091525 HRA Agenda Packet (1)Richfield Housing and Redevelopment Authority
Agenda
September 15, 2025 -- 7:00 PM
Richfield Municipal Center
Council Chambers
6700 Portland Avenue South
1.Call to Order
2.Roll Call
3.Open Forum
a.Participants can share their comments in person, by voicemail, or email, and may also request
to participate virtually. For more information on submitting comments, refer to the Housing and
Redevelopment Authority (HRA) Agenda and Minutes page on the City's website.
4.Approval of the Agenda
5.Approval of Minutes
a.Approval of the minutes of the Regular Housing and Redevelopment Authority meeting of
August 18, 2025.
6.Presentations
7.Consent Calendar
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 a Loan Agreement and related documents with Penn Station Apartments,
LLLP for a Tax Base Revitalization Account Grant.
b.Consideration of an Estoppel Certificate and an Assignment and Assumption Agreement of the
Contract for Private Development for the Riley-Richlyn development.
8.Consideration of Items, if Any Removed From Consent Calendar
9.Public Hearings
10.Resolutions
a.Consideration of a resolution accepting a Bring It Home Minnesota funding award.
11.Other Business
12.Executive Director’s Report
13.HRA Discussion Items
14.Approval of Claims
15.Adjournment
Auxiliary aids for individuals with accessibility needs are available upon request. Requests must be made at least 96 hours in
advance to the City Clerk at 612-861-9739.
Includes Materials - Materials relating to these agenda items can be found in the HRA agenda packet located by the entrance. The
complete HRA agenda packet is available electronically on the City of Richfield’s website.
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HRA Meeting Minutes August 18, 2025
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HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
August 18, 2025
Acting Chair Hanson called the meeting to order at 7:00 PM in the Council Chambers.
HRA Present: Gordon Hanson, Acting Chair; Mary Supple; Sean Hayford Oleary; John Young.
Excused: Erin Vrieze Daniels, Chair.
Staff Present: Melissa Poehlman, Executive Director; Julie Urban, Assistant Community
Development Director; and Michelle Friedrich, City Clerk.
OPEN FORUM
Acting Chair Hanson gave instructions on how to participate in the open forum. No residents participated
in the open forum opportunity.
APPROVAL OF THE MINUTES
MOTION: made by Hanson, seconded by Young to approve the minutes of the Housing and
Redevelopment Authority regular meeting Minutes of July 21, 2025, as presented.
Motion carried: 4-0
ITEM #1 APPROVAL OF THE AGENDA
MOTION: made by Hayford Oleary, seconded by Young to approve the agenda as presented.
Motion carried: 4-0
ITEM #2 CONSENT CALENDAR
Executive Director Poehlman presented the consent calendar items.
A.Consideration of a Grant Compliance Agreement with Penn Station Apartments, LLLP
regarding a Tax Base Revitalization Account Grant for 6501-6525 Penn Avenue South. Staff
Report No. 21.
MOTION: made by Supple, seconded by Hayford Oleary, to approve the consent calendar as presented.
CALL TO ORDER
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HRA Meeting Minutes August 18, 2025
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Motion carried: 4-0
ITEM #3 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR
None.
ITEM #4
CONSIDER RESOLUTIONS APPROVING THE PROPOSED 2026 HOUSING AND
REDEVELOPMENT AUTHORITY BUDGET AND TAX LEVY AND 2025 REVISED
HOUSING AND REDEVELOPMENT AUTHORITY BUDGET.
Executive Director Poehlman reviewed the 2026 Housing and Redevelopment Authority budget and tax
levy and noted expenses, investments, highlights, and challenges. Staff Report No. 22
MOTION: made by Hayford Oleary, seconded by Young, to adopt the Resolution authorizing the proposed
2026 Housing and Redevelopment Authority Budget and Tax Levy and 2025 Revised Housing and
Redevelopment Authority Budget.
RESOLUTION NO. 1513
RESOLUTION AUTHORIZING THE PROPOSED 2026 HOUSING AND REDEVELOPMENT
AUTHORITY BUDGET AND TAX LEVY
RESOLUTION NO. 1514 RESOLUTION AUTHORIZING 2025 REVISED HOUSING AND
REDEVELOPMENT AUTHORITY BUDGET.
Motion carries: 4-0
ITEM #5 OTHER BUSINESS
Consideration of the approval of an amended Contract with the Center for Energy and Environment to
provide additional funding for Community Fix-Up Fund loan services to Richfield homeowners for 2025,
and funds for loan services, Remodeling Advisor visits, and administration fees as approved in the 2026
Budget. Staff Report No. 23.
Assistant Community Development Director Urban presented item for Contract with the Center for Energy
to provide funding for community fix-up loan services. Assistant Community Development Director Urban
reviewed loans to date and reviewed changes for fix-up fund revenue additions, and interest rate
adjustments to 5%.
MOTION: made by Supple, seconded by Young, to approve the amended contract with the Center for
Energy and Environment 25-26.
Motion carries: 4-0
ITEM #6 HRA DISCUSSION ITEMS
No items were discussed.
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HRA Meeting Minutes August 18, 2025
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ITEM #7 EXECUTIVE DIRECTOR REPORT
Executive Director Poehlman reported the updates within HRA and noted transitioning legal services for
HRA back to Kennedy-Graven. Executive Director Poehlman noted the Penn Avenue reconstruction open
house is scheduled for Wednesday, August 20, from 4:30-7:00 p.m., and noted the HRA/EDA agendas will
be created in CivicPlus in September.
ITEM #7 CLAIMS
MOTION: made by Supple, seconded by Hayford Oleary, to approve claims:
U.S. BANK 08/18/2025
HRA Checks (Dated 7/18/2025-8/14/2025) $31,319.81
Section 8 Checks (Dated 8/1/2025-8/4/2025) $222,788.18
TOTAL $254,107.99
Motion carried: 4-0
ITEM #8 ADJOURNMENT
This meeting was adjourned by unanimous consent at 7:30 p.m.
Date Approved: September 15, 2025
Gordon Hanson
Acting HRA Chair
Michelle Friedrich Melissa Poehlman
City Clerk Executive Director
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Housing and Redevelopment Authority Meeting 9/15/2025
Agenda Section: Consent Calendar
Agenda Item: 7.a.
Report Prepared By:
Julie Urban, Assistant Community Development Director
Department Director:
Melissa Poehlman, Community Development Director
Item for Consideration:
Consideration of a Loan Agreement and related documents with Penn Station
Apartments, LLLP for a Tax Base Revitalization Account Grant.
EXECUTIVE SUMMARY
On June 25, 2025, the Housing and Redevelopment Authority (HRA) was awarded a
Tax Base Revitalization Account (TBRA) Grant (Grant) from the Metropolitan Council in
the amount of $303,200 to undertake activities related to the clean-up of polluted land
and building located at 6501-6525 Penn Avenue South. Environmental assessments of
the properties have identified contaminated soils and building materials which need to
be removed before development can proceed. JO Companies (the Developer) will
conduct the remediation activities and request reimbursement for the costs from the
TBRA grant. In August, the HRA approved a Grant Compliance Agreement, which
details the terms under which the HRA will provide reimbursement.
The development is using equity from federal Low Income Housing Tax Credits (LIHTC)
to finance the project, and the rules of LIHTC financing make it most beneficial to the
project if the LHIA funds are provided to the project in the form of a deferred loan. The
Loan Agreement, promissory note, and mortgage between the HRA and the Developer
lay out the terms of the loan, which are consistent with the requirements of the TBRA
Grant.
HISTORICAL CONTEXT
•The HRA owns both 6501 and 6525 Penn Avenue South but has entered into
a Contract for Private Redevelopment with JO Companies (dba Penn Station
Apartments LLLP) for the redevelopment of the properties.
•On July 7, 2025, the HRA was awarded a TBRA grant for environmental
remediation activities.
•On August 18, 2025, the HRA approved a Grant Agreement with Penn Station
LLLP for the TBRA Grant.
RECOMMENDED ACTION
By motion: Approve a Loan Agreement and related documents with Penn Station
Apartments, LLLP for a Tax Base Revitalization Account Grant.
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•The proposed affordable housing development associated with the Grant would
help meet the Strategic Plan goal to maintain Richfield as an affordable place to
live.
•The development will provide affordable housing opportunities for people with
low incomes and people with disabilities.
POLICIES (RESOLUTIONS, ORDINANCES, REGULATIONS, STATUTES, ETC.)
LIHTC rules make it most beneficial to the development if the TBRA Grant is provided to
the development as a deferred loan.
CRITICAL TIMING ISSUES
•Approval of the loan documents by the City will help the Developer to submit the
documents to Minnesota Housing for approval and meet the goal of closing on all
financing sometime this Fall.
FINANCIAL IMPACT
•The City was awarded $303,200 in TBRA Grant funds from the Metropolitan
Council.
•The City intends to provide the proceeds of the Grant to the Developer. The
terms of LIHTC financing make it most beneficial to the project if the funds are
provided in the form of a loan instead of a grant. The form of the assistance does
not negatively impact the HRA.
LEGAL CONSIDERATIONS
•The HRA Attorney prepared the loan documents and will review any minor
administrative changes that may be required of the project's lenders.
•The term of the loan is 30 years. At the time of maturity, the Developer will be
required to repay the loan to the City. In accordance with the terms of the City's
Grant Agreement with the Metropolitan Council, the City agrees to do one of the
following with the proceeds:
1.Repay the proceeds to the Metropolitan Council;
2.Make the Grant funds available to the development for "an extended use period"
(i.e., extension of the affordability period beyond 30 years), or
3.Redeploy the Grant funds in compliance with the Livable Communities Act or
affordable housing goals.
ALTERNATIVE RECOMMENDATION(S)
1. Decide to not approve the Loan Documents.
2. Approve the Loan Documents with changes.
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EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
1.Penn Station Loan Agreement TBRA
2.Penn Station Promissory Note TBRA
3.Penn Station Mortgage TBRA
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ATTACHMENTS
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RC125-399-1045680.v1
LOAN AGREEMENT
(TBRA)
THIS LOAN AGREEMENT (the “Agreement”) is made and entered into as of this ___
day of ____________, 2025 (the “Effective Date”), between the Housing and Redevelopment
Authority in and for the City of Richfield, a public body corporate and politic under the laws of
Minnesota (the “Authority”), and Penn Station Apartments LLLP, a limited liability limited
partnership under the laws of Minnesota (the “Borrower”). The Effective Date is the date this
Agreement is executed by the second party to sign.
WITNESSETH:
WHEREAS, the Borrower proposes to acquire and redevelop the property located at 6501-
6525 Penn Avenue South in the City and legally described in Exhibit A attached hereto (the
“Redevelopment Property”) and construct thereon a multifamily housing project consisting of
approximately 42 units meeting certain affordability levels (the “Project”); and
WHEREAS, to assist with the costs of the Project, the Authority, on behalf of the Borrower,
applied for and received a Tax Base Revitalization Account grant in the total sum of $303,200 (the
“TBRA Grant”) from the Metropolitan Council (the “Council”); and
WHEREAS, on August 20, 2025, the Council and the Authority entered into a
Metropolitan Livable Communities Act Grant Agreement (the “Grant Agreement”), with an
expiration date of June 30, 2028, as may be extended pursuant to Section 5.03 of the Grant
Agreement, as more specifically described herein and which is attached hereto as Exhibit B; and
WHEREAS, the proceeds of the TBRA Grant may be used for eligible project activities of
the Project to be constructed on the Redevelopment Property and as further described in the Grant
Agreement (the “Grant-Eligible Activities”); and
WHEREAS, the Authority desires to loan the proceeds of the TBRA Grant in the principal
amount of $303,200 to the Borrower (the “Loan”) to provide financing for a portion of the Grant-
Eligible Activities with respect to the construction of the Project on the Redevelopment Property;
and
WHEREAS, the Authority believes that the development of the Project, and fulfillment
generally of this Agreement, are in the vital and best interests of the Authority and the health,
safety, morals, and welfare of its residents, and in accord with the public purposes and provisions
of the applicable Minnesota and local laws and requirements under which the Project has been
undertaken and is being assisted; and
WHEREAS, the Authority and the Borrower desire to enter into this Agreement for the
purpose of setting forth their respective responsibilities with respect to the Loan.
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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RC125-399-1045680.v1
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following meaning:
Borrower Documents: any and all documents and instruments in connection with the
Project as reasonably requested by the Authority.
Disbursement Request Form: the form, substantially in the form attached hereto as
Exhibit C, to be submitted to the Authority when a disbursement of the Loan is requested and
which is referred to in Article VI hereof, together with such other request forms as may be
reasonably required from the Council and the Authority.
Grant Agreement: the Metropolitan Livable Communities Act Grant Agreement No. SG-
23209 between the Council and the Authority for the Penn Station Project, attached hereto as
Exhibit B.
Grant-Eligible Activities: the activities on the Redevelopment Property funded in full or
in part by the TBRA Grant, as set forth in Exhibit A of the Grant Agreement.
Loan: the sum of $303,200 to be loaned by the Authority to the Borrower under this
Agreement.
Loan Documents: collectively, this Agreement, the Mortgage, and the Note.
Mortgage: the Combination Mortgage and Security Agreement of even date herewith from
the Borrower to the Authority securing repayment of the Note in the form approved by the
Authority.
Note: the Note of even date herewith from the Borrower to the Authority in the amount of
the Loan evidencing Borrower’s obligation to repay the Loan in the form approved by the
Authority.
Plans and Specifications: the final plans and specifications for the construction and
installation of the Grant-Eligible Activities which have been approved by the Authority.
Project: the Penn Station Project including approximately 42 units of affordable
multifamily residential housing.
Project Costs: the costs of the Grant-Eligible Activities eligible to be reimbursed with the
proceeds of the TBRA Grant under the Grant Agreement and as authorized by law.
Redevelopment Property: the property legally described in Exhibit A attached hereto.
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ARTICLE II
TERM OF AGREEMENT
This Agreement shall take effect and be in force from and after the Effective Date, and
shall remain in effect until the Borrower has performed all of its obligations under this Agreement,
the Loan Documents, and the Grant Agreement, unless earlier terminated as provided in this
Agreement or the Grant Agreement.
ARTICLE III
THE LOAN
Subject to the terms and conditions of this Agreement, the Authority will make the Loan
to the Borrower to be used for payment of Project Costs, which Loan shall be disbursed pursuant
to this Agreement. In consideration for the Loan, the Borrower agrees to perform all of its
obligations under this Agreement. The Loan shall be evidenced by the Note payable by the Borrower
to the Authority which shall be dated as of the date of closing on the Loan (the “Loan Closing Date”).
Proceeds of the Loan shall be disbursed in accordance with Articles V and VI hereof.
ARTICLE IV
STATEMENT OF WORK
Proceeds of the Loan may be used to construct or install any of the improvements described
as Grant-Eligible Activities in the Grant Agreement in accordance with the terms set forth herein.
In accordance with the Grant Agreement, the Borrower will commence construction of the Grant-
Eligible Activities and pay the Project Costs with respect to the Project Improvements prior to
June 30, 2028. The grant expires on June 30, 2028. If the Borrower finds it necessary to request
an extension of the Grant Agreement from the Metropolitan Council, the Borrower must provide
written notice to the Authority at least 120 days prior to the expiration date of the grant for the
Authority to have sufficient time to request an extension of the Grant Agreement under Section
5.03 of the Grant Agreement.
ARTICLE V
CONDITIONS OF DISBURSEMENT
The obligation of the Authority to make or cause to be made disbursements of the proceeds
of the Loan pursuant to Article VI hereof shall be subject to the conditions precedent that it shall
have received on or before the date of the disbursement hereunder the following:
a. the Borrower Documents, the Mortgage, and the Note, duly executed and
delivered by the Borrower;
b. evidence satisfactory to the Authority that the Grant-Eligible Activities and
the construction, installation and contemplated use thereof are permitted by and comply in
all material respects with all applicable restrictions and requirements in prior conveyances,
zoning ordinances, subdivision and platting requirements and other laws and regulations;
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RC125-399-1045680.v1
c. all other conditions specified in the authorizing Authority approvals and
entitlements and the Grant Agreement shall have been duly satisfied by the Borrower or
waived in writing by the Authority or the Council, as applicable;
d. no uncured Event of Default (as defined in Article VIII hereof), and no event
which with the giving of notice or the lapse of time or both would constitute an Event of
Default, shall have occurred and be continuing and all representations and warranties made
by the Borrower in Article VII hereof shall continue to be, in all material respects, true and
correct as of the date of such disbursement;
e. if required by the Authority, the Authority shall have been furnished with a
statement of the Borrower and of any contractor, in form and substance acceptable to the
Authority, to the extent reasonably available, setting forth the names, addresses and
amounts due or to become due as well as the amounts previously paid to every contractor,
subcontractor, person, firm or corporation furnishing materials or performing labor in
connection with the construction of any part of the Grant-Eligible Activities; and
f. the Borrower shall have provided to the Authority such documentation and
information reasonably necessary to evidence its compliance with all of the provisions of
this Agreement, including without limitation the provisions of the Grant Agreement
applicable to the Borrower, as the Authority may reasonably request.
ARTICLE VI
REQUESTS FOR DISBURSEMENT
6.01. Disbursement. The Authority and the Borrower agree that, on the terms and subject
to the conditions hereinafter set forth and the conditions set forth in the Grant Agreement, the Loan
shall be disbursed from the Authority to the Borrower, or the Borrower’s agent or designee, in
disbursements, with the last disbursement being made upon one hundred percent (100%)
completion of the Grant-Eligible Activities. Disbursements of the Loan shall not be made more
often than monthly. Notwithstanding anything to the contrary contained herein, the Authority shall
only be obligated to make the disbursements hereunder to pay Project Costs in an amount up to or
equal to the lesser of the amount of the Loan or the amount actually disbursed by the Council to
the Authority under the Grant Agreement and such obligation is further subject to the conditions
of Article V hereof.
6.02. Disbursement Request.
a. When the Borrower desires to obtain a disbursement of the Loan, the
Borrower shall submit to the Authority the Disbursement Request Form, together with any
additional documents reasonably required by the Authority or the Council, duly signed by
the Borrower.
The Disbursement Request Form shall be submitted by the Borrower at least 45
days prior to the date of the requested disbursement. The Disbursement Request Form
shall constitute a representation and warranty by the Borrower to the Authority that all
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RC125-399-1045680.v1
representations and warranties of the Borrower set forth in the Borrower Documents are
true and correct as of the date of such Disbursement Request Form, except for such
representations and warranties which, by their nature, would not be applicable as of the
date of such Disbursement Request.
b. At the time of submission of the Disbursement Request Form, the Borrower
shall also submit the following to the Authority:
1. a written lien waiver from the general contractor for work done and
materials supplied by it which were paid or a conditional lien waiver from the
general contractor for work done and materials supplied by it which are to be paid
pursuant to the current Disbursement Request Form and from each subcontractor
for work done and materials supplied by it which were paid or are to be paid for
pursuant to the prior Disbursement Request Form;
2. evidence satisfactory to the Authority that the Grant-Eligible
Activities completed as of the date of the Disbursement Request Form have been
constructed or installed in accordance with the Plans and Specifications in all
material respects;
3. an executed Sworn Construction Statement, in form and substance
acceptable to such parties, signed by the Borrower showing all costs and expenses
of any kind theretofore actually paid or incurred in constructing the Grant-Eligible
Activities; and
4. a certified statement of the Borrower reflecting the use to which the
proceeds of the Loan have been applied in addition to those uses reflected in the
Sworn Construction Statement referred to in clause (b)(3) above.
c.Upon receipt of the Disbursement Request Form, if the Authority has
determined that all the conditions set forth in Articles V and VI hereof have been satisfied, a
request for disbursement shall be submitted to the Council. The adequacy of the request for
disbursement shall be determined by the Authority and the Council in their sole discretion,
such determination not to be unreasonably withheld, conditioned, or delayed. After
submission of the Disbursement Request Form, if the Borrower has performed all of its
agreements and complied with all requirements to be performed or complied with under this
Agreement and the Grant Agreement, including satisfaction of all applicable conditions
precedent contained in Article V hereof, the Authority shall make a disbursement to the
Borrower, or the Borrower’s agent or designee, in the amount of the requested disbursement
or such lesser amount as shall be approved, within 45 days after the date of the Authority’s
receipt of the Disbursement Request Form, or, if later, upon receipt of grant proceeds from
the Council. Each disbursement shall be paid from the proceeds of the TBRA Grant, subject
to the Authority’s and the Council’s determination that the relevant Project Cost is payable
from the TBRA Grant under the Grant Agreement. The Authority is under no obligation to
disburse any proceeds of the Loan until it receives a disbursement of the TBRA Grant from
the Council. Notwithstanding anything to the contrary herein, if the Project Costs of the
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Grant-Eligible Activities exceeds the amount to be reimbursed under this Agreement, such
excess shall be the sole responsibility of the Borrower.
ARTICLE VII
BORROWER’S COVENANTS, REPRESENTATIONS, WARRANTIES AND
AGREEMENTS
The Borrower covenants, represents, warrants and agrees that:
a. The Borrower is a limited liability limited partnership duly organized and
validly existing under the laws of Minnesota, is duly authorized to operate in Minnesota,
has the power to enter into and execute this Agreement and by appropriate action has
authorized the execution and delivery of this Agreement.
b. The Borrower Documents will not result in any breach of or constitute a
default under any other mortgage, lease, loan, grant or credit agreement, organizational
documents, or other instrument to which the Borrower is a party or by which it may be
bound or affected.
c. The Loan Documents will constitute valid, legal and binding obligations of
the Borrower enforceable against the Borrower.
d. The Borrower has or will have all necessary approvals, licenses and permits
required for construction and operation of the Project except those which cannot be
obtained until completion of the Grant-Eligible Activities or the Project, as the case may
be.
e. The Borrower shall permit the Authority, upon reasonable notice, during
normal business hours, and in a manner that does not unreasonably interfere with
Borrower’s operations, to examine all books, records, contracts, plans, permits, bills and
statements of account pertaining to the Grant-Eligible Activities and to make copies as the
Authority may require.
f. The Borrower shall obey and comply with all federal, state and local laws,
rules and regulations in connection with the Project.
g. The Authority’s actions in approving the Loan shall not be construed as an
approval by the Authority of providing any additional funds for the Project or other
improvements related to the Project.
h. The Borrower agrees to pay for all of the costs incurred to construct or
install the Grant-Eligible Activities including any cost overruns. There are no public funds
for the Grant-Eligible Activities except for the Loan.
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i. The Borrower agrees to cooperate with the Authority in any action by the
Authority under Minnesota Statutes, section 115B.04 to recover Project Costs incurred to
clean up the Redevelopment Property.
ARTICLE VIII
DEFAULT
Any one or more of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:
a. The Borrower shall herein default in the performance or observance of any
agreement, covenant or condition required to be performed or observed by the Borrower
under the terms of this Agreement or the Grant Agreement, to the extent such obligations
exist, and such default shall not be remedied within 60 days after written notice to the
Borrower from the Authority specifying such default.
b. The Borrower shall be in default of any term of any other agreement relating
to the Grant-Eligible Activities which is not cured within 60 days after written notice from
the Authority or if the default cannot be cured within 60 days within such reasonable time
as is required to cure the default, provided that the Borrower is diligently pursuing a cure.
c. Any representation or warranty made by the Borrower herein or any
document or certificate furnished to the Authority shall prove at any time to be materially
incorrect or misleading as of the date made.
d. The Borrower engages in any illegal activities.
e. The Borrower uses any of the Loan funds contrary to this Agreement or the
Grant Agreement which is not cured within 60 days after written notice from the Authority.
f. The Borrower shall fail to obtain and/or keep in force insurance only of the
types and in the amounts as specified within this Agreement, or shall fail to indemnify and
hold harmless the Authority as set forth herein which is not cured within 10 business days
after written notice from the Authority, or such longer period as may be reasonably required
to obtain such insurance provided Borrower is diligently pursuing the same.
g. The failure to repay any principal of the Loan when due.
ARTICLE IX
REMEDIES
Whenever any Event of Default shall have happened and is continuing beyond any
applicable cure period, any one or more of the following remedial steps may be taken by the
Authority:
a. The Authority may terminate this Agreement;
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b. The Authority may suspend or terminate any further disbursements to be
made under this Agreement;
c. The Authority may suspend its performance under this Agreement during
the continuance of the Event of Default; and/or
d.The Authority may take whatever action at law or in equity, consistent with
applicable law and subject to the limitations herein, as may be necessary or appropriate to
seek repayment or reimbursement of the Loan funds disbursed to the Borrower, to enforce
performance and observance of any obligation, agreement, covenant, representation or
warranty of the Borrower under this Agreement, or any related instrument; or to otherwise
compensate the Authority for any damages on account of such Event of Default.
No remedy conferred upon or reserved to the Authority 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 Event of Default shall impair any such right or power, nor 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. To entitle the Authority to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice, other than such notice as may be herein expressly required
or be required by law.
ARTICLE X
ADDITIONAL PROVISIONS
a. Indemnity, Hold Harmless. The Borrower shall and does hereby agree to
indemnify against and to hold the Authority, and its officers, council members, agents, and
employees including the independent contractors, consultants and legal counsel, servants
and employees thereof (hereinafter, for purposes of this section, collectively the
“Indemnified Parties”), harmless of and from any and all liability, loss, or damage to the
extent caused by Borrower’s acts or omissions that it or they may incur under or by reason
of this Agreement and 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 Grant-Eligible
Activities or the Project, and of and from any and all claims and demands whatsoever that
may be asserted against one or more of the Indemnified Parties by reason of any alleged
obligations or undertakings on the Borrower’s part to perform or discharge any of the
terms, covenants, or agreements contained herein.
Except for any willful misrepresentation or any willful, wanton, or grossly
negligent misconduct of the Indemnified Parties, the Borrower agrees to protect and defend
the Indemnified Parties, now and 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 under this Agreement, the Grant Agreement or the transactions
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contemplated hereby or the acquisition, construction, installation, ownership, and
operation of the Project or the Grant-Eligible Activities.
This indemnification and hold harmless provision shall survive the execution,
delivery, and performance of this Agreement and the creation and repayment of any
indebtedness to Authority under this Agreement.
b. Independent Contractor. For the purpose of this Agreement, the Borrower
shall be deemed an independent contractor and not an employee or agent of the Authority.
Any and all employees or agents of the Borrower shall not be considered employees or
agents of the Authority.
c. Compliance With Minnesota Laws. All of the data created, collected,
received, stored, used, maintained or disseminated by the Borrower with respect to the
Grant-Eligible Activities are subject to the requirements of Minnesota Statutes, Chapter 13,
(the “Minnesota Government Data Practices Act” or “MGDPA”) and, except as provided
in Section 13.05, subdivision 11(b) of the MGDPA, the Borrower agrees to comply with
those requirements under the MGDPA to the extent applicable. The remedies in Section
13.08 of the MGDPA may apply to the Borrower. If any provision of this Agreement is in
conflict with the MGDPA or other Minnesota State laws, state law shall control. The
Borrower shall comply with the conflict of interest provisions of Minnesota Statutes,
Sections 471.87 through 471.88.
d. Contractor and Subcontractor Compliance. The Borrower shall comply
with and shall cause all contractors and subcontractors to comply with all applicable state
and federal laws, and to the extent applicable to the Borrower, the Grant Agreement. The
Borrower shall require all contractors and subcontractors performing work covered by the
Loan to obtain all required permits, licenses and certifications and comply with all
applicable state and federal Occupational Safety and Health Act regulations, especially the
federal Hazardous Waste Operations and Emergency Response standards under Code of
Federal Regulations, title 29, sections 1910.120 and 1926.65.
e. Site Compliance. The Borrower shall meet or require to be met all
applicable requirements of:
(1)Federal and state laws relating to stormwater discharges including, without
limitation, any applicable requirements of Code of Federal Regulations, title 40, parts 122
and 123; and
(2)The Council’s 2030 Water Resources Management Policy Plan and the
Authority’s local water management plan applicable to the Redevelopment Property and
the Project.
f. Fair Housing Compliance. The Borrower shall comply in all respects with
the affordability and fair housing marketing plan requirements set forth in Article VI of the
Grant Agreement.
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g. Environmental Site Assessment. The Borrower shall ensure that a Phase I
Environmental Site Assessment or other environmental review of the Project will be
carried out if appropriate for the scope and nature of the Project.
ARTICLE XI
INSURANCE
With respect to the Project, the Borrower shall maintain all insurance required by the Grant
Agreement.
ARTICLE XII
RECORDS AND REPORTS
Upon request, the Borrower shall submit to the Authority a full account of the status of the
activities undertaken as part of this Agreement. The following records shall be maintained by the
Borrower, copies of which shall be submitted in such form as Authority may prescribe:
a. All receipts and invoices relating to expenditure of Loan funds.
b. Records shall be sufficient to reflect all costs incurred in performance of the
Loan. The books, records, documents, and accounting procedures, relevant to the Loan
shall be subject to examination by the Authority, the Council and state agencies and the
legislative auditor.
ARTICLE XIII
AMENDMENT
This Agreement shall not be amended or modified without the prior written approval of the
Authority and the Borrower.
ARTICLE XIV
INCORPORATION OF GRANT AGREEMENT
The Borrower acknowledges and agrees that all terms, conditions and obligations
contained in the Grant Agreement are incorporated herein, and made a part of this Agreement. In
addition to the terms, conditions and obligations described herein, the Borrower further
acknowledges, accepts and assumes all of the Authority’s obligations described in the Grant
Agreement, unless such obligations can only be reasonably performed by the Authority, including
but not limited to, the obligation to repay the TBRA Grant if required by the Council. For purposes
of enforcing this Agreement, the Borrower acknowledges, accepts and agrees that the Authority
shall inure to, and possess the rights and authority of the Council as described in the Grant
Agreement.
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ARTICLE XV
MISCELLANEOUS
a. Notices. All notices provided for herein shall be in writing and shall be
deemed to have been given when delivered personally or when deposited in the United
States mail, registered or certified, postage prepaid, addressed as follows:
(a) Name and Address of the Borrower:
Penn Station Apartments LLLP
510 Brunson Street, Suite 100
St. Paul, MN 55130
Attn: Johnny Opara, President and CEO
With a copy to: Winthrop & Weinstine, P.A.
225 South 6th St, Suite 3500
Minneapolis, MN 55402
Attn: Jon L. Peterson
(b) Name and Address of the Authority:
Housing and Redevelopment Authority
6700 Portland Avenue South
Richfield, MN 55423
Attn: Executive Director
With a copy to: Kennedy & Graven, Chartered
150 South Fifth Street, Suite 700
Minneapolis, MN 55402
Attention: Ronald H. Batty
or addressed to either party at such other address as such party shall hereafter
furnish by notice to the other party as above provided.
b. Binding Effect; Waiver. The provisions of this Agreement shall inure to the
benefit of and be binding upon the Borrower and the Authority and their respective
successors and assigns. No delay on the part of the Authority in exercising any right, power
or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege constitute such waiver nor exhaust the same, which shall be
continuing. The rights and remedies of the Authority specified in this Agreement shall be
in addition to and not exclusive of any other right and remedies which the Authority, by
operation of law, would otherwise have.
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c.Survival of Agreements, Representations and Warranties. All agreements,
representations and warranties made in this Agreement by the Borrower shall survive its
termination.
d.Governing Law. This Agreement and the attachments are to be construed
and enforced according to and governed by the laws of Minnesota.
e.Counterparts, Electronic Signatures. This Agreement may be executed in
any number of counterparts, all of which shall constitute a single agreement, any one of
which bearing signatures of all parties shall be deemed an original. An electronic or
facsimile signature is deemed to be the same as an original signature.
f.Time. Time is of the essence in the performance of this Agreement.
g.Entire Agreement. This Agreement contains the entire agreement of the
parties hereto on the matters covered herein. No other agreement, statement or promise
made by either party or by any employee, officer or agent of either party hereto that is not
in writing and signed by both parties to this Agreement shall be binding.
h.No Joint Venture. The relationship between the Authority and the Borrower
is solely that of grantor and grantee and the relationship by and between the Authority and
the Borrower is not, nor shall it be deemed to create, a partnership or joint venture in the
Project.
i.Venue. All matters whether sounding in tort or in contract, relating to the
validity, construction, performance, or enforcement of this Agreement shall be controlled
by and determined in accordance with the laws of Minnesota, and the Borrower agrees that
all legal actions initiated by the Borrower with respect to or arising from any provision
contained in this Agreement shall be initiated, filed and venued exclusively in District
Court in Hennepin County, Minnesota.
j.Attorneys’ Fees and Expenses. In the event the Borrower should default
under any of the provisions of this Agreement and the Authority should employ attorneys
or incur other expenses for the collection of amounts due hereunder or the enforcement of
performance of any obligation or agreement on the part of the Borrower, the Borrower will
on demand pay to the Authority the reasonable fee of such attorneys and such other
expenses so incurred, but only in the event the Authority prevails in pursuing such claims
and as awarded by a court of competent jurisdiction.
k.Assignment. This Agreement may not be assigned by the Borrower without
the prior written consent of Authority, which consent shall be in the sole discretion of the
Authority.
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IN WITNESS WHEREOF, the parties have caused this Loan Agreement to be executed
the day and year first above written.
PENN STATION APARTMENTS LLLP, a
Minnesota limited liability limited partnership
By: Penn Station Apartments LLC, a Minnesota
limited liability company
Its: General Partner
By: JO Companies, LLC,
a Minnesota limited liability company
Its Sole Member
By: Johnny Opara
Its Manager
Dated:
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HOUSING AND REDEVELOPMENT
AUTHORITY
By
Erin Vrieze Daniels, Chair
Dated:
By
Melissa Poehlman, Executive Director
Dated:
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EXHIBIT A
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
The Redevelopment Property is legally described as follows:
[to be completed]
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EXHIBIT B
GRANT AGREEMENT
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EXHIBIT C
DISBURSEMENT REQUEST FORM
Housing and Redevelopment Authority
6700 Portland Avenue South
Richfield, MN 55423
Attn: _______________
The undersigned, Penn Station Apartments LLLP, a Minnesota limited liability limited
partnership (the “Borrower”), pursuant to that certain Loan Agreement, dated as
__________________ (the “Loan Agreement”), between the Authority of Richfield, Minnesota
(the “Authority”), and the Borrower, hereby requests payment of the expenses listed on the
attached Expense Listing.
The total amount to be disbursed for this draw is $_________________.
In connection with this draw, the undersigned hereby represents as follows:
a. each obligation listed in the attached Exhibit A has been incurred and is a
Project Cost related to the Grant-Eligible Activities,
b. no license or permit necessary for construction of the Grant-Eligible
Activities previously issued has been revoked or the issuance thereof
subjected to challenge before any court of other governmental authority
having or asserting jurisdiction thereover;
c. no event has occurred and is continuing which, but for the giving of notice,
the expiration of any cure period, or both, would constitute an event of
default under the Loan Agreement or the Grant Agreement;
d. all funds of the Borrower’s match, if any, have been fully disbursed for the
payment of Project Costs; and
e. ______% of the Grant-Eligible Activities have been completed.
Penn Station Apartments LLLP
By: Penn Station Apartments, LLC
Its: General Partner
By: ____________________________
Name: Johnny Opara
Its: President and CEO
Approved:
HOUSING AND REDEVELOPMENT
AUTHORITY
By
Its ____________________
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Exhibit A
Expense Listing
Expense Description Amount
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NOTE
(TBRA)
$303,200 Richfield, Minnesota
______________, 2025
FOR VALUE RECEIVED, the undersigned (herein called the “Borrower”), promises to
pay to the order of the Housing and Redevelopment Authority in and for the City of Richfield, a
public body corporate and politic under the laws of Minnesota, or its assigns (the “Lender”), the
sum of $303,200 (the “Loan”). Said sum was made available to the Borrower pursuant to the terms
of a Loan Agreement of even date herewith (the “Loan Agreement”) between the Lender and the
Borrower to enable the Borrower to undertake the development of the Grant-Eligible Activities
(as defined in the Loan Agreement) on Property (as defined in the Loan Agreement) located in the
City of Richfield, Minnesota.
1. This Note shall not bear interest.
2. The principal of the Loan shall be due and payable in one lump sum on the earliest
of: (a) December 31, 2055, (b) the sale of any portion of the Property by the Borrower without
the Lender’s prior written consent, or (c) the Borrower’s material default under the Loan
Agreement or Combination Mortgage and Security Agreement of even date herewith (the
“Mortgage”) from the Borrower to the Lender (the “Maturity Date”), at which time all unpaid
principal and sums paid or advanced by the Lender is due and payable. This Note may also be
required to be repaid in whole or in part in accordance with Article IX of the Loan Agreement.
The Note may be prepaid in whole or in part at any time without penalty.
3. If suit is instituted by Lender, or its successors or assigns, to recover on this Note,
the Borrower agrees to pay all costs of such collection actually incurred, awarded by a court of
competent jurisdiction, and reasonably documented, including reasonable attorneys’ fees and court
costs. If this Note be reduced to judgment, such judgment shall bear the lawful interest rate
pertaining to judgments, but not to exceed six percent (6%) per annum.
4. The Borrower hereby waives presentment, demand, protest and notice of demand,
protest and nonpayment of this Note.
5. This Note is given pursuant to the Loan Agreement and the Mortgage delivered by
the Borrower. If either the Loan Agreement or the Mortgage is found to be invalid due to a material
breach, misrepresentation, or act of the Borrower, such invalidity shall constitute an Event of
Default hereunder. This Note is secured by the Mortgage and such Mortgage describes the rights
of the Lender as to the acceleration of the indebtedness evidenced by this Note.
All of the agreements, conditions, covenants, provisions, and stipulations contained in the
Loan Agreement, the Mortgage, or any other instrument securing this Note 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. If an Event of Default occurs under
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the Loan Agreement, the Mortgage, or any other instrument securing this Note, then the Lender
may at its right and option, after giving any written notice and allowing any applicable cure period
provided in the Loan Agreement or Mortgage, declare immediately due and payable the principal
balance of this Note and sums paid or advanced by the Lender, together with reasonable attorneys’
fees and expenses, to the extent awarded to Lender by a court of competent jurisdiction, incurred
by the Lender in collecting or enforcing payment hereof and all other sums due hereunder or any
instrument securing this Note.
6. The remedies of the Lender as provided herein and in the Loan Agreement, the
Mortgage, or any other instrument securing this Note shall be cumulative and concurrent and may
be pursued singly, successively, or together, and, at the sole discretion of the Lender, may be
exercised, subject always to the nonrecourse limitations in paragraph 9 and applicable law, as often
as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no
event be construed as a waiver or release thereof.
The Lender 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 Lender
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 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.
8. This Note shall be governed by and construed in accordance with the laws of
Minnesota.
9. Neither the Borrower nor any partner shall have any personal liability for the
Borrower’s obligations hereunder, it being recognized by the Lender the obligations of the
Borrower hereunder are non-recourse obligations and that the remedies of the Lender are limited
to the collateral security provided in connection with the Loan.
10. 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.
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IN WITNESS WHEREOF, this Note has been duly executed by the undersigned as of the
date and year first written above.
PENN STATION APARTMENTS LLLP, a
Minnesota limited liability limited partnership
By: Penn Station Apartments LLC, a Minnesota
limited liability company
Its: General Partner
By: JO Companies, LLC, a Minnesota limited
liability company
Its Sole Member
By:
Johnny Opara, Its Manager
Dated:
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COMBINATION MORTGAGE AND SECURITY AGREEMENT
(TBRA)
THIS MORTGAGE SECURES A LOAN MADE UNDER AN AFFORDABLE HOUSING
PROGRAM BY A STATE OR LOCAL GOVERNMENT AGENCY, AND AS SUCH IS
EXEMPT FROM MORTGAGE REGISTRATION TAX PURSUANT TO MINNESOTA
STATUTES, SECTION 287.04(6).
THIS COMBINATION MORTGAGE AND SECURITY AGREEMENT (hereinafter
referred to as the “Mortgage”) is made and given as of the ___ day of ___________, 2025, by Penn
Station Apartments LLLP, a Minnesota limited liability limited partnership (the “Mortgagor”), in
favor of the Housing and Redevelopment Authority in and for the City of Richfield, a public body
corporate and politic under the laws of Minnesota (the “Mortgagee”).
RECITALS:
WHEREAS, the Mortgagor hereby mortgages and conveys to the Mortgagee the real
property and improvements situated in the County of Hennepin, State of Minnesota, and legally
described on Exhibit A attached hereto and made a part hereof, the leases and rents with respect
to the real property and improvements and all personal property and equipment, and all products
and proceeds thereof owned by Mortgagor and used in the operation of the Project (as defined in
the hereinafter-described Loan Agreement) (herein, collectively the “Property”); and
WHEREAS, this Mortgage, together with the Loan Agreement of even date herewith (the
“Loan Agreement”) between the Mortgagor and the Mortgagee and all other documents securing
the Loan as defined below (collectively, the “Loan Documents”) are given in consideration of and
as security for the payment of $303,200 (the “Loan”), receipt of which is hereby acknowledged
and which is made to enable the Mortgagor to complete the Grant-Eligible Activities (as defined
in the Loan Agreement). The Loan is evidenced by a Note (the “Note”) in the amount of $303,200
executed by the Mortgagor, to the order of the Mortgagee, of even date herewith. The unpaid
principal sum shall be due and payable by the Mortgagor in full on December 31, 2055 unless
forgiven in accordance with the Note (the “Maturity Date”).
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AGREEMENTS:
NOW, THEREFORE, to secure (a) the due and punctual payment of principal on the Note
and the obligations of the Mortgagor under the Loan Agreement and all renewals, extensions and
modifications thereof any agreements or obligations issued in substitution therefore (provided the
principal amount secured by this Mortgage shall not exceed $303,200) and (b) the performance of
all the covenants and agreements of the Mortgagor herein, in the Loan Agreement and in any other
agreement now or hereafter entered into between the Mortgagor and Mortgagee in connection with
the Loan Agreement or the Grant-Eligible Activities contemplated therein (the payment and other
obligations evidenced by the Loan Agreement, this Mortgage and all such other agreements are
hereinafter collectively referred to as the “Indebtedness”), the Mortgagor does hereby mortgage,
grant, bargain, sell, assign, transfer and convey unto the Mortgagee forever, with power of sale the
following:
I.
All of the Mortgagor’s right, title and interest in and to the Property and the buildings,
structures, other improvements, fixtures and personal property now standing or at any time
hereafter constructed or placed upon the Property (the “Improvements”), including but not limited
to (i) all building materials, supplies and equipment now or hereafter located on the Property and
suitable or intended to be incorporated in any Improvements located or to be erected on the
Property; (ii) all heating, plumbing and lighting apparatus, motors, engines and machinery,
electrical equipment, incinerator apparatus, air-conditioning equipment, water and gas apparatus,
pipes, faucets, and all other fixtures of every description which are now or may hereafter be placed
or used upon the Property or in any of the Improvements now or hereinafter located thereon;
(iii) all additions, accessions, increases, parts, fittings, accessories, replacements, substitutions,
betterments, repairs and proceeds to and of any and all of the foregoing; (iv) all hereditaments,
easements, appurtenances; estates, and other rights and interests now or hereafter belonging to or
in any way pertaining to the Property or to any of the Improvements now or hereafter located
thereof; and (v) all tangible personal property owned by the Mortgagor and now or at any time
hereafter located on or relating to the Property.
II.
All rents, issues, profits, condemnation awards, revenues and income arising from the
ownership, operation or sale of the Property and the Improvements and all proceeds and products
thereof (herein collectively called “Revenues and Income”).
To Have and To Hold the Property and the Improvements (together, the “Mortgaged
Property”), and the Revenues and Income unto the Mortgagee forever; provided, nevertheless, that
this Mortgage is granted upon the express condition that if the Mortgagor shall cause to be paid to
the Mortgagee as and when due and payable the Indebtedness, and shall also keep and perform
each and every covenant and agreement of the Mortgagor herein contained, then this Mortgage
and the estate hereby granted shall cease and be and become void and shall be released of record
at the expense of the Mortgagor; otherwise this Mortgage shall be and remain in full force and
effect.
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The Mortgagor represents, warrants and covenants to and with the Mortgagee that
Mortgagor is lawfully seized of the Property and has good right and full power and authority to
execute this Mortgage and to mortgage the Mortgaged Property; that the Mortgagor owns the
Mortgaged Property free from all liens; security interests and encumbrances except as agreed to
by the Mortgagee; that the Mortgagor will warrant and defend the title to the Mortgaged Property
and the lien and priority of this Mortgage against all claims and demands of all persons
whomsoever, whether now existing or hereafter arising, except (i) as agreed to by the Mortgagee,
(ii) listed on Exhibit B attached hereto and made a part hereof, and (iii) the regulatory agreement
or land use restriction agreement to be entered into relating to low-income housing tax credits
(collectively, the “Permitted Encumbrances”). The covenants and warranties of this paragraph
shall survive foreclosure of this Mortgage and shall run with the Property.
The Mortgagor further covenants and agrees as follows:
1.Payment of the Indebtedness and Compliance with Other Agreements.
(a)The Mortgagor will cause the principal on the Indebtedness to be duly and
punctually paid in accordance with the terms of the Note, the Loan Agreement and this
Mortgage, when and as due and payable. The provisions of the Note and Loan Agreement
are hereby incorporated by reference into this Mortgage as fully as if set forth at length
herein.
(b)Mortgagor will duly and punctually perform each and every obligation
under the Loan Agreement and any other agreement on or hereafter entered into by the
Mortgagor and Mortgagee in connection with the Loan Agreement or the Grant-Eligible
Activities contemplated therein.
2.Payment of Taxes, Assessments and Other Charges; Escrow. Subject to
paragraph 6 relating to contests, the Mortgagor shall pay before a penalty might attach for
nonpayment thereof, all taxes and assessments and all other charges whatsoever levied upon or
assessed or placed against the Mortgaged Property, except that assessments may be paid in
installments so long as no fine or penalty is added to any installment for the nonpayment thereof.
The Mortgagor shall likewise pay all taxes, assessments and other charges, levied upon or assessed,
placed or made against, or measured by, this Mortgage, or the recordation hereof, or the
Indebtedness secured hereby, provided that the Mortgagor shall not be obliged to pay such tax,
assessment or charge if such payment would be contrary to law or would result in the payment of
an unlawful rate of interest on the Indebtedness secured hereby; and provided further that nothing
herein contained shall be construed as requiring the Mortgagor to pay any net income, profits or
revenues taxes of the Mortgagee. The Mortgagor shall promptly furnish to the Mortgagee all
notices received by the Mortgagor of amounts due under this paragraph and shall furnish receipts
evidencing such payments within 10 days after such payments are made.
3.Payment of Utility Charges. Subject to paragraph 6 relating to contests, the
Mortgagor shall pay all charges made by utility companies, whether public or private, for
electricity, gas, heat, water, or sewer, furnished or used in connection with the Mortgaged Property
or any part thereof, and will upon written request of the Mortgagee, furnish proper receipts
evidencing such payment.
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4.Liens. Subject to paragraph 6 hereof relating to contests, the Mortgagor shall not
create, incur or suffer to exist any lien, encumbrance or charge on the Mortgaged Property or
Revenues and Income or any part thereof which may have priority over the lien hereof, other than
the lien of current real estate taxes and installments of special assessments with respect to which
no penalty is yet payable, and other than any lien granted in connection with the current financing
secured by the Property including without limitation the Permitted Encumbrances. Subject to
paragraph 6 relating to contests, the Mortgagor shall pay, when due, the claims of all persons
supplying labor or materials to or in connection with the Mortgaged Property.
5.Compliance with Laws. Subject to paragraph 6 relating to contests, the Mortgagor
shall comply, in all material respects, with all present and future statutes, laws, rules, orders,
regulations and ordinances affecting the Mortgaged Property, any part thereof or the use thereof.
The Mortgagor shall not use or occupy nor permit the use and occupancy of the Property without
a current Certificate of Occupancy issued by the City of Richfield, Minnesota.
6.Permitted Contests. The Mortgagor shall not be required to (i) pay any tax,
assessment or other charge referred to in paragraph 2 hereof, (ii) pay any charges referred to in
paragraph 3 hereof, (iii) discharge or remove any lien, encumbrance or charge referred to in
paragraph 4 hereof, or (iv) comply with any statute, law, rule, order, regulation or ordinance
referred to in paragraph 5 hereof, so long as the Mortgagor shall (a) contest, in good faith, the
existence, or the validity thereof, the amount of damages caused thereby or the extent of the
Mortgagor’s liability therefor, by appropriate proceedings which shall operate during the pendency
thereof to prevent (A) the collection of, or other realization upon the tax, assessment, charge or
lien, encumbrance or charge so contested, (B) the sale, forfeiture or loss of the Mortgaged Property
or any part thereof, and (C) any interference with the use or occupancy of the Mortgaged Property
or any part thereof, and (b) shall give such security to the Mortgagee as may be reasonably
demanded by the Mortgagee to insure compliance with the foregoing provisions of this
paragraph 6. Mortgagor shall give prompt written notice to Mortgagee of the commencement of
any contest referred to in this paragraph 6.
7.Insurance. The Mortgagor shall keep the improvements now existing or hereafter
erected on the Mortgaged Property insured against loss by fire and any other hazards for which the
Mortgagee requires insurance for full replacement value of the improvements. This insurance
shall be maintained only in the amounts and for the periods as required under the terms of the Loan
Agreement. If the Mortgagor fails to maintain coverage described above, the Mortgagee may, at
the Mortgagee’s option, obtain coverage to protect the Mortgagee’s rights in the Mortgaged
Property in accordance with paragraph 6.
All insurance policies and renewals shall be reasonably acceptable to the Mortgagee and
shall include a standard mortgage clause. If the Mortgagee requires, the Mortgagor shall, upon
reasonable notice, give to the Mortgagee all receipts of paid premiums and renewal notices. In the
event of loss, the Mortgagor shall give prompt notice to the insurance carrier and the Mortgagee.
The Mortgagee may make proof of loss if not made promptly by the Mortgagor.
If the Mortgaged Property is acquired by the Mortgagee, the Mortgagor’s rights to any
insurance policies and proceeds resulting from damage to the Mortgaged Property prior to the
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acquisition shall pass to the Mortgagee to the extent of the sums secured by this Mortgage
immediately prior to the acquisition.
8. Preservation and Maintenance of Mortgaged Property. The Mortgagor (i) shall
keep the buildings and other Improvements hereafter erected as part of the Project on the Property
in safe and good repair and condition, ordinary wear and tear and damage by insured casualty
excepted (provided that the Mortgagor may proceed to demolish the existing buildings when
vacant), (ii) shall reasonably maintain the parking and landscaped areas of the Mortgaged Property,
(iii) shall not commit waste or permit impairment or deterioration of the Mortgaged Property, and
(iv) shall not remove from the Property any of the fixtures and personal property included in the
Mortgaged Property unless the same is immediately replaced with like property of at least equal
value and utility (provided that Mortgagor may proceed to demolish and remove all existing
personal property and fixtures located on the Property).
9. Inspection. The Mortgagee, or its agents, shall have the right at all reasonable
times, upon not less than two (2) business days’ prior written notice to Mortgagor, to enter upon
the Mortgaged Property for the purposes of inspecting the Mortgaged Property or any part thereof,
which inspection shall not interfere with the use or occupancy of the Mortgaged Property. The
Mortgagee shall, however, have no duty to make such inspection.
10. Protection of Mortgagee’s Security. Subject to the rights of the Mortgagor under
paragraph 6 hereof, if the Mortgagor fails to perform any of the covenants and agreements contained
in this Mortgage or if any action or proceeding is commenced which affects the Mortgaged Property
or the interest of the Mortgagee therein, or the title thereto, then the Mortgagee, at the Mortgagee’s
option, upon advance written notice to the Mortgagor, may perform such covenants and agreements,
defend against and/or investigate such action or proceeding, and take such other action as the
Mortgagee deems necessary to protect the Mortgagee’s interest. The Mortgagee shall be the sole
judge of the legality, validity and priority of any claim, lien, encumbrance, tax assessment, charge
and premium paid by it and of the amount necessary to be paid in satisfaction thereof. The
Mortgagee is hereby given the irrevocable power of attorney (which power is coupled with an
interest and is irrevocable) effective upon the occurrence of an Event of Default, to enter upon the
Mortgaged Property as the Mortgagor’s agent in the Mortgagor’s name to perform any and all
covenants and agreement to be performed by the Mortgagor as herein provided. Any amounts
disbursed or incurred by the Mortgagee pursuant to this paragraph 10 shall become additional
Indebtedness of the Mortgagor secured by this Mortgage. Unless the Mortgagor and the Mortgagee
agree in writing to other terms of repayment, such amounts shall be immediately due and payable.
The Mortgagee shall, at its option, be subrogated to the lien of any mortgage or other lien discharged
in whole or in part by the Indebtedness or by the Mortgagee under the provisions hereof, and any
such subrogation rights shall be additional and cumulative security for this Mortgage. Nothing
contained in this paragraph 10 shall require the Mortgagee to incur any expense or do any act
hereunder, and the Mortgagee shall not be liable to the Mortgagor for any damages or claims arising
out of action taken by the Mortgagee pursuant to this paragraph 10.
11. Condemnation.
(a) The Mortgagor hereby irrevocably assigns to the Mortgagee any award or
payment which becomes payable by reason of any taking of the Mortgaged Property, or
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any part thereof, whether directly or indirectly or temporarily or permanently, in or by
condemnation or other eminent domain proceedings or by reason of sale under threat
thereof, or in anticipation of the exercise of the right of condemnation or other eminent
domain proceedings (hereinafter called “Taking”). Forthwith upon receipt by Mortgagor
of notice of the institution of any proceeding or negotiations for a Taking, the Mortgagor
shall give notice thereof to the Mortgagee. The Mortgagee may appear in any such
proceedings and participate in any such negotiations and may be represented by counsel.
The Mortgagor, notwithstanding that the Mortgagee may not be a party to any such
proceeding, will promptly give to the Mortgagee copies of all notices, pleadings,
judgments, determinations, and other papers received by the Mortgagor therein. The
Mortgagor will not enter into any agreement permitting or consenting to the Taking of the
Mortgaged Property, or any part thereof, or providing for the conveyance thereof in lieu of
condemnation, with anyone authorized to acquire the same in condemnation or by eminent
domain unless the Mortgagee shall first have consented thereto in writing, which consent
will not be unreasonably withheld. All Taking awards shall be adjusted jointly by the
Mortgagor and the Mortgagee. All awards payable as a result of a Taking shall be paid to
the Mortgagee, which shall, after first deducting the Mortgagee’s expenses incurred in the
collection thereof, be applied to the repair or restoration of the Mortgaged Property. To the
extent that restoration or repair is not economically feasible, which determination shall be
made in Mortgagor’s sole discretion, any remaining proceeds may be applied by the
Mortgagee against the Indebtedness in such order of application as the Mortgagee may
determine. Any application of Taking awards to principal of the Indebtedness shall not
extend or postpone the due date of any installments payable under the Indebtedness or
change the amount of such installments.
(b)If the Taking involves a taking of any building or other Improvements now
or hereafter located on the Property, the Mortgagor shall proceed, with reasonable
diligence, to demolish and remove any ruins and complete repair or restoration of the
Mortgaged Property as nearly as possible to its size, type and character immediately prior
to the Taking, but only to the extent that the condemnation awards are available or adequate
to complete such repair or restoration.
(c)The Mortgagor shall promptly reimburse the Mortgagee upon demand for
all of the Mortgagee’s expense, including reasonable attorneys’ fees, incurred in the
collection of awards.
12.Information; Books and Records. The Mortgagor will prepare or cause to be
prepared at the Mortgagor’s expense and deliver to the Mortgagee immediately upon becoming
aware of the existence of any condition or event which constitutes, or which after notice or lapse
of time or both would constitute, an Event of Default, written notice specifying the nature and
period of existence thereof and what action the Mortgagor has taken, is taking or proposes to take
with respect thereto. The Mortgagor shall keep and maintain at all times at the Mortgagor’s
address stated below or at such other place as the Mortgagee may approve in writing, complete
and accurate books of accounts and records in sufficient detail to correctly reflect the receipts and
expenses in connection with the acquisition, construction, operation and/or sale of the Mortgaged
Property and copies of all written contracts, leases and other instruments which affect the
Mortgaged Property. Such books, records, contracts, leases and other instruments shall be subject
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to examination and inspection by the Mortgagee or its representative during ordinary business
hours.
13. Indemnification by the Mortgagor. The Mortgagor shall bear all loss, expense
(including reasonable attorneys’ fees) and damage in connection with, and agrees to indemnify
and hold harmless the Mortgagee and its agents, servants and employees (the “Indemnified
Parties”) from, all claims, demands and judgments made or recovered against the Indemnified
Parties because of bodily injuries, including death at any time resulting therefrom, and/or because
of damages to property of the Mortgagee or others (including loss of use) from any cause
whatsoever, arising out of, incidental to, or in connection with the construction and/or operation
of the Improvements prior to appointment of a receiver or foreclosure of this Mortgage or arising
by reason of the presence of hazardous or toxic substances on the Property or in the Improvements
or releases thereof from the Mortgaged Property, whether or not due to any act of omission or
commission, including negligence of the Mortgagor or the Mortgagor’s employee, servants or
agents. The Mortgagor’s liability hereunder shall not be limited to the extent of insurance carried
by or provided by the Mortgagor or subject to any exclusion from coverage in any insurance policy.
The obligations of the Mortgagor under this paragraph shall survive the payment of the Note;
provided, however, that Mortgagor shall not be required to indemnify, defend, and hold harmless
the Indemnified Parties from and against any of the foregoing if such claims, demands, losses,
expenses, and/or judgements made or recovered against or suffered by the Indemnified Parties are
the result of the gross negligence, willful misconduct, or breach of this Mortgage or the Loan
Agreement by such Indemnified Parties.
14. Security Interest. This Mortgage shall constitute a security agreement with respect
to (and the Mortgagor hereby grants the Mortgagee a security interest in) the tangible personal
property and fixtures included in the Mortgaged Property, as more particularly described in
Granting Clause I of this Mortgage, and the Revenues and Income, as more particularly described
in Granting Clause II. The Mortgagor will from time to time, at the request of the Mortgagee,
execute any and all financing statements covering such personal property and fixtures (in a form
satisfactory to the Mortgagee) which the Mortgagee may reasonably consider necessary or
appropriate to perfect its interest.
15. Events of Default. Each of the following occurrences shall constitute an event of
default hereunder (herein called an “Event of Default”):
(a) The Mortgagor shall fail to duly and punctually pay any obligation payable
under the Note or Loan Agreement which is not cured within 10 business days after written
notice from the Mortgagee.
(b) The Mortgagor shall fail duly to perform or observe any of the covenants or
agreements contained in this Mortgage (other than default in the performance, or breach,
of any covenant of the Mortgagor in paragraph 1(a) hereof) and such failure shall continue
for a period of 60 days after the Mortgagee has given written notice to the Mortgagor
specifying such default or breach. If such failure cannot reasonably be cured within 60
days, no Event of Default shall occur so long as Mortgagor commences cure within such
60-day period and diligently prosecutes such cure to completion.
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(c)The Mortgagor shall make assignment for the benefit of the Mortgagor’s
creditors, or shall admit in writing the Mortgagor’s inability to pay the Mortgagor’s debts
as they become due, or shall file a petition in bankruptcy, or shall become or be adjudicated
bankrupt or insolvent, however defined, or shall file a petition seeking any reorganization,
dissolution, liquidation, arrangement, composition, readjustment or similar relief under any
present or future bankruptcy or insolvency statute, law or regulation or shall file an answer
admitting to or not contesting the material allegations of petition filed against the
Mortgagor in such proceedings, or shall not, within 120 days after the filing of such petition
against the Mortgagor, have same dismissed or vacated, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of a material part of the
Mortgagor’s properties or of the Mortgaged Property or shall not, within 90 days after the
appointment, without the Mortgagor’s consent or acquiescence, of a trustee, receiver or
liquidator of any material part of the Mortgagor’s properties or of the Mortgaged Property,
have such appointment vacated.
(d)An Event of Default under the Loan Agreement (as defined in the Loan
Agreement) or Note shall have occurred and be continuing or the Mortgagor shall be in
default under any other agreement now or hereafter entered into by the Mortgagor and the
Mortgagee in connection with the Loan Agreement or the Grant-Eligible Activities
contemplated therein after expiration of any applicable cure periods.
16.Remedies. Whenever any Event of Default shall have occurred and be continuing,
the Mortgagee may, at its option, exercise one or more of the following rights and remedies (and/or
any other rights and remedies available to it), subject to the rights of the Senior Lender (hereinafter
defined) pursuant to the terms and conditions of the Subordination Agreement (hereinafter
defined):
(a)The Mortgagee may, by written notice to the Mortgagor, declare
immediately due and payable all Indebtedness secured by this Mortgage, and the same shall
thereupon be immediately due and payable, without further notice or demand, provided
that Mortgagee has first given written notice of the Event of Default and afforded
Mortgagor any applicable cure period set forth herein or in the Loan Agreement.
(b)The Mortgagee shall have and may exercise with respect to all personal
property and fixtures which are part of the Mortgaged Property and with respect to the
Revenues and Income all the rights and remedies accorded upon default to a secured party
under the Uniform Commercial Code, as in effect in Minnesota. If notice to the Mortgagor
of the intended disposition of such property is required by law in a particular instance, such
notice shall be deemed commercially reasonable if given to the Mortgagor in the manner
specified in paragraph 20 at least 10 calendar days prior to the date of intended disposition.
The Mortgagor shall pay on demand all costs and expenses incurred by the Mortgagee in
exercising such rights and remedies, including without limitation, reasonable attorneys’
fees and legal expenses.
(c)The Mortgagee may (and is hereby authorized and empowered to) foreclose
this Mortgage by action or advertisement, pursuant to the statutes of Minnesota in such
case made and provided, power being expressly granted to sell the Mortgaged Property at
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public auction and convey the same to the purchaser in fee simple the Mortgagor’s interest
in the Property at the time of such sale and, out of the proceeds arising from such sale, to
pay all Indebtedness secured hereby, and all legal costs and charges of such foreclosure
and the maximum attorneys’ fees permitted by law, which costs, charges and fees the
Mortgagor agree to pay.
THE MORTGAGOR HEREBY CONSENTS TO AND ACKNOWLEDGES THE RIGHT
OF THE MORTGAGEE, AT MORTGAGEE’S OPTION, TO ACT TO FORECLOSE THIS
MORTGAGE BY ACTION OR ADVERTISEMENT PURSUANT TO MINNESOTA
STATUTES, CHAPTER 580 OR 581. A POWER OF SALE BEING HEREIN EXPRESSLY
GRANTED WHICH SHALL ALLOW THE MORTGAGEE TO SELL AT PUBLIC AUCTION
AFTER SERVICE OF NOTICE THEREOF UPON THE OCCUPANT OF THE MORTGAGED
PROPERTY, THE MORTGAGOR ACKNOWLEDGES THAT SUCH SERVICE NEED NOT
BE MADE ON THE MORTGAGOR PERSONALLY UNLESS THE MORTGAGOR IS AN
OCCUPANT OF THE MORTGAGED PROPERTY AND THAT NO HEARING IS REQUIRED
IN CONNECTION WITH THE SALE. MORTGAGOR EXPRESSLY WAIVES ANY AND ALL
RIGHTS TO PRIOR NOTICE OF SALE AND ANY AND ALL RIGHTS TO PRIOR HEARING
IN CONNECTION WITH THE SALE. OUT OF THE PROCEEDS OF SUCH SALE THE
PRINCIPAL AMOUNT OF THE LOAN SHALL BE PAID TOGETHER WITH ALL LEGAL
COSTS AND CHARGES OF FORECLOSURE WITH MAXIMUM ATTORNEYS’ FEES
PERMITTED BY LAW. NOTHING HEREIN SHALL WAIVE ANY RIGHT THAT CANNOT
BE WAIVED UNDER APPLICABLE LAW, AND THIS PARAGRAPH SHALL BE
INTERPRETED AND ENFORCED CONSISTENT WITH SUCH LAW.
(d)The Mortgagee shall be entitled, without notice and without any showing of
waste of the Mortgaged Property, inadequacy of the Mortgaged Property as security for the
Indebtedness, or insolvency of the Mortgagor, to the appointment of a receiver of the rents
and profits of the Mortgaged Property, including those past due.
(e)The Mortgagee may pursue one or more of the remedies provided for in the
Loan Agreement or any other agreement now or hereafter entered into between the
Mortgagor and the Mortgagee in connection with the Loan Agreement or the Grant-
Eligible Activities contemplated herein.
17.Estoppel Certificate. The Mortgagor agrees at any time and from time to time, upon
not less than 15 days’ prior notice by the Mortgagee, to execute, acknowledge and deliver, without
charge, to the Mortgagee or to any person designated by the Mortgagee, a statement in writing
certifying, to the best of its knowledge, that this Mortgage is unmodified (or if there have been
modifications, identifying the same by the date thereof and specifying the nature thereof), the
principal amount then secured hereby, that the Mortgagor has not received any notice of default or
notice of acceleration or foreclosure of this Mortgage (or if the Mortgagor has received such a
notice, that it has been revoked, if such be the case), that to the knowledge of the Mortgagor no
Event of Default exists hereunder (or if any such Event of Default does exist, specifying the same
and stating that the same has been cured, if such be the case), the Mortgagor to the Mortgagor’s
knowledge have no claims or offsets against the Mortgagee (or if the Mortgagor have any such
claims, specifying the same), and the dates to which the principal and the other sums and charges
payable by the Mortgagor pursuant to the Loan Agreement have been paid. In the event the
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Mortgagor fails to execute, acknowledge and deliver such statement within the time above
required, the Mortgagor hereby appoint and constitute the Mortgagee as the Mortgagor’s attorney-
in-fact to do so (which power of attorney is coupled with an interest and is irrevocable), the
Mortgagor shall be fully bound by any such statement executed by the Mortgagee on the
Mortgagor’s behalf to the same extent as if the Mortgagor had executed, acknowledged and
delivered the same. The Mortgagee agrees to provide statements of the principal balance payable
pursuant to the Note from time to time upon request of the Mortgagor.
18. Forbearance Not a Waiver, Rights and Remedies Cumulative. No delay by the
Mortgagee in exercising any right shall be deemed a waiver of or preclude the exercise of such
right or remedy, and no waiver by the Mortgagee of any particular provision of this Mortgage shall
be deemed effective unless in writing signed by the Mortgagee. All such rights and remedies
provided for herein or which the Mortgagee may have otherwise, at law or in equity, shall be
distinct, separate and cumulative and may be exercised concurrently, independently or
successively in any order whatsoever, and as often as the occasion therefor arises. The
Mortgagee’s taking action pursuant to paragraph 10 or receiving proceeds, awards or damages
pursuant to paragraph 7 or 11 shall not impair any right or remedy available to the Mortgagee
under paragraph 16 hereof. Acceleration of maturity of the Indebtedness, once claimed hereunder
by the Mortgagee, may, at the option of Mortgagee, be rescinded by written acknowledgment to
that effect by the Mortgagee, but the tender and acceptance of partial payments alone shall not in
any way affect or rescind such acceleration of maturity of the Indebtedness.
19. Successors and Assigns Bound; Number; Gender; Agents; Captions. The
covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the
respective heirs, legal representatives, successors and assignees of the Mortgagee and the
Mortgagor. Wherever used, the singular number shall include the plural, and the plural the
singular, and the use of any gender shall apply to all genders. In exercising any rights hereunder
or taking any actions provided for herein, the Mortgagee may act through its employees, agents or
independent contractor as authorized by Mortgagee. The captions and headings of the paragraphs
of this Mortgage are for convenience only and are not to be used to interpret or define the
provisions hereof.
20. Notice. Any notice from the Mortgagee to the Mortgagor under this Mortgage shall
be deemed to have been given by the Mortgagee and received by the Mortgagor when mailed by
certified mail by the Mortgagee or its agents to the Mortgagor at the address set forth in
paragraph 26(a) below or at such other address as the Mortgagor may designate in writing to the
Mortgagee.
21. Governing Law; Severability. This Mortgage shall be governed by the laws of
Minnesota. In the event that any provision or clause of this Mortgage conflicts with applicable law,
such conflict shall not affect other provisions of this Mortgage which can be given effect without
the conflicting provisions and to this end the provisions of the Mortgage are declared to be
severable.
22. Counterparts. This Mortgage may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one instrument.
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23. Waiver of Marshaling. To the fullest extent permitted by law and subject to the
rights of the senior lenders, the Mortgagor, any party who consents to this Mortgage, and any party
who now of hereafter acquires a lien on the Mortgaged Property and who has actual or constructive
notice of this Mortgage hereby waives any and all right to require the marshaling of assets in
connection with the exercise of any of the remedies permitted by applicable law or provided herein
and waives any right to have the Mortgaged Property sold in separate tracts pursuant to Minnesota
Statutes, Section 580.08.
24. Construction Mortgage. This Mortgage secures an obligation incurred for the
construction of an improvement on land and is a construction mortgage.
25. Application of Rents. Notwithstanding anything to the contrary herein, all Rents
collected by the Mortgagee or any receiver each month shall be applied as determined by
Mortgagor, or as otherwise determined by applicable law.
26. Fixture Filing. From the date of its recording, this Mortgage shall be effective as a
financing statement filed as a fixture filing with respect to all goods constituting part of the
Mortgaged Property (as more particularly described in Granting Clause I of this Mortgage) which
are or are to become fixtures related to the real estate described herein. For this purpose, the
following information is set forth:
(a) Name and Address of the Mortgagor:
Penn Station Apartments LLLP
510 Brunson Street, Suite 100
St. Paul, MN 55130
Attn: Johnny Opara, President and CEO
With a copy to: Winthrop & Weinstine, P.A.
225 South 6th St, Suite 3500
Minneapolis, MN 55402
Attn: Jon L. Peterson
(b) Name and Address of the Mortgagee:
Housing and Redevelopment Authority
6700 Portland Avenue South
Richfield, MN 55423
Attn: ________
With a copy to: Kennedy & Graven, Chartered
150 South Fifth Street, Suite 700
Minneapolis, MN 55402
Attention: Ronald H. Batty
This document covers goods which are or are to become fixtures.
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27. Additional Provisions.
(a) The Mortgagee agrees, notwithstanding any other provision herein to the
contrary, that in the event of a foreclosure of the Property, that no tenant may be evicted or
tenancy terminated (other than for good cause), and the rent on no apartment unit may be
increased, for the three year period following foreclosure if such eviction, termination of
tenancy or increase in rent would be contrary to the provisions of Section 42(h)(6)(E) of
the Internal Revenue Code of 1986, as amended. This Mortgage is expressly subordinate
to this provision.
(b) This Mortgage and the Note shall be construed according to the laws of
Minnesota.
(c) In the event of any fire or other casualty to the Project or eminent domain
proceedings resulting in condemnation of the Project or any part hereof, the Mortgagor
shall have the right to rebuild the Project, and to use all available insurance or
condemnation proceeds therefor, provided that no material default then exists under the
Loan Documents. If the casualty or condemnation affects only part of the Project and total
rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial
repayment of the Loan in a manner that provides adequate security to the Mortgagee for
repayment of the remaining balance of the Loan.
(d) The Mortgagor will permit the Mortgagee’s authorized representatives to
enter the Property at all times during normal business hours upon not less than two (2)
business days’ prior written notice for the purpose of inspecting the same, which
inspections shall not unreasonably interfere with use or occupancy of the Property;
provided the Mortgagee shall have no duty to make such inspections and shall not incur
any liability or obligation for making or not making any such inspections .
(e) The Mortgagor hereby agrees to defend, indemnify, and hold harmless
Mortgagee from and against any and all claims, losses, damages, liabilities, costs, and
expenses, including without limitation reasonable attorneys’ fees, incurred by the
Mortgagee as a result of any hazardous materials or substances which are on the Property
in violation of applicable environmental laws at any time during which the Mortgagor shall
be in custody or control of the Property. This indemnification shall remain in full force
and effect and shall survive the repayment of the Loan and the exercise of any remedy by
the Mortgagee hereunder including a foreclosure of the Mortgage or the acceptance of a
deed in lieu of foreclosure.
(f) The Mortgagor shall have the right and privilege, but not the obligation, to
borrow additional funds and to further encumber the security and collateral given and
pledged to the Mortgagee hereunder at any time, from time to time, and as often as the
Mortgagor shall determine, but only with the prior written consent of the Mortgagee, which
consent shall not be unreasonably withheld, delayed and conditioned, except for the
Permitted Encumbrances set forth in Exhibit B.
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(g) If the Mortgagor fails to perform any of the covenants and agreements
contained in this Mortgage, subject to any applicable cure periods, or if any action or
proceeding is commenced which affects the Property or the interest of the Mortgagee
therein, or the title thereto, then the Mortgagee, at Mortgagee’s option, upon 60 days
advance written notice to the Mortgagor, may perform such covenants and agreements to
defend against and/or investigate such action or proceeding, and take such other action as
the Mortgagee deems necessary to protect the Mortgagee’s interest. The Mortgagee shall
be the sole judge of the legality, validity and priority of any claim, lien, encumbrance, tax
assessment, charge and premium paid by it and of the amount necessary to be paid in
satisfaction thereof. The Mortgagee is hereby given the irrevocable power of attorney
(which power is coupled with an interest and is irrevocable) effective 60 days after written
notice, to enter upon the Property as the Mortgagor’s agent in the Mortgagor’s name to
perform any and all covenants and agreements to be performed by the Mortgagor as herein
provided. Any amounts disbursed or incurred by the Mortgagee pursuant to this paragraph
shall become additional indebtedness of the Mortgagor secured by this Mortgage. Unless
the Mortgagor and the Mortgagee agree in writing to other terms of repayment, such
amounts shall be immediately due and payable. The Mortgagee shall, at its option, be
subrogated to the lien of any mortgage or other lien discharged in whole or in part by the
indebtedness or by the Mortgagee under the provisions hereof, and any such subrogation
rights shall require the Mortgagee to incur any expense or do any act hereunder, and the
Mortgagee shall not be liable to the Mortgagor for any damages or claims arising out of
action taken by the Mortgagee pursuant to this paragraph.
THE MORTGAGOR ACKNOWLEDGES THAT THIS IS A LEGAL DOCUMENT AND THAT
BEFORE SIGNING THE MORTGAGOR HAS FULLY UNDERSTOOD THE TERMS AND
CONDITIONS HEREIN, AND THE RIGHTS WAIVED HEREBY AND THE EFFECT OF
SUCH WAIVER OR HAS SOUGHT LEGAL COUNSEL TO EXPLAIN SUCH TERMS AND
CONDITIONS, RIGHTS AND THE WAIVER OF SUCH RIGHTS.
(The remainder of this page is intentionally left blank.)
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RC125-399-1045716.v1
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly executed
as of the day and year first above written.
PENN STATION APARTMENTS LLLP, a
Minnesota limited liability limited partnership
By: Penn Station Apartments LLC, a Minnesota
limited liability company
Its: General Partner
By: JO Companies, LLC, a Minnesota limited
liability company
Its Sole Member
By:
Johnny Opara, Its Manager
Dated:
STATE OF MINNESOTA )
) ss
COUNTY OF __________________)
The foregoing instrument was acknowledged before me this _____ day of _______________,
2025 by Johnny Opara, the Manager of JO companies, LLC, a Minnesota limited liability
company, the Sole Member of Penn Station Apartments LLC, a Minnesota limited liability
company, the General Partner of Penn Station Apartments LLLP, a Minnesota limited liability
limited partnership, on behalf of the Mortgagor.
___________________________________
Notary Republic
This document drafted by:
Kennedy & Graven, Chartered (RHB)
150 South Fifth Street
Minneapolis, MN 55402-1299
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A-1
RC125-399-1045716.v1
EXHIBIT A
LEGAL DESCRIPTION
[to be completed]
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B-1
RC125-399-1045716.v1
EXHIBIT B
PERMITTED ENCUMBRANCES
[to be completed]
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Housing and Redevelopment Authority Meeting 9/15/2025
Agenda Section: Consent Calendar
Agenda Item: 7.b.
Report Prepared By:
Julie Urban, Assistant Community Development Director
Department Director:
Melissa Poehlman, Community Development Director
Item for Consideration:
Consideration of an Estoppel Certificate and an Assignment and Assumption
Agreement of the Contract for Private Development for the Riley-Richlyn development.
EXECUTIVE SUMMARY
The Riley and the Richlyn, apartment developments located at 6345 Lyndale Avenue
South and 600 64th Street West (Properties), are under contract by Court Place of
Burnsville, LLP
(Buyer). The Properties were developed with the financial assistance of Tax Increment
Financing (TIF) and include income-restricted units. The terms of the financial
assistance are detailed in a Contract for Private Redevelopment (Contract) and a
Declaration of Restrictive Covenants between the Housing and Redevelopment
Authority (HRA) and 6345 Partners, LLC (Developer). In order to facilitate the purchase,
the Buyer is seeking HRA approval of an Assignment and Assumption of the Contract
(Agreement) and the Declaration of Restrictive Covenants. The Buyer is also seeking
approval of an Estoppel Certificate (Certificate), certifying that the development is
currently in compliance with the Contract.
The HRA has no legal reason not to approve the Agreement, and HRA staff is
supportive of a sale to a Buyer who plans to honor the affordability requirements of the
TIF District.
HISTORICAL CONTEXT
The HRA approved a Contract on September 22, 2020, with the Developer, for the
development of the Properties. Under the terms of the Contract, the Developer
constructed 82 units of new rental housing (Riley) and rehabilitated 22 units of existing
naturally occurring affordable rental housing (Richlyn). A housing TIF District was
created, and the HRA agreed to provide a $2,025,987 Pay-as-You-Go TIF Note to pay
for eligible costs related to the extraordinary costs of redevelopment. The TIF Note was
collaterally assigned to Drake Bank. The TIF District requires that the development
provide 21 units (20%) affordable to households earning no more than 50% of the Area
Median Income (AMI) for the life of the TIF District. Five of the units are provided in the
Riley and 16 units in the Richlyn. The restrictions are memorialized in a Declaration of
Restrictive Covenants recorded against the Properties.
In 2024, the development's lender started foreclosure proceedings against the owner,
and in early 2025, management of the Properties was taken over by Lighthouse
Management Group, a Court-appointed Receiver (Receiver). The Receiver placed the
Properties up for sale and on August 7, 2025, and has entered into a purchase
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agreement with the Buyer.
RECOMMENDED ACTION
By Motion: Adopt a resolution approving an Assignment and Assumption Agreement for
the Contract for Private Development and an Estoppel Certificate for the Riley-Richlyn
development.
EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The Buyer plans to honor the requirements of the TIF District, which will retain the
affordability restrictions on the 21 units, consistent with the Strategic Plan outcome to
maintain Richfield as an affordable place to live.
POLICIES (RESOLUTIONS, ORDINANCES, REGULATIONS, STATUTES, ETC.)
State Statute requires that 20% of the units be affordable to households earning no
more than 50% of the AMI. If the Buyer does not honor the affordability covenant, the
TIF District will need to be decertified. No further payments would be made on the Note
would be made.
CRITICAL TIMING ISSUES
•The Buyer needs approval of the Assignment and Assumption Agreement and
Estoppel Certificate to move forward with closing on the property this fall.
•The units will remain affordable until the TIF District is decertified. The TIF
District's maximum term is 2047, but current estimates have the TIF Note paid in
2037.
FINANCIAL IMPACT
The HRA approved issuance of a $2,025,987 TIF Note, which is held by Drake Bank.
This financial commitment does not change with the approval of the Agreement and
Certificate.
LEGAL CONSIDERATIONS
•The HRA Attorney approved the Agreement and Certificate.
•The Buyer will assume the requirements of the Contract and the Declaration of
Restrictive Covenants, including the requirement for 21 income-restricted units. If
the Buyer does not meet the affordability requirements, the TIF District will be
decertified.
ALTERNATIVE RECOMMENDATION(S)
Decide not to approve the Agreement or Certificate.
ATTACHMENTS
1.091525 Resolution Riley-Richlyn Assignments
2.091525 Riley-Richlyn Estoppel Certificate
3.091525 Riley-Richlyn Assignment and Assumption
Page 65 of 87
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING ASSIGNMENT AGREEMENT AND ESTOPPEL CERTIFICATE
RELATED TO THE RILEY- RICHLYN DEVELOPMENT
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the “Authority”) entered into a Contract for Private Development, dated
September 22, 2020, with 6345 PARTNERS, LLC, a Minnesota limited liability company
(“Partners”); and
WHEREAS, pursuant to the Development Agreement, the Partners agreed to construct an
82-unit multifamily develop and purchase and rehabilitate a 22-unit apartment building with
naturally occurring affordable rents (collectively, the “Minimum Improvements”), located at 600 64th
Street West and 6345 Lyndale Avenue South (the “Project”), and requested the Authority use tax
increment financing to assist with certain costs to fill the gap between the project costs and the
funds available to pay such costs; and
WHEREAS, the Authority issued the Tax Increment Limited Revenue Note, Series 2021
(the “TIF Note”), dated September 1, 2021, in the original aggregate principal amount of
$2,025,987.00, to Richfield Property Holdings, LLC, a Minnesota limited liability company (an
undivided 15.54% interest) 15th NB Property1 LLC, a Minnesota limited liability company (an
undivided 23.27% interest) 6345 Partners, LLC, a Minnesota limited liability company (an undivided
61.19% interest) (collectively the “Original TIF Holders”), to reimburse the Partners for certain
Public Redevelopment Costs (as defined in the Development Agreement) associated with the
Minimum Improvements; and
WHEREAS, in connection with the Development Agreement, the Project was subjected to
that certain Declaration of Restrictive Covenants dated December 22, 2020, and filed May 3, 2021
(the “Restrictive Covenant”); and
WHEREAS, pursuant to a Collateral Assignment of Development Agreement and TIF Note
dated as of December 23, 2020, the Authority consented to the collateral assignment by the
Original TIF Holders to Drake Bank, a Minnesota state banking corporation (the “TIF Lender”) of all
of its right, title and interest the TIF Note; and
WHEREAS, Lighthouse Management Group, Inc., a Minnesota corporation, acting solely in
its capacity as the Receiver of the Developer (the “Assigner”), and Court Place of Burnsville, LLP, a
Minnesota limited liability company (the “Assignee”), entered into that certain Purchase Agreement
dated August 7, 2025 (the “Purchase Agreement”) for sale of the Project, together with the
Development Agreement and the Restrictive Covenant, among other things; and
WHEREAS, there are no defaults or outstanding obligations under the Development
Agreement by the Assigner or the Assignee, and as developed and currently operating the
Property is in compliance with all terms and conditions of the TIF Documents; and
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2
WHEREAS, pursuant to the terms of the Purchase Agreement, the TIF Note is to remain in
favor of the TIF Lender; and
WHEREAS, the Assignor desires to assign all of the Developer’s right, title and interest
under the Development Agreement, the Restrictive Covenant, and related documents (collectively,
the “Transferred Documents”) to the Assignee, and Assignee desires to assume the Developer’s
obligations; and
WHEREAS, there have been presented to the Board of Commissioners of the Authority
(the “Board”) forms of the following agreements: (i) an Assignment and Assumption Agreement
(the “Assignment and Assumption Agreement”) between the Authority, the Assignor, and the
Assignee, pursuant to which the Assignor will assign to the Assignee, and the Assignee will
assume, the Assignor’s rights and obligations under the Development Agreement and Restrictive
Covenant; (ii) an Estoppel Certificate certifying that the Project is currently in compliance with the
terms of the Development Agreement; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota as follows:
Section 1. Approvals.
1.01. The Board hereby consents to the assumption by the Assignee of the rights and
obligations of the Assignor under the Development Agreement, and the Assignee shall be the
developer under the Development Agreement (the “Developer”).
1.02. The Assignment and Assumption Agreement and the Estoppel Certificate are
hereby in all respects authorized, approved, and confirmed, and the Chair and the Executive
Director are hereby authorized and directed to execute the Agreement and Estoppel Certificate for
and on behalf of the Authority in substantially the forms now on file with the Executive Director but
with such modifications as shall be deemed necessary, desirable, or appropriate, the execution
thereof to constitute conclusive evidence of their approval of any and all modifications therein.
1.03. This resolution shall be in full force and effect upon its adoption.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 15th day of September, 2025.
Erin Vrieze Daniels, Chair
Sean Hayford Oleary, Secretary
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ESTOPPEL CERTIFICATE
THIS ESTOPPEL CERTIFICATE (“Certificate”) is made by 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”) in favor of Court Place of
Burnsville, L.L.P., a Minnesota limited liability partnership (“Buyer”) and Bridgewater Bank
(“Lender”) with respect to the property located in the County of Hennepin, State of Minnesota
and more particularly described in Exhibit A attached hereto (the “Property”).
The Authority hereby understands that Buyer intends to, in connection with Buyer’s acquisition
of the residential apartment project located at the Property, obtain a new loan from Lender, which
such loan is secured in part by the Property. The Property is currently owned by LIGHTHOUSE
MANAGEMENT GROUP, INC., a Minnesota corporation, acting solely in its capacity as the
Receiver of 6345 Partners, LLC, a Minnesota limited liability company, Richfield Property
Holdings, LLC, a Minnesota limited liability company, and 15th NB Property1, LLC, a limited
liability company, pursuant to the certain Receivership Orders filed in the District Court, Fourth
Judicial District, State of Minnesota, on April 17, 2025, in Hennepin County Court File No. 27-
CV-24-16245 and 27-CV-24-16388 (collectively “Property Seller”), from which Buyer will
acquire the Property, and which the Property was developed pursuant to those certain (i) Contract
for Private Development dated September 22, 2020, filed May 3, 2021 as Document Number
10948739 between the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota, and 6345 Partners, LLC, a Minnesota limited liability company, and that certain First
Amendment to Contract for Private Development filed May 3, 2021 as Document Number
10948740 (the “Development Agreement”); (ii) Declaration of Restrictive Covenants dated
December 22, 2020, filed May 3, 2021 as Document Number 10948741 (“Restrictive
Covenant”); and (iii) Tax Increment Limited Revenue Note Series 2021 dated September 1, 2021
in the original principal amount of $2,025,987.00 to 6345 Partners, LLC, a Minnesota limited
liability company, Richfield Property Holdings, LLC, a Minnesota limited liability company, and
15th NB Property1 LLC, a Minnesota limited liability company (the “TIF Note”) (the
Development Agreement, the Restrictive Covenant, and the TIF Note, collectively, the “TIF
Documents”). This Estoppel Certificate (“Estoppel”) may be relied upon by the parties to whom
this Estoppel is addressed, by Property Seller, by Buyer, and by their respective successors and
assigns.
The undersigned hereby certifies and agrees to the following as of the date hereof:
1.The TIF Documents constitute a true, correct and complete list of all the tax
increment financing (TIF) assistance agreements, documents, and instruments applicable
to the Property. The TIF Documents are in full force and effect and have not been modified
or amended, except as may be stated herein.
2.There are no defaults or outstanding obligations under any of the provisions of the
TIF Documents by Property Seller or Buyer, and as developed and currently operating the
Property is in compliance with all terms and conditions of the TIF Documents. To the best
of the undersigned’s knowledge, no act or event has occurred or failed to occur which, with
the passage of time or the giving of notice or both, would result in Property Seller, Buyer,
or the Property being in default under the TIF Documents. Additionally, there are no unpaid
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or past due fees, amounts, or other charges under the TIF Documents that are due with
respect to the Property.
3.The undersigned acknowledges and approves of the assignment and transfer of the
Development Agreement and Restrictive Covenant from Property Seller to Buyer in
connection with the Buyer’s above-described acquisition of the Property from Property
Seller.
4.The Minimum Improvements have been constructed in accordance with the TIF
Documents. In connection with delivering this Estoppel, the HRA has issued or is prepared
to issue a certificate of completion in the form required under the Development Agreement
dated as of the Effective Date.
5.The undersigned acknowledges and approves of the TIF Note remaining the
property of Drake Bank, a Minnesota state banking corporation pursuant to that certain
Collateral Assignment of Development Agreement and TIF Note dated as of December 23,
2020.
6.The TIF Documents have not been assigned or pledged as collateral for any other
obligation, except as described in Section 4 herein and as follows: notwithstanding any
provisions to the contrary in the Development Agreement, the undersigned hereby
acknowledges, approves, and permits Buyer, in connection with the above-described loan,
to collaterally assign the Development Agreement and Restrictive Covenant, to Lender, as
may be required by Lender.
7.The maturity date of the TIF Note is February 1, 2048.
8.This Estoppel shall inure to the benefit of the parties to whom this Estoppel is
addressed, to Property Seller, to Buyer, Lender, and to their respective successors and
assigns.
9.The undersigned is duly authorized to execute this Estoppel on behalf of the
Authority.
The Authority makes the statements contained in this Estoppel with the understanding that
Buyer and Lender intend to rely upon this Estoppel and the undersigned agrees that it may so rely.
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Dated as of ____________ ___, 2025.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA,
a public body corporate and politic under the laws of the
State of Minnesota
By:
Name:
Title: Chair
By:
Name:
Title: Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ________, 2025,
by __________________, the Chair of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a public body corporate and politic organized and existing under the
laws of the State of Minnesota, on behalf of the public body corporate and politic.
NOTARY PUBLIC
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ________, 2025,
by __________________, the Executive Director of the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota, a public body corporate and politic organized and
existing under the laws of the State of Minnesota, on behalf of the public body corporate and
politic.
NOTARY PUBLIC
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EXHIBIT A
Legal Description of the Property
Lots 1 and 2, Block 1, Richlyn Riley, Hennepin County, Minnesota.
Abstract Property.
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ASSIGNMENT AND ASSUMPTION OF CONTRACT FOR PRIVATE
DEVELOPMENT AND DECLARATION OF RESTRICTIVE COVENANTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACT FOR PRIVATE
DEVELOPMENT AND DECLARATION OF RESTRICTIVE COVENANTS (this
“Agreement”) is made and entered into as of __________________, 2025 (the “Effective Date”),
by and among Lighthouse Management Group, Inc., a Minnesota corporation, acting solely in its
capacity as the Receiver of 6345 Partners, LLC, a Minnesota limited liability company, Richfield
Property Holdings, LLC, a Minnesota limited liability company, and 15th NB Property1, LLC, a
limited liability company, pursuant to the certain Receivership Orders filed in the District Court,
Fourth Judicial District, State of Minnesota, on April 17, 2025, in Hennepin County Court File
No. 27-CV-24-16245 and 27-CV-24-16388 (collectively “Assignor”), Court Place of Burnsville,
L.L.P., a Minnesota limited liability partnership (“Assignee”), and the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”). “Party”
or “Parties” shall mean one (1) or more of Assignor, Assignee or the Authority.
RECITALS
A.Pursuant to a Contract for Private Development dated September 22, 2020, filed
May 3, 2021 as Document Number 10948739 between the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota, and 6345 Partners, LLC, a Minnesota limited liability
company, and that certain First Amendment to Contract for Private Development filed May 3,
2021 as Document Number 10948740 (the “Development Agreement”), Assignor’s predecessor
in interest proposed to (i) construct an eighty-two unit multifamily housing development; and (ii)
purchase and rehabilitate a 22 unit apartment building with naturally occurring affordable rents;
each located on those certain real properties located in Hennepin county and as legally described
on the attached Exhibit A (the “Project”) and requested the Authority use tax increment financing
to assist with certain costs thereof in order to fill the gap between the Project costs and the funds
available to pay such costs.
B.In connection with the Development Agreement, the Authority issued its Tax
Increment Limited Revenue Note Series 2021 dated September 1, 2021 in the original principal
amount of $2,025,987.00 to Richfield Property Holdings, LLC, a Minnesota limited liability
company (an undivided 15.54% interest)15th NB Property1 LLC, a Minnesota limited liability
company (an undivided 23.27% interest) 6345 Partners, LLC, a Minnesota limited liability
company (an undivided 61.19% interest) (collectively the “Original TIF Holders”), as the holder
thereof (the “TIF Note”).
C.In connection with the Development Agreement, the Project was subjected to that
certain Declaration of Restrictive Covenants dated December 22, 2020, filed May 3, 2021 as
Document Number 10948741 (the “Restrictive Covenant”).
D.Pursuant to that certain Collateral Assignment of Development Agreement and TIF
Note dated as of December 23, 2020, the Authority consented to the collateral assignment by the
Original TIF Holders to Drake Bank, a Minnesota state banking corporation (the “TIF Lender”)
of all of its right, title and interest in and to the Development Agreement and the TIF Note.
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E.Assignee and Assignor entered into that certain Purchase Agreement dated August
7, 2025 (the “Purchase Agreement”) for sale of the Project, together with all personal property,
fixtures and improvements thereon, and easements, leases and rights benefiting or appurtenant to
the property (collectively the “Property”), the Development Agreement and the Restrictive
Covenant, among other things.
F.Pursuant to the terms of the Purchase Agreement, the TIF Note is to remain in favor
of the TIF Lender.
G.As of the Effective Date, Assignor desires to assign all its right, title and interest
under the Development Agreement, the Restrictive Covenant, and related documents (collectively,
the “Transferred Documents”) to Assignee, and Assignee desires to assume Assignor’s
obligations thereunder, subject to the terms and conditions set forth herein.
H.Assignor and Assignee have requested the Authority consent to Assignor’s
assignment and Assignee’s assumption of the Development Agreement and Restrictive Covenant
and consent to the transfer of the Property to Assignee, subject to the terms and conditions set forth
herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Authority, Assignor and Assignee agree as follows:
1.Recitals. The Recitals set forth above are true and correct and are incorporated
herein by this reference.
2.Capitalized Terms. Capitalized terms not separately defined in this Agreement
shall have the definitions ascribed to such terms in the Development Agreement.
3.Ratification of the Transferred Documents. The Parties hereby agree that the
Development Agreement and the Restrictive Covenant have not been extinguished, terminated or
foreclosed prior to the date hereof, and that the same have been and remain in full force and effect.
4.Assignment and Assumption. Assignor hereby transfers, assigns and conveys to
Assignee, from and after the Effective Date, all of Assignor’s right, title, interest and obligations
in, to and under the Transferred Documents. From and after the Effective Date, Assignee hereby
accepts such transfer, assignment and conveyance of Assignor’s right, title, interest and obligations
in, to and under the Transferred Documents, and Assignee agrees, for the benefit of Assignor and
the Authority, to perform, observe, keep and comply with all of the terms, covenants, conditions,
provisions and agreements contained in the Transferred Documents on the part of the Assignor to
be performed, observed, kept and complied with from and after the Effective Date. From and after
the Effective Date, Assignee agrees to be subject to all the conditions, provisions and restrictions
to which the Assignor is subject to under the Transferred Documents.
5.Representations and Warranties of Assignee. Assignee hereby represents and
warrants to Assignor and the Authority that:
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(a)Organization. Assignee is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Minnesota.
(b)Authorization, Validity and Enforceability. Assignee has all requisite power and
authority to enter into this Agreement and to carry out the actions contemplated hereby.
The execution, delivery and performance by Assignee of this Agreement has been duly
authorized and approved by all necessary corporate action. This Agreement, when
executed, shall constitute the valid and legally binding obligation of Assignee, enforceable
against Assignee in accordance with its terms.
(c)No Conflicts. Neither the execution and delivery of this Agreement, or any other
documents attached hereto or referenced herein, 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 contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which Assignee is now a party or by which
it is bound, or constitutes a default under any of the foregoing.
(d)Conflict of Interest. The execution and delivery of this Agreement will not create
a conflict of interest prohibited by Minnesota Statutes section 469.009, as amended.
(e)No Violations of Laws. Assignee has complied in all material respects with all
legal requirements and is not in default with respect to any judgment, order, injunction or
decree of any court, administrative agency or other governmental authority that is in any
respect material to the transactions contemplated in and by this Agreement.
6.Authority Consent to Assignment and Assumption and Conveyance. In accordance
with Section 8.2 of the Development Agreement, the Authority hereby consents to Assignor’s
transfer, assignment and conveyance to Assignee, from and after the Effective Date, of all of
Assignor’s right, title, interest and obligations in, to and under the Transferred Documents.
7.TIF Note. The Authority consents to the TIF Lender remaining the holder of the
TIF Note.
8.Execution, Delivery and Performance of Agreement. Each Party hereby represents
and warrants that it has the right, power, legal capacity and authority to execute, deliver and
perform this Agreement.
9.Further Instruments. Each Party hereby agrees to execute and deliver to the other
such further instruments reasonably requested or appropriate to evidence or give effect to the
provisions of this Agreement and which are consistent with the provisions and intent of this
Agreement.
10.Rights of Authority. Nothing herein limits the Authority’s ability to exercise its
rights and remedies under the Development Agreement.
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11.Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the Parties hereto and their respective successors and assigns.
12.Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the state where the Property is located.
13.Counterparts. This Agreement may be executed in any number of counterparts,
each of which, when executed, shall be deemed to be an original, and all of which shall be deemed
to be one and the same instruments. Electronically-transmitted signatures shall be deemed
originals.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered as of the Effective Date.
ASSIGNOR:
LIGHTHOUSE MANAGEMENT GROUP, INC.,
in its capacity as the Receiver for:
6345 Partners, LLC;
Richfield Property Holdings, LLC; and
15th NB Property1, LLC
By:
Name:
Title:
Date:__________________________
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________,
2025, by ______________________, the ___________of the Lighthouse Management Group,
Inc., a corporation under the laws of the State of Minnesota, on behalf of the corporation.
NOTARY PUBLIC
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered as of the Effective Date.
ASSIGNEE:
Court Place of Burnsville, L.L.P.,
a Minnesota limited liability partnership
By:
Name:
Its:
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of __________,
2025, by ______________________, the ___________of the Court Place of Burnsville, L.L.P., a
limited liability partnership under the laws of the State of Minnesota, on behalf of the partnership.
NOTARY PUBLIC
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered as of the Effective Date.
AUTHORITY:
Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota
By: ___________________________
Chair
By: ___________________________
Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ________, 2025,
by __________________, the Chair of the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota, a public body corporate and politic organized and existing under the
laws of the State of Minnesota, on behalf of the public body corporate and politic.
NOTARY PUBLIC
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ________, 2025,
by __________________, the Executive Director of the Housing and Redevelopment Authority
in and for the City of Richfield, Minnesota, a public body corporate and politic organized and
existing under the laws of the State of Minnesota, on behalf of the public body corporate and
politic.
NOTARY PUBLIC
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This Instrument Drafted By:
WINTHROP & WEINSTINE, P.A. (NPV)
225 South Sixth Street
Suite 3500
Minneapolis, MN 55402
(612) 604-6400
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EXHIBIT A
Legal Description of the Property
Lots 1 and 2, Block 1, Richlyn Riley, Hennepin County, Minnesota.
Abstract Property.
Page 80 of 87
Housing and Redevelopment Authority Meeting 9/15/2025
Agenda Section: Resolutions
Agenda Item: 10.a.
Report Prepared By:
Julie Urban, Assistant Community Development Director
Department Director:
Melissa Poehlman, Community Development Director
Item for Consideration:
Consideration of a resolution accepting a Bring It Home Minnesota funding award.
EXECUTIVE SUMMARY
In 2023, the State Legislature passed a Metro area sales tax and dedicated a portion of
the funds toward a state-level rental assistance program called Bring It Home
Minnesota (BIH). All housing and redevelopment authorities that administer the Federal
Section 8 Housing Choice Voucher (HCV) program were eligible to apply for BIH
funding, the funding formula for which is based on the amount of income-eligible
households in a community.
In March of 2025, the Housing and Redevelopment Authority (HRA) submitted an
application for funds and was awarded $1,004,264, which includes two years of
program and administrative funding and up to $55,104 in start-up costs. The funds are
expected to serve between 35 and 45 households with ongoing rental assistance.
The BIH program will be operated similarly to the HCV program with some modifications
designed to allow the HRA to utilize the funds more efficiently. The modifications
include:
•BIH vouchers will be awarded through a Lease-in-Place system, i.e., existing
Richfield residents who have a current lease will be eligible to apply for rental
assistance. Unlike the federal HCV program, BIH voucher holders will only be
able to use their voucher in Richfield.
•The BIH program will open once a year. Applicants will apply, and their names
will be kept on file for one year. Residents will need to reapply annually.
•The BIH legislation requires that priority for the BIH program be given to families
with children under 18 and earning under 30% of the Area Median Income (AMI).
In order to fulfill this requirement, up to 30% of the vouchers will be reserved for
Hennepin County’s Schools to Housing Program (Program). This Program works
with the Richfield Public Schools to support precariously-housed families with
temporary rental assistance and case management services. BIH may provide
the rental assistance portion of the assistance and/or participants may transition
from the temporary help to more permanent BIH assistance.
The HRA's application also includes the option to set aside a portion of the funding for
project-based vouchers if the HRA were to choose to support a specific development
with project-based subsidies in the future.
Page 81 of 87
Several “due diligence” items, including a resolution approved by the HRA Board, are
due to Minnesota Housing by October 15. Once the due diligence items are submitted,
Minnesota Housing will prepare a Grant Contract Agreement. Set-up and marketing of
the BIH program will begin in early 2026. Staff estimates issuing the first vouchers in the
second quarter of 2026.
HISTORICAL CONTEXT
•In 2023, the State Legislature approved a Metro area sales tax and dedicated a
portion of the funds toward a state-level rental assistance program called Bring It
Home Minnesota (BIH).
•In October 2024, the HRA approved the HCV Administrative Plan, which governs
the HRA's administration of the HCV program and will be used in the
administration of BIH with some modifications.
RECOMMENDED ACTION
By Motion: Adopt a resolution accepting a Bring It Home Minnesota funding award and
authorizing the Chair and Executive Director to execute the Grant Contract Agreement.
EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
Providing rental assistance to families with low incomes helps to further the Strategic
Plan outcome of maintaining Richfield as an affordable place to live. Many of the
community's renters are also people of color, and rental assistance offers housing
stability and can help to reduce racial inequities and barriers for traditionally excluded
communities.
POLICIES (RESOLUTIONS, ORDINANCES, REGULATIONS, STATUTES, ETC.)
State legislation requires BIH recipients to prioritize serving families with children who
earn less than 30% of the AMI. Communities may also establish additional priorities
based on local need. Families that are elderly or disabled and families earning between
31 - 50% of the AMI will be additional priorities for the Richfield BIH program.
CRITICAL TIMING ISSUES
The resolution and other due diligence items are due to Minnesota Housing by October
15, 2025.
FINANCIAL IMPACT
•The two-year award of $1,004,264 includes up to $55,104 in start-up costs and
$949,160 in Housing Assistance Payments (HAP) and administrative fees.
Administrative fees are based on the number of vouchers being utilized. Staff
anticipates adding hours to the current part-time HCV staff and believes that the
fees will be adequate to cover the HRA's administrative costs.
•Funds will be provided on a reimbursement basis; however, Minnesota Housing
has agreed to advance up to 50% of start-up funding and three months of
anticipated HAP payments.
Page 82 of 87
LEGAL CONSIDERATIONS
The HRA Attorney will review the Grant Contract Agreement.
ALTERNATIVE RECOMMENDATION(S)
Decide not to approve the resolution accepting the Bring It Home Minnesota funding
award.
ATTACHMENTS
1.091525 Resolution Bring It Home Minnesota
2.BIH Award Letter Housing and Redevelopment Authority in and for the City of
Richfield
Page 83 of 87
RESOLUTION NO.
RESOLUTION AUTHORIZING ACCEPTANCE OF BRING IT HOME MINNESOTA
FUNDING AWARD AND AUTHORIZING EXECUTION OF THE GRANT CONTRACT
AGREEMENT
WHEREAS, the Bring It Home Rental Assistance Program, also referred to as
“Bring It Home”, is a new program to create rental assistance for low-income families
across Minnesota; and
WHEREAS, Bring It Home is funded by state appropriations and a new metro
sales tax for housing, the program will provide grants to eligible Program Administrators
who will administer the program as direct tenant and/or project based rental assistance
for cost burdened households at 50% area median income (AMI) or less; and
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield (the “Authority”) is an eligible Program Administrator and applied for a Bring It
Home grant to administer the program and provide rental assistance to eligible Richfield
residents; and
WHEREAS, the Authority was awarded $1,004,264 in Bring It Home funds,
including up to $55,104 in start-up costs to be used in the first twelve months of
contracting and $949,160 in Housing Assistance Payments (HAP) and Administrative
Fees intended to be used during the full two-year contract term; and
WHEREAS, the Authority has the staff capacity and capability to administer the
awarded funds, and
WHEREAS, the Authority Chair and Executive Director have the authority to sign
all contracts on behalf of the Authority.
NOW, THEREFORE, BE IT RESOLVED
1.The Authority accepts the Bring It Home award in the amount of $1,004,264 over
a two-year period, and
2.The Authority authorizes the Chair and Executive Director to execute the Grant
Contract Agreement on behalf of the Authority.
Adopted by the Housing and Redevelopment Authority of the City of Richfield,
Minnesota this 15th day of September, 2025.
Erin Vrieze Daniels, Chair
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ATTEST:
Sean Hayford Oleary, Secretary
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Minnesota Housing
400 Wabasha St. N
Suite 400
St. Paul, MN 55102
July 31, 2025
Julie Urban
Housing and Redevelopment Authority in and for the City of Richfield
6700 Portland Ave S Sent via email
Richfield, MN 55423
RE: Bring It Home Rental Assistance Program funding to Housing and Redevelopment Authority in and
for the City of Richfield
Dear Julie Urban,
We are pleased to inform you that your application was approved for funding by Minnesota Housing
on July 24, 2025.
Your organization will be awarded up to a total grant amount of $1,004,264.00. This is made up of
$55,104.00 in startup costs to be used in the first twelve months of contracting and $949,160.00 in
Housing Assistance Payments (HAP) and Administrative Fees intended to be used during the full two-
year contract term.
The grant term will start upon execution of the Grant Contract Agreement by both parties and will end
two years after execution. Funding is contingent upon satisfactory completion of all due diligence
items, approval of which is at the sole discretion of Minnesota Housing.
Enclosed with this letter is the Due Diligence Checklist. All items listed in the Due Diligence Checklist
must be returned to, and approved by, Minnesota Housing prior to the execution of the Grant Contract
Agreement.
An informative webinar detailing the Due Diligence Checklist will be held on August 18 th at 1:00pm.
Registration link to follow.
If you have program specific questions, contact Dani Salus at: danielle.salus@state.mn.us
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Thank you for your continued commitment to providing rental assistance to low-income households in
Minnesota.
Sincerely,
Jennifer Bergman
Director of Local Government Housing Programs
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