06202023 HRA AgendaR E G U LAR H O U S IN G AN D R E D E V E LO P ME N T AU TH O R ITY ME E TIN G
R IC H F IE L D MU N IC IPAL C E N TE R, C O U N C IL C H AMB E R S
J U N E 20, 2023
7:00 P M
C all to Order
A ppoint a Temporary S ecretary
Open F orum
E ach speaker is to keep their comment period to three minutes to allow sufficient time for others. C omments
are to be an opportunity to address the H R A . P lease refer to the H R A agenda and minutes web page for
additional ways to submit comments. You may also call 612-861-9764 or email ldubois@richfieldmn.gov with
questions. C all into the open forum by dialing 1-415-655-0001 U se webinar access code: 2630 557 9041 and
password: 1234.
Approval of the Minutes
A pproval of the 1) Regular Housing and Redevelopment A uthority meeting minutes of A pril 17, 2023, 2) the S pecial
Housing and Redevelopment A uthority meeting minutes of June 5, 2023; and 3) the S pecial Housing and
Redevelopment A uthority work session minutes of J une 7, 2023.
AG E N D A APPR O VAL
1.A pproval of the A genda
2.Consent Calendar contains several separate items which are acted upon by the H R A in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further H R A action on these items is necessary. However, any H R A
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for H R A discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A .C onsideration of a Resolution authorizing execution of a D eveloper A greement with the West Hennepin
A ffordable L and Housing Trust, dba Homes W ithin Reach, for the acquisition, rehabilitation and sale of
houses under the New Home P rogram.
S taff Report No. 11
B .C onsideration of the adoption of a resolution approving a S ubordination of the C ontract for P rivate
Redevelopment and a C ollateral A ssignment of the Tax Increment F inancing Note for Woodlake C entre,
and authorize the E xecutive D irector to execute an E stoppel C ertificate.
S taff Report No. 12
3.C onsideration of items, if any, removed from C onsent C alendar
R E S O L U T IO N S
4.C onsider a resolution approving a Redevelopment A greement with B eacon Interfaith Housing C ollaborative for
the development of approximately 38 units of supportive housing at 6613-25 P ortland Avenue.
S taff Report No. 13
5.C onsideration of the adoption of a resolution approving the A mended and Restated C ontract for P rivate
D evelopment with 101 E 66th S T L L C and authorizing the issuance of a Tax Increment L imited Revenue Note
related to the construction of an 80-unit mixed use project at 101 - 66th S treet E ast.
S taff Report No. 14
6.C onsider a request to modify (2024) and then terminate (2025) B est B uy's Minimum A ssessment A greement.
S taff Report No. 15
H R A D IS C U S S IO N ITE MS
7.HRA D iscussion Items
E X E C U T IV E D IR E C TO R R E P O R T
8.E xecutive D irector's Report
C LAIMS
9.C laims
10.A djournment
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 612-861-9739.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
April 17, 2023
CALL TO ORDER
Chair Vrieze Daniels called the meeting to order at 7:01 p.m. in the Council Chambers.
HRA Members
Present:
Erin Vrieze Daniels, Chair; Mary Supple; Sean Hayford Oleary;
and Gordon Hanson
HRA Members
Absent
Lee Ohnesorge
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant
Community Development Director; Jan Youngquist, Economic
Development Manager; and Dustin Leslie, City Clerk.
OPEN FORUM
No callers
APPROVAL OF THE MINUTES
M/Hanson, S/Supple to approve the minutes of the 1) Housing and Redevelopment
Authority Work Session of March 20, 2023; and 2) the regular Housing and
Redevelopment Authority Meeting of March 20, 2023.
Motion carried: 4-0
APPROVAL OF THE AGENDA
M/Hayford Oleary, S/Hanson to approve the agenda.
Motion carried: 4-0
HRA Meeting Minutes -2- April 17, 2023
ITEM #1
2022 HRA AND EDA YEAR IN REVIEW PRESENTATION
Executive Director Poehlman began the presentation by discussing themes of 2022; an
overview of redevelopment projects; and business assistance programs.
Assistant Director Urban continued the presentation by discussing affordable housing
progress; programs for renters; programs for homebuyers; programs for homeowners; and
Richfield Rediscovered.
Executive Director Poehlman wrapped up the presentation giving an overview of staffing
updates in the Community Development Department.
Commissioners thanked staff for their work and for the report.
ITEM #2
HRA DISCUSSION ITEMS
Commissioner Supple spoke about the Eco Fair and complimented staff on the handouts
and asked for them to be available on the website.
Chair Vrieze Daniels spoke about the Habitat house at 6600 Logan Ave and
stated there was great progress made so far. Commissioner Hanson asked if tours
would be available once completed. Assistant Director Urban stated she would reach
out for a possible tour for Authority members.
ITEM #3
EXECUTIVE DIRECTOR REPORT
None.
ITEM #4
CLAIMS
M/Supple, S/Hanson that the following claims be approved:
U.S. BANK 4/17/2023
HRA Checks: #34343-34354 $29,670.17
Section 8 Checks: #134737-134815 $205,017.07
TOTAL $234,687.24
Motion carried: 4-0
HRA Meeting Minutes -3-April 17, 2023
ITEM #5 ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:34 p.m.
Date Approved: June 20, 2023
Gordon Hanson
Acting HRA Chair
Dustin Leslie Melissa Poehlman
City Clerk Executive Director
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Special Meeting
June 5, 2023
CALL TO ORDER
Chair Vrieze Daniels called the meeting to order at 7:00 p.m. in the Council Chambers.
HRA Members
Present:
Erin Vrieze Daniels, Chair; Mary Supple; Sean Hayford Oleary;
and Gordon Hanson
HRA Members
Absent
Staff Present:
Guests:
Melissa Poehlman, Executive Director; Julie Urban, Assistant
Community Development Director; and Dustin Leslie, City Clerk.
Julie Eddington, HRA Attorney; John Nolde, Dominium Attorney;
Khayree Duckett, Dominium Attorney.
OPEN FORUM
Chair Vrieze Daniels opened the public forum. No one spoke and the forum was closed.
ITEM #1 APPROVAL OF THE AGENDA
M/Supple, S/Hanson to approve the agenda.
Motion carried: 4-0
ITEM #2 PUBLIC HEARING TO CONSIDER A RESOLUTION AUTHORIZING THE
ISSUANCE OF $10 MILLION IN MULTIFAMILY HOUSING REVENUE BONDS FOR
THE BENEFIT OF THE UPPER POST FLATS HOUSING DEVELOPMENT AND
RELATED POST-ISSUANCE COMPLIANCE POLICY
Executive Director Poehlman gave the report and spoke about the conduit bond process
as well as the benefits to the HRA.
Chair Vrieze Daniels opened the public hearing.
Special HRA Meeting Minutes -2-June 5, 2023
Alex Asmus – 6401 Harriet Ave S: Asmus pointed out that the project would be beyond
Richfield city limits in Fort Snelling. He also spoke about troubling tenant records in regard to the
developer Dominium.
Ann Dougherty – 6844 James Ave S: Dougherty spoke about a Section 8 resident she
was helping to find housing. She stated it has been difficult helping her find a rental in Richfield
and was in support of helping Dominium create more affordable housing in the area. She also
stated she would like to see more affordable housing units for families in the project.
Mary Best – 6727 Elliot Ave S: Best spoke about how the plan would add around 200
students to the Richfield School District. She also recited statistics about student proficiencies
within the district and stated the School District was failing students and should not be allowed to
add more through this project. She further stated that the project would be closer to Mendota
Heights and could benefit them more.
Janet Coleman – 6632 Elliot Ave S: Coleman spoke about comments from the Columbia
Heights Mayor which were published in the Star Tribune. Resident noted that the Mayor spoke
negatively about Dominium and was not in favor of approving the bond.
Larry Ernster – 6727 Elliot Ave S: Ernster stated this project would not benefit Richfield
with Dominium’s reputation. Ernster also spoke about unfavorable comments made by the Mayor
of Columbia Heights in regard to Dominium which were published in the Star Tribune.
Kathleen Balaban – 6526 Stevens Ave S: Balaban questioned the public hearing process
and stated the community should have more input on projects.
Ruane Onesirosan – 2421 W. 65th St.: Onesirosan spoke against the bonding and did not
want her tax dollars going toward the project. She also spoke about Dominium’s negative
reputation.
Linda Kohlman – 6430 Logan Ave S: Kohlman spoke about how the city has more
pressing issues than this project and asked to put the money elsewhere.
There were no more speakers. M/Hanson, S/Hayford Oleary to close the public hearing.
Motion carried 4-0
Commissioner Hayford Oleary asked if there would be any financial stake from the city if
they were to approve the conduit bonds.
HRA Attorney Eddington stated the conduit bond was passing from the Minnesota
Department of Natural Resources (DNR) to Dominium with the Richfield HRA acting as a
passthrough conduit. She further stated there would be no financial stake for the city or HRA.
Commissioner Hayford Oleary asked if $10 million would be availab le to the city if the
HRA denied the request. HRA Attorney Eddington responded that it would not be available to the
city.
Commissioner Hayford Oleary asked what would happen if Dominium defaults on the
bond. HRA Attorney Eddington stated that defaults were extremely rare but if it were to happen,
the developer would pay the costs.
Commissioner Hayford Oleary asked if there was a default would the city’s credit be
negatively impacted in any way. HRA Attorney Eddington responded that if there was a default,
neither the city nor the HRA’s credit would be impacted in any way.
Special HRA Meeting Minutes -3-June 5, 2023
Commissioner Hayford Oleary asked the developer representatives what would happen if
the request was denied. Dominium representative Duckett stated that there was currently no
backup plan if the bonding request was denied.
Commissioner Supple asked if denial would affect the current tenants. Dominium
representative Noldy stated denial would not affect current tenants in any way.
Executive Director Poehlman asked if the developer was unable to get the $10 million in
bond funding, would they look elsewhere for funding? Dominium representative Noldy stated that
they would look elsewhere.
Commissioner Hanson asked the developers why they chose Richfield for this project.
Dominium representative Noldy stated that they chose Richfield for geographical reasons and
because it would benefit their school district.
Commissioner Supple asked who had the ability to inspect units to ensure quality for
tenants. Executive Director Poehlman stated inspections would mostly be done by the State of
Minnesota but the city could also request to perform inspections.
Commissioner Supple asked if there were plans to increase accessibility. Executive
Director Poehlman stated that since this was a historic preservation project, there would be
difficulties with ensuring accessibility features. However, some accessibility features such as
ramps would be included where they could be.
Chair Vrieze Daniels spoke about low income housing and asked if rent would be lower
for qualified tenants. Executive Director Poehlman spoke about tenant qualification requirements
and how rent would be set for tenants. She further stated that rates were set by the Department
of Housing and Urban Development (HUD).
M/Hayford Oleary, S/Hanson to approve a resolution authorizing the issuance of $10
million in multifamily housing revenue bonds for the benefit of the Upper Post Flats housing
development and related Post-Issuance Compliance Policy.
Commissioner Hanson stated there was a dire need for affordable housing and that this
project was an opportunity to offer deep affordability. He further stated this would benefit the
School District by getting more students.
Commissioner Hayford Oleary stated not approving this project would not offer any
advantages to Richfield.
Commissioner Supple spoke about the comments from residents during the public
hearing and encouraged Dominium to take their criticisms to hear.
Motion carried 4-0
ITEM #3
HRA DISCUSSION ITEMS: UPDATE ON DISCUSSIONS AND ACTIONS RELATED
TO THE REQUEST BY BEST BUY TO TERMINATE THE MINIMUM ASSESSMENT
AGREEMENT FOR THE CORPORATE CAMPUS PROPERTY AT 7601 PENN
AVENUE SOUTH
Executive Director Poehlman gave an update to the Commissioners.
Special HRA Meeting Minutes -4-June 5, 2023
Commissioner Supple asked which entities would vote to approve the request. Executive
Director Poehlman stated approval would come from the City Council, the School District, and
the County. She further stated the HRA would sign the agreement.
Commissioner Supple asked about the timeline. Executive Director Poehlman stated the
agreement would have to be executed by all parties by June 30.
ITEM #4 ADJOURNMENT
Before adjournment, Assistant Community Development Director Urban gave the
Commissioners an update on the housing legislation passed during the most recent legislative
session.
The meeting was adjourned by unanimous consent at 8:15 p.m.
Date Approved: June 20, 2023
Gordon Hanson
Acting HRA Chair
Dustin Leslie Melissa Poehlman
City Clerk Executive Director
CITY COUNCIL MEETING MINUTES
Richfield, Minnesota
Special HRA Work Session
June 7, 2023
The meeting was called to order by Chair Erin Vrieze Daniels at 5:15 p.m. held in the Heredia
Room.
HRA Members Erin Vrieze Daniels, Chair; Mary Supple; and Gordon Hanson
Present:
Staff Present: Kelly Wynn, Administrative Assistant
Item #1 MEETINGS WITH APPLICANTS FOR VACANT HRA AND EDA SEAT
The HRA members interviewed James Jaffe as an applicant for the HRA and EDA.
The work session was adjourned by unanimous consent at 6:08 p.m.
Date Approved: June 20, 2023
Gordon Hanson
Acting HRA Chair
Kelly Wynn Melissa Poehlman
Administrative Assistant Executive Director
CALL TO ORDER
ADJOURNMENT
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF RE P ORT NO. 11
HOUSING AND RE DEVELOPMENT AUT HORIT Y
MEET ING
6/20/2023
RE P O RT P RE PA RE D B Y: C eleste McD ermott, Housing S pecialist
O THE R D E PA RTM E NT RE V IE W:
E X E C UTIV E D IRE C TO R RE V IE W: Melissa P oehlman, E xecutive D irector
6/13/2023
I T E M F O R C O UNC IL C O NS ID E RAT I O N:
Consideration of a Resolution authorizing execution of a Developer Agreement with the West
Hennepin Affordable Land Housing Trust, dba Homes W ithin Reach, for the acquisition, rehabilitation
and sale of houses under the New Home Program.
E X E C UT IV E S UM M ARY:
The Housing and Redevelopment Authority's (HRA) New Home Program (Program) provides affordable
homeownership opportunities in the community through new construction, acquisition and rehabilitation, and
down payment assistance. As part of the Program, the HRA works with the West Hennepin Affordable Land
Housing Trust (W HA HLT), dba Homes W ithin Reach, to purchase and rehabilitate homes to be sold to
income-qualifying households. W HA L HT is a Community Land Trust that allows moderate-income buyers to
achieve affordable homeownership by holding ownership of the land, and reducing the burden of down
payment and large mortgage payments on the homeowner. The model ensures ongoing affordability
throughout the lifetime of the property and with multiple owners.
W HA HLT is seeking to continue providing affordable housing in Richfield through this model. The proposed
Developer Agreement (Agreement) between the HRA and W HA HLT details the terms of this continued
partnership through 2023. Under the terms of the Agreement, the HRA would provide up to $200,000 to
W HA HLT for the purchase and rehabilitation of up to two single-family homes. W HA HLT would then resell the
homes to households earning no more than 80% of the Area Median I ncome (A MI ). Funding for this work will
come from both Community Development Block Grant funds (C D B G) and the Affordable Housing Trust Fund
(A HTF).
RE C O M M E ND E D AC T I O N:
By motion: Approve a r esolution authorizing the execution of a Developer Agreement with the West
Hennepin Affordable Land Housing Trust, dba Homes W ithin Reach, for the acquisition, rehabilitation
and sale of up to two houses under the New Home Program.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
Under the Program, the HRA has worked with several developers over the years to either build
new homes or purchase and rehabilitate existing homes. These homes are then sold to households
earning no more than 80% of the A MI .
Since 2002, W HA HLT has successfully purchased, rehabilitated and sold 15 homes in Richfield.
Funding for the work of the Program has varied by year, with most recent projects funded with
local C D B G funds and the A HTF, as well as pooled Tax I ncrement Financing.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The objectives of the Program are to:
Eliminate the blighting influence of substandard housing, thus improving residential
neighborhoods;
Maintain and improve the existing housing stock while preserving housing affordability;
Develop quality housing with long-term affordability, to the greatest extent possible;
Coordinate with developers to provide affordable housing for families.
Purchasing and rehabilitating homes to provide affordable housing carries out the policies of the
City’s Comprehensive Plan, including: support the rehabilitation and upgrading of the existing
housing stock; promote the development, management and maintenance of affordable housing in
the City through assistance programs, alternative funding sources, and the creation of
partnerships whose mission is to promote low to moderate income housing.
C.C R IT IC AL T IMIN G IS S U E S:
W HA HLT has identified one property in Richfield that they would like to develop under the
Program. The Agreement must be approved before they can include the property in the Program
and request reimbursement.
T he Agreement provides for HRA staff to approve the acquisition of the specific property
and to review income documentation prior to the final sale.
D.F IN AN C IAL IMPAC T:
The 2023 budget includes $200,000 for acquisition and rehabilitation through the Program.
HRA funds can be used for the acquisition of the property or applied to rehabilitation. Maximum
reimbursement under this Agreement is $200,000 ($100,000 per property).
E.L E GAL C ON S ID E R AT ION:
The Agreement was prepared by HRA legal counsel.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve a resolution authorizing execution of a Developer Agreement with the West Hennepin
Affordable Land Housing Trust, dba Homes W ithin Reach.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
D eveloper A greement C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING DEVELOPER AGREEMENT WITH WEST HENNEPIN
AFFORDABLE HOUSING LAND TRUST DBA HOMES WITHIN REACH
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) intends to provide $200,000 from Community Development Block Grant
funds ("CDBG Funds") or Affordable Housing Trust Fund ("AHTF funds") to the West Hennepin
Affordable Housing Land Trust dba Homes Within Reach, a Minnesota nonprofit corporation
(“WHAHLT”), for the purposes of acquiring and rehabilitating homes in the City of Richfield,
Minnesota; and
WHEREAS, the Authority has proposed that WHAHLT use the CDBG Funds or AHTF
funds to purchase, rehabilitate, and resell one or more properties to households 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 Developer Agreement (the “Developer Agreement”) to be executed by the Authority and
WHAHLT, which sets for the terms of the CDBG Funds or AHTF funds to be provided to WHAHLT
and the agreement by WHAHLT to purchase, rehabilitate, and resell the properties; 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 Developer 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 Developer Agreement for and on behalf of the Authority in substantially the form now on file
with the Executive Director but with such modifications as shall be deemed necessary, desirable,
or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and
all modifications therein.
2.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
Developer Agreement.
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 20th day of June, 2023.
Gordon Hanson, Acting Chair
Secretary
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 ___________, 2023 (“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 up to $200,000 in Community
Development Block Grant funds (“CDBG Funds”) or Affordable Housing Trust Fund
funds (“AHTF Funds”) for the purposes of acquiring and rehabilitating up to two 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 up to two
properties eligible to be purchased, rehabilitated and resold with CDBG Funds or AHTF
Funds (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(ies) to an income-qualified buyer(s), and will retain ownership of
the land to ensure long-term affordability.
E.The grant of the CDBG Funds or AHTF Funds 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 CDBG Funds or AHTF Funds set forth in this Agreement.
2
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.
B.Memorandum of Understanding. WHAHLT shall purchase, rehabilitate and resell
Eligible Properties based on the Memorandum of Understanding of the parties set forth in
EXHIBIT A.
C.Criteria. WHAHLT will identify Eligible Properties that WHAHLT would like to
acquire under this Agreement. 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 B.
D.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:
(i)Equal opportunity and discrimination provisions of all applicable State and Federal
laws, rules, and regulations;
(ii)Section 504 of the Rehabilitation Act of 1973, as amended;
(iii)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;
(iv)All Lead Laws and Rules, including Minn. Stat. Sections 144.9501 through
144.9512, Minnesota Rules 4761.2000 through 4761.2700, and Federal Regulations including
Residential Lead-Based Paint Disclosure Program (Section 1018 of Title X) and the Renovation,
Repair, and Painting Rule (TSCA 406(B)).
(v)The Hennepin County Affirmative Action Policy.
WHAHLT further agrees to provide HRA with a timely certification that the requirements listed
in this Section have been met.
E.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 each
Eligible Property.
3
2.Term. This Agreement is effective as of the Effective Date and until December 31, 20__.
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
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 CDBG Funds or AHTF Funds, 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.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: Richfield Housing and Redevelopment Authority
Attention: Melissa Poehlman, Executive Director
6700 Portland Avenue
Richfield, Minnesota 55423-2599
Fax: (612) 861-8974
4
To WHAHLT: West Hennepin Affordable Housing Land Trust
Attention: Brenda Lano, Executive Director
5101 Thimsen Avenue
Suite 202
Minnetonka, MN 55345-4117
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 17 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.
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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
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 Acting Chairperson
By ________________________________
Its Executive Director
WEST HENNEPIN AFFORDABLE HOUSING LAND
TRUST
By ________________________________
Its Executive Director
A-1
EXHIBIT A
PROCEDURES
Memorandum of Understanding
Properties, In General:
WHAHLT will identify, purchase, and rehabilitate up to two Eligible Properties for subsequent
resale to households earning at or below 80% of the Area Median Income.
The HRA agrees to cover $100,000 of the Development Gap for Eligible Properties.
Development Gap means the estimated total development costs less the sales price of the
improved property up to a maximum gap amount as shown on “Exhibit B” or other developer
pro forma approved by the HRA.
Identification of Eligible Property:
WHAHLT will identify Eligible Properties.
WHAHLT will provide the HRA with the identity of the Eligible Property so that the HRA
may decide whether the HRA will use CDBG or AHTF funds to acquire said Eligible Property.
Purchase of Eligible Property:
WHAHLT will identify one or more Eligible Properties and only purchase an Eligible Property
after receipt of the HRA’s express written consent.
HRA may express its written consent via email to WHAHLT at blano@homeswithinreach.org.
WHAHLT shall be responsible for the timely completion of all CDBG or AHTF required
documentation.
Rehabilitation of Eligible Property:
After WHAHLT has purchased an Eligible Property, WHAHLT will submit a rehabilitation
plan to the HRA and the HRA will agree in writing to the plan, prior to WHAHLT beginning
its rehabilitation efforts at that Eligible Property.
Subsequent Resale of Certain Eligible Property to End Buyer:
After WHAHLT completes the rehabilitation of an Eligible Property, WHAHLT will market
said Eligible Property and execute a purchase agreement with an end buyer whose household
income is at or below 80% of Area Median Income.
WHAHLT will maintain long-term affordability by retaining ownership of the land through
its land trust.
Reimbursement of Acquisition/Rehabilitation Costs (or Payment of the Development Gap):
WHAHLT will use its own funds to purchase an eligible property.
Following the acquisition of the property, WHAHLT may request that the HRA provide
payment up to $80,000 of the estimated Development Gap.
The remaining $20,000 will be paid upon sale of the Eligible Property and submittal of all
required documentation to the HRA.
The maximum amount of reimbursement available under this Agreement is $100,000 per
Eligible Property up to a total of $200,000.
B-1
EXHIBIT B
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 $
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.B.
STAFF REPORT NO. 12
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/20/2023
REPORT PREPARED BY: Julie Urban, Asst. Community Development Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
6/13/2023
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the adoption of a resolution approving a Subordination of the Contract for Private
Redevelopment and a Collateral Assignment of the Tax Increment Financing Note for Woodlake
Centre, and authorize the Executive Director to execute an Estoppel Certificate.
EXECUTIVE SUMMARY:
The Urban Village Tax Increment Financing (TIF) District was established in July 1999. It is a Redevelopment
District that includes BMO Harris Bank, McDonald's, The Oaks on Pleasant, The Pines, and Woodlake
Centre office/retail space, located at 66th Street and Lyndale Avenue. In 2001, the Housing and
Redevelopment Authority (HRA) entered into a Contract for Private Redevelopment and agreed to
provide tax increment assistance to the property and issue Tax Increment Revenue Notes to
reimburse development costs.
Woodlake Centre MOB, LLC (Owner) is the current owner of the Woodlake Centre office/retail space and
the holder of Taxable Tax Increment Revenue Note Series 2001B (TIF Note). The Owner is refinancing with
Alerus Financial (Lender) and is requesting that the HRA subordinate the Contract for Private Redevelopment
(Contract) to the primary financing. The Owner is also assigning the TIF Note to the Lender, which requires
approval of a Collateral Assignment. Finally, the Lender requires an Estoppel Certificate in order to complete
the refinance.
The HRA's Attorney has reviewed and approved all documents.
RECOMMENDED ACTION:
By motion: Adopt a resolution approving a Subordination of Contract for Private Redevelopment and a
Collateral Assignment of Tax Increment Financing Note for Woodlake Centre, and authorize the
Executive Director to execute an Estoppel Certificate.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The Urban Village TIF District was established in July 1999.
On May, 21, 2001 the HRA entered into an Amended and Restated Contract for Private
Redevelopment with Richfield State Agency, Inc.
Two Pay-Go Notes were issued in 2001 and will mature in 2026.
The property has been sold several times since then, most recently to Woodlake Centre MOB,
LLC in 2019.
W oodlake Centre MOB, LLC attempted to sell the property in 2022. The sale did not go through,
and now the Owner is refinancing their primary financing.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The HRA is required to approve all Subordinations and Assignments of Pay-As-You-Go Notes.
C.C R IT IC AL T IMIN G IS S U E S:
The Owner has closed on its financing, contingent upon HRA Approval of the Subordination and
related documents.
D.F IN AN C IAL IMPAC T:
Alerus Financial will receive the Pay-Go tax increment on Tax I ncrement Revenue Note Series
2001B per the Assignment and Assumption Agreement.
The HRA will continue to receive a portion of the tax increment to pay administrative costs
associated with the TI F District and a contribution of pooled TI F to the Housing and
Redevelopment Fund.
E.L E GAL C ON S ID E R AT ION:
HRA legal counsel reviewed and approved all documents.
The Collateral Assignment will be provided once the Lender provides an I nvestment Letter to the
HRA.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the Assignment and Assumption Agreement.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
S ubordination C ontract/A greement
C ollateral A ssignment C ontract/A greement
E stoppel C ertificate C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING SUBORDINATION AGREEMENT, COLLATERAL ASSIGNMENT
OF TIF NOTE, AND ESTOPPEL CERTIFICATE FOR WOODLAKE CENTRE
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield (the
“Authority” and the Woodlake Centre MOB, LLC a Delaware limited liability company (the “Developer”)
entered into that certain Amended and Restated Contract for Private Redevelopment dated May 21, 2001, as
amended by that certain First Amendment to Amended and Restated Contract for Private Redevelopment
dated January 25, 2005, as assigned by that certain Assignment and Assumption of Amended and Restated
Contract for Private Redevelopment dated January 25, 2005, as assigned by that certain Assignment and
Assumption of Amended and Restated Contract for Private Redevelopment dated January 31, 2014, as
assigned and amended by that certain Assignment and Secondment Amendment to Amended and Restated
Contract for Private Redevelopment dated March 19, 2018, as assigned by that certain Assignment and
Assumption Agreement (Amended and Restated Contract for Private Redevelopment) dated March 11, 2019,
(collectively, the “Development Agreement”); and
WHEREAS, Alerus Financial, N.A. (the “Lender”) and the Borrower have entered into a Loan
Agreement (the “Loan Agreement”), pursuant to which the Lender has agreed to make a real estate loan in
the amount of $22,300,000.00 (the “Loan”); and
WHEREAS, as a condition to providing the Loan, the Bank is requiring that the Authority
subordinate certain of the Authority’s rights under the Development Agreement, including but not limited to
the rights of the Authority with respect to the development property, to the rights of the Bank under the
documents to be executed in conjunction with the Loan, pursuant to the terms of a Subordination Agreement
(the “Subordination Agreement”) proposed to be entered into between the Authority, the Bank, and the
Developer, a copy of which has been presented before this Board of Commissioners of the Authority and
execute an estoppel certificate; and
WHEREAS, the Lender has also requested a Collateral Assignment of TIF Note, between the
Authority, the Developer, and the Lender and an Estoppel Certificate and Notice Request; and
WHEREAS, the Subordination Agreement, the Collateral Assignment of TIF Note, and the Estoppel
Certificate and Notice Request have been provided to the member of the Board of Commissioners; 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 Subordination Agreement, Collateral Assignment of TIF Note, and the Estoppel
Certificate and Notice Request are hereby in all respects authorized, approved, and confirmed, and the Chair
and the Executive Director are hereby authorized and directed to execute the Subordination Agreement and
the estoppel certificate for and on behalf of the Authority in substantially the form now on file with the
Community Development 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.
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2.The Chair and the Executive Director are hereby authorized to execute and deliver all
documents deemed necessary to carry out the intentions of this resolution, the Subordination Agreement, the
Collateral Assignment of TIF, and the Estoppel Certificate and Notice Request.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 20th day of June, 2023.
Gordon Hanson, Acting Chair
______________________________
______________________Secretary
SUBORDINATION OF CONTRACT FOR PRIVATE REDEVELOPMENT
THIS SUBORDINATION OF CONTRACT FOR PRIVATE REDEVELOPMENT (this
“Agreement”) is made and entered into effective as of this ___ day of _______, 2023, by and
among 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”), WOODLAKE CENTRE MOB, LLC, a Delaware limited liability
company (the “Borrower”), and ALERUS FINANCIAL, N.A., a national banking association (the
“Lender”).
R E C I T A L S:
WHEREAS, the Authority and the Borrower entered into that certain Amended and Restated
Contract for Private Redevelopment dated May 21, 2001, recorded on November 30, 2001 in the
Office of the County Recorder of Hennepin County, Minnesota as Document No. A7593401, and
on January 26, 2005 in the Office of the Registrar of Titles of Hennepin County, Minnesota as
Document No. T4070502, as amended by that certain First Amendment to Amended and Restated
Contract for Private Redevelopment dated January 25, 2005, recorded on May 4, 2005 in the Office
of the County Recorder of Hennepin County, Minnesota as Document No. A8576021, and on
January 26, 2005 in the Office of the Registrar of Titles of Hennepin County, Minnesota as
Document No. T4070504, as assigned by that certain Assignment and Assumption of Amended
and Restated Contract for Private Redevelopment dated January 25, 2005, recorded on May 4,
2005 in the Office of the County Recorder of Hennepin County, Minnesota as Document No.
A8576023, and on January 26, 2005 in the Office of the Registrar of Titles of Hennepin County,
Minnesota as Document No. T4070506, as assigned by that certain Assignment and Assumption
of Amended and Restated Contract for Private Redevelopment dated January 31, 2014, recorded
on February 4, 2014 in the Office of the County Recorder of Hennepin County, Minnesota as
Document No. A10051789, and on February 4, 2014 in the Office of the Registrar of Titles of
Hennepin County, Minnesota as Document No. T05150284, as assigned and amended by that
certain Assignment and Secondment Amendment to Amended and Restated Contract for Private
Redevelopment dated March 19, 2018, recorded on August 22, 2018 in the Office of the Registrar
of Titles of Hennepin County, Minnesota as Document No. T5554637, as assigned by that certain
Assignment and Assumption Agreement (Amended and Restated Contract for Private
Redevelopment) dated March 11, 2019, recorded on April 10, 2019 in the Office of the County
Recorder of Hennepin County, Minnesota as Document No. A10648855, and on March 14, 2019
in the Office of the Registrar of Titles of Hennepin County, Minnesota as Document No. T5600118
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(collectively, the “Development Agreement”) concerning the real property legally described on
Exhibit A attached hereto and incorporated herein (the “Property”); and
WHEREAS, Lender, and the Borrower have entered into a certain Loan Agreement dated June
___, 2023 (the “Loan Agreement”), pursuant to which Lender and the Lender has agreed to make
a real estate loan in the amount of $22,300,000.00 (the “Loan”) in accordance and subject to the
conditions set forth therein; and
WHEREAS, the obligations of the Borrower under and pursuant to the Loan Agreement and all
“Loan Documents” (as that term is defined in the Loan Agreement) will be secured by, among
other things, a Mortgage, Security Agreement, Fixture Financing Statement and Assignment of
Leases and Rents dated as of June ___, 2023, recorded in the Office of the County Recorder of
Hennepin County, Minnesota as Document No. ___________ on ___________ in the Office of
the Registrar of Titles of Hennepin County, Minnesota as Document No. ___________ on
__________ (the “Mortgage”); and
WHEREAS, Lender requires, as a condition of making the Loan, that the Authority subordinate
it’s rights with respect to the Property pursuant to the Development Agreement to Lender’s interest
in the Property under and pursuant to the Mortgage.
NOW, THEREFORE, in consideration of the Recitals, which are hereby made a part hereof, and
for other good and valuable consideration, the receipt and sufficiency are hereby acknowledged,
it is hereby agreed as follows:
1.Subordination of Development Agreement. The Authority agrees that its rights under the
Development Agreement shall be subject and subordinate to the Mortgage and Lender’s rights,
title and interest set forth therein.
2.Notification of Bank and Right to Cure. The Authority agrees to notify Lender in writing
of any default by Borrower under the Development Agreement that the Authority is aware of.
Lender shall have the right, but not the obligation, to cure any such default under the Development
Agreement.
3.Representations of the Authority. The Authority, with the understanding that Lender will
rely upon the statements and representations made by the Authority herein in providing the Loan
contemplated by the Loan Agreement, hereby certifies, represents, warrants and confirm to
Lender, its successors and assigns, that, as of the date hereof:
(a)The Development Agreement sets forth all of the agreements and
understandings of the Borrower and the Authority with respect to the Property; there are
no other written or oral agreements or understandings between the Authority and the
Borrower with respect to the Property; the Development Agreement is in full force and
effect in accordance with its terms.
(b)To the best of the Authority’s knowledge, no default by the Borrower or the
Authority in the performance of any obligation or promise of such party in the
Development Agreement exists on the date hereof, and no event has occurred which, after
3
the passage of time or expiration of any notice, grace or right to cure period, would
constitute a default under the Development Agreement.
4.This Agreement may not be amended or modified in any manner other than by an
agreement in writing signed by all of the parties hereto.
5.This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, personal representatives, successors and
assigns, including any purchaser of the Property at a foreclosure sale.
6.Unless otherwise required by the specific provisions hereof or by law in respect to any
matter, any notice or other communication to any party in connection with this Agreement shall
be in writing and shall be sent by manual delivery, facsimile transmission, overnight courier or
United States mail, registered or certified, return receipt requested, postage prepaid, addressed as
follows:
If to the Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, Minnesota 55423
Attention: Community Development Director
If to the Borrower: Woodlake Centre MOB, LLC
533 South Third Street, Suite 100
Minneapolis, MN 55415
Attention: Shawn Moore
If to the Lender: Alerus Financial, N.A.
120 South 6th Street, Suite 200
Minneapolis, Minnesota 55402
Attention: Kristine Johnson
or addressed to any such party at such other address as such party shall hereafter furnish by written
notice to the other party hereto, at least ten (10) days prior to the effective date of said change in
address, and all periods of notice shall be measured from the date of delivery thereof if manually
delivered, from the date of sending thereof if sent by facsimile transmission, from the first business
day after the date of sending if sent by overnight courier, or from four days after the date of mailing
if mailed.
7.This Agreement shall be governed by and construed and interpreted in accordance with the
laws of the State of Minnesota.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly executed
effective as of the day and year first above written.
22725.31
26515357v3
[SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW]
S-1
[SIGNATURE PAGE TO SUBORDINATION OF CONTRACT FOR PRIVATE
REDEVELOPMENT]
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA
By:
Name: Gordon Hanson
Its: Acting Chair
By:
Name: Melissa Poehlman
Its: Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _______________, 2023,
by Sean Hayford Oleary, the Vice 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, for and on behalf of said public body.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ____________, 2023, by
Melissa Poehlman, 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, for and on behalf of said public body.
Notary Public
S-2
[SIGNATURE PAGE TO SUBORDINATION OF CONTRACT FOR PRIVATE
REDEVELOPMENT]
WOODLAKE CENTRE MOB, LLC,
a Delaware limited liability company
By: VREC Ryan Woodlake Centre, LLC,
a Delaware limited liability company,
its sole member
By: Ryan Woodlake, LLC, a Delaware
limited liability company, its manager
By:
Brian C. Murray
Its Manager
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Brian C. Murray, the Manager of Ryan Woodlake, LLC, a Delaware limited liability company, the
manager of VREC Ryan Woodlake Centre, LLC, a Delaware limited liability compan y, the sole
member of Woodlake Centre MOB, LLC, a Delaware limited liability company, for and on behalf
of the limited liability company.
Notary Public
S-3
[SIGNATURE PAGE TO SUBORDINATION OF CONTRACT FOR PRIVATE
REDEVELOPMENT]
ALERUS FINANCIAL, N.A., a national
banking association
By:
Kristine Johnson
Its Senior CRE Lending Advisor
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Kristine Johnson, the Senior CRE Lending Advisor of Alerus Financial, N.A., a national banking
association, for and on behalf of said national banking association.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Winthrop & Weinstine, P.A. (TJK)
225 South Sixth Street, Suite 3500
Minneapolis, Minnesota 55402-4629
S-4
AGREED TO AND APPROVED BY TAX EXEMPT NOTE HOLDER AS REQUIRED
PURSUANT OT SECTION 8.3 OF THE DEVELOPMENT AGREEMENT:
BMO HARRIS BANK N.A.
By:
Name:
Its:
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by
_________________, the ______________ of BMO Harris Bank N.A., a national banking
association, for and on behalf of said national banking association.
Notary Public
EXHIBIT A
Legal Description
Real property in the City of Richfield, County of Hennepin, State of Minnesota, described as
follows:
PARCEL 1:
TORRENS PROPERTY, Certificate of Title No. 1480793:
Lots 2 and 3, Block 1, Richfield Urban Village, Hennepin County, Minnesota; and Outlots A and
C, Richfield Urban Village, EXCEPT that part of said Outlot C lying easterly of the centerline of
vacated Grand Avenue South and its southerly extension, Hennepin County, Minnesota.
AND
ABSTRACT PROPERTY:
That part of Outlot C, Richfield Urban Village, Hennepin County, Minnesota, lying Easterly of
the centerline of vacated Grand Avenue South and its southerly extension.
PARCEL 2:
Non-exclusive easements contained within that certain Easements and Declaration of Covenants
and Restrictions recorded as Document No. 7359245 in the Office of the County Recorder, and
also recorded as Document No. 3317547 in the Office of the Registrar of Titles, all in Hennepin
County, Minnesota.
PARCEL 3:
Non-exclusive easements contained within that certain Ingress/Egress Easement Agreement
recorded as Document No. 8576022 in the Office of the County Recorder, and also recorded as
Document No. 4070505 in the Office of the Registrar of Titles, all in Hennepin County, Minnesota.
COLLATERAL ASSIGNMENT OF TIF NOTE
THIS COLLATERAL ASSIGNMENT OF TIF NOTE (this “Agreement”) is made and
entered into as of the ___ day of June, 2023, by and among 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”), WOODLAKE CENTRE MOB, LLC, a Delaware limited liability company (the
“Borrower”), and ALERUS FINANCIAL, N.A., a national banking association (the “Lender”).
W I T N E S S E T H:
WHEREAS, the Authority and Borrower are parties to that certain Amended and
Restated Contract for Private Redevelopment dated May 21, 2001 (as amended and assigned
from time to time, collectively, the “Development Agreement”), concerning property legally
described on Exhibit A attached hereto and hereby made a part hereof (the “Project”); and
WHEREAS, pursuant to the Development Agreement, the Authority issued that certain
Taxable Tax Increment Revenue Note Series 2001B dated October 17, 2001, in the principal
amount of up to $7,000,000.00 (the “TIF Note”); and
WHEREAS, the Lender intends to make a loan to the Borrower to be evidenced by,
among other things, a Real Estate Note (the “Lender Note”) in the original principal amount of
$22,300,000.00 (the “Loan”); and
WHEREAS, the Lender has required, as a condition to the making of the Loan, that
(a)the Borrower assign all of its rights under the TIF Note to the Lender to secure the obligations
of the Borrower to the Lender under the Lender Note (the Lender Note and all documents
executed in connection therewith are collectively referred to as the “Loan Documents”), and (b)
the Authority agrees to certain other matters, all as more fully contained herein.
NOW THEREFORE, in consideration of the foregoing recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1.Assignment. The Borrower hereby assigns to the Lender all of its right, title and
interest under the TIF Note, including, without limitation, the right to receive payments under the
TIF Note, to secure the Borrower’s obligations under the Loan Documents. The Borrower shall
2
execute and deliver to the Lender an endorsement to the TIF Note, all to be held by the Lender
pursuant to the terms of this Agreement.
2.TIF Note. To perfect the Lender’s security interest in the TIF Note, the Authority
accepts the endorsement of the TIF Note from the Borrower to the Lender, and the Borrower
shall deliver the TIF Note directly to the Lender. Prior to the Borrower endorsing the TIF Note
to the Lender, the Lender shall execute an investment letter. Until payment in full of the Lender
Note, the Borrower authorizes and directs the Authority to make all payments under the TIF
Note directly to the Lender, and the Lender shall apply any such payments amounts owing under
the Lender Note in the amount set forth in the Loan Agreement, with any remaining amounts
being paid over to the Borrower provided no Event of Default has occurred and is then
continuing.
3.Representations and Warranties of Borrower. The Borrower hereby represents
and warrants that there have been no prior assignments of the TIF Note that have not been
released as of the date hereof, that the TIF Note is a valid and enforceable agreement and that
neither the Authority nor the Borrower is in default thereunder or under any agreement related
thereto and that all covenants, conditions and agreements have been performed as required
therein, except those not to be performed until after the date hereof. The Borrower agrees not to
sell, assign, pledge, mortgage or otherwise transfer or encumber its interest in the TIF Note as
long as this Agreement is in effect. The Borrower hereby irrevocably constitutes and appoints
the Lender as its attorney-in-fact to demand, receive and enforce the Borrower’s rights with
respect to the TIF Note for and on behalf of and in the name of the Borrower, or, at the option of
the Lender, in the name of the Lender, with the same force and effect as the Borrower could do if
this Agreement had not been made.
4.Present Assignment. This Agreement shall constitute a perfected, absolute and
present assignment, provided that the Lender shall have no right under this Agreement to enforce
the provisions of the TIF Note or exercise any of its rights or remedies under this Agreement
until an Event of Default (as that term is defined in the Lender Note) shall occur and be
continuing.
5.Event of Default. Upon the occurrence and during the continuance of an Event of
Default (as that term is defined in the Loan Documents), the Lender may, without affecting any
of its rights or remedies against the Borrower under any other instrument, document or
agreement, exercise its rights under this Agreement as the Borrower’s attorney-in-fact in any
manner permitted by law and, in addition, the Lender shall have the right to exercise and enforce
any and all rights and remedies available after a default to a secured party under the Uniform
Commercial Code as adopted in the State of Minnesota. If notice to the Borrower of any
intended disposition of collateral or of any intended action is required by law in any particular
instance, such notice shall be deemed commercially reasonable if given at least ten (10) days
prior to the intended disposition or other action.
6.Representations and Warranties of the Authority. The Authority hereby consents
and agrees to the terms and conditions of this Agreement. The Authority has not declared an
event of default under the Development Agreement.
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7.No Assumption. The Authority acknowledges that the Lender is not a party to the
Development Agreement and by executing this Agreement does not become a party to the
Development Agreement, and specifically does not assume and shall not be bound by any
obligations of the Borrower to the Authority under the Development Agreement.
8. Default Under Development Agreement. Notwithstanding anything to the
contrary in the Development Agreement, if the Lender exercises its rights under this Agreement
or under the Loan Documents, the Authority will not declare an event of default under the
Development Agreement; provided, however, that the Authority’s obligations under the
Development Agreement, and in any event, Authority’s obligation to make payments under the
TIF Note is conditioned upon performance by the Borrower or the Lender or their successors of
all of the Borrower’s obligations under the Development Agreement to the extent provided in the
Development Agreement.
9.Notice from the Authority. So long as the Development Agreement remains in
effect, the Authority agrees to give to the Lender copies of notices of any event of default given
to the Borrower under the Development Agreement.
10. Amendments. The Authority and the Borrower agree that no change or
amendment shall be made to the terms of the Development Agreement or the TIF Note without
the prior written consent of the Lender.
11.Waiver. This Agreement can be waived, modified, amended, terminated or
discharged only explicitly in writing signed by the parties hereto. A waiver by the Lender sha ll
be effective only in a specific instance and for the specific purpose given. Mere delay or failure
to act shall not preclude the exercise or enforcement of any of the Lender’s rights or remedies
hereunder. All rights and remedies of the Lender shall be cumulative and may be exercised
singularly or concurrently at the Lender’s option, and any exercise or enforcement of any one
such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any
other.
12.Headings. The descriptive headings for the several sections of this Agreement are
inserted for convenience only and not to confine or limit any of the terms or provisions hereof.
13.Addresses for Notice. Any notice from, request, demand or communication
hereunder shall be deemed fully given if delivered or served by depositing the same with the
United States Postal Service, postage prepaid, certified or registered, addressed to the parties as
set forth below:
If to the Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, Minnesota 55423
Attention: Community Development Director
4
If to the Borrower: Woodlake Centre MOB, LLC
533 South Third Street, Suite 100
Minneapolis, MN 55415
Attention: Shawn Moore
If to the Lender: Alerus Financial, N.A.
120 South 6th Street, Suite 200
Minneapolis, Minnesota 55402
Attention: Kristine Johnson
14.Transfer of Title to Lender. The Authority agrees that in the event the Lender, a
transferee of the Lender, or a purchaser at foreclosure sale, acquires title to the Project pursuant
to foreclosure, or a deed in lieu thereof, the Lender, transferee or purchaser shall not be bound by
the terms and conditions of the Development Agreement.
15.Rights of Authority. Nothing herein limits the Authority’s ability to exercise its
rights and remedies under the Development Agreement.
16.Successors. This Agreement and each and every covenant, agreement and other
provision hereof shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
17.Severability. The enforceability or invalidity of any provision hereof shall not
render any other provision or provisions herein contained unenforceable or invalid.
18.Governing Law. This Agreement is made in and shall be construed in accordance
with the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
22725.31
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO COLLATERAL ASSIGNMENT OF TIF NOTE]
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA
By:
Name: Gordon Hanson
Its: Acting Chair
By:
Name: Melissa Poehlman
Its: Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Sean
Hayford Oleary, the Vice 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, for and on behalf of said public body.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Melissa
Poehlman, 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, for and on behalf of said public body.
Notary Public
[SIGNATURE PAGE TO COLLATERAL ASSIGNMENT OF TIF NOTE]
WOODLAKE CENTRE MOB, LLC,
a Delaware limited liability company
By: VREC Ryan Woodlake Centre, LLC,
a Delaware limited liability company,
its sole member
By: Ryan Woodlake, LLC, a Delaware
limited liability company, its manager
By:
Brian C. Murray
Its Manager
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Brian C. Murray, the Manager of Ryan Woodlake, LLC, a Delaware limited liability company,
the manager of VREC Ryan Woodlake Centre, LLC, a Delaware limited liability company, t he
sole member of Woodlake Centre MOB, LLC, a Delaware limited liability company, for and on
behalf of the limited liability company.
Notary Public
[SIGNATURE PAGE TO COLLATERAL ASSIGNMENT OF TIF NOTE]
ALERUS FINANCIAL, N.A., a national
banking association
By:
Kristine Johnson
Its Senior CRE Lending Advisor
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Kristine Johnson, the Senior CRE Lending Advisor of Alerus Financial, N.A., a national banking
association, for and on behalf of said national banking association.
Notary Public
EXHIBIT A
(Legal Description)
Real property in the City of Richfield, County of Hennepin, State of Minnesota, described as
follows:
PARCEL 1:
TORRENS PROPERTY, Certificate of Title No. 1480793:
Lots 2 and 3, Block 1, Richfield Urban Village, Hennepin County, Minnesota; and Outlots A and
C, Richfield Urban Village, EXCEPT that part of said Outlot C lying easterly of the centerline of
vacated Grand Avenue South and its southerly extension, Hennepin County, Minnesota.
AND
ABSTRACT PROPERTY:
That part of Outlot C, Richfield Urban Village, Hennepin County, Minnesota, lying Easterly of
the centerline of vacated Grand Avenue South and its southerly extension.
PARCEL 2:
Non-exclusive easements contained within that certain Easements and Declaration of Covenants
and Restrictions recorded as Document No. 7359245 in the Office of the County Recorder, and
also recorded as Document No. 3317547 in the Office of the Registrar of Titles, all in Hennepin
County, Minnesota.
PARCEL 3:
Non-exclusive easements contained within that certain Ingress/Egress Easement Agreement
recorded as Document No. 8576022 in the Office of the County Recorder, and also recorded as
Document No. 4070505 in the Office of the Registrar of Titles, all in Hennepin County,
Minnesota.
ESTOPPEL CERTIFICATE
(Contract for Private Redevelopment & Assessment Agreement)
TO: Alerus Financial, N.A.
120 South 6th Street, Suite 200
Minneapolis, Minnesota 5540
The undersigned understands that Alerus Financial, N.A., a national banking association (the
“Lender”) has or will extend a real estate loan to Woodlake Centre MOB, LLC, a Delaware limited
liability company (the “Borrower”) the owner of certain real property legally described on Exhibit
A attached hereto (the “Property”), which is affected by that certain Amended and Restated
Contract for Private Redevelopment dated May 21, 2001, recorded on November 30, 2001 in the
Office of the County Recorder of Hennepin County, Minnesota as Document No. A7593401, and
on January 26, 2005 in the Office of the Registrar of Titles of Hennepin County, Minnesota as
Document No. T4070502, as amended by that certain First Amendment to Amended and Restated
Contract for Private Redevelopment dated January 25, 2005, recorded on May 4, 2005 in the Office
of the County Recorder of Hennepin County, Minnesota as Document No. A8576021, and on
January 26, 2005 in the Office of the Registrar of Titles of Hennepin County, Minnesota as
Document No. T4070504, as assigned by that certain Assignment and Assumption of Amended
and Restated Contract for Private Redevelopment dated January 25, 2005, recorded on May 4,
2005 in the Office of the County Recorder of Hennepin County, Minnesota as Document No.
A8576023, and on January 26, 2005 in the Office of the Registrar of Titles of Hennepin County,
Minnesota as Document No. T4070506, as assigned by that certain Assignment and Assumption
of Amended and Restated Contract for Private Redevelopment dated January 31, 2014, recorded
on February 4, 2014 in the Office of the County Recorder of Hennepin County, Minnesota as
Document No. A10051789, and on February 4, 2014 in the Office of the Registrar of Titles of
Hennepin County, Minnesota as Document No. T05150284, as assigned and amended by that
certain Assignment and Secondment Amendment to Amended and Restated Contract for Private
Redevelopment dated March 19, 2018, recorded on August 22, 2018 in the Office of the Registrar
of Titles of Hennepin County, Minnesota as Document No. T5554637, as assigned by that certain
Assignment and Assumption Agreement (Amended and Restated Contract for Private
Redevelopment) dated March 11, 2019, recorded on April 10, 2019 in the Office of the County
Recorder of Hennepin County, Minnesota as Document No. A10648855, and on March 14, 2019
in the Office of the Registrar of Titles of Hennepin County, Minnesota as Document No. T5600118
(collectively, the “Contract for Private Redevelopment”), and that certain Assessment Agreement
and Assessor’s Certification dated February 15, 1994, recorded on February 25, 1994 in the Office
of the Registrar of Titles of Hennepin County, Minnesota as Document No. T2484811 (the
“Assessment Agreement”).
The undersigned hereby certifies to the Lender as to the following:
1.As of the date hereof, the Contract for Private Redevelopment as described above is in full
force and effect and has not been amended.
2.To the best knowledge of the Authority, as of the date hereof, there is no event of default,
and no event which with the giving of notice or passage of time or both would result in a
-2-
default or a violation by the Borrower under the Contract for Private Redevelopment.
3.As of the date hereof, there are no costs and expenses due and owing to the undersigned
pursuant to the Contract for Private Redevelopment which would constitute a lien against the
Property.
4.The undersigned agrees that all notices under Section 8.1 of the Contract for Private
Redevelopment will be provided to the Lender as follows:
Alerus Financial, N.A.
120 South 6th Street, Suite 200
Minneapolis, Minnesota 55402
Attention: Kristine Johnson
5.As of the date hereof, the Assessment Agreement is null and void pursuant to Section 6 of the
terms thereof.
6.To the best knowledge of the Authority, as of the date hereof, there is no event of default,
and no event which with the giving of notice or passage of time or both would result in a
default or a violation by the Borrower under the Assessment Agreement.
7.As of the date hereof, there are no costs and expenses due and owing to the undersigned
pursuant to the Assessment Agreement which would constitute a lien against the Property.
Dated as of June __, 2023.
22725.31
26472426v3
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO ESTOPPEL CERTIFICATE]
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA
By:
Name: Melissa Poehlman
Its: Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ____________, 2023, by
Melissa Poehlman, 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, for and on behalf of said public body.
Notary Public
A-1
EXHIBIT A
(Legal Description)
Real property in the City of Richfield, County of Hennepin, State of Minnesota, described as
follows:
PARCEL 1:
TORRENS PROPERTY, Certificate of Title No. 1480793:
Lots 2 and 3, Block 1, Richfield Urban Village, Hennepin County, Minnesota; and Outlots A and
C, Richfield Urban Village, EXCEPT that part of said Outlot C lying easterly of the centerline of
vacated Grand Avenue South and its southerly extension, Hennepin County, Minnesota.
AND
ABSTRACT PROPERTY:
That part of Outlot C, Richfield Urban Village, Hennepin County, Minnesota, lying Easterly of
the centerline of vacated Grand Avenue South and its southerly extension.
PARCEL 2:
Non-exclusive easements contained within that certain Easements and Declaration of Covenants
and Restrictions recorded as Document No. 7359245 in the Office of the County Recorder, and
also recorded as Document No. 3317547 in the Office of the Registrar of Titles, all in Hennepin
County, Minnesota.
PARCEL 3:
Non-exclusive easements contained within that certain Ingress/Egress Easement Agreement
recorded as Document No. 8576022 in the Office of the County Recorder, and also recorded as
Document No. 4070505 in the Office of the Registrar of Titles, all in Hennepin County, Minnesota.
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF REPORT NO. 13
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/20/2023
REPORT PREPARED BY: Julie Urban, Asst. Community Development Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
6/15/2023
ITEM FOR COUNCIL CONSIDERATION:
Consider a resolution approving a Redevelopment Agreement with Beacon Interfaith Housing
Collaborative for the development of approximately 38 units of supportive housing at 6613-25 Portland
Avenue.
EXECUTIVE SUMMARY:
In April of 2022, the Housing and Redevelopment Authority (HRA) approved a Preliminary
Redevelopment Agreement with Beacon Interfaith Housing Collaborative (Beacon) to develop
approximately 40 units of affordable, supportive rental housing, with the target population of neuro-
diverse youth on the HRA-owned property located at 6613-25 Portland Avenue.
Since that time, Beacon has reduced the number of units to 38 and the bedroom mix to all studios, identified a
service provider, obtained an initial capital grant from Hennepin County, submitted preliminary plans for
sketch plan review by City staff, held a neighborhood meeting, obtained a commitment from Hennepin County
for 20 units of supportive housing, and conducted environmental testing.
Beacon (dba Aster Commons Limited Partnership and Aster Commons GP LLC) is now seeking financial
assistance for the project through the City's Affordable Housing Trust Fund (AHTF) and a commitment from
the HRA to sell the property at a reduced price. Beacon is seeking a variety of funding sources for the
project, including Low Income Housing Tax Credits (LIHTC) through the Minnesota Housing Finance Agency
(MN Housing). The application for LIHTC is due July 14, and funding decisions are expected by the end of
the year. Evidence of financial commitments and site control must be submitted with the application and are
necessary for the project to be competitive for LIHTC funding.
The attached Redevelopment Agreement (Agreement) proposes the following terms and deadlines:
$500,000 grant from the AHTF.
Sale of the property for one dollar.
Funds to be provided at the closing on the property and on the construction financing.
Requirement to close on the property by January 31, 2025. Because of the competitive nature of
LIHTC funding, Beacon is asking that the HRA to agree to supporting their application for up to two
rounds of funding.
Construction to begin by July 1, 2025.
A commitment of at least 50% of the units to be affordable at 30% of the Area Median Income (AMI).
Compliance with the City's Inclusionary Housing Policy, including accessibility requirements.
The terms of the Redevelopment Agreement are contingent upon the project receiving tax credits
and City land use approvals. Sale of the land will require a public hearing at a future date.
RE C O M M E ND E D AC T I O N:
By motion: Approve the attached resolution approving a Redevelopment Agreement with Aster
Commons Limited Partnership and Aster Commons G P LL C for the development of up to 38 units of
affordable, supportive housing at 6613-25 Portland Avenue.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
Beacon I nterfaith Housing Collaborative is a non-profit housing developer that has developed
deeply affordable, supportive housing throughout the Twin Cities.
The property is made up of remnant parcels from the Portland Avenue roundabout project.
The HRA has been seeking a viable development proposal for the site since 2009.
On Tuesday, March 8, 2022, at a joint work session of the City Council, HRA, and Planning
Commission, Beacon presented conceptual plans for the development of up to 40 units of
supportive rental housing at 6613-25 Portland Avenue. Beacon specializes in developing
supportive housing at deeply affordable levels throughout the Twin Cities.
On March 21, 2022, the HRA approved a resolution of support for the Beacon concept.
On April 18, 2022, the HRA approved a Preliminary Redevelopment Agreement with Beacon.
On J anuary 17, 2023, the HRA extended the Preliminary Agreement until J anuary 31, 2024.
The population to be served would include neuro-diverse youth and young adults, and
supportive housing services would be provided on-site. The 20 units of County-assisted units
would be affordable at 30% of the A MI and the remaining units would be affordable at 50% of
the A MI . Beacon continues to seek sources of funding to be able to provide all units affordable
at 30% of the A MI .
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The 2040 Comprehensive Plan calls for a full range of housing choices that meets residents'
needs at every stage of their lives and ensures a healthy balance of housing types that meet the
needs of a diverse population with diverse needs.
The City of Richfield and its HRA have a long history of partnering with organizations that best
serve its residents. Supporting housing stability for people with the lowest incomes is a way to
further the community's commitment to equitable opportunities for all.
The Metropolitan Council has identified the City's share of housing affordable at 30% of the A MI
to be 66 units by 2030.
The proposed project meets several priorities of the A HTF, including:
Housing with units affordable at 30% of the A MI
Housing with accessible units
Housing with supportive services
Housing with resident rental subsidies
I n order to be financially competitive for LI HTC, the project needs to demonstrate evidence of site
control and financial commitments of at least 10% of all financing needed.
C.C R IT IC AL T IMIN G IS S U E S:
The application for L I HTC funding is due J uly 14, 2023. A letter and accompanying resolution
from the HRA, committing to the sale of the land and funding from the A HTF are needed for the
application.
D.F IN AN C IAL IMPAC T:
Under the Agreement, the HRA would sell the property to Beacon for one dollar. There was no
cost to the HRA for the property.
The Agreement commits $500,000 from the A HTF to the project. W hile there are sufficient funds
available in the A HTF, the payment to Beacon would use up most of the fund's balance, so staff
will likely recommend that funds be transferred from the Spending Plan to the A HTF to cover this
commitment.
The HRA's financial consultant reviewed the request and determined that the project needs the
requested funds and land write-down in order to be economically viable.
Beacon has and will continue to cover the HRA's financial consultant and legal fees related to the
project.
E.L E GAL C ON S ID E R AT ION:
The HRA Attorney prepared the Agreement.
A public hearing on the sale of the land will be required.
A Declaration of Restrictive Covenants will be filed against the property, establishing the
affordability requirements.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
Do not approve the Agreement.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
N/A
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
C ontract for P rivate Redevelopment C ontract/A greement
E hlers A nalysis B ackup Material
A erial P hotograph of S ite E xhibit
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT WITH ASTER
COMMONS LIMITED PARTNERSHIP AND ASTER COMMONS GP LLC
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, Aster Commons GP LLC, a Minnesota limited liability company (the
“Redeveloper”), has proposed to acquire certain property located in the City (the “Redevelopment
Property”) from the Authority and to transfer the Redevelopment Property to Aster Commons
Limited Partnership, a Minnesota limited partnership (the “Partnership”);
WHEREAS, the Partnership has proposed to construct on the Redevelopment Property a
multifamily housing project consisting of approximately 38 supportive housing units (the “Minimum
Improvements”); and
WHEREAS, to make the Minimum Improvements economically feasible for the Partnership
to construct, the Authority has proposed to provide a grant to the Redeveloper in the principal
amount of $500,000 (the “Grant”) with pooled tax increment from the Affordable Housing Trust
Fund; and
WHEREAS, to make the Minimum Improvements economically feasible for the Partnership
to construct, the Authority has proposed to sell the Redevelopment Property for the reduced price
of $1.00, following a public hearing; and
WHEREAS, there has been presented before this Board of Commissioners of the Authority
(the “Board”) a Contract for Private Redevelopment (the “Contract”) between the Authority, the
Partnership, and the Redeveloper, which sets forth the terms of the development of the Minimum
improvements and the Grant; 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 Contract is hereby in all respects authorized, approved, and confirmed, and the
Chair and the Executive Director are hereby authorized and directed to execute the Contract 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
Contract.
2
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 20th day of June, 2023.
Gordon Hanson, Acting Chair
ATTEST:
Secretary
RC125-390 (JAE)
882588v1
Draft
June 16, 2023
CONTRACT
FOR
PRIVATE REDEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
ASTER COMMONS LIMITED PARTNERSHIP
and
ASTER COMMONS GP LLC
Dated ___________, 2023
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 .............................................................................................. 4
Section 2.2. Representations by the Redeveloper ......................................................................................... 4
Section 2.3. Representations by Partnership ................................................................................................. 4
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Redevelopment Property ........................................................................................... 6
Section 3.2. Environmental Conditions ........................................................................................................ 6
Section 3.3. Grant .......................................................................................................................................... 7
Section 3.4. Payment of Administrative Costs ............................................................................................. 8
Section 3.5. Exception to Business Subsidy Act .......................................................................................... 8
Section 3.6. Records ...................................................................................................................................... 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 ................................................................... 9
Section 4.4. Certificate of Completion .......................................................................................................... 9
Section 4.5. Assignment of Minimum Improvements ................................................................................ 10
Section 4.6. Affordability Covenants .......................................................................................................... 10
Section 4.7. Affordable Housing Reporting ............................................................................................... 10
Section 4.8. Notice of Sale of Minimum Assessments ............................................................................... 10
ARTICLE V
Insurance
Section 5.1. Insurance ................................................................................................................................. 11
Section 5.2. Subordination .......................................................................................................................... 12
ARTICLE VI
Financing
Section 6.1. Mortgage Financing ................................................................................................................ 13
Section 6.2. Modification; Subordination ................................................................................................... 13
ii
ARTICLE VII
Prohibitions Against Assignment and Transfer; Indemnification
Section 7.1. Representation as to Development.......................................................................................... 14
Section 7.2. Prohibition Against Partnership’s Transfer of Property and Assignment of
Agreement ............................................................................................................................... 14
Section 7.3. Release and Indemnification Covenants ................................................................................. 15
ARTICLE VIII
Events of Default
Section 8.1. Events of Default ..................................................................................................................... 16
Section 8.2. Remedies on Default ............................................................................................................... 16
Section 8.3. No Remedy Exclusive ............................................................................................................. 17
Section 8.4. No Additional Waiver Implied by One Waiver ...................................................................... 17
Section 8.5. Attorneys’ Fees and Costs....................................................................................................... 18
Section 8.6. No Additional Waiver Implied by One Waiver ...................................................................... 18
Section 8.7. Attorneys Fees and Costs. ....................................................................................................... 18
ARTICLE IX
Additional Provisions
Section 9.1. Conflict of Interests; Authority Representatives Not Individually Liable.............................. 19
Section 9.2. Equal Employment Opportunity ............................................................................................. 19
Section 9.3. Restrictions on Use ................................................................................................................. 19
Section 9.4. Provisions Not Merged with Deed .......................................................................................... 19
Section 9.5. Titles of Articles and Sections ................................................................................................ 19
Section 9.6. Notices and Demands ............................................................................................................. 19
Section 9.7. Counterparts ............................................................................................................................ 20
Section 9.8. Recording ................................................................................................................................ 20
Section 9.9. Amendment ............................................................................................................................. 20
Section 9.10. Memorandum of Understanding ............................................................................................. 20
Section 9.11. Preliminary Development Agreement .................................................................................... 20
SIGNATURES ................................................................................................................................................ S-1
EXHIBIT A Redevelopment Property ....................................................................................................... A-1
EXHIBIT B Form of Certificate of Completion ...................................................................................... B-1
EXHIBIT C Form of Declaration of Restrictive Covenants ..................................................................... C-1
1
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS CONTRACT FOR PRIVATE REDEVELOPMENT, made as of the ___ day of __________,
2023 (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”), ASTER COMMONS LIMITED PARTNERSHIP, a Minnesota limited
partnership (the “Partnership”), and ASTER COMMONS GP LLC, a Minnesota limited liability company
(the “Redeveloper”).
WITNESSETH:
WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001 through
469.047, as amended (the “HRA Act”), and was authorized to transact business and exercise its powers by a
resolution of the City Council of the City of Richfield, Minnesota (the “City”); and
WHEREAS, the Authority has undertaken a program to promote redevelopment and development of
land that is underused or underutilized within the City, and in this connection the Authority administers a
redevelopment project known as the Richfield Redevelopment Project (the “Redevelopment Project”)
pursuant to the HRA Act; and
WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or
interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private
enterprise and promote the redevelopment within the City; and
WHEREAS, the Redeveloper proposes to acquire from the Authority certain property (the
“Redevelopment Property”) within the Redevelopment Project and to transfer the Redevelopment Property to
the Partnership; and
WHEREAS, the Partnership will construct thereon a multifamily housing project consisting of
approximately 38 supportive housing units (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 Partnership to construct, the
Authority is prepared to provide a grant to the Redeveloper in the principal amount of $500,000 (the “Grant”)
with pooled tax increment from the Affordable Housing Trust Fund; and
WHEREAS, the Redeveloper will convey the Minimum Improvements to the Partnership, who will
be responsible for constructing, operating and maintaining the Minimum Improvements; and
WHEREAS, the Authority believes that the redevelopment to be performed 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 Redevelopment, 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.
“Board” means the Board of Commissioners of the Authority.
“Business Subsidy Act” means Minnesota Statutes, Sections 116J.993 to 116J.995, as amended.
“Certificate of Completion” means the certification provided to the Redeveloper pursuant to
Section 4.4 hereof and set forth in EXHIBIT B.
“City” means the City of Richfield, Minnesota.
“City Council” means the City Council of the City.
“Closing” has the meaning provided in Section 3.2(d) hereof.
“Code” means the Internal Revenue Code of 1986, as amended.
“Construction Plans” means the plans, specifications, drawings and related documents for the
construction work to be performed by the Partnership on the Redevelopment 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” means the Declaration of Restrictive Covenants in substantially the form set forth in
EXHIBIT C attached hereto.
“Event of Default” means an action by the Redeveloper listed in Article XIII hereof.
“Grant” means the grant provided by the Authority to the Redeveloper in the amount of $500,000.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
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“Minimum Improvements” means a multifamily housing project consisting of approximately 38
supportive housing units.
“Partnership” means the Aster Commons Limited Partnership, a Minnesota limited partnership, or its
permitted successors and assigns.
“Preliminary Redevelopment Agreement” means the Amended and Restated Preliminary
Redevelopment Agreement, dated January 17, 2023, between the Authority and the Redeveloper.
“Redeveloper” means Aster Commons GP LLC, a limited liability company, or its permitted
successors and assigns.
“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.
“Redevelopment Property” means the real property described in EXHIBIT A.
“State” means the State of Minnesota.
“Termination Date” means the date of termination of the “Qualified Project Period” as defined in the
Declaration.
“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.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following representations
as the basis for the undertaking on its part herein contained:
(a)The Authority is a housing and redevelopment authority organized and existing under the
laws of the State. Under the provisions of the 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 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 and provide supportive housing units that are needed within the City.
(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 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 Redeveloper. The Redeveloper represents and warrants that:
(a)The Redeveloper is a 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 Redeveloper has received no notice or communication from any local, State or federal
official that the activities of the Redeveloper or the Authority in or on the Redevelopment 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 Redeveloper 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.
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(c)The Redeveloper 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.
(d)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 Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing.
(e)The proposed development hereunder would not occur but for the financial assistance being
provided by the Authority hereunder.
(f)The Redeveloper 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 Redeveloper
or its business which may delay or require changes in construction of the Minimum Improvements.
(g)The Redeveloper shall convey the Redevelopment Property to the Partnership.
Section 2.3. Representations by Partnership. The Partnership represents and warrants that:
(a)The Partnership is a limited partnership duly organized and in good standing under the laws
of the State of Minnesota, is duly authorized to transact business within the State, and has the power to enter
into this Agreement.
(b)The Partnership will cause the construction of 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).
(c)Following the Redeveloper’s conveyance of the Redevelopment Property to the Partnership,
the Partnership shall be responsible for all of the duties of the Redeveloper in this Agreement except for the
requirements of Sections 3.1 through 3.3 of this Agreement.
(d)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 Partnership is now a party or by which it is bound, or constitutes a default under any of the foregoing.
(e)The Partnership 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.
(f)The Partnership 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 Partnership
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 Redevelopment Property. The Authority currently owns the Redevelopment
Property and shall convey the Redevelopment Property to the Redeveloper pursuant to the provisions of
Section 3.2 hereof.
Section 3.2. Conveyance of Redevelopment Property.
(a)The Authority will convey the Redevelopment Property to the Redeveloper via a quit claim
deed. The Redevelopment Property will be conveyed “as-is” and “where-is.” The conveyance of the
Redevelopment Property to the Redeveloper is contingent on the Board conducting a public hearing and
approving the sale of the Redevelopment Property to the Redeveloper in accordance with Section 469.029 of
the HRA Act. Within sixty (60) days following execution of this Agreement, the Authority will provide the
Redeveloper with a commitment for title insurance from a title insurance company acceptable to the
Redeveloper (the “Title Company”). The Redeveloper will be responsible for reimbursing the Authority for
the cost of preparation of the commitment for title insurance. The Redeveloper shall pay for the cost of
obtaining a policy of title insurance.
(b)Within sixty (60) days after the Redeveloper’s receipt of the title commitment, the
Redeveloper may give the Authority written notice of any alleged defect(s) in the marketability of the
Authority’s actual and/or record title to the Redevelopment Property, or any portion thereof (the
“Objections”) and request that the Authority make the Authority’s title marketable or conforming. The
Redeveloper’s failure to object to defects in the marketability of Authority’s title to the Redevelopment
Property, in writing, within the time period set forth above or at any time prior to Closing, shall be deemed a
waiver of the Redeveloper’s right to require the Authority to cure such defects. If the Redeveloper notifies
the Authority of Objections within the time period set forth above, the Authority shall use good faith efforts
to make the Authority’s actual and record title to the Redevelopment Property marketable. The Authority
shall have up to forty-five (45) days from the Authority’s receipt of the Redeveloper’s Objections to use good
faith efforts to make the Authority’s actual and record title to the Redevelopment Property marketable. In no
event will the Authority be required to expend more than $1,000 in its good faith efforts to make the
Authority’s actual and record title to the Redevelopment Property marketable. If the Authority makes the
Authority’s title marketable within the forty-five (45) day period, the Authority shall notify the Redeveloper,
in writing, and the parties shall close pursuant to the terms of this Agreement. If the Authority is unable to
make title marketable within the forty-five (45) day period, the Redeveloper may either (i) terminate this
Agreement by delivering written notice of termination to the Authority; or (ii) notify the Authority that the
Redeveloper waives the Redeveloper’s Objections. If the Redeveloper waives the Redeveloper’s Objections,
the matters giving rise to such Objections shall be deemed a permitted encumbrance and the parties shall
otherwise perform their obligations under this Agreement. The Authority shall have no obligation to take any
action to clear defects in the title to the Redevelopment Property other than the good faith efforts described
above.
(c)Without limitation, the Redeveloper is responsible for satisfying itself as to matters such as
contamination, soils and soil stability, title and survey. The Authority shall have no obligation to cure any
defect or other matter, but agrees to cooperate, at no cost or expense to it, in any efforts by the Redeveloper to
achieve such a cure.
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(d)On the date the Redevelopment Property is conveyed to the Redeveloper (the “Closing”), the
Authority will execute and deliver to the Redeveloper the following, in form and content reasonably
acceptable to the Redeveloper:
(i)a quit claim deed conveying the Redevelopment Property to the Redeveloper;
(ii)a non-foreign affidavit, properly executed, containing such information as is
required by Section 1445(b)(2) of the Internal Revenue Code and its regulations;
(iii)a standard form Seller’s Affidavit;
(iv)if required, a well certificate in the form required by law;
(v)any affidavits and disclosures required by law pertaining to private sewage
treatment systems; and
(vi)any affidavits, certificates, or other documents that may be required under
applicable law and/or that are reasonably determined by the Redeveloper or the Title Company to be
necessary to transfer the Redevelopment Property to the Redeveloper and to evidence that the
Authority has duly authorized the transactions contemplated hereby.
(e)The Redeveloper acknowledges that the Authority will be conveying the Redevelopment
Property to the Redeveloper for a purchase price of $1.00 (the “Redevelopment Property Purchase Price”).
The fair market value of the Redevelopment Property is $570,000; therefore, the Redevelopment Property
Purchase Price represents a land write-down in the amount of $100.
(f)Prior to the conveyance of the Redevelopment Property to the Partnership or Redeveloper
having delivered to the Authority a list of all sources of funding to be used to develop the Minimum
Improvements and evidence of the total costs of developing the Minimum Improvements, in a form
reasonably satisfactory to the Authority.
(g)The Closing will not take place until the Redeveloper or Partnership has (i) obtained all
necessary land use approvals from the City; (ii) has applied for tax credits through the Minnesota Housing
Finance Agency; (iii) has received bond housing allocation from Minnesota Management and Budget or
through the Minnesota Housing Finance Agency or received proceeds of Housing Infrastructure Bonds
(“HIBs”) or other financing from the Minnesota Housing Finance Agency; and (iv) has executed the
Declaration in substantially the form set forth in EXHIBIT C attached hereto. The Partnership intends to
apply for tax credits in July 2023. If the Partnership receives housing allocation from Minnesota
Management and Budget or through the Minnesota Housing Finance Agency or proceeds of HIBs prior to
January 31, 2024, the Redeveloper or Partnership shall obtain all of the land use approvals on or prior to one
hundred eighty (180) days after receiving the allocation.
(h)In the event that the Partnership does not receive tax credits and/or other financing sufficient
to build the Minimum Improvements housing allocation by January 31, 2025, unless extended by mutual
agreement of the parties, this Agreement will terminate and be of no further force and effect, and the parties
will be relieved of any further obligations hereunder.
Section 3.3. Grant.
(a)Grant. The Authority shall provide the Redeveloper with a Grant in the amount of $500,000
to support construction of the Minimum Improvements.
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(b) Disbursement of Grant. Subject to the immediately following conditions, the Grant shall be
funded in a single disbursement of funds to the Redeveloper at the closing of construction financing for the
Minimum Improvements:
(i) the Redeveloper has closed on the Redevelopment Property;
(ii) the Redeveloper having delivered to the Authority a list of all sources of funding to
be used to develop the Minimum Improvements and evidence of the total costs of developing the
Minimum Improvements, in a form reasonably satisfactory to the Authority; and
(iii) a fully executed construction contract;
(iv) the Redeveloper having provided evidence satisfactory to the Authority that the
Redeveloper has established a separate accounting system for the Minimum Improvements for the
purpose of recording the receipt and expenditure of the Grant proceeds;
(v) there being no uncured Event of Default under this Agreement.
Section 3.4. Payment of Administrative Costs. Pursuant to the Preliminary Redevelopment
Agreement, the Redeveloper has deposited with the Authority $5,000 to pay Administrative Costs related to
the Preliminary Redevelopment Agreement. The Redeveloper will deposit with the Authority an additional
$7,000 to pay Administrative Costs related to this Agreement. “Administrative Costs” are defined as $2,000
in Authority staff costs, along with all out-of-pocket costs incurred by the Authority (including without
limitation reasonable attorney and consultant costs of the Authority), all attributable to or incurred in
connection with the negotiation and preparation of this Agreement and other documents and agreements in
connection with the redevelopment of the Redevelopment Property, and not previously paid by Redeveloper.
At the Redeveloper’s request, but no more often than monthly, the Authority will provide the Redeveloper
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 Redeveloper shall replenish the deposit to the full $7,000 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 Redeveloper 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
Redeveloper, the Authority shall return to the Redeveloper any funds not anticipated to be needed.
Section 3.5. Exception to Business Subsidy Act. The parties agree and understand that the purpose
of the Authority’s financial assistance to the Redeveloper is to facilitate development of housing and is not a
“business subsidy” within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995, as amended.
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 the Redeveloper and the
Partnership relating to the Minimum Improvements and the costs for which the Partnership has been
reimbursed.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. Following the conveyance of the
Redevelopment Property to the Partnership, the Partnership agrees that it will construct the Minimum
Improvements on the Redevelopment Property substantially in accordance with the Construction Plans as
approved pursuant to Section 4.2 hereof, and at all times prior to the Termination Date, the Partnership 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. Before commencement of construction of the Minimum
Improvements, the Partnership shall obtain all the necessary planning approvals from the City’s Planning
Division.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Partnership will commence the construction of the Minimum Improvements by July 1, 2025, and
substantially complete construction of the Minimum Improvements by September 30, 2026. 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 Partnership on the
Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted by the
Partnership and approved by the Authority. The Executive Director of the Authority is authorized to extend
the dates of commencement of construction and completion of construction set forth in this Section.
The Partnership agrees for itself, its successors and assigns, and every successor in interest to the
Redevelopment Property, or any part thereof, that the Partnership, 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 Partnership to construct the Minimum
Improvements (including the dates for beginning and completion thereof), the Authority Representative will
furnish the Partnership with a Certificate of Completion shown in EXHIBIT B hereof; provided, however,
that prior to the issuance of the Certificate of Completion, the Partnership 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, the Authority Representative shall, within thirty (30) days after written
request by the Partnership, provide the Partnership with a written statement, indicating in adequate detail in
what respects the Partnership 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 Partnership 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.
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Section 4.5. Reserved.
Section 4.6. Affordability Covenants. The Partnership agrees that at all times from initial occupancy
of the Minimum Improvements through the Termination Date, (a) at least fifty percent (50%) of the units
within the Minimum Improvements shall be reserved for occupancy by individuals and families whose
income is thirty percent (30%) or less of the area median gross income constructed and satisfy the income
requirements for a qualified residential rental project as defined in Section 142(d) of the Code; and the
remainder of the units within the Minimum Improvements shall be reserved for occupancy by individuals
whose income is fifty percent (50%) 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 Code. The
Partnership and the Authority shall execute the Declaration and record such agreement against the
Redevelopment Property.
During the term of the Declaration, the Partnership shall not adopt any policies that the Partnership
knows or should know prohibit or in any way exclude rental to tenants holding certificates/vouchers under
Section 8 of the United States 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. Additionally,
the Partnership shall not adopt policies that the Partnership knows or should know will have the effect of
making it difficult for tenants holding certificates/vouchers under Section 8 of the United States Housing Act
of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its successor, to rent units within the
Minimum Improvements (for example, policies that require income of more than two times the rent to be
paid for a unit).
Section 4.7. 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 Partnership shall
provide a report to the Authority evidencing that the Partnership 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
Partnership to provide additional information reasonably necessary to assess the accuracy of such
certification. Unless earlier excused by the Authority, the Partnership shall send affordable housing reports to
the Authority until the Termination Date.
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 Partnership, 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
Partnership, and the trustee for such tax-exempt revenue obligations.
Section 4.8. Notice of Sale of Minimum Improvements. In consideration of the financial assistance
provided pursuant to Article III hereof, the Partnership 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 Partnership 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
Termination Date, the Partnership shall maintain, or cause to be maintained, at its cost and expense, and from
time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as
follows:
(i)insurance against loss and/or damage to the Minimum Improvements under a policy
or policies covering such risks as are ordinarily insured against by similar businesses;
(ii)comprehensive general public liability insurance, including personal injury liability
(with employee exclusion deleted), against liability for injuries to persons and/or property, in the
minimum amount for each occurrence and for each year of $2,000,000, and shall be endorsed to
show the Authority as an additional insured; and
(iii)such other insurance, including workers’ compensation insurance respecting all
employees, if any, of the Partnership, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the Partnership
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 Partnership which are authorized under the laws of the State to assume
the risks covered thereby. Upon request, the Partnership 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 Partnership and the Authority at least
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thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the
Partnership may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the
coverage required herein, in which event the Partnership 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 Partnership agrees to notify the Authority immediately in the case of damage exceeding
$200,000, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other
casualty. In such event the Partnership 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 Partnership will apply the net proceeds of any insurance relating to such damage received by the
Partnership to the payment or reimbursement of the costs thereof.
The Partnership shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Partnership 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 Partnership.
(e)The Partnership and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon the Termination Date.
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 VI hereof.
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ARTICLE VI
Financing
Section 6.1. Mortgage Financing.
(a)Before commencement of construction of the Minimum Improvements, the Partnership 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 Partnership 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 Partnership shall submit adequate evidence of financing within thirty (30)
days after such rejection.
Section 6.2. Modification; Subordination. In order to facilitate the Partnership 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. If a separate agreement to subordinate this Agreement is
required by any lender, the agreement must be approved by the Board.
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ARTICLE VII
Prohibitions Against Assignment and Transfer; Indemnification
Section 7.1. Representation as to Development. The Partnership represents and agrees that its
purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will
be used, for the purpose of development of the Redevelopment Property and not for speculation in land
holding.
Section 7.2. Prohibition Against Partnership’s Transfer of Property and Assignment of Agreement.
The Partnership represents and agrees that until the Termination Date:
(a)Except only by way of security for, and only for, the purpose of obtaining financing
necessary to enable the Partnership or any successor in interest to the Redevelopment 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 Partnership 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
Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of
the same, except for a purchase option and right of first refusal in favor of, without the prior written approval
of the Authority, the Partnership 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 Partnership, upon
transfer or assignment of the Redevelopment 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 Partnership.
(ii)Any proposed transferee, by instrument in writing reasonably 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 Partnership under this Agreement and agreed to be subject to all the conditions and restrictions
to which the Partnership is subject; provided, however, that the fact that any transferee of, or any
other successor in interest whatsoever to, the Redevelopment 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 Redevelopment
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 Redevelopment Property or
any part thereof, or any interest therein, however consummated or occurring, and whether voluntary
or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect
to any rights or remedies on controls provided in or resulting from this Agreement with respect to the
Minimum Improvements that the Authority would have had, had there been no such transfer or
change. In the absence of specific written agreement by the Authority to the contrary, no such
15
transfer or approval by the Authority thereof shall be deemed to relieve the Partnership 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 Redevelopment 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 Partnership shall be released from its obligation
under this Agreement.
After issuance of the Certificate of Completion for the Minimum Improvements, the Partnership may
transfer or assign the Redevelopment Property or the Partnership’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 Partnership’s obligations hereunder. The Partnership shall submit to the
Authority written evidence of any such transfer or assignment, including the transferee or assignee’s express
assumption of the Partnership’s obligations under this Agreement. If the Partnership fails to provide such
evidence of transfer and assumption, the Partnership shall remain bound by all its obligations under this
Agreement.
Notwithstanding the foregoing, if the Partnership does not receive an allocation of low-income
housing tax credits prior to the commencement of construction of the Minimum Improvements, the
Partnership may, with notice to, but without the consent of the Authority, assign this Agreement to the
Redeveloper. Upon such assignment, the Redeveloper shall assume all obligations of the Partnership and all
references to the Partnership in this Agreement and the Declaration shall be deemed to be references to the
Redeveloper.
Section 7.3. Release and Indemnification Covenants.
(a)The Partnership and the Redeveloper release from and covenant and agree that the Authority
and its governing body members, officers, agents, servants and employees thereof shall not be liable for and
agree 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 Partnership
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
Partnership, 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 Partnership or their
officers, agents, servants or employees or any other person who may be about the Redevelopment Property or
Minimum Improvements due to any act of negligence of any person.
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(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.
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ARTICLE VIII
Events of Default
Section 8.1. 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 Partnership 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 Partnership:
(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 Redevelopment 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 labor laws; or
(vii)fails to comply with the Declaration.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 hereof
occurs, the non-defaulting party may exercise its rights under this Section 8.2 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; or
(c)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.
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Section 8.3. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to
Partnership. In the event that subsequent to conveyance of the Redevelopment Property to the Partnership,
subject to Unavoidable Delays, the Partnership fails to commence construction of the Minimum
Improvements by the dates specified in Section 4.3 hereof, and such failure to commence is not cured within
ninety (90) days after written notice from the Authority to the Partnership to do so, then the Authority shall
have the right to re-enter and take possession of the Redevelopment Property and to terminate and revest in
the Authority the Redevelopment Property, it being the intent of this provision, together with other provisions
of this Agreement, that the conveyance of the Redevelopment Property to the Partnership shall be made upon,
and that the deeds shall contain a condition subsequent to the effect that in the event of any default on the part
of the Partnership in performance of the obligations specified in this Section 8.3 and failure on the part of the
Partnership to remedy, end, or abrogate such default within the period and in the manner stated in this
Section, the Authority at its option may declare a termination in favor of the Authority of the title, and of all
the rights and interests in and to the Redevelopment Property and that such title and all rights and interests of
the Partnership, and any assigns or successors in interest to and in the Redevelopment Property, shall revert to
the Authority, as applicable, but only if the events stated in this Section have not been cured within the time
periods provided above. The rights of the Authority under this Section shall be subordinate to any mortgage
financing pursuant to Section 6.2
Section 8.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the
Authority of title to and/or possession of the Redevelopment Property, the Authority shall, pursuant to its
responsibilities under law, use its best efforts to sell the Redevelopment Property and in such manner as the
Authority to a qualified and responsible party or parties (as determined by the Authority) who will assume the
obligation of making or completing the Minimum Improvements or such other improvements in its stead as
shall be satisfactory to the Authority in accordance with the uses specified for the Redevelopment Property in
this Agreement. During any time while the Authority has title to and/or possession of a parcel of property
obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering
such parcel. Upon resale of the Redevelopment Property, the proceeds thereof shall be applied:
(a)first, to reimburse the Authority for all costs and expenses incurred by it, including but not
limited to salaries of personnel, in connection with the recapture, management, and resale of the
Redevelopment Property (but less any income derived by the Authority from the property or part thereof in
connection with such management); all taxes, assessments, and water and sewer charges with respect to the
Redevelopment Property or part thereof (or, in the event the Redevelopment Property is exempt from taxation
or assessment or such charge during the period of ownership thereof by the Authority, an amount, if paid,
equal to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have
been payable if the Redevelopment Property were not so exempt); any payments made or necessary to be
made to discharge any encumbrances or liens existing on the Redevelopment Property, or part thereof at the
time of revesting of title thereto in the Authority, or to discharge or prevent from attaching or being made any
subsequent encumbrances or liens due to obligations, defaults or acts of the Partnership, its successors or
transferees; any expenditures made or obligations incurred with respect to the making or completion of the
subject improvements or any part thereof on the Redevelopment Property; and any amounts otherwise owing
the Authority by the Partnership and its successor or transferee; and
(b)second, to reimburse the Partnership, its successor or transferee, up to the amount equal to
the portion of the Redevelopment Property Purchase Price paid by the Partnership under Section 3.2 hereof
and the amount actually invested by it in making any of the subject improvements on the Redevelopment
Property or part thereof, including any related costs related to acquisition and development of the
Redevelopment Property, less any gains or income withdrawn or made by it from this Agreement or the
Redevelopment Property.
Any balance remaining after such reimbursements shall be retained by the Authority as its property.
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Section 8.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or the Partnership 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 Section 8.2 hereof.
Section 8.6. 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 8.7. 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 Partnership
under this Agreement, and the Authority prevails in the action, the Partnership agrees that it will, within ten
(10)days of written demand by the Authority, pay to the Authority the reasonable fees of the attorneys and
the other expenses so incurred by the Authority.
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ARTICLE IX
Additional Provisions
Section 9.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority
and the Redeveloper, 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 Partnership, 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 Partnership or successor or on any obligations under
the terms of this Agreement.
Section 9.2. Equal Employment Opportunity. The Partnership, 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 9.3. Restrictions on Use. The Partnership agrees that, prior to the Termination Date, the
Partnership, and such successors and assigns, shall use the Redevelopment Property solely for the
development of affordable housing in accordance with the terms of this Agreement, including the
affordability requirements set forth in Section 4.5 hereof, 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
Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof.
Section 9.4. 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 Redevelopment Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 9.5. 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 9.6. 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 Partnership or the Redeveloper, is addressed to or delivered personally to
the Partnership or the Redeveloper, as applicable, at 2610 University Avenue West, Suite 100, Saint Paul,
MN 55114, Attn: Kevin Walker, Vice President, Housing Development;
(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.
21
Section 9.7. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall constitute one and the same instrument.
Section 9.8. 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 Redeveloper shall pay all costs for recording.
Section 9.9. Amendment. This Agreement may be amended only by written agreement executed by
the Authority and the Redeveloper.
Section 9.10. Interpretation; Concurrence. The language in this Agreement shall be construed
simply according to its generally understood meaning, and not strictly for or against any party and no
interpretation shall be affected by which party drafted any part of this Agreement. By executing this
Agreement, the parties acknowledge that they (a) enter into and execute this Agreement knowingly,
voluntarily and willingly of their own volition with such consultation with legal counsel as they deem
appropriate; (b) have had a sufficient amount of time to consider this Agreement’s terms and conditions, and
to consult an attorney before signing this Agreement; (c) have read this Agreement, understand all of its
terms, appreciate the significance of those terms and have made the decision to accept them as stated herein;
and (d) have not relied upon any representation or statement not set forth herein.
Section 9.11. Preliminary Redevelopment Agreement. On the date of this Agreement, the
Preliminary Redevelopment Agreement shall terminate.
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IN WITNESS WHEREOF, the Authority, the Redeveloper, and the Partnership have caused this
Contract for Private Redevelopment to be duly executed in their respective 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 Acting Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 2023, by
_______________________________________, the Chair of the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of
Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 2023, by Melissa
Poehlman, 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 Partnership to the Contract for Private Redevelopment, dated the date and year first
written above.
ASTER COMMONS LIMITED PARTNERSHIP
By: Aster Commons GP LLC,
a Minnesota limited liability company,
Its: General Partner
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this day of __________, 2023, by
_________________________________, the _____________________________ of Aster Commons GP
LLC, a limited partnership, on behalf of the Partnership.
Notary Public
S-3
Execution page of the Redeveloper to the Contract for Private Redevelopment, dated the date and year first
written above.
ASTER COMMONS GP LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this day of __________, 2023, by
_________________________________, the _____________________________ of Aster Commons GP
LLC, a Minnesota limited liability company, on behalf of the Owner.
Notary Public
A-1
EXHIBIT A
REDEVELOPMENT PROPERTY
Lot 31, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418472
Lot 32, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418471
Lot 33, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418470
Lot 34, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418469
B-1
EXHIBIT B
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Aster Commons Limited Partnership, a Minnesota limited
partnership (the “Partnership”), has fully complied with its obligations under Articles III and IV of the
Contract for Private Redevelopment, dated ________________, 2023 (the “Agreement”), between the
Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, the Partnership, and Aster
Commons GP LLC, a Minnesota limited liability company, recorded in the office of [County Recorder]
[Registrar of Titles] of Hennepin County, Minnesota on ______________, 20___, as document number
__________________, with respect to construction of the Minimum Improvements in accordance with
Article IV of the Agreement, and that the Partnership is released and forever discharged from its
obligations with respect to construction of the Minimum Improvements under Articles III and IV of the
Agreement.
Dated: _______________, 20___.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______________, 20__, by
_________________, the Executive Director of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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EXHIBIT C
FORM OF DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS, made as of the _____ day of
_______________, 2023 (the “Declaration”), is by ASTER COMMONS LIMITED PARTNERSHIP, a
Minnesota limited partnership (the “Partnership”), in favor of the HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and
politic under the laws of the State of Minnesota (the “Authority”).
RECITALS:
WHEREAS, the Authority intends to convey the real property legally described in EXHIBIT A
attached hereto (the “Redevelopment Property”) to Aster Commons GP LLC, a limited liability company
(the “Redeveloper”) under a Contract for Private Development of even date herewith (the “Contract”)
between the Authority, the Redeveloper, and the Partnership; and
WHEREAS, pursuant to the Contract, the Partnership will construct a multifamily housing project
consisting of approximately 38 supportive housing units and (the “Project”) on the Redevelopment
Property, and to cause compliance with certain affordability covenants described in Section 4.5 of the
Contract; and
WHEREAS, the Redeveloper shall convey the Minimum Improvements to the Partnership; and
WHEREAS, Section 4.5 of the Contract requires that the Partnership cause to be executed an
instrument in recordable form substantially reflecting the covenants set forth in Section 4.5 of the Contract;
and
WHEREAS, the Partnership intends, declares, and covenants that the restrictive covenants set forth
herein will be and are covenants running with the Redevelopment Property for the term described herein and
binding upon all subsequent owners of the Redevelopment Property for the term described herein, and are not
merely personal covenants of the Partnership; and
WHEREAS, capitalized terms in this Declaration have the meaning provided in the Contract unless
otherwise defined herein.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, and of
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Partnership
agrees as follows:
1.Term of Restrictions.
(a)Occupancy and Rental Restrictions. The term of the Occupancy Restrictions set forth in
Section 3 hereof will commence on the date a certificate of occupancy is received from the City of Richfield,
Minnesota (the “City”) for all affordable rental units on the Redevelopment Property (the “Rental Housing
Units”). The period from commencement to termination is the “Qualified Project Period.”
(b)Termination of Declaration. This Declaration will terminate upon the date that is forty (40)
years after the commencement of the Qualified Project Period.
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(c)Removal from Real Estate Records. Upon termination of this Declaration, the Authority
will, upon request by the Partnership or its assigns, file any document appropriate to remove this Declaration
from the real estate records of Hennepin County, Minnesota.
2.Project Restrictions.
(a)the Partnership represents, warrants, and covenants that:
(i)All leases of Rental Housing Units to Qualifying Tenants (as defined in
Section 3(a)(i) hereof) will contain clauses, among others, wherein each individual lessee:
(1)certifies the accuracy of the statements made in its application and
Eligibility Certification (as defined in Section 3(a)(ii) hereof); and
(2)agrees that the family income at the time the lease is executed will be
deemed substantial and material obligation of the lessee’s tenancy, that the lessee will
comply promptly with all requests for income and other information relevant to determining
low or moderate income status from the Partnership or the Authority, and that the lessee’s
failure or refusal to comply with a request for information with respect thereto will be
deemed a violation of a substantial obligation of the lessee’s tenancy.
(ii)Upon reasonable prior written notice, the Partnership will permit any duly
authorized representative of the Authority to inspect the books and records of the Partnership
pertaining to the income of Qualifying Tenants residing in the Project.
3.Occupancy Restrictions.
(a)Tenant Income Provisions. The Partnership represents, warrants, and covenants that:
(i)Qualifying Tenants. From the commencement of the Qualified Project Period, all of
the housing units (the “Rental Housing Units”) shall be occupied (or treated as occupied as provided
herein) or held vacant and available for occupancy by Qualifying Tenants. Qualifying Tenants shall
mean one or more occupants of a unit who are determined from time to time by the Partnership to
have combined adjusted income that does not exceed thirty percent (30%) or fifty percent (50%) of
the Minneapolis-St. Paul metropolitan statistical area (the “Metro Area”) median income for the
applicable calendar year, subject to the following: (1) at least fifty percent (50%) of the Rental
Housing Units shall be occupied or held vacant and available for occupancy by Qualifying Tenants
with a combined adjusted income that does not exceed thirty percent (30%) of the Metro Area
median income for the applicable calendar year; and (2) the remainder of the Rental Housing Units
shall be occupied or held vacant and available for occupancy by Qualifying Tenants with a combined
adjusted income that does not exceed fifty percent (50%) of the Metro Area median income for the
applicable calendar year. For purposes of this definition, the occupants of a residential unit will not
be deemed to be Qualifying Tenants if all the occupants of such residential unit at any time are
“students,” as defined in Section 151(c)(4) of the Internal Revenue Code of 1986, as amended (the
“Code”), not entitled to an exemption under the Code. The determination of whether an individual
or family is of low or moderate income will be made at the time the tenancy commences and on an
ongoing basis thereafter, determined at least annually. If during their tenancy a Qualifying Tenant’s
income exceeds one hundred forty percent (140%) of the maximum income qualifying as low or
moderate income for a family of its size, the next available unit (determined in accordance with the
Code and applicable regulations) (the “Next Available Unit Rule”) must be leased to a Qualifying
Tenant or held vacant and available for occupancy by a Qualifying Tenant. If the Next Available
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Unit Rule is violated, the Rental Housing Unit will not continue to be treated as a Qualifying Unit. If
any rental unit is determined not to be a Qualifying Tenant, Owner shall have one hundred eighty
(180) days to have the unit become a Qualifying Unit.
(ii)Certification of Tenant Eligibility. As a condition to initial and continuing
occupancy, each person who is intended to be a Qualifying Tenant will be required annually to sign
and deliver to the Partnership a Certification of Tenant Eligibility substantially in the form attached
hereto as EXHIBIT B, or in any other form as may be approved by the Authority (the “Eligibility
Certification”), in which the prospective Qualifying Tenant certifies as to qualifying as low or
moderate income. In addition, the person will be required to provide whatever other information,
documents, or certifications are deemed necessary by the Authority to substantiate the Eligibility
Certification, on an ongoing annual basis, and to verify that the tenant continues to be a Qualifying
Tenant within the meaning of Section 3(a) hereof. Eligibility Certifications will be maintained on
file by the Partnership with respect to each Qualifying Tenant who resides in a Rental Housing Unit
or resided therein during the immediately preceding calendar year.
(iii)Lease. The form of lease to be utilized by the Partnership in renting any Rental
Housing Units to any person who is intended to be a Qualifying Tenant will provide for termination
of the lease and consent by the person to immediate eviction for failure to qualify as a Qualifying
Tenant as a result of any material misrepresentation made by the person with respect to the Eligibility
Certification.
(iv)Annual Report. The Partnership covenants and agrees that during the term of this
Declaration, it will prepare and submit to the Authority on or before April 1 of each year, a certificate
substantially in the form of EXHIBIT C hereto, executed by the Partnership, (a) identifying the
tenancies and the dates of occupancy (or vacancy) for all Qualifying Tenants in the Project, including
the percentage of the Rental Housing Units which were occupied by Qualifying Tenants (or held
vacant and available for occupancy by Qualifying Tenants) at all times during the year preceding the
date of the certificate; (b) describing all transfers or other changes in ownership of the Project or any
interest therein; and (c) stating, that to the best knowledge of the person executing the certificate after
due inquiry, all the Rental Housing Units were rented or available for rental on a continuous basis
during the year to members of the general public and that the Partnership was not otherwise in
default under this Declaration during the year. In the event of a casualty, any damaged units shall be
deemed to be Qualifying Units provided that the Partnership promptly commences and completes
restoration of the Minimum Improvements.
(v)Notice of Non-Compliance. The Partnership will immediately notify the Authority
if at any time during the term of this Declaration the Rental Housing Units are not occupied or
available for occupancy as required by the terms of this Declaration.
(c)Section 8 Housing. During the term of this Declaration, the Partnership shall not adopt any
policies that the Partnership knows or should know will prohibit or in any way exclude rental to tenants
holding certificates/vouchers under Section 8 of the United States 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. Additionally, the Partnership shall not adopt policies that the Partnership knows
or should know will have the effect of making it difficult for tenants holding certificates/vouchers under
Section 8 of the United States Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq.,
or its successor, to rent units within the Minimum Improvements (for example, policies that require income
of more than two times the rent to be paid for a unit).
C-4
(d)Compliance with City’s Inclusionary Housing Policy. The Partnership covenants and agrees
to comply with the City’s Inclusionary Housing Policy.
4.Transfer Restrictions. The Partnership covenants and agrees that the Partnership will cause
or require as a condition precedent to any conveyance, transfer, assignment, or any other disposition of the
Project prior to the termination of the Rental Restrictions and Occupancy Restrictions provided herein (the
“Transfer”) that the transferee of the Project pursuant to the Transfer assume in writing, in a form acceptable
to the Authority, all duties and obligations of the Partnership under this Declaration, including this Section 4,
in the event of a subsequent Transfer by the transferee prior to expiration of the Rental Restrictions and
Occupancy Restrictions provided herein (the “Assumption Agreement”). The Partnership will deliver the
Assumption Agreement to the Authority prior to the Transfer.
5.Notice of Sale. In consideration of the financial assistance provided to the Partnership
pursuant to Article IV of the Contract, the Partnership agrees to provide the Authority with at least ninety (90)
days’ notice of any sale of the Project.
6.Enforcement.
(a)The Partnership will permit, during normal business hours and upon reasonable prior written
notice, any duly authorized representative of the Authority to inspect any books and records of the
Partnership regarding the Project with respect to the incomes of Qualifying Tenants.
(b)The Partnership will submit any other information, documents or certifications requested by
the Authority which the Authority deems reasonably necessary to substantial the Partnership’s continuing
compliance with the provisions specified in this Declaration.
(c)The Partnership acknowledges that the primary purpose for requiring compliance by the
Partnership with the restrictions provided in this Declaration is to ensure compliance of the property with the
housing affordability covenants set forth in Section 4.5 of the Contract, and by reason thereof, the
Partnership, in consideration for assistance provided by the Authority under the Contract that makes possible
the construction of the Project on the Redevelopment Property, hereby agrees and consents that the Authority
will be entitled, for any breach of the provisions of this Declaration, and in addition to all other remedies
provided by law or in equity, to enforce specific performance by the Partnership of its obligations under this
Declaration in a state court of competent jurisdiction. The Partnership hereby further specifically
acknowledges that the Authority cannot be adequately compensated by monetary damages in the event of any
default hereunder.
(d)The Partnership understands and acknowledges that, in addition to any remedy set forth
herein for failure to comply with the restrictions set forth in this Declaration, the Authority may exercise any
remedy available to it under Article IX of the Contract.
7.Indemnification. The Partnership hereby indemnifies, and agrees to defend and hold
harmless the Authority and its members, officers, and agents from and against all liabilities, losses, damages,
costs, expenses (including attorneys’ fees and expenses), causes of action, suits, allegations, claims, demands,
and judgments of any nature arising from the consequences of a legal or administrative proceeding or action
brought against them, or any of them, on account of any failure by the Partnership to comply with the terms
of this Declaration, or on account of any representation or warranty of the Partnership contained herein being
untrue.
C-5
8.Agent of the Authority. The Authority will have the right to appoint an agent to carry out
any of its duties and obligations hereunder, and will inform the Partnership of any agency appointment by
written notice.
9.Severability. The invalidity of any clause, part or provision of this Declaration will not
affect the validity of the remaining portions thereof.
10.Notices. All notices to be given pursuant to this Declaration must be in writing and will be
deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the
addresses set forth below, or to any other place as a party may from time to time designate in writing. The
Partnership and the Authority may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates, or other communications are sent. The initial addresses for notices
and other communications are as follows:
To the Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, MN 55423
Attn: Community Development Director
To the Partnership: Aster Commons Limited Partnership
c/o Beacon Interfaith Housing Collaborative
2610 University Avenue West, Suite 100
Saint Paul, MN 55114
Attn: President or CEO
11.Governing Law. This Declaration is governed by the laws of the State of Minnesota and,
where applicable, the laws of the United States of America.
12.Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory
relief, is brought against the Partnership to enforce the provisions of this Declaration, the Partnership agrees
to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in
connection with the action.
13.Declaration Binding. This Declaration and the covenants contained herein will run with the
real property comprising the Project and will bind the Partnership and its successors and assigns and all
subsequent owners of the Project or any interest therein, and the benefits will inure to the Authority and its
successors and assigns for the term of this Declaration as provided in Section 1(b) hereof.
14.Tax Credits. If the Partnership obtains housing tax credits, it may submit the report it
provides to the U.S. Department of Housing and Urban Development instead of completing the forms
attached as EXHIBITS B and C to this Declaration of Restrictive Covenants.
(The remainder of this page is intentionally left blank.)
C-6
IN WITNESS WHEREOF, the Partnership has caused this Declaration of Restrictive Covenants
to be signed by its duly authorized representative as of the date and year first written above.
ASTER COMMONS LIMITED PARTNERSHIP
By Aster Commons GP LLC,
A Minnesota limited liability company,
General Partner
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this day of __________, 2023, by
_________________________________, the _____________________________ of Aster Commons GP
LLC, a Minnesota limited liability company, on behalf of the Partnership.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
C-7
This Declaration of Restrictive Covenants is acknowledged and consented to by:
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 2023, by
_____________________________, the Chair of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on
behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of __________, 2023, by Melissa
Poehlman, 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
C-8
EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
Lot 31, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418472
Lot 32, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418471
Lot 33, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418470
Lot 34, Auditor’s Subdivision No. 340, Hennepin County, Minnesota
Torrens Property
Certificate of Title 1418469
C-9
EXHIBIT B TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATION OF TENANT ELIGIBILITY
Certification of Tenant Eligibility
(INCOME COMPUTATION AND CERTIFICATION)
(TO BE COMPLETED THE FIRST YEAR OF RESIDENCY ONLY)
Project: ____________________ Portland Avenue South, Richfield, Minnesota
Partnership: Aster Commons Limited Partnership
Unit Type: ______ [___ BR]
1. I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully,
frankly and personally each of the following questions for all persons (including minors) who are to occupy
the unit in the above apartment development for which application is made, all of whom are listed below:
Name of
Members of the
Household
Relationship
To Head of
Household
Age
Place of
Employment
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
Income Computation
2. The anticipated income of all the above persons during the 12-month period beginning this
date,
(a) including all wages and salaries, overtime pay, commissions, fees, tips and bonuses
before payroll deductions; net income from the operation of a business or profession or from the
rental of real or personal property (without deducting expenditures for business expansion or
amortization of capital indebtedness); interest and dividends; the full amount of periodic payments
received from social security, annuities, insurance policies, retirement funds, pensions, disability or
death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as
unemployment and disability compensation, worker’s compensation and severance pay; the
maximum amount of public assistance available to the above persons; periodic and determinable
allowances, such as alimony and child support payments and regular contributions and gifts received
from persons not residing in the dwelling; and all regular pay, special pay and allowances of a
member of the Armed Forces (whether or not living in the dwelling) who is the head of the
household or spouse; but
(b) excluding casual, sporadic or irregular gifts; amounts which are specifically for or in
reimbursement of medical expenses; lump sum additions to family assets, such as inheritances,
insurance payments (including payments under health and accident insurance and workmen’s
C-10
compensation), capital gains and settlement for personal or property losses; amounts of educational
scholarships paid directly to the student or the educational institution, and amounts paid by the
government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in
either case only to the extent used for these types of purposes; special pay to a serviceman head of a
family who is away from home and exposed to hostile fire; relocation payments under Title II of the
Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; foster child care
payments; the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act
of 1964 which is in excess of the amount actually charged for the allotments; and payments received
pursuant to participation in ACTION volunteer programs, is as follows: $_____________.
3. If any of the persons described above (or whose income or contributions was included in
item 2) has any savings, bonds, equity in real property or other form of capital investment, provide:
(a) the total value of all such assets owned by all such persons: $____________;
(b) the amount of income expected to be derived from such assets in the 12 month
period commencing this date: $_______________; and
(c) the amount of such income which is included in income listed in item 2:
$__________.
4. (a) Will all of the persons listed in item 1 above be or have they been full-time students
during five calendar months of this calendar year at an educational institution (other than a
correspondence school) with regular faculty and students?
Yes _________________ No ________________
(b) Is any such person (other than nonresident aliens) married and eligible to file a joint
federal income tax return?
Yes _________________ No ________________
THE UNDERSIGNED HEREBY CERTIFY THAT THE INFORMATION SET FORTH ABOVE
IS TRUE AND CORRECT. THE UNDERSIGNED ACKNOWLEDGE THAT THE LEASE FOR THE
UNIT TO BE OCCUPIED BY THE UNDERSIGNED WILL BE CANCELLED UPON 10 DAYS
WRITTEN NOTICE IF ANY OF THE INFORMATION ABOVE IS NOT TRUE AND CORRECT.
Head of Household
Spouse
C-11
FOR COMPLETION BY PARTNERSHIP
(OR ITS MANAGER) ONLY
1. Calculation of Eligible Tenant Income:
(a) Enter amount entered for entire household in 2 above: $__________
(b) If the amount entered in 3(a) above is greater than $5,000, enter the greater of (i) the
amount entered in 3(b) less the amount entered in 3(c) or (ii) 10% of the amount entered in 3(a):
$__________
(c) TOTAL ELIGIBLE INCOME (Line 1(a) plus Line 1(b)): $__________
2. The amount entered in 1(c) is less than or equal to [30%] [50%] of median income for the
area in which the Project is located, as defined in the Declaration. [30%] [50%] is necessary for status as a
“Qualifying Tenant” under Section 3(a) of the Declaration.
3. Rent:
(a) The rent for the unit is $________________.
(b) The amount entered in 3(a) is less than or equal to the maximum rent permitted
under the Declaration.
4. Number of apartment unit assigned: ___________.
5. This apartment unit was ____ was not ____ last occupied for a period of at least
31 consecutive days by persons whose aggregate anticipated annual income as certified in the above manner
upon their initial occupancy of the apartment unit was less than or equal to [30%] [50%] of Median Income
in the area.
6. Check as applicable: _______ Applicant qualifies as a Qualifying Tenant (tenants of at least
________ units must meet), or ____ Applicant otherwise qualifies to rent a unit.
THE UNDERSIGNED HEREBY CERTIFIES THAT THEY HAVE NO KNOWLEDGE OF ANY FACTS
WHICH WOULD CAUSE THEM TO BELIEVE THAT ANY OF THE INFORMATION PROVIDED BY
THE TENANT MAY BE UNTRUE OR INCORRECT.
ASTER COMMONS LIMITED PARTNERSHIP
By Aster Commons GP LLC,
A Minnesota limited liability company,
General Partner
By
Its
C-12
EXHIBIT C TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
(PROVIDED EACH YEAR OF RESIDENCY)
Certificate of
Continuing Program Compliance
Date: ___________________
The following information with respect to the multifamily housing development located at
__________________ Portland Avenue South, Richfield, Minnesota (the “Project”), is being provided by
Aster Commons Limited Partnership, a Minnesota limited partnership (the “Partnership”), to the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), pursuant to that
certain Declaration of Restrictive Covenants, dated ___________, 2023 (the “Declaration”), with respect to
the Project:
(A) The total number of residential units which are available for occupancy is
___________. The total number of these units occupied is _________________.
(B) The following residential units (identified by unit number) are currently occupied by
“Qualifying Tenants,” as the term is defined in the Declaration (for a total of ____units):
Studio Units: _____________
[____ BR Units]: _____________
(C) The following residential units which are included in (B) above, have been re-
designated as units for Qualifying Tenants since _______________, 20___, the date on which the
last “Certificate of Continuing Program Compliance” was filed with the Authority by the
Partnership:
Unit
Number
Previous Designation
of Unit (if any)
Replacing
Unit Number
___________ _________________ _________________
___________ _________________ _________________
C-13
(D) The following residential units are considered to be occupied by Qualifying Tenants
based on the information set forth below:
Unit
Number
Name of Tenant
Number of
Persons
Residing in
the Unit
Number of
Bedrooms
Total Adjusted
Gross Income
Date of Initial
Occupancy
Rent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
[etc.]
(E) The Partnership has obtained a “Certification of Tenant Eligibility,” in the form
provided as EXHIBIT B to the Declaration, from each Tenant named in (D) above, and each such
Certificate is being maintained by the Partnership in its records with respect to the Project. Attached
hereto is the most recent “Certification of Tenant Eligibility” for each Tenant named in (D) above
who signed such a Certification since ______________, 20___, the date on which the last
“Certificate of Continuing Program Compliance” was filed with the Authority by the Partnership.
(F) In renting the residential units in the Project, the Partnership has not given
preference to any particular group or class of persons (except for persons who qualify as Qualifying
Tenants); and none of the units listed in (D) above have been rented for occupancy entirely by
students, no one of which is entitled to file a joint return for federal income tax purposes. All of the
residential units in the Project have been rented pursuant to a written lease, and the term of each lease
is at least twelve (12) months.
(G) The information provided in this “Certificate of Continuing Program Compliance”
is accurate and complete, and no matters have come to the attention of the Partnership which would
indicate that any of the information provided herein, or in any “Certification of Tenant Eligibility”
obtained from the Tenants named herein, is inaccurate or incomplete in any respect.
(H) The Project is in continuing compliance with the Declaration.
(I) The Partnership certifies that as of the date hereof at least ______ of the residential
dwelling units in the Project are occupied or held open for occupancy by Qualifying Tenants, as
defined and provided in the Declaration.
C-14
(J) The rental levels for each Qualifying Tenant comply with the maximum permitted
under the Declaration.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the Partnership, on
____________________, 20___.
ASTER COMMONS LIMITED PARTNERSHIP
By Aster Commons GP LLC,
A Minnesota limited liability company,
General Partner
By
Its
RC125-390 (JAE)
855843v7
•
•
•
Recommendation:
SOURCES
Amount Pct.Per Unit
Deferred Loan 6,300,792 40%165,810
Tax Credits 4,607,267 29%121,244
Sales Tax Rebate 281,038 2%7,396
Energy Rebates 5,000 0%132
Hennepin County Supportive Hsg 950,000 6%25,000
Met Council LCDA 990,000 6%26,053
City of Richfield AHTF 500,000 3%13,158
FHLB AHP 1,000,000 6%26,316
Met Council LHIA 1,000,000 6%26,316
TOTAL SOURCES 15,634,097 100%411,424
USES
Amount Pct.Per Unit
Construction Costs 11,578,119 74%304,687
Environmental Abatement/Soil Correction 100,000 1%2,632
Professional Services 926,250 6%24,375
Financing Costs 844,709 5%22,229
Developer Fee 1,900,000 12%50,000
Cash Accounts/Escrows/Reserves 285,019 2%7,501
TOTAL USES 15,634,097 100%411,424
8
The Richfield Site
66th Street East and Portland Avenue South
6613-25 Portland
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #5.
STAFF REPORT NO. 14
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/20/2023
REPORT PREPARED BY: Jan Youngquist, Economic Development Manager
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: Melissa Poehlman, Executive Director
6/14/2023
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the adoption of a resolution approving the Amended and Restated Contract for
Private Development with 101 E 66th ST LLC and authorizing the issuance of a Tax Increment Limited
Revenue Note related to the construction of an 80-unit mixed use project at 101 - 66th Street East.
EXECUTIVE SUMMARY:
The property at 101 - 66th Street East was first vacated in 2013. After three years of neglect, it was
purchased for redevelopment by PLH & Associates in 2016. After many years of work, the City approved
plans for a 42-unit mixed use building in October 2020, and the Housing and Redevelopment Authority (HRA)
approved a Contract for Private Development to provide financial assistance in the form of Tax Increment in
January 2021. Shortly thereafter, PLH sold the property to 101 E 66th ST LLC (Developer).
In June 2021, the Developer presented new plans for redevelopment of the site and on January 11, 2022, the
City Council approved plans for the development of an 80-unit, 5-story mixed use building. On June 21, 2022,
the HRA approved a Contract for Private Development and issuance of a Tax Increment Financing (TIF)
Note for up to $2,300,000.
In the interim, the Developer's budget has been impacted by increases in both construction costs and
interest rates. Ehlers, the HRA's financial consultant, has reviewed updated project finances and
has concluded that, as was the case with the previous financial request, there is a substantial
financial "gap" that must be filled in order to redevelop the blighted site and that an increased
subsidy of $385,000 is justified, resulting in a recommendation for a new TIF Note of up to
$2,685,000.
HRA staff has worked with HRA Legal Counsel and the Developer to negotiate an Amended and
Restated Contract for Private Development (Contract). Among the provisions of the Contract are:
The Developer will make improvements totaling at least $18,000,800 to include construction of
a new 5-story mixed use building with approximately 80 apartment units and 2,800 square feet
of ground floor commercial space.
The Developer will pay and/or reimburse the HRA's up-front costs to create this Contract and
for other administrative costs.
A minimum of 20% of the units in the building (16 units) will be reserved for households
earning up to 60% of the Area Median Income (AMI) for fifteen years. Affordable units are to
be distributed proportionally among the various unit types.
In accordance with the City and HRA's Inclusionary Housing Policy, the development must
include at least three "Type A" units that include roll-in showers and grab bars; or at least two
units that are AD A accessible.
T he H R A will withhold the first 10% of the Tax Increment for reimbursement of its ongoing
administrative costs throughout the life of the T IF District.
T he maximum T IF that would be available to the Developer is $2,685,000. Staff, and Ehlers,
have concluded that the development could not occur "But For" this level of assistance.
T he Contract includes a one-time "lookback" where the project's financial performance will be
reviewed and the principal amount of the T IF Note may be adjusted accordingly. Based on
this analysis, the T IF Note will either be reduced or will not change.
As a reminder, in a T IF District, the property owner continues to pay taxes on the pre-
redevelopment property values to all of the taxing jurisdictions (City, County, and School
District) as had been the case prior to the establishment of the T IF District. T he property
owner also pays property taxes on the value of the new construction; these "new" taxes can be
returned to the Developer as reimbursement for costs necessary to make the project
financially feasible.
RE C O M M E ND E D AC T I O N:
By motion: Approve a resolution approving the Amended and Restated Contract for Private
Development with 101 E 66th S T LL C and authorizing the issuance of a Tax Increment Limited
Revenue Note.
B AS IS O F RE C O M M E ND AT I O N:
A.H IS TOR IC AL C ON T E X T
Southview Baptist Church vacated the property and began marketing it for sale in 2013.
Developer P L H & Associates purchased the property in 2016.
J une 26, 2018 - The City Council approved land use applications for a 31-unit mixed use
development.
May 28, 2019 and May 12, 2020 - the City Council approved extensions of the land use
approvals.
J une 15, 2020 - Revised plans with reduced commercial space and affordable units were
presented to the City Council and HRA.
J uly 14, 2020 - The City Council approved an application for Livable Communities Development
Account grant funds through the Metropolitan Council (not awarded).
J uly 20, 2020 - The HRA approved a Preliminary Development Agreement.
October 13, 2020 - The City Council approved a revised land use application for a 42-unit mixed
use development.
J anuary 19, 2021 - The HRA approved a Contract for Private Development and issuance of a TI F
Note (not executed).
May 2021 - P L H & Associates sold the project to North Bay Companies, dba 101 E 66th S T L L C
(Developer).
J une 21, 2021 - The Developer presented plans for a 75-unit, 6-story mixed use building at a joint
work session of the City Council, HRA, and Planning Commission.
J anuary 11, 2022 - The City Council approved land use plans for an 80-unit, 5-story mixed use
building.
J une 6, 2022 - The HRA approved a Contract for Private Development and issuance of a TI F
Note for up to $2,300,000.
February 14, 2022 - The City Council approved an extension of the land use approvals.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
I n a Redevelopment TI F District, there are no statutory requirements related to housing
affordability. The HRA and City's I nclusionary Housing Policy states that rental housing
developments that receive financial assistance must either:
Reserve 20% of the units for households earning up to 60% of the Area Median I ncome;
OR
Contribute 15% of the available Tax I ncrement generated to the Richfield Housing and
Redevelopment Fund.
C.C R IT IC AL T IMIN G IS S U E S:
The Contract requires that construction commence by December 31, 2023 and be substantially
complete by December 31, 2025.
The City Council approved an extension of the land use approvals, which requires that substantial
construction needs to be underway by J anuary 11, 2024.
The TI F District was certified on March 16, 2021. I n accordance with state statute, site
improvements must take place before March 16, 2025 or no increment from the site may be
collected for the duration of the TI F District.
D.F IN AN C IAL IMPAC T:
The Contract calls for the Developer to receive up to $2,685,000 in TI F.
The 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 adequate property taxes
were not paid).
The development property will continue to generate and pay property taxes to all of the
current taxing jurisdictions (City, County and School District) based on the "base value" of
the property.
The Developer would be obligated to reimburse the HRA for legal and financial costs
associated with drafting this Contract and with evaluating project finances.
The HRA would retain 10% of the TI F generated to reimburse the HRA for ongoing
expenses related to administration of the TI F District.
The Contract calls for a one-time "lookback" where the project's financial performance will
be reviewed and the principal amount of the TI F Note may be adjusted accordingly. Based
on this analysis, the TI F Note will either be reduced or will not change.
E.L E GAL C ON S ID E R AT ION:
The Contract was drafted by the HRA Attorney, J ulie Eddington.
ALTE R N AT IV E R E C O MME N D ATIO N(S):
1. Do not approve the Contract.
2. Approve the Contract with modifications.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
Representative(s) of 101 E 66th S T L L C.
AT TAC H ME N T S:
D escription Type
Resolution Resolution L etter
A mended and Restated C ontract for P rivate D evelopment C ontract/A greement
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING THE AMENDED AND RESTATED CONTRACT FOR PRIVATE
DEVELOPMENT WITH 101 E 66TH ST 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, the City and the Authority has established a redevelopment tax increment financing
district (the “TIF District”) within the Richfield Redevelopment Project, pursuant to Minnesota Statutes,
Sections 469.174 through 469.1794, as amended (the “TIF Act”); and
WHEREAS, 101 E 66th St LLC, a Minnesota limited liability company (the “Developer”), owns
certain property in the City (the “Development Property”) and has proposed to construct thereon
approximately 80 rental housing units, including sixteen affordable housing units, and approximately 2,800
square feet of commercial space (the “Minimum Improvements”); and
WHEREAS, there has been presented before this Board of Commissioners of the Authority (the
“Board”) an Amended and Restated 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
$2,685,000 to reimburse the Developer for the Public Redevelopment Costs; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
Section 1. The Development Agreement. The Development Agreement is hereby in all
respects authorized, approved, and confirmed, and the Chair and the Executive Director are hereby authorized
and directed to execute the Development Agreement for and on behalf of the Authority in substantially the
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
Error! Unknown document property name.
Section 2. The TIF Note.
2.01. The Authority hereby approves and authorizes the Chair and Executive Director to execute
the TIF Note upon the Executive Director’s determination that the conditions for issuance of the TIF Note set
forth in Section 3.3 of the Development Agreement have been met. The TIF Note shall be sold to the
Developer with such terms provided in the Development Agreement. The Authority hereby delegates to the
Executive Director the determination of the date on which the TIF Note is to be delivered. The Authority
shall receive in exchange for the sale of the TIF Note the agreement of the Developer to pay or cause to be
paid the Public Redevelopment Costs.
2.02. The TIF Note shall be in substantially the form set forth in Exhibit B attached to the
Development Agreement, with the blanks to be properly filled in and the principal amount and payment
schedule adjusted as of the date of issue.
2.03. The TIF Note shall be issued as a single typewritten note numbered R-1. The TIF Note shall
be issuable only in fully registered form. Principal of the TIF Note shall be payable by check or draft issued
by the registrar described herein. Principal of the TIF Note shall be payable by mail to the owner of record
thereof as of the close of business on the fifteenth day of the month preceding the Payment Date (as defined
in the Development Agreement), whether or not such day is a business day.
2.04. The Authority hereby appoints the Executive Director of the Authority to perform the
functions of registrar, transfer agent and paying agent (the “Registrar”) for the TIF Note. The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as
follows:
(a) The Registrar shall keep at its office a bond register in which the Registrar shall provide for
the registration of ownership of the TIF Note and the registration of transfers and exchanges of the TIF Note.
(b) Upon surrender for transfer of the TIF Note duly endorsed by the registered owner thereof or
accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly
executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing,
the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new TIF
Note or Notes of a like aggregate principal amount and maturity, as requested by the transferor.
Notwithstanding the foregoing, the TIF Note shall not be transferred to any person other than an affiliate, or
other related entity, of the Developer unless the Authority has been provided with an investment letter in a
form substantially similar to the investment letter submitted by the Developer or a certificate of the transferor,
in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws. The Registrar may close the books for
registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such
Payment Date.
(c) Any TIF Note surrendered upon any transfer shall be promptly cancelled by the Registrar
and thereafter disposed of as directed by the Authority.
(d) If the TIF Note is presented to the Registrar for transfer, the Registrar may refuse to transfer
the same until it is satisfied that the endorsement on such TIF Note or separate instrument of transfer is
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
3
Error! Unknown document property name.
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.
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,
4
Error! Unknown document property name.
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. This resolution shall be effective upon the establishment of the TIF District.
4.04. The approval of the execution and delivery of the Development Agreement shall supersede
any prior approvals by the Board with respect to the development of the Development Property by a private
developer.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
this 20th day of June, 2023.
Gordon Hanson, Acting Chair
ATTEST:
Secretary
Draft
June 13, 2023
AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
and
101 E 66TH ST LLC
Dated ______________, 2023
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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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. Term of TIF District .................................................................................................................. 7
Section 3.5. 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
Section 3.8. Lookback ................................................................................................................................... 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
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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
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.............................. 21
Section 10.2. Equal Employment Opportunity ............................................................................................. 21
Section 10.3. Restrictions on Use ................................................................................................................. 21
Section 10.4. Provisions Not Merged With Deed ......................................................................................... 21
Section 10.5. Titles of Articles and Sections ................................................................................................ 21
Section 10.6. Notices and Demands ............................................................................................................. 21
Section 10.7. Counterparts ............................................................................................................................ 21
Section 10.8. Recording ................................................................................................................................ 21
Section 10.9. Amendment ............................................................................................................................. 21
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
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EXHIBIT D Form of Certificate of Completion ...................................................................................... D-1
EXHIBIT E Form of Declaration of Restrictive Covenants ..................................................................... E-1
EXHIBIT F Pro Forma Financial Statement ............................................................................................. F-1
EXHIBIT G Sample Lookback Calculation .............................................................................................. G-1
1
CONTRACT FOR PRIVATE DEVELOPMENT
THIS AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT, made as of
the __________ day of June, 2023 (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 101 E 66TH ST
LLC, a Minnesota limited liability company (the “Developer”).
WITNESSETH:
WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001 through
469.047, as amended (the “HRA Act”), and was authorized to transact business and exercise its powers by a
resolution of the City Council of the City of Richfield, Minnesota (the “City”); and
WHEREAS, the Authority has undertaken a program to promote redevelopment and development of
land that is underused or underutilized within the City, and in this connection the Authority administers a
redevelopment project known as the Richfield Redevelopment Project (the “Redevelopment Project”)
pursuant to the HRA Act; and
WHEREAS, pursuant to the HRA Act, the Authority is authorized to 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 80
apartment units (including sixteen affordable units) and approximately 2,800 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, 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 Amended and Restated 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 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 that has not been waived by the
Authority. Once the Event of Default is cured or waived by the Authority, withheld Tax Increment shall be
Available Tax Increment.
“Board” means the Board of Commissioners of the Authority.
“Calculation Date” means the earliest of (A) 90 days after the earlier of (i) the date of
Stabilization of the Project; (ii) two years after the date of completion of the Project, as evidenced by the
City’s issuance of a Certificate of Completion, or; (B) at least 30 days prior to sale of the Project
“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.
“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.
“Consultant” means Ehlers & Associates, Inc.
“County” means Hennepin County, Minnesota.
3
“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 101 E 66th St LLC, a Minnesota limited liability company, or its permitted
successors and assigns.
“Development Property” means the real property described in EXHIBIT A.
“Event of Default” means an action by the Developer listed in Article IX hereof.
“Holder” means the owner of a Mortgage.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
“Material Change” means a change in construction plans that materially and 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 80 apartment units (including 16 affordable units) and approximately
2,800 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.
“Net Operating Income (NOI)” means total annual income and other project-derived annual
revenue, including payments under the TIF Note, less Operating Expenses, which exclude debt service
payments.
“Operating Expenses” means reasonable and customary expenses actually incurred in operating
the Project and any other expenses actually incurred by the Developer pursuant to its obligations under
this Agreement, determined in the same manner as shown in the Pro Forma Fina ncial Statement, which
excludes expenses after debt service, and includes administrative, payroll, marketing, insurance, property
management fees, utilities, maintenance, deposits to commercially reasonable capital replacement
reserves and payment of real estate taxes, but subject to final review and acceptance by the Consultant.
“Payment Date” means each February 1 and August 1 on which principal of and interest on the TIF
Note is paid.
“Pro Forma Financial Statement” Project cash flow pro forma model f inancial statement
projecting future returns, a summary of which is attached to this Agreement as EXHIBIT F.
“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, and demolition and remediation costs.
4
“Qualified Project Period” means the period commencing on the date a certificate of occupancy is
received from the City and continuing through the date that is fifteen years after the date a certificate of
occupancy is received from the City.
“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.
“Stabilization” means the calendar month-end date on which the Project has first achieved an
average occupancy of 90% during the preceding 12 calendar months, or such earlier date as may be
requested by the Developer but, for purposes of the Yield on Cost Return calculation, assuming 95%
occupancy notwithstanding actual occupancy rate as of such date.
“State” means the State of Minnesota.
“Tax Increment” means that portion of the real property taxes which is paid with respect to the TIF
District and which is remitted to the Authority as tax increment pursuant to the TIF Act.
“Tax Official” means any County assessor, County auditor, County or State board of equalization,
the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or
the State Supreme Court.
“TIF Act” means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.1794, as amended.
“TIF District” means the 2020-2 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.
“Total Project Cost” means the total expenditures incurred to complete development of the
Project inclusive of land acquisition, hard construction costs, soft costs and financing costs as approved
by Developer’s senior construction debt lender.
“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, acts of public enemies, wars, blockades, insurrections, riots, earthquakes, fires,
floods, disasters, sabotage, regulatory changes, or other events or circumstances not within the
reasonable control of a party preventing a party from performing its obligations, including, without
limitation, diseases, public health emergencies, pandemics (e.g., COVID-19), endemics, travel bans,
domestic or international restrictions on travel, or acts of governmental bodies (but not including
governmental actions, orders, penalties, judgments, or requirements which such party could have
prevented by compliance with applicable laws, regulations and standards).
5
“Yield on Cost Return” means NOI divided by the Minimum Improvements’ actual Total
Development Costs, calculated as set forth in the sample lookback calculation attached as EXHIBIT G.
(The remainder of this page is intentionally left blank.)
6
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 Minnesota 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).
7
(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.
(The remainder of this page is intentionally left blank.)
8
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 $2,685,000 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.
The Developer agrees that it will not seek Class 4d property status pursuant to Minn. Stat. Section
273.13, Section 25(e), as amended.
(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
9
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.
Section 3.4. Term of TIF District. The Developer understands and acknowledges that the TIF Note
is payable solely from the Available Tax Increment generated in the first sixteen years of the TIF District.
Section 3.5. Termination of TIF District. At any time following payment in full of the principal of
and interest on the 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 3.6. Payment of Administrative Costs. The Developer has deposited with the Authority
$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 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 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 3.7. 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 3.8. 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. No portion of the tax increment assistance provided pursuant to
the Agreement shall be utilized for the commercial portion of the Minimum Improvements.
Section 3.9. Lookback.
(a)Generally. The financial assistance to the Developer under this Agreement is based on
certain assumptions regarding likely performance of the Minimum Improvements including operating
revenues, expenses and development costs of constructing the Minimum Improvements. The Authority
and the Developer agree that the actual financial performance of the Project will be reviewed at the times
described in this Section, and that the principal amount of the TIF Note will be adjusted accordingly. the
Developer shall provide the Authority and its municipal advisor (the “Consultant”) with the Pro Forma
Financial Statements showing a target Yield on Cost Return of 7%.
(b)On the Calculation Date, the Developer of the Minimum Improvements shall deliver to
the Authority and Consultant, at a minimum, (i) the Developer’s actual financial statement, in the same
form as the Pro Forma Financial Statement submitted to the Authority pursuant to clause (a) above and
showing Net Operating Income (NOI), and such other financial information as the Consultant shall
reasonably require, for trailing 12-month period preceding the Calculation Date calculated as of the
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Calculation Date as provided herein and as set forth in the Pro Forma Financial Statement and
(ii)evidence, satisfactory to the Authority, of its Total Project Cost.
(c)The average annual Yield on Cost Return shall be calculated by the Consultant based on
the Minimum Improvements’ financial statement submitted to the Authority pursuant to clause (b) above,
(in the manner the Consultant determines is consistent with the sample lookback calculation attached as
EXHIBIT G, as approved by the City).
(d)If the average annual Yield on Cost Return does not exceed 7% over the term of the TIF
Note, then the principal amount of the TIF Note will not change. For purposes of the Yield on Cost
Return calculation on the Calculation Date, (i) revenue shall be based upon 95% occupancy regardless of
whether the average occupancy for the measured period is higher or lower than 95%, (ii) revenue for
periods after the Calculation Date shall be inflated by 2% annually, and (iii) Operating Expenses for
periods after the Calculation Date, shall be inflated by 2% annually.
(e)If the Consultant determines, based on such review, that the average annual Yield on Cost
Return over the term of the TIF Note exceeds 7% (to be calculated in a manner comparable to the sample
attached as EXHIBIT F), then the principal balance of the TIF Note will be reduced by an amount
calculated in the manner the Consultant determines is consistent with clause (f) below.
(f)The Consultant will determine the amount of the reduction of the principal amount of the
TIF Note, calculated in the manner the Consultant determines is consistent with the sample lookback
calculation attached as EXHIBIT G, by:
(i)First, determining the period over which the TIF Note needs to be outstanding to
achieve a 7% average annual Yield on Cost Return over the term of the TIF Note based on the
Consultant’s calculation of the average annual Yield on Cost Return.
(ii)Second, by determining the present value of actual or projected (with respect to
future payments) annual TIF Note payments over the life of the TIF Note through the year
determined in clause f(i) using the interest rate on the TIF Note as the present value discount rate.
(iii)Third, by determining the amount equal to 50% of the difference between the
original principal amount of the TIF Note and the present value number calculated in clause f(ii).
(iv)Finally, the new principal amount of the TIF Note will then be determined by
adding the amounts in clauses f(ii) and f(iii) and rounding to the nearest $1,000 (the “Revised TIF
Note Principal Amount”).
(v)Such Revised TIF Note Principal Amount will be effective upon delivery to the
Developer of a written notice stating the revised TIF Note Principal Amount as determined by the
Consultant in accordance with this Section 3.8(f), accompanied by the Consultant’s report. The
Developer shall, thereupon, deliver the TIF Note in exchange for a new TIF Note in the Revised
TIF Note Principal Amount.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. 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
$18,000,800 (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 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 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 30 days after receipt of the notice of such change. The Authority’s 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.
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Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Developer will commence the construction of the Minimum Improvements by December 31, 2023, and
substantially complete construction of the Minimum Improvements by December 31, 2025. 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; 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 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 at all times from initial occupancy of the Minimum
Improvements through the date that is fifteen (15) years after the date the Developer received a Certificate of
Occupancy for the Minimum Improvements, at least sixteen (16) 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 and satisfy the income requirements for a qualified residential rental project
as defined in Section 142(d) of the Internal Revenue Code.
(b)Pursuant to the City’s Inclusionary Housing Policy, the Minimum Improvements must
include (i) at least three (3) “Type A” units per ANSI A117.1, Section 1003 of the 2020 Minnesota
Accessibility Code that include roll-in showers and grab bars; or (ii) at least two (2) Rental Housing Units
that are ADA accessible units per ANSI A117.1 Section 1002 of the 2020 Minnesota Accessibility Code.
(c)The Developer agrees to distribute the affordable units across unit types as follows:
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Type of Unit Total Number of Units Number of Affordable Units
Studio 37 7 at 60% Area Median Income
One Bedroom 31 5 at 60% Area Median Income
Two Bedroom 11 3 at 60% Area Median Income
Three Bedroom 1 1 at 60% Area Median Income
(d)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.
(e)During the term of the Declaration, the Developer shall not adopt any policies specifically
prohibiting or excluding any rental to tenants holding certificates/vouchers under Section 8 of the United
Stated Housing Act of 1937, as amended, codified as 42 U.S.C. Sections 1401 et seq., or its successor
because of such prospective tenant’s status as such a certificate/voucher holder.
(f)The Authority and its representatives will have the right at all reasonable times while the
covenants in this Section are in effect, after reasonable notice to inspect, examine, and copy all books and
records of the Developer and its successors and assigns relating to the covenants described in this Section and
in the Declaration.
(g)The Developer will immediately notify the Authority if at any time during the term of the
Declaration the dwelling units in the Minimum Improvements are not occupied or available for occupancy as
required by the terms of the Declaration.
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 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
30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer
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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
$250,000 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 $250,000 and the Developer fails to complete any repair,
reconstruction or restoration of the Minimum Improvements within 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 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 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.
21
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 30 days’ written notice to the defaulting party of the event, but
only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30
days, the defaulting party does not, within the 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 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 30 days or, if the Event of Default is by its nature incurable within 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;
22
(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 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 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 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 4.6 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 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.
23
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 2118
Fourth Avenue South, Minneapolis, MN 55404, Attn: President; 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.
24
Section 10.8. Recording. The Authority may record a memorandum of this Agreement and any
amendments thereto with the Registrar of Titles of the County. 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.
(The remainder of this page is intentionally left blank.)
S-1
IN WITNESS WHEREOF, the Authority has caused this Amended and Restated Contract for
Private Development to be duly executed in its name and behalf and the Developer has caused this Amended
and Restated 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 Acting Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by
Gordon Hanson, the Acting 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 __________, 2023, by
Melissa Poehlman, 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 Amended and Restated Contract for Private Development, dated the
date and year first written above.
101 E 66TH ST LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by
_________________________________, the _____________________________ of 101 E 66th St LLC, a
Minnesota limited liability company, on behalf of the Developer.
Notary Public
A-1
EXHIBIT A
DEVELOPMENT PROPERTY
Parcel 1:
That part of Lot 7, Goodspeed's First Plat, Hennepin County, Minnesota, described as
follows, to wit:
Beginning at the northwest corner of said Lot 7, and running thence south along the west line
of said Lot 7, a distance of 46.56 feet; thence running east a distance of 135.62 feet; thence
running north a distance of 46.62 feet to the north line of said Lot 7; thence running west
along the said north line of Lot 7 a distance of 135.63 feet to the place of beginning;
The North 22.56 feet of that part of Lot 7, Goodspeed's First Plat, Hennepin County,
Minnesota, described as follows:
Beginning at a point on the west line of said Lot 7, 46.56 feet south of the northwest corner
of said Lot 7, thence running east a distance of 135.62 feet; thence south to a point on the
south line of said Lot 7, 135.61 feet east of the southwest corner of said Lot 7; thence west to
said southwest corner, thence north along the west line of said Lot 7 to the point of
beginning.
Parcel 2:
That part of Lot 7, Goodspeed's First Plat, Hennepin County, Minnesota, described as
follows:
Beginning at a point on the west line of said Lot 7, 46.56 feet south of the northwest corner
of said Lot 7, thence running east a distance of 135.62 feet; thence south to a point on the
south line of said Lot 7, 135.61 feet east of the southwest corner of said Lot 7, thence west to
said southwest corner, thence north along the west line of said Lot 7 to the point of
beginning, except the North 22.56 feet thereof,
The west half of Lot 8, except the south 50 feet thereof, Goodspeed's First Plat, Hennepin
County, Minnesota..
Parcel 3:
That part of Lot 7, Goodspeed's First Plat, Hennepin County, Minnesota, described as
follows:
Commencing at the northwest corner of said Lot 7, thence south along the west line of said
Lot 7, 46.56 feet, thence east on a line parallel to the north line of said Lot 7, 135.62 feet to
the actual point of beginning; thence north to a point on the north line of said Lot 7, 135.63
feet east from the northwest corner thereof, thence east along the north line of said Lot 7 to
the northeast corner, thence south along the east line to the southeast corner of said Lot 7,
thence west along the south line to a point 135.61 feet east from the southwest corner
measured along the south line of said Lot 7, thence north to the actual point of beginning.
Parcel 4:
The east half of Lot 8, Goodspeed's First Plat, Hennepin County, Minnesota.
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 101 E 66th St
LLC, a Minnesota limited liability company, or registered assigns (the “Owner”), the principal sum of
$2,685,000 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
Amended and Restated Contract for Private Development, dated _______________, 2023 (the
“Agreement”), between the Authority and the Owner.
1.Payments. Principal and interest (the “Payments”) shall be paid on August 1, 2024, and
each February 1 and August 1 thereafter (each a “Payment Date”) to and including February 1, 2039, 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 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 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. No payments
will be made on the Note on any Payment Date if there is an uncured Event of Default under the Agreement.
B-2
“Available Tax Increment” means, on each Payment Date, the Tax Increment attributable to the
Development Property and paid to the Authority by the County in the six (6) months preceding the Payment
Date after first deducting therefrom ten percent (10%) of the Tax Increment to be used to reimburse the
Authority for administrative expenses and subject to Section 4.5 hereof. Available Tax Increment shall not
include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this
Agreement that has not been waived by the Authority. Once the Event of Default is cured or waived by the
Authority, withheld Tax Increment shall be Available Tax Increment.
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
____________, 2023, 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.
B-3
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 this 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
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, this 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 this 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 this 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
B-4
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
101 E 66th St, 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
__________, 2023 (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 Amended and Restated Contract for Private Development, dated
______________, 2023 (the “Agreement”), 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 Agreement 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 Agreement 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.
101 E 66TH ST LLC
By
Its
Dated: _________________, 20___
D-1
EXHIBIT D
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that 101 E 66th St LLC, a Minnesota limited liability company (the
“Developer”), has fully complied with its obligations under Articles III and IV of that document titled
“Amended and Restated Contract for Private Development,” dated __________, 2023, between the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota and the Developer (the
“Agreement”), which was recorded in the office of Registrar of Titles of Hennepin County, Minnesota on
______________, 20___, as document number __________________, with respect to construction of the
Minimum Improvements in accordance with Article IV of the Agreement, and that the Developer is
released and forever discharged from its obligations with respect to construction of the Minimum
Improvements under Articles III and IV of the Agreement.
Dated: _______________, 20___.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _______________, 20__,
by _________________, the Executive Director of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
E-1
EXHIBIT E
FORM OF DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS, made as of the 20th day of June,
2023 (the “Declaration”), is by 101 E 66TH ST LLC, a Minnesota limited liability company (the
“Developer”), in favor of the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State of
Minnesota (the “Authority”).
RECITALS:
WHEREAS, the Developer owns real property legally described in EXHIBIT A attached hereto
(the “Development Property”); and
WHEREAS, pursuant to the Amended and Restated Contract for Private Development, dated
__________ (the “Agreement”), the Developer will construct a multifamily housing development
consisting of a mixed use development, including approximately 80 apartment units and approximately
2,800 square feet of commercial space (the “Minimum Improvements”) on the Development Property, and
to cause compliance with certain affordability covenants described in Section 4.5 of the Agreement; and
WHEREAS, Section 4.5 of the Agreement requires that the Developer cause to be executed an
instrument in recordable form substantially reflecting the covenants set forth in Section 4.5 of the Agreement;
and
WHEREAS, the Developer intends, declares, and covenants that the restrictive covenants set forth
herein will be and are covenants running with the Development Property for the term described herein and
binding upon all subsequent owners of the Development Property for the term described herein, and are not
merely personal covenants of the Developer; and
WHEREAS, capitalized terms in this Declaration have the meaning provided in the Agreement
unless otherwise defined herein.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, and of
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Developer
agrees as follows:
1.Term of Restrictions.
(a)Occupancy and Rental Restrictions. The term of the Occupancy Restrictions set forth in
Section 3 hereof will commence on the date a certificate of occupancy is received from the City of Richfield,
Minnesota (the “City”) for all affordable rental units on the Development Property (the “Rental Housing
Units”). The Qualified Project Period shall continue through the date that is fifteen (15) years following the
receipt of a certificate of occupancy from the City. The period from commencement to termination is the
“Qualified Project Period.”
(b)Removal from Real Estate Records. Upon termination of this Declaration, the Authority
will, upon request by the Developer or its assigns, execute any document appropriate to remove this
Declaration from the real estate records of Hennepin County, Minnesota.
E-2
2.Project Restrictions.
(a)the Developer represents, warrants, and covenants that:
(i)All leases of Rental Housing Units to Qualifying Tenants (as defined in
Section 3(a)(i) hereof) will contain clauses, among others, wherein each individual lessee:
(1)certifies the accuracy of the statements made in its application and
Eligibility Certification (as defined in Section 3(a)(ii) hereof); and
(2)agrees that the family income at the time the lease is executed will be
deemed substantial and material obligation of the lessee’s tenancy, that the lessee will
comply promptly with all requests for income and other information relevant to determining
low or moderate income status from the Developer or the Authority, and that the lessee’s
failure or refusal to comply with a request for information with respect thereto will be
deemed a violation of a substantial obligation of the lessee’s tenancy.
(ii)Upon at least forty-eight (48) hours’ notice, the Developer will permit any duly
authorized representative of the Authority to inspect the books and records of the Developer
pertaining to the income of Qualifying Tenants residing in the Project.
3.Occupancy Restrictions.
(a)Tenant Income Provisions. The Developer represents, warrants, and covenants that:
(i)Qualifying Tenants. From the commencement of the Qualified Project Period, at
least 16 of the Rental Housing Units will be occupied (or treated as occupied as provided herein) or
held vacant and available for occupancy by Qualifying Tenants. Qualifying Tenants means those
persons and families who are determined from time to time by the Developer to have combined
adjusted income that does not exceed sixty percent (60%) of the Minneapolis-St. Paul metropolitan
statistical area (the “Metro Area”) median income for the applicable calendar year, except as
provided in the last two sentences of this paragraph. For purposes of this definition, the occupants of
a residential unit will not be deemed to be Qualifying Tenants if all the occupants of such residential
unit at any time are “students,” as defined in Section 151(c)(4) of the Internal Revenue Code of 1986,
as amended (the “Code”), not entitled to an exemption under the Code. The determination of
whether an individual or family is of low or moderate income will be made at the time the tenancy
commences and on an ongoing basis thereafter, determined at least annually. If during their tenancy
a Qualifying Tenant’s income exceeds one hundred forty percent (140%) of the maximum income
qualifying as low or moderate income for a family of its size, the next available unit (determined in
accordance with the Code and applicable regulations) (the “Next Available Unit Rule”) must be
leased to a Qualifying Tenant or held vacant and available for occupancy by a Qualifying Tenant. If
the Next Available Unit Rule is violated, the Rental Housing Unit will not continue to be treated as a
Qualifying Unit. A tenant that initially qualified as a Qualifying Tenant, will continue to qualify
even if such Qualifying Tenant’s income exceeds sixty percent (60%) of the Metro Area median
income so long as that Tenant’s income does not exceed 140% of the maximum qualifying income.
A tenant that initially qualified as a Qualifying Tenant, even if that Tenant’s income exceeds 140%
of the maximum qualifying income, will continue to qualify as a Qualifying Tenant so long as the
Next Available Unit Rule is complied with.
(ii)Certification of Tenant Eligibility. As a condition to initial and continuing
occupancy, each person who is intended to be a Qualifying Tenant will be required annually to sign
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and deliver to the Developer a Certification of Tenant Eligibility substantially in the form attached
hereto as EXHIBIT B, or in any other form as may be approved by the Authority (the “Eligibility
Certification”), in which the prospective Qualifying Tenant certifies as to qualifying as low or
moderate income. In addition, the person will be required to provide whatever other information,
documents, or certifications are deemed necessary by the Authority to substantiate the Eligibility
Certification, on an ongoing annual basis, and to verify that the tenant continues to be a Qualifying
Tenant within the meaning of Section 3(a) hereof. Eligibility Certifications will be maintained on
file by the Developer with respect to each Qualifying Tenant who resides in a Rental Housing Unit or
resided therein during the immediately preceding calendar year.
(iii)Lease. The form of lease to be utilized by the Developer in renting any Rental
Housing Units to any person who is intended to be a Qualifying Tenant will provide for termination
of the lease and consent by the person to immediate eviction for failure to qualify as a Qualifying
Tenant as a result of any material misrepresentation made by the person with respect to the Eligibility
Certification.
(iv)Annual Report. The Developer covenants and agrees that during the term of this
Declaration, it will prepare and submit to the Authority on or before April 1 of each year, a certificate
substantially in the form of EXHIBIT C hereto, executed by the Developer, (a) identifying the
tenancies and the dates of occupancy (or vacancy) for all Qualifying Tenants in the Project, including
the percentage of the Rental Housing Units which were occupied by Qualifying Tenants (or held
vacant and available for occupancy by Qualifying Tenants) at all times during the year preceding the
date of the certificate; (b) describing all transfers or other changes in ownership of the Project or any
interest therein; and (c) stating, that to the best knowledge of the person executing the certificate after
due inquiry, all the Rental Housing Units were rented or available for rental on a continuous basis
during the year to members of the general public and that the Developer was not otherwise in default
under this Declaration during the year.
(v)Notice of Non-Compliance. The Developer will immediately notify the Authority if
at any time during the term of this Declaration the Rental Housing Units are not occupied or
available for occupancy as required by the terms of this Declaration.
(b)Section 8 Housing. During the term of this Declaration, the Developer shall not adopt any
policies specifically excluding rental to tenants holding Section 8 certificate/voucher holders.
4.Transfer Restrictions. The Developer covenants and agrees that the Developer will cause or
require as a condition precedent to any conveyance, transfer, assignment, or any other disposition of the
Project prior to the termination of the Rental Restrictions and Occupancy Restrictions provided herein (the
“Transfer”) that the transferee of the Project pursuant to the Transfer assume in writing, in a form acceptable
to the Authority, all duties and obligations of the Developer under this Declaration, including this Section 4,
in the event of a subsequent Transfer by the transferee prior to expiration of the Rental Restrictions and
Occupancy Restrictions provided herein (the “Assumption Agreement”). The Developer will deliver the
Assumption Agreement to the Authority prior to the Transfer.
5.Notice of Sale. In consideration of the financial assistance provided to the Developer
pursuant to Article IV of the Agreement, the Developer agrees to provide the Authority with at least ninety
(90) days’ notice of any sale of the Project.
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6.Enforcement.
(a)The Developer will permit, during normal business hours and upon reasonable notice, any
duly authorized representative of the Authority to inspect any books and records of the Developer regarding
the Project with respect to the incomes of Qualifying Tenants.
(b)The Developer will submit any other information, documents or certifications requested by
the Authority which the Authority deems reasonably necessary to substantial the Developer’s continuing
compliance with the provisions specified in this Declaration.
(c)The Developer acknowledges that the primary purpose for requiring compliance by the
Developer with the restrictions provided in this Declaration is to ensure compliance of the property with the
housing affordability covenants set forth in Section 4.5 of the Agreement, and by reason thereof, the
Developer, in consideration for assistance provided by the Authority under the Agreement that makes
possible the construction of the Project on the Development Property, hereby agrees and consents that the
Authority will be entitled, for any breach of the provisions of this Declaration, and in addition to all other
remedies provided by law or in equity, to enforce specific performance by the Developer of its obligations
under this Declaration in a state court of competent jurisdiction. The Developer hereby further specifically
acknowledges that the Authority cannot be adequately compensated by monetary damages in the event of any
default hereunder.
(d)The Developer understands and acknowledges that, in addition to any remedy set forth
herein for failure to comply with the restrictions set forth in this Declaration, the Authority may exercise any
remedy available to it under Article IX of the Agreement.
7.Indemnification. The Developer hereby indemnifies, and agrees to defend and hold
harmless the Authority and its members, officers, and agents from and against all liabilities, losses, damages,
costs, expenses (including attorneys’ fees and expenses), causes of action, suits, allegations, claims, demands,
and judgments of any nature arising from the consequences of a legal or administrative proceeding or action
brought against them, or any of them, on account of any failure by the Developer to comply with the terms of
this Declaration, or on account of any representation or warranty of the Developer contained herein being
untrue.
8.Agent of the Authority. The Authority will have the right to appoint an agent to carry out
any of its duties and obligations hereunder, and will inform the Developer of any agency appointment by
written notice.
9.Severability. The invalidity of any clause, part or provision of this Declaration will not
affect the validity of the remaining portions thereof.
10.Notices. All notices to be given pursuant to this Declaration must be in writing and will be
deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the
addresses set forth below, or to any other place as a party may from time to time designate in writing. The
Developer and the Authority may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates, or other communications are sent. The initial addresses for notices
and other communications are as follows:
To the Authority: Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota
6700 Portland Avenue South
Richfield, MN 55423
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Attn: Community Development Director
To the Developer: 101 E 66th St LLC
2118 Fourth Avenue South
Minneapolis, MN 55404
Attn: President
11.Governing Law. This Declaration is governed by the laws of the State of Minnesota and,
where applicable, the laws of the United States of America.
12.Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory
relief, is brought against the Developer to enforce the provisions of this Declaration, the Developer agrees to
pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in
connection with the action.
13.Declaration Binding. This Declaration and the covenants contained herein will run with the
real property comprising the Project and will bind the Developer and its successors and assigns and all
subsequent owners of the Project or any interest therein, and the benefits will inure to the Authority and its
successors and assigns for the term of this Declaration as provided in Section 1(b) hereof.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the Developer has caused this Declaration of Restrictive Covenants to
be signed by its duly authorized representative as of the date and year first written above.
101 E 66TH ST LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by
_________________________________, the _____________________________ of 101 E 66th St LLC, a
Minnesota limited liability company, on behalf of the Developer.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (JAE)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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This Declaration of Restrictive Covenants is acknowledged and consented to by:
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by
_____________________, the Chair of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf
of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by
Melissa Poehlman, 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
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EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
Parcel 1:
That part of Lot 7, Goodspeed's First Plat, Hennepin County, Minnesota, described as
follows, to wit:
Beginning at the northwest corner of said Lot 7, and running thence south along the west line
of said Lot 7, a distance of 46.56 feet; thence running east a distance of 135.62 feet; thence
running north a distance of 46.62 feet to the north line of said Lot 7; thence running west
along the said north line of Lot 7 a distance of 135.63 feet to the place of beginning;
The North 22.56 feet of that part of Lot 7, Goodspeed's First Plat, Hennepin County,
Minnesota, described as follows:
Beginning at a point on the west line of said Lot 7, 46.56 feet south of the northwest corner
of said Lot 7, thence running east a distance of 135.62 feet; thence south to a point on the
south line of said Lot 7, 135.61 feet east of the southwest corner of said Lot 7; thence west to
said southwest corner, thence north along the west line of said Lot 7 to the point of
beginning.
Parcel 2:
That part of Lot 7, Goodspeed's First Plat, Hennepin County, Minnesota, described as
follows:
Beginning at a point on the west line of said Lot 7, 46.56 feet south of the northwest corner
of said Lot 7, thence running east a distance of 135.62 feet; thence south to a point on the
south line of said Lot 7, 135.61 feet east of the southwest corner of said Lot 7, thence west to
said southwest corner, thence north along the west line of said Lot 7 to the point of
beginning, except the North 22.56 feet thereof,
The west half of Lot 8, except the south 50 feet thereof, Goodspeed's First Plat, Hennepin
County, Minnesota..
Parcel 3:
That part of Lot 7, Goodspeed's First Plat, Hennepin County, Minnesota, described as
follows:
Commencing at the northwest corner of said Lot 7, thence south along the west line of said
Lot 7, 46.56 feet, thence east on a line parallel to the north line of said Lot 7, 135.62 feet to
the actual point of beginning; thence north to a point on the north line of said Lot 7, 135.63
feet east from the northwest corner thereof, thence east along the north line of said Lot 7 to
the northeast corner, thence south along the east line to the southeast corner of said Lot 7,
thence west along the south line to a point 135.61 feet east from the southwest corner
measured along the south line of said Lot 7, thence north to the actual point of beginning.
Parcel 4:
The east half of Lot 8, Goodspeed's First Plat, Hennepin County, Minnesota.
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EXHIBIT B TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATION OF TENANT ELIGIBILITY
Certification of Tenant Eligibility
(INCOME COMPUTATION AND CERTIFICATION)
Project: [Address], Richfield, Minnesota
Owner: ________________
Unit Type: ______ Studio _____ 1 BR _____ 2 BR _____ 3 BR
1.I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully,
frankly and personally each of the following questions for all persons (including minors) who are to occupy
the unit in the above apartment development for which application is made, all of whom are listed below:
Name of
Members of the
Household
Relationship
To Head of
Household Age
Place of
Employment
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
_____________ _____________ ___ _________________
Income Computation
2.The anticipated income of all the above persons during the 12-month period beginning this
date,
(a)including all wages and salaries, overtime pay, commissions, fees, tips and bonuses
before payroll deductions; net income from the operation of a business or profession or from the
rental of real or personal property (without deducting expenditures for business expansion or
amortization of capital indebtedness); interest and dividends; the full amount of periodic payments
received from social security, annuities, insurance policies, retirement funds, pensions, disability or
death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as
unemployment and disability compensation, worker’s compensation and severance pay; the
maximum amount of public assistance available to the above persons; periodic and determinable
allowances, such as alimony and child support payments and regular contributions and gifts received
from persons not residing in the dwelling; and all regular pay, special pay and allowances of a
member of the Armed Forces (whether or not living in the dwelling) who is the head of the
household or spouse; but
(b)excluding casual, sporadic or irregular gifts; amounts which are specifically for or in
reimbursement of medical expenses; lump sum additions to family assets, such as inheritances,
insurance payments (including payments under health and accident insurance and workmen’s
compensation), capital gains and settlement for personal or property losses; amounts of educational
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scholarships paid directly to the student or the educational institution, and amounts paid by the
government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in
either case only to the extent used for these types of purposes; special pay to a serviceman head of a
family who is away from home and exposed to hostile fire; relocation payments under Title II of the
Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; foster child care
payments; the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act
of 1964 which is in excess of the amount actually charged for the allotments; and payments received
pursuant to participation in ACTION volunteer programs, is as follows: $_____________.
3.If any of the persons described above (or whose income or contributions was included in
item 2) has any savings, bonds, equity in real property or other form of capital investment, provide:
(a)the total value of all such assets owned by all such persons: $____________;
(b)the amount of income expected to be derived from such assets in the 12 month
period commencing this date: $_______________; and
(c)the amount of such income which is included in income listed in item 2:
$__________.
4.(a) Will all of the persons listed in item 1 above be or have they been full-time students
during five calendar months of this calendar year at an educational institution (other than a
correspondence school) with regular faculty and students?
Yes _________________ No ________________
(b)Is any such person (other than nonresident aliens) married and eligible to file a joint
federal income tax return?
Yes _________________ No ________________
THE UNDERSIGNED HEREBY CERTIFY THAT THE INFORMATION SET FORTH ABOVE
IS TRUE AND CORRECT. THE UNDERSIGNED ACKNOWLEDGE THAT THE LEASE FOR THE
UNIT TO BE OCCUPIED BY THE UNDERSIGNED WILL BE CANCELLED UPON 10 DAYS
WRITTEN NOTICE IF ANY OF THE INFORMATION ABOVE IS NOT TRUE AND CORRECT.
Head of Household
Spouse
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FOR COMPLETION BY OWNER
(OR ITS MANAGER) ONLY
1.Calculation of Eligible Tenant Income:
(a)Enter amount entered for entire household in 2 above: $__________
(b)If the amount entered in 3(a) above is greater than $5,000, enter the greater of (i) the
amount entered in 3(b) less the amount entered in 3(c) or (ii) 10% of the amount entered in 3(a):
$__________
(c)TOTAL ELIGIBLE INCOME (Line 1(a) plus Line 1(b)): $__________
2.The amount entered in 1(c) is less than or equal to [50%] [60%] of median income for the
area in which the Project is located, as defined in the Declaration. [50%] [60%] is necessary for status as a
“Qualifying Tenant” under Section 3(a) of the Declaration.
3.Rent:
(a)The rent for the unit is $________________.
(b)The amount entered in 3(a) is less than or equal to the maximum rent permitted
under the Declaration.
4.Number of apartment unit assigned:___________.
5.This apartment unit was ____ was not ____ last occupied for a period of at least
31 consecutive days by persons whose aggregate anticipated annual income as certified in the above manner
upon their initial occupancy of the apartment unit was less than or equal to [50%] [60%] of Median Income in
the area.
6.Check as applicable: _______ Applicant qualifies as a Qualifying Tenant (tenants of at least
________ units must meet), or ____ Applicant otherwise qualifies to rent a unit.
THE UNDERSIGNED HEREBY CERTIFIES THAT HE/SHE HAS NO KNOWLEDGE OF ANY FACTS
WHICH WOULD CAUSE HIM/HER TO BELIEVE THAT ANY OF THE INFORMATION PROVIDED
BY THE TENANT MAY BE UNTRUE OR INCORRECT.
101 E 66TH ST LLC
By
Its
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EXHIBIT C TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Certificate of
Continuing Program Compliance
Date: ___________________
The following information with respect to the multifamily housing development located at
__________________, Richfield, Minnesota (the “Project”), is being provided by 101 E 66th St LLC, a
Minnesota limited liability company (the “Owner”), to the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota (the “Authority”), pursuant to that certain Declaration of Restrictive
Covenants, dated ___________, 2023 (the “Declaration”), with respect to the Project:
(A)The total number of residential units which are available for occupancy is
___________. The total number of these units occupied is _________________.
(B)The following residential units (identified by unit number) are currently occupied by
“Qualifying Tenants,” as the term is defined in the Declaration (for a total of ____units):
Studio Units: _____________
1 BR Units: _____________
2 BR Units: _____________
3 BR Units: _____________
(C)The following residential units which are included in (B) above, have been re-
designated as units for Qualifying Tenants since _______________, 20___, the date on which the
last “Certificate of Continuing Program Compliance” was filed with the Authority by the Owner:
Unit
Number
Previous Designation
of Unit (if any)
Replacing
Unit Number
___________ _________________ _________________
___________ _________________ _________________
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(D)The following residential units are considered to be occupied by Qualifying Tenants
based on the information set forth below:
Unit
Number
Name of Tenant
Number of
Persons
Residing in
the Unit
Number of
Bedrooms
Total Adjusted
Gross Income
Date of Initial
Occupancy
Rent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
[etc.]
(E)The Owner has obtained a “Certification of Tenant Eligibility,” in the form provided
as EXHIBIT B to the Declaration, from each Tenant named in (D) above, and each such Certificate
is being maintained by the Owner in its records with respect to the Project. Attached hereto is the
most recent “Certification of Tenant Eligibility” for each Tenant named in (D) above who signed
such a Certification since ______________, 20___, the date on which the last “Certificate of
Continuing Program Compliance” was filed with the Authority by the Owner.
(F)In renting the residential units in the Project, the Owner has not given preference to
any particular group or class of persons (except for persons who qualify as Qualifying Tenants); and
none of the units listed in (D) above have been rented for occupancy entirely by students, no one of
which is entitled to file a joint return for federal income tax purposes. All of the residential units in
the Project have been rented pursuant to a written lease, and the term of each lease is at least twelve
(12) months.
(G)The information provided in this “Certificate of Continuing Program Compliance”
is accurate and complete, and no matters have come to the attention of the Owner which would
indicate that any of the information provided herein, or in any “Certification of Tenant Eligibility”
obtained from the Tenants named herein, is inaccurate or incomplete in any respect.
(H)The Project is in continuing compliance with the Declaration.
(I)The Owner certifies that as of the date hereof at least ______ of the residential
dwelling units in the Project are occupied or held open for occupancy by Qualifying Tenants, as
defined and provided in the Declaration.
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(J)The rental levels for each Qualifying Tenant comply with the maximum permitted
under the Declaration.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the Owner, on
____________________, 20___.
101 E 66TH ST LLC
By
Its
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EXHIBIT F
PRO FORMA FINANCIAL STATEMENT
F-1
EXHIBIT G
SAMPLE LOOKBACK CALCULATION
RC125-387 (JAE)
874528.2
AGENDA SECTION: RESOLUTIONS
AGENDA ITEM # 6.
STAFF REPORT NO. 15
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
6/20/2023
REPORT PREPARED BY: Melissa Poehlman, Executive Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW:
ITEM FOR COUNCIL CONSIDERATION:
Consider a request to modify (2024) and then terminate (2025) Best Buy's Minimum Assessment
Agreement.
EXECUTIVE SUMMARY:
The Interchange West / Lyndale Gateway Tax Increment Financing (TIF) District was established in 1999.
This District is a “scattered site” redevelopment District with multiple projects and outstanding obligations,
including the Best Buy corporate headquarters, Mainstreet Village, and the Casteel Place Townhomes. Best
Buy has approached the City and Housing and Redevelopment Authority (HRA) to request a modification to
their individual contract which would remove the Minimum Assessment Agreement (MMA) that prevents the tax
value of their property from falling below $118.5 million during the life of the TIF District (ending December
31, 2025).
After an initial denial of the request by the City Council on May 23, staff and Best Buy representatives
continued discussions in hopes of finding a path forward that would address the needs and concerns of all
parties. These concerns, left unaddressed, could lead to significant costs, staff time, and uncertainty in the
coming years.
The attached Contracts and Assessment (Agreements) address the largest concerns for both the City/HRA
and Best Buy. Specifically, it guarantees that the HRA will be able to recoup $851,000 without the threat of
future litigation; and it allows Best Buy to discuss a fair market value for its property with the County and pay
the commensurate taxes.
The Agreements require compromise on both sides. Best Buy believes that the HRA has underpaid them and
that they are owed approximately $600,000, which they will not recoup, and they have agreed not to contest
the HRA recouping $851,000. The HRA will almost certainly see a reduction in tax increment generated in the
remaining years of the TIF District; an estimated loss of $105,000 - $385,000 in pooling revenue. The parties
agree that the costs associated with continued disagreement outweigh the losses posed by the compromise.
Staff and its legal and financial experts recommend approval of the attached resolution and Agreements.
In order to modify and/or terminate the MAA, Best Buy needs the approval of both the City Council and the
HRA, in addition to approvals by Hennepin County and the Richfield School District. On June 13, 2023 the
Council approved attached documents.
RECOMMENDED ACTION:
By Motion: Approve a resolution approving the attached Contract and Assessment with Best Buy Co.,
Inc.
Melissa Poehlman, Executive Director
6/15/2023
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The Interchange West / Lyndale Gateway TIF District was established in 1999. This
District is a “scattered site” redevelopment District with multiple projects and outstanding
obligations, including the Best Buy Corporate Campus, Mainstreet Village, and the
Casteel Place Townhomes.
Best Buy has approached the City and HRA to request a modification to their individual
contract which would remove the MMA that prevents the tax value of their property from
falling below $118.5 million during the life of the TIF District (ending December 31, 2025).
The Interchange West / Lyndale Gateway TIF District is by-far the most complex TIF
District in the City. There have been five amendments to the Contract for Private
Redevelopment with Best Buy since its initial adoption.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
Additional approvals by the HRA, County, and School Board are required.
As discussed at the March 6, 2023 work session, there would be no financial impact to the County
or School District due to this action. The taxes paid to the City, County, and School District will
remain unchanged until the TIF District expires on December 31, 2025.
C.CRITICAL TIMING ISSUES:
Best Buy would like the MAA modified/terminated as soon as possible. In order to reduce pay
2024 taxes, they must obtain the approval of the City, County, and School Board prior to June 30,
2023. While staff does not believe it will be possible to receive County Board approvals in time,
the agreement stipulates that the City will support and work toward this goal with Best Buy. The
proposed Agreements are contingent upon these future approvals by the County and School
Board, but not by the June 30, 2023 deadline. Given that there will be no financial impact to the
County or School Board, staff does not anticipate a denial by either body and will work with Best
Buy to communicate and educate the bodies, as needed.
D.FINANCIAL IMPACT:
Sufficient increment will be available to make the remaining two payments on the General
Obligation Bonds issued for infrastructure improvements related to the Best Buy Corporate
Campus Project.
The MAA is also in place to provide a mechanism for pooling. Pooling allows the HRA to spend a
portion of tax increment outside the geographical boundaries of the TIF District for TIF-eligible
activities such as affordable housing. A modification and termination of the MAA will likely impact
the amount of money contributed to the Housing and Redevelopment Fund by an
estimated $210,000 to $385,000. If Best Buy is unable to get the required approvals for 2023, the
estimated reduction is $105,000-$192,500.
The HRA has concluded that Best Buy has been overpaid by approximately $851,000. Under the
proposed Agreements, the HRA is able to recoup this money without threat of future legal
challenge.
The proposed Agreements would not impact taxes paid to either Hennepin County or the School
District because those jurisdictions receive payments based on the baseline property value
established prior to the Best Buy Campus construction.
E.LEGAL CONSIDERATION:
The HRA has the legal authority and duty to recoup overpayments and will begin to do so with the
August 1, 2023 TIF Payment. The proposed Agreements allow the HRA to do this without the
threat of a legal challenge.
ALTERNATIVE RECOMMENDATION(S):
Deny the request for modification/termination of the Minimum Assessment Agreement with Best Buy for
property at 7601 Penn Avenue South.
PRINCIPAL PARTIES EXPECTED AT MEETING:
Jeanne Vogt, Senior Fiscal Consultant, Ehlers Tracy Smith, Senior Director and Tax Counsel, Best Buy Dan
Lopez, Director of Government Affairs, Best Buy William Griffith & Timothy Rye, Attorneys for Best Buy,
Larkin Hoffman
ATTACHMENTS:
Description Type
Resolution Resolution Letter
Contract Amendment Contract/Agreement
Amended Assessment Agreement Contract/Agreement
Amended Assessment Agreement (Redline)Contract/Agreement
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. _______
RESOLUTION APPROVING AGREEMENTS WITH BEST BUY CO., INC.
BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), as follows:
Section 1. Recitals.
1.01. The Authority and Best Buy Co., Inc., a Minnesota corporation (the
“Redeveloper”), have entered into a Contract for Private Redevelopment, dated March 28, 2000,
as amended by the First Amendment to Contract for Private Redevelopment, dated
November 27, 2000, as amended by the Second Amendment to Contract for Private
Redevelopment, dated February 20, 2001, as amended by the Third Amendment to Contract for
Private Redevelopment, dated March 5, 2003, as amended by the Fourth Amendment to
Contract for Private Redevelopment, dated December 21, 2010, and as amended by the Fifth
Amendment to Contract for Private Redevelopment, dated July 14, 2014 (collectively, the
“Contract”), with respect to the redevelopment of land (the “Property”) located in the City of
Richfield, Minnesota (the “City”).
1.02. The Authority and the Redeveloper also entered into an Assessment Agreement,
dated March 5, 2003 (the “Assessment Agreement”), which set forth the minimum market value
for the Property as improved by the redevelopment.
1.03. The Authority and the Redevelopment have proposed to revise the provisions
related to the Assessment Agreement, the overpayment of tax increment by the Authority, and
the release of certain claims.
1.04. There have been presented to the Board forms of the following documents
(collectively, the “Authority Documents”): (i) a Sixth Amendment to Contract for Private
Redevelopment between the Authority and the Redeveloper, which amends the Contract to
govern the overpayment of tax increment; and (ii) an Amended and Restated Assessment
Agreement between the Authority and the Redeveloper, and including consents to termination
of the Assessment Agreement by Independent School District No. 280 (Richfield Public
Schools) and Hennepin County, Minnesota, which amends and restates the Assessment
Agreement to modify the valuation floor of the Property, as improved by the redevelopment.
Section 2. Approvals.
2.01. The Authority Documents are hereby in all respects authorized, approved, and
confirmed, and the Chair and the Executive Director are hereby authorized and directed to
execute the Authority Documents for and on behalf of the Authority in substantially the forms
now on file with the Executive Director but with such modifications as shall be deemed
necessary, desirable, or appropriate, the execution thereof to constitute conclusive evidence of
their approval of any and all modifications therein.
2
2.02. The Chair and the Executive Director are authorized and directed to execute any
and all other documents or certificates deemed necessary to carry out the intentions of this
resolution and the Authority Documents.
Section 3. Effective Date. This resolution shall be in full force and effect from and
after its approval.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 20th day of June, 2023.
Gordon Hanson, Acting Chair
ATTEST:
Secretary
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SIXTH AMENDMENT
TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS SIXTH AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT (the
“Agreement”), made and entered into as of the _____ day of June, 2023, between the CITY OF
RICHFIELD, MINNESOTA, a Minnesota municipal corporation (the “City”), the HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a
Minnesota public body corporate and politic (the “HRA”), and BEST BUY CO., INC., a Minnesota
corporation (the “Redeveloper”). The City, the HRA and the Redeveloper are referred to herein as the
“Parties.”
WITNESSETH:
WHEREAS, the HRA and the Redeveloper entered into a Contract for Private Development
Agreement, dated March 28, 2000 (the “Contract”), for the purposes of redeveloping land within the City
of Richfield (the “Property”); and
WHEREAS, the HRA and the Redeveloper entered into an Assessment Agreement, dated March
5, 2003 (the “Assessment Agreement”); and
WHEREAS, the HRA and the Redeveloper amended the Contract five times by entering into a First
Amendment on November 27, 2000, a Second Amendment on February 20, 2001, a Third Amendment on
March 5, 2003, a Fourth Amendment on December 21, 2010, and a Fifth Amendment on July 14, 2014;
and
WHEREAS, the City, the HRA and the Redeveloper propose to amend the Contract further to
revise the provisions related to the Assessment Agreement, payment to the HRA, and the release of certain
claims; and
NOW, THEREFORE, based upon the mutual covenants and undertakings hereinafter, and in the
Contract provided, the Parties hereto stipulate and agree as follows:
Section 1. Whereas Clauses. The WHEREAS clauses set forth above are incorporated into this
Agreement and are confirmed in all respects.
Section 2. Definitions.
“Available Tax Increment” for the purpose of the TIF Note means seventy-five percent (75%) of
the Tax Increment attributable to the Minimum Improvements and Development Property that is paid to
the HRA by the County in the six months preceding each Payment Date, after deducting any amount necessary
to pay principal and interest on the TIF Bonds or, subject to the provisions of Section 3.5, subd. 3, any TIF
Refunding Bonds.
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Section 3. Amendments to Contract. The Contract is hereby amended in the following respects:
A.The Redeveloper agrees that the HRA will receive $851,000 in tax increment, in addition to
the funds the HRA receives based on the provisions of the Contract. The Redeveloper agrees that the
HRA will be provided the $851,000 from the County payments of tax increment on August 1, 2023,
February 1, 2024, and August 1, 2024 until the amount is paid in full.
B.All Parties agree and understand that the Tax Increment District for the Redeveloper ends
as of December 31, 2025 and the final payment for the TIF Note will occur on February 1, 2026.
Section 4. Assessment Agreement.
A.The City and the HRA approve the modification and termination of the Assessment
Agreement. Modification means the valuation floor in the Assessment Agreement will not be less than
$60 million until the Assessment Agreement is terminated. The modification of the Assessment
Agreement is effective for the 2023 tax assessment payable in 2024. The termination of the
Assessment Agreement is effective on December 31, 2023, for the 2024 tax assessment payable in
2025.
B.Section 6.3(b) of the Contract is hereby deleted and is no longer of any force or effect.
C.The City and the HRA will support the Redeveloper in seeking consent of the School District
and Hennepin County for modifying and terminating the Assessment Agreement.
D.If the Redeveloper appeals its property value after the Assessment Agreement is modified
or after the Assessment Agreement is terminated, the Redeveloper will be solely responsible for
repaying the Available Tax Increment from the Development Property paid under the TIF Note if
Hennepin County determines that the Available Tax Increment should be returned to Hennepin County
due to one or more tax appeals initiated by the Redeveloper. The HRA will alert the Redeveloper of
any reduction in tax increment due to tax appeals. The Redeveloper shall have three weeks to pay the
HRA the funds owed to Hennepin County. Upon receipt of the funds from the Redeveloper, the HRA
will send the funds to Hennepin County within five business days and provide timely notice to the
Redeveloper of such transmittal to Hennepin County.
E.If the Redeveloper appeals its property value after the Assessment Agreement is modified or
after the Assessment Agreement is terminated, the HRA will be solely responsible for repaying the
25% of the Tax Increment from the Development Property paid to the HRA if Hennepin County
determines that the Available Tax Increment should be returned to Hennepin County due to one or
more tax appeals initiated by the Redeveloper.
F.If the Redeveloper appeals its property value, it must notify the HRA within two weeks of
filing the tax petition.
G.The Parties understand and agree that this agreement is contingent upon obtaining approval of
this Sixth Amendment and the Amended and Restated Assessment Agreement by the City Council
and HRA Board on or prior to June 20, 2023, and the consent of the School District and Hennepin
County to modification and termination of the Assessment Agreement as provided in the Amended
and Restated Assessment Agreement prior to June 30, 2023 or thereafter. Each party will use best
efforts to obtain the approvals and consents contemplated by this paragraph.
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Section 5. Release of Claims.
A.All Parties will release all claims to date regarding any defaults under the Contract. The HRA
will continue to follow the requirements of the Tax Increment Act and will make any corrective
payments determined by the Office of State Auditor.
B.The agreement will constitute a full and final satisfaction between the Parties regarding any
and all matters relating to the Assessment Agreement. The Redeveloper will agree not to request, or
encourage any other person to request, an audit from the Office of the State Auditor with respect to
matters relating to the Contract or the Assessment Agreement.
C.With the exception of Sections 4(D) and 4(E), the City, the HRA, and the Redeveloper will:
(a) mutually release and discharge each other from any and all claims or matters arising out of or
relating to the Contract or the Assessment Agreement to date; and (b) agree not to sue any Party to this
Agreement with respect to any matters arising out of or relating to the Contract or the Assessment
Agreement to date.
D.The Parties agree not to disparage another Party to this Agreement.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed on
their behalf by their authorized representatives on or as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Acting Chair
By
Its Executive Director
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Sean
Hayford Oleary, the Acting 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 Minnesota, on behalf of the
HRA.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Melissa
Poehlman, 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 Minnesota, on behalf of the
HRA.
___________________________________
Notary Public
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BEST BUY CO., INC.
By
Its
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this _____ day of June, 2023, by
___________________, the ______________ of Best Buy Co., Inc., a Minnesota corporation, on behalf of
the Redeveloper.
____________________________________
Notary Public
Error! Unknown document property name.
CITY OF RICHFIELD, MINNESOTA
By
Its Mayor
By
Its City Manager
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Mary B.
Supple, the Mayor of the City of Richfield, a Minnesota municipal corporation, on behalf of the City.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Katie
Rodriguez, the City Manager of the City of Richfield, a Minnesota municipal corporation, on behalf of the
City.
___________________________________
Notary Public
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AMENDED AND RESTATED
ASSESSMENT AGREEMENT
THIS AMENDED AND RESTATED ASSESSMENT AGREEMENT, made on the ____
day of June, 2023, by and between the Housing and Redevelopment Authority in and for the City
of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota (the
"Authority") and Best Buy Co., Inc., a Minnesota corporation, (the "Redeveloper"), modifies and
replaces the Assessment Agreement dated March 5, 2003, between the same parties.
WITNESSETH:
WHEREAS, the Authority and Redeveloper entered into a Contract for Private
Development, dated March 28, 2000 (the "Development Agreement") regarding certain real
property located in the city of Richfield, Hennepin County, Minnesota, and legally described in
Exhibit A attached hereto (the "Property"); and
WHEREAS, the Authority and Redeveloper entered into that certain Assessment
Agreement dated March 5, 2003 (the “Assessment Agreement”); and
WHEREAS, the Authority and Redeveloper amended the Development Agreement six
times by entering into a First Amendment on November 27, a Second Amendment on February
20, 2001, a Third Amendment on March 5, 2003, a Fourth Amendment on December 21, 2010, a
Fifth Amendment on July 14, 2014, and a Sixth Amendment on June ____, 2023; and
WHEREAS, pursuant to the Sixth Amendment the parties have agreed to modify and then
terminate the Assessment Agreement by entering into this Amended and Restated Assessment
Agreement; and
WHEREAS, pursuant to the Development Agreement, the Redeveloper has constructed a
1.5 million square foot office facility and related parking structures and other improvements upon
the Property (the "Minimum Improvements"); and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market value
for the Property and the Minimum Improvements constructed thereon (the "Minimum Market
Value"), pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and
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WHEREAS, the Authority and the Assessor for Hennepin County (the "Assessor") have
reviewed or examined the Property and the Minimum Improvements.
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1.The Minimum Market Value which shall be assessed for the Property described
in Exhibit A, together with the Minimum Improvements thereon, shall be $60,000,000 as of January
2, 2023 payable in 2024.
2.The Minimum Market Value herein established shall be of no further force and
effect and this Agreement shall terminate on December 31, 2023.
3.This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
4.Neither the preambles nor provisions of this Agreement are intended to, nor
shall they be construed as, modifying the terms of the Development Agreement between the
Authority and the Redeveloper.
5.This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
6.Each of the parties has authority to enter into this Agreement and to take all
actions required of it, and has taken all actions necessary to authorize the execution and delivery
of this Agreement.
7.In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
8.The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments
and modifications hereto, and such further instruments as may reasonably be required for correcting
any inadequate, or incorrect, or amended description of the Property, or for carrying out the
expressed intention of this Agreement.
9.Except as provided in Section 8 of this Agreement, this Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10.This Agreement may be simultaneously executed in several counterparts, each
of which shall be an original and all of which shall constitute but one and the same instrument.
This Agreement shall be governed by and construed in accordance with the laws of the State of
Minnesota.
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IN WITNESS WHEREOF, the HRA has caused this Amended and Restated Assessment
Agreement to be duly executed on its behalf by its authorized representatives on or as of the date
first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By
Its Acting Chair
By
Its Executive Director
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Sean Hayford Oleary, the Acting 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 Minnesota,
on behalf of the HRA.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Melissa Poehlman, 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
Minnesota, on behalf of the HRA.
___________________________________
Notary Public
Error! Unknown document property name.
IN WITNESS WHEREOF, the City of Richfield, Minnesota has caused this Amended and
Restated Assessment Agreement to be duly executed on its behalf by its authorized representatives
on or as of the date first above written.
CITY OF RICHFIELD, MINNESOTA
By
Its Mayor
By
Its City Manager
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Mary B. Supple, the Mayor of the City of Richfield, Minnesota, a public body corporate and politic
under the laws of Minnesota, on behalf of the City.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Katie Rodriquez, the City Manager of the City of Richfield, Minnesota, a public body corporate
and politic under the laws of Minnesota, on behalf of the City.
___________________________________
Notary Public
Error! Unknown document property name.
IN WITNESS WHEREOF, the Redeveloper has caused this Amended and Restated Assessment
Agreement to be duly executed on their behalf by their authorized representatives on or as of the
date first above written.
BEST BUY CO., INC.
By
Its
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this _____ day of June, 2023, by
___________________, the ______________ of Best Buy Co., Inc., a Minnesota corporation, on
behalf of the Redeveloper.
____________________________________
Notary Public
Drafted By:
William Griffith
Larkin Hoffman
8300 Norman Center Drive
Suite 1000
Minneapolis, MN 55437
Error! Unknown document property name.
IN WITNESS WHEREOF, the School District has caused this Amended and Restated Assessment
Agreement to be duly executed on their behalf by their authorized representatives on or as of the
date first above written.
INDEPENDENT SCHOOL DISTRICT NO. 280
(RICHFIELD PUBLIC SCHOOLS),
HENNEPIN COUNTY, MINNESOTA
By
Its Chair
By
Its Clerk
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Paula Cole, the Chair of Independent School District No. 280 (Richfield Public Schools),
Hennepin County, Minnesota, a public body corporate and politic under the laws of Minnesota, on
behalf of the School District.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Allegra Smisek, the Clerk of Independent School District No. 280 (Richfield Public Schools),
Hennepin County, Minnesota, a public body corporate and politic under the laws of Minnesota, on
behalf of the School District.
___________________________________
Notary Public
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IN WITNESS WHEREOF, Hennepin County, Minnesota has caused this Amended and Restated
Agreement to be duly executed on their behalf by their authorized representatives on or as of the
date first above written.
COUNTY OF HENNEPIN
Reviewed by the County STATE OF MINNESOTA
Attorney’s Office
By: _________________________ By:
Chair
Date: ________________________ Date:
ATTEST:
Deputy/Clerk of County Board
Date:
By:
County Administrator
Date:
Recommended for Approval:
By:
Chief Housing and Economic Development
Officer
Date:
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STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Irene Fernando, the Chair of Hennepin County, Minnesota, a public body corporate and politic
under the laws of Minnesota, on behalf of the County.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
David J. Hough, the County Administrator of Hennepin County, Minnesota, a public body
corporate and politic under the laws of Minnesota, on behalf of the County.
___________________________________
Notary Public
Error! Unknown document property name.
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be
constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: the undersigned Assessor, being legally responsible for the
assessment of the above-described property, hereby certifies that the market values assigned to the
land and improvements are reasonable.
ASSESSOR FOR HENNEPIN COUNTY
By
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of June, 2023, by
___________________________, the County Assessor of Hennepin County, Minnesota.
Notary Public
Error! Unknown document property name.
EXHIBIT A
DESCRIPTION OF PROPERTY
Lot 1, Block 1, Best Buy Campus
RC125-210-881427.v12
AMENDED AND RESTATED
ASSESSMENT AGREEMENT
THIS AMENDED AND RESTATED ASSESSMENT AGREEMENT, made on the ____
day of June, 2023, by and between the Housing and Redevelopment Authority in and for the City
of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota (the
"Authority") and Best Buy Co., Inc., a Minnesota corporation, (the "Redeveloper"), modifies and
replaces the Assessment Agreement dated March 5, 2003, between the same parties.
WITNESSETH:
WHEREAS, the Authority and Redeveloper entered into a Contract for Private
Development, dated March 28, 2000 (the "Development Agreement") regarding certain real
property located in the city of Richfield, Hennepin County, Minnesota, and legally described in
Exhibit A attached hereto (the "Property"); and
WHEREAS, the Authority and Redeveloper entered into that certain Assessment
Agreement dated March 5, 2003 (the “Assessment Agreement”); and
WHEREAS, the Authority and Redeveloper amended the Development Agreement six
times by entering into a First Amendment on November 27, a Second Amendment on February
20, 2001, a Third Amendment on March 5, 2003, a Fourth Amendment on December 21, 2010, a
Fifth Amendment on July 14, 2014, and a Sixth Amendment on June ____, 2023; and
WHEREAS, pursuant to the Sixth Amendment the parties have agreed to modify and then
terminate the Assessment Agreement by entering into this Amended and Restated Assessment
Agreement; and
WHEREAS, pursuant to the Development Agreement, the Redeveloper has constructed a
1.5 million square foot office facility and related parking structures and other improvements upon
the Property (the "Minimum Improvements"); and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market value
for the Property and the Minimum Improvements constructed thereon (the "Minimum Market
Value"), pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and
RC125-210-881427.v12
WHEREAS, the Authority and the Assessor for Hennepin County (the "Assessor") have
reviewed or examined the Property and the Minimum Improvements.
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1.The Minimum Market Value which shall be assessed for the Property described
in Exhibit A, together with the Minimum Improvements thereon, shall be $60,000,000 as of January
2, 2023 payable in 2024.
2.The Minimum Market Value herein established shall be of no further force and
effect and this Agreement shall terminate on December 31, 2023.
3.This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
4.Neither the preambles nor provisions of this Agreement are intended to, nor
shall they be construed as, modifying the terms of the Development Agreement between the
Authority and the Redeveloper.
5.This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
6.Each of the parties has authority to enter into this Agreement and to take all
actions required of it, and has taken all actions necessary to authorize the execution and delivery
of this Agreement.
7.In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
8.The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments
and modifications hereto, and such further instruments as may reasonably be required for correcting
any inadequate, or incorrect, or amended description of the Property, or for carrying out the
expressed intention of this Agreement, including, without limitation, any further instruments
required to delete from the description of the Property such part or parts as may be included within
a separate assessment agreement, and any instrument necessary to confirm the occurrence of the
Termination Date (as defined in the Contract) and thereby the termination of this Agreement.
9.Except as provided in Section 8 of this Agreement, this Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10.This Agreement may be simultaneously executed in several counterparts, each
of which shall be an original and all of which shall constitute but one and the same instrument.
RC125-210-881427.v12
This Agreement shall be governed by and construed in accordance with the laws of the State of
Minnesota.
(The remainder of this page is intentionally left blank.)
RC125-210-881427.v12
IN WITNESS WHEREOF, the HRA has caused this Amended and Restated Assessment
Agreement to be duly executed on its behalf by its authorized representatives on or as of the date
first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By
Its Acting Chair
By
Its Executive Director
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Erin Vrieze Daniels, 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 Minnesota, on behalf
of the HRA.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Melissa Poehlman, 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
Minnesota, on behalf of the HRA.
___________________________________
Notary Public
RC125-210-881427.v12
IN WITNESS WHEREOF, the City of Richfield, Minnesota has caused this Amended and
Restated Assessment Agreement to be duly executed on its behalf by its authorized representatives
on or as of the date first above written.
CITY OF RICHFIELD, MINNESOTA
By
Its Mayor
By
Its City Manager
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Mary B. Supple, the Mayor of the City of Richfield, Minnesota, a public body corporate and politic
under the laws of Minnesota, on behalf of the City.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Katie Rodriquez, the City Manager of the City of Richfield, Minnesota, a public body corporate
and politic under the laws of Minnesota, on behalf of the City.
___________________________________
Notary Public
RC125-210-881427.v12
IN WITNESS WHEREOF, the Redeveloper has caused this Amended and Restated Assessment
Agreement to be duly executed on their behalf by their authorized representatives on or as of the
date first above written.
BEST BUY CO., INC.
By
Its
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this _____ day of June, 2023, by
___________________, the ______________ of Best Buy Co., Inc., a Minnesota corporation, on
behalf of the Redeveloper.
____________________________________
Notary Public
Drafted By:
William Griffith
Larkin Hoffman
8300 Norman Center Drive
Suite 1000
Minneapolis, MN 55437
RC125-210-881427.v12
IN WITNESS WHEREOF, the School District has caused this Amended and Restated Assessment
Agreement to be duly executed on their behalf by their authorized representatives on or as of the
date first above written.
INDEPENDENT SCHOOL DISTRICT NO. 280
(RICHFIELD PUBLIC SCHOOLS),
HENNEPIN COUNTY, MINNESOTA
By
Its Chair
By
Its Clerk
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Paula Cole, the Chair of Independent School District No. 280 (Richfield Public Schools),
Hennepin County, Minnesota, a public body corporate and politic under the laws of Minnesota, on
behalf of the School District.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Allegra Smisek, the Clerk of Independent School District No. 280 (Richfield Public Schools),
Hennepin County, Minnesota, a public body corporate and politic under the laws of Minnesota, on
behalf of the School District.
___________________________________
Notary Public
RC125-210-881427.v12
IN WITNESS WHEREOF, Hennepin County, Minnesota has caused this Amended and Restated
Agreement to be duly executed on their behalf by their authorized representatives on or as of the
date first above written.
COUNTY OF HENNEPIN
Reviewed by the County STATE OF MINNESOTA
Attorney’s Office
By: _________________________ By:
Chair
Date: ________________________ Date:
ATTEST:
Deputy/Clerk of County Board
Date:
By:
County Administrator
Date:
Recommended for Approval:
By:
Chief Housing and Economic Development
Officer
Date:
RC125-210-881427.v12
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
Irene Fernando, the Chair of Hennepin County, Minnesota, a public body corporate and politic
under the laws of Minnesota, on behalf of the County.
___________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
)
)
ss.:
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
David J. Hough, the County Administrator of Hennepin County, Minnesota, a public body
corporate and politic under the laws of Minnesota, on behalf of the County.
___________________________________
Notary Public
RC125-210-881427.v12
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be
constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: the undersigned Assessor, being legally responsible for the
assessment of the above-described property, hereby certifies that the market values assigned to the
land and improvements are reasonable.
ASSESSOR FOR HENNEPIN COUNTY
By
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of June, 2023, by
___________________________, the County Assessor of Hennepin County, Minnesota.
Notary Public
RC125-210-881427.v12
EXHIBIT A
DESCRIPTION OF PROPERTY
Lot 1, Block 1, Best Buy Campus
Document comparison by Workshare 10.0 on Friday, June 9, 2023 12:17:16 PM
Input:
Document 1 ID PowerDocs://DOCSOPEN/881427/1
Description DOCSOPEN-#881427-v1-
Amended_and_Restated_Assessment_Agreement
Document 2 ID PowerDocs://DOCSOPEN/881427/2
Description DOCSOPEN-#881427-v2-
Amended_and_Restated_Assessment_Agreement
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