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02-16-10 agenda packet
CITY OF RICHFIELD, MINNESOTA TUESDAY, FEBRUARY 16, 2010 _ REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA Call to order Roll call 1. Approval of minutes of (1) Special HRA Worksession of January 19, 2010 and (2) Regular HRA Meeting of January 19, 2010 2. HRA approval of agenda 3. Presentation of Penn Central Annual Report 2009 4. HRA Programs 2009 year in review 5. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items listed on the Consent Calendar are recommended for approval ~. A. Consideration of approval of resolution affirming and ratifying HRA submittal of application to Hennepin County Housing, Support Services and Transit Coordinated Request for Proposals for down payment assistance program S.R. No. 7 B. Consideration of approval of resolution authorizing purchase of real property located at 6637 Fifth Avenue through New Home Program S.R. No. 8 C. Consideration of approval of resolution authorizing purchase of real property located at 6938-13th Avenue for a Richfield Rediscovered Program project S.R. No. 9 D. Consideration of approval of contract with S.R. Stevens Excavating, Inc. for demolition at 6825 Grand Avenue and 6220-15th Avenue and' authorizing staff to contract for any uncovered abatement costs S.R. No. 10 Notes: 6. Consideration of approval of revisions to the guidelines for the Foreclosure Purchase Incentive Program Staff Report No. 11 Notes: 7. Executive Director report 8. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. HOUSING AND REDEVELOPMENT ' ~ AUTHORITY SPECIAL- WORKSESSION MINUTES Richfield, Minnesota January 19, 2010 CALL TO ORDER The meeting was called to order by Chair Sandahl at 6:00 p.m. ROLL CALL Members Present: Sue Sandahl Chair, David Gepner, Steven Quam and Joan Helmberger. Staff Present: Steven Devich, Executive Director; John Stark, Community Development Director; and Nancy Gibbs, City Clerk Item # I DISCUSSION WITH MINNESOTA LIFE COLLEGE REGARDING. FUTURE EXPANSION PLANS IN RICHFIELD Kathryn Thomas, Executive Director of Minnesota Life College, explained future expansion plans for Minnesota Life College. Ms. Thomas introduced Eric Engh, Vice President of Ryan _ Companies. Commissioner Quam asked if the college is a tax exempt organization. Ms. Thomas responded, yes, the main office building would be tax exempt. Commissioner Quam asked what the source of funding would be. Ms. Thomas responded that they had been saving for six years, they will also have fundraisers, parents will be contributing, they will be partnering with others, and City money if available. Item #2 DISCUSSION WITH RON CLARK CONSTRUCTION REGARDING POTENTIAL USES OF FORMER CITY GARAGE/HRA-OWNED MORTUARY SITE Ron Clark, owner of Ron Clark Construction, presented construction proposal for the former City garage site and HRA mortuary site. Tim Whitten of Whitten Associates presented two plans for development of townhomes at the site. Special Worksession Minutes -2- January 19, 2010 After much discussion, Commissioner Quam stated that he would like more time and more information to make a decision between the plans presented by Minnesota Life College and Ron Clark Construction. Commissioner Helmberger agreed with Commissioner Quam. Chair Sandahl directed staff to get together with both groups, gather additional financial information on how they intend to pay for their projects and report to the HRA next month. ADJOURNMENT The meeting was adjourned by unanimous consent at 6:50 p.m. Date Approved: Nancy Gibbs City Clerk Suzanne M. Sandahl Chair Steven L. Devich Executive Director J HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting January 19, 2010 ` CALL TO ORDER The meeting was called to order by Chair Sandahl at 7:05 p.m. ROLL CALL HRA Members Present: Sue Sandahl, Chair; Joan Helmberger; David Gepner, and Steven Quam HRA Members Absent: Doris Rubenstein. Staff Present: Steven L. Devich, Executive Director; John Stark, Community Development Director; Chris Regis, Finance Manager; and Nancy Gibbs, City Clerk. Item #1 CONSIDERATION OF ELECTION OF HRA OFFICERS FOR 2010 M/Helmberger, S/Gepner to approve Sue Sandahl as Chair of the HRA for 2010. Motion carried 4-0. M/Sandahl, S/Quam to approve David Gepner as Vice Chair of the HRA for 2010. Motion carried 4-0. M/Quam, S/Sandahl to approve Joan Helmberger as Secretary of the HRA for 2010. Motion carried 4-0. HRA Meeting -2- January 19, 2010 Item #2 HRA APPROVAL OF MINUTES M/Gepner, S/Sandahl to approve the minutes of December 21 2009 Regular HRA Meeting. Motion carried 4-0. Item #3 HRA APPROVAL OF AGENDA M/Quam, S/Gepner to approve the agenda. Motion carried 4-0. Item #4 CONSENT CALENDAR A. Consideration of approval of designating Community Development Director as Acting Executive Director of HRA in event Executive Director is absent from City for 2010- S.R. No. 2 B. Consideration of approval of resolution designating official depositories for HRA, including collateral for 2010 S.R. No. 3 HRA RESOLUTION NO. 1063 RESOLUTION DESIGNATING U.S. BANK A DEPOSITORY OF FUNDS OF THE HRA OF RICHFIELD FOR THE YEAR 2010 This resolution appears as HRA Resolution No. 1063. HRA RESOLUTION NO. 1064 RESOLUTION DESIGNATIONG CERTAIN SAVINGS AND LOAN ASSOCIATIONS, , BANKS AND CREDIT UNIONS AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2010 This resolution appears as HRA Resolution No. 1064. HRA RESOLUTION NO. 1065 RESOLUTION DESIGNATING CERTAIN FINANCIAL INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2010 This resolution appears as HRA Resolution. No. 1065. HRA Meeting -3- January 19, 2010 C. Consideration of approval of resolution designating Richfield Sun-Current as official newspaper of 20.10 S.R. No. 4 HRA RESOLUTION NO. 1062 RESOLUTION DESIGNATING AN OFFICIAL NEWSPAPER FOR 2010 This resolution appears as HRA Resolution No. 1062. D. Consideration of approval of 2010 consultant services agreement with Greater Metropolitan Housing Corporation S.R. No. 5 M/Helmberger, S/Quam to approve the Consent Agenda. Motion carried 4-0. Item #5 CONSIDERATION OF RESOLUTION AUTHORIZING HRA EXECUTIVE DIRECTOR AND HRA CHAIR TO EXECUTE INSTRUMENTS NECESSARY TO PURCHASE VACANT AND FORECLOSED PROPERTIES FROM HOUSING AND REDEVELOPMENT FUND THROUGH DECEMBER 31, 2010 S.R. NO. 6 Community Development Director John Stark presented Staff Report No. 6. HRA RESOLUTION NO. 1061 RESOLUTION AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY STAFF TO ACQUIRE CERTAIN FORECLOSED HOMES WITHIN THE CITY AND TO EXECUTE ALL INSTRUMENTS AND CONTRACTS RELATED THERTO This resolution appears as HRA Resolution No. 1061. M/Sandahl, S/Quam to approve Item No. 5. Motion carried 4-0. Item#6 CONSIDERATION OF PROPOSAL MADE BY OWNER OF 6804 MORGAN AVENUE FOR SETTLEMENT FO $25,000 HRA DEFERRED LOAN S.R. N0.7 Community Development Director Stark presented Staff Report No. 7. M/Quam, S/Gepner to deny settlement of $1,000. Motion carried 4-0. M/Quam, S/Gepner directed staff to negotiate with lender to receive larger settlement without coming back to HRA for approval. Motion carried 3-0 (Helmberger abstained). HRA Meeting -4- January 19, 2010 Item #7 EXECUTIVE DIRECTOR REPORT None. Item#8 CLAIMS AND PAYROLL M/Helmberger, S/Gepner that the following claims and payrolls be approved: U.S. Bank 01/19/2010 Section 8 Checks: 118363 - 118502 $ 169,102.00 HRA Checks: 30797 - 30821 $ 53,619.72 TOTAL $222, 721.72 Motion carried 4-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 7:55 p.m. Date Approved: Nancy Gibbs City Clerk Suzanne M. Sandahl Chair Steven L. Devich Executive Director AGENDA ITEM # REPORT # ~i STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 16, 2010 REPORT PREPARED BY: JULIE URBAN, HOUSING SPECIALIST REPORT PRESENTER: NA,uE~, T/TLE KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR Nandr;, Tizzc DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a resolution for submittal of an application to the Hennepin County Housing, Support Services and Transit Coordinated Request for Proposals to request funding for a down payment assistance program. L RECOMMENDED ACTION: By Motion: Adopt the attached resolution approving submittal to the Hennepin County Housing, Support Services and Transit Coordinated Request for Proposals to request funding for a down payment assistance program. II. BACKGROUND The Hennepin Housing Consortium, which represents all 45 suburban Hennepin County communities, has approximately $2.0 million in HOME funds available. HOME funds are federal funds that come from the U.S. Department of Housing and Urban Development (HUD) to develop affordable housing. Hennepin County administers the HOME Program on behalf of the Consortium and has issued the 2010 Hennepin County Housing, Support Services and Transit Coordinated Request for Proposals. 021610 HOME Funding Application A proposal is being prepared to request funding for a down payment assistance program for households buying foreclosed homes in Richfield. The program would provide up to $10,000 to buyers with a household income below 80 percent of the Twin Cities Area Median Income (AMI) to be used for down payment and closing .costs. The assistance would be in t_he form of a no-interest deferred loan, with a five-year term. The City currently has two programs; the Foreclosure Purchase Incentive Program (FPIP) and Neighborhood Stabilization Program (NSP) to respond to the foreclosure crisis; however, the primary focus of both of these programs is to stabilize neighborhoods. The program being proposed for HOME funds is intended primarily to assist low and moderate income households with homeownership and secondarily to stabilize neighborhoods. The application will request $40,000 in HOME funding and the HRA would be required to provide an additional 25% in matching funds to assist a total of five households. III. BASIS OF RECOMMENDATION A. POLICY • It is appropriate to seek outside funding wherever possible. • The Hennepin County Consortium Consolidated Plan establishes several goals for HOME funds including providing increased opportunities for homeownership to moderate and low-income households (up to 80 percent of AMI). • An additional County priority is to give priority consideration to funding proposals that address foreclosure issues. B. CRITICAL TIMING ISSUES • Applications are due to Hennepin County on February 25, 2010. C. FINANCIAL • HOME requires applicants to leverage an amount equal to or greater than 25 percent of the funding request from non-federal sources. The HRA would be required to provide $10,000. The .funding source would be the Housing and Redevelopment Fund. • Not submitting an application will cause the HRA to forego a potential funding source in 2010. D. LEGAL • N/A TERNATIVE RECOMMENDATION(S) Do not adopt the resolution and direct staff to withhold the application I V . ATTACHMENTS I VI. PRINCIl'AL PARTIES EXPECTED AT MEETING • N/A ~~- i RESOLUTION NO. RESOLUTION AFFIRMING AND RATIFYING HOUSING AND REDEVELOPMENT AUTHORITY STAFF SUBMITTAL OF AN APPLICATION TO THE HENNEPIN COUNTY HOUSING, SUPPORT SERVICES AND TRANSIT COORDINATED REQUEST FOR PROPOSALS FOR A DOWN PAYMENT ASSISTANCE PROGRAM WHEREAS, the Richfield Housing and Redevelopment Authority (the "HRA") is located within Hennepin County and is therefore eligible to access the Hennepin County Housing, Support Services and Transit Coordinated Request for Proposals (CRFP); and WHEREAS, the Hennepin County Housing, Support Services and Transit CRFP includes the HOME Investment Partnerships Program (HOME) and Affordable Housing Incentive Fund (AHIF) Program. WHEREAS, the HRA has the institutional, managerial and financial capability to ensure adequate project administration; and WHEREAS, the HRA certifies that it will comply with all applicable laws and regulations as stated in the contract agreements; and NOW, THEREFORE, BE IT RESOLVED, that the HRA supports the Hennepin County Housing, Support Services and Transit CRFP application submitted to Hennepin County on February 25, 2010, for a down payment assistance program. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 16th day of February, 2010. Suzanne M. Sandahl, Chair ATTEST: Joan Helmberger, Secretary 021610 HOME Funding Application AGENDA ITEM # 'j$ REPORT # R STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 16, 2010 REPORT PREPARED BY: MICHELLE LEWIS, HOUSING SPECIALIST Nan~c, Trz~r REPORT PRESENTER: KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR 1 Nanlr:, Tizcc DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIR (SCR: ~ ~,~'~~ ~ ~_ !~ ITEM FOR HRA CONSIDERATION: Consideration of a resolution authorizing the purchase of real property located at 6637 5th Avenue through the New Home Program. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the purchase of real property located at 6637 5th Avenue through the New Home Pro ram. II. BACKGROUND The owner of 6637 5th Avenue approached staff and expressed an interest in selling the property to the Housing and Redevelopment Authority (HRA). Built in 1931, the house has two bedrooms and is 596 square feet in total. The house is in fair condition; however the small size makes it difficult to market in an as-is condition and expansion would be economically and functionally impractical. The house is located on a 6,350 square foot lot. The property would be developed for affordable housing under the New Home Program. Established in 1978, the New Home Program allows the HRA to purchase substandard property, demolish the existing home and sell the property to a nonprofit developer with plans to build a new affordable home. 02162010 6637 5th Ave Acq The agreed purchase price of the property is $105,000 plus closing costs and will be paid through the HRA's Housing and Redevelopment Fund. This expense is provided for in the 2010 Budget. III. BASIS OF RECOMMENDATION A. POLICY • The Richfield Comprehensive Plan calls for the City to "Promote the development, management, and maintenance of affordable housing in the City." Acquiring this property would allow the replacement of a functionally obsolete property with a newly constructed, affordable home that offers features desirable to families. • The HRA has demonstrated success through its New Home Program in removing substandard housing and providing affordable replacement housing for families. • The Planning Commission approved on November 11, 2009 and reviewed on February 8, 2010 the resolution that the acquisition and disposition of single family properties for single family residential purposes would be consistent with the Richfield Comprehensive Plan in the following conditions: • The property is zoned R (single family residential). • The property is used as single family residential. • The property is guided as low density residential. • The proposed use is as single family residential. B. CRITICAL TIMING ISSUES • The house is currently vacant, and the Seller initiated a voluntary sale with the H RA. • Purchase of this property by the HRA will result in the replacement of a substandard, functionally obsolete house with an affordable family house that offers desirable features in today's market. • A nonprofit developer will be identified in the future. C. FINANCIAL • Due to the current housing market, the HRA is able to acquire the property at a very reasonable price of $105,000 plus closing costs. The current assessed value is $118,000 with a land value of $62,000. • Funds are available for the acquisition through the Housing and Redevelopment Fund. • Funding for this activity has been budgeted for in the HRA's 2010 Budget. D. LEGAL • Legal Counsel drafted the Purchase Agreement. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not authorize the purchase of the property. V. ATTACHMENTS • Resolution • Purchase Agreement • Photo of existing structure VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ^' HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6637 5th AVENUE WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota ("the HRA") desires to purchase certain real property pursuant to and in furtherance of the New Home Program, said property being described as: 6637 5th Avenue Lot 15, Block 1, McCutchan's Portland Avenue Park, Include Adj'/2 of Alley Vac, Abstract; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property. within its area of operation; and WHEREAS, Housing and Redevelopment Funds are available for acquisition purposes. NOW THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield: 1. The purchase price for the property identified is approved at $105,000, plus closing costs, not to exceed $115,000. 2. The Chairperson and Executive Director are authorized to execute a Purchase Agreement and to take other actions necessary to purchase the property for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota on this 16th day of February, 2010. Suzanne M. Sandahl, Chair ATTEST: Joan Helmberger, Secretary ~~~ ~ ~ 6637 5th Avenue South ~~"1~ PURCHASE AGREEMENT THIS AGREEMENT is made as of this day of , 2010, by and between Cheri E. Maurer, a single person ("Seller") and the Housing and Redevelopment Authority in and for the City of Richfield , a public body corporate and politic under the laws of the State of Minnesota (`TIRA" or "Buyer"). RECITALS A. Seller is the owner of property located at 6637 5t1i Avenue South, Richfield, Minnesota, which is legally described on the attached Exhibit A ("Property"). B. The Property includes includes all plants, shrubs and trees, storm windows and/or inserts, storm doors, screens, awnings, •~ ~„~^••° ^~^a°~, i,i;„a~, ^••~-*^~„ *r^~~°r~° ,plumbing fixtures, water heater, heating system, "~~m~a~~°'-, ^°„*~-^' ^ „'';*;°~;r~, ele~t~e~~n~~-autetic > > ~p Jt ~°, m °r,''°°a ~ r, ~H*°r^°~ and installed carpeting located on the premises which .are the property of Seller. The property also includes the following personal property: NONE. Seller is responsible for removal of all personal property. Seller may remove the following items, provided Seller does not cause any unnecessary damage to the Property: The window air conditioner unit is not included in the sale to the buyer. AGREEMENT 1. Offer/Acceptance for Sale of Property. The Seller agrees to sell to the HRA the Property and the HRA agrees to purchase the same, according to the terms of this Agreement. 2. Purchase Price for Property and Terms. A. PURCHASE PRICE: The total Purchase Price for the Property is One Hundred Five Thousand and 00/100ths Dollars ($105,000.00). B. TERMS: (1): EARNEST MONEY. The sum of Five Thousand Dollars ($5,000.00) Earnest Money shall be paid by the Buyer to the Seller. (2): BALANCE DiJE SELLER:, Buyer agrees to pay by check or electronic transfer of funds on the Closing Date any remaining Balance Due ~~`~ according to the terms of this Purchase Agreement. (3): DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed or Personal Representative's Deed conveying marketable title to the Property to Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. c. Public utility and drainage easements of record which will not interfere with Buyer's intended use of the Property. (4): DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. In addition to the Warranty Deed required at paragraph 2B(3) above, Seller shall deliver to the Buyer: a. Standard form Affidavit of Seller. b. A "bring-down" certificate, certifying that all of the warranties made by Sellers in this Purchase Agreement remain true as of the date of closing. c. Certificate that Seller is not a foreign national. d. If an environmental investigation by or on behalf of the Buyer discloses the existence of petroleum product or other pollutant, contaminant or other hazardous substance on the Property, either (i) a closure letter from the Minnesota Pollution Control Agency (MPCA) or other appropriate regulatory authority that remediation has been completed to the satisfaction of the MPCA or other authority; or (ii) Agreement for remediation/indemnification and security as the HRA may require. e. Well disclosure certification, if required, or, if there is no well on the Property, the Warranty Deed given pursuant to paragraph 2B(4) above must include the following statement: "The Seller certifies that the Seller does not know of any wells on the described real property." f. Any other documents reasonably required by the HRA's title insurance company or attorney to evidence that title to the Property is marketable and that Seller has complied with the terms of this 2 ~~ Purchase Agreement. 3. Contingencies. Buyer's obligation to buy is contingent upon the following: a. Buyer's determination of marketable title pursuant to paragraph 4 of this Agreement. b. Buyer's determination, in its sole discretion, that the results of the environmental investigation under this Agreement are satisfactory to Buyer; c. The parties acknowledge that the Richfield zoning ordinance requires that lots in the R district meet certain minimum lot width, and area requirements. If these standards are not met, one or more variances will be necessary prior to construction of a new dwelling on the property. If the City does not issue all variances necessary to make the property a buildable lot within the meaning of the zoning ordinance, the Buyer at its sole discretion may cancel this Purchase Agreement; and d. Approval of this Agreement by the HRA's Board. Buyer shall have until the Date of Closing to remove the foregoing contingencies. The contingencies at a. b. and c. are solely for the benefit of Buyer and may be waived by Buyer. The contingency at c. may not be waived by either parry. If Buyer or its attorney gives written notice to Seller that the contingencies at a., b. c, and d. are duly satisfied or waived, the Buyer and Seller shall proceed to close the transaction as contemplated herein. If one or more or Buyer's or Seller's contingencies is not satisfied, or is not satisfied on time, and is not waived, this Purchase Agreement shall thereupon be void at the written option of Buyer, Seller shall return the Earnest Money to Buyer, and Buyer and Seller shall execute and deliver to each other the termination of this Purchase Agreement. As a contingent Purchase Agreement, the termination of this Agreement is not required pursuant to Minnesota Statutes, Section 559.21, et. seq. 4. Title Examination/Curing Title Defects. The Seller will provide the Buyer with the abstract of title for the Property for updating at Buyer's expense. If the abstract is not available, the HRA shall, at its expense and within a reasonable time after Seller's acceptance of this Agreement, obtain a commitment for title insurance ("Commitment") for the Property. The HRA shall have ten (10) business days after receipt of the commitment and executed Purchase Agreement to examine the same and to deliver written objections to title, if any, to Seller, or HRA's right to do so shall be deemed waived. Seller shall have until the Closing Date (or such later date as the parties may agree upon) to make title marketable, at the Seller's cost. In the event that title to the Property cannot be made marketable or is not made marketable by the Seller by the Closing Date, then, this Agreement may be terminated at the option of the Buyer. 5. Environmental Investigation. The Seller warrants that the Property has not been used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product during the period of time the Seller has owned the Property. The Seller further warrants that the Seller has no knowledge or 3 5~3~ information of any fact which would indicate the Property was used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product prior to the date the Seller purchased the Property. Notwithstanding the above, the Seller's warranty regarding petroleum products does not preclude the presence of heating oil or other similar products used as a heating fuel for the dwelling but the Seller does warrant that if there was a fuel tank on the Property used for the storage of heating oil or other similar product, the Seller has no knowledge of any leak in the tank or contamination caused thereby. Seller hereby grants to Buyer and Buyer's agents a license to enter and evaluate the Property for the purpose of conducting an environmental assessment. The Buyer is required to perform an environmental assessment prior to committing federal Community Development Block Grant (CDBG) funds. Further, the Buyer or Buyer's agent shall have the right pursuant to the license to bring persons and equipment onto the Property, make inspections and perform tests and analyses as Buyer may deem reasonable to determine the presence of any toxic or hazardous waste, substance, or petroleum product or asbestos product, and ascertain soil conditions on the Property. Buyer shall bear the cost of the environmental assessment. If the results of the environmental assessment are not to the satisfaction of the Buyer, including a release from environmental conditions related to the commitment and expenditure of CDBG funds, the Buyer at its sole discretion may cancel this Purchase Agreement. If the Buyer cancels this Purchase Agreement pursuant to this provision, the Buyer shall restore the Property to its original condition or nearly so as is reasonably practicable. 6. Real Estate Taxes and Special Assessments. Real estate taxes payable in the year of closing will be pro-rated between the Buyer and Seller to the date of closing. Seller shall pay all real estate taxes payable in previous years, the entire unpaid balance of special assessments, and all installments of special assessments levied and pending, including special assessments installments payable after the year of closing. Seller also agrees to pay all assessments related to service charges furnished to the Property prior to the date of closing (e.g., delinquent water or sewer bills, removed or diseased trees), including those charges levied, pending, or certified to taxes payable in the year of closing. If closing occurs prior to the date the amount of real estate taxes due in the year of closing are available from Hennepin County, the current year's taxes will be pro-rated based on the amount due in the prior year. 7. Closing Date. The date of closing will be on or before March 31, 2010. Delivery of all papers and the closing shall be made at the offices of HRA, 6700 Portland Avenue South, Richfield, Minnesota 55423, or at such other location as is mutually agreed upon by the parties. All deliveries and notices to HRA shall be made to the above address and marked to the attention of Housing Specialist. 8. Possession/Utilities/Removal of Property/Escrow. (a) Possession. The Seller agrees to deliver possession not later than the date of closing. (b) Utilities. City water and sewer charges, electricity and natural gas charges, fuel oil 4 ~~ and liquid petroleum gas shall be pro-rated between the parties as of the date of closing. Seller shall arrange for final readings as of the date of closing. (c) Personal Property. The Seller agrees to remove all debris and all personal property not included herein from the Property before the possession date. Personal property not so removed shall be deemed forfeited to and shall become the property of the Buyer. The Buyer may inspect the Property immediately prior to closing and deduct from the purchase price payable at closing an amount reasonably necessary to pay for the cost of removal of any debris or personal property then remaining on the Property. The provisions of this paragraph shall not merge with the deed and shall survive closing on the property. (d) Escrow. Seller agrees that, at closing, the HRA may retain Five Hundred Dollars ($500.00) from the purchase price for the Property as an Escrow for payment of personal property removal, disposal charges and utility charges. The retained amount, less deductions provided for this in paragraph 8, will be delivered to Seller no later than 60 days following the date of closing or delivery of possession, whichever is later. Said funds shall be held by Kennedy & Graven, Chartered, as Escrow Agent, pursuant to the terms of the Escrow Agreement attached here as Exhibit C. (e) The HRA's ability to deduct amounts due under this paragraph from the retained escrow is not exclusive but is in addition to the HRA's rights at law and equity to collect such amounts from Seller. The Seller is responsible for the amounts due under this paragraph even if: (i) the HRA neglects to deduct the amount from escrow; or (ii) the escrowed amount is insufficient to pay all amounts due under this paragraph 8. 9. Seller Warranties. (a) Sewer and water. Seller warrants that the Property is connected to City sewer and City water. (b) Mechanics' Liens. Seller warrants that, prior to the closing, Seller shall pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure upon or improvement to the Property. (c) Notices. Seller warrants that it has not received any notice from any governmental authority as to violation of any law, ordinance or regulation in connection with the Property. (d) Tenants. Seller warrants that the Property is not now occupied by tenants and was not occupied by tenants at the time the Seller first received the Buyer's written offer to purchase the Property. (e) Broker Commission. Each party represents to the other that it has not utilized the services of any real estate broker or agent in connection with this Purchase Agreement or the transaction contemplated by this Purchase Agreement. Each party agrees to indemnify, defend, and hold harmless the other party against and in respect of any such obligation and liability based in any way upon agreements, arrangements, or understandings made or claimed to have been made by the party with any third person. ~~~~ (f) Structures. The Seller warrants that the buildings, if any, are entirely within the boundary lines of the Property. The parties acknowledge that the Property is being sold in "as is" condition relating to the structural, operational, and mechanical systems. 10. Closing Costs/Recording Fees/Deed Tax. The HRA will pay: (a) the closing fees charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Agreement; (b) the premium for title insurance policy, if any, obtained by the HRA; and (c) the recording fee for the deed transferring title to the HRA. Seller will pay all other fees normally paid by sellers, including (a) any transfer taxes and recording fees required to enable the HRA to record its deed from Seller under this Agreement, and (b) fees and charges related to the filing of any instrument required to make title marketable. Each party shall pay its own attorney fees. 11. Inspections. From the date of this Agreement to the Date of Closing, HRA, its employees and agents, shall be entitled to enter upon the Property to conduct such surveying, inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and testing of groundwater monitoring wells, as the HRA shall elect; provided, that Seller is given at least 24 hours' notice. 12. Risk of Loss. It there is any loss or damage to the Property between the date hereof and the date of closing, for any reason including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on the Seller. If the Property is destroyed or substantially damaged before the closing date, this Purchase Agreement shall become null and void, at the HRA's option. At the request of the HRA, Seller agrees to sign a cancellation of Purchase Agreement. 13. Default/Remedies. If the Buyer defaults in any of the covenants herein, the Seller may terminate this Purchase Agreement, and on such termination all payments made hereunder shall be retained by the Seller as liquidated damages, time being of the essence. This provision shall not deprive either party of the right to enforce specific performance of this Purchase Agreement, provided this Purchase Agreement has not terminated and action to enforce specific performance is commenced within six months after such right of action arises. In the event the Buyer defaults in its performance of the terms of this Purchase Agreement and Notice of Cancellation is served upon the Buyer pursuant to Minn. Stat. Section 559.21, the termination period shall be thirty (30) days as permitted by Minn. Stat., Section 559.21, Subd. 4. 14. Notice. Any notice, demand, request or other communication which may or shall be given or served by the parties, shall be deemed to have been given or served on the date the same is personally served upon one of the following indicated recipients for notices or is deposited in the United States Mail, registered or certified, return receipt requested, postage prepaid and addressed as follows: 6 ~~" / SELLER: Cheri E. Maurer 12929 16th Avenue South Burnsville, MN 55337 BUYER: Housing and Redevelopment Authority of the City of Richfield Attn: Housing Specialist 6700 Portland Avenue South Richfield, MN 55423 AGENT: Kennedy & Graven, Chartered ATTN: Corrine Heine and Catherine B. Rocklitz 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 15. Entire Agreement. This Purchase Agreement, Exhibits, and other amendments signed by the parties, shall constitute the entire Agreement between Seller and the HRA and supersedes any other written or oral agreements between the parties relating to the Property. This Purchase Agreement can be modified only in a writing properly signed on behalf of Seller and the HRA. 16. Survival. Notwithstanding any other provisions of law or court decision to the contrary, the provisions of this Purchase Agreement shall survive closing. IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above. Buyer: Housing and Redevelopment Authority in and for the City of Richfield By: Its Chair And by: Its Executive Director Seller: u ~~~ ~~i~~ri~~.r/ Cheri E. Maurer 7 ~~-~© EXHIBIT A Legal Description of Property Lot 15, Block 1, McCutchan's Portland Avenue Park, Include Adj %2 of Alley Vac Abstract A-1 5~--ri EXHIBIT B Escrow Agreement THIS AGREEMENT entered into this day of 2010, by and between Cheri E. Maurer, a single person ("Seller"), the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, a Minnesota municipal corporation ~`FIIZA" or "Buyer"), and KENNEDY & GRAVEN, CHARTERED ("Escrow Agent" or "Agent"). RECITALS A. Seller and Buyer have entered into a Purchase Agreement dated , 2010 ("Agreement") for the sale of property located at 6637 5th Avenue South, Richfield, Minnesota and legally described on the attached Exhibit One .(the ("Property") B. The parties desire to close the sale of the Property on AGREEMENT The parties agree as follows: 1. Delivery of Possession. Seller shall deliver possession of the Property to Buyer on or in accordance with the Purchase Agreement entered into by the parties. The Purchase Agreement requires the Seller to pay all utilities and to remove all personal property from the Property upon closing. 2. Escrow. (a) Upon closing and execution of this Agreement, Seller agrees to deposit into escrow the sum of $500.00 (the "Escrowed Funds") from the purchase price, to be held by Agent in anon-interest bearing account. (b) Within 7 days after requested by Agent, Buyer shall provide to Agent (with copy to Seller) evidence of expenses incurred for the removal and disposal of personal property and for payment of utility charges for services provided to the Property prior to date of possession, if any. Agent shall reimburse Buyer for the incurred expenses from the Escrowed Funds within 7 days following receipt of such evidence from Buyer. (c) Agent shall deliver to Seller the balance of the Escrowed Funds on deposit, less deductions provided for in paragraph 6(b) above, no later than 30 days following vacation of the Property by Seller. (d) The sole duties of Agent shall be those described herein, and Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other B-1 ~~`l~ agreements among said parties. Agent shall have no duty or liability to verify any amounts deducted from the retained amount and Agent's sole responsibility shall be to act expressly as set forth in this Escrow Agreement. 7. Escrow Agent Liability. The sole duties of Escrow Agent shall be those described herein, and Escrow Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Escrow Agent may conclusively rely upon and shall be protected in acting on any notice believed by it to be genuine and to have been signed or presented by the proper parry or parties, consistent with reasonable due diligence on Escrow Agent's part. Escrow Agent shall have no duty or liability to verify any such notice, and its sole responsibility shall be to act expressly as set forth in this Escrow Agreement. Seller and Buyer understand that Agent is legal counsel to the Buyer and each consents to Agent's serving as Escrow Agent notwithstanding such representation. In the event Agent determines, in its sole discretion, that it cannot continue to serve as Escrow Agent herein, Agent shall deposit the funds with Old Republic National Title Insurance Company or such other Escrow Agent acceptable to Seller and Buyer. Seller consents to Agent's continued representation of Buyer after a deposit is made, and Buyer agrees to pay all escrow fees charged by the substitute Escrow Agent. 8. Notices to be sent to the parties to this Agreement shall be sent by mail or personal delivery to: SELLER: Cheri E. Maurer 12929 16t" Avenue South Burnsville, MN 55337 BUYER: Housing and Redevelopment Authority in and for the City of Richfield Attn: Housing Specialist 6700 Portland Avenue South Richfield, MN 55423 AGENT: Kennedy & Graven, Chartered ATTN: Corrine Heine and Catherine B. Rocklitz 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. B-2 5~ -~ l3 SELLER: BUYER: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By: Its Chair ESCROW AGENT: KENNEDY & GRAVEN, CHARTERED By: And by: Its Executive Director B-3 5~- i~ Exhibit One Legal Description of Property Lot 15, Block 1, McCutchan's Portland Avenue Park, Include Adj '/2 of Alley Vac Abstract B-4 AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 16, 2010 5C REPORT PREPARED BY: MICHELLE LEWIS, HOUSING SPECIALIST NAMF„ TITLE REPORT PRESENTER: KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR Na,~IE, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOI ITEM FOR HRA CONSIDERATION: Consideration of a resolution authorizing the purchase of real property located at 6938 13th Avenue for a Richfield Rediscovered Program project. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the purchase of real property located at 6938 18th Avenue through the Richfield Rediscovered Program. II. BACKGROUND In November 2009 Hennepin County inquired if the Housing and Redevelopment Authority (HRA) would have an interest in purchasing a tax forfeited property at 6938 13th Avenue. The property is a 55' x 127' vacant lot that is bordered by single-family homes to the north, south, and west. The purchase price is $46,579. An appraisal valued the property at $45,000 and the County offered the property to the HRA for the appraised value plus closing costs and fees. Additionally, 20% of the net proceeds from the sale will be returned to the City of Richfield for repayment of unpaid taxes. If purchased the property will be developed for a new infill property under the Richfield Rediscovered Program or New Home Program. 021610 6938 13th III. BASIS OF RECOMMENDATION A. POLICY •` A stated goal of the Richfield 2020 plan is to "sustain, expand, and continuously improve our housing assets." Acquiring this property would allow the construction of a new home on a previously vacant lot. • -The HRA has demonstrated success through its Richfield Rediscovered Program in providing new housing choices for families. • While the HRA typically purchases substandard homes for the Richfield Rediscovered Program or New Home Program, there is no legal requirement to do so. B. CRITICAL TIMING ISSUES • The property is underutilized and is not currently on the tax roles. • A percentage of the net proceeds will be returned to the City of Richfield for unpaid taxes. • A newly constructed three to four bedroom house will be added to the housing stock without removing an existing house. • If the HRA elects to forego the purchase at this time, the lot will be auctioned. C. FINANCIAL • Hennepin County is willing to sell the lot for $46,579. At $7.33 a square foot, the property purchase is considerably less than .recent HRA purchases and involves no demolition costs. • The Housing and Redevelopment Fund would be used to purchase the property. The 2010 HRA budget provides for this expense. D. LEGAL • The Planning Commission approved on November 11, 2009 and reviewed on February 8, 2010 the resolution that the acquisition and disposition of single family properties for single family residential purposes would be consistent with the Richfield Comprehensive Plan in the following conditions: • The property is zoned R (single family residential). • The property is used as single family residential. • The property is guided as low density residential. • The proposed use is as single family residential. IV. ALTERNATIVE RECOMMENDATION~S~ • Do not authorize the purchase of the property. V. ATTACHMENTS • Resolution VI. PRINCII'AL PARTIES EXPECTED AT MEETING • N/A ~~~ ~ HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6938 13TH AVENUE UNDER THE RICHFIELD REDISCOVERED PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota ("the HRA") desires to purchase certain real property pursuant to and in furtherance of the Richfield Rediscovered Program, said property being described as: 6938 13th Avenue The North 55 feet of Lot 4, Block 2, "Richlands 2"d Addition" Hennepin County, Minnesota; Torrens Certificate #1105562 WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operations; and WHEREAS, the Property is tax forfeited land, and the HRA desires to acquire the Property pursuant to Minn. Stat. Sec. 282.01; and WHEREAS, a proceeding subsequent to initial registration will be required to establish clear title to the property in the HRA; and WHEREAS, a purchase price has been negotiated; and WHEREAS, local HRA funds are available for acquisition purposes. NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows 1. The purchase price for the property at 6938 13th Avenue is approved at $46,579 using the Housing and Redevelopment Fund. 2. The Chairperson and Executive Director are authorized to execute purchase agreements and to take other actions necessary to purchase the property for the amount set forth in this Resolution, and to establish clear title to the property in the name of the HRA. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 16th day of February, 2010. Suzanne M. Sandahl, Chair ATTEST: Joan Helmberger, Secretary AGENDA ITEM # REPORT # ~- STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 16, ZO10 REPORT PREPARED BY: JULIE URBAN, HOUSING SPECIALIST NAME, TITLC REPORT PRESENTER: JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR NAME, TiTLr DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE ITEM FOR HRA CONSIDERATION: Consideration of a contract with S.R. Stevens Excavating, Inc. for demolition at 6825 Grand Avenue and 6220 15th Avenue and authorize staff to contract for any uncovered abatement costs. I. RECOMMENDED ACTION: By Motion: 1) Approve the attached Contract for Demolition with SR Stevens Excavating for demolition at 6825 Grand Avenue and 6220 15th Avenue and 2) Authorize staff to contract for any uncovered abatement costs. II. BACKGROUND In November 2009 the Housing and Redevelopment Authority (HRA) acquired the properties at 6825 Grand Avenue and 6220 15th Avenue. The HRA plans to demolish the existing substandard structures and make the lot at 6825 Grand Avenue available for new home construction through the Richfield Rediscovered Program and develop a new affordable home on the lot at 6220 15th Avenue through the New Home program. 02162010 Demo Grand and 15th.doc HRA staff solicited bids for demolition of the houses and garages from five companies: S.R. Stevens Excavating; Frattalone Companies; VEIT & Company; Demo, Dig & Haul, Inc.; and Doboszenski & Sons. Each company responded to the request, submitting the following estimates: • S.R. Stevens $13,100 • Demo, Dig & Haul $13,895 • Doboszenski $20,600 • VEIT $22,511 • Frattalone $28,51.5 Staff recommends that the HRA approve a contract with SR Stevens Excavating for the demolition work. As part of the contract, S.R. Stevens will survey both properties for asbestos and other hazardous materials. The cost for removal is not covered by the contract but will be subcontracted for, if necessary. III. BASIS OF RECOMMENDATION A. POLICY • The HRA has demonstrated success through its Richfield Rediscovered and New Home Programs in removing obsolete housing in poor condition and developing new housing that meets the needs of today's households. • Historically, the HRA has demolished the existing home prior to selling the property. B. CRITICAL TIMING ISSUES • The houses are currently vacant. To reduce potential risks, holding costs, and negative impacts to the surrounding neighborhood, the houses should be demolished as soon as possible. • If the contract is approved, demolition will be completed once load limits are removed in April or May. C. FINANCIAL • S.R. Stevens Excavating submitted the lowest bid at $13,100. • Any abatement costs will be considered above and beyond the demolition costs. There are funds available for the demolition and any necessary abatement in the 2010 budget. D. LEGAL • Legal counsel drafted the Contract for Demolition. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not approve the Contract for Demolition. Award contract to another bidder. V. ATTACHMENTS • Contract for Demolition. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ~~'' 1 CONTRACT FOR DEMOLITION OF 6825 GRAND AVENUE AND 622015TH AVENUE THIS CONTRACT is made and entered into this day of , 200_, by and between SR Stevens Excavating (the "Contractor") and the Housing and Redevelopment Authority in and for. the City of Richfield, State of Minnesota (the "HRA") (collectively, the "Parties"), for the demolition of buildings and abatement of hazardous substances and materials of the property located at 6825 Grand Avenue and 6220 15th Avenue, Richfield, MN 55423. RECITALS WHEREAS, the HRA requires the demolition of buildings at 6825 Grand Avenue and 6220 15th Avenue including among other items, the abatement of hazardous substances and materials (the "Work"). WHEREAS, the HRA has awarded the Work to the Contractor; WHEREAS, the Contractor represents that it has the necessary personnel, experience, competence, and legal right to perform the Work; NOW, THEREFORE, in consideration of the mutual obligations of the Parties hereto, each of them does hereby covenant and agree as follows: Section 1. Definitions "Asbestos" means any_ material containing more than one percent asbestos, which is friable, releasing asbestos fibers into the air, above current levels established by .the United States Occupational Safety and Health Administration. "Contract" or "Agreement" means this agreement between the HRA and Contractor for the performance of the Work, together with all exhibits, amendments, or modifications to the Contract. "Destructive Report" means a hazardous materials abatement inventory prepared to assist in establishing the scope of the Work. "Final Completion" means all items of the Work, "punch list items" and site work are completed and Contractor is eligible for Final Payment. "Hazardous Materials" means asbestos, PCBs, petroleum hazardous waste, radioactive material, or any other hazardous materials or hazardous wastes within the meaning of City, State of Minnesota, or Federal definitions of hazardous materials or hazardous waste. "Owner" means the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. 314396v2 MTN RC125-1 1 ~~~a "Property" means 6825 Grand Avenue South and 6220 15~' Avenue South, Richfield, MN 55423. "Substantial Completion" means the time at which the HRA determines that the Work has progressed to a point where it is sufficiently complete, leaving only minor "punch list" and close out items and other minor site work required to be completed for full payment of the contract price. "Work" means the entire completed demolition, abatement of hazardous materials, and all other activities to be performed by Contractor on the Property as provided for in the Contract. Section 2. General Requirements 2.1. Rights of the HRA. The HRA and the City reserve the right to reject any or all proposals or parts of proposals, to accept part or all of proposals on the basis of considerations other than lowest cost, and to create a project of lesser or greater expense and reimbursement than described in this Contract. The HRA also reserves the right to cancel the Contract without penalty, if circumstances arise which prevent the HRA from completing the project. In the event of any conflict between the General Conditions and this Contract, this Contract shall control. 2.2. Interest of Members of City or HRA. The Contractor agrees that no member of the governing body, officer, employee, or agent of the City or the HRA shall have any interest, financial or otherwise, direct or indirect, in the Contract. 2.3. Equal Opportunity Statement. Contractor agrees to comply with the provisions of all applicable federal, state, and City of Richfield statutes, ordinances, and regulations pertaining to civil rights and nondiscrimination including without limitation Minnesota Statutes, Section 181.59 as amended, incorporated herein by reference. 2.4. Transfer of Interest. The Contractor shall not assign any interest in the Contract, and shall not transfer any interest in the same either by assignment or novation, without the prior written approval of the HRA, provided, however, that claims for money due or to income due to the Contractor may be assigned to a bank, trust company, or other financial institution, or to a Trustee in Bankruptcy without such approval. Notice of any such assignment or transfer shall be furnished to the HRA. Notwithstanding the foregoing, Contractor shall be entitled to use subcontractors to perform the Work. 2.5. Independent Contractor. Nothing contained in this agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer/employee between the parties. The Contractor shall at all times remain an independent contractor with respect to the services to be performed under this agreement. The HRA shall be exempt from payment of all Unemployment Compensation, FICA, retirement, life and/or medical insurance and Workers Compensation Insurance as the Contractor is an independent contractor. 314396v2 M1'N RC125-1 2 ~^ ~~~ 2.6. Hold Harmless. The Contractor agrees to defend, indemnify and hold harmless the HRA and the City ,its officers and employees, from any liabilities, claims, damages, costs, judgments, and expenses, including attorney's fees, resulting directly or indirectly from an act or omission of the contractor, its employees, its agents, or employees of subcontractors, in the performance of the services provided by this contract or by reason of the failure of the contractor to fully perform, in any respect, all of its obligations under this Contract. 2.7. Accounting Standards. The Contractor agrees to maintain the necessary source documentation and enforce sufficient internal controls as dictated by normally accepted accounting practices to properly account for expenses incurred under this contract. 2.8. Retention of Records. The Contractor shall retain all records pertinent to expenditures incurred under this Contract for a period of three years after the resolution of all audit findings. Records for non-expendable property acquired with funds under this contract shall be retained for three years after final disposition of such property. 2.9. Disclosure. The Contractor agrees to comply with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, and all other applicable state and federal laws relating to data privacy or confidentiality, asthose laws may be amended. The Contractor shall immediately report to the HRA any requests from third parties for information relating to this agreement. All data created, collected, received, stored, used, maintained, or disseminated by the Contractor in performing its obligations is subject to the requirements of the Act, and the Contractor must comply with those requirements as if it were a government entity. The HRA agrees to promptly respond to inquiries from the Contractor concerning data requests. The Contractor agrees to hold the City and the HRA, its officers, department heads and employees harmless from any claims resulting from the Contractor's failure to disclose data maintained by the Contractor and authorized for release by the HRA, and from Contractor's unlawful disclosure or use of data protected under state and federal laws. Section 3. Contract Price 3.1. Upon compliance with all the requirements of this Contract, Contractor shall be paid the Contract Price of $13,100, pursuant to Section 28 of this Contract. Section 4. Project Schedule 4.1. Contractor shall commence the Work on or after contract execution and Substantial Completion of the Work shall be achieved no later than ~) days thereafter. Section 5. Local Permit Requirements and Related Submittals 314396v2 MTN RC125-1 s~~~ 5.1. Contractor shall obtain permits required by the City of Richfield, including a plumbing permit (for water & sanitary sewer disconnects) and a demolition permit. Questions about these permits, permit fees, and the scheduling process for the required inspections should be directed to the Building Inspections Department at Richfield City Hall (612-861-9816). Contractor (has) (has not) been provided a copy of an abatement hazardous materials inventory ("Destructive Report"). The Destructive Report is not intended by the HRA to limit the activities of the Contractor, but to assist the Contractor in assessing the scope of the Work for purposes of complying with its obligations under this Agreement. 5.2. No less than 2 days prior to beginning the Work, the Contractor shall provide: - Description of proposed dust and noise control measures for the Property. 5.3. Upon completion of the Work, Contractor shall provide: - Copies of any permits required by government agencies other than the City of Richfield, such as transport or disposal permits. - Copies of any test results required by government agencies other than the City of Richfield, including but not limited to testing required as part of the asbestos abatement process. - Copies of all landfill records indicating receipt and acceptance of hazardous wastes by a landfill licensed to accept hazardous wastes. Section 6. Job Conditions -General 6.1. Contractor will disconnect and abandon utilities serving the Property, including water, sanitary sewer, electricity, gas and telecommunications; or arrange for disconnection and abandonment of same. Contractor shall not begin work before field- verifying that disconnection and abandonment has been completed. 6.2. Owner shall ensure that the buildings will be vacated and use of the property will be discontinued prior to start of work. 6.3. Owner assumes no responsibility for actual condition of structures to be demolished. Conditions existing at time of inspection for bidding purposes will be maintained by Owner to the extent practicable. Contractor may salvage any and all materials and equipment from the Property. Variations within structures may occur due to removal and salvage operations prior to the start of demolition work. 6.4. This is a lump sum contract. Contractor must immediately contact Owner prior to exceeding the Contract Price set out in Section 3.1. Change orders for additional payment will not be granted due to the Contractor underestimating quantities of material(s). 314396v2 MT'N RC125-1 4, ~D 6.5. Contractor shall provide all labor, materials, equipment, employee training, compliance with all regulations, permits, notifications, licenses and agreement necessary to perform the work described in this Contract. 6.6. All materials from undertaking the Work shall become the property -and responsibility of the Contractor. 6.7. Contractor may choose to salvage materials and equipment. Any salvaged items must be removed from the Property in a timely manner as they are salvaged. On site storage or sale of salvaged items is prohibited. 6.8. The use of explosives and on site burning by the Contractor are prohibited. 6.9. Contractor shall provide water, electricity, communications and toilet facilities on site as necessary to complete the work. 6.10. Contractor shall provide and maintain uninterrupted vehicular access to the Property, including temporary demolition facilities, storage and work areas, for not only persons and equipment involved in the project but also emergency vehicles. 6.11. Contractor shall keep fire hydrants and water control valves free from obstruction and accessible for use. 6.12. Contractor shall take all necessary safeguards to prevent damage or injury to neighboring property. 6.13. Prior to closing or rerouting existing traffic lanes or sidewalks in any public street easement or right-of--way adjacent to streets, the Contractor .shall obtain written permission from the City Engineer. Expenses related to lane closures, including but not limited to traffic barriers, signs and similar equipment as well as traffic control personnel, shall be the responsibility of the Contractor. Section 7. Asbestos Abatement 7.1. Contractor shall remove and properly dispose of all friable and category 2 non- friable asbestos containing materials and complete asbestos abatement on the Property in accordance with Minnesota Pollution Control Agency regulations and the Destructive Report identified in Section 5.1 of this Contract. 7.2. Contractor shall decontaminate and encapsulate the work area prior to final clearance and air monitoring. 7,3. Contractor shall provide final cleanup and removal of all remaining temporary barriers, equipment and supplies. 314396v2 M1'N RC125-1 ~~T~ 7.4. Contractor shall provide all monitoring and analysis of air samples as required by state and federal regulations. 7.5. Contractor shall complete final clearance and air monitoring as required by state and federal regulations. Section 8. Other Hazardous Materials Abatement Pursuant to Minnesota Pollution Control Agency regulations (and the Destructive Report), Contractor shall remove and properly dispose of the following materials and items from the Property: 8.1. Mercury: a. Batteries: Smoke .detectors, emergency lighting, exit signs, security systems and alarms. b. Lighting: Fluorescent lights and bulbs; high intensity discharge lights (metal halide, high pressure sodium, mercury vapor and neon); switches and controls for lighting. c. Heating, Ventilating and Air Conditioning Systems: controls, devices, thermostats, aquastats, pressurestats, firestats, manometers, thermometers. d. Boilers, Furnaces, Heaters and Tanks: Mercury flame sensors by pilot lights; manometers, thermometers, gauges, pressure-trol, float and level controls, space heater and unit ventilator controls. e. Electrical- systems: Load meters and supply relays, phase splitters, microwave relays and mercury displacement relays. f. Miscellaneous: All vacuum, pressure, fluid level, temperature and flow rate control boxes and panels. g. Any electrical wiring from fixtures or equipment being removed for abatement shall be capped. 8.2. Poly-Chlorinated Biphenyls (PCBs): Transformers, transistors, capacitors, heat transfer equipment, light ballasts. 8.3. Chlorofluorocarbons (CFCs) and Hydrochlorofluorocarbons (HCFCs): Fire extinguishers, air conditioners, walk-in coolers and freezers, water fountains and dehumidifiers, refrigerators/freezers/chillers, and heat pumps. 8.4. Miscellaneous: 314396v2 MT'N RC125-1 6 ~~ ~~ a. Hazardous waste including general-purpose cleaners, paints and thinners. b. Oils including used oil and hydraulic oil in door closers. c. Water heaters. d. Space heaters. e. Air compressors and controls. f. Building unit ventilators. g. Radiators. h. Fuse boxes and electrical panels. i. Roof top exhaust vents with motors. j. Boiler chemicals. k. Heating fuel tank, including contents, if any. Section 9. Demolition 9.1 Owner has not conducted any testing to determine the extent of lead based paint. Contractor shall conduct demolition in compliance with any state or federal regulations governing demolition of structures containing lead based paint. 9.2. Contractor shall use water sprinkling, temporary enclosures and other suitable methods to limit dust and dirt rising and scattering in air. Contractor shall comply with any and all governing regulations pertaining to environmental protection. Contractor shall not use water when it may create hazardous or objectionable conditions such as flooding or pollution. 9.3. Contractor shall clean adjacent structures and improvements of dust, dirt and debris caused by demolition operations and return adjacent areas to condition existing prior to start of work. 9.4. Contractor shall. demolish buildings, other structures, improvements, and landscaping completely and remove all debris from the Property. Contractor may use such methods as required to complete the work subject to the limitations of governing regulations. 9.5. Contractor shall proceed with demolition in a systematic manner, from top of structures to ground, and will complete demolition work above each floor or tier before disturbing supports on lower levels. 9.6. Contractor shall locate demolition equipment throughout the building and remove materials so as to not impose excessive loads to supporting walls, floor or framing. 9.7. Contractor shall provide and maintain interior and exterior shoring, bracing or other structural support to preserve structural stability and prevent movement, settlement or collapse of the building. 9.8. Contractor shall break up any concrete slabs-on-grade and remove from the Property. 314396v2 MTN RC125-1 7 ~~^C7 9.9. Contractor shall demolish footings, foundation walls, tunnels and other below- grade structures and remove from the Property. 9.10 Contractor shall provide certificate of well abandonment if required. Section 10. Debris Control 10.1. Contractor shall maintain the Property free of extraneous debris. 10.2. Contractor shall prohibit overloading of trucks to prevent spillage on access and haul routes. 10.3. Contractor shall maintain a sweeping and clean-up program to prevent deposition, release and disbursal of soils and debris onto paved surfaces. Section 11. Disposal 11.1. Contractor shall move from the Property all debris, rubbish and other materials resulting from demolition operations. 11.2. Contractor shall transport materials from the Property and legally dispose of them off-site in accordance with governing regulations. Section 12. Earthwork 12.1. Contractor shall rough grade the Property using clean fill after completing all abatement and demolition activities; taper edges of all excavated areas to minimize slope of 2 to 1, keeping soil disturbance to a minimum. Section 13. Excusable Delays 13.1. The .following circumstances, and only these circumstances, will, at the H1ZA's discretion, be considered legitimate cause for a change in the commencement and/or completion dates specified in Section 4 of this Agreement: a. Material delay -- material delays that are beyond the control of the Contractor, which can be shown to have directly caused the overall late completion. b. Adverse weather and emergency conditions -- weather or emergency conditions that directly affect the scheduling of exterior work over a significant portion of the term of this Agreement. c. Strikes -- Contractors who face union work stoppage in the case where they have to rely on such a work force in order to complete the Work. 314396v2 MTN RC125-1 g .~~~ 9 d. Amendments -- amendments in the original scope of work, which can be reasonably shown to require an extension of the time allowed for completion. Other delays -act or neglect of the Owner, or of an employee of either, or of a separate contractor employed by the Owner, or by changes ordered in the Work or by unavoidable casualties or other causes beyond the Contractor's control. Section 14. Change Order 14.1. The HRA shall have the right, within the general scope of the Work and without notice to any surety or sureties of the Contractor, if any, to make changes in the Work, either by altering the nature of the same or by adding to or deducting from it. All changes shall, except in the case of emergencies endangering the safety of persons or property, be made by written Change Order. The parties shall determine the effect of any Change Order on the Contract Price and project schedule by mutual agreement. The Contractor shall promptly comply with any and all written Change Orders. No such Change Order shall be deemed to invalidate the remaining terms and conditions contained in the Contract. Section 15. Waiver of Liability 15.1 It is agreed that the Work is undertaken at the sole risk of the Contractor. The Contractor does expressly forever release the HRA and the City of Richfield from any claims, demands, injuries, damage actions, or causes of action whatsoever, arising out of or connected with the Work. Section 16. Indemnification 16.1. Any and all claims that arise or may arise as a consequence of any act or omission on the part of the Contractor, its agents, servants, or employees while engaged in the performance of the Work shall in no way be the obligation or responsibility of the HRA or the City of Richfield. The Contractor shall indemnify, hold harmless, and defend the HRA and the City of Richfield, its commissioners, council members, officers, employees, successors, and assigns against any and all liability, loss, cost, damages, expenses, claims, or actions, including attorney's fees which the HRA and the City of Richfield, its commissioners, council members, officers, or employees may hereinafter incur or be required to pay on account of injury to or death of any person or persons or damage to any property arising out of or by reason of any act or omission of the Contractor, its agents, servants, or employees in the execution, performance, or failure to adequately perform its obligations under this Agreement, whatever the cause of such injuries or damage. 314396v2 MT'N RC125-1 C~ Section 17. Insurance 17.1. The Contractor agrees that in order to protect itself, the HRA, and the City of Richfield under the indemnity provisions set forth in Section 16 of this Agreement, it will at all times. during the term of this Agreement, maintain, at a minimum, the following insurance policies: a. Workers Compensation Insurance. The Contractor shall maintain worker's compensation insurance in compliance with all applicable statutes including Chapter 176 of the Minnesota Statutes. Such policy shall include Employer's Liability Coverage and at least such amount(s) as are customarily provided in worker's compensation policies issued in Minnesota. Contractor further agrees to require all subcontractors and independent contractors to maintain worker's compensation insurance in compliance with all applicable statutes and to monitor the compliance of such subcontractors and independent contractors with the applicable statutes. b. Commercial General Liability Insurance. The Contractor shall maintain Occurrence Based Commercial General Liability Insurance ("CGL"), providing coverage on an "occurrence", rather than on a "claims made" basis, which policy shall include coverage for the Completed Operations Hazard, and which shall also include a Broad Form General Liability Endorsement, ISO number GL 0404, or an equivalent form (or forms), so long as such an equivalent form (or forms) affords coverage which is in all material respects at least as broad. Any equivalent form (or forms) of coverage shall be approved by the HRA. The Contractor agrees to maintain total liability policy limits of at least One Million Dollars ($1,000,000), applying to liability for Bodily Injury, Personal Injury, and Properly Damage, which total limits may be satisfied by the limits afforded under its Occurrence Based CGL policy as specified above, or by such policy in combination with the limits afforded by an Umbrella Liability Policy (or policies) provided, however, that the coverage afforded under any such Umbrella Liability Policy shall be at least as broad as that afforded by the underlying occurrence based CGL Policy as specified above. c. Automobile Liability Insurance. The Contractor shall maintain automobile liability insurance covering liability for Bodily Injury and Property Damage arising out of the ownership, use, maintenance, or operation of all owned, non-owned, and hired automobiles and other motor vehicles. Such policy shall provide total liability limits for combined Bodily Injury and/or Property Damage in the amount of at least One Million Dollars ($1,000,000) per accident, which total limits may be satisfied by the limits afforded under such policy, or by such ,policy in combination with the 314396v2 M1'N RC125-1 1 ~ ~p^1 limits afforded by an Umbrella Liability Policy (or policies) provided, however, that the coverage afforded under any such Umbrella Liability Policy shall be at least as broad as that afforded by the underlying automobile liability insurance policy. The HRA and the City of Richfield shall be named as "additional insured" parties with respect to the insurance policies specified. in (b) and (c) above. The Contractor shall not commence work until a Certificate of Insurance evidencing all of the insurance policies required above is approved and a written Notice to Proceed is issued by an authorized representative of the HRA. The HRA shall, at any time during the term of this agreement, have the right to require that the Contractor secure any additional insurance, or additional feature to existing insurance, as the HRA may' reasonably require for the protection of its interests or those of the public. It is expressly understood that the HRA does not in any way represent that the minimum insurance coverage set forth in this paragraph is sufficient or adequate to protect the interest or liabilities of the Contractor. Section 18. Bond 18.1. No payment or performance bonds for the Work shall be required pursuant to Minn. Stat. § 574.26. (Option to require bonds.) Section 19. Lien Waiver 19.1. Neither the Contractor nor any subcontractor or other person or entity furnishing labor, equipment, or materials in connection with the Work shall file any mechanic's lien against the HRA's buildings, structures or land or any part thereof, provided that the HRA makes all payments due to Contractor under this Contract. The Contractor shall protect, defend, indemnify, and hold harmless the HRA and the City of Richfield from any and all claims, demands, or actions of whatever nature arising out of work, labor, equipment, or materials furnished by the Contractor or its subcontractors in connection with the Work, provided that the HRA makes all payments due to Contractor under this Contract. Payment of the Contract Price shall not be due until the Contractor has delivered to the HRA lien waivers acceptable to the HRA, which release the HRA from all liens that may arise in connection with the Work. The Contractor shall list on the attached Exhibit A the names of all suppliers and/or subcontractors that will provide materials, services, or labor in connection with the Work. The Contractor will notify the HRA of any changes in this list prior to the commencement of the Work. Section 20. Subcontractors 20.1. Contractor agrees to bind every subcontractor by the terms, conditions, and provisions set forth in the Contract that are applicable to the subcontractor's work, unless otherwise specifically agreed otherwise in writing by the HRA. 314396v2 MT'N RC125-1 11 :.J ~~ l Section 21. Assignment 21.1. This Contract shall be binding upon the Contractor, its legal representatives, heirs, successors, and assigns. No assignment or attempted assignment of this Contract or any rights hereunder shall be effective unless the written consent of the HRA is first obtained. No such assignment, even if consented to by the H1ZA, shall relieve the Contractor from liability under this Contract for the performance and completion of the Work in accordance with the Contract. Notwithstanding the foregoing, Contractor shall be entitled to use subcontractors to perform the Work. Section 22. Entire Agreement 22.1. The Contract contains all the terms, conditions, and provisions pertaining to the Work to be completed by the Contractor, there being no other understandings, agreements, or warranties, express or implied. All prior negotiations and dealings regarding the subject matter of the Agreement are superseded by and merged into the Contract. Section 23. Applicable Law 23.1. This Contract shall be construed in accordance with and governed by the laws of the state of Minnesota. Section 24. Amendment 24.1. This Contract may be modified or amended only with the written approval of the HRA and the Contractor. Section 25. Construction 25.1. In the event that any one or more of the provisions of this Contract, or any application thereof, shall be found to be invalid, illegal, or otherwise unenforceable, the validity, legality, and enforceability of the remaining provisions or any application thereof shall not in any way be affected or impaired thereby. Section 26. Authority 26.1. Each of the undersigned parties warrants that it has the full authority to execute this Contract, and each individual signing this Contract on behalf of a corporation hereby warrants that he or she has full authority to sign on behalf of the corporation and that he or she represents and binds such corporation thereby. Section 27. Waiver 27.1. No failure by the HRA to insist upon the strict performance of any covenant, duty, agreement, or condition contained in this Agreement or to exercise any right or remedy 314396v2 MTN RC125-1 12 ~/~-~ f 3 consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, agreement, term, or condition, nor does it imply that such covenant, agreement, term, or condition may be waived again. Section 28. Payments to Contractor and Completion 28.1. The Contractor shall be paid upon completion of the Work in accordance with the payment schedule of the HRA, if any, and this section. 28.2. Application for Patent. Prior to receiving payment for Substantial Completion of the Work, the Contractor shall in writing state that the respective portion of the Work has been substantially completed and is free and clear of all liens as provided in this Contract. Upon Substantial Completion and inspection and verification by the HRA, the payment for that portion of the Work shall be made. Final payment shall be made when Contractor certifies that Final Completion has been achieved and verified by the HRA. IN WITNESS WHEREOF, the parties have caused this Contract to be duly executed in their names and behalves and on or as of the date and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Suzanne M. Sandahl Its Chair By Steven L. Devich Its Executive Director 314396v2 MTN RC125-1 13 s.~-~y THIS INSTRUMENT DRAFTED BY: Kennedy & Graven, Chartered (MTN) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 314396-v1.DOC CONTRACTOR By Its By Its 314396v2 MTN RC125-1 14 ~~^ ~ ~ EXHIBIT A LIST OF SUPPLIERS AND SUBCONTRACTORS 314396v2 MT'N RC125-1 A-1 AGENDA ITEM # REPORT # J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING FEBRUARY 16, 2010 REPORT PREPARED BY: MICHELLE LEWIS, HOUSING SPECIALIST NAMr:, TrTtE REPORT PRESENTER: KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~ ~~~ REVIEWED BY EXECUTIVE DIREC ITEM FOR HRA CONSIDERATION: Approval of revised guidelines for the Foreclosure Purchase Incentive Program. L RECOMMENDED ACTION: By Motion: Approve revisions to the guidelines for the Housing and Redevelopment Authority funded Foreclosure Purchase Incentive Program. II. BACKGROUND In February 2009 the Housing and Redevelopment Authority (HRA) approved the locally funded Foreclosure Purchase Incentive Program (FPIP) to help stabilize neighborhoods impacted by foreclosures. After 12 months of program operation, staff noted several small changes needed to clarify program eligibility and the terms and conditions of the loan program. In 2009, seven households purchasing vacant and foreclosed single family properties received a total of $90,000 in incentive loans. An additional nine complete applications were submitted in which the household did not qualify for the program. In five cases the households could not meet the equity requirements; in three cases the households' offers were not accepted; in one case the household 021709 Foreclosure Purchase Incentive Program Guidelines rejected the property due to fire damage. Four incomplete applications were also received. The following revisions are proposed for the Program Guidelines. • Broaden program definitions to include other housing types. Expand definition of Property to include foreclosed condominiums and attached, owner-occupied housing units. • Clarify funding eligibility to specify that applications must meet HRA Subordination Agreement requirements. Funds are available on a first-come, first-served basis provided that the applicant meets the HRA's Subordination Agreement policy that the owner has at least 20% equity in the property. • Clarify loan terms and conditions to explain how the HRA calculates the combined Loan To Value ratio. III. BASIS OF RECOMMENDATION • The City has seen a record number of foreclosures over the past two years. It is anticipated that the City will continue to experience many foreclosures due to continued economic difficulties. Foreclosed properties contribute to blighted neighborhoods and negatively impact surrounding property values. Many foreclosed properties are plagued by deferred maintenance and/or damage associated with the foreclosure. A. POLICY • Richfield Comprehensive Plan: Housing Plan Goals are: 1. Maintain and enhance Richfield's image as a community with strong, desirable and livable neighborhoods. 2. Ensure sufficient diversity in the housing stock to provide for a range of household sizes, income levels and needs. • The FPIP accomplishes the Housing Plan Goals through the following policies: o Supporting the rehabilitation and upgrading of the existing housing stock (Housing Plan Goal #1). o Supporting the ongoing maintenance and upkeep of residential properties (Housing Plan Goal #1). o Supporting initiatives to connect residents with their neighborhoods and foster a sense of community (Housing Plan Goal #1). o Encouraging improvements to the housing stock to better serve families with children and seniors (Housing Plan Goal #2). o Promoting housing diversity to serve families at all stages in their life-cycle through incentive programs (Housing Plan Goal #2). • It is the HRA's policy to ensure the housing stock is maintained to facilitate stable neighborhoods and a solid tax-base. It is the HRA's policy to provide homeownership opportunities to households of a variety of income levels. B. CRITICAL TIMING ISSUES • Revising the guidelines to clarify the program strengthens and expands the program for applicants and administrators. • Due to the large number of homes available on the market and due to the deferred maintenance/rehab issues associated with these foreclosed houses, it is prudent to offer an incentive to households to purchase foreclosed properties in the City of Richfield. C. FINANCIAL • $150,000 has been budgeted by the HRA in 2010 for the FPIP. Funds will be distributed in the form of a Deferred Loan, forgivable after five years. D. LEGAL • The HRA Attorney has drafted the FPIP Agreements. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not approve the revised FPIP Guidelines. V. ATTACHMENTS • Proposed revised program guidelines. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ~~~ FORECLOSURE PURCHASE INCENTIVE PROGRAM PROCEDURAL GUIDELINES February 16, 2010 ~~a Table of Contents Statement of Purpose Program Objective Program Outcomes Definitions Eligibility Terms and Conditions Data Privacy General Program Marketing 2 2 2 r~ Foreclosure Purchase Incentive Program Procedural Guidelines Statement of Purpose The purpose of the Foreclosure Purchase Incentive Program (FPIP) is to return foreclosed, vacant properties to owner-occupied properties as quickly as possible. Program Objectives • To eliminate the blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods. • To off-set costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. This will be achieved through the provision of adown-payment assistance or rehabilitation incentive to encourage prospective homebuyers to purchase foreclosed, vacant homes in the city. Program Outcomes • Return ten to fifteen foreclosed, vacant housing units in the city to owner-occupied status. • Stabilize neighborhoods impacted by foreclosed, vacant housing units. • Maintain and increase property values in neighborhoods impacted by foreclosed, vacant housing units. Definitions Buyer -The buyer of the subject Property. HRA -The Housing and Redevelopment Authority in and for the City of Richfield. Property -The subject housing unit and lot, where applicable. Foreclosed Property - A housing unit and lot, where applicable, that has been through a mortgage foreclosure process with the most recent owner of record, and the current owner of record is a lending agency/bank. Eli ibili 1. Funding is limited to the purchase of foreclosed properties, with priority given to foreclosed AND vacant properties. Funding is on a first come, first served basis with priority given to complete applications. HRA Staff will review applications for compliance with FPIP guidelines and the current HRA Subordination and Satisfaction Policy. 2. If the Buyer obtains mortgage financing for the purchase of the Property, a minimum of 20% equity in the Property will be required. (Equity can be in the form of Buyer down-payment and/or the difference between appraised market value and amount of all liens against the property.) 3. Applicants' household incomes are not restricted. 4. The loan recipient must be the Buyer. The Buyer must reside in and homestead the Property during the life of the loan. 5. The Property must be located within the City of Richfield municipal boundaries. 6. Applicants must submit a complete HRA FPIP Application. 7. Applicants who may be eligible to receive down-payment assistance through available State or Federal Programs must apply for those funds prior to applying for HRA FPIP funds. Applicants Y~ ''~ who receive down-payment assistance through State or Federal programs will not be eligible for FPIP funds. 8. Eligible Properties must meet minimum health and safety requirements. Loans will not be issued for uninhabitable properties. Determination of habitability will be at the discretion of the HRA based on City of Richfield Point of Sale Inspection report and physical inspection facilitated by the HRA. Terms and Conditions 1. Maximum loan amount is $10,000 per eligible household for down-payment assistance OR $15,000 per eligible household for rehabilitation assistance. 2. Rehabilitation assistance loans will only be issued in conjunction with the purchase of a Foreclosed Property. 3. Only one loan per eligible household. 4. Funds can be used within the City of Richfield boundaries. 5. Funds can be used for down-payment assistance OR for rehabilitation projects associated with the Property. 6. Buyers will be required to sign an Agreement with the HRA consenting to all loan requirements prior to loan disbursement. 7. Funds for down-payment assistance will be disbursed at closing. 8. Funds for rehabilitation projects will be disbursed in three installments as detailed in the Agreement. 9. Alien will be placed against the Property by the HRA for the full loan amount. 10. Funds will be awarded in the form of a five-year, zero-interest, forgivable loan. 11. Buyer must reside in and homestead the property during the life of the loan. If at any time during the life of the loan the property is vacant for a period of six consecutive months or longer, or the property is no longer homesteaded, the loan will be required to be repaid in full. 12. If the house is sold or the title transferred during the loan period, the loan will be required to be repaid in full. 13. Any mortgage or financing ahead of the HRA for the Property must be in the form of a fixed interest rate. 14. If Buyer obtains mortgage financing for the purchase of the Property, a maximum Loan to Value Ration of 80% (a minimum of 20% equity) in the Property will be required. Equity can be in the form of Buyer down-payment and/or the difference between appraised market value and amount of all liens against the Property. Fifty percent of the HRA loan will be calculated as debt against the Property. See chart below for examples. Rehabilitation Loan Down Pa ment Assistance Loan Home appraisal value $ 100, 000 Home appraisal value $ 100, 000 HRA FPIP Rehabilitation HRA FP1P Down Payment Loan $ 15, 000 Assistance Loan $ 10, 000 Sale Sale First Mortgage /other debt +$ 72,500 price First Mortgage /other debt + $ 75,000 price 50% of HRA 50% of HRA Down Rehabilitation Loan +$ 7,500 Payment Loan + $ 5,000 Totallndebtedness =$ 80,000 Totallndebtedness =$ 80,000 Loan to value ratio $ 80,000 -~ 80% Loan to value ratio $ 80,000 ~ 80% $ 100,000 $ 100,000 2 15. The HRA reserves the right to refuse loan is~ n e to properties deemed to be uninhabitable. 16. The HRA may conduct an inspection of the property to verify that rehabilitation work has been completed in compliance with documentation submitted for the loan. 17. Loan funds are available on a limited basis. Data Privacy All information secured through the program is subject to the Minnesota Data Privacy Act. General Program Marketing Program marketing is entirely at the discretion of the HRA. It may include the following: Buyer Solicitation. The HRA may market the program to Buyers through promotional articles, direct mail, the Internet, or other methods as deemed appropriate. End Buyers may be any financially eligible family. The HRA is a Fair Housing agency. 3