042125 HRAREGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS
APRIL 21, 2025
7:00 PM
Call to Order
Open Forum
Please refer to the HRA agenda and minutes web page for additional ways to submit comments.
Appr oval of t he M inut es
Approval of the minutes of the Regular Housing and Redevelopment Authority meeting of March 17, 2025.
AGENDA APPROVAL
1.Approval of the Agenda
2.Consent Calendar contains several separate items which are acted upon by the HRA in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further HRA action on these items is necessary. However, any HRA
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for HRA discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A.Consideration of an amended Contract for Private Redevelopment with Hempel Real Estate providing
financial assistance toward the acquisition and preservation of three affordable rental communities.
Staff Report No. 10
3.Consideration of items, if any, removed from Consent Calendar
RESOLUTIONS
4.Consideration of a resolution authorizing submittal of two grant applications for environmental cleanup of
contaminated soils and asbestos at 6501 and 6525 Penn Avenue South.
Staff Report No. 11
HRA DISCUSSION ITEMS
5.HRA Discussion Items
EXECUTIVE DIRECTOR REPORT
6.Executive Director's Report
CLAIMS
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 AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
March 17, 2025
Chair Vrieze Daniels called the meeting to order at 7:00 PM in the Council Chambers.
HRA Members Erin Vrieze Daniels, Chair; Mary Supple; Sean Hayford Oleary; Gordon Hanson;
Present: John Young
HRA Members Absent: None
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant Community
Development Director; Michelle Friedrich, City Clerk
Chair Vrieze Daniels noted consideration of officers for the Richfield Housing Redevelopment Authority for
2025. Chair Vrieze Daniels noted in 2024 Commissioner Vrieze Daniels was Chair, Commissioner Hanson
was Vice Chair, and Commissioner Hayford Oleary was Secretary. The following commissioners were
nominated for the 2025 Housing and Redevelopment Authority officers:
Commissioner Hayford Oleary nominated Commission Chair Vrieze Daniels for Chair for 2025.
MOTION: made by Hayford Oleary, seconded by Supple.
Motion carried: 5-0
Commissioner Supple nominated Commission Vice Chair Hanson for Vice Chair for 2025.
MOTION: made by Supple, seconded by Young.
Motion carried: 5-0
Commissioner Young nominated Commissioner Hayford Oleary for Secretary for 2025.
MOTION: made by Young, seconded by Vrieze Daniels.
Motion carried: 5-0
OPEN FORUM
Chair Vrieze Daniels gave instructions on how to participate in the open forum, there were no participants.
APPROVAL OF THE MINUTES
MOTION: made by Hanson, seconded by Young to approve the minutes of the Regular Housing and
Redevelopment Authority meeting of February 18, 2025.
Motion carried: 5-0
CALL TO ORDER
HRA Meeting Minutes March 17, 2025
ITEM #1 PRESENTATIONS: 2024 HOUSING AND REDEVELOPMENT AUTHORITY AND
ECOMONIC DEVELOPMENT AUTHORITY YEAR IN REVIEW
Executive Director Poehlman and Assistant Community Director Urban presented the 2024 Year in Review
for the Housing Redevelopment Authority (HRA) and Economic Development Authority (EDA), highlighting
key accomplishments, challenges, and alignment with the City Council’s core values, vision, and mission.
The HRA and EDA Commissions thanked staff for the work they have completed.
ITEM #2 APPROVAL OF THE AGENDA
MOTION: made by Supple, seconded by Hayford Oleary to approve the agenda.
Motion carried: 5-0
ITEM #3 APPROVAL OF THE CONSENT CALENDAR
Executive Director Poehlman presented the consent calendar item.
A. Consider Resolutions designating official depositories for the Housing and Redevelopment
Authority for 2025, including the approval of collateral.
HRA RESOLUTION NO. 2025-1500
DESIGNATING CERTAIN FINANCIAL INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2025
MOTION: made Young, seconded by Hanson to adopt Consent Calendar item 2A, Resolution 2025-1500
Designating Certain Financial Institutions as Depositories for the Investment of Housing and
Redevelopment Authority of Richfield Funds in 2025. Staff Report No. 8.
Motion carried 5-0
HRA RESOLUTION NO. 2025-1501
DESIGNATING RESOLUTION DESIGNATING U.S. BANK A DEPOSITORY OF FUNDS OF THE
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 2025
MOTION: made Young, seconded by Hanson to adopt Consent Calendar item 2A, Resolution 2025-1501
Designating U.S. Bank a Depository of Funds of the Housing and Redevelopment Authority of Richfield
Funds in 2025. Staff Report No. 8.
Motion carried 5-0
HRA RESOLUTION NO. 2025-1502
DESIGNATING CERTAIN SAVING AND LOAN ASSOCIATIONS, BANKS AND CREDIT UNIONS AS
DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT AUTHORITY OF
RICHFIELD FUNDS IN 2025
MOTION: made Young, seconded by Hanson to adopt Consent Calendar item 2A, Resolution 2025-1502
Designating Certain Saving and Loan Associations, Banks, and Credit Unions as Depositories for the
Investment of Housing and Redevelopment Authority of Richfield Funds in 2025. Staff Report No. 8.
Motion carried 5-0
ITEM #4 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR
HRA Meeting Minutes March 17, 2025
None.
ITEM #5
RESOLUTIONS: CONSIDER THE ADOPTION OF RESOLUTION AMENDING THE
BYLAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY TO CLARIFY
SPECIAL MEETING PROCECURES
Executive Director Poehlman noted the amendment to the bylaws includes revisions within Article III –
Meetings, Section 3, and related to Special Meetings procedures. Executive Director Poehlman reviewed
proposed language and noted the amendment allows the executive director to call a special meeting, and
aligns the notification period with the statutory requirement to post special meetings at least three days in
advance of the special meeting.
The Commission and staff discussed the current Council agenda process and order of business, noting the
Commission agendas follow the same processes of order of the Council. Staff noted the order of business
for the Commission will reflect the Council order of business once Council has reviewed and approved a
new order of business. The Commission noted support of moving the Approval of the Agenda to be moved
to the top of the order of business.
HRA RESOLUTION NO. 1503 RESOLUTION AMENDING THE BYLAWS OF THE HOUSING AND
REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA
MOTION: made by Supple, seconded by Hayford Oleary to adopt a Resolution 2025-1503 Amending the
Bylaws of the Housing and Redevelopment Authority of the City of Richfield, Minnesota. Staff Report No. 9.
Motion carried: 5-0
ITEM #6 HRA DISCUSSION ITEMS
Commissioner Supple noted the Open Book Meeting with Hennepin County on April 14, 2025, at the City of
Richfield Municipal Center, Council Chambers.
ITEM #7 EXECUTIVE DIRECTOR’S REPORT
Executive Director Poehlman noted a $225,000 Trust Fund Match grant the City is applying to, and a Bring
it Home Minnesota application, and partnering with School District, in the Bring it Home Minnesota Program
for rent assistance.
Executive Director Poehlman noted the informational neighborhood meeting for the Luce Line food hall
proposal, with an overall positive acceptance of the proposal. Some concerns noted included performances
at the venue and how late the performances would last, landscaping questions, and parking challenges.
Executive Director Poehlman noted a possible land use application in April 2025 is the next step in the
process.
Staff and commissioners discussed updates to the Strongest Town Competition and noted voting is still
open and a recap of results would be available soon.
ITEM #8 CLAIMS
MOTION: made by Young, seconded by Supple that the following claims be approved:
HRA Meeting Minutes March 17, 2025
U.S. BANK 3/17/2025
HRA Checks #37209-37221 $374,527.11
Section 8 Checks #136566-136650 $228,202.77
TOTAL $602,729.88
Motion carried: 5-0
ITEM #9 ADJOURNMENT
This meeting was adjourned by unanimous consent at 7:31 p.m.
Date Approved: April 21, 2025
Erin Vrieze Daniels
HRA Chair
Michelle Friedrich Melissa Poehlman
City Clerk Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF REPORT NO. 10
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
4/21/2025
Julie Urban, Asst. Community Development DirectorREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW:
ITEM FOR COUNCIL CONSIDERATION:
Consideration of an amended Contract for Private Redevelopment with Hempel Real Estate providing
financial assistance toward the acquisition and preservation of three affordable rental communities.
EXECUTIVE SUMMARY:
On February 18, 2025, the Housing and Redevelopment Authority (HRA) approved a Contract for Private
Redevelopment (Contract) with Hempel Real Estate, dba Hempel Holdings, LLC (Developer), in which the
HRA agrees to provide the Developer with financial assistance toward the purchase of three affordable
Richfield apartment complexes: New Orleans Court, Richland Court, and Winton House (Properties).
Freddie Mac (Lender) and the NOAH Impact Fund (Equity Investor) are requesting some modifications to
the Contract and its related documents, which include a Declaration of Restrictive Covenants and a Note and
Mortgage. The primary change is that separate contracts are required for each of the three properties
and each property will be owned by a separate legal entity. The final per building amounts may be
adjusted slightly to meet the needs of the individual buildings. The terms and the total amount of
assistance are the same and all legal entities are owned by the Developer.
The Lender and Equity Investor are also requesting that the HRA Mortgage subordinate to the principal loan
and equity contribution, so the HRA is being asked to approve a Subordination Agreement. This is typical and
expected.
The remaining changes are administrative in nature and don't change the terms of the Contract or the deal.
Given the sensitive timing of the closing, staff recommends that the HRA authorize that any additional
administrative changes and final loan amounts be approved by the Executive Director and HRA Attorney. A
copy of the draft Contract with New Orleans Court is attached to the staff report. Once final language is
approved, identical contracts (except for legal name, property details, and loan amounts) will be prepared for
Richland Court and Winton House.
RECOMMENDED ACTION:
By Motion: Adopt a resolution approving the execution and delivery of Contracts for Private
Redevelopment and Declaration of Restrictive Covenants with three legal entities owning the
affordable rental communities of New Orleans Court, Richland Court, Winton House and approving a
Subordination Agreement.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Melissa Poehlman, Executive Director
04/17/2025
The Properties, containing a total of 236 units (current estimate of 477+ residents) are
located along 77th Street at Wentworth, and on 14th and Cedar Avenues. The Properties,
built in the 1960s, are considered NOAH properties. The buildings contain a mix of one,
two, and three bedroom units, and rent levels are considered affordable to households
earning between 50% and 60% Area Median Income (AMI).
On January 28, 2025, the City Council approved the use of the 4d tax status in exchange
for the preservation of affordability.
On February 18, 2025, the HRA approved a Contract for Private Redevelopment with the
Developer providing $1.77 million in financial assistance to the Properties.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
Preserving the City's NOAH apartment communities furthers the Strategic Plan goal to maintain
Richfield as an affordable place to live. The City's rental housing is also occupied by a significant
number of Black, Indigenous, and People of Color (BIPOC) residents and residents with lower
incomes. Investing in housing stability is an investment in the health and vitality of these communities.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
Minnesota Statutes 273.128 provides a property tax break for affordable rental properties under the
Low Income Rental Classification Program (LIRC), commonly referred to as the 4d Program.
Affordable rental properties are eligible for the 4d tax classification when a property
restricts at least 20% of the units at rents affordable at 60% of the AMI and when financial
assistance is provided by federal, state, or local government requiring these rent and income
restrictions. A Declaration of Restrictive Covenants must be filed in order for the property to be eligible
for the 4d classification.
D.CRITICAL TIMING ISSUES:
The Developer is planning to close on the Properties in May of this year.
E.FINANCIAL IMPACT:
Under the terms of the Contract for Private Redevelopment, the HRA agrees to provide $1.57 million in
funds from the Affordable Housing Trust Fund and $200,000 in Apartment Remodeling Program loans.
F.LEGAL CONSIDERATION:
A Declaration of Restrictive Covenants will be recorded against the Properties requiring
that all one and two bedroom units charge rents affordable at 60% AMI and three
bedroom units affordable at 70% AMI, and that units be restricted to households meeting
those income requirements. The limits will be required for 15 years. The Declaration will
also require that the Properties accept households using Section 8 and other local rental
assistance programs, to agree to meetings between property management and City staff,
and to regularly seek feedback from residents.
A Mortgage will be recorded against the Properties to secure, along with a Promissory Note, the HRA's
loan. The Mortgage will be in position behind the Developer's Lender and Equity Investor, which will be
confirmed by approval of the Subordination Agreement. The HRA Attorney and Executive Director will
approve any additional minor changes to these and other documents requested by the principal funders.
More substantive changes would be brought back to the HRA for consideration.
ALTERNATIVE RECOMMENDATION(S):
Decide not to approve three separate Contracts with Hemple.
PRINCIPAL PARTIES EXPECTED AT MEETING:
NA
ATTACHMENTS:
Description Type
Resolution Resolution Letter
Contract for Private Redevelopment Contract/Agreement
S ubordination A greement C ontract/A greement
RC125-402-1008022.v1
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING THE EXECUTION AND DELIVERY OF AMENDED
CONTRACTS FOR PRIVATE REDEVELOPMENT AND DECLARATION OF RESTRICTIVE
COVENANTS WITH OWNER OF NEW ORLEANS COURT
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) has recently learned that there are three naturally occurring
affordable housing (“NOAH”) properties up for sale in the City of Richfield (the “City”) and a
preservation buyer is interested in purchasing the properties; and
WHEREAS, the NOAH properties consist of the New Orleans Court Apartments and
Townhomes (located at 50 West 78th St), the Richland Court Apartments (located at 1300-1324
East 78th St), and the Winton House Apartments (located at 7500/7544 Cedar Ave); and
WHEREAS, the Authority proposes to work with Hempel Holdings, LLC, a Minnesota
limited liability company, or a subsidiary thereof (collectively, the “Redeveloper”), to preserve
and maintain the affordability of the three existing NOAH properties, and to that end the Board
of Commissioners of the Authority (the “Board”) approved the execution and delivery of a
Contract for Private Redevelopment with the Redeveloper at its meeting on February 18, 2025;
and
WHEREAS, the Board has been presented with a new Contract for Private
Redevelopment (the “Agreement”) between the Authority and the Redeveloper, which provides
for three separate Agreements to be filed against each property; and
WHEREAS, the Redeveloper’s lender and equity investor have requested administrative
changes to the Agreements; and
WHEREAS, the Redeveloper’s lender and equity investor have requested that the HRA
Subordinate its mortgage to the primary financing; and
WHEREAS, the Board has reviewed the Amended Agreements and the Declaration and
the Subordination Agreements and finds that the execution thereof by the Authority and
performance of the Authority’s obligations thereunder are in the best interest of the City and its
residents; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
1. The Agreements and the Declarations and Subordination Agreement presented to
the Board and on file with the staff of the Authority are hereby in all respects approved, subject to
modifications that do not alter the substance of the transaction and that are approved by the Chair
and Executive Director; provided that execution of such documents by such officials shall be
conclusive evidence of approval.
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RC125-402-1008022.v1
2. The Chair and Executive Director are hereby authorized to execute the Agreements
and the Declarations and the Subordination Agreement on behalf of the Authority and to carry out
the Authority’s obligations thereunder.
3. The Chair and the Executive Director are hereby also authorized to execute any
additional documents or certificates determined to be necessary by staff and counsel to the
Authority in order to carry out the intention of this resolution, the Agreements, and the Declarations.
4. 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 April, 2025.
Erin Vrieze Daniels, Chair
Sean Hayford Oleary, Secretary
4901-7905-1287.2
DRAFT
April ___, 2025
CONTRACT
FOR
PRIVATE REDEVELOPMENT
between
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF RICHFIELD, MINNESOTA
and
[OWNER OF NEW ORLEANS COURT]
Dated ____________, 2025
This document was drafted by:
Kutak Rock LLP (JAE)
60 South Sixth Street, Suite 3400
Minneapolis, Minnesota 55402
Telephone: 612-334-5000
i
4901-7905-1287.2
TABLE OF CONTENTS
Page
PREAMBLE ................................................................................................................................................... 1
ARTICLE I
Definitions
Section 1.1. Definitions ................................................................................................................................. 3
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority .............................................................................................. 5
Section 2.2. Representations by the Redeveloper ......................................................................................... 5
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Redevelopment Property ........................................................................................... 7
Section 3.2. Environmental Conditions ........................................................................................................ 7
Section 3.3. AHTF Loan ............................................................................................................................... 7
Section 3.4. Other Sources of Funding ......................................................................................................... 8
Section 3.5. Payment of Administrative Costs ............................................................................................. 8
Section 3.6. Records ...................................................................................................................................... 8
Section 3.7. Purpose of Assistance ............................................................................................................... 8
ARTICLE IV
Affordability Covenants
Section 4.1. Affordability Covenants ............................................................................................................ 9
Section 4.2. Affordable Housing Reporting ................................................................................................. 9
Section 4.3. Notice of Sale of Properties ...................................................................................................... 9
ARTICLE V
Insurance
Section 5.1. Insurance ................................................................................................................................. 10
ARTICLE VI
[Reserved]
ARTICLE VII
[Reserved]
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Redevelopment ...................................................................................... 14
Section 8.2. Redeveloper’s Transfer of Property and Assignment of Agreement ..................................... 14
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4901-7905-1287.2
Section 8.3. Release and Indemnification Covenants ................................................................................. 14
ARTICLE IX
Events of Default
Section 9.1. Events of Default ..................................................................................................................... 15
Section 9.2. Remedies on Default ............................................................................................................... 15
Section 9.3. Repayment of AHTF Loan ..................................................................................................... 16
Section 9.4. [Reserved] ............................................................................................................................... 16
Section 9.5. [Reserved] ............................................................................................................................... 16
Section 9.6. No Remedy Exclusive ............................................................................................................. 16
Section 9.7. No Additional Waiver Implied by One Waiver ...................................................................... 16
Section 9.8. Attorneys’ Fees and Costs....................................................................................................... 16
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable.............................. 17
Section 10.2. Equal Employment Opportunity ............................................................................................. 17
Section 10.3. Restrictions on Use ................................................................................................................. 17
Section 10.4. Provisions Not Merged With Deed ......................................................................................... 17
Section 10.5. Titles of Articles and Sections ................................................................................................ 17
Section 10.6. Notices and Demands ............................................................................................................. 17
Section 10.7. Counterparts ............................................................................................................................ 17
Section 10.8. Recording ................................................................................................................................ 18
Section 10.9. Amendment ............................................................................................................................. 18
Section 10.10. Interpretation; Concurrence .................................................................................................... 18
Section 10.10. Memorandum of Understanding ............................................................................................. 18
SIGNATURES ................................................................................................................................................ S-1
EXHIBIT A Redevelopment Property ....................................................................................................... A-1
EXHIBIT B Form of Declaration of Restrictive Covenants ..................................................................... B-1
EXHIBIT C Form of Promissory Note ...................................................................................................... C-1
EXHIBIT D Form of Mortgage ................................................................................................................. D-1
1
4901-7905-1287.2
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS CONTRACT FOR PRIVATE REDEVELOPMENT, made as of the ___ day of ________,
2025 (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 [OWNER OF NEW ORLEANS COURT], a ____________
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 development of affordable housing within the City, including preserving naturally
occurring affordable housing (“NOAH”) properties; and
WHEREAS, the Redeveloper proposes to acquire the following NOAH property (the “Properties”)
in the City and preserve and maintain the affordability of the Properties located on the property legally
described in EXHIBIT A attached hereto (collectively, the “Redevelopment Property”):
New Orleans Court Apartments and Townhomes are located at 50 West 78th Street in the
City, and consist of eleven separate structures containing 104 affordable rental apartment and
townhome units; prospective tenants will earn 60% AMI or less (3 BR Townhomes at 70% AMI
or less); the property includes 56 one bedroom, 24 two bedroom and 24 three bedroom units with
60 surface parking spaces and 24 garages; and
WHEREAS, in order to achieve the objectives of the redevelopment plan for the Redevelopment
Project and make the acquisition of the Properties economically feasible for the Redeveloper, the Authority is
prepared to provide funds from the City’s Affordable Housing Trust Fund to the Redeveloper for acquisition
costs; and
WHEREAS, the Redeveloper will agree to maintain certain affordability requirements for the
Properties pursuant to a Declaration of Restrictive Covenants of even date herewith (the “Declaration of
Restrictive Covenants”) between the Redeveloper and the Authority; and
WHEREAS, the Authority believes that the fulfillment generally of this Agreement is in the vital and
best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the
public purposes and provisions of the applicable State of Minnesota and local laws and requirements under
which the Redevelopment Project has been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
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4901-7905-1287.2
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:
“Affordable Housing Trust Fund” means the fund established by the City and administered by the
Authority to be used for making grants, loans, and loan guarantees for acquisition, development,
rehabilitation or financing of housing or providing matches for other federal, state, or private resources for
housing projects.
“Agreement” means this Contract for Private Redevelopment, as the same may be from time to time
modified, amended, or supplemented.
“AHTF Loan” means the deferred loan from the Affordable Housing Trust Fund in the amount of up
to $696,900 to be made by the Authority to the Redeveloper pursuant to the terms of this Agreement.
“Area Median Income” means the area median income of the Minneapolis-St. Paul metropolitan
statistical area as established from time to time by HUD.
“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.
“City” means the City of Richfield, Minnesota.
“City Council” means the City Council of the City.
“Closing” has the meaning given such term in Section 3.2 hereof.
“County” means Hennepin County, Minnesota.
“Declaration of Restrictive Covenants” means the Declaration of Restrictive Covenants between the
Authority and the Redeveloper in substantially the form set forth in EXHIBIT B attached hereto.
“EP Member” means NOAH Pool II LLC, a Minnesota limited liability company, the equity partner
member of the Redeveloper.
“Event of Default” means an action by the Redeveloper listed in Article IX hereof.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
“HUD” means the Department of Housing and Urban Development.
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4901-7905-1287.2
“Member Control Agreement and Operating Agreement” means the Member Control Agreement
and Operating Agreement of the Redeveloper dated of even date herewith entered into by and between the
OP Member and EP Member, together with all amendments or modifications thereto.”
“Memorandum of Understanding” means the Memorandum of Understanding, dated
January 21, 2025, between the Authority and the Redeveloper.
“Mortgage” means the Mortgage in substantially the form attached hereto as EXHIBIT D.
“NOAH” means naturally occurring affordable housing.
“OP Member” means ____________________, a Minnesota limited liability company, the operating
partner member of the Redeveloper.
“Promissory Note” means the Promissory Note in substantially the form attached hereto as
EXHIBIT C.
“Properties” means the NOAH property on the Redevelopment Property to be acquired by the
Redeveloper and described in the recitals hereto commonly known as the New Orleans Court Apartments and
Townhomes, located at 50 West 78th Street in the City, and consist of eleven separate structures containing
104 affordable rental apartment and townhome units; prospective tenants will earn 60% AMI or less (3
BR Townhomes at 70% AMI or less); the property includes 56 one bedroom, 24 two bedroom and 24
three bedroom units with 60 surface parking spaces and 24 garages.
“Qualified Project Period” has the meaning provided in the Declaration of Restrictive Covenants.
“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.
“Redeveloper” means [OWNER OF NEW ORLEANS COURT], a ____________ limited liability
company, or its permitted successors and assigns.
“Redevelopment Property” means the real property described in EXHIBIT A attached hereto.
“State” means the State of Minnesota.
“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 Properties, litigation commenced by third parties which,
by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local
governmental unit (other than the Authority in exercising its rights under this Agreement) which directly
result in delays.
(The remainder of this page is intentionally left blank.)
4
4901-7905-1287.2
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 costs by the Redeveloper related to the
acquisition of the Properties in accordance with the terms of this Agreement to further the objectives of the
Redevelopment Plan.
(c) The Authority finds that the acquisition of the Properties by the Redeveloper is necessary to
maintain existing supplies of decent, safe, and sanitary affordable 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] [State of _____________], is duly authorized to transact business within the State, and
has the power to enter into this Agreement.
(b) The Redeveloper will operate and maintain the Properties 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) 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
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4901-7905-1287.2
which the Redeveloper has made the Authority 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.
(d) [Reserved].
(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 Redeveloper 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 Redeveloper hereunder would not occur but for the
AHTF Loan being provided by the Authority hereunder.
(g) The Redeveloper shall promptly advise the Authority in writing of all litigation or claims
materially affecting any part of the Properties and all written complaints and charges made by any
governmental authority materially affecting the Properties.
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4901-7905-1287.2
ARTICLE III
Property Acquisition; Financing
Section 3.1. Status of Redevelopment Property. The Redeveloper has entered into a purchase
agreement to purchase the Redevelopment Property. The Authority has no obligation to purchase the
Redevelopment Property.
Section 3.2. Environmental Conditions.
(a) The Redeveloper acknowledges that the Authority makes no representations or warranties as
to the condition of the soils on the Redevelopment Property or the fitness of the Redevelopment Property for
any purpose for which the Redeveloper may make use of such property, and that the assistance provided to
the Redeveloper under this Agreement neither implies any responsibility by the Authority for any
contamination of the Redevelopment Property nor imposes any obligation on such parties to participate in
any cleanup of the Redevelopment Property.
(b) Without limiting its obligations under Section 8.3 hereof, the Redeveloper 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 Redevelopment 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. AHTF Loan. The Authority will provide the AHTF Loan to the Redeveloper in an
amount not to exceed $696,900. The AHTF Loan will be a deferred, forgivable loan with a maximum term
of fifteen (15) years. The Redeveloper will use the proceeds of the AHTF Loan to finance a portion of the
costs of the acquisition of the Properties. The AHTF Loan shall be disbursed to the Redeveloper in one
installment at the closing on the Redeveloper’s purchase of the Properties and after the following conditions
have occurred:
(a) the Redeveloper having submitted to the Authority a sources and uses statement for the
acquisition of the Properties;
(b) the Redeveloper having submitted to the Authority an income and expense budget
showing the anticipated monthly and annual income and expenses of the Properties;
(c) the Redeveloper having developed and provided to the Authority a ten (10) year
operating proforma, along with assumptions and estimated return on investment, with and without public
finance assistance;
(d) the Redeveloper having provided to the Authority information regarding any grants
and/or equity the Redeveloper will pursue, including the NOAH Impact Fund; and
(e) the Redeveloper having delivered to the Authority executed copies of a Promissory Note
and a Mortgage in substantially the forms attached hereto as EXHIBITS C and D, respectively.
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So long as the Redeveloper is not in default under this Agreement at the end of the term of the
AHTF Loan (i.e., on the date that is fifteen (15) years from the date of disbursement of the AHTF Loan),
then the AHTF Loan will be forgiven.
Section 3.4. Other Sources of Funding. In addition to the AHTF Loan described in Section 3.3
hereof, the Redeveloper expects to receive an Apartment Remodeling Loan in the principal amount of
$83,200 from the Richfield Economic Development Authority, which loan will be administered by the
Minnesota Center for Energy and Environment. The loan described in this Section will also be a deferred,
forgivable loan with a maximum term of fifteen (15) years.
Section 3.5. Payment of Administrative Costs. The Redeveloper has deposited with the Authority
$5,000 to pay Administrative Costs. “Administrative Costs” are defined as out-of-pocket costs incurred by
the Authority, together with staff costs in the amount of $2,000 and actual consultant costs and attorneys’ fees
of the Authority in an amount not to exceed $15,000, 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 the 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 $5,000 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 3.6. 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 Redeveloper relating to
the Properties and the costs for which the Redeveloper has been reimbursed from proceeds of the AHTF
Loan.
Section 3.7. Purpose of Assistance. 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.
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ARTICLE IV
Affordability Covenants
Section 4.1. Affordability Covenants. The Redeveloper agrees that at all times during the Qualified
Project Period, as set forth in the Declaration of Restrictive Covenants, the Redeveloper will ensure and
maintain the units within the Properties with the following income and rent restrictions:
Type of Unit Area Median Income Number of Units
One-Bedroom 60% 56
Two-Bedroom 60% 24
Three-Bedroom 70% 24
The Redeveloper and the Authority shall execute the Declaration of Restrictive Covenants in substantially the
form set forth in EXHIBIT B attached hereto and record such agreement against the Redevelopment
Property.
During the Qualified Project Period under the Declaration, the Redeveloper shall not adopt any
policies specifically prohibiting or excluding any 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, or any participants in the Kids@Home program or other rental assistance program operated
by the City, the Authority, or the Richfield Economic Development Authority solely because of such
prospective tenant’s status as such a certificate/voucher holder or participant in the Kids@Home program, as
the case may be.
The Redeveloper shall agree to meetings between its property management provider and City
housing staff to discuss ways to best serve residents and to regularly seek feedback from residents.
Section 4.2. Affordable Housing Reporting. At least annually, no later than April 1 of each year
commencing on April 1, 2026, the Redeveloper shall provide a report to the Authority in substantially the
form of Exhibit B to the Declaration of Restrictive Covenants evidencing that the Redeveloper complied with
the income affordability covenants set forth in Section 4.1 hereof during the previous calendar year. The
Authority may require the Redeveloper to provide additional information reasonably necessary to assess the
accuracy of such certification. Unless earlier excused by the Authority, the Redeveloper shall send affordable
housing reports to the Authority until April 1, 2041. If the Redeveloper fails to provide the annual reporting
required under this Section, the Authority may terminate this Agreement and demand the repayment of the
AHTF Loan.
Section 4.3. Notice of Sale of Properties. In consideration of the financial assistance provided to
the Redeveloper pursuant to Article III hereof, the Redeveloper agrees to provide the Authority with at least
ninety (90) days’ notice of any sale of the Properties.
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ARTICLE V
Insurance
Section 5.1. Insurance.
(a) [Reserved].
(b) So long as the AHTF Loan it outstanding, the Redeveloper 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 Properties 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 Redeveloper, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the Redeveloper
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 Redeveloper which are authorized under the laws of the State to assume
the risks covered thereby. Upon request, the Redeveloper 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 Redeveloper and the Authority at least
thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the
Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the
coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or
certificates of the respective insurers as to the amount of coverage in force upon the Properties.
(d) The Redeveloper agrees to notify the Authority immediately in the case of damage or
destruction of the Properties or any portion thereof resulting from fire or other casualty that exceeds five
percent (5%) of the value of the Properties. In such event, the Redeveloper will forthwith repair, reconstruct
and restore the Properties 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 Redeveloper will apply the net proceeds of any insurance relating to such damage received by
the Redeveloper to the payment or reimbursement of the costs thereof.
The Redeveloper shall complete the repair, reconstruction, and restoration of the Properties, whether
or not the net proceeds of insurance received by the Redeveloper 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 Redeveloper.
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(e) Notwithstanding anything to the contrary contained in this Agreement, in the event of
damage to the Properties exceeding five percent (5%) of the value of the Properties and the Redeveloper fails
to complete any repair, reconstruction or restoration of the Properties within twenty-four (24) months from
the date of damage, subject to force majeure, including any delay in settlement with the insurer of the
Properties, the Authority may, at its option, terminate this Agreement and demand the repayment of the
AHTF Loan. If the Authority demands the repayment of the AHTF Loan, such repayment shall constitute the
Authority’s sole remedy under this Agreement as a result of the Redeveloper’s failure to repair, reconstruct,
or restore the Properties. Thereafter, the Authority shall have no further obligations to make any payments
under the AHTF Loan.
(f) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon the termination of this Agreement.
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ARTICLE VI
[Reserved]
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ARTICLE VII
[Reserved]
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Redevelopment. The Redeveloper 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 NOAH preservation of the Redevelopment Property and not for speculation in
land holding.
Section 8.2. Redeveloper’s Transfer of Property and Assignment of Agreement. The Redeveloper
may transfer or assign the Redevelopment Property or the Redeveloper’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 Redeveloper’s obligations hereunder. The Redeveloper shall submit
to the Authority written evidence of any such transfer or assignment, including the transferee or assignee’s
express assumption of the Redeveloper’s obligations under this Agreement. If the Redeveloper fails to
provide such evidence of transfer and assumption, the Redeveloper shall remain bound by all its obligations
under this Agreement.
Section 8.3. Release and Indemnification Covenants.
(a) The Redeveloper 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 Properties; provided, however, that the foregoing
release and indemnity shall not include any loss or damage to property or any injury to or death of any person
occurring at or about or resulting from any gross negligence or willful or wanton misconduct of the Authority
and its respective governing commissioners, members, officers, agents, servants, and employees thereof.
(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 Redeveloper
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 Properties. 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 Redeveloper, 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 Redeveloper or its
officers, agents, servants or employees or any other person who may be about the Redevelopment Property or
the Properties due to any act of negligence of any other 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.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default. The following will be “Events of Default” under this Agreement and
the term “Event of Default” means, whenever it is used in this Agreement, any one or more of the following
events, after the non-defaulting party provides thirty (30) days’ written notice to the defaulting party of the
event, but only if the event has not been cured within said thirty (30) days or, if the event is by its nature
incurable within thirty (30) days, the defaulting party does not, within the thirty (30) day period, provide
assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will
be cured as soon as reasonably possible:
(a) failure by the Redeveloper 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 Redeveloper:
(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 Properties as they
become due;
(iv) admits in writing its inability to pay its debts generally as they become due;
(v) is adjudicated a bankrupt or insolvent;
(vi) fails to comply with the Declaration; or
(vii) fails to comply with labor laws.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 hereof
occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thirty (30) days’
written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been
cured within said thirty (30) days or, if the Event of Default is by its nature incurable within thirty (30) days,
the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the
Event of Default will be cured and will be cured as soon as reasonably possible:
(a) suspend its performance under this Agreement until it receives assurances that the defaulting
party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate this Agreement, subject to the provisions of Section 9.3
hereof;
(c) upon a default by the Redeveloper resulting from the Redeveloper’s noncompliance with
labor laws, the Authority may demand immediate repayment of all or a portion of the AHTF Loan and/or
terminate this Agreement; or
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(d) 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. Repayment of AHTF Loan. As permitted by Section 9.2 hereof, the Authority may
exercise its option to demand immediate repayment of all or a portion of the AHTF Loan if the Redeveloper
fails to comply with the Declaration of Restrictive Covenants.
Section 9.4. [Reserved].
Section 9.5. [Reserved].
Section 9.6. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or the Redeveloper 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 9.7. 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 9.8. 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 Redeveloper
under this Agreement, and the Authority prevails in the action, the Redeveloper agrees that it will, within ten
(10) days of written demand by the Authority, pay to the Authority the reasonable fees of the attorneys and
the other expenses so incurred by the Authority.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The
Authority and the 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 Redeveloper, 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 Redeveloper or
successor or on any obligations under the terms of this Agreement.
Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and
assigns, agrees that 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 Redeveloper agrees that, so long as the Declaration of
Restrictive Covenants is in effect, the Redeveloper, and such successors and assigns, shall use the
Redevelopment Property solely for NOAH preservation in accordance with the terms of this Agreement,
including the affordability requirements set forth in Section 4.1 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 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 Redevelopment 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 (i) dispatched by registered or certified mail, postage prepaid, return
receipt requested; (ii) dispatched by prepaid nationally recognized delivery service (e.g., FedEx or UPS); or
(iii) delivered personally:
(a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at
800 LaSalle Avenue, Suite 1250, Minneapolis, MN 55402, Attn: Joshua D. Krsnak, CEO; 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.
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Section 10.8. Recording. The Authority may record a memorandum of this Agreement and any
amendments thereto with the County Recorder and/or Registrar of Titles of the County, as the case may be.
The Redeveloper 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 Redeveloper.
Section 10.10. 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 10.11. Memorandum of Understanding. The Memorandum of Understanding shall
terminate as of the date of this Agreement.
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4901-7905-1287.2
IN WITNESS WHEREOF, the Authority has caused this Contract for Private Redevelopment to be
duly executed in its name and behalf and the Redeveloper has caused this Contract for Private
Redevelopment to be duly executed in its name and behalf as of the date and year first written above.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________, 2025, 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 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 __________, 2025, 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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4901-7905-1287.2
Execution page of the Redeveloper to the Contract for Private Redevelopment, dated the date and year first
written above.
[OWNER OF NEW ORLEANS COURT]
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of __________, 2025 by
_________________________________, the _____________________________ of [OWNER OF NEW
ORLEANS COURT], a ____________________ limited liability company, on behalf of the Redeveloper.
Notary Public
A-1
4901-7905-1287.2
EXHIBIT A
REDEVELOPMENT PROPERTY
[Insert legal description of Redevelopment Property (New Orleans Court)]
4901-7905-1287.2 B-1
EXHIBIT B
FORM OF DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS, made as of the _____ day of
_______________, 2025 (the “Declaration”), is by [OWNER OF NEW ORLEANS COURT], a
________________ limited liability company (the “Redeveloper”), 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, pursuant to a Contract for Private Redevelopment of even date herewith (the
“Contract”) between the Authority and the Redeveloper, the Redeveloper intends to acquire the following
naturally occurring affordable housing property (the “Properties”) located on the real property legally
described in EXHIBIT A attached hereto (the “Redevelopment Property”) and to cause compliance with
certain affordability covenants described in Section 4.1 of the Contract:
New Orleans Court Apartments and Townhomes are located at 50 West 78th Street in the
City, and consist of eleven separate structures containing 104 affordable rental apartment and
townhome units; prospective tenants will earn 60% AMI or less (3 BR Townhomes at 70% AMI
or less); the property includes 56 one bedroom, 24 two bedroom and 24 three bedroom units with
60 surface parking spaces and 24 garages; and
WHEREAS, Section 4.1 of the Contract requires that the Redeveloper cause to be executed an
instrument in recordable form substantially reflecting the covenants set forth in Section 4.1 of the Contract;
and
WHEREAS, the Redeveloper 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 Redeveloper; 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 Redeveloper
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 the Redeveloper closes on the acquisition of the Properties. The
period from commencement to termination is the “Qualified Project Period.”
(b) Termination of Declaration. This Declaration will terminate upon the date that is
_______________, 2040, fifteen (15) years after the commencement of the Qualified Project Period.
4901-7905-1287.2 B-2
(c) Removal from Real Estate Records. At the end of the Qualified Project Period, this
Declaration shall automatically terminate and be of no further force and effect without any further action
necessary by any party. If requested by the Redeveloper, the Authority will execute a termination of this
Declaration to remove the Declaration from the real estate records of Hennepin County, Minnesota.
2. Project Restrictions.
(a) the Redeveloper 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 Redeveloper 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) The Redeveloper will permit any duly authorized representative of the Authority to
inspect the books and records of the Redeveloper pertaining to the income of Qualifying Tenants
residing in the Project.
3. Occupancy Restrictions.
(a) Tenant Income Provisions. The Redeveloper represents, warrants, and covenants that:
(i) Qualifying Tenants. From the commencement of the Qualified Project Period, all of
the Rental Housing Units coming available for a new occupancy will be made available for
occupancy by Qualifying Tenants. Qualifying Tenants means those persons and families who are
determined from time to time by the Redeveloper to have combined adjusted income that does not
exceed sixty percent (60%) or seventy percent (70%) of the Minneapolis-St. Paul metropolitan
statistical area (the “Metro Area”) median income for the applicable calendar year, subject to the
following: (1) all of the one-bedroom and two-bedroom 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 sixty percent (60%) of the Metro Area median income for the applicable
calendar year; and (2) all of the three-bedroom 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 seventy percent (70%) of the Metro Area median income for the applicable calendar
year. The determination of whether an individual or family is of low or moderate income and
therefore a Qualifying Tenant will be made only at the time their tenancy commences. Once an
individual or family is deemed to be a Qualifying Tenant, they shall remain a Qualifying Tenant even
if their income changes and their Rental Housing Unit shall be deemed to be occupied by a
Qualifying Tenant even if their income exceeds the applicable median income stated herein.
(ii) Certification of Tenant Eligibility. As a condition to initial occupancy, each person
who is intended to be a Qualifying Tenant will be required to sign and deliver to the Redeveloper a
Certification of Tenant Eligibility substantially in the form attached hereto as EXHIBIT B, or in any
4901-7905-1287.2 B-3
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 and to verify that the
tenant is a Qualifying Tenant within the meaning of Section 3(a) hereof. Eligibility Certifications
will be maintained on file by the Redeveloper with respect to each Qualifying Tenant who moves
into a Rental Housing Unit during the immediately preceding calendar year.
(iii) Lease. The form of lease to be utilized by the Redeveloper 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 Redeveloper 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 Redeveloper, (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 Redeveloper was not otherwise in
default under this Declaration during the year.
(v) Notice of Non-Compliance. The Redeveloper 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; Kids@Home. During the term of this Declaration, the Borrower shall
not adopt any policies specifically excluding rental to tenants holding Section 8 certificate/voucher holders or
participants in the Kids@Home program or other rental assistance program operated by the City of Richfield,
the Authority, or the Richfield Economic Development Authority that is consistent with the operation of a
multifamily residential project of the type then being operated on the Redevelopment Property.
4. Transfer Restrictions. The Redeveloper covenants and agrees that the Redeveloper 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
reasonably acceptable to the Authority, all duties and obligations of the Redeveloper 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
Redeveloper will deliver the Assumption Agreement to the Authority prior to the Transfer. Notwithstanding
the foregoing, a Transfer shall not include a transfer of or removal of the OP Member or Manager’s interest in
the Redeveloper pursuant to Sections 4.11(A) or 5.2(B) of the Member Control Agreement and Operating
Agreement of the Redeveloper.
5. Notice of Sale. In consideration of the financial assistance provided to the Redeveloper
pursuant to Article IV of the Contract, the Redeveloper agrees to provide the Authority with at least ninety
(90) days’ notice of any sale of the Project.
4901-7905-1287.2 B-4
6. Enforcement.
(a) The Redeveloper 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 Redeveloper
regarding the Project with respect to the incomes of Qualifying Tenants.
(b) The Redeveloper will submit any other information, documents or certifications requested
by the Authority which the Authority deems reasonably necessary to substantiate the Redeveloper’s
continuing compliance with the provisions specified in this Declaration.
(c) The Redeveloper acknowledges that the primary purpose for requiring compliance by the
Redeveloper with the restrictions provided in this Declaration is to ensure compliance of the property with the
housing affordability covenants set forth in Section 4.1 of the Contract, and by reason thereof, the
Redeveloper, in consideration for assistance provided by the Authority under the Contract that makes
possible the acquisition 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 Redeveloper of its obligations
under this Declaration in a state court of competent jurisdiction. The Redeveloper hereby further specifically
acknowledges that the Authority cannot be adequately compensated by monetary damages in the event of any
default hereunder.
(d) The Redeveloper 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 Redeveloper 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 reasonable 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 Redeveloper to
comply with the terms of this Declaration, or on account of any representation or warranty of the
Redeveloper 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 Redeveloper 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
Redeveloper 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
4901-7905-1287.2 B-5
Richfield, MN 55423
Attn: Community Development Director
To the Redeveloper: [OWNER OF NEW ORLEANS COURT]
800 LaSalle Avenue, Suite 1250
Minneapolis, MN 55402
Attn: Joshua D. Krsnak, 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 Redeveloper to enforce the provisions of this Declaration, the Redeveloper
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 Redeveloper 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.)
4901-7905-1287.2 B-6
IN WITNESS WHEREOF, the Redeveloper has caused this Declaration of Restrictive Covenants
to be signed by its duly authorized representative as of the date and year first written above.
[OWNER OF NEW ORLEANS COURT]
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of __________, 2025 by
_________________________________, the _____________________________ of [OWNER OF NEW
ORLEANS COURT], a ________________ limited liability company, on behalf of the Redeveloper.
Notary Public
This document was drafted by:
Kutak Rock LLP (JAE)
60 South Sixth Street, Suite 3400
Minneapolis, Minnesota 55402
Telephone: 612-334-5000
4901-7905-1287.2 B-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 __________, 2025, 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 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 __________, 2025, 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
4901-7905-1287.2 B-8
EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
[Insert legal description (New Orleans Court)]
4901-7905-1287.2 B-9
EXHIBIT B
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 [OWNER OF NEW
ORLEANS COURT], a ______________________ limited liability company (the “Owner”), to the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), pursuant to that
certain Declaration of Restrictive Covenants, dated ___________, 2025 (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 _________________.
4901-7905-1287.2 B-10
(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.]
(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). 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.
(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___.
4901-7905-1287.2 B-11
[OWNER OF NEW ORLEANS COURT]
By
Its
4901-7905-1287.2 C-1
EXHIBIT C
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
$______________ _______, 2025
[OWNER OF ____________________], a __________________ limited liability company (the “Maker”),
for value received, hereby promises to pay to the HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic of the
State of Minnesota (the “Authority”), or its assigns (the Authority and any assigns are hereinafter referred to
as the “Holder”), at its designated principal office or such other place as the Holder may designate in writing,
the principal sum of ____________________ and No/100ths Dollars ($_______________.00), or so much
thereof as may be advanced under this Note, with interest as hereinafter provided, in any coin or currency
which at the time or times of payment is legal tender for the payment of private debts in the United States of
America. All terms capitalized herein and not defined have the definitions given such terms in the Contract
for Private Redevelopment of even date herewith (the “Agreement”) between the Maker and the Holder.
The principal of and interest on this Note is due and payable as follows:
1. The funds loaned by the Holder to the Maker (the “AHTF Loan”) pursuant to the terms of the
Agreement shall not bear interest. The AHTF Loan is a deferred, forgivable loan, subject to the terms of
Section 2 hereof, and shall mature no later than ____________, 2040, unless extended by written agreement
between the Holder and the Maker.
2. The entire unpaid balance of principal shall be due and payable in full on the earlier of the following:
(i) subject to Section 12 hereof, thirty (30) days after written notification by the Holder to the Maker of the
occurrence of an Event of Default which is not cured and demand of payment according to Sections 9.2 and
9.3 of the Agreement, including but not limited to an event of default under the Declaration of Restrictive
Covenants of even date herewith (the “Declaration of Restrictive Covenants”) between the Maker and the
Authority; or (ii) ten (10) days after Maker makes or allows to be made any total or partial transfer, sale,
assignment, conveyance, lease (except a lease to a residential tenant of a unit within the Properties), or
transfer in any other mode, of the Properties; provided, however, that the exit of NOAH Pool II LLC as the
EP Member of the Maker or transfers of or removal of the OP Member or Manager’s interest in the Maker
pursuant to Sections 4.11(A) or 5.2(B) of the Member Control Agreement and Operating Agreement of the
Maker shall not cause repayment of the AHTF Loan.
3. The Maker shall have the right to fully or partially prepay this Note at any time without penalty. Any
partial prepayment shall be applied first to any unpaid, accrued interest with the balance, if any, applied to
principal.
4. This Note is given pursuant to the Agreement, as the same may be amended from time to time, and is
secured by a Mortgage of even date herewith (the “Mortgage”) by the Maker in favor of the Authority,
covering certain real property located in Hennepin County, Minnesota and legally described in the Mortgage
(the “Property”). All of the agreements, conditions, covenants, provisions, and stipulations contained in the
Agreement, the Declaration of Restrictive Covenants, and the Mortgage are hereby made a part of this Note
to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that
time is of the essence of this Note.
5. If an Event of Default occurs under the Agreement or the Declaration of Restrictive Covenants, then
4901-7905-1287.2 C-2
the Holder of this Note may, at its right and option, but subject in all respects to Section 12 hereof, declare
immediately due and payable the principal balance of this Note and interest accrued thereon, without notice,
demand or presentment for payment to Maker or others. The remedies of the Holder, as provided herein and
in the Agreement, the Declaration of Restrictive Covenants, and the Mortgage, shall be cumulative and
concurrent, may be pursued singly, successively, or together, and, at the sole discretion of the Holder of this
Note, and may be exercised as often as occasion therefor shall occur, subject in all respects to the provisions
of Section 12 hereof.
6. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived
any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder of this Note
and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not
be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note
may not be amended, modified, or changed except only by an instrument in writing signed by the party
against whom enforcement of any such amendment, modifications, or change is sought.
7. If any Event of Default occurs, and if the Holder engages legal counsel or others in connection with
advice to the Holder or the Holder’s rights and remedies under the Agreement or this Note, the Maker shall
pay all reasonable expenses incurred by the Holder for such persons, irrespective of whether any suite or
other proceeding has been or is filed or commenced. Any such expenses, costs and charges shall constitute
additional principal, payable upon demand, and subject to this Note, the Agreement, and the Declaration of
Restrictive Covenants.
8. Except as otherwise provided in this Note, the Agreement, or the Declaration of Restrictive
Covenants, the Maker hereby (a) waives demand, presentment for payment, notice of nonpayment, protest,
notice of protest, and all other notice; (b) agrees to any substitution, exchange, addition, or release of any
party or person primarily or secondarily liable hereon; (c) agrees that Holder shall not be required first to
institute any suit or to exhaust its remedies against the Maker or any other person or party in order to enforce
payment of this Note; and (d) consents to any extension, rearrangement, renewal, or postponement of time or
payment of this Note and to any other indulgence with respect hereto without notice, consent, or
consideration to any of them.
9. If any term of this Note, or the application thereof to any person or circumstances shall, to any extent,
be invalid or unenforceable, the remainder of this Note, or the application of such term to persons or
circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each
term of this Note shall be valid and enforceable to the fullest extent permitted by law.
10. It is intended that this Note is made with reference to and shall be construed as a Minnesota contract
and governed by the laws thereof.
11. Notwithstanding anything to the contrary herein, this Note shall be nonrecourse, and the Holder’s
sole recourse with respect to the Note shall be as set forth in the Mortgage.
12. Subject to a Subordination Agreement of even date herewith (the “Subordination Agreement”)
between _______________, ____________________, the Maker, and the Authority, the indebtedness
evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of (i) the
indebtedness evidenced by a promissory note in the principal amount of $__________, executed by the
Maker and payable to the order of _________________, which Note has been assigned to Freddie Mac (the
“Freddie Mac Note”); and (ii) the “EP Exit Payment” due to NOAH Pool II LLC as the EP Member of the
Maker, as that term is defined in the Member Control Agreement and Operating Agreement of the Maker.
The Mortgage (and any exhibits) securing this Note is and shall be subject and subordinate in all respects to
the liens, terms, covenants, and conditions of the mortgage securing the Freddie Mac Note and the terms,
4901-7905-1287.2 C-3
covenants, and conditions of the equity investment by NOAH Pool II LLC as the EP Member of the Maker,
as more fully set forth in the Subordination Agreement. The rights and remedies of the payee and each
subsequent holder of this Note under the Mortgage (and any exhibits) securing this Note are subject to the
restrictions and limitations set forth in the Subordination Agreement. Each subsequent holder of this Note
shall be deemed, by virtue of such holder’s acquisition of this Note, to have agreed to perform and observe all
of the terms, covenants and conditions to be performed or observed by the Holder under the Subordination
Agreement. Any capitalized terms used specifically in this Section that are otherwise not defined shall have
the meanings assigned such terms in the Subordination Agreement.
13. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist,
happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been
performed in regular and due form as required by law.
(The remainder of this page is intentionally left blank.)
4901-7905-1287.2 C-4
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the date and year first
written above.
[OWNER OF ____________________]
By
Its
4901-7905-1287.2 D-1
EXHIBIT D
FORM OF MORTGAGE
MORTGAGE
THIS MORTGAGE, made as of _________, 2025 (the “Mortgage”), is by [OWNER OF
____________________], a __________________ limited liability company, as mortgagor (the
“Mortgagor”), in favor 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, as
mortgagee (the “Mortgagee”).
WITNESSETH:
That the Mortgagor, in consideration of the sum of _______________________ Dollars
($_______________) and other good, valuable and sufficient consideration, the receipt whereof is hereby
acknowledged, does hereby grant, bargain, sell, and convey unto the Mortgagee, its successors and assigns,
forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota and
legally described in EXHIBIT A attached hereto (the “Land”).
To have and to hold the same, together with the hereditaments and appurtenances thereto belonging to the
Mortgagee, its successors and assigns, forever. And the Mortgagor, for itself, and its successors and assigns,
does covenant with the Mortgagee, its successors and assigns, as follows: That it is lawfully seized of said
premises and has good right to sell and convey the same; that the same are free from all encumbrances, save
and except reservations, restrictions and easements set forth on EXHIBIT B attached hereto; that the
Mortgagee, its successors and assigns, shall quietly enjoy and possess the same; and that the Mortgagor will
warrant and defend the title to the same against all lawful claims not hereinbefore specifically excepted.
Provided, nevertheless, that if the Mortgagor, its successors and assigns, shall keep and perform each and
every one of its obligations under and pursuant to that certain Promissory Note of even date herewith (the
“Note”) given by the Mortgagor to the Mortgagee, and shall keep and perform all the covenants and
agreements herein contained, then this deed to be null and void, and to be released at the Mortgagor’s
expense.
This Mortgage secures a principal debt in the amount of ______________ Dollars ($____________) payable
by the Mortgagor to the Mortgagee under the terms of the Note and the Contract for Private Redevelopment
of even date herewith (the “Agreement”) between the Mortgagor and the Mortgagee, which Note matures no
later than _______, 2040, unless extended by written agreement between the Mortgagor and the Mortgagee.
Notwithstanding the provisions of this Mortgage or any other document, the Mortgagor shall not be
personally liable for payment of the indebtedness evidenced by the Note, and the Mortgagee’s sole recourse
for payment of such indebtedness upon the occurrence of an Event of Default (hereinafter defined) shall be to
pursue the security provided by this Mortgage and other instruments securing payment of the Note. Nothing
in this Section shall affect, limit or impair (i) the security provided by this Mortgage or any other document;
(ii) the right to seek monetary judgment against the Mortgagor or any owner of the mortgaged property to the
extent necessary to permit foreclosure of this Mortgage by action (except that the Mortgagor shall not be
personally liable for payment of any such judgment to the extent that the judgment is for payment of the
indebtedness evidenced by the Note and no deficiency judgment will be sought or obtained against the
Mortgagor for payment of the indebtedness evidenced by the Note); (iii) the enforcement by the Mortgagee
of any other legal or equitable rights or remedies or any other provision of any instrument by which the Note
4901-7905-1287.2 D-2
is secured; or (iv) the personal liability of the Mortgagor for the failure to observe or perform any of the
covenants or obligations of the Mortgagor and other instruments securing payment of the Note other than the
obligation to pay the indebtedness evidenced by the Note.
1. The Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree
with the Mortgagee, its successors and assigns, to perform its obligations as above specified, to pay all
taxes and assessments now due or that may hereafter become liens against said premises at least ten (10)
days before penalty attaches thereto; to pay, when due, both principal and interest of all prior liens or
encumbrances, if any, above mentioned and to keep said premises free and clear of all other prior lien s or
encumbrances; to commit or permit no waste on said premises and to keep them in good repair; to
complete forthwith any improvements which may hereafter be under course of construction thereon, and
to pay any other expenses and attorneys’ fees incurred by the Mortgagee, its successors or assigns, by
reason of litigation with any third party for the protection of the lien of this Mortgage.
2. The Mortgagor does further covenant and agree that if any lien for labor, skill or material
shall be filed for record during the life of this Mortgage, upon or against the premises hereby mortgaged,
the Mortgagor will, within thirty (30) days after the date of its filing for record, either pay off the said lien
and secure its satisfaction of record, or will protect the Mortgagee against any loss or damage growing out
of its enforcement, by furnishing a bond for the same amount in the form and with the sureties to be
approved by the Mortgagee.
3. In case of failure to pay said taxes and assessments, prior liens or encumbrances,
expenses and attorneys’ fees as above specified, or to insure said buildings and deliver the poli cies as
aforesaid, the Mortgagee, its successors or assigns, may pay such taxes, assessments, prior liens, expenses
and attorneys’ fees and interest thereon, or effect such insurance, and the sums so paid shall bear interest
at the highest rate permitted by law from the date of such payment, shall be impressed as an additional
lien upon said premises, and be immediately due and payable from the Mortgagor, its successors or
assigns, to the Mortgagee, it successors or assigns, and this Mortgage shall from date thereof secure the
repayment of such advance with interest.
4. In case of default in any of the foregoing covenants (each an “Event of Default”), the
Mortgagor confers upon the Mortgagee the option, of declaring a default and hereby authorizes and
empowers the Mortgagee, its successors and assigns, to foreclose this Mortgage by judicial proceedings
or to sell said premises at public auction and convey the same to the purchaser in fee simple in accordance
with the statute, and out of the money arising from such sale to retain all sums secured hereby, with
interest and all legal costs and charges of such foreclosure and the maximum attorneys’ fee permitted by
law, which costs, charges and fees the Mortgagor herein agrees to pay.
5. Any member or partner of the Mortgagor shall have the right, but not the obligation, to
cure any Event of Default by the Mortgagor under this Mortgage or any default under the Note, the
Agreement, or the Declaration of Restrictive Covenants of even date herewith between the Mortgagor and
the Mortgagee, and the Mortgagee shall accept performance by the member or partner of the Mortgagor
of any obligation of the Mortgagor thereunder as though tendered by the Mortgagor itself, provided such
performance by the member or partner of the Mortgagor has occurred during the applicable cure period, if
any, provided to the Mortgagor thereunder with respect to such default or Event of Default.
6. Subject to a Subordination Agreement of even date herewith (the “Subordination
Agreement”) between _______________, ____________________, the Mortgagor, and the Mortgagee,
the indebtedness evidenced by the Note is and shall be subordinate in right of payment to the prior
payment in full of (i) the indebtedness evidenced by a promissory note in the principal amount of
4901-7905-1287.2 D-3
$__________, executed by the Mortgagor and payable to the order of _________________, which Note
has been assigned to Freddie Mac (the “Freddie Mac Note”); and (ii) the “EP Exit Payment” due to
NOAH Pool II LLC as the EP Member of the Maker , as that term is defined in the Member Control
Agreement and Operating Agreement of the Maker . This Mortgage (and any exhibits) securing the Note
is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the
mortgage securing the Freddie Mac Note and the terms, covenants, and conditions of the equity
investment by NOAH Pool II LLC as the EP Member of the Maker, as more fully set forth in the
Subordination Agreement. The rights and remedies of the payee and each subsequent holder of the Note
under this Mortgage (and any exhibits) securing the Note are subject to the restrictions and limitations set
forth in the Subordination Agreement. Each subsequent holder of the Note shall be deemed, by virtue of
such holder’s acquisition of the Note, to have agreed to perform and observe all of the terms, covenants
and conditions to be performed or observed by the Mortgagee under the Subordination Agreement. Any
capitalized terms used specifically in this Section that are otherwise not defined shall have the meanings
assigned such terms in the Subordination Agreement.
(The remainder of this page is intentionally left blank.)
4901-7905-1287.2 D-4
IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage as of the date and year first written
above.
[OWNER OF ____________________]
By
Its
STATE OF MINNESOTA )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of __________, 2025, by
________________________________, the ________________________ of [OWNER OF
________________________], a ________________ limited liability company, on behalf of the Mortgagor.
Notary Public
This document was drafted by:
Kutak Rock LLP (JAE)
60 South Sixth Street, Suite 3400
Minneapolis, Minnesota 55402
Telephone: 612-334-5000
4901-7905-1287.2 D-5
EXHIBIT A
DESCRIPTION OF LAND
[Insert legal description]
Prepared by, and after recording
return to:
Moss & Barnett (______)
A Professional Association
150 South Fifth Street, Suite 1200
Minneapolis, MN 55402
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
(Revised 2-25-2025)
Freddie Mac Loan No. «FHLMCLoanNo»
Property Name: «ProjectName»
Freddie Mac Loan Number: «FHLMCLoanNo»
Property Name: «ProjectName»
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
(Revised 2-25-2025)
THIS SUBORDINATION AGREEMENT (“Agreement”) is entered into as of «DateofLoan»,
by and between (i) «LenderName», a «TypeofLenderEntity» organized and existing under the
laws of «StateofLenderOrganization» (“Senior Lender”) and (ii) [GOVERNMENTAL
ENTITY], a ____________ organized and existing under the laws of the [State]
[Commonwealth] of ____________ (“Subordinate Lender”).
RECITALS
A. «BorrowerName», a «TypeofBorrowerEntity» organized under the laws of
«StateofBorrowerOrganization» (“Borrower”) is the owner of certain land located in
«CountyofProjectLocation» County, «StateofProjectLocation», described in Exhibit A
(“Land”). The Land is improved with a multifamily rental housing project
(“Improvements”).
B. Senior Lender has made or is making a loan to Borrower in the original principal amount
of $«NumericalLoanAmount» (“Senior Loan”) upon the terms and conditions of a
Multifamily Loan and Security Agreement dated as of «DateofLoan» between Senior
Lender and Borrower (“Senior Loan Agreement”) in connection with the Mortgaged
Property. The Senior Loan is secured by a «TypeofSecurityInstrument» dated as of the
date of the Senior Loan Agreement (“Senior Mortgage”) encumbering the Land, the
Improvements and related personal and other property described and defined in the
Senior Mortgage as the “Mortgaged Property.”
C. Pursuant to a [NAME OF SUBORDINATE LOAN AGREEMENT] dated [as of]
___________ between Subordinate Lender and Borrower (“Subordinate Loan
Agreement”), Subordinate Lender has made or is making a loan to Borrower in the
original principal amount of $______________ (“Subordinate Loan”). The Subordinate
Loan is or will be secured by a [NAME OF SUBORDINATE MORTGAGE] dated [as
of] _________ (“Subordinate Mortgage”) encumbering all or a portion of the
Mortgaged Property.
D. The Senior Mortgage [is] [will be] recorded in [DESCRIBE APPLICABLE
RECORDING OFFICE] (“Recording Office”) at [INSERT RECORDING
INFORMATION IF KNOWN]. The Subordinate Mortgage [is] [will be] recorded in
the Recording Office at [INSERT RECORDING INFORMATION IF KNOWN]
[INCLUDE IF SUBORDINATE MORTGAGE IS NOT ALREADY OF RECORD:
following the recording of the Senior Mortgage].
Subordination Agreement – Governmental Entity Page 2
E. The execution and delivery of this Agreement is a condition of Senior Lender’s
[CHOOSE ONE: making of the Senior Loan OR consenting to Subordinate Lender’s
making of the Subordinate Loan and Borrower’s granting of the Subordinate Mortgage].
AGREEMENT
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. Definitions. The following terms, when used in this Agreement (including, as
appropriate, when used in the above recitals), will have the following meanings:
The terms “Condemnation,” “Imposition Reserve Deposits,” “Impositions,” “Leases,”
“Rents” and “Restoration,” as well as any term used in this Agreement and not
otherwise defined in this Agreement, will have the meanings given to those terms in the
Senior Loan Agreement.
“Bankruptcy Proceeding” means any bankruptcy, reorganization, insolvency,
composition, restructuring, dissolution, liquidation, receivership, assignment for the
benefit of creditors, or custodianship action or proceeding under any federal or state law
with respect to Borrower, any guarantor of any of the Senior Indebtedness, any of their
respective properties, or any of their respective partners, members, officers, directors, or
shareholders.
“Borrower” means all persons or entities identified as “Borrower” in the first Recital of
this Agreement, together with their successors and assigns, and any other person or entity
who acquires title to the Mortgaged Property after the date of this Agreement; provided
that the term “Borrower” will not include Senior Lender if Senior Lender acquires title to
the Mortgaged Property.
“Casualty” means the occurrence of damage to or loss of all or any portion of the
Mortgaged Property by fire or other casualty.
“Enforcement Action” means any of the following actions taken by or at the direction of
Subordinate Lender: the acceleration of all or any part of the Subordinate Indebtedness,
the advertising of or commencement of any foreclosure or trustee’s sale proceedings, the
exercise of any power of sale, the acceptance of a deed or assignment in lieu of
foreclosure or sale, the collecting of Rents, the obtaining of or seeking of the appointment
of a receiver, the seeking of default interest, the taking of possession or control of any of
the Mortgaged Property, the commencement of any suit or other legal, administrative, or
arbitration proceeding based upon the Subordinate Note or any other of the Subordinate
Loan Documents, the exercising of any banker’s lien or rights of set-off or recoupment,
or the exercise of any other remedial action against Borrower, any other party liable for
any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan
Documents, or the Mortgaged Property.
Subordination Agreement – Governmental Entity Page 3
“Enforcement Action Notice” means a Notice given from Subordinate Lender to Senior
Lender following one or more Subordinate Mortgage Default(s) and the expiration of any
applicable notice or cure periods, setting forth in reasonable detail the Subordinate
Mortgage Default(s) and the Enforcement Actions proposed to be taken by Subordinate
Lender.
“Lien” means any lien, encumbrance, estate or other interest, recorded against or secured
by the Mortgaged Property.
“Loss Proceeds” means all monies received or to be received under any insurance policy,
from any condemning authority, or from any other source, as a result of any
Condemnation or Casualty.
“Notice” means all notices, requests, demands, consents, approvals or other
communication pursuant to this Agreement provided in accordance with the provisions of
Section 10.
“Regulatory Agreement” means the [NAME OF REGULATORY AGREEMENT,
DEED RESTRICTIONS, OR LAND USE RESTRICTIONS] between Borrower and
Subordinate Lender dated [as of] ______________, _____ and [recorded] [to be
recorded] [at] [INSERT RECORDING INFORMATION IF AVAILABLE] in the
Recording Office of «CountyofProjectLocation» County, «StateofProjectLocation».
“Senior Indebtedness” means the “Indebtedness” as defined in the Senior Loan
Agreement.
“Senior Lender” means the “Lender” as defined in the Senior Mortgage. When any other
person or entity becomes the legal holder of the Senior Note, such other person or entity
will automatically become Senior Lender.
“Senior Loan Documents” means the “Loan Documents” as defined in the Senior Loan
Agreement, as such documents may be amended.
“Senior Mortgage Default” means any act, failure to act, event, condition, or occurrence
which constitutes, or which with the giving of Notice or the passage of time, or both,
would constitute, an “Event of Default” as defined in the Senior Loan Agreement.
“Senior Note” means the promissory note or other evidence of the Senior Indebtedness
and any replacement of the Senior Note.
“Subordinate Indebtedness” means all sums evidenced or secured or guaranteed by, or
otherwise due and payable to Subordinate Lender pursuant to, the Subordinate Loan
Documents.
Subordination Agreement – Governmental Entity Page 4
“Subordinate Lender” means the person or entity named as such in the first paragraph
of this Agreement and any other person or entity who becomes the legal holder of the
Subordinate Note after the date of this Agreement.
“Subordinate Loan Documents” means the Subordinate Mortgage, the Subordinate
Note, the Subordinate Loan Agreement, the Regulatory Agreement and all other
documents at any time evidencing, securing, guaranteeing, or otherwise delivered in
connection with the Subordinate Indebtedness, as such documents may be amended.
“Subordinate Mortgage Default” means any act, failure to act, event, condition, or
occurrence which allows (but for any contrary provision of this Agreement), Subordinate
Lender to take an Enforcement Action.
“Subordinate Note” means the promissory note or other evidence of the Subordinate
Indebtedness and any replacement of the Subordinate Note.
[PROVISION FOR SOFT DEBT]
“Surplus Cash” means, with respect to any period, any revenues of Borrower remaining
after paying, or setting aside funds for paying, all the following:
(a) All sums due or currently required to be paid under the Senior Loan Documents,
including any reserves and Imposition Reserve Deposits.
(b) All reasonable operating expenses of the Mortgaged Property, including real
estate taxes, insurance premiums, utilities, building maintenance, painting and
repairs, management fees, payroll, administrative expenses, legal expenses and
audit expenses (excluding any developer fees payable with respect to the
Mortgaged Property).
2. Subordinate Lender’s Representations and Warranties.
(a) Subordinate Lender represents and warrants that each of the following is true as
of the date of this Agreement:
(i) Subordinate Lender is now the owner and holder of the Subordinate Loan
Documents.
(ii) No Subordinate Mortgage Default has occurred and is continuing.
(iii) The current unpaid principal balance of the Subordinate Indebtedness is
$________.
(iv) No scheduled payments under the Subordinate Note have been prepaid.
Subordination Agreement – Governmental Entity Page 5
(b) Without the prior written consent of Senior Lender, Subordinate Lender will not
do any of the following:
(i) Pledge, assign, transfer, convey, or sell any interest in the Subordinate
Indebtedness or any of the Subordinate Loan Documents.
(ii) Take any action which has the effect of increasing the Subordinate
Indebtedness, except to cure a Senior Mortgage Default as contemplated
under Section 5(a) of this Agreement.
(iii) Accept any prepayment of the Subordinate Indebtedness.
3. Terms of Subordination.
(a) Agreement to Subordinate. The Subordinate Indebtedness is and will at all times
continue to be subject and subordinate in right of payment to the prior payment in
full of the Senior Indebtedness. Each of the Subordinate Loan Documents is, and
will at all times remain, subject and subordinate in all respects to the liens, terms,
covenants, conditions, operations, and effects of each of the Senior Loan
Documents.
(b) Subordination of Subrogation Rights. If Subordinate Lender, by indemnification,
subrogation or otherwise, acquires any Lien on any of the Mortgaged Property,
then that Lien will be fully subject and subordinate to the receipt by Senior
Lender of payment in full of the Senior Indebtedness, and to the Senior Loan
Documents, to the same extent as the Subordinate Indebtedness and the
Subordinate Loan Documents are subordinate pursuant to this Agreement.
(c) Payments Before Senior Mortgage Default [; Soft Subordinate Debt]. Until the
occurrence of a Senior Mortgage Default, Subordinate Lender will be entitled to
retain for its own account all payments of the principal of and interest on the
Subordinate Indebtedness pursuant to the Subordinate Loan Documents; provided
that Subordinate Lender expressly agrees that it will not accept any such payment
that is made more than 10 days in advance of its due date [PROVISION FOR
SOFT DEBT: and provided further that Subordinate Lender will not accept any
payment in an amount that exceeds 75% of then available Surplus Cash].
(d) Payments After Senior Mortgage Default or Bankruptcy.
(i) Immediately upon Subordinate Lender’s receipt of Notice or actual
knowledge of a Senior Mortgage Default, Subordinate Lender will not
accept any payments of the Subordinate Indebtedness, and the provisions
of this Section 3(d) will apply.
(ii) If Subordinate Lender receives any of the following, whether voluntarily
or by action of law, after a Senior Mortgage Default of which Subordinate
Subordination Agreement – Governmental Entity Page 6
Lender has actual knowledge (or is deemed to have actual knowledge as
provided in Section 4(c)) or has been given Notice, such will be received
and held in trust for Senior Lender:
(A) Any payment, property, or asset of any kind or in any form in
connection with the Subordinate Indebtedness.
(B) Any proceeds from any Enforcement Action.
(C) Any payment, property, or asset in or in connection with any
Bankruptcy Proceeding.
(iii) Subordinate Lender will promptly remit, in kind and properly endorsed as
necessary, all such payments, properties, and assets described in Section
3(d)(ii) to Senior Lender. Senior Lender will apply any payment, asset, or
property so received from Subordinate Lender to the Senior Indebtedness
in such order, amount (with respect to any asset or property other than
immediately available funds), and manner as Senior Lender determines in
its sole and absolute discretion.
(e) Bankruptcy. Without the prior written consent of Senior Lender, Subordinate
Lender will not commence, or join with any other creditor in commencing, any
Bankruptcy Proceeding. In the event of a Bankruptcy Proceeding, Subordinate
Lender will not vote affirmatively in favor of any plan of reorganization or
liquidation unless Senior Lender has also voted affirmatively in favor of such
plan.
4. Default Under Subordinate Loan Documents.
(a) Notice of Subordinate Mortgage Default and Cure Rights.
(i) Subordinate Lender will deliver to Senior Lender a copy of each Notice
delivered by Subordinate Lender pursuant to the Subordinate Loan
Documents within 5 Business Days of sending such Notice to Borrower.
Neither giving nor failing to give a Notice to Senior Lender pursuant to
this Section 4(a) will affect the validity of any Notice given by
Subordinate Lender to Borrower.
(ii) For a period of 90 days following delivery to Senior Lender of an
Enforcement Action Notice, Senior Lender will have the right, but not the
obligation, to cure any Subordinate Mortgage Default. However, if such
Subordinate Mortgage Default is a non-monetary default and is not
capable of being cured within such 90-day period and Senior Lender has
commenced and is diligently pursuing such cure to completion, Senior
Lender will have such additional period of time as may be required to cure
Subordination Agreement – Governmental Entity Page 7
such Subordinate Mortgage Default or until such time, if ever, as Senior
Lender takes either of the following actions:
(A)Discontinues its pursuit of any cure.
(B)Delivers to Subordinate Lender Senior Lender’s written consent to
the Enforcement Action described in the Enforcement Action
Notice.
(iii)Senior Lender will not be subrogated to the rights of Subordinate Lender
under the Subordinate Loan Documents as a result of Senior Lender
having cured any Subordinate Mortgage Default.
(iv)Subordinate Lender acknowledges that all amounts advanced or expended
by Senior Lender in accordance with the Senior Loan Documents or to cure
a Subordinate Mortgage Default will be added to and become a part of the
Senior Indebtedness and will be secured by the lien of the Senior Mortgage.
(b)Subordinate Lender’s Exercise of Remedies After Notice to Senior Lender.
(i)In the event of a Subordinate Mortgage Default, Subordinate Lender will
not commence any Enforcement Action until 90 days after Subordinate
Lender has delivered to Senior Lender an Enforcement Action Notice.
During such 90-day period or such longer period as provided in Section
4(a), Subordinate Lender will be entitled to seek specific performance to
enforce covenants and agreements of Borrower relating to income, rent, or
affordability restrictions contained in the Regulatory Agreement, subject
to Senior Lender’s right to cure a Subordinate Mortgage Default set forth
in Section 4(a).
(ii)Subordinate Lender may not commence any other Enforcement Action,
including any foreclosure action under the Subordinate Loan Documents,
until the earlier of:
(A)The expiration of such 90-day period or such longer period as
provided in Section 4(a).
(B)The delivery by Senior Lender to Subordinate Lender of Senior
Lender’s written consent to such Enforcement Action by
Subordinate Lender.
(iii)Subordinate Lender acknowledges that Senior Lender may grant or refuse
consent to Subordinate Lender’s Enforcement Action in Senior Lender’s
sole and absolute discretion. At the expiration of such 90-day period or
such longer period as provided in Section 4(a) and, subject to Senior
Subordination Agreement – Governmental Entity Page 8
Lender’s right to cure set forth in Section 4(a), Subordinate Lender may
commence any Enforcement Action.
(iv) Senior Lender may pursue all rights and remedies available to it under the
Senior Loan Documents, at law, or in equity, regardless of any
Enforcement Action Notice or Enforcement Action by Subordinate
Lender. No action or failure to act on the part of Senior Lender in the
event of a Subordinate Mortgage Default or commencement of an
Enforcement Action will constitute a waiver on the part of Senior Lender
of any provision of the Senior Loan Documents or this Agreement.
(c) Cross Default. Subordinate Lender acknowledges that a Subordinate Mortgage
Default constitutes a Senior Mortgage Default. Accordingly, upon the occurrence
of a Subordinate Mortgage Default, Subordinate Lender will be deemed to have
actual knowledge of a Senior Mortgage Default. If Subordinate Lender notifies
Senior Lender in writing that any Subordinate Mortgage Default of which Senior
Lender has received Notice has been cured or waived, as determined by
Subordinate Lender in its sole discretion, then provided that Senior Lender has
not conducted a sale of the Mortgaged Property pursuant to its rights under the
Senior Loan Documents, any Senior Mortgage Default under the Senior Loan
Documents arising solely from such Subordinate Mortgage Default will be
deemed cured, and the Senior Loan will be reinstated.
5. Default Under Senior Loan Documents.
(a) Notice of Senior Mortgage Default and Cure Rights.
(i) Senior Lender will deliver to Subordinate Lender a copy of any Notice sent
by Senior Lender to Borrower of a Senior Mortgage Default within 5
Business Days of sending such Notice to Borrower. Failure of Senior Lender
to send Notice to Subordinate Lender will not prevent the exercise of Senior
Lender’s rights and remedies under the Senior Loan Documents.
(ii) Subordinate Lender will have the right, but not the obligation, to cure any
monetary Senior Mortgage Default within 30 days following the date of such
Notice. During such 30-day period Senior Lender will be entitled to continue
to pursue its remedies under the Senior Loan Documents.
(iii) Subordinate Lender may, within 90 days after the date of the Notice, cure a
non-monetary Senior Mortgage Default if during such 90-day period,
Subordinate Lender keeps current all payments required under the Senior
Loan Documents. If such a non-monetary Senior Mortgage Default creates
an unacceptable level of risk relative to the Mortgaged Property, or Senior
Lender’s secured position relative to the Mortgaged Property, as determined
by Senior Lender in its sole discretion, then during such 90-day period
Senior Lender may exercise all available rights and remedies to protect and
Subordination Agreement – Governmental Entity Page 9
preserve the Mortgaged Property and the Rents, revenues and other proceeds
from the Mortgaged Property.
(iv) All amounts paid by Subordinate Lender to Senior Lender to cure a Senior
Mortgage Default will be deemed to have been advanced by Subordinate
Lender pursuant to, and will be secured by the lien of, the Subordinate
Mortgage. Notwithstanding anything in this Section 5(a) to the contrary,
Subordinate Lender’s right to cure any Senior Mortgage Default will
terminate immediately upon the occurrence of any Bankruptcy Proceeding.
(b) Release of Mortgaged Property.
(i) Subordinate Lender consents to and authorizes any future release by
Senior Lender of all or any portion of the Mortgaged Property from the
lien, operation, and effect of the Senior Loan Documents. Subordinate
Lender waives to the fullest extent permitted by law, all equitable or other
rights it may have in connection with the release of all or any portion of
the Mortgaged Property, including any right to require Senior Lender to do
any of the following:
(A) To conduct a separate sale of any portion of the Mortgaged
Property.
(B) To exhaust its remedies against all or any portion of the Mortgaged
Property or any combination of portions of the Mortgaged Property
or any other collateral for the Senior Indebtedness.
(C) To proceed against Borrower, any other party that may be liable
for any of the Senior Indebtedness (including any general partner
of Borrower if Borrower is a partnership), all or any portion of the
Mortgaged Property or combination of portions of the Mortgaged
Property or any other collateral, before proceeding against all or
such portions or combination of portions of the Mortgaged
Property as Senior Lender determines. [ADD FOR
CALIFORNIA TRANSACTIONS: Subordinate Lender waives
to the fullest extent permitted by law any and all benefits under
California Civil Code Sections 2845, 2849 and 2850.]
(ii) Subordinate Lender consents to and authorizes, at the option of Senior
Lender, the sale, either separately or together, of all or any portion of the
Mortgaged Property. Subordinate Lender acknowledges that without
Notice to Subordinate Lender and without affecting any of the provisions
of this Agreement, Senior Lender may do any of the following:
(A) Extend the time for or waive any payment or performance under
the Senior Loan Documents.
Subordination Agreement – Governmental Entity Page 10
(B) Modify or amend in any respect any provision of the Senior Loan
Documents.
(C) Modify, exchange, surrender, release, and otherwise deal with any
additional collateral for the Senior Indebtedness.
(c) Termination Upon Foreclosure. The lien of the Subordinate Loan Documents will
automatically terminate upon the acquisition by Senior Lender or by a third-party
purchaser of title to the Mortgaged Property pursuant to a foreclosure of, deed in
lieu of foreclosure, or trustee’s sale or other exercise of a power of sale or similar
disposition under the Senior Mortgage.
6. Conflicts. If there is any conflict or inconsistency between the terms of the Subordinate
Loan Documents and the terms of this Agreement, then the terms of this Agreement will
control. Borrower acknowledges that the terms and provisions of this Agreement will not,
and will not be deemed to do any of the following:
(a) Extend Borrower’s time to cure any Senior Mortgage Default or Subordinate
Mortgage Default.
(b) Give Borrower the right to receive notice of any Senior Mortgage Default or
Subordinate Mortgage Default, other than that, if any, provided, respectively
under the Senior Loan Documents or the Subordinate Loan Documents.
(c) Create any other right or benefit for Borrower as against Senior Lender or
Subordinate Lender.
7. Rights and Obligations of Subordinate Lender Under the Subordinate Loan
Documents and of Senior Lender under the Senior Loan Documents.
(a) Insurance.
(i) All requirements pertaining to insurance under the Subordinate Loan
Documents (including requirements relating to amounts and types of
coverages, deductibles and special endorsements) will be deemed satisfied
if Borrower complies with the insurance requirements under the Senior
Loan Documents and of Senior Lender.
(ii) All original policies of insurance required pursuant to the Senior Loan
Documents will be held by Senior Lender.
(iii) Nothing in this Section 7(a) will preclude Subordinate Lender from
requiring that it be named as a mortgagee and loss payee, as its interest
may appear, under all policies of property damage insurance maintained
by Borrower with respect to the Mortgaged Property, provided such action
Subordination Agreement – Governmental Entity Page 11
does not affect the priority of payment of Loss Proceeds, or that
Subordinate Lender be named as an additional insured under all policies of
liability insurance maintained by Borrower with respect to the Mortgaged
Property.
(b) Condemnation or Casualty.
In the event of a Condemnation or a Casualty, the following provisions will apply:
(i) The rights of Subordinate Lender (under the Subordinate Loan Documents
or otherwise) to participate in any proceeding or action relating to a
Condemnation or a Casualty, or to participate or join in any settlement of,
or to adjust, any claims resulting from a Condemnation or a Casualty, will
be and remain subordinate in all respects to Senior Lender’s rights under
the Senior Loan Documents, and Subordinate Lender will be bound by any
settlement or adjustment of a claim resulting from a Condemnation or a
Casualty made by Senior Lender.
(ii) All Loss Proceeds will be applied either to payment of the costs and
expenses of Restoration or to payment on account of the Senior
Indebtedness, as and in the manner determined by Senior Lender in its
sole discretion; provided however, Senior Lender agrees to consult with
Subordinate Lender in determining the application of Casualty proceeds.
In the event of any disagreement between Senior Lender and Subordinate
Lender over the application of Casualty proceeds, the decision of Senior
Lender, in its sole discretion, will prevail.
(iii) If Senior Lender holds Loss Proceeds, or monitors the disbursement of
Loss Proceeds, Subordinate Lender will not do so. Nothing contained in
this Agreement will be deemed to require Senior Lender to act for or on
behalf of Subordinate Lender in connection with any Restoration or to
hold or monitor any Loss Proceeds in trust for or otherwise on behalf of
Subordinate Lender, and all or any Loss Proceeds may be commingled
with any funds of Senior Lender.
(iv) If Senior Lender elects to apply Loss Proceeds to payment on account of
the Senior Indebtedness, and if the application of such Loss Proceeds
results in the payment in full of the entire Senior Indebtedness, any
remaining Loss Proceeds held by Senior Lender will be paid to
Subordinate Lender unless another party has asserted a claim to the
remaining Loss Proceeds.
(c) Modification of Subordinate Loan Documents. Subordinate Lender agrees that,
until the principal of, interest on and all other amounts payable under the Senior
Loan Documents have been paid in full, it will not, without the prior written
consent of Senior Lender, increase the amount of the Subordinate Loan, increase
Subordination Agreement – Governmental Entity Page 12
the required payments due under the Subordinate Loan, decrease the term of the
Subordinate Loan, increase the interest rate on the Subordinate Loan, or otherwise
amend the Subordinate Loan terms in a manner that creates an adverse effect
upon Senior Lender under the Senior Loan Documents. If Subordinate Lender
either (i) amends the Subordinate Loan Documents in the manner set forth above
or (ii) assigns the Subordinate Loan without Senior Lender’s consent, then such
amendment or assignment will be void ab initio and of no effect whatsoever.
(d) Modification of Senior Loan Documents. Senior Lender may amend, waive,
postpone, extend, renew, replace, reduce or otherwise modify any provisions of
the Senior Loan Documents without the necessity of obtaining the consent of or
providing Notice to Subordinate Lender, and without affecting any of the
provisions of this Agreement. Notwithstanding the foregoing, Senior Lender may
not modify any provision of the Senior Loan Documents that increases the Senior
Indebtedness, except for increases in the Senior Indebtedness that result from
advances made by Senior Lender to protect the security or lien priority of Senior
Lender under the Senior Loan Documents or to cure defaults under the
Subordinate Loan Documents.
(e) Commercial or Retail Leases. If requested, Subordinate Lender will enter into
attornment and non-disturbance agreements with all tenants under commercial or
retail Leases, if any, to whom Senior Lender has granted attornment and non-
disturbance, on the same terms and conditions given by Senior Lender.
(f) Consent Rights. Whenever the Subordinate Loan Documents give Subordinate
Lender approval or consent rights with respect to any matter, and a right of
approval or consent for the same or substantially the same matter is also granted
to Senior Lender pursuant to the Senior Loan Documents or otherwise, Senior
Lender’s approval or consent or failure to approve or consent will be binding on
Subordinate Lender. None of the other provisions of Section 7 are intended to be
in any way in limitation of the provisions of this Section 7(f).
(g) Escrows. Except as provided in this Section 7(g), and regardless of any contrary
provision in the Subordinate Loan Documents, Subordinate Lender will not
collect any escrows for any cost or expense related to the Mortgaged Property or
for any portion of the Subordinate Indebtedness. However, if Senior Lender is not
collecting escrow payments for one or more Impositions, Subordinate Lender may
collect escrow payments for such Impositions; provided that all payments so
collected by Subordinate Lender will be held in trust by Subordinate Lender to be
applied only to the payment of such Impositions.
(h) Certification. Within 10 days after request by Senior Lender, Subordinate Lender
will furnish Senior Lender with a statement, duly acknowledged and certified
setting forth the then-current amount and terms of the Subordinate Indebtedness,
confirming that there exists no default under the Subordinate Loan Documents (or
Subordination Agreement – Governmental Entity Page 13
describing any default that does exist), and certifying to such other information
with respect to the Subordinate Indebtedness as Senior Lender may request.
8.Refinancing. Subordinate Lender agrees that its agreement to subordinate under this
Agreement will extend to any new mortgage debt which is for the purpose of refinancing
all or any part of the Senior Indebtedness (including reasonable and necessary costs
associated with the closing and/or the refinancing, and any reasonable increase in
proceeds for rehabilitation in the context of a preservation transaction). All terms and
covenants of this Agreement will inure to the benefit of any holder of any such
refinanced debt, and all references to the Senior Loan Documents and Senior Lender will
mean, respectively, the refinance loan documents and the holder of such refinanced debt.
9.Governmental Powers. Nothing in this Agreement is intended, nor will it be construed,
to in any way limit the exercise by Subordinate Lender of its governmental powers
(including police, regulatory and taxing powers) with respect to Borrower or the
Mortgaged Property to the same extent as if it were not a party to this Agreement or the
transactions contemplated by this Agreement.
10.Notices.
(a)Any Notice required or permitted to be given pursuant to this Agreement will be
in writing and will be deemed to have been duly and sufficiently given if (i)
personally delivered with proof of delivery (any Notice so delivered will be
deemed to have been received at the time so delivered), or (ii) sent by a national
overnight courier service (such as FedEx) designating earliest available delivery
(any Notice so delivered will be deemed to have been received on the next
Business Day following receipt by the courier), or (iii) sent by United States
registered or certified mail, return receipt requested, postage prepaid, at a post
office regularly maintained by the United States Postal Service (any Notice so
sent will be deemed to have been received on the date of delivery as confirmed by
the return receipt), addressed to the respective parties as follows:
Notices intended for Senior Lender will be addressed to:
«LenderName»
«LenderAddress»
Attention: _________________
Notices intended for Subordinate Lender will be addressed to:
_____________________________ [Name]
_____________________________ [Address]
Attention: _________________
(b)Any party, by Notice given pursuant to this Section 10, may change the person or
persons and/or address or addresses, or designate an additional person or persons
Subordination Agreement – Governmental Entity Page 14
or an additional address or addresses, for its Notices, but Notice of a change of
address will only be effective upon receipt. Neither party will refuse or reject
delivery of any Notice given in accordance with this Section 10.
11.Reserved.
12.Miscellaneous Provisions.
(a)Assignments/Successors. This Agreement will be binding upon and will inure to
the benefit of the respective legal successors and permitted assigns of the parties
to this Agreement. Without prior notice to or the consent of the Subordinate
Lender or the Borrower, the Senior Lender may freely transfer or assign the
Senior Loan and the Senior Loan Documents, including this Agreement, in whole
or in part, and the Subordinate Lender acknowledges and agrees that any future
legal holder of the Senior Note will automatically be a legal successor and
permitted assignee of Senior Lender hereunder, without the necessity of any
further action or instrument. No other party will be entitled to any benefits under
this Agreement, whether as a third-party beneficiary or otherwise.
(b)No Partnership or Joint Venture. Nothing in this Agreement or in any of the
Senior Loan Documents or Subordinate Loan Documents will be deemed to
constitute Senior Lender as a joint venturer or partner of Subordinate Lender.
(c)Further Assurances. Upon Notice from Senior Lender, Subordinate Lender will
execute and deliver such additional instruments and documents, and will take
such actions, as are required by Senior Lender to further evidence or implement
the provisions and intent of this Agreement.
(d)Amendment. This Agreement may be amended, changed, modified, altered or
terminated only by a written instrument signed by the parties to this Agreement or
their successors or assigns.
(e)Governing Law. This Agreement will be governed by the laws of the State in
which the Land is located.
(f)Severable Provisions. If any one or more of the provisions contained in this
Agreement, or any application of any such provisions, is invalid, illegal, or
unenforceable in any respect, the validity, legality, enforceability, and application
of the remaining provisions contained in this Agreement will not in any way be
affected or impaired.
(g)Term. The term of this Agreement will commence on the date of this Agreement
and will continue until the earliest to occur of the following events:
Subordination Agreement – Governmental Entity Page 15
(i) The payment of all the Senior Indebtedness; provided that this Agreement
will be reinstated in the event any payment on account of the Senior
Indebtedness is avoided, set aside, rescinded or repaid by Senior Lender.
(ii) The payment of all the Subordinate Indebtedness other than by reason of
payments which Subordinate Lender is obligated to remit to Senior Lender
pursuant to this Agreement.
(iii) The acquisition by Senior Lender or by a third-party purchaser of title to
the Mortgaged Property pursuant to a foreclosure of, deed in lieu of
foreclosure, or trustee’s sale or other exercise of a power of sale or similar
disposition under the Senior Mortgage.
(iv) With the prior written consent of Senior Lender, without limiting the
provisions of Section 4(b)(iv), the acquisition by Subordinate Lender of
title to the Mortgaged Property subject to the Senior Mortgage pursuant to
a foreclosure, or a deed in lieu of foreclosure, of (or the exercise of a
power of sale under) the Subordinate Mortgage.
(h) Counterparts. This Agreement may be executed in two or more counterparts, each
of which will be deemed an original but all of which together will constitute one
and the same instrument.
(i) Entire Agreement. This Agreement represents the entire understanding and
agreement between the parties regarding the matters addressed in this Agreement,
and will supersede and cancel any prior agreements regarding such matters.
(j) Authority. Each person executing this Agreement on behalf of a party to this
Agreement represents and warrants that such person is duly and validly
authorized to do so on behalf of such party with full right and authority to execute
this Agreement and to bind such party with respect to all of its obligations under
this Agreement.
(k) No Waiver. No failure or delay on the part of any party to this Agreement in
exercising any right, power, or remedy under this Agreement will operate as a
waiver of such right, power, or remedy, nor will any single or partial exercise of
any such right, power or remedy preclude any other or further exercise of such
right, power, or remedy or the exercise of any other right, power or remedy under
this Agreement.
(l) Remedies. Each party to this Agreement acknowledges that if any party fails to
comply with its obligations under this Agreement, the other parties will have all
rights available at law and in equity, including the right to obtain specific
performance of the obligations of such defaulting party and injunctive relief.
13. Attached Riders. The following Riders are attached to this Agreement:
Subordination Agreement – Governmental Entity Page 16
[LIST EACH RIDER ATTACHED OR STATE “NONE”; INSERT ANY RIDER
AFTER THE SIGNATURE PAGE AND PRIOR TO EXHIBIT A]
14.Attached Exhibits. The following Exhibits, if marked with an “X” in the space provided,
are attached to this Agreement:
Exhibit A Description of the Land (required)
Exhibit B Ground Lease Description (if applicable)
[SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW]
Subordination Agreement – Governmental Entity
Signature Page - «ProjectName» Page S - 1
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year
first above written.
SENIOR LENDER:
«LenderName»,
a «StateofLenderOrganization» «TypeofLenderEntity»
By: __________________________________
Name: «LenderSigner»
Title: «TitleofLenderSigner»
[INSERT NOTARY BLOCK FOR RECORDATION]
[The remainder of this page intentionally left blank; signature page follows.]
Subordination Agreement – Governmental Entity
Signature Page - «ProjectName» Page S - 2
SUBORDINATE LENDER:
_______________ [GOVERNMENTAL ENTITY],
a ______________________________
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
[INSERT NOTARY BLOCK FOR RECORDATION]
[The remainder of this page intentionally left blank; signature page follows.]
Subordination Agreement – Governmental Entity
Signature Page - «ProjectName» Page S - 3
CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement, dated
«DateofLoan», by and between «LenderName», a «StateofLenderOrganization»
«TypeofLenderEntity» and _____________________________ [NAME OF
GOVERNMENTAL ENTITY] and consents to the agreement of the parties set forth in this
Agreement.
«BorrowerName»,
a «StateofBorrowerOrganization»
«TypeofBorrowerEntity»
By: ____________________________
Name: «BorrowerSigner1»
Title: «TitleofBorrowerSigner1»
Date: ____________________________
[INSERT NOTARY BLOCK FOR RECORDATION]
Subordination Agreement – Governmental Entity Page A - 1
EXHIBIT A
LEGAL DESCRIPTION
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF REPORT NO. 11
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
4/21/2025
Julie Urban, Asst. Community Development DirectorREPORT PREPARED BY:
EXECUTIVE DIRE CTOR RE VIEW: Melissa Poehlman, Executive Director
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution authorizing submittal of two grant applications for environmental cleanup
of contaminated soils and asbestos at 6501 and 6525 Penn Avenue South.
EXECUTIVE SUMMARY:
The Housing and Redevelopment Authority (HRA) approved a Preliminary Development Agreement with JO
Companies (Developer) for the redevelopment of HRA-owned property located at 6501-6525 Penn Avenue
South (Property). The Developer is proposing 42 units of affordable multi-family housing on the site. Initial
environmental investigations by the HRA when it purchased the Property indicated the presence of
contaminated soils from past auto uses on the Property. Further testing by the Developer has identified the
extent of the petroleum contamination in the soil and also found significant asbestos in the 6525 Penn Avenue
South building, both of which need to be removed before redevelopment can proceed.
The current cost estimate for the cleanup is $299,119. The Developer is planning to apply to Hennepin
County for an Environmental Response Fund (ERF) grant and is asking the HRA to apply to the Metropolitan
Council for a Tax Base Revitalization Account (TBRA) grant to cover these costs. They plan to request half of
the total cost from each grant fund. The resolutions, however, are written to authorize "up to" the total amount
of $299,119 from each grant source in the event that the cost estimate increases.
RECOMMENDED ACTION:
By Motion:
1. Approve a resolution authorizing submittal of an application by the Developer for a Hennepin County
Environmental Response Fund grant for environmental cleanup of contaminated soils and hazardous
building materials at 6501-6525 Penn Avenue South.
2. Approve a resolution authorizing submittal of an application for Tax Base Revitalization Account
grant for environmental cleanup of contaminated soils and hazardous building materials at
6501-6525 Penn Avenue South.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The HRA purchased 6501 Penn Avenue South in 2018 and the tax-forfeited property at 6525 Penn
Avenue South in 2024. The HRA approved a Preliminary Development Agreement with the Developer
in June of 2024 (revised in July and extended in February 2025).
Phase I and Phase II Environmental Surveys for 6501 Penn Avenue South in 2018-2019 identified soil
contamination from previous auto uses.
The buildings at 6501 Penn Avenue South were demolished in 2022. Contaminated soils were not
04/16/2025
cleaned up at the time with the intention of having remediation occur at the same time as redevelopment
activity.
The HRA authorized an application for grant funding in February 2025 for additional environmental
investigation work. The results of the investigation have defined the amount and location of
contaminated soil and identified asbestos in the 6525 Penn Avenue South building.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
Redevelopment of the Property provides an opportunity to further goals of the Strategic Plan, including
diversifying the tax base and maintaining Richfield as an affordable place to live.
Climate resilience is also a desired outcome of the Strategic Plan, and environmental cleanup of
contaminated sites can further this goal.
The proposed development will help to reduce racial inequities and barriers for traditionally excluded
groups by providing housing stability through affordable housing, including 16 units affordable to
households earning less than 30% of the area median income and 12 three- and four-bedroom units to
serve families with children with low incomes.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
It is the HRA's policy to seek outside funding when possible to support redevelopment that may further
community goals.
The Metropolitan Council Livable Communities Act (LCA) funding programs require either a city or its
housing and redevelopment authority to be the applicant and administrator of the funds. Hennepin
Council allows a developer to be the applicant but requires a resolution of support from either the city or
in this case, the HRA as owner of the Property.
D.CRITICAL TIMING ISSUES:
Both applications are due May 1, 2025.
The Developer is working to complete work necessary to begin construction this Fall. Plans for land use
approvals will likely be submitted in April with Planning Commission review in May and City Council
consideration in June.
The HRA will also be asked to consider a full development agreement and hold a public hearing on the
sale of the land likely in June.
E.FINANCIAL IMPACT:
The Developer will request a total of $299,119 from the two funding sources.
The HRA would provide an in-kind contribution for the TBRA application in the form of staff time to
prepare a subgrantee agreement with the Developer, review invoices, and submit requests for payment
to the Metropolitan Council.
F.LEGAL CONSIDERATION:
The HRA will sign a grant agreement with the Metropolitan Council agreeing to following all Program
requirements, and in turn, the Developer will sign a subgrantee agreement with the City agreeing to
follow those same requirements.
One of the terms of the Preliminary Development Agreement is that the HRA will cooperate with funding
requests that help the development move forward.
ALTERNATIVE RECOMMENDATION(S):
Decide not to authorize applications for cleanup funds for the Property.
PRINCIPAL PARTIES EXPECTED AT MEETING:
NA
ATTACHMENTS:
Description Type
ERF Resolution Resolution Letter
TBRA Resolution Resolution Letter
RESOLUTION NO.
RESOLUTION AUTHORIZING JO COMPANIES LLC TO APPLY FOR AN
ENVIRONMENTAL RESPONSE FUND CLEANUP GRANT FROM HENNEPIN
COUNTY
WHEREAS, JO Companies LLC (the “Developer”) is proposing to construct Penn
Station (the “Project”), a development containing 42 units of work force housing on
property owned by the City’s Housing and Redevelopment Authority (the “HRA”) located
at 6501 and 6525 Penn Avenue South (the “Property”); and
WHEREAS, the HRA conducted environmental testing on the Property that
indicates that some environmental contamination is present and needs to be
remediated; and
WHEREAS, on June 17, 2024, the HRA approved a Preliminary Development
Agreement (the “Agreement”) with the Developer to purchase the Property and develop
the Project; and
WHEREAS, the Developer is applying for an Environmental Response Fund
(ERF) cleanup grant from Hennepin County for up to $299,119 in funding (the
“Program”); and
WHEREAS, the Program’s application requires a resolution from the HRA as
owner of the Property; and
NOW, THEREFORE, BE IT RESOLVED
1.The HRA authorizes JO Companies LLC to apply for an Environmental
Response Fund cleanup grant from Hennepin County.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 21st day of April, 2025.
Erin Vrieze Daniels, Chair
ATTEST:
Sean Hayford Oleary, Secretary
RESOLUTION NO.
RESOLUTION AUTHORIZING APPLICATION FOR THE TAX BASE REVITALIZATION
ACCOUNT ON BEHALF OF 6501-6525 PENN AVENUE SOUTH
WHEREAS the City of Richfield is a participant in the Livable Communities Act's Local
Housing Incentives Program for 2025 as determined by the Metropolitan Council, and the City’s
Housing and Redevelopment Authority (the “HRA”) is therefore eligible to make application
apply for funds under the Tax Base Revitalization Account; and
WHEREAS the HRA owns property at 6501 and 6525 Penn Avenue South and has
identified a contamination cleanup project on the property that meets the Tax Base
Revitalization Account’s purposes and criteria and is consistent with and promotes the purposes
of the Metropolitan Livable Communities Act and the policies of the Metropolitan Council’s
adopted metropolitan development guide; and
WHEREAS the HRA has the institutional, managerial, and financial capability to ensure
adequate project and grant administration; and
WHEREAS the HRA certifies that it will comply with all applicable laws and regulations
as stated in the contract grant agreements; and
WHEREAS the HRA finds that the required contamination cleanup will not occur through
private or other public investment within the reasonably foreseeable future without Tax Base
Revitalization Account grant funding; and
WHEREAS the HRA represents that it has undertaken reasonable and good faith efforts
to procure funding for the activities for which Livable Communities Act Tax Base Revitalization
Account funding is sought but was not able to find or secure from other sources funding that is
necessary for cleanup completion and states that this representation is based on the following
reasons and supporting facts:
BE IT FURTHER RESOLVED that, the HRA authorizes the Executive Director to submit
an application for Metropolitan Council Tax Base Revitalization Account grant funds, and, if the
Richfield HRA is awarded a Tax Base Revitalization Account grant for this project, the Richfield
HRA will be the grantee and agrees to act as legal sponsor to administer and be responsible for
grant funds expended for the project contained in the Tax Base Revitalization grant application
submitted on May 1, 2025.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 21st day of April, 2025.
______________________________
Erin Vrieze Daniels, Chair
ATTEST:
Sean Hayford Oleary, Secretary