%196,570 98,285 (354) (9,793) (14,690) 73,448 989,298 9.5 2032 08/01/32
100%150,315 (5,860) (2,199) 142,255 138.181%196,570 98,285 (354) (9,793) (14,690) 73,448 1,038,727 10 2032 02/01/33
100%154,824 (5,860) (2,267) 146,697 138.181%202,707 101,353 (365) (10,099) (15,148) 75,741 1,088,700 10.5 2033 08/01/33
100%154,824 (5,860) (2,267) 146,697 138.181%202,707 101,353 (365) (10,099) (15,148) 75,741 1,137,692 11 2033 02/01/34
100%159,469 (5,860) (2,338) 151,271 138.181%209,028 104,514 (376) (10,414) (15,621) 78,103 1,187,222 11.5 2034 08/01/34
100%159,469 (5,860) (2,338) 151,271 138.181%209,028 104,514 (376) (10,414) (15,621) 78,103 1,235,780 12 2034 02/01/35
100%164,253 (5,860) (2,410) 155,983 138.181%215,539 107,769 (388) (10,738) (16,107) 80,536 1,284,869 12.5 2035 08/01/35
100%164,253 (5,860) (2,410) 155,983 138.181%215,539 107,769 (388) (10,738) (16,107) 80,536 1,332,996 13 2035 02/01/36
100%169,180 (5,860) (2,484) 160,836 138.181%222,245 111,122 (400) (11,072) (16,608) 83,042 1,381,647 13.5 2036 08/01/36
100%169,180 (5,860) (2,484) 160,836 138.181%222,245 111,122 (400) (11,072) (16,608) 83,042 1,429,344 14 2036 02/01/37
100%174,256 (5,860) (2,561) 165,835 138.181%229,152 114,576 (412) (11,416) (17,125) 85,623 1,477,559 14.5 2037 08/01/37
100%174,256 (5,860) (2,561) 165,835 138.181%229,152 114,576 (412) (11,416) (17,125) 85,623 1,524,829 15 2037 02/01/38
100%179,483 (5,860) (2,640) 170,983 138.181%236,266 118,133 (425) (11,771) (17,656) 88,281 1,572,611 15.5 2038 08/01/38
100%179,483 (5,860) (2,640) 170,983 138.181%236,266 118,133 (425) (11,771) (17,656) 88,281 1,619,456 16 2038 02/01/39
100%184,868 (5,860) (2,722) 176,286 138.181%243,594 121,797 (438) (12,136) (18,204) 91,019 1,666,806 16.5 2039 08/01/39
100%184,868 (5,860) (2,722) 176,286 138.181%243,594 121,797 (438) (12,136) (18,204) 91,019 1,713,229 17 2039 02/01/40
100%190,414 (5,860) (2,806) 181,749 138.181%251,142 125,571 (452) (12,512) (18,768) 93,839 1,760,151 17.5 2040 08/01/40
100%190,414 (5,860) (2,806) 181,749 138.181%251,142 125,571 (452) (12,512) (18,768) 93,839 1,806,153 18 2040 02/01/41
100%196,126 (5,860) (2,892) 187,375 138.181%258,916 129,458 (466) (12,899) (19,349) 96,744 1,852,649 18.5 2041 08/01/41
100%196,126 (5,860) (2,892) 187,375 138.181%258,916 129,458 (466) (12,899) (19,349) 96,744 1,898,234 19 2041 02/01/42
100%202,010 (5,860) (2,981) 193,169 138.181%266,923 133,462 (480) (13,298) (19,947) 99,736 1,944,306 19.5 2042 08/01/42
100%202,010 (5,860) (2,981) 193,169 138.181%266,923 133,462 (480) (13,298) (19,947) 99,736 1,989,476 20 2042 02/01/43
100%208,071 (5,860) (3,073) 199,138 138.181%275,171 137,585 (495) (13,709) (20,564) 102,818 2,035,128 20.5 2043 08/01/43
100%208,071 (5,860) (3,073) 199,138 138.181%275,171 137,585 (495) (13,709) (20,564) 102,818 2,079,885 21 2043 02/01/44
100%214,313 (5,860) (3,167) 205,286 138.181%283,666 141,833 (511) (14,132) (21,198) 105,992 2,125,119 21.5 2044 08/01/44
100%214,313 (5,860) (3,167) 205,286 138.181%283,666 141,833 (511) (14,132) (21,198) 105,992 2,169,466 22 2044 02/01/45
100%220,742 (5,860) (3,264) 211,618 138.181%292,416 146,208 (526) (14,568) (21,852) 109,261 2,214,285 22.5 2045 08/01/45
100%220,742 (5,860) (3,264) 211,618 138.181%292,416 146,208 (526) (14,568) (21,852) 109,261 2,258,224 23 2045 02/01/46
100%227,364 (5,860) (3,364) 218,140 138.181%301,428 150,714 (543) (15,017) (22,526) 112,629 2,302,630 23.5 2046 08/01/46
100%227,364 (5,860) (3,364) 218,140 138.181%301,428 150,714 (543) (15,017) (22,526) 112,629 2,346,165 24 2046 02/01/47
100%234,185 (5,860) (3,467) 224,858 138.181%310,711 155,355 (559) (15,480) (23,219) 116,097 2,390,161 24.5 2047 08/01/47
100%234,185 (5,860) (3,467) 224,858 138.181%310,711 155,355 (559) (15,480) (23,219) 116,097 2,433,295 25 2047 02/01/48
100%241,211 (5,860) (3,574) 231,777 138.181%320,272 160,136 (576) (15,956) (23,934) 119,670 2,476,884 25.5 2048 08/01/48
100%241,211 (5,860) (3,574) 231,777 138.181%320,272 160,136 (576) (15,956) (23,934) 119,670 2,519,618 26 2048 02/01/49
Total 5,836,556 (21,012) (581,554) (872,332) 4,361,658
Present Value From 02/01/2023 Present Value Rate 4.00%3,371,628 (12,138) (335,949) (503,924) 2,519,618
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2020-2 - Emi\Cashflows\TIF 10.19.2020 - TIF Plan
Richfield Housing and Redevelopment Authority
2020-2 Tax Increment Financing District: Emi 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 2020-2 Tax Increment Financing District: Emi (the “District”), as required
pursuant to Minnesota Statutes, Section 469.175, Sub division 3 are as follows:
1.Finding that 2020-2 Tax Increment Financing District: Emi is a redevelopment district as
defined in M.S., Section 469.174, Subd. 10.
The District consists of one parcel and vacant right-of-way, with plans to redevelop the area
for the development of a mixed-use project including approximately 42 units of apartments
and 1,358 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 th e
present value of the projected tax increments for the maximum duration of 2020-2 Tax
Increment Financing District: Emi 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 c osts
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
2020-2 Tax Increment Financing District: Emi 15
b.If the proposed development occurs, the total increase in market value will be
$8,639,180.
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 $3,371,628.
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 $5,267,552 (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 2020-2 Tax Increment Financing District: Emi 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 in the City, 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
2020-2 Tax Increment Financing District: Emi 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
101 66TH STREET EAST REDEVELOPMENT TIF DISTRICT
RICHFIELD, MINNESOTA
October 20, 2020
Prepared for the CITY OF R ICHFIELD, MINNESOTA
Prepared by:
LHB, Inc.
701 Washington Avenue North, Suite 200
Minneapolis, Minnesota 55401
LHB Project No. 200617
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 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
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 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 bounded by 1st
Avenue South, 66th Street East, and Stevens Avenue (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 one (1) parcel,
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 one (1) parcel with three (3) buildings and one (1) outbuilding. Three (3) buildings were
inspected on September 8, 2020. Building Code and Condition Deficiency reports for the buildings that were inspected and
found substandard are located in Appendix B.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 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.”
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 4 of 9 Final Report
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.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 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 September 8, 2020.
For the purposes of our work, we are defining buildings as those structures inhabited by human beings. These structures
would typically include water, sewer and electricity. Barns and small storage facilities, and garages are considered
“outbuildings” which are not typically considered in TIF analysis because they have very few code requirements and are not
intended for human occupation.
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).
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 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.
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.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 7 of 9 Final Report
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
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).
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 8 of 9 Final Report
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. In
addition, the substandard buildings are reasonably distributed within the parcels that contain buildings.
Diagram 3 – Substandard Buildings
Shaded green area depicts parcels with buildings.
Shaded orange area depicts substandard buildings.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 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
101 66th Street East 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 substandardA101 66th St E Exterior16605 1st Avenue South Interior/Exterior$975,816 $146,372 $338,762 1 126600 Stevens Avenue Interior/Exterior$110,937 $16,640 $39,897 1 136608 Stevens Avenue Interior/Exterior$91,424 $13,714 $17,189 1 1TOTALS42,82342,823333100.0%100.0%https://share.lhbcorp.com/PD/SpeIns/PD Special Inspections/TIF Analysis Templates/TIF Summary Spreadsheet Templates/[Redevelopment TIF Summary Spreadsheet Template.xlsx]Property Info100.0%42,82332702824420134Improved42,82314,97735.0%Total Coverage Percent:Percent of buildings exceeding 15 percent code deficiency threshold: Percent of buildings determined substandard: LHB Project Number 200617Page 1 of 1Property Condition Assessment Summary Sheet
APPENDIX B
Building Code, Condition Deficiency and Context Analysis Reports
101 66th Street East Redevelopment TIF District Page 1 of 2 Building Report
LHB Project No. 200617 Parcel A Building 1 – Church / Office
101 66th Street East Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
Parcel A Building 1 Church / Office
Address: 6605 1st Ave South, Richfield, Minnesota 55423
Parcel ID: 27-028-24-42-0134
Inspection Date(s) & Time(s): September 8, 2020 9:30 am
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: $975,816
Estimated Cost to Correct Building Code Deficiencies: $338,762
Percentage of Replacement Cost for Building Code Deficiencies: 34.72%
DEFECTS IN STRUCTURAL ELEMENTS
1.None observed
COMBINATION OF DEFICIENCIES
1.Essential Utilities and Facilities
a. There are no code required accessible parking spaces.
b. There is no code compliant accessible route into the building.
c.There is no code required accessible route to all levels of the building.
d. There are no utilities connected to the building.
e. Drinking fountain is not accessible per code.
2. Light and Ventilation
a. The HVAC system is not code compliant.
3. Fire Protection/Adequate Egress
a. Thresholds do not comply with code for maximum height.
b.Exterior stairways do not comply with code.
c.Door hardware is not code compliant.
d. Emergency lighting is not code compliant.
e. Smoke detectors are not code compliant.
f.Emergency notification system is not code compliant.
g. There is no code required building sprinkler system in the building.
h. Interior stairways are not code compliant.
i.Flooring is damaged/missing creating an impediment to emergency egress, contrary to code.
j.Sidewalks are damaged, creating an impediment to emergency egress, which is contrary to code.
101 66th Street East Redevelopment TIF District Page 2 of 2 Building Report
LHB Project No. 200617 Parcel A Building 1 – Church / Office
4. Layout and Condition of Interior Partitions/Materials
a.Walls should be repaired/repainted.
b. Carpeting is stained and should be replaced.
c.Ceilings are damaged from water intrusion from failed roofing material.
d. Mold is present on walls and ceilings.
5. Exterior Construction
a. Siding is damaged, allowing for water intrusion, contrary to code.
b. Wood siding and trim should be repainted.
c.Windows have failed, allowing for water intrusion, contrary to code.
d. Roofing material has failed, allowing for water intrusion, contrary to code.
DESCRIPTION OF CODE DEFICIENCIES
1. Code required accessible parking spaces should be created.
2. A code required accessible route into the building should be created.
3. A code required accessible route to all levels should be created.
4. A code required accessible drinking fountain should be installed.
5. Restrooms are not accessible per code.
6. The HVAC system is not code compliant.
7. Thresholds do not comply with code for maximum height.
8. Exterior stairways do not comply with code.
9. Door hardware is not code compliant.
10. Emergency lighting is not code compliant.
11. Smoke detectors are not code compliant.
12. Emergency notification system is not code compliant.
13. There is no code required building sprinkler system.
14.Interior stairways are not code compliant.
15. Damaged/missing flooring is creating an impediment to emergency egress, contrary to code.
16. Damaged sidewalks are creating an impediment to emergency egress, contrary to code.
17. Siding is damaged allowing for water intrusion, contrary to code.
18. Windows have failed, allowing for water intrusion, contrary to code.
19. Roofing material has failed, allowing for water intrusion, contrary to code.
OVERVIEW OF DEFICIENCIES
This multi-level building most recently housed a church but is currently vacant. The building is not code compliant for
accessibility. The building walls, windows and roofing material are compromised, allowing for water intrusion, contrary to
code. The exterior walls and wood surfaces should be repaired/repainted. None of the life safety systems are code compliant
and the building does not have a code required sprinkler system. All stairways do not comply with code. Interior walls and
ceilings should be repaired/repainted. Flooring is damaged and should be replaced. The HVAC system does not comply with
code.
M:\20Proj\200617\300 Design\Reports\Building Reports\1-6605 1st Ave S\6605 1st Ave S Building Report.docx
101 66th Street East Redevelopment TIF District Page 1 of 2 Building Report
LHB Project No. 200617 Parcel A Building 2 - Residence
101 66th Street East Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
Parcel A Building 2 Residence
Address: 6600 Stevens Ave, Richfield, Minnesota 55423
Parcel ID: 27-028-24-42-0134
Inspection Date(s) & Time(s): September 8, 2020 10:00 am
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: $110,937
Estimated Cost to Correct Building Code Deficiencies: $39,897
Percentage of Replacement Cost for Building Code Deficiencies: 35.96%
DEFECTS IN STRUCTURAL ELEMENTS
1. Foundation is cracked, allowing for water intrusion, contrary to code.
COMBINATION OF DEFICIENCIES
1.Essential Utilities and Facilities
a. There is no electrical connection to the building.
b. There is no potable water connection to the building.
2. Light and Ventilation
a. The HVAC system does not comply with code.
3. Fire Protection/Adequate Egress
a. There are no code required Ground Fault Circuit Interrupters in the building.
b. There are no code required Arc Fault Circuit Interrupters in the building.
c.Basement stairs do not comply with code.
d. Smoke detectors do not comply with code.
e. There are no code required carbon monoxide detectors in the building.
4. Layout and Condition of Interior Partitions/Materials
a. Interior walls are damaged and should be repaired/repainted.
b. Carpeting should be replaced.
c.Basement floor to ceiling height does not comply with code.
101 66th Street East Redevelopment TIF District Page 2 of 2 Building Report
LHB Project No. 200617 Parcel A Building 2 - Residence
5.Exterior Construction
a. Wood siding and trim needs to be repainted.
b. Gutters should be cleaned of vegetation.
c.Windows have failed, allowing for water intrusion, contrary to code.
d. Wood fascia boards are rotted, allowing for water intrusion, contrary to code.
e. Concrete stoop is damaged and should be repaired/replaced.
f.Roofing material has failed, allowing for water intrusion, contrary to code.
DESCRIPTION OF CODE DEFICIENCIES
1. Cracked foundation is allowing water intrusion, contrary to code.
2. The HVAC system does not comply with code.
3. Code required GFCI’s should be installed.
4. Code required AFCI’s should be installed.
5. Basement stairs do not comply with code.
6. Smoke detectors do not comply with code.
7. There are no code required carbon monoxide detectors in the building.
8. Basement floor to ceiling height does not comply with code.
9. Windows have failed, allowing for water intrusion, contrary to code.
10. Replace rotted fascia to prevent water intrusion per code.
11. Roofing material has failed, allowing for water intrusion, contrary to code.
OVERVIEW OF DEFICIENCIES
This residential dwelling is currently vacant. All utilities have been disconnected. The concrete foundation is cracked,
allowing for water intrusion, contrary to code. The roofing material, wood fascia, and windows have failed, allowing for water
intrusion, contrary to code. Exterior wood trim and siding should be repainted. Interior walls are damaged and should be
repaired/repainted. Carpeting should be replaced. There are no code required GFCI’s and AFCI’s in the building. Smoke
detectors are not code compliant. There are no code required carbon monoxide detectors. Basement stairs do not comply
with code. The basement floor to ceiling height does not comply with code. The HVAC system does not comply with code.
M:\20Proj\200617\300 Design\Reports\Building Reports\2-6600 Stevens Ave\6600 Stevens Ave Building Report.docx
101 66th Street East Redevelopment TIF District Page 1 of 2 Building Report
LHB Project No. 200617 Parcel A Building 3 - Residence
101 66th Street East Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
Parcel A Building 3 Residence
Address: 6608 Stevens Ave, Richfield, Minnesota 55423
Parcel ID: 27-028-24-42-0134
Inspection Date(s) & Time(s): September 8, 2020 10:30 am
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: $91,424
Estimated Cost to Correct Building Code Deficiencies: $17,189
Percentage of Replacement Cost for Building Code Deficiencies: 18.80%
DEFECTS IN STRUCTURAL ELEMENTS
1.None observed
Combination of Deficiencies
1.Essential Utilities and Facilities
a. There are no utilities connected to the building.
2. Light and Ventilation
a. HVAC system does not comply with code.
3. Fire Protection/Adequate Egress
a. Basement stairway does not comply with code.
b. Ground Fault Circuit Interrupters are not code compliant.
c.There are no code required Arc Fault Circuit Interrupters in the building.
d. Smoke detectors are not code compliant.
e. There is no code required egress window in the basement.
4. Layout and Condition of Interior Partitions/Materials
a.Interior ceilings are damaged and should be repaired.
b. Interior walls are damaged and should be repaired/repainted.
c.Carpeting should be replaced.
101 66th Street East Redevelopment TIF District Page 2 of 2 Building Report
LHB Project No. 200617 Parcel A Building 3 - Residence
5. Exterior Construction
a. Sidewalk is damaged and should be replaced.
b. Exterior steps are damaged and should be replaced.
c. Windows have failed, allowing for water intrusion, contrary to code.
d. Exterior would trim should be repainted.
e. Chimney is failing, allowing for water intrusion, contrary to code.
f. Rear concrete steps are damaged and should be repaired/replaced.
DESCRIPTION OF CODE DEFICIENCIES
1. The plumbing system does not comply with code.
2. The HVAC system does not comply with code.
3. Basement stairway does not comply with code.
4. GFCI’s are not code compliant.
5. There are no code required AFCI’s in the building.
6. There are no code required carbon monoxide detectors.
7. The smoke detectors are not code compliant.
8. Basement bathroom is not code compliant.
9. Windows have failed, allowing for water intrusion, contrary to code and should be replaced.
10. Chimney is failing, allowing for water intrusion, contrary to code and should be replaced.
11. A code required egress window should be installed in the basement.
OVERVIEW OF DEFICIENCIES
This residential dwelling is currently vacant, and all utilities are disconnected. Entrance into the building is hampered by
damaged sidewalks and concrete stairs. Windows have failed, allowing for water intrusion, and should be replaced. The
chimney is failing, allowing for water intrusion, contrary to code. The HVAC system does not comply with code. The
basement stairway does not comply with code. The GFCI’s are not code compliant and there are no code required AFCI’s.
Carpeting is damaged and should be replaced. Smoke detectors do not comply with code. Interior ceilings and walls are
damaged and should be repaired/replaced. The basement bathroom does not comply with code.
M:\20Proj\200617\300 Design\Reports\Building Reports\3 -6608 Stevens Ave\6608 Stevens Ave Building Report.docx
APPENDIX C
Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
101 66th Street East Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:9/8/2020
Estimate Name:6605 1st Ave S
Building Type:Church/Office, 2-4 Story with Wood Siding / Wood Frame
Location:RICHFIELD, MN
Story Count:2
Story Height
(L.F.):10
Floor Area (S.F.):4940
Labor Type:OPN
Basement
Included:Yes
Data Release:Year 2019
Cost Per Square $197.53
Building Cost:$975,815.57
% of
Total Cost Per S.F. Cost
A Substructure 12.80% $21.98 $108,589.19
A1010 Standard Foundations $5.54 $27,357.09
A10101102700 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 KSF,
12" deep x 24" wide
$1.86 $9,178.80
A10102107700 Spread footings, 3000 PSI concrete, load 200K, soil bearing capacity 6 KSF, 6'
- 0" square x 20" deep
$3.68 $18,178.29
A1030 Slab on Grade $2.86 $14,144.01
A10301202240 Slab on grade, 4" thick, non industrial, reinforced $2.86 $14,144.01
A2010 Basement Excavation $1.98 $9,802.49
A20101104620 Excavate and fill, 10,000 SF, 8' deep, sand, gravel, or common earth, on site
storage
$1.98 $9,802.49
A2020 Basement Walls $11.60 $57,285.60
A20201107260 Foundation wall, CIP, 12' wall height, pumped, .444 CY/LF, 21.59 PLF, 12"
thick
$11.60 $57,285.60
B Shell 30.68% $52.71 $260,367.30
B1010 Floor Construction $25.94 $128,124.89
B10102030860 Cast-in-place concrete column, 12" square, tied, 200K load, 12' story height,
142 lbs/LF, 4000PSI
$4.05 $19,992.42
B10102103450 Wood column, 8" x 8", 20' x 20' bay, 10' unsupported height, 133 BF/MSF, 160
PSF total allowable load
$0.22 $1,110.86
B10102103450 Wood column, 8" x 8", 20' x 20' bay, 10' unsupported height, 133 BF/MSF, 160
PSF total allowable load
$0.22 $1,110.86
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
$7.13 $35,211.58
B10102643050 Wood beam and joist floor, 12"x16" girder, 8"x16" beam, 2x10 joists @ 16",
20'x20' bay, 75 PSF LL, 102 PSF total load
$8.81 $43,541.88
B10107203700 Fireproofing, gypsum board, fire rated, 2 layer, 1" thick, 14" steel column, 3
hour rating, 22 PLF
$5.50 $27,157.29
B1020 Roof Construction $4.65 $22,971.00
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary
significantly.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 1 of 3
Replacement Cost Report
Parcel A Building 1 - 6605 1st Ave South
* B10201023700 Wood roof, flat rafter, 2" x 10", 12" O.C. $4.65 $22,971.00
B2010 Exterior Walls $11.62 $57,413.72
B20101484850 Wood siding, 2"x6" studs 16"OC, insulated wall, 8" plain vinyl siding $10.82 $53,454.19
B20101907600 Insulation, fiberglass batts, 6" thick, R19 $0.80 $3,959.53
B2020 Exterior Windows $5.79 $28,584.24
B20201066550 Windows, aluminum, awning, insulated glass, 4'-5" x 5'-3" $5.79 $28,584.24
B2030 Exterior Doors $1.43 $7,059.58
B20301106950 Door, aluminum & glass, with transom, narrow stile, double door, hardware, 6'-
0" x 10'-0" opening
$0.75 $3,688.51
B20301107300 Door, aluminum & glass, with transom, bronze finish, hardware, 3'-0" x 10'-0"
opening
$0.39 $1,907.59
B20302203450 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0" x 7'-0"
opening
$0.30 $1,463.48
B3010 Roof Coverings $3.28 $16,213.87
* B30101051400 Roofing, asphalt flood coat, gravel, base sheet, 3 plies 15# asphalt felt, $3.20 $15,808.00
B30106200100 Downspout, aluminum, rectangular, 2" x 3", embossed mill finish, .020" thick $0.08 $405.87
C Interiors 14.80% $25.42 $125,597.04
C1010 Partitions $3.65 $18,006.41
C10101241200 Wood partition, 5/8"fire rated gypsum board face, none base,2 x 4,@ 16" OC
framing,same opposite face, 0 insul
$1.42 $7,009.78
C10101241425 Wood partition, 5/8" fire rated gypsum board face, 1/4"sound deadening
gypsum board, 2x4 @ 16" OC framing, same opposite face, sound attenuation
$1.05 $5,165.36
C10101280700 Gypsum board, 1 face only, exterior sheathing, fire resistant, 5/8" $0.72 $3,532.75
C10101280960 Add for the following: taping and finishing $0.47 $2,298.52
C1020 Interior Doors $4.01 $19,804.22
C10201022600 Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, 3'-0"
x 7'-0" x 1-3/8"
$4.01 $19,804.22
C1030 Fittings $0.23 $1,138.82
C10301100420 Toilet partitions, cubicles, ceiling hung, plastic laminate $0.23 $1,138.82
C2010 Stair Construction $4.47 $22,095.89
C20101100720 Stairs, steel, pan tread for conc in-fill, picket rail,12 risers w/ landing $4.47 $22,095.89
C3010 Wall Finishes $1.36 $6,714.08
C30102300140 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2
coats
$0.72 $3,566.40
C30102300140 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2
coats
$0.64 $3,147.68
C3020 Floor Finishes $5.26 $25,960.59
C30204100080 Carpet tile, nylon, fusion bonded, 18" x 18" or 24" x 24", 35 oz $3.15 $15,568.00
C30204101600 Vinyl, composition tile, maximum $0.91 $4,506.02
C30204101720 Tile, ceramic natural clay $1.19 $5,886.57
C3030 Ceiling Finishes $6.45 $31,877.03
C30302106000 Acoustic ceilings, 3/4" fiberglass board, 24" x 48" tile, tee grid, suspended
support
$6.45 $31,877.03
D Services 41.72% $71.66 $353,981.75
D1010 Elevators and Lifts $11.97 $59,125.08
D10101108900 Hydraulic passenger elevator, 3000 lb, 3 floors,12' story height, 2 car
group,125 FPM
$11.97 $59,125.08
D2010 Plumbing Fixtures $2.12 $10,481.74
D20101102080 Water closet, vitreous china, bowl only with flush valve, wall hung $0.86 $4,260.32
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 2 of 3
Replacement Cost Report
Parcel A Building 1 - 6605 1st Ave South
D20102102000 Urinal, vitreous china, wall hung $0.14 $686.86
D20103101560 Lavatory w/trim, vanity top, PE on CI, 20" x 18" $0.26 $1,289.98
D20104404340 Service sink w/trim, PE on CI,wall hung w/rim guard, 24" x 20" $0.57 $2,819.95
D20108201920 Water cooler, electric, wall hung, wheelchair type, 7.5 GPH $0.29 $1,424.63
D2020 Domestic Water Distribution $0.60 $2,952.74
D20202501860 Gas fired water heater, commercial, 100< F rise, 100 MBH input, 91 GPH $0.60 $2,952.74
D3050 Terminal & Package Units $17.58 $86,828.16
D30501553960 Rooftop, multizone, air conditioner, offices, 25,000 SF, 79.16 ton $17.58 $86,828.16
D4010 Sprinklers $3.79 $18,725.68
D40104100600 Wet pipe sprinkler systems, steel, light hazard, 1 floor, 5000 SF $1.67 $8,248.16
D40104100720 Wet pipe sprinkler systems, steel, light hazard, each additional floor, 5000 SF $1.85 $9,136.46
D40104108930 Standard High Rise Accessory Package 3 story $0.27 $1,341.06
D4020 Standpipes $1.03 $5,106.24
D40203101540 Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor $0.56 $2,763.70
D40203101560 Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, additional
floors
$0.47 $2,342.54
D5010 Electrical Service/Distribution $14.95 $73,852.39
D50101200440 Overhead service installation, includes breakers, metering, 20' conduit & wire,
3 phase, 4 wire, 120/208 V, 1000 A
$3.90 $19,267.25
D50102300440 Feeder installation 600 V, including RGS conduit and XHHW wire, 1000 A $4.99 $24,648.80
D50102400320 Switchgear installation, incl switchboard, panels & circuit breaker, 120/208 V, 3
phase, 1200 A
$6.06 $29,936.34
D5020 Lighting and Branch Wiring $13.34 $65,903.23
D50201100640 Receptacles incl plate, box, conduit, wire, 16.5 per 1000 SF, 2.0 W per SF,
with transformer
$4.99 $24,628.07
D50201350320 Miscellaneous power, 1.2 watts $0.34 $1,704.20
D50201400280 Central air conditioning power, 4 watts $0.62 $3,065.96
D50201452080 Motor installation, three phase, 460 V, 15 HP motor size $1.05 $5,204.96
D50202100520 Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40 FC, 10
fixtures @32watt per 1000 SF
$6.34 $31,300.04
D5030 Communications and Security $6.28 $31,006.49
D50303101020 Telephone wiring for offices & laboratories, 8 jacks/MSF $1.69 $8,347.22
D50309100454 Communication and alarm systems, fire detection, addressable, 50 detectors,
includes outlets, boxes, conduit and wire
$2.10 $10,389.31
D50309100462 Fire alarm command center, addressable with voice, excl. wire & conduit $0.66 $3,239.17
D50309200110 Internet wiring, 8 data/voice outlets per 1000 S.F. $1.83 $9,030.79
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% $171.77 $848,535.28
15.0 % $25.77 $127,280.29
0.0 % $0.00 $0.00
0.0 % $0.00 $0.00
Cost $197.53 $975,815.57
User Fees
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
SubTotal
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 3 of 3
Replacement Cost Report
Parcel A Building 1 - 6605 1st Ave South
101 66th Street East Redevelopment TIF District
Code Deficiency Cost Report
Parcel A Building 1 - 6605 1st Ave South, Richfield, MN 55423 Church / Office
Parcel ID 27-028-24-42-0134
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Accessibility Items
Accessible Parking
Create accessible parking spaces per code 100.00$ EA 2 200.00$
Accessible Routes
Create an accessible route into the building per code 2,500.00$ Lump 1 2,500.00$
Create an accessible route to all levels of the building per code 11.97$ SF 4,940 59,131.80$
Drinking Fountain
Install an accessible drinking fountain per code 0.29$ SF 4,940 1,432.60$
Structural Elements
-$
Exiting
Thresholds -$
Modify thresholds to comply with code for maximum height 100.00$ EA 6 600.00$
Stairways
Install code compliant exterior stairway 2.23$ SF 4,940 11,016.20$
Install code compliant interior stairways 2.23$ SF 4,940 11,016.20$
Door Hardware
Install code compliant door hardware 150.00$ EA 14 2,100.00$
Flooring Material
Replace damaged flooring material to create an unimpeded means for
emergency egress per code 3.15$ SF 4,940 15,561.00$
Sidewalks
Repair replace damaged sidewalks to create an unimpeded means for
emergency egress per code 5,000.00$ Lump 1 5,000.00$
Fire Protection
Emergency Lighting
Install code compliant emergency lighting 1.00$ SF 4,940 4,940.00$
Emergency Notification System
Install code compliant emergency notification system 0.66$ SF 4,940 3,260.40$
Smoke Detectors
Install code compliant smoke detectors 2.10$ SF 4,940 10,374.00$
Building Sprinkler System
Install code required building sprinkler system 4.82$ SF 4,940 23,810.80$
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 1 of 2
Code Deficiency Cost Report
Parcel A Building 1 - 6605 1st Ave South
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Exterior Construction
Siding
Replace failed siding to prevent water intrusion per code 10.82$ SF 4,940 53,450.80$
Windows
Replace failed windows to prevent water intrusion per code 5.79$ SF 4,940 28,602.60$
Roof Construction
Roofing Material
Remove failed roofing material 0.55$ SF 4,940 2,717.00$
Install roofing material to prevent water intrusion per code 3.28$ SF 4,940 16,203.20$
Mechanical- Electrical
Mechanical
Install code compliant HVAC system 17.58$ SF 4,940 86,845.20$
Total Code Improvements 338,762$
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 2 of 2
Code Deficiency Cost Report
Parcel A Building 1 - 6605 1st Ave South
101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 1 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 2 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 3 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 4 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 5 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 6 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
Page 7 of 8
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 1 - Church / Offi ce - 6605 1st Avenue South
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101 66th Street East Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:9/8/2020
Estimate Name:6600 Stevens Ave
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.):650
Labor Type:RES
Basement:Unfinished
Data Release:Year 2019
Cost Per Square Foot:$170.67
Building Cost:$110,936.50
% of
Total
Cost Per
S.F. Cost
01 Site Work 3.10% $4.60 $2,990.39
0104034 Footing excavation, building, 26' x 46', 4' deep $4.60 $2,990.39
02 Foundation 21.96% $32.59 $21,185.93
0204030 Footing systems, 10" thick by 20" wide footing $3.74 $2,428.23
0208034 Block wall systems, 8" wall, grouted, full height $13.07 $8,498.32
0208034 Block wall systems, 8" wall, grouted, full height $11.44 $7,436.03
0220034 Floor slab systems, 4" thick slab $4.34 $2,823.35
03 Framing 12.99% $19.28 $12,534.03
0302106 Floor framing, wood joists, #2 or better, pine, 2" x 8", 16" OC $2.07 $1,344.65
0302112 Floor framing, bridging, wood 1" x 3", joists 16" OC $0.40 $258.49
0302119 Box sills, #2 or better pine, 2" x 8" $0.31 $202.13
0308026 Exterior wall framing systems, 2" x 4", 16" OC $6.15 $3,995.93
0316042 Truss roof framing systems, 24" OC, 4/12 pitch, 1' overhang, 26' span $7.21 $4,684.16
0348026 Partition framing systems, 2" x 4", 16" OC $3.15 $2,048.67
04 Exterior Walls 19.79% $29.36 $19,087.23
0408034 Wood siding systems, 1/2" x 8" beveled cedar siding, "A" grade $14.35 $9,326.02
0420043 Non-rigid insul, batts, fbgls, kraft faced, 3-1/2" thick, R13, 15" W $0.99 $645.63
0420051 Non-rigid insul, batts, fbgls, kraft faced, 12" thick, R38, 23" wide $1.57 $1,023.26
0440026 Sliding window systems, builder's quality wood window, 3' x 2' $8.61 $5,599.66
0452046 Door systems, solid core birch, flush, 3' x 6'-8" $2.95 $1,916.64
0460025 Storm door, al, combination, storm & screen, anodized, 3'-0" x 6'-8" $0.89 $576.02
05 Roofing 3.69% $5.48 $3,561.08
0504034 Gable end roofing, asphalt, roof shingles, class A $5.48 $3,561.08
06 Interiors 19.80% $29.38 $19,095.91
0604026 Wall system, 1/2" drywall, taped & finished $9.19 $5,970.88
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary
significantly.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 1 of 2
Replacement Cost Report
Parcel A Building 2 - Residence
0608026 1/2" gypsum wallboard, taped & finished ceilings $2.75 $1,788.58
0620026 Lauan, flush door, hollow core, interior $8.19 $5,326.03
0660017 Carpet, Olefin, 15 oz $2.07 $1,348.57
0660027 Padding, sponge rubber cushion, minimum $0.77 $500.61
0660038 Underlayment plywood, 1/2" thick $2.11 $1,373.56
0664029 Resilient flooring, vinyl sheet goods, backed, .070" thick, minimum $1.40 $907.26
0664048 Resilient flooring, sleepers, treated, 16" OC, 1" x 3" $1.08 $699.37
0690137 Basement stairs, open risers $1.82 $1,181.05
07 Specialties 6.15% $9.13 $5,932.70
0708026 Kitchen, economy grade $4.39 $2,851.72
0712035 Sinks, stainless steel, single bowl 16" x 20" $2.62 $1,703.51
0712039 Water heater, electric, 30 gallon $2.12 $1,377.47
08 Mechanical 9.31% $13.82 $8,980.62
0812046 Three fixture bathroom with wall hung lavatory $7.33 $4,766.85
0860101 Furnace, gas heating only, 100 MBH, area to 1200 SF $1.84 $1,196.44
0860109 Intermittent pilot, 100 MBH furnace $0.43 $282.15
0860111 Supply duct, rectangular, area to 1200 SF, rigid fiberglass $0.85 $554.63
0860121 Return duct, sheet metal galvanized, to 1500 SF $1.02 $665.85
0860123 Lateral ducts, flexible round 6" insulated, to 1200 SF $0.91 $592.31
0860135 Register elbows, to 1500 SF $0.52 $339.33
0860137 Floor registers, enameled steel w/damper, to 1500 SF $0.34 $219.09
0860139 Return air grille, area to 1500 SF 12" x 12" $0.10 $63.14
0860143 Thermostat, manual, 1 set back $0.19 $125.58
0860147 Plenum, heating only, 100 MBH $0.27 $175.25
09 Electrical 3.21% $4.77 $3,098.63
0910036 100 amp electric service $1.89 $1,226.27
0930018 Duplex receptacles using non-metallic sheathed cable $0.34 $220.80
0935112 Wiring device systems, economy to 1200 S.F. $2.00 $1,302.99
0945112 Light fixture systems, economy to 1200 S.F. $0.54 $348.57
100% $148.41 $96,466.52
15.0 % $22.26 $14,469.98
0.0 % $0.00 $0.00
0.0 % $0.00 $0.00
Total Building Cost $170.67 $110,936.50
User Fees
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
SubTotal
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 2 of 2
Replacement Cost Report
Parcel A Building 2 - Residence
101 66th Street East Redevelopment TIF District
Code Deficiency Cost Report
Parcel A Building 2 - 6600 Stevens Ave, Richfield, MN 55423 Residence
Parcel ID 27-028-24-42-0134
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Accessibility Items
-$
Structural Elements
Foundation
Repair cracked foundation to prevent water intrusion per code 1,000.00$ Lump 1 1,000.00$
Exiting
Basement Stairway
Install code compliant basement stairway 1.82$ SF 650 1,183.00$
Basement Floor to Ceiling Height
Modify basement floor to ceiling height to comply with code 32.00$ SF 650 20,800.00$
Fire Protection
Ground Fault Circuit Interrupter's
Install code required GFCI's 150.00$ EA 3 450.00$
Arc Fault Circuit Interrupter's
Install code required AFCI's 150.00$ EA 8 1,200.00$
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$
Exterior Construction
Windows
Replace failed windows to prevent water intrusion per code 8.61$ SF 650 5,596.50$
Wood Fascia
Replace rotted fascia to prevent water intrusion per code 500.00$ Lump 1 500.00$
Roof Construction
Roofing Material
Remove failed roofing material 5.48$ SF 650 3,562.00$
Install roofing material to prevent water intrusion per code 1.00$ SF 650 650.00$
Mechanical- Electrical
Mechanical
Install code compliant HVAC system 6.47$ SF 650 4,205.50$
Total Code Improvements 39,897$
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 1 of 1
Code Deficiency Cost Report
Parcel A Building 2 - Residence
101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 2 - Residence - 6600 Stevens Avenue
Page 1 of 3
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 2 - Residence - 6600 Stevens Avenue
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 2 - Residence - 6600 Stevens Avenue
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101 66th Street East Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:9/8/2020
Estimate Name:6608 Stevens Ave
Building Type:Economy 1 Story with Vinyl Siding - Wood Frame
Location:RICHFIELD, MN
Story Count:1
Story Height (L.F.):8.00
Floor Area (S.F.):458
Labor Type:RES
Basement:Finished
Data Release:Year 2019
Cost Per Square Foot:$199.62
Building Cost:$91,424.13
% of
Total
Cost Per
S.F. Cost
01 Site Work 3.76% $6.53 $2,990.39
0104034 Footing excavation, building, 26' x 46', 4' deep $6.53 $2,990.39
02 Foundation 22.03% $38.24 $17,515.64
0204030 Footing systems, 10" thick by 20" wide footing $4.48 $2,053.16
0208034 Block wall systems, 8" wall, grouted, full height $15.69 $7,185.66
0208034 Block wall systems, 8" wall, grouted, full height $13.73 $6,287.45
0220034 Floor slab systems, 4" thick slab $4.34 $1,989.37
03 Framing 13.55% $23.52 $10,773.02
0302106 Floor framing, wood joists, #2 or better, pine, 2" x 8", 16" OC $2.07 $947.46
0302112 Floor framing, bridging, wood 1" x 3", joists 16" OC $0.40 $182.13
0302119 Box sills, #2 or better pine, 2" x 8" $0.31 $142.42
0302123 Girders, including lally columns, 3 pieces spiked together, 2" x 8" $1.68 $769.43
0308026 Exterior wall framing systems, 2" x 4", 16" OC $0.70 $320.11
0308026 Exterior wall framing systems, 2" x 4", 16" OC $7.38 $3,378.71
0316042 Truss roof framing systems, 24" OC, 4/12 pitch, 1' overhang, 26' span $7.21 $3,300.53
0348026 Partition framing systems, 2" x 4", 16" OC $3.78 $1,732.23
04 Exterior Walls 14.53% $25.22 $11,549.79
* 0416042 Metal & plastic siding systems, vinyl clapboard siding, 8" wide, white $6.67 $3,055.50
0420043 Non-rigid insul, batts, fbgls, kraft faced, 3-1/2" thick, R13, 15" W $1.19 $545.90
0420051 Non-rigid insul, batts, fbgls, kraft faced, 12" thick, R38, 23" wide $1.57 $721.00
0440026 Sliding window systems, builder's quality wood window, 3' x 2' $10.34 $4,734.73
0452046 Door systems, solid core birch, flush, 3' x 6'-8" $4.18 $1,916.64
0460025 Storm door, al, combination, storm & screen, anodized, 3'-0" x 6'-8" $1.26 $576.02
05 Roofing 3.16% $5.48 $2,509.19
0504034 Gable end roofing, asphalt, roof shingles, class A $5.48 $2,509.19
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary
significantly.
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 1 of 2
Replacement Cost Report
Parcel A Building 3 - Residence
06 Interiors 21.13% $36.68 $16,799.09
0604026 Wall system, 1/2" drywall, taped & finished $11.02 $5,048.61
0620026 Lauan, flush door, hollow core, interior $10.24 $4,691.00
0660017 Carpet, Olefin, 15 oz $2.07 $950.23
0660021 Carpet, tile, foam backed, needle punch $5.41 $2,475.57
0660027 Padding, sponge rubber cushion, minimum $0.77 $352.74
0660038 Underlayment plywood, 1/2" thick $2.11 $967.83
0664029 Resilient flooring, vinyl sheet goods, backed, .070" thick, minimum $1.40 $639.27
0664048 Resilient flooring, sleepers, treated, 16" OC, 1" x 3" $1.08 $492.79
0690137 Basement stairs, open risers $2.58 $1,181.05
07 Specialties 7.46% $12.95 $5,932.70
0708026 Kitchen, economy grade $6.23 $2,851.72
0712035 Sinks, stainless steel, single bowl 16" x 20" $3.72 $1,703.51
0712039 Water heater, electric, 30 gallon $3.01 $1,377.47
08 Mechanical 10.39% $18.04 $8,261.54
0812046 Three fixture bathroom with wall hung lavatory $10.41 $4,766.85
0860101 Furnace, gas heating only, 100 MBH, area to 1200 SF $2.61 $1,196.44
0860109 Intermittent pilot, 100 MBH furnace $0.62 $282.15
0860111 Supply duct, rectangular, area to 1200 SF, rigid fiberglass $0.85 $390.80
0860121 Return duct, sheet metal galvanized, to 1500 SF $1.02 $469.16
0860123 Lateral ducts, flexible round 6" insulated, to 1200 SF $0.91 $417.35
0860135 Register elbows, to 1500 SF $0.52 $239.10
0860137 Floor registers, enameled steel w/damper, to 1500 SF $0.34 $154.37
0860139 Return air grille, area to 1500 SF 12" x 12" $0.10 $44.49
0860143 Thermostat, manual, 1 set back $0.27 $125.58
0860147 Plenum, heating only, 100 MBH $0.38 $175.25
09 Electrical 3.98% $6.92 $3,167.88
0910036 100 amp electric service $2.68 $1,226.27
0930018 Duplex receptacles using non-metallic sheathed cable $1.70 $777.90
0935112 Wiring device systems, economy to 1200 S.F. $2.00 $918.11
0945112 Light fixture systems, economy to 1200 S.F. $0.54 $245.60
100% $173.58 $79,499.24
15.0 % $26.04 $11,924.89
0.0 % $0.00 $0.00
0.0 % $0.00 $0.00
Total Building Cost $199.62 $91,424.13
User Fees
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
SubTotal
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 2 of 2
Replacement Cost Report
Parcel A Building 3 - Residence
101 66th Street East Redevelopment TIF District
Code Deficiency Cost Report
Parcel A Building 3 - 6608 Stevens Ave, Richfield, Minnesota 55423 Residence
Parcel ID 27-028-24-42-0134
Code Related Cost Items Unit Cost
Unit
Quantity Units Total
Accessibility Items
Bathroom
Install code compliant basement bathroom 5.20$ SF 458 2,381.60$
Structural Elements
-$
Exiting
Stairway
Modify basement stairway to comply with code 2.58$ SF 458 1,181.64$
Egress Window
Install basement egress window per code 2,500.00$ Lump 1 2,500.00$
Fire Protection
Ground Fault Circuit Interrupter's
Install code required GFCI's 150.00$ EA 3 450.00$
Arc Fault Circuit Interrupter's
Install code required AFCI's 150.00$ EA 8 1,200.00$
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$
Exterior Construction
Windows
Install new windows to prevent water intrusion per code 10.34$ SF 458 4,735.72$
Chimney
Repair chimney to prevent water intrusion per code 500.00$ Lump 1 500.00$
Roof Construction
-$
Mechanical- Electrical
Mechanical
Install code compliant HVAC system 7.62$ SF 458 3,489.96$
Total Code Improvements 17,189$
101 66th Street East Redevelopment TIF District
LHB Project No. 200617 Page 1 of 1
Code Deficiency Cost Report
Parcel A Building 3 - Residence
101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 3 - Residence - 6608 Stevens Avenue
Page 1 of 4
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 3 - Residence - 6608 Stevens Avenue
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 3 - Residence - 6608 Stevens Avenue
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101 66th Street East Redevelopment TIF District
Photos: Parcel A Building 3 - Residence - 6608 Stevens Avenue
Page 4 of 4
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AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #5.
STAFF RE P ORT NO. 5
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
1/19/2021
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
1/13/2021
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 Contract for Pr ivate Development with P LH
& Associates - 6605 1st, L LC and authoriz ing the issuance of a Tax Increment Limited R evenue Note
related to the construction of a 42-unit mixed use project at 101 66th Street E ast.
E X E C UT IV E S UM M ARY:
P L H & Associates (Developer) has been working to redevelop the site at 101 66th S treet East since 2016.
The site is currently oc cupied by three vacant buildings in various states of disrepair. On J une 15, 2020 the
Developer presented a revised conc ept to the C ity Council and Housing and Redevelopment Authority (HRA )
that would reduc e ground floor c ommercial spac e in favor of affordable rental units, and asked that the HRA
explore the use of Tax I nc rement Financing to help make the project financially feasible. A Preliminary
Development Agreement (Preliminary Agreement) was approved by the HRA on J uly 20, 2020.
The Preliminary A greement provided for the support and cooperation of the HRA as the D eveloper worked to
develop a financ ially feasible project. I n addition, the Preliminary Agreement provided the time and financial
support for HRA staff and financ ial c onsultants (E hlers) to quantify the potential public assistanc e available to
cover any cost "gap" that the D eveloper's feasibility analy sis identified.
Sinc e the approval of the Preliminary Agreement, the Developer has worked with HRA staff, Ehlers, and the
HRA Attorney to develop a financ ially feasible projec t that meets the goals of the HRA and C ity. These
efforts have included:
Submittal of a revised pro forma for review.
Submittal of amended land use applications for a mixed use development to include 42 rental units and
approximately 1,300 square feet of ground floor commerc ial space. This application was approved by
the City C ounc il on October 13, 2020.
Cooperate in and fund an independent B light Analysis of the property by LHB , I nc .
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 C ontrac t was
drafted by HRA Legal C ounc il (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 $8,041,600 million to include construction of a
new 3-story mixed use building to include 42 apartment units and approximately 1,300 square feet of
ground floor commerc ial spac e;
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;
A minimum of 20% of the units in the building will be reserved for households earning 60% or less of
the Area Median I ncome (A MI ) for the life of the TI F D istrict (projected to be 12 y ears). Affordable
units are to be distributed proportionally among the various unit types.
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 maximum TI F that would be available to the Developer is $971,070. S taff and the HRA's Financial
Advisor (Ehlers) have conc luded that the development could not occur "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, and School Distric t) as had been the
case prior to the establishment of the TI F D istrict. The property owner also pay s normal property
taxes on the value of the new c onstruction; 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: Approve a resolution approving a C ontract for Private Development with P L H &
Associates - 6605 1st, L LC 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
J une 26, 2018 - City Counc il approves land use applications for 31-unit mixed use development.
May 28, 2019 & May 12, 2020 - City C ounc il approves extension of land use approvals.
J une 15, 2020 - Revised plans with reduc ed c ommercial space and affordable units presented to
City C ounc il and HRA.
J uly 14, 2020 - City Counc il approves application for Livable Communities D evelopment Account
grant funds (not awarded).
J uly 20, 2020 - HRA approves Preliminary D evelopment Agreement.
Oc tober 13, 2020 - City Council approves revised land use application for 42-unit mixed use
development.
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 J uly 20, 2020. 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.
C.C R IT IC AL T IMIN G ISSU E S:
The C ity Council will hold a Public Hearing on J anuary 26, 2021.
The C ontrac t requires that c onstruction commence by J une 1, 2021 and be substantially
complete by J une 1, 2023.
D.F IN AN C IAL IMPAC T:
The C ontrac t c alls for the Developer to rec eive up to $971,070 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 will c ontinue to generate and pay property taxes to all of the
current taxing jurisdic tions (City, C ounty, and Sc hool Distric t) based 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.
The HRA would retain 10% of the TI F generated to reimburse the HRA for ongoing
expenses related to the administration of the D istrict.
E.L E GAL C ON S ID E R AT ION :
The C ontrac t was drafted by HRA Attorney J ulie Eddington.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
1. Do not approve the Contract.
2. Approve the C ontrac t with modifications.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
Representative(s) of PLH & Assoc iates, L L C
AT TAC H ME N TS :
D escripti on Type
Resolution Resolution L etter
C ontract C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH PLH &
ASSOCIATES – 6605 1ST, 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 2020-2 Tax Increment Financing
District: Emi (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 January 26, 2021,
approving the modification of the Redevelopment Plan and the TIF Plan for the TIF District, in accordance
with the TIF Act; and
WHEREAS, PLH & Associates – 6605 1st, LLC, a Wisconsin limited liability company (the
“Developer”), intends to acquire certain property from the Authority (the “Development Property”) and
construct thereon approximately 42 apartment units with at least 20% of the units available to persons earning
sixty percent (60%) or less of area median income, and approximately 1,300 square feet of commercial 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
$971,070 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:
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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
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.
3
(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
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 19th day of January, 2021.
Mary B. Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
CONTRACT
FOR
PRIVATE DEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
and
PLH & ASSOCIATES – 6605 1ST, LLC
Dated January 26, 2021
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
Section 6.3. Qualifications .......................................................................................................................... 15
ii
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 ..................................................................................................................... 19
Section 9.2. Remedies on Default ............................................................................................................... 19
Section 9.3. Termination or Suspension of TIF Note ................................................................................. 20
Section 9.4. No Remedy Exclusive ............................................................................................................. 20
Section 9.5. No Additional Waiver Implied by One Waiver ...................................................................... 20
Section 9.6. Attorneys’ Fees and Costs....................................................................................................... 20
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
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 26th day of January, 2021
(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 PLH & ASSOCIATES - 6605 1ST, LLC, a Wisconsin 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 undertake certain activities to
facilitate the redevelopment of blighted properties and promote the development of affordable housing within
the City; and
WHEREAS, within the Redevelopment Project, the Authority has created the 2020-2 Tax Increment
Financing District – Emi (the “TIF District”), a redevelopment district, in order to facilitate redevelopment of
certain property in the Redevelopment Project and promote the development of affordable housing within the
City; and
WHEREAS, the Developer owns certain property in the City (the “Development Property”) within
the TIF District and intends to construct thereon a mixed use development, including approximately 42
apartment units and approximately 1,300 square feet of commercial 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 land acquisition costs, site improvement
costs, infrastructure costs, costs of constructing affordable housing, demolition and remediation 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:
2
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. Available Tax Increment shall not include any Tax Increment if, as of
any Payment Date, there is an uncured Event of Default under this Agreement.
“Board” means the Board of Commissioners of the Authority.
“Certificate of Completion” means the certification provided to the Developer pursuant to
Section 4.4 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.
“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 PLH & Associates - 6605 1st, LLC, a Wisconsin limited liability company, or its
permitted successors and assigns.
“Development Property” means the real property described in EXHIBIT A.
3
“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 that adversely affects generation of tax
increment or changes the number of units of rental housing.
“Maturity Date” means the date that the TIF Note has been paid in full or terminated, whichever is
earlier.
“Minimum Improvements” means the development on the Development Property of a mixed use
development, including approximately 42 apartment units and approximately 1,300 square feet of
commercial space.
“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
July 20, 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 land acquisition
costs, site improvement costs, infrastructure costs, costs of constructing affordable housing, and demolition
and remediation costs.
“Qualified Project Period” has the meaning provided in Section 4.5 hereof.
“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.
“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.
4
“TIF Act” means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.1794, as amended.
“TIF District” means the 2020-2 Tax Increment District - Emi, 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 January 26, 2021, 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, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal,
state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which
directly result in delays.
(The remainder of this page is intentionally left blank.)
5
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 HRA 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, and maintain existing supplies of, decent, safe, and sanitary housing and to 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 Wisconsin limited liability company duly organized and in good
standing under the laws of the State, is duly authorized to transact business within the State, and has the
power to enter into this Agreement.
(b) 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. The Developer owns the Development Property. The
Authority has no obligation to purchase 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 $971,070 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 conveyance of the
Development Property to the Developer, the Developer agrees that it will construct the Minimum
Improvements on the Development Property substantially in accordance with the Construction Plans as
approved pursuant to Section 4.2 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
$8,041,600 (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 June 1, 2021, and substantially
complete construction of the Minimum Improvements by June 1, 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 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.
(a) The Developer agrees that during the Qualified Project Period at least twenty percent (20%)
of the 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 Qualified Project Period shall commence upon the on the date a certificate of occupancy for the
Minimum Improvements is received from the City and shall continue through the date that is the earlier of
(i) twelve (12) years after the commencement of the Qualified Project Period and (ii) the Maturity Date of the
TIF Note. Notwithstanding the foregoing, the Qualified Project Period shall be a minimum of ten (10) years.
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.
(b) 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
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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.
(c) The Developer agrees to distribute the affordable units across unit types as follows:
Type of Unit* Number of Units
Studio 4
One-Bedroom (at least 780 sf) 3
One-Bedroom (at least 1,080 sf) 1
ADA Accessible Unit 1
*Any Two-Bedroom Unit may be substituted for any of the specified units (except the ADA
Accessible Unit
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 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 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 eighteen (18) 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, 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.
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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 lease to a retail/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) Prior to the issuance of the Certificate of Completion, 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
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absence of specific written agreement by the Authority to the contrary, no such transfer or approval
by the Authority thereof shall be deemed to relieve the Developer or any other party bound in any
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) 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.
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
Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the
individual capacity thereof.
19
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 terminate this Agreement;
20
(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.
21
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 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 PO
Box 390157, Minneapolis, MN 55439, Attn: Paul Lynch; 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.
22
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 executed
by the Authority and the Developer.
Section 10.10. Preliminary Development Agreement. On the date of this Agreement, the
Preliminary Development Agreement shall terminate.
(The remainder of this page is intentionally left blank.)
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 __________, 2021, 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 __________, 2021, 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.
PLH & ASSOCIATES - 6605 1ST, LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this day of __________, 2021, by
_________________________________, the _____________________________ of PLH & Associates -
6605 1st, LLC, a Wisconsin limited liability company, on behalf of the Developer.
Notary Public
A-1
EXHIBIT A
DEVELOPMENT PROPERTY
All of Lot 7 and Lot 8, except the South 50 feet of the west ½, subject to the road, Goodspeed’s First Plat
Torrens Property
[Confirm Accuracy of Legal Description]
B-1
EXHIBIT B
FORM OF TIF NOTE
UNITED STATES 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
____________% __________, 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 PLH & Associates
- 6605 1st, LLC, a Wisconsin 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 January 26, 2021 (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 February 1, 2035, 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, ten
percent (10%) 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 Increment will not include
any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under the Agreement.
B-2
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 January
19, 2021, 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,
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
B-3
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.
Date of Registration Registered Owner Signature of Executive Director
PLH & Associates - 6605 1st, 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 January 19,
2021 (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 January 26, 2021 (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.
C-2
9. We represent to you that we are purchasing the TIF Note for our own accounts and not for
resale or other distribution thereof, except to the extent otherwise provided in the TIF Note, the Resolution, or
any other resolution adopted by the Authority.
10. All capitalized terms used herein have the meaning provided in the Contract unless the
context clearly requires otherwise.
11. The Owner’s federal tax identification number is __________________________.
12. We acknowledge receipt of the TIF Note as of the date hereof.
PLH & ASSOCIATES - 6605 1ST, LLC
By
Its
Dated: _________________, 20___
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #6.
STAFF RE P ORT NO. 6
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
1/19/2021
RE P O RT P RE PA RE D B Y: John S tark, E xecutive D irector
O TH E R D E PA RTM E NT RE V IE W:
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
1/13/2021
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Designation of Community D evelopment Dir ector John Stark as the Executive D irector of the Richfield
Housing and Redevelopment Authority for 2021.
E X E C UT IV E S UM M ARY:
I n September 2018, Community Development Director J ohn Stark was initially appointed by the Ric hfield
Housing and Redevelopment Authority (HRA) to serve as its Exec utive Direc tor. That appointment was
reaffirmed at the J anuary 21, 2020 HRA meeting.
That term has now expired and it would be appropriate for the HRA to designate an Executive D irec tor for the
year 2021.
RE C O M M E ND E D AC T IO N:
By motion: D esignate C ommunity Development D irector John Stark as the Housing and
Redevelopment Authority Executive Director until the first regular meeting is conducted by the H R A in
2022.
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 S eptember 2018, Community Development D irec tor J ohn Stark was appointed as the HRA
Executive D irec tor.
That appointment has been reaffirmed since that point.
Prior to that point, the Ric hfield City Manager had served as its Exec utive Director.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The By laws of the Richfield HRA require the designation of an Exec utive Director.
C.C R IT IC AL T IMIN G ISSU E S:
The term of the current Executive D irec tor will terminate on J anuary 19, 2021.
D.F IN AN C IAL IMPAC T:
N/A
E.L E GAL C ON S ID E R AT ION :
The By laws of the Richfield HRA require the designation of an Exec utive Director.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Appoint Community Development Director John Stark as Executive Director of the Richfield HRA for
a longer period (the HRA Bylaws do not stipulate the term of appointment).
Appoint someone else as the HRA E xecutive Director.
PRINCIPAL PARTIES EXPECTED AT MEETING:
Community Development Director John Stark
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #7.
STAFF RE P ORT NO. 7
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
1/19/2021
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: K atie Rodri guez, C ity Manager
E X E C U TIV E D IRE C TO R RE V IE W: John S tark, E xecutive D irector
1/13/2021
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of an authoriz ation of the Executive D irector to amend the P rofessional Services
Agreement with Volunteers Enlisted to Assist People for providing emer gency rent assistance, as the
need arises.
E X E C UT IV E S UM M ARY:
Volunteers Enlisted to Assist People (VE AP) provided a significant amount of emergency rent
assistance to 618 Richfield households who were impacted by the C OVID-19 crisis (Crisis) in 2020.
VEAP received funding from the Housing and Redevelopment Authority (HRA), Hennepin County
as well as the State of Minnesota to meet this need.
At the end of December, the federal government authorized funding specifically for emergency rent
assistance. T he State anticipates receiving an estimated $375 million in funding, of which suburban
Hennepin County is likely to receive around $25 million. VEAP expects to receive a portion of these
funds to serve renters in Richfield, Bloomington and Edina; however, the timing of when the funds
will be distributed is unknown at this time.
VEAP plans to continue serving people in need while waiting for federal funding. T hey currently
have access to $110,000 in Community Development Block Grant (C D BG) funding to serve
Richfield and Edina; however, the average amount spent to serve Richfield households in 2020 was
between $115,000-120,000 a month, so they anticipate a shortfall but cannot determine a specific
amount at this time.
Because of this uncertainty, staff is asking the HRA to give the Executive Director the authority to
amend the Professional Services Agreement (Agreement) with VE AP, on an as needed basis, up to
a maximum amount of $125,000.
T he H R A's original expenditure of funds was reimbursed by the Federal CARES Act funds, so
funding remains in the investment earnings of the HRA's Capital Improvement Fund to fund this
request.
RE C O M M E ND E D AC T IO N:
By motion: Authoriz e the Executive Director to amend the Professional Services Agreement with
Volunteers E nlisted to Assist People, as needed, up to $125,000.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
VE AP serves low-income families, children, seniors, and individuals at serious risk of
hunger and homelessness. Serving the South Hennepin County communities of
Bloomington, Richfield, Edina, and S outh Minneapolis, V E A P offers immediate and caring
support through acc ess to healthy foods, stable housing, and financ ial support and assistance.
The C ity provides human services funds annually to V E A P to provide assistance to Ric hfield
households earning up to 200% of the federal poverty level.
I n 2020, V EAP spent over a million dollars assisting 618 Richfield households with rent
assistanc e. Monthly expenditures between April and November averaged $115-120,000 a month.
I n the month of D ec ember, V E A P spent $300,000 on assistance to Ric hfield households.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The C risis is having an economic impac t on members of our community. V E A P saw a significant
inc rease in the number of calls from Richfield residents seeking food and emergenc y rent
assistanc e due to the loss of jobs and inc ome. People with the lowest incomes are most at risk of
hunger and housing instability. Supporting housing stability is a core part of the HRA's mission.
W ith administrative funds from the State and City of Bloomington, V E A P was able to add staff,
inc luding two bi-lingual Housing Spec ialists to better meet the needs of our Spanish-speaking
residents. I t is a core value of the C ity to work with partners to promote an environment of equity
and inc lusion.
V E A P also works c losely with Hennepin C ounty and other organizations to leverage additional
resourc es by ensuring that residents are able to ac cess as many resources as possible.
C.C R IT IC AL T IMIN G ISSU E S:
W hile V E AP anticipates a signific ant amount of federal funds to meet ongoing needs in 2021, the
timing of that funding is currently unknown. I n order to continue serving people waiting for
assistanc e, V E A P is requesting additional funding from the City.
D.F IN AN C IAL IMPAC T:
T he HRA authorized $125,000 in emergency rental assistance in 2020 and was then
reimbursed for those expenses with federal C AR ES Act funding, so that amount of
funding remains in the HRA's Capital Improvement Fund
T he Capital Improvement Fund was created years ago as an interest-earning fund and
intended to provide a source of funding for future needs. T he policy established at the
time was to maintain $1 million in the fund and to use the interest to fund special H R A
programs.
VE AP has approximately $110,000 in federal C D BG funds to serve Richfield and Edina,
but given the uncertain timing of the new federal funding, VE AP does not know if the cash
they have on hand will be sufficient to meet the need.
By authorizing the Executive Director to amend the Agreement as needed, the HRA will ensure
that HRA funds will not replace federal funds but will be used to fill any gap in funding.
E.L E GAL C ON S ID E R AT ION :
The HRA Attorney prepared the P rofessional Services Agreement.
On May 26, 2020, the City established an Affordable Housing Trust Fund (Trust Fund) through
which the funds will be provided to V E A P for rent assistanc e.
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Decide not to approve the Amendment to the Agreement.
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
Original P rofessional S ervices A greement C ontract/A greement
PROFESSIONAL SERVICE AGREEMENT
VEAP, INC.
THIS PROFESSIONAL SERVICE AGREEMENT (the “Agreement”) made
and entered into by and between the Richfield Housing and Redevelopment
Authority, hereinafter referred to as the “HRA”, and the VEAP, Inc., a Minnesota
nonprofit corporation, hereinafter referred to as “the Contractor”.
WITNESSETH:
WHEREAS, the HRA wishes to purchase the services of the Contractor;
and
WHEREAS, the Contractor wishes to provide the services to the HRA.
NOW, THEREFORE, in consideration of the mutual undertakings and
agreements hereinafter set forth, the HRA and the Contractor agree as follows:
1. SCOPE OF SERVICES AND TERM
The Contractor shall perform the work as described in Exhibit A to this
Agreement, which is incorporated herein by reference.
The Contractor agrees to comply with all federal, state, and local laws and
ordinances applicable to the services to be performed under this
Agreement, including all safety standards. The Contractor shall be solely
and completely responsible for conditions of the job site, including the
safety of all persons and property during the performance of the services.
The Contractor represents and warrants that it has the requisite training,
skills, and experience necessary to provide the services and is
appropriately licensed by all applicable agencies and governmental
entities.
The Contractor shall not perform any additional services without the
express written permission of the HRA.
This Agreement is effective beginning April 29, 2020, and will be in effect
until December 31, 2020. The Agreement will be terminated automatically
on December 31, 2020. The agreement may also be terminated by the
City, with or without cause, upon giving 30 days’ notice prior to written
notice to the Contractor.
2. PAYMENT FOR SERVICES
In exchange for the services provided under this Agreement by the
Contractor, the HRA shall pay the Contractor $30,000 in one lump sum on
or before April 30, 2020, following the receipt of a fully-executed
Agreement.
3. INDEPENDENT CONTRACTOR
The Contractor shall select the means, method, and manner of performing
the services herein in consultation with the HRA. Nothing is intended or
should be construed in any manner as creating or establishing the
relationship of copartners between the Contractor and the HRA or as
constituting the Contractor as the agent, representative, or employee of
the HRA for any purpose or in any manner whatsoever. The Contractor is
to be and shall remain an independent contractor with respect to all
services performed under this Agreement. Any and all personnel of the
Contractor or other persons while engaged in the performance of any work
or services required by this Agreement shall have no contractual
relationship with the HRA, and shall not be considered employees of the
HRA. The Contractor shall also supply, at its own expense, all materials,
supplies, equipment and tools required to accomplish the work
contemplated by this Agreement.
Any and all claims that may or might arise under the Unemployment
Compensation Act or the Workers’ Compensation Act of the State of
Minnesota on behalf of said personnel, arising out of employment,
including, without limitation, claims of discrimination against The
Contractor, its officers, agents, contractors, or employees shall in no way
be the responsibility of the HRA. The Contractor shall indemnify and hold
the HRA, its officers and employees harmless from any and all such
claims irrespective of any determination of any pertinent tribunal, agency,
board, commission, or court. The Contractor, anyone directly or indirectly
employed by the Contractor, subcontractors of the Contractor or other
persons shall neither require nor be entitled to any compensation, rights,
or benefits of any kind whatsoever from the HRA, including, without
limitation, tenure rights, insurance benefits, sick and vacation leave,
workers’ compensation benefits, unemployment compensation, disability,
severance pay, retirement benefits (including but not limited to PERA).
4. NONDISCRIMINATION
The HRA operates in accordance with the City of Richfield’s policies
against discrimination. The Contractor shall abide by all City policies, as
well as all applicable Federal and State laws, against discrimination
including, but not limited to, Minn. Stat. § 181.59.
5. INDEMNITY
To the fullest extent permitted by law, the Contractor agrees to defend,
indemnify and hold harmless the HRA and the City of Richfield, and their
employees, officials, volunteers and agents from and against all claims,
actions, damages, losses and expenses, including attorney fees, arising
out of the Contractor’s negligence or the Contractor’s performance or
failure to perform its obligations under this Agreement. The Contractor’s
indemnification obligation shall apply to the Contractor’s subcontractor(s),
or anyone directly or indirectly employed or hired by the Contractor, or
anyone for whose acts the Contractor may be liable. The Contractor
agrees this indemnity obligation shall survive the completion or termination
of this Agreement.
6. INSURANCE
A. Liability. The Contractor agrees to maintain commercial general liability
insurance in a minimum amount of $1,000,000 per occurrence;
$2,000,000 annual aggregate. The policy shall cover liability arising from
premises, operations, products-completed operations, personal injury,
advertising injury, and contractually assumed liability. The HRA shall be
named as an additional insured.
B. Automobile Liability. If the Contractor operates a motor vehicle in
performing the services under this Agreement, the Contractor shall
maintain commercial automobile liability insurance, including owned,
hired, and non-owned automobiles, with a minimum liability limit of
$1,000,000, combined single limit.
C. Workers’ Compensation. The Contractor agrees to comply with all
applicable workers’ compensation laws in Minnesota.
D. Certificate of Insurance. The Contractor shall, prior to commencing
services, deliver to the HRA a Certificate of Insurance as evidence that the
above coverages are in full force and effect.
7. RECORDS - AVAILABILITY
The Contractor agrees that the HRA, the State Auditor, or any of their duly
authorized representatives at any time during normal business hours and
as often as they may reasonably deem necessary, shall have access to
and the right to examine, audit, excerpt, and transcribe any books,
documents, papers, records, etc., which are pertinent to the accounting
practices and procedures of the Contractor and involve transactions
relating to this Agreement. Records shall be retained for three years from
date of final payment with respect to the project. All reports, memos, and
other data produced by the Contractor shall become the property of the
HRA.
8. DATA PRACTICES COMPLIANCE
This contract is governed by Minnesota Statutes, Chapter 13 (the
“Minnesota Government Data Practices Act”) and specifically § 13.05,
subd. 6 and 11, the provisions of which are incorporated by reference into
this contract. The HRA agrees to give the Contractor access to data
collected or maintained by the HRA as necessary to perform the
Contractor's obligations under this Agreement. The Contractor agrees to
maintain all data obtained from the HRA consistent with the requirements
of the Minnesota Government Data Practices Act, Minn. Stat. §§ 13.02 et
seq. The Contractor will not release or disclose the contents of data
classified as not public to any person except at the written direction of the
HRA. The Contractor agrees to indemnify the HRA from any claim,
liability, damage or loss asserted against HRA as a result of the
Contractor's failure to comply with the requirements of this paragraph;
provided that the Contractor shall have no duty to defend or indemnify
where the Contractor has acted in conformance with the HRA's written
directions. Upon termination of this contract, the Contractor agrees to
return data to the HRA, as requested by the HRA.
9. NO ASSIGNMENT
The Contractor shall not assign, subcontract, transfer, or pledge this
contract and/or the services to be performed hereunder, whether in whole
or in part, without the prior written consent of the HRA. To the extent that
the HRA consents to the subcontracting of any of the services of this
agreement, the Contractor agrees to bind every subcontractor by the
applicable terms, conditions, and provisions to the subcontractor's work as
set forth in this Agreement, unless otherwise specifically agreed otherwise
in writing by the HRA, and to pay every subcontractor within 10 days of
receipt of payment from the HRA pursuant to Minn. Stat. § 471.425.
10. MERGER AND MODIFICATION
It is understood and agreed that the entire agreement between the parties
is contained herein and that this Agreement supersedes all oral
agreements and negotiations between the parties relating to the subject
matter hereof. All items referred to in this Agreement are incorporated or
attached and are deemed to be part of this Agreement.
Any material alterations, variations, modifications, or waivers of provisions
of this Agreement shall only be valid when they have been reduced to
writing as an amendment to this Agreement signed by the parties hereto.
11. DEFAULT AND CANCELLATION
The HRA shall have the option to terminate this Agreement at any time.
Termination shall be effective upon ten (10) days written notice to the
Contractor.
If the Contractor refuses or fails to complete the tasks described in
paragraph 1, or to complete the services in a manner satisfactory to the
HRA, the HRA may, by written notice to the Contractor, give notice of its
intention to terminate this Agreement. After such notice, the Contractor
shall have ten (10) days to cure, to the satisfaction of the HRA. If the
Contractor fails to cure, the HRA shall send the Contractor a written
termination letter which shall be effective upon deposit in the United
States mail to the Contractor’s address as stated in paragraph 13.
In the event of termination, the HRA shall only be responsible to pay for all
services satisfactorily performed by the Contractor to the effective date of
termination, as described in the final invoice to the HRA.
12. CONTRACT ADMINISTRATION
In order to coordinate the services of the Contractor with the activities of
the HRA so as to accomplish the purposes of this contract, Julie Urban
shall manage this contract on behalf of the HRA.
In addition, from time to time, meetings shall be held between the
Contractor and HRA staff. The Contractor may also report directly to the
HRA Board of Commissioners.
13. NOTICES
Any notice or demand which must be given or made by a party hereto
under the terms of this Agreement shall be in writing.
Notices shall be sent as follows:
Community Development Department
Attn: Julie Urban
6700 Portland Avenue South
Richfield, MN 55423
VEAP, Inc.
Attn: Kari Thompson
9600 Aldrich Avenue South
Bloomington, MN 55420
14. GENERAL PROVISIONS
A. Nondiscrimination. In the hiring of employees to perform work under this
Agreement, the Contractor shall not discriminate against any person by
reason of any characteristic protected by state or federal law.
B. Force Majeure. Except for payment of sums due, neither party shall be
liable to the other or deemed in default under this Agreement, if and to the
extent that such party’s performance is prevented by reason of Force
Majeure, as determined by the HRA.
C. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Minnesota. All proceedings
related to this Agreement shall be venued in the State of Minnesota.
D. Waivers. The waiver by either party of any breach or failure to comply
with any provision of this Agreement by the other party shall not be
construed as, or constitute a continuing waiver of such provision or a
waiver of any other breach of or failure to comply with any other provision
of this Agreement.
E. Ownership of Documents. All reports, plans, specifications, data, maps,
and other documents produced by the Contractor in the performance of
services under this Agreement shall be the property of the HRA.
F. Counterparts. This Agreement may be signed in counterparts, each of
which shall be deemed an original, and which taken together shall be
deemed to be one and the same document.
G. Savings Clause. If any court finds any portion of this Agreement to be
contrary to law, invalid, or unenforceable, the remainder of the Agreement
will remain in full force and effect.
The Contractor having signed this contract, and the HRA having duly approved
this contract on April 20, 2020, and pursuant to such approval and the proper
HRA officials having signed this contract, the parties hereto agree to be bound by
the provisions herein set forth.
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
By: __________________________
Chairperson
By: __________________________
Executive Director
VEAP, INC.
By: __________________________
Its Executive Director
EXHIBIT A
SCOPE OF WORK
Program
VEAP will provide support and rental assistance to low income renters impacted
by the COVID-19 crisis. Specifically, VEAP will provide 1) support for low and
moderate income renters to maintain safe and stable housing by communicating
with property management and negotiating payment arrangements directly with
property management or landlords, a need which could increase as job hours are
cut or job loss occurs; 2) limited emergency rent assistance to help maintain
housing stability and prevent homelessness, and 3) administration and staffing
as needed to provide housing stability to residents of the City.
Actions of Contractor
A. Contractor will provide regular progress reports to the HRA as to the
expenditure of funds. Upon completion of all services, VEAP will provide
a close-out report showing the use of all funds provided.
B. Contractor will provide services under this agreement to all persons
without regard to race, color, sex, marital status, or status with regard to
public assistance or disability.