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102124 HRA Agenda
R 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 O C TO B ER 21, 2024 7:00 P M C all to Order 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. C all into the open forum by dialing 1-415-655-0001 U se webinar access code: 2870 810 7680 and password: 1234. Approval of the Minutes A pproval of the minutes of the 1) S pecial C losed Housing and Redevelopment A uthority Meeting of S eptember 16, 2024; and 2) the Regular Housing and Redevelopment A uthority meeting of S eptember 16, 2024. P R E S E N TATIO N S 1.TIF S tatus Report P resentation AG E N D A APPR O VAL 2.A pproval of the A genda 3.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 the adoption of a resolution approving A ssignments of the C ontract for P rivate D evelopment and Tax Increment F inancing Note relating to the sale of the Rya A partments. S taff Report No. 20 4.C onsideration of items, if any, removed from C onsent C alendar H R A D IS C U S S IO N ITE MS 5.HRA D iscussion Items E X E C U T IV E D IR E C TO R R E P O R T 6.E xecutive D irector's Report C LAIMS 7.C laims 8.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 REDEVELOPMENT AUTHORITY MEETING MINUTES Special Closed Housing and Redevelopment Authority Meeting September 16, 2024 CALL TO ORDER The special closed meeting was called to order by Chair Vrieze Daniels at 6:15 p.m. in the Bartholomew Room. HRA Members Present: Erin Vrieze Daniels, Chair; Sean Hayford Oleary, John Young, Gordon Hanson, and Mary Supple. HRA Members Absent: None Staff Present: Melissa Poehlman, Executive Director; Jan Youngquist, Economic Development Manager; Julie Eddington Housing and Redevelopment Authority Attorney; and Michelle Friedrich, City Clerk. ITEM #1 DISCUSS POTENTIAL ACQUISITION OF LAND The Special Closed Session was conducted pursuant to Minnesota State Statute 13D.05, subd. 3. ADJOURNMENT The meeting was adjourned by unanimous consent at 6:55 p.m. Date Approved: October 21, 2024 Erin Vrieze Daniels HRA Chair Michelle Friedrich Melissa Poehlman City Clerk Executive Director HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting September 16, 2024 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; Sean Hayford Oleary; John Young, Gordon Hanson and Mary Supple HRA Members Absent: Staff Present: Melissa Poehlman, Executive Director; Katie Rodriguez, City Manager; Karl Huemiller, Recreation Manager; Jan Youngquist, Economic Development Manager; and Michelle Friedrich, City Clerk OPEN FORUM Chair Vrieze Daniels gave instructions on how to participate in the open forum. No one spoke. APPROVAL OF THE MINUTES M/Supple, S/Young to approve the minutes of the Regular Housing and Redevelopment Authority meeting of August 19, 2024. Motion carried: 5-0 ITEM #1 LOCAL SALES TAX PRESENTATION City Manager Rodriguez and Recreation Manager Huemiller presented the Local Sales Tax presentation. The viewing platform and trails at Veteran’s Park were discussed. HRA Meeting Minutes -2- September 16, 2024 ITEM #2 APPROVAL OF THE AGENDA M/Hayford Oleary, S/Hanson to approve the agenda. Motion carried 5-0 ITEM #3 APPROVAL OF THE CONSENT CALENDAR Executive Director Poehlman presented the consent calendar. A. Approve the final revised Executive Director’s budget document. B. Consideration of a Section 8 payment standard adjustment. M/Hayford Oleary, S/Supple to approve the consent calendar. Motion carried 5-0 ITEM #4 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR None. ITEM #5 PUBLIC HEARING REGARDING CONSIDERATION OF APPROVAL OF THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY'S FIVE- YEAR PUBLIC HOUSING PLAN. Executive Director Poehlman explained how the Housing and Redevelopment Authority provided services related to the Violence Against Women’s Act. A public hearing was held, there were no speakers or comments. M/Hayford Oleary, S/Hanson to close the public hearing. M/Hayford Oleary, S/Supple to approve the Housing and Redevelopment Authority's Five-Year Public Housing Plan for the Section 8 Housing Assistance Program and authorize the Chair and Executive Director to execute Program documents. Motion carried 5-0 HRA Meeting Minutes -3-September 16, 2024 ITEM #6 HRA DISCUSSION ITEMS The Penn Fest event was discussed. ITEM #7 EXECUTIVE DIRECTOR’S REPORT Executive Director Poehlman provided an update on the Aster Commons and Penn Station projects. ITEM #8 CLAIMS M/Young, S/Supple that the following claims be approved: U.S. BANK 9/16/2024 HRA Checks: #37108-37123 $51,249.39 Section 8 Checks: #136092-136170 $209,520.24 TOTAL $260,769.63 Motion carried: 5-0 ITEM #9 ADJOURNMENT The meeting was adjourned by unanimous consent at 7:34 p.m. Date Approved: October 21, 2024 Erin Vrieze Daniels HRA Chair LaTonia DuBois Melissa Poehlman Administrative Assistant Executive Director Richfield Housing and Redevelopment Authority2024 Tax Increment Financing UpdateOctober 21, 2024 2• TIF Management Plan completed 2023Assess opportunities and challengesCompliance requirementsDetails by District for City and HRA staff• Review 2024 updatesOverview 3• Districts are on trackNo TIF plan modifications recommendedNo compliance issues• Pooling opportunities available10% to Housing Trust FundTemporary Spending AuthorityRegular 25% poolingFindings 4District Summary of TIF DistrictsDistrictLyndale Gateway / Interchange WestUrban Village City BellaLyndale Gateway West (Kensington Park)Cedar Avenue (Rya)2010-1 Woodlake HousingLyndale Gardens2014-1 RM Senior Living Richfield (Havenwood)2017-1 Chamberlain2018-1 Cedar Pointe Townhomes - RF 642020-2 Emi (101 66th St E)2020-3 Lynk65 (Lynvue)2020-1 Henley II (Riley)TIF AuthorityRichfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRA Richfield HRAProject Area / Development DistrictRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaRichfield Redevelopment Project AreaDistrict TypeRedevelopment Redevelopment Redevelopment Redevelopment Redevelopment Housing Redevelopment Redevelopment Housing Housing Redevelopment Redevelopment HousingApproved6/14/1999 11/23/1998 6/11/2002 12/10/2002 9/26/2006 9/13/2011 8/9/2011 3/18/2014 11/28/2017 8/21/2018 1/26/2021 11/24/2020 9/22/2020Legal Max Term12/31/2025 12/31/2025 12/31/2030 12/31/2029 12/31/2043 12/31/2039 12/31/2039 12/31/2043 12/31/2045 12/31/2047 12/31/2048 12/31/2048 12/31/2047Anticipated Term12/31/2025 12/31/2025 12/31/2030 12/31/2029 12/31/2043 12/31/2039 12/31/2037 12/31/2043 12/31/2045 12/31/2047 12/31/2038 12/31/2042 12/31/2047First Increment2000 2000 2005 2004 2008 2014 2014 2018 2020 2022 2023 2023 2022Anticipated Last IncrementDecember 2025 December 2025 December 2030 December 2029 December 2043 December 2039 December 2039 December 2043 December 2045 December 2046 December 2038 December 2042 December 2047Current ObligationsBest Buy PAYGO & Richfield Sr Housing(TCCH) PAYGOPAYGO Notes A & BCity Bella PAYGO NoteIFL(ILN TIF District & HRA General Acct), 2012B G.O. TIF Ref BdsIFL to General Fund; CPII Dev. PAYGO NotePAYGO Notes A & B, IFLs to HRA General FundPAYGO Master Developer Note & Secondary Note BIFL to Non Tax Increment Account & Mesaba Capital Dev LLC PAYGOIFL to Non Tax Increment Account & Chamberlain Apartments LLS PAYGOPAYGO Note to Cedar Point Investments, LLC & IFL to Non Tax Increment AccountIFL to General FundIFL to General FundPAYGO Note to Richfield Property Holdings, LLC & IFL to General Fund 5Impact of Decertified TIF DistrictsCity of RichfieldProjected Additional Tax Levy Dollars As A Result of DECERTIFED TIF DistrictsTIF District Decertifies 2024 2025 2026 2027 2028 2029 2030 2031 2032Lyndale Gateway / Interchange West 12/31/2025 1,154,602 (2)Urban Village 12/31/2025 861,933 City Bella 12/31/2030670,941 Lyndale Gateway West (Kensington Park) 12/31/2029333,659 Total Annual Captured Net Tax Capacity Returned to Tax Rolls - - 2,016,535 - - - 333,659 670,941 - City Tax Rate for Taxes Payable in 2024 (1)53.553%Estimated Additional Annual Tax Levy Available (1)-$ -$ 1,079,915$ -$ -$ -$ 178,684$ 359,309$ -$ (1) - Assumptions:- Calculates additional dollars the City could levy and still maintain the same tax rate as Pay 2024.- Assumes no change in existing tax base from prior year- Assumes no change in the Fiscal Disparities Distribution Dollars from Pay 2024(2) - Notes: - The value for this District reflects the final value per the stipulation of $69M for the Best Buy portion of the District. Projected 6Outstanding ObligationsHighlights• 1 bond remains2012B – done 2/1/25• PAYGO NotesRisk is on the developer• Interfund LoansCovers early AdminPay for project costsRisk is on City/HRALyndale Gateway / Interchange West Richfield Sr. Housing PAYGO NoteBest Buy PAYGO NoteUrban Village Note B PAYGO NoteCity Bella City Bella PAYGO NoteLyndale Gateway West (Kensington Park) 2012B Taxable TIF Refunding BondsInterfund Loan - From ILNInterfund Loan - From HRA General FundInterfund Loan - From HRA Development FundCedar Avenue (Rya) CPII Development PAYGO NoteRya PAYGO Note2010-1 Woodlake Housing PAYGO Note ALyndale Gardens Master PAYGO NoteSecondary PAYGO Note (Henley)2014-1 RM Senior Living Richfield (Havenwood) RM Senior Housing PAYGO Note2017-1 Chamberlain Chamberlain Apartments PAYGO Note2018-1 Cedar Pointe Townhomes - RF 64 Cedar Point PAYGO Note2020-2 Emi (101 66th St E) Interfund Loan - From HRA General Fund2020-3 Lynk65 (Lynvue) Interfund Loan - From HRA General FundNote A PAYGO Note2020-1 Henley II (Riley) Richfield Property Holdings, LLC PAYGO Note1281 / 12824,104,944 6,153,162 12961280Summary of Outstanding Non-Pooled Debt Obligations as of 10/1/2024TIF No. District Name Obligation Outstanding10,622,304 12851286260,000 1287,1288129410,852 129517,268 1293805,856 1,364,576 590,800 2,025,987 3,836,362 57,850,839 13,803,987 1,100,000 533,913 85,613 1289611,205 12902,659,428 12912,400,000 12927,470,554 7• Best Buy requested the Minimum Assessment Agreement (MMA) be amended for 2024 and terminated for 2025. MMA remains for 2024 market value of $118.5 millionEstimated MV for 2025 is $69 millionTIF estimate of $801,349. Decrease of $781,133 from Pay 2024:–Best Buy PAYGO payment of $585,850 (75% reduction)–HRA Admin / Pooling of $195,283Best Buy 8• Owner-occupied housing TIF districtRequired that at least 95% of the units be purchased and occupied by persons with family income less than or equal to 100-115% area median income• 39 parcels were removed in 2023 to keep District in compliance with Statutory income requirements32 units remain in District2018-1 TIF District: RF 64 9• Redevelopment TIF certified March 16, 2021Five-year Rule: March 16, 2026• Terminated Agreement with Developer for non-performanceDecertify TIF District; orKeep District open for incurred expenses and obligation by March 16, 20262020-2: Emi 10• Unobligated TIF may be used to redevelop sites or build affordable housing not located in a TIF District• 3 Districts identifiedLyndale Gateway / Interchange WestUrban VillageCity Bella• 3 Pooling Options Special Legislation for 10% pooling to Housing Trust Fund Temporary Legislation for Spending Plans25% Regular PoolingPooling Opportunities 11• 2021 Special LegislationDesignate an additional 10% for affordable housingTransfer this additional 10% out of TIF funds to Housing Trust Fund$750,000 transferred in 2022Funds available now, can be transferred anytime through December 31, 2026Special Legislation: 10% to Housing Trust FundYearLyndale Gateway / Interchange West DistrictUrban Village TIF DistrictCity Bella TIF DistrictTOTAL2022 250,000$ 250,000$ 250,000$ 750,000$ 2023 - - - - 2024 - - - - 2025 - - - - 2026 - - TOTAL 250,000$ 250,000$ 250,000$ 750,000$ 12• TIF Authorities can use unobligated tax increment to help stimulate private developmentSpending Plan adopted December 13, 2022Funds transferred to a new fund Funds must be spent by December 31, 2025Unspent increment transferred back to TIF Fund(s)Temporary Spending Authority: Ends 12/2025YearLyndale Gateway / Interchange West DistrictUrban Village TIF DistrictCity Bella TIF DistrictTOTAL2022 3,145,000$ 760,000$ 465,000$ 4,370,000$ TOTAL 3,145,000$ 760,000$ 465,000$ 4,370,000$ 13• Public Redevelopment CostsSpent within Richfield Redevelopment Project Area (City limits)Includes up to 10% for Administrative costsMust meet criteria for “TIF eligible” of Pooled DistrictOther redevelopment districts can also participate25% Regular PoolingYearLyndale Gateway / Interchange West DistrictUrban Village TIF DistrictCity Bella TIF DistrictTOTAL2022 - - - - 2023 1,200,000 195,688 140,381 1,536,069 2024 1,200,000 198,013 124,526 1,522,539 2025 1,024,801 179,708 124,527 1,329,036 2026 - - 124,526 124,526 2027 - - 124,527 124,527 2028 - - 124,526 124,526 2029 - - 124,527 124,527 2030 - - 868,137 868,137 TOTAL 3,424,801$ 573,409$ 1,755,674$ 5,753,884$ 14Housing Districts and Affordable Housing• Affordable Criteria20% of units at 50% or less of median income40% of units at 60% or less of median incomeRental projects remain affordable for life of TIF districtsOwner-occupied affordable for initial sale• No limit - Considered “In-District”• 2 Districts with future potential2010-1 Woodlake Housing: $3.3M by 2039$150,000/year until PAYGO Note paid in 2035; $250,000/year until decertification2017-1 The Chamberlain: $8.7M by 2045$0/year until PAYGO Note is paid in 2036; $875,000/year until decertification 15• Every parcel must have qualifying activityCompliance: 4-Year RuleFour-Year Rule DeadlineTIF DistrictMay 20232018-1 Cedar Pointe Townhomes – RF64March 20252020-2: Emi (101 – 66thStreet E.)March 20252020-3: Lynk 65 (Lynvue)July 20252020-1: Henley II (Riley) 16• Districts must have an obligationCompliance: 5-Year RuleFive-Year Rule DeadlineTIF DistrictMarch 20262020-2: Emi (101 – 66thStreet E.)March 20262020-3: Lynk 65 (Lynvue) 17• Statute allows for up to 10% of revenues or expenses for administrative costsDepends on when district was establishedIncludes staff time, legal expenses, financial advisory expenses, publication and reporting expensesStaff time must be documented10% limit must be met when district decertifiesNot an annual calculationCannot take 10% “off the top”Administrative Expenses 18• All districts on track and in complianceNo budget modifications recommended at this time• Looking AheadMarket value for Best Buy will decrease for Pay 2025Affordable housing opportunities available now and in the futurePooling and In-District opportunitiesFindings & Recommendations 19AQ& AGENDA SECTION:Consent Calendar AGENDA ITEM #3.A. STAFF REPORT NO. 20 HOUSING AND REDEVELOPMENT AUTHORITY MEETING 10/21/2024 Julie Urban, Asst. Community Development DirectorREPORT PREPARED BY: EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director 10/16/2024 ITEM FOR COUNCIL CONSIDERATION: Consideration of the adoption of a resolution approving Assignments of the Contract for Private Development and Tax Increment Financing Note relating to the sale of the Rya Apartments. EXECUTIVE SUMMARY: The Housing and Redevelopment Authority (HRA) approved a Contract for Private Development (Contract) in 2018 for the construction of the Rya Apartments (6300 and 6400 Richfield Parkway) as part of the Cedar Point II development. The Contract provides tax increment to the project in the form of a $4,305,200 Pay as You Go Tax Increment Financing Note (TIF Note). The current owner, Schafer Richardson (Owner), is in the process of selling the property to Timberland Partners, doing business as TPAF IV Turtle Cover, LLC (Buyer), and is asking the HRA to approve an Assignment and Assumption of the Contract and the TIF Note. In addition, the Buyer's lender is requiring approval of a Collateral Assignment of the TIF Note and Contract to the lender to secure the principal loan. The terms of the Contract will remain in effect. The HRA's Attorney will review and approve the final form of all agreements. RECOMMENDED ACTION: By motion: Adopt a resolution approving the following documents related to the sale of the Rya Apartments from Rya Apartments, LLC to TPAF IV Turtle Cove, LLC,: 1.Assignment and Assumption Agreement; 2.Assignment of the Tax Increment Financing Note; and 3.Collateral Assignment of Tax Increment Financing Note, and Development Agreement. BASIS OF RECOMMENDATION: A.HISTORICAL CONTEXT The HRA entered into a Contract for Private Development of the apartment portion of the Cedar Point II redevelopment project on September 17, 2018. The HRA approved an amendment to the Contract on October 19, 2020, and an Assignment and Assumption of the Contract upon the sale of the apartments to Schafer Richardson (Rya Apartments, LLC) on March 11, 2021. Construction of the buildings was completed in 2021. Schafer Richardson is now planning to sell the buildings to TPAF IV Turtle Cover, LLC. B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS The project furthers the desired outcome of the Strategic Plan to create a diversified tax base. Ten percent of the tax increment generated by the project is contributed to the HRA's Housing and Redevelopment Fund, which is used to support housing and redevelopment activities in the community, including affordable housing. C .P OL IC IE S (resolutions, ordinances, regulations, statutes, exc): Under the terms of the C ontract, the C ontract and TIF Note may be assigned to a different entity as long as all terms remain in force. D .C R IT IC AL T IMIN G IS S U E S: C losing on the sale is expected to occur on November 12. E .F IN AN C IAL IMPAC T: There is no additional financial impact to the HRA with the sale. F.L E GAL C ON S ID E R AT ION: The HRA retains its rights under the C ontract. The HRA A ttorney will approve the final form of all documents to be executed by the HRA C hair and E xecutive D irector. ALTE R N AT IV E R E C O MME N D ATIO N(S): Deny the request for any or all of the requested items. 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 A ssignment and A ssumption C ontract/A greement A ssignment of TIF Note C ontract/A greement C ollateral A ssignment of TIF Note and D evelopment A greement C ontract/A greement HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. 1490 RESOLUTION APPROVING ASSIGNMENT AGREEMENTS RELATED TO THE RYA AT RF64 DEVELOPMENT WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) entered into a Contract for Private Development, dated September 17, 2018, with NHH Companies L.L.C., a Minnesota limited liability company (“NHH”), as assigned by NHH to the Assignor pursuant to an Assignment of Contract for Private Development, dated January 15, 2019, as amended by the First Amendment to Contract for Private Development, dated September 16, 2019, between the Authority and CPII Development LLC, a Minnesota limited liability company (“CPII Development”), as amended by the Second Amendment to Contract for Private Development, dated October 19, 2020, between the Authority and CPII Development, and as assigned by CPII Development to Rya Apartments, LLC, a Minnesota limited liability company (the “Assignor”), pursuant to the Assignment and Assumption Agreement, dated March 11, 2021 (collectively, the “Development Agreement”), between the Authority, CPII Development, and the Assignor; and WHEREAS, pursuant to the Development Agreement, the “Developer” agreed to acquire property within the Cedar Avenue Tax Increment Financing District (the “TIF District”), a redevelopment district within the Richfield Redevelopment Project, from the Authority, which is legally described in the Development Agreement, and construct a development known as Rya at RF64 which will include (i) multifamily housing with approximately 237 market-rate units; (ii) a parking ramp with approximately 188 spaces; and (iii) necessary public infrastructure, including streets and utilities (collectively, the “Minimum Improvements”); and WHEREAS, the Authority issued the Tax Increment Limited Revenue Note, Series 2023 (the “TIF Note”), dated August 1, 2023, in the original aggregate principal amount of $4,305,200, to the Assignor, to reimburse the Assignor for certain Public Redevelopment Costs (as defined in the Development Agreement) associated with the Minimum Improvements; and WHEREAS, the Assignor intends to assign its rights and obligations as the “Developer” under the Development Agreement and its interest in and rights to the TIF Note to TPAF IV Turtle Cove, LLC, a Delaware limited liability company (the “Assignee”); and WHEREAS, Northmarq Capital Finance, L.L.C., a Nebraska limited liability company (the “Lender”), has agreed to provide a mortgage loan to the Assignee (the “Loan”) and has required that the Assignee provide a collateral assignment of the Development Agreement to the Lender and that the Assignee redirect the payments of the TIF Note directly to the Lender; and WHEREAS, there have been presented to the Board of Commissioners of the Authority (the “Board”) forms of the following agreements: (i) an Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”) between the Authority, the Assignor, and the Assignee, pursuant to which the Assignor will assign to the Assignee, and the Assignee will assume, the Assignor’s rights and obligations under the Development Agreement; (ii) an Assignment of TIF Note (the “Assignment of TIF Note”) between the Assignor and the Assignee and acknowledged and consented to by the Authority, pursuant to which the Assignor will assign its 2 interest in and rights to the TIF Note to the Assignee; (iii) a Collateral Assignment of Tax Increment Note and Redevelopment Agreement (the “Collateral Assignment”) between the Assignee and the Lender, which provides for a collateral assignment of the Development Agreement to the Lender and the redirection of payments under the TIF Note directly to the Lender; and (iv) a Consent to Collateral Assignment of Tax Increment Note and Redevelopment Agreement (the “Consent to Collateral Assignment”) by the Authority in favor of the Lender, which provides the Authority’s consent to the Collateral Assignment; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: Section 1. Approvals. 1.01. The Board hereby consents to the assumption by the Assignee of the rights and obligations of the Assignor under the Development Agreement, and the Assignee shall be the developer under the Development Agreement (the “Developer”). 1.02. The Assignment and Assumption Agreement, the Assignment of TIF Note, and the Consent to Collateral Assignment (collectively, the “Authority Agreements”) 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 Agreements 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. 1.03. This resolution shall be in full force and effect upon its adoption. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of October, 2024. Erin Vrieze Daniels, Chair Sean Hayford Oleary, Secretary RC125-366 (JAE) 980504v2 ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, made as of ____________, 2024 (the “Agreement”), is between RYA APARTMENTS, LLC, a Minnesota limited liability company (the “Assignor”), TPAF IV TURTLE COVE, LLC, a Delaware limited liability company (the “Assignee”), and the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic of the State of Minnesota (the “Authority”). RECITALS WHEREAS, the Authority has established the Cedar Avenue Tax Increment Financing District (the “TIF District”), a redevelopment district within the Richfield Redevelopment Project (the “Redevelopment Project”) in the City of Richfield, Minnesota (the “City”), pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended, and Laws of Minnesota 2005, Chapter 152, Article 2, Section 25, as amended by Laws of Minnesota 2017, 1st Special Session, Chapter 1, Article 6, Section 18, in order to facilitate redevelopment of certain property in the Redevelopment Project and promote the development of affordable housing within the City; and WHEREAS, the Authority entered into a Contract for Private Development, dated September 17, 2018, with NHH Companies L.L.C., a Minnesota limited liability company (“NHH”), as assigned by NHH to CPII Development LLC, a Minnesota limited liability company (“CPII Development”) pursuant to an Assignment of Contract for Private Development, dated January 15, 2019, as amended by the First Amendment to Contract for Private Development, dated September 16, 2019, between the Authority and CPII Development, as amended by the Second Amendment to Contract for Private Development, dated October 19, 2020, between the Authority and CPII Development, and as assigned by CPII Development to the Assignor pursuant to the Assignment and Assumption Agreement, dated March 11, 2021 (collectively, the “Development Agreement”), between the Authority, CPII Development, and the Assignor; and WHEREAS, pursuant to the Development Agreement, the “Developer” agreed to acquire property within the TIF District from the Authority, which is legally described in EXHIBIT A attached h ereto, and construct a development which will include (i) multifamily housing with approximately 237 market-rate units; (ii) a parking ramp with approximately 188 spaces; and (iii) necessary public infrastructure, including streets and utilities; and WHEREAS, the Assignor desires to assign to the Assignee all of its interest in and its rights and obligations under the Development Agreement as of the date hereof, and the Assignee desires to assume the Assignor’s interest in and rights and obligations as the “Developer” under the Development Agreement from and after the date hereof, all as more particularly set forth in this Agreement. 2 NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Definitions. All capitalized terms not defined herein shall have the meanings given such terms in the Development Agreement. 2. Assignment and Assumption of Development Agreement. Section 8.2 of the Contract allows the Assignor to assign its rights and duties under the Development Agreement to another entity if: (a) the proposed transferee has the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in the Development Agreement by the Assignor; and (b) any proposed transferee expressly assumes all of the obligations of the Assignee under the Development Agreement from and after the date hereof and agrees to be subject to all the conditions and restrictions to which the Assignor is subject. The Assignor hereby assigns to the Assignee all of its interest in the Development Agreement and its rights and obligations under the Development Agreement as of the date hereof. The Assignee hereby accepts such rights and assumes such obligations from and after the date hereof, subject to the terms of this Agreement. The Authority acknowledges and consents to such assignment. 3. Covenants of the Assignee. The Assignee expressly assumes all of the obligations, rights and interests of the Assignor as the “Developer” under the Development Agreement from and after the date hereof, and the Assignee agrees to be subject to all the conditions and restrictions to which the Assignor is subject under the Development Agreement. 4. Release of Assignor. This Agreement shall be deemed to release and discharge the Assignor from any obligations of the “Developer” under the Development Agreement as of the date hereof, such obligations having been assumed by the Assignee from and after the date hereof. 5. Assignee Address. For purposes of notice under the Development Agreement, the Assignee’s address is: TPAF IV TURTLE COVE, LLC c/o Timberland Partners, Inc. 8500 Normandale Lake Blvd., Suite 700 Bloomington, Minnesota 55437 6. Governing Law. It is agreed that this Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Minnesota. 7. Entirety of Agreement. This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement. 8. Modification. Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party. 9. Execution in Counterparts. This Agreement may be executed, acknowledged and delivered in any number of counterparts and each of such counterparts shall constitute an original but all of which together shall constitute one agreement. 3 (The remainder of this page is intentionally left blank.) S-1 IN WITNESS WHEREOF, the Assignor, the Assignee, and the Authority have caused this Assignment and Assumption Agreement to be executed as of the date and year first written above. ASSIGNOR: RYA APARTMENTS, LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF _________ ) The foregoing instrument was acknowledged before me this _________________, 2024, by ______________________________, the _____________________________ of Rya Apartments, LLC, a Minnesota limited liability company, on behalf of the Assignor. Notary Public This instrument drafted by: Kennedy & Graven, Chartered (JAE) 150 South Fifth Street, Suite 700 Minneapolis, MN 55402-1299 612-337-9300 S-2 Execution page of the Assignee to the Assignment and Assumption Agreement, dated as of the date and year first written above. ASSIGNEE: TPAF IV TURTLE COVE, LLC By: Timberland Partners Apartment Fund IV, LLC, a Delaware limited liability company Its: Sole Member By Name Its STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _________________, 2024, by ______________________________, the _____________________________ of Timberland Partners Apartment Fund IV, LLC, a Delaware limited liability company, as the Sole Member of TPAF IV Turtle Cove, LLC, a Delaware limited liability company, on behalf of the Assignee. Notary Public S-3 Execution page of the Authority to the Assignment and Assumption Agreement, dated as of the date and year first written above. AUTHORITY: 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 _________________, 2024, 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 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 _________________, 2024, 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 of the State of Minnesota, on behalf of the Authority. Notary Public A-1 EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY Lots 1 and 2, Block 1, RF64, Hennepin County, Minnesota RC125-366 (JAE) 980372v1 29952628v3 ASSIGNMENT OF TIF NOTE THIS ASSIGNMENT OF TIF NOTE, made as of ____________, 2024 (the “Assignment”), is by RYA APARTMENTS, LLC, a Minnesota limited liability company (the “Assignor”), in favor of TPAF IV Turtle Cove, LLC, a Delaware limited liability company (the “Assignee”), and is acknowledged and consented to by the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic of the State of Minnesota (the “Authority”). RECITALS WHEREAS, the Authority has established the Cedar Avenue Tax Increment Financing District (the “TIF District”), a redevelopment district within the Richfield Redevelopment Project (the “Redevelopment Project”) in the City of Richfield, Minnesota (the “City”), pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended, and Laws of Minnesota 2005, Chapter 152, Article 2, Section 25, as amended by Laws of Minnesota 2017, 1st Special Session, Chapter 1, Article 6, Section 18, in order to facilitate redevelopment of certain property in the Redevelopment Project and promote the development of affordable housing within the City; and WHEREAS, the Authority entered into a Contract for Private Development, dated September 17, 2018, with NHH Companies L.L.C., a Minnesota limited liability company (“NHH”), as assigned by NHH to CPII Development LLC, a Minnesota limited liability company (“CPII Development”) pursuant to an Assignment of Contract for Private Development, dated January 15, 2019, as amended by the First Amendment to Contract for Private Development, dated September 16, 2019, between the Authority and CPII Development, as amended by the Second Amendment to Contract for Private Development, dated October 19, 2020, between the Authority and CPII Development, and as assigned by CPII Development to the Assignor pursuant to the Assignment and Assumption Agreement, dated March 11, 2021, between the Authority, CPII Development, and the Assignor, and as further assigned by the Assignor to the Assignee pursuant to an Assignment and Assumption Agreement of even date herewith (collectively, the “Development Agreement”), between the Authority, the Assignor, and the Assignee; and WHEREAS, the Authority issued the Tax Increment Limited Revenue Note, Series 2023 (the “TIF Note”), dated August 1, 2023, in the original aggregate principal amount of $4,305,200, to the Assignor, to reimburse the Assignor for certain Public Redevelopment Costs; and WHEREAS, the Assignor wishes to assign its interest in and rights to the TIF Note to the Assignee; and WHEREAS, on the date hereof, the Assignee has executed and delivered an investment letter to the Authority; and NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Definitions. All capitalized terms not defined herein shall have the meanings given such terms in the Development Agreement. 2. Assignment of TIF Note. The Assignor hereby assigns its interest in and rights to the TIF Note to the Assignee. 2 3. Governing Law. It is agreed that this Assignment shall be governed by, construed and enforced in accordance with the laws of the State of Minnesota. 4. Entirety of Assignment. This Assignment shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Assignment shall not be binding upon either party except to the extent incorporated in this Assignment. 5. Modification. Any modification of this Assignment or additional obligation assumed by either party in connection with this Assignment shall be binding only if placed in writing and signed by each party or an authorized representative of each party. 6. Execution in Counterparts. This Assignment may be executed, acknowledged and delivered in any number of counterparts and each of such counterparts shall constitute an original but all of which together shall constitute one agreement. (The remainder of this page is intentionally left blank.) S-1 IN WITNESS WHEREOF, the Assignor, the Assignee, and the Authority have caused this Assignment of TIF Note to be executed as of the date and year first written above. ASSIGNOR: RYA APARTMENTS, LLC By Its This instrument drafted by: Kennedy & Graven, Chartered (JAE) 150 South Fifth Street, Suite 700 Minneapolis, MN 55402-1299 612-337-9300 S-2 Execution page of the Assignee to the Assignment of TIF Note, dated as of the date and year first written above. ASSIGNEE: TPAF IV TURTLE COVE, LLC By: Timberland Partners Apartment Fund IV, LLC, a Delaware limited liability company Its: Sole Member By Name Its S-3 The undersigned, on behalf of the Authority, acknowledge and consent to this Assignment of TIF Note, dated as of the date and year first written above. AUTHORITY: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chair By Its Executive Director RC125-366 (JAE) 380447v1 29952630v3 Consent to Collateral Assignment of Tax Increment Note and Redevelopment Agreement Form 6418 Page 1 Fannie Mae 05-24 © 2024 Fannie Mae CONSENT TO COLLATERAL ASSIGNMENT OF TAX INCREMENT NOTE AND REDEVELOPMENT AGREEMENT NORTHMARQ CAPITAL FINANCE, L.L.C., a Nebraska limited liability company (“Lender”) has agreed, subject to the satisfaction of certain terms and conditions, to make a loan in the original principal amount of $____TBD______ (the “Mortgage Loan”) to TPAF IV TURTLE COVE, LLC, a Delaware limited liability company (“Borrower”), which loan is or will be secured by a lien on that certain multifamily residential apartment project located at 6400 Richfield Pkwy, Minneapolis, Minnesota 55423 (the “Mortgaged Property”). Lender is requiring this Consent to Collateral Assignment of Tax Increment Note and Redevelopment Agreement (the “Consent”) as a condition to making the Mortgage Loan. 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”), hereby consents to the collateral assignment by Borrower of (1) that certain Contract for Private Development dated September 17, 2018, and recorded November 24, 2020, as Document No. 10866101, with NHH Companies L.L.C., a Minnesota limited liability company (“NHH”), as assigned by NHH to CPII Development LLC, a Minnesota limited liability company (“CPII Development”), pursuant to an Assignment of Contract for Private Development, dated January 15, 2019, and recorded November 24, 2024 as Document No. 10866102, as amended by the First Amendment to Contract for Private Development, dated September 16, 2019, and recorded November 24, 2020, as Document No. 10866103, between the Authority and CPII Development, as amended by the Second Amendment to Contract for Private Development, dated October 19, 2020, and recorded November 24, 2024, as Document No. 10866104, between the Authority and CPII Development, as assigned by CPII Development to Rya Apartments, LLC, a Minnesota limited liability company (“Rya”), pursuant to the Assignment and Assumption Agreement, dated March 11, 2021, and recorded March 15, 2021, as Document No. 10931670, and as assigned by Rya to Borrower pursuant to the Assignment and Assumption Agreement dated as of the date hereof (collectively, the “Redevelopment Agreement”) and (2) that certain Tax Increment Limited Revenue Note (Series 2023) in the original principal amount of $4,305,200.00 in favor of Rya, as payee and holder, from the Authority, as Maker, dated as of February 21, 2023, as assigned by Rya to Borrower pursuant to the Assignment of TIF Note dated as of the date hereof (collectively, the “TIF Note”), pursuant to the terms of that certain Collateral Assignment of Tax Increment Note and Redevelopment Agreement from Borrower to Lender, dated as of October ___, 2024 (the “Assignment”), for the purpose of (i) securing the Mortgage Loan, (ii) assigning the Redevelopment Agreement to Lender as collateral for the Mortgage Loan as provided in the Assignment, and (iii) redirecting the payments under the TIF Note directly to Lender in accordance with the Assignment after Lender’s written demand has been delivered to the Authority in the manner set forth in the Redevelopment Agreement. Until such time that Lender succeeds to Borrower’s interest under the Redevelopment Agreement and TIF Note pursuant to the terms of the Assignment, the Authority agrees that Lender shall not be deemed to have assumed any of the obligations or liabilities under the Redevelopment Agreement or TIF Note, nor shall Lender be liable to the Authority by reason of any default by any party under the Redevelopment Agreement or TIF Note. At such time that Lender succeeds to Borrower’s interest under the Redevelopment Agreement, Lender’s liability shall be strictly limited to acts and Consent to Collateral Assignment of Tax Increment Note and Redevelopment Agreement Form 6418 Page 2 Fannie Mae 05-24 © 2024 Fannie Mae omissions of Lender occurring during the period of ownership and operation of the Mortgaged Property and the improvements located thereon by Lender. (1) The Authority Representations and Warranties. The Authority hereby represents and warrants to Lender that: (a) it has the right to exercise and deliver this Consent under the terms of the Redevelopment Agreement and the TIF Note. The execution of this Consent and performance and observance of its terms have been duly authorized by necessary company action and do not contravene or violate any provision of the Authority’s organizational documents; (b) to the knowledge of the Authority, Borrower has made no prior assignments of the TIF Note or Redevelopment Agreement; (c) the Redevelopment Agreement and the TIF Note are in full force and effect, subject to no defenses, setoffs or counterclaims; and there exists no event, condition or occurrence that would cause the Redevelopment Agreement or the TIF Note to be subject to any defenses, setoffs or counterclaims; (d) the Authority has performed all of its obligations under the Redevelopment Agreement and the TIF Note and there exists no event, condition or occurrence which constitutes, or which with notice and/or the passage of time would constitute, a breach of or default under any terms or conditions of the Redevelopment Agreement or the TIF Note; and (e) the Authority has not delivered any notice to Borrower of the Authority’s intention to prepay all or any portion of the TIF Note in advance of the r egularly scheduled payments thereunder. (2) The Authority Covenants Regarding Collateral Assignment of Tax Increment Note And Redevelopment Agreement. The Authority hereby covenants and agrees: (a) to faithfully observe and perform all of the obligations and agreements of the TIF Note and Redevelopment Agreement, if any; (b) not to do any act which would destroy or impair the security afforded to Lender under the Assignment; (c) to simultaneously deliver to Lender a copy of each notice delivered by the Authority to Borrower pursuant to the Redevelopment Agreement and the TIF Note, including any notice relating to any default, alleged default, or potential default of Borrower, under and pursuant to the Redevelopment Agreement and the TIF Note; and Consent to Collateral Assignment of Tax Increment Note and Redevelopment Agreement Form 6418 Page 3 Fannie Mae 05-24 © 2024 Fannie Mae (d) not permit or consent to the amendment, modification, cancellation or surrender of the Redevelopment Agreement or the TIF Note without the prior written consent of Lender. The Authority acknowledges and agrees that (i) the Authority is executing this Consent to induce Lender to make (A) the Mortgage Loan and (B) approve of the Redevelopment Agreement and TIF Note as additional security for the Mortgage Loan, and (ii) Lender will rely on the representations and agreements made by the Authority herein in connection with Lender’s agreement to make the Mortgage Loan and the Authority agrees that Lender may so rely on such representations and agreements. [SIGNATURES CONTINUE ON NEXT PAGE] Consent to Collateral Assignment of Tax Increment Note and Redevelopment Agreement Form 6418 Page S-1 Fannie Mae 05-24 © 2024 Fannie Mae TIF Project Name: Rya at RF64 Executed October ___, 2024. AUTHORITY: 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 By: Name: Title: Chair By: Name: Title: Executive Director 29949807v4