HRA 08/13/1992 - 637311
s
HOUSING AND REDEVELOPMENT AUTHORITY
THURSDAY, AUGUST 13, 1992
7:30 P.M.
. WILLIAM BURNS
EXECUTIVE DIRECTOR OF.HRA
r,
CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, SEPTEMBER 10, 1992, 7:30 P.M.
-----------------------------------------------------------------
-----------------------------------------------------------------
Location: Council Chambers
Fridley Municipal Center
6431 University Avenue N.E.
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: July 9, 1992 (included in August agenda)
ACTION ITEMS:
CONSIDER APPROVAL OF RESOLUTION TO
EXECUTE DEVELOPMENT AGREEMENT WITH
SHEET METAL CONNECTORS . . . . . . . . . . . . . . . . . 1 - 1D
CONSIDER APPROVAL OF RESOLUTION TO EXECUTE
DEVELOPMENT AGREEMENT WITH BOB'S PRODUCE . . . . . . . . 2 - 2H
CONSIDER APPROVAL OF RECOMMENDED HOUSING
PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . 3 - 30
CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . 4 - 4C
INFORMATION ITEMS:
REVISED.PARKING LEASE BETWEEN HRA AND
COLUMBIA PARK PROPERTIES . . . . . . . . . . . . . . . . 5 - 5D
RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . . . 6 - 6B
REQUEST BY TIM WERNER REGARDING LAKE
POINTE SITE . . . . . . . . . . . . . . . . . . . . . . 7
CONSIDER REQUEST FOR TEMPORARY SIGNAGE
FOR.SOUTHWEST QUADRANT . . . . . . . . . . . . . . . . . 8 - 8D
FRIDLEY TOWN SQUARE UPDATE . . . . . . . . . . . . . . . 9
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, AUGUST 13, 1992, 7:30 P.M.
Location: Council Chambers
Fridley Municipal Center
6431 University Avenue N.E.
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: July 9, 1992
ACTION ITEMS:
CONSIDER APPROVAL OF RESOLUTION TO
EXECUTE DEVELOPMENT AGREEMENT WITH
SHEET METAL CONNECTORS . . . . . . . . . . . . . . . . 1 - 1D
CONSIDER CONCEPT APPROVAL OF TIF ASSISTANCE
FOR REDEVELOPMENT OF BOB'S PRODUCE . . . . . . . . . . 2 - 2A
CONSIDER REQUEST FOR TEMPORARY SIGNAGE
FOR SOUTHWEST QUADRANT . . . . . . . . . . . . . . . . 3 - 3C
CONSIDER APPROVAL OF RECOMMENDED HOUSING
PROGRAMS . . . . . . . I . . . . . . . . . . . . . . 4 - 4L
CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . 5 - 5B
INFORMATION ITEMS:
REVISED PARKING LEASE BETWEEN HRA AND
COLUMBIA PARK PROPERTIES . . . . . . . . . . . . . . . 6 - 6D
RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . . 7 - 7B
REQUEST BY TIM WERNER REGARDING LAKE
POINTE SITE . . . . . . . . . . . . . . . . . . . . . . 8
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9,.1992
John Meyer was appointed to act as chairperson in the absence of
the chairperson.
CALL TO ORDER:
Acting Chairperson Meyer called the July 9, 1992, Housing &
Redevelopment Authority minutes to order at 7:35 p.m.
ROLL CALL:
Members Present: John Meyer, Duane Prairie, Jim McFarland
Members Absent: Larry Commers, Virginia Schnabel
Others Present: Barbara Dacy, Community Development Director
Paul Hansen, Accountant
Jim Casserly, Consultant
Jerome Myers, Sheet Metal'Connectors
Robert Schwartz, 900 - 2nd Ave. S., #450
Doug Erickson, Fridley Focus
APPROVAL OF MAY 14, 1992, HOUSING & REDEVELOPMENT AUTHORITY
MINUTES:
MOTION by Mr..McFarland, seconded by Mr. Prairie, to approve the
May'14, 1992, Housing & Redevelopment Authority minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
1. CONSIDER CONCEPT APPROVAL OF LOAN AGREEMENT WITH SHEET METAL
CONNECTORS:
Ms. Dacy stated staff reviewed the various elements of this project
at the May 14, 1992, HRA meeting. Sheet Metal Connectors is
proposing to build a 100,000 sq. ft. building on the six acre
parcel located on the west side of Main Street north of I -694. At
that meeting, staff proposed the concept of establishing a tax
increment district and a pay -as- you -go assistance plan. The HRA
had a lot of concerns about the costs they were incurring to
establish the district and wondered if there was another
alternative that would still assist the company and be more.
efficient for the HRA and the City.
Ms. Dacy stated staff has done that and is proposing that the HRA
establish this parcel in the redevelopment project area but not
HOUSING & REDEVELOPMENT AUTHORITY MTG., JULY 9, 1992 PAGE 2
establish a tax increment district and execute a loan agreement
with'Sheet Metal Connectors to loan them $200,000 over a ten year.
period. .The first two years the principal and interest payments
would not be due. The interest rate would be 5 %, and the remaining
amount would be amortized over the life of the loan.
Ms. Dacy stated the advantage to this concept is that the current
taxing jurisdictions will still get their tax money.. The HRA will
also recover its costs in issuing the loan, and they avoid the cost
of establishment a.tax increment district.
Ms. Dacy stated staff is strongly recommending the HRA approve the
concept of loaning $200,000 to Sheet Metal Connectors. In terms
of the HRA's assistance guidelines, it is right.in line with what
was discussed for the TIF guidelines. The estimated project value
of the project is $2 2 1/2 million, so the maximum percent of
assistance is 10 %.
Ms. Dacy stated Mr. Casserly and the petitioner have been working
on the terms of the development agreement.. If the HRA approves
the concept, the development agreement will be brought back to the
HRA for action at the August meeting.
Mr. Casserly stated that the HRA has extended loans on projects in
the redevelopment area in the past. The next action now is to
expand the project area to include this site. The terms of the
agreement are very standard.
Mr.. Jerry Myers, Sheet Metal Connectors, stated the loan will
really help them to bring the property up to standard. They
appreciate the HRA giving Sheet Metal Connectors this
consideration.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the
concept of the proposed loan to Sheet Metal Connectors and
authorize staff to prepare the development agreement for action at
the HRA's August 13, 1992, meeting.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
2. CONSIDER RESOLUTION TO APPROVE MODIFICATION TO REDEVELOPMENT..
PROJECT NO. 1 TO REFLECT INCREASED GEOGRAPHIC AREA AND
INCREASED PROJECT COSTS:
Ms. Dacy stated the HRA needs to make a motion to approve this
resolution to recommend to the City Council to establish this
parcel on which Sheet Metal Connectors will be building as part of
the redevelopment project area. The resolution is dated June 11,
1992, and the motion needs to reflect that the date should be July
9, 1992.
HOUSING & REDEVELOPMENT AUTHORITY MTG., JULY 9, 1992 PAGE 3
MOTION by Mr. McFarland, seconded by' Mr. Prairie, to approve
Resolution No. HRA 2 -1992, "A Resolution Modifying the
Redevelopment Plan for Redevelopment Project No. 1 to Reflect
Increased Geographic Area and Increased Project Costs within
Redevelopment Project 'No. 1 and Modifying the Tax Increment
Financing Plans for Tax Increment Financing Districts No. 1 through
No. 12 to Reflect Increased Project Costs within Redevelopment
Project No. 111, and that the date of the Resolution be changed to
July 9, 1992.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED'THE MOTION CARRIED UNANIMOUSLY.
3. CONSIDER APPROVAL OF TEMPORARY CONSTRUCTION EASEMENT FOR
MISSISSIPPI STREET IMPROVEMENT PROJECT:
Ms. Dacy stated Anoka County is requesting a 5 ft. by 270 ft.
temporary construction easement until the end of 1992 in order for
the County to complete a detail of the street expansion project..
This easement area is located on the north side of the Target
office building between Target's north wall and the south side of
the sidewalk. Because of the change in elevation after the County
adds the additional lane, they will be adding a retaining wall.
Ms. Dacy stated staff is recommending the HRA approve the temporary
construction easement and authorize the Executive Director and
Chairperson to execute the temporary construction easement
document.
Ms. Dacy stated she had spoken to someone from Anoka County that
day, and the County intends to start the Mississippi Street project
in mid to late August.
Mr. Meyer asked if Target has any problems with this temporary
easement.
Ms. Dacy stated Target is aware of the County's plans and does not
have any problems with the temporary easement. The retaining wall
has been a part of the construction plans since the plans were
originally drawn 4 -5 years ago.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the
temporary construction easement for a 5 ft. by 270 ft. long strip
along the south side of Mississippi Street and authorize the
Executive Director and Chairperson to execute the temporary
construction easement document.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
HOUSING & REDEVELOPMENT AUTHORITY MTG., JULY. 9, 1992 PAGE'4
4. CONSIDER REVISED REQUEST FOR TIF ASSISTANCE FOR FRIDLEY TOWN
SQUARE PROJECT:
Ms. Dacy stated that the original project approved by the City for
Fridley Town Square was a 28,000 sq. ft. retail building on the
10,000 Auto Parts site and the.two single family homes to the east
of it. That development included a Walgreen store on the east end
of the building, spaces in the middle portion, and then a fast food
restaurant on the west end. During the approval process, that fast
food restaurant was Burger King.
Ms. Dacy stated Scott Ericson now has proposed a revised proposal
that essentially eliminates the middle portion of the. building.
He is proposing two free - standing buildings, the Walgreen store and
the Burger King.
Ms. Dacy stated the HRA members had a copy of a memo dated July 1,
1992, from Mr. Burns, Executive Director, in which Mr. Burns
recommends the HRA deny the revised proposal because it exceeds
the HRA's guidelines and because the value of the project has
decreased and the assistance has remained the same.
Mr. Casserly stated part of the problem with this project has
always been that it is a "redevelopment project" so it doesn't fit
very neatly with some of the guidelines. They might be able to
work around that issue; however, what is more fundamental is that
the valuation being reduced dramatically cuts down the amount of
tax increment even more dramatically because the base stays the
same. There are already structures on the site, so the base of the
district is a constant. When they reduce the valuation from about
$1.7 million down to about $1.1 million, it really reduces the
amount of increment to be generated from the project. The HRA
could clearly not recover the kind of investment they are being
asked to put into the project. The real decision the HRA has to
make is whether they want to invest more than they can recover to
do the project being proposed.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to refuse the
request made by Scott Ericson to provide TIF assistance in the
amount of $250,000 for a scaled -down Fridley Town Square project.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
5. CLAIMS AND EXPENSES:
a. Check Register (2222 -2233)
Mr. Hansen stated the current check register included in
the agenda is incorrect. He passed out the revised check
register.
HOUSING & REDEVELOPMENT AUTHORITY MTG., JULY 9, 1992 PAGE 5
Mr. Hansen stated that at the last meeting, the HRA
members had questioned the check for the 3rd Street
extension. Staff reviewed the situation and that check,
#2219, has been voided.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to
approve the check register (2222 -2233) as amended.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON
MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY.
6. RICE PLAZA UPDATE:
Ms.. Dacy stated the air conditioning unit in the former T's Hair
Plus space completely broke down and was replaced. ,In the budget,
$2,500 was allocated for the entire year for the building, and the
air conditioning replacement plus the sign clean -up totals about
$2,800. They are slightly over budget, but she did not anticipate
any additional costs.
Ms. Dacy stated Children's Charm has moved out of the building,
but a new tenant, Bargains, Bargains, has moved in. Given that
they were able to obtain a new tenant, the HRA continues to break
even. If another tenant does leave, staff will schedule a review
of this situation as was discussed during the budget process.
7. ONAN EXPANSION UPDATE:
Ms. Dacy stated Mr. Burns recently spoke to Mr. Nelson from Onan.
Mr. Nelson said Onan has not yet made a decision regarding whether
or not Onan will pursue the Fridley site or the Huntsville,
Alabama, site.
ADJOURNMENT:
MOTION by Mr. McFarland, seconded by Mr. Prairie, to adjourn the
meeting. Upon a voice vote, all voting aye, Acting Chairperson
Meyer declared the motion carried and the July 9, 1992, Housing &
Redevelopment Authority meeting.adjourned at 8:15 p.m.
Resp ctfully sub itted,
Lyn Saba
Recording Secretary
1
a° 0
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
DATE: August 4, 1992
City of Fridley
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Approval of Development Agreement
with Sheet Metal Connectors
The City Council approved the addition of the 6,6 acre parcel into
the redevelopment project area to enable the HRA to assist with the
relocation of Sheet Metal Connectors to Fridley. At the HRA
meeting on.July 9, 1992, concept approval was given to assist Sheet
Metal Connectors via a $200,000 loan.
Jim Casserly has prepared the development contract, and has been
working with Sheet Metal Connectors in finalizing language in the
agreement. (The development agreement is not in the agenda, but
is contained in the packet.) Jim Casserly will be present at next
Thursday's meeting to review the key elements of the development
agreement.
Like previous development agreements, Sheet Metal Connectors is
required to construct "minimum improvements" prior to receiving HRA
assistance. "Minimum improvements" is defined as the construction
of an office warehouse building of approximately 100,000 square
feet, with a total project cost of approximately $2.5 million.
Sheet Metal Connectors also warrants that the completed building
is to have a market value of at least $1.9 million, for the
purposes of real estate property taxation.
The-HRA would issue the $200,000 loan only when a certificate of
completion from the Authority has been issued. Further, the loan
must be repaid in accordance with the payment schedule identified
in Schedule D attached to the development agreement. Finally, the
development agreement requires a personal guarantee from Jerome
Myers in case a default of the loan occurs.
Recommendation
Staff recommends that the HRA authorize the Executive Director and
Chairperson of the HRA to execute the development agreement with
Sheet Metal Connectors. Also, a resolution is passed when the HRA
approves a development agreement. The resolution will be
distributed at the meeting.
BD:rsc
612 334 3382 _
612-334-3382 C ASSEELYMOLZAHNFL I NT 273 F02i02 JUN 09'92 16:46
METAL2 CITY OF FRIDLEY, MINNESOTA 09- Jun -92
PREPARED BY CASSERLY MOLZAHN & ASSOCIATES
1 A
PROPOSED METAL CONNECTORS PROJECT
- 10 YEAR
LOAN SCHEDULE
BEGINNING
TOTAL
ENDING
BALANCE
PRINCIPAL INTEREST
PAYMENT
BALANCE
12
%
1992
200,OOp
Q
- w- -0
-
- -- _---
0
200,000
6
j
1993
200,000
0
0
0
200,000
12
/
1993
200,000
0
0
0
200,000
6
/
1994
200,000
0
0
0
200,000
12
/
1994
200,000
0
0
0
200,000
6
/
1995
200,000
10,320
51,000
15,320
189,680
12
f
1995
189,680
10,578
4,742
15,320
179,102
6
/
1996
179,102
10,842
4,478
15,320
168,260
12
j
1996
168,260
11,113
4,207
15,320
157,147
6
/
1997
157,147
11,391
3,929
15,320
145,756
12
/
1997
145,756
11,676
3,644
15,320
134,080
6
/
1998
134,080
11,968
31352
15,320
122,112
12
j
1998
122,112
12,267
31053
15,320
109,845
6
%
1999
109,845
12,574
2,746
15,320
97,271
12
/
1999
97,271
12,888
2,432
15,320
84,383
6
!
2000
84,383
13,210
2,110
15,320
71,173
12
1
2000
71,173
13,540
1,779
15,320
57,633
6
/
2001
57,633
13,879
11441
15,320
43,754
12
/
2001
43,754
14,226
1,094
15,320
29,528
6
/
2002
29,528
14,582
738
15,320
14,946
12
/
2002
14,946
14,946
374
15,320
(0)
200,000
45,117
245,117
------
PRINCIPAL
200,000
INTEREST RATE
5.00%
YEARS 1 -- 2
NO INTEREST
YEARS 3 - 10
AMORTIZED
16 SEMI ANNUAL
PAYMENTS
PREPARED BY CASSERLY MOLZAHN & ASSOCIATES
r
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF T'RIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT
FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY FRIDLEY AND MSCJ, INC.
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and Redevelopment Authority in and
for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a
Contrast For Private Redevelopment (the "Contract ") with MSCJ, Inc.
(the "Redeveloper").
Section 2. Findings.
2.01. The Authority hereby finds that it has approved and
adopted a development program known as the Modified Redevelopment
Plan for its Redevelopment Project No. 1 (the "Redevelopment
Program ")pursuant to Minnesota Statutes, Section 469.001 &-t- seg.
2.02. The Authority hereby finds that the Contract
promotes the objectives as outlined in its Redevelopment Program.
Section 3. Authorization for Execution and Delivery.
3.01. The Chairman and the Executive Director of the
Authority are hereby authorized to execute and deliver the Contract
when the following condition is met:
Substantial conformance of a Contract to the Contract
presented to the Authority as of this date.
Adopted by the Board of Commissioners of the Authority this
day of _, 1992.
ATTEST:
Executive Director
Chairman
it-.71
1C
Casserly Molzahn & Associates, Inc.
215 South 11th Street, Suite 300 « Minneapolis • Minnesota 55403
Office (612) 342 -2277 . Fax (612) 332 -4765
MEMO__ AWDUM
TO: Fridley Housing and Redevelopment Authority
FROM: James R. Casserly
Mary E. Molzahn
DATE: August 6, 1992
RE: Contract for Private Redevelopment by and between
the Fridley HRA and MSCJ, Inc.
Enclosed is the Contract for Private Redevelopment between the
Fridley Hi2A and MSCJ, Inc. (the "Agreement "). This Agreement
adheres to the concept approved by the HtEtA at its July 9, 1992
meeting.
Because of the security provisions, the Agreement is rather
lengthy, but its essential features are described as follows:
1. The project must have an approximate cost of $2
million.-
2. After the project is . completed the City will provide a
loan to assist MSCJ, Inc. (the "Redeveloper ") in
payment of eligible expenses.
3. The loan can only be for eligible expenses which are
described as Site Improvements and are listed on
Schedule B of the Agreement (page 23).
4. The loan will actually be made when the Certificate of
Completion is provided (see Schedule C of the Agreement
on page 24). The,Certificate of Completion is provided
after an occupancy permit is provided by the City.
5. To secure the Authority the Redeveloper will sign a
Note (see Schedule D starting on page 26). Interest on
the Note wild. not start until February 1, 1995. The
first payment on the Note is August 1, 1995 and the
last payment is February 1, 2003 (see Payment Schedule
attached to the Note on page 28).
e.
Page 2
Fridley HRA
August 6, 1992
6. To secure the Loan the Authority will receive a second
mortgage (see Schedule E starting on page 29).' The
Agreement stipulates that the construction mortgage and
the second or Authority Mortgage shall not secure an
amount greater than 90% of the costs of the acquisition
of the site and construction of the facilities (see
Section 8.1 and 8.2 of the Agreement on page 17).
7. As additional security for the loan there is a personal
guarantee by Jerome J. Myers, the majority shareholder
of Sheet Metal Connectors, Inc. and MSCJ, Inc.; and a
corporate guarantee by Sheet Metal Connectors, Inc.
The remaining provisions of the Agreement are consistent with
previous agreements approved by the HRA. If there are any
questions, please call.
JRC,MEM /db
enclosure
1D
2
Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: August 5, 1992
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Bob's Produce Update
Jim Casserly, Bill Burns, and I met with Bob and Mike Schroer and
Dave Newman on June 18, 1992, regarding a potential assistance
package for the redevelopment of the Bob's Produce Ranch, including
construction of a new Lyndale Garden Center. -As you recall,
construction has been postponed due to the discovery of 8 -10 feet
of poor soils behind the existing building. The Schroers have
revised the site plan and recently completed the zoning and
development approval processes.
A "pay as you go" assistance package for 5% of the construction
costs to aid the demolition and correction of. poor soils was
discussed. The estimated construction cost is $1,300,000; however,
Schroer indicated that a higher construction cost was anticipated.
Without changes in construction cost, our proposed assistance
equates to $120,379 paid over seven tax payable years.
A copy of Casserly's original spreadsheet is attached, based on the
lower construction cost. Casserly was to receive a revised
estimate late this week. A revised spreadsheet will be distributed
at the meeting.
Recommendation
The Schroer's are requesting concept approval of a 5% assistance
package. The development agreement would then be approved at the
September meeting in hopes of a fall construction start. Because
we were unable to analyze the revised spreadsheet, we do not have
a recommendation at this time. We will be prepared to advise the
HRA next Thursday.
BD /mj r
M -92 -508
2 -A
8081 CITY OF FRIDLEY, MINNESOTA 05- Jun -92
SCHEDULE I: TAX INCREMENT ANALYSIS - OVERVIEW
(A) (8)
(C)
(D)
---------
(E)
-- --- - ----
(F)
--- ---
(G)
- --------------- - ------
(H) (I)
--------------------------
(J)
(K)
ORIGINAL
ESTIMATED
CAPTURED
ESTIMATED
LESS:
LESS: AVAILABLE
TAXABLE PRESENT VALUE
I OF PERIOD
•TAX
TAX
TAX
TAX
ADMIN
L.G.A. TAX
SEMIANNUAL
CUMULATIVE
YEARS ENDING
CAPACITY
CAPACITY
CAPACITY
INCREMENT
EXPENSES
ADJUSTMENT INCREMENT
BALANCE
BALANCE
0.0 12 / 1991
25,254
25,254
0
------------------------------------
0
0
- - - - -- ----
0 0
- --------------------
0
0.5 6/ 1992
25,254
25,254
0
0
0
0 0
0
0
1.0 12 / 1992
25,254
25,254
0
0
0
0 0
0
0
1.5 6/ 1993
25,254
60,403
0
0
0
0 0
0
0
2.0 12 / 1993
25,254
60,403
0
0
0
0 0
0
0
2.5 6 / 1994
25,254
61,611
35,149
18,099
1,810
0 16,289
14,172
0
14,172
3.0 12 / 1994
25,254
61,611
35,149
18,099
1,810
0 16,289
13,530
27,702
3.5 6 / 1995
25,254
62,844
36,357
18,721
1,872
0 16,849
13,360
41,b62
4.0 12 / 1995
25,254
62,844
36,357
18,721
1,872
0 16,849
12,754
53,816
4.5 6 / 1996
25,254
64,101
37,590
19,356
1,936
388 17,032
12,308
66,124
5.0 12 / 1996
25,254
64,101
37,590.
19,356
1,936
388 17,032
11,750
77,874
5.5 6 / 1997
25,254
65,383
38,847
20,003
2,000
601 17,201
11,329
89,203
6.0 12 / 1997
25,254
65,383
38,847
20,003
2,000
801 17,201
10,815
100,018
6.5 6 / 1998
25,254
66,690
40,129
20,663
2,066
1,241 17,355
10,417
110,435
7.0 12 / 1998
25.254
66,690
-----------------------------------------------------
40,129
20,663
2,066
1,241 17,355
9,944
120,379
193,684
19,368
- - - - -- --------------------------
4,861, 169,455
120,379
120,379
ORIGINAL MARKET VALUE
566,400
ESTIMATED TAX CAPACITY
60,403
ORIGINAL TAX CAPACITY
25,254
CONSTRUCTION COSTS
(1992)
1,300,000
11- 30 -24 -22 -0020
VACANT LAND
67,100
3,187
ESTIMATED MARKET VALUE - BUILDING
1,040,000
11- 30 -24 -22 -0018
LAND /BUILDING
468,200
20,590
1991 MARKET VALUE - LAND
307,900
-0
02- 30- 24- 33026
VACANT LAND
31,100
1,477
ESTIMATED MARKET VALUE
1,347,900
CERTIFIED TAX CAPACITY
RATE
1.02984
TOTAL ESTIMATED TAXES
62,206
INFLATION
(1995)
2.00%
ESTIMATED TAXES /SQUARE FOOT
1,89
ADMIN EXPENSES
10.002
BOB'S PRODUCE
18,000
PRESENT VALUE RATE
(12/92)
9.502
L•YNDALE GARDEN STORE
15,000
TOTAL SQUARE FEET
33,000
CASSERLY MOLZAfiN & ASSOCIATES
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
DATE: July 15, 1992
City of Fridley
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Sign for Redirecting Traffic During
Mississippi Street Reconstruction
Bill, you asked me to research the possibility of the installation
of a sign for Burger Ring at the intersection of 3rd Street and
Mississippi Street during the Mississippi Street reconstruction.
It occurred to me when researching this request that we had also
discussed the same type of approach for Dairy Queen because the
entrance to the drive - through lane will also be at the same
location of 3rd Street and Mississippi Street. Further, in order
to be fair to other businesses along the frontage road, I have
developed a sign prototype that we can consider for installation
at the intersection.
The prototype is based on the typical blue information signs that
are seen along the interstates. They identify upcoming restaurants
and hotels by identifying the businesses and also providing the
logo of that particular enterprise. Proposed is a double - faced. 60
square foot sign which lists all the businesses served by the
frontage road and 3rd Street. The businesses are listed in
alphabetical order and room is provided for a logo or symbol to
additionally identify the enterprise, if desired.
The background of the sign would be dark blue and would consist of
white reflective letters and arrows. The logos would be the colors
of the particular enterprise.
John Flora indicated that his shop could prepare such a sign. In
so doing, the HRA could pay for the cost of the sign, or the sign
could be split between the nine enterprises identified on the sign.
The problem with splitting the cost is that it may be difficult to
obtain payment from the enterprises; in that case, the name may not
appear on the sign.
Sign Location
The location of the sign needs to be 10 feet back from the property
line and needs to be placed so that it does not conflict with the
new Liquor Store sign. The sign height should not exceed 10 feet,
consistent with other types of traffic control signs such as stop
signs.
3
"3 -A'
Sign During Mississippi Street Reconstruction
July 15, 1992
Page 2
Code Compliance
There are three issues affecting this sign:
1. If it is" intended as an "interim" sign for just the term of
the Mississippi. Street construction project, the Code does
provide for "governmental signs" which "direct or guide
traffic or provide public information ".
2. If it is intended for the period until redevelopment occurs
on the property, the HRA could be subject to criticism by
business owners in similar situations where access is limited
(Moon Plaza or other businesses along frontage roads). In
other words, the HRA would be permitting "off premise" signage
specifically prohibited by the ordinance. A variance
applicaton should be processed.
3. Who pays for the sign? If it is just for the street
construction, the HRA might want to consider paying for it.
If it is to be on the site longer, the businesses should pay
for it.
Sian Cost
We have received a cost estimate of $600 from DeMars Sign. We could
possibly do it "in house ", although I have not reviewed the details
with Public Works. As you recall, additional signage is needed for
the Dairy Queen to direct traffic in front of Rice Plaza to the
realigned entrance to the Dairy Queen drive - through. I have worked
previously with Don Fitch on this issue. If this proposed sign is
not installed, the HRA does need to. work with Don Fitch to have
directional signs placed on the property for drive - through traffic.
This does not violate the Sign Code, because the HRA owns both the
Dairy Queen and Rice Plaza properties, so we can easily install
directional signs. Fitch had previously indicated he was willing
to pay for those signs.
Summary
1. If a multi- business is proposed, I believe we can process it
as a governmental sign via our Sign Code for just the term of
the Mississippi Street construction project.
2. If the sign is to remain on the property until the area is
redeveloped, we should have the HRA process a sign variance
application for the Council to permit a sign advertising the
location of enterprises not on its property.
Sign During Mississippi Street Reconstruction
July 15, 1992
Page 3
3. After I obtain a cost estimate for the proposed sign, the HRA
should decide whether it should pay for the. sign or have the
cost shared by the affected businesses.
I look forward to your response.
BD:ls
cc: John Flora, Public Works Director
M -92 -450
3 -B
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Community Development Department
PIANNiNG DIVISION
DATE: August 5, 1992
City of Fridley
TOr William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Proposed Recommendations for Housing Programs
An 11 member interdepartmental staff team was composed to develop
recommendations for housing programs to the City Council and HRA.
This memo discusses the recommended programs, identifies potential
costs, recommends an implementation timeframe, and identifies
future issues which the City Council and HRA will need to address.
The strategies proposed for the City Council and HRA hope to
interrupt the cycle of declining and deferred maintenance. They
hope to increase community awareness via its neighborhood land use
planning process. They hope to encourage community involvement
which will hopefully remove the fear of a culturally diverse
population. The recommended strategies identify ways to attack
potential problem areas but also to serve the community as a whole.
Recommended Primary Strategies
1. The City should develop an "aggressive inspection program ".
The staff team strongly recommends more rental inspections
per year. The City must aggressively enforce its housing
maintenance codes for rental licensing. Other cities in the
immediate "market area" inspect more units per year than
Fridley (see Exhibit A). The City of Fridley is at risk of
receiving the. displaced problem tenants from those
communities. The age of the multiple family housing stock,
about 30 - 35 years old, also dictates that more inspections
need to be conducted beyond the current amount. About 13% of
the total number of rental units (about 4,000) are inspected.
Staff recommends that 2,000 units per, year should be
inspected. The proposed amount is equal to -or greater than
Columbia Heights, Brooklyn Park or Brooklyn Center. Existing
staff cannot perform this amount of inspections; additional
staff needs to be hired.
4
e
4 -A
Housing Programs Memo
Page - 2
Three options exist to conduct rental inspections: hire
additional City staff, execute a contract with a private
building inspection firm, or contract with another city who
has. inspectors in place (Brooklyn Park has expressed an
interest). The City of Mound recently went out to bid for a
private firm to do its rental inspections. Using the
information from Mound, about two inspectors and one clerk are
needed for 2000 units /year. Estimated cost would be $110,000.
The rental licensing. fees are a good revenue source to pay for
the inspections. The fees now charged are minimal and should
be increased to pay for inspection costs no matter what option
is chosen (see Appendix B).
Ordinance Amendments
Coupled with the aggressive inspection program is a necessity
to research potential ordinance amendments to the City Code.
The inspectors in the staff team expressed frustration over
the court system's apparent lack of interest and concern about
issues pertaining to zoning, housing, property maintenance,
and related areas. Because the legal system is not well
equipped to address these issues, other communities like Coon
Rapids are evaluating establishing administrative procedures
to deal with problems outside the typical court .process.
Therefore, staff would like to research further "the
administrative "hearing" officer approach, not only on housing
code violations, but nuisance abatement issues as well (see
Appendix C for memos from inspectors) . Further, the City only
has a code for residential rental property and condominium
common areas. The City should investigate the creation of a
housing maintenance code.
2. Scattered Site Acquisition and Abandoned Home Program
An annual amount of $225,000 per year should be allocated in
the HRA budget to remove blighted, abandoned homes and to
acquire properties for resale for new single family or other
types of construction. A preliminary list of vacant and
abandoned properties has been developed (please see Appendix
D) . Site numbers 1 - 9 refer to parcel numbers that are
listed in the Residential Vacant Land Inventory which is a
separate document enclosed in your packet. Site number 10 -
13 are abandoned homes which do not appear in the Vacant Land
Inventory. Those lots are not large enough for reconstruction
of a single family home according to our ordinance. Initial
authorization to proceed this year on some of these properties
is requested.
44
Housing Programs Memo
Page - 3
In order to implement the program,.a consultant will need to
be hired. The consultant will act on behalf of� the City to
acquire the property, arrange for.demolition, if necessary,
and to reconvey it to a builder. We are estimating that this
cost is $25,000 of the total $225,000 recommended. Staff
would submit a list of sites to the HRA and City Council on
an annual basis or as sites come up via the tax forfeit
process or if targeted sites are put up for sale.
3. Actively pursue MHFA programs.
Single Famil
There are two existing MHFA single family rehab programs which
are "lender" administered (MHFA Program Summaries are in
Appendix E). The MHFA Fix -up Fund and MHFA Minnesota Energy
Loan provide monies for single family owners to do general
code improvements. The City is not directly involved in the
administration of these programs. The City does need to
pursue an aggressive advertising program to make owners aware
of the availability of the MHFA programs (this will be
discussed later in this memo).
A first time homebuyer program is also available through MHFA,
and it is called the Minnesota City Participation Program. It
requires application by the City during a two week application
period in April of 1993. While the City prepares the
application, the City also needs to work with the lender to
agree to participate in the program. We would request. the,
lenders to pay for the application fees ($500- 700)., but we may
want to allocate money for other application fees.
Multiple Family
There are several MHFA multiple. family rehabilitation,
construction, and conversion programs. The current rental
rehab, program will continue to be administered via ACCAP;
however, again the City needs to be more aggressive in
advertising the availability, of the program. Some of the
programs do require the cities and /or non - profit entities to
apply. Staff will continue to pursue MHFA funds for any type
of multiple family rehab assistance.
Problem multiple family buildings, those that have high
vacancy rates or are severely deteriorated, should be
identified for evaluation -for conversion to three bedrooms or
another housing density. The evaluation should also include
an analysis of whether it would be eligible for a scattered
site acquisition, demolition, and reconstruction project.
These problem buildings can be identified during the
neighborhood land use planning process which is discussed
later.
4 -C
Housing Programs Memo
Page - 4
4. The City should institute a "Fridley Rehabilitation Loan
Program ".
The amount of funds -provided through the- typical state and
federal rehabilitation loan programs are not enough to address
Fridley's housing problems. The staff team completed an
intensive windshield survey to identify structures which need
rehabilitation or need to be demolished. While a majority of
the single family stock is in good shape, there are areas
which need help. Further, there are areas of multiple family
buildings which also need a significant amount of
rehabilitation.
Therefore, it is necessary to develop a rehabilitation loan
program to enable property owners to bring their units up to
code, build garages, or build additions. We have identified
a good way to address single family owner occupied housing;
however, there are less financial resources available for
multiple family.
Single Family
Community lenders would provide rehabilitation loans to
residents and then sell the loans to the Federal National
Mortgage Association. The HRA would agree to pay for certain
costs of the loan like reducing the interest rate by. 1%,
closing costs, inspection costs, etc. The loan to the
resident would in essence become a second mortgage. Other
cities are evaluating this approach because it avoids the cost
of a bond sale. The challenge is to define the terms of the
loan package and the requirements of the program (see Jim
Casserly memo in Appendix F).
The loan program would work as follows. The City would
contract with a non - profit entity such as ACCAP to act as the
"prequalifier" and to receive the inquiries about the program.
ACCAP would conduct a preliminary investigation of the
resident's credit history and determine if the proposed rehab
meets the program requirements. The resident would then be
referred to the lender who would prepare a loan which would
essentially be a second mortgage on the property. Loan terms
would probably be at 1% below the fair market interest rate
(about 7 %) and be for a term of 20 years. FNMA regulations
stipulate that the total debt, both first and second mortgage,
cannot exceed 80% of the property value. The percentage can
increase to 95% if the difference (up to 15 %) is insured by
a primary mortgage insurer. In this case, the HRA could act
as the "P.M.I.". The loans could be used for, not only code
improvements, but for room additions or other living area
additions up to the amounts specified by FNMA. For purposes
of calculating the costs, Casserly assumed that the HRA would
4 -D
Housing Programs Memo
Page - 5
pay about 16% of each loan amount. The HRA would be paying
for interest writedown, origination fees, inspection/
processing of the loan .via ACCAP, closing costs, insurance and
reserve costs, and administrative costs. If a $10,000 loan
at a 20 year term with a 9% interest rate is used, the
estimated cost to the HRA is approximately $1,600 per loan or
$160,000 per $1 million.
Multiple Family
MHFA funding for programs for rental properties is not as
plentiful as it was earlier in the decade. Further; the City
receives only $100,000 in CDBG funds. The new HOME program
is administered through the County; it receives only $500,000
county wide. Finally, the FNMA loans discussed earlier only
apply to single family owner occupied properties.
,t
Nonetheless, there are alternatives to pursue. For example,
the CDBG funds could be used toward building garages along
Able and Baker Streets for the 73rd Avenue. The street is
lined with rental duplexes with no garages for tenant parking.
Or, the funds could be-used for a handful of low to very low
income properties. There are a number of Federal requirements
to follow which makes the program an administrative headache,
but it may be worth the effort.
In some extreme cases, the HRA may want to consider acquiring
severely deteriorated multiple family structures and selling
the property to a developer to build a new building. There
are several non - profit groups which could be tapped for
funding as well as management. of the building. Westminster
Corporation is an example.
For those MHFA funds which can be obtained, the HRA could pay
for the application fees on behalf of the owners to encourage
participation. Costs may range from $200 - $1,000 per
application.
5. Complete a Neighborhood Land Use Planning Process.
The staff team strongly recommends that a list of potential
sites for housing and other redevelopment projects be
completed with an accompanying prioritization plan. In order
to accomplish this step, the team recommended that the
planning process be done on a neighborhood basis. The
neighborhood planning process would also serve to encourage
citizen participation and community involvement. The planning
process would determine the acceptable mix of housing styles
and provide the City Council direction on future land use
related decisions.
4 -E
Housing Programs Memo
Page - 6
As part of this process, potential sites for senior housing
could also be developed. Char Fitzpatrick submitted
information regarding senior "shared living residences" where
larger homes are converted as residences for a number of
senior individuals. Further, sites for elderly townhomes or
other projects can be evaluated. One site that has already
been discussed is the Westminster project next to St.
William's Church. Westminster is now applying for Section 202
HUD funds to construct a 50 unit senior apartment building.
The City should continue to support Westminster's application
effort.
A neighborhood planning process can also determine potential
sites for the HRA scattered site acquisition program.
6. Secondary Strategies
A. Community Development Department staff should assist in
organizing a multi - family owner, landlord, and manager
coalition, similar to the effort completed in Brooklyn
Center and Brooklyn Park. Assistance would be limited
to initiating the organization and acting as a resource
for information to the owners. Assistance should also
include preparation of a pamphlet describing existing
resources available to multi - family owners and referrals
to key resources. This would serve to improve
communication between the City and owners regarding
problem tenants and promote cooperation between the City
and multi- family properties for rental inspections.
B. Prepare a "how to" rehabilitation booklet for homeowners.
The Community Development Department staff could prepare
it in conjunction with local contractors or other cities
which have completed one.
C. Neighborhood crime prevention is a key aspect of
improving neighborhood quality. How residents perceive
safety in their neighborhood is very important.
Expansion of the Crime Prevention Program should be
evaluated in the future in order to properly maintain and
to improve the neighborhood prevention program.
Alternative funding sources should be researched.
D. Alternative funding sources should be researched to
reduce fees for recreation programs for "at risk" and
lower income households.
E. Zoning Ordinance amendments to create a senior housing
district and to permit shared living residences should
be researched.
4 -F
Housing Programs Memo
Page - 7
F. The City should make sure that public improvements, such
as repaving streets, replacing curbs and gutters,,
updating streetlights, etc., coincide with housing
improvement programs.
G. Provide information in the newsletter regarding reverse
mortgages for the senior population (there are two banks
in the metropolitan area that offer reverse mortgages).
H. Each department, on an annual . basis, should identify an
employee to participate in a housing team. The purpose
of the group is to monitor the progress and
implementation of the programs as directed by the City
Council and the HRA. A leader would be appointed by the
group and report to the City Manager on a regular basis.
I. Identify key staff people to act as information sources
for housing issues and social service issues.
J. Develop a marketing program to advertise the availability
of the rehabilitation programs. Incorporate into the HRA
advertising budget for 1993 (note that MHFA does have
pre - prepared brochures on their programs).
K. Use the Human Resources Commission to study the extent
of social needs in the community and provide
recommendations to target areas for funding with CDBG
programs, non - profit funds, or other services that can
be made available.
L. Continue GIS system coordination with the HTE software
so that housing data and neighborhood information can be
adequately tracked and obtained when needed. Further,
acquisition of the HTE code enforcement software package
should be considered which would computerize the
systematic code enforcement program and would provide
computerization of the rental housing inspection process.
M. Conduct cultural diversity training seminars for not only
City staff.but commission and City Council members as
well.
O. Organize a mandatory inspection team of problem
properties including rehabilitation, code enforcement,
building, fire, electrical, and Section 8 inspectors.
P. Adopt an ordinance identifying, proper procedures for
mobile home tie - downs, inspection requirements, and
safety requirements.
Estimated Costs and Proposed Implementation
4 -G
Housing Programs Memo
Page - 8
We have prepared a matrix showing the costs
and a potential implementation timeframe
whether the cost would be borne by the HRA
Summary of Future Issues
of the primary programs
Also identified is
or by the City.
Although we have accomplished a significant amount of research to
determine what directions we should head, another set of issues
were determined as a result! To follow is a list of issues which
the City Council and HRA will need to decide in the future as we
begin to implement the recommended programs:
1. Bonds versus Banks
At this point in time, we are finalizing the details of
the FNMA loan option as recommended by Casserly; however,
we will continue to research the availability of bond
funds as a source of financing for programs. If bonds
are pursued, the City would be responsible for
administering the loans (see Question #3!).
2. Big Brother versus Laissez Faire
The "Big Brother" approach is necessary when doing MHFA
or other federal loan programs. Not only are there a lot
of inspection requirements (at least three) but also the
minimum HUD Housing Quality Codes must be met as well as
other code requirements.
Under the "Laissez Faire" approach, the City has more
leeway because we are using FNMA's money. Do we need to
be as aggressive with the inspections and the eligibility
requirements as other programs are? Secondly, how many
strings do we attach as conditions to the program? If
the program is benefitting the middle income households,
do we still want to pursue enforcement of minimum housing
codes and other issues such as installation of smoke
detectors.
3. In -House versus Contracting Out (House)
Administration of the single family rehab program will
more than likely need to be done by a consultant like
ACCAP. Further, a likely option for implementing the
rental inspection program may be to contract out to a
private.inspection firm (or another community). Issues
will arise as to where the inspectors are housed, how
long do they work at the "City offices ", if at all, how
do they document their work (their system versus our
computer system), and how is information coordinated?
4 -H
Housing Programs Memo
Page - 9
4. Condemnation versus Cooperative Acquisitions
How willing is the City Council and HRA to condemn
properties as identified as scattered site targets or
shall we just attempt to obtain cooperative agreements
with land owners?
5. How tough should we be.with prosecution?
What is the message that we send to our prosecutors?
Should we tell them to "throw the book at the violators"
or should we tell them to achieve compliance with the
code no matter how long it takes?
6. How much money should we spend for these programs and
where.should they come from?
About $1 million is needed for a single family rehab
program for about 100 homes. Is that enough? Should it
be more? Is $200,000 enough for a scattered site
program? In terms of the rehab program, should we make
money available on a quarterly basis knowing an annual
budget amount, or should the loan program just be made
available in its entirety on a first -come, first -serve
basis?
7. Sources of Funding
What is the best way to use the funding sources available
to us? A recommended standard has. been to use other
money first, i.e., MHFA, CDBG, and HOME programs. What
sources of "our own" money should we use and how much?
Other cities have used an HRA tax levy. Should we do the
same?
HRA Budget Impact
We have analyzed the impact to the HRA budget if $500,000 was spent
for housing programs every year (see attached chart). We assumed
that a $10 million bond issue was sold to buy Lake Pointe and to
complete redevelopment of the southwest quadrant. We also
estimated tax increment from those projects. Further, we assumed
a tenth of a percent reduction in class rates for industrial and
commercial property as well as a full reimbursement of the school
district referendum money. Finally, we assumed increment
reductions from two pending tax petitions on Moore Lake Commons
and Skywood Mall.
ID �
4-1
Housing Programs Memo
Page - 10
The 1992 balance is a deficit because of the Mississippi Street
improvement costs. Up to 1997, we have a positive annual balance,
but in 2007, our reserves essentially run out.
Whether we continue these programs for ten years is hard to predict
(except for the rental inspections). We do know that we can
initiate these programs now and closely monitor the budget to
insure we do not jeopardize other financial responsibilities.
Conclusion
No matter what the strategies the City Council and HRA choose to
initiate immediately, it is important to create momentum, energy,
and interest in the housing issue. At the same time, it is
necessary to proceed to the next level of planning and look at the
neighborhoods more closely and determine what makes them vital.
It is important to develop a consensus among the neighborhoods as
to future development and housing choices.
We look forward to discussing the future direction of housing
issues at the City Council and HRA's meetings.
BD /mj r
M -92 -509
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Proposed Costs and Implementation of Secondary Strategies
Program
When
Activities
HRA
City
Implemented
1. Multiple
Absorbed
1993
Family Owner/
Landlord Coalition
2. 'How To'
Absorbed
1992
Rehab Book
(Grants or donations
from contractors would
be obtained)
3. Neighborhood
$301000
Unknown
Crime Prevention
Specialist
4. Ordinance
Amendments:
Housing
Maintenance
$1,000
1993
Senior Issues
$1,000
1993
Mobile Homes
$500
1993
Abatement Process
$1,000
1993
5. Marketing Rehab
$5,000
Late 1992
and Other
and 1993
Programs
6. HTE Software
$20,000
Total
$59000
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TO: FRIDLEY H.R.A.
FROM: CITY OF FRIDLEY
RE: BILLING FOR OPERATING EXPENSES FOR JULY, 1992
AND JULY 1992 ADMINISTRATIVE EXPENSES
ADMINISTRATIVE BILLING:
JULY ADMINISTRATIVE PERSONAL SERVICES 13,631.00
JULY ADMINISTRATIVE OVERHEAD 252.25
TOTAL ADMINISTRATIVE BILLING 13,883.25
JULY OPERATING EXPENSES:
ADVERTISING - FOCUS NEWSPAPER
1.25.29
JUNE MANAGEMENT FEE - RICE PLAZA
234.96
NSP - RICE PLAZA
160.14
MOWING - RICE PLAZA
63.60
NSP - LAKE POINTE
57.44
MCGLYNN - GLEN CREEK POND
4,781.24
INSURANCE
5,571.00
INSURANCE
240.00
INSURANCE
315.00
TOTAL OPERATING EXPENSES FOR JULY 11,548.67
TOTAL EXPENDITURES 25,431.92
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ROBERT A. GUZY
BERNARD E. S FFFEN
RICHARD A. MERRILL
ROBERT C. HYNES
RICHARD A. BEENS
RONALD B. PETERSON
DARRELL A. JENSEN
JEFFREY S.- JOHNSON
RUSSELL H. CROWDER
JON P. ERICKSON .
LAWRENCE R. JOHNSON
DAVID A. COSSI
THOMAS P.MALONE
MICHAEL F. HURLEY
SHARON L. HALL
July 1, 1992
`.A
VIRGIL C. HERRICK
HERMAN L. TALLE
THOMAS L. DONOV.AN
PAMELA M. HARRIS
CHARLES MI SEYKORA
Barna Guzy & Steffen Ltd. WILLIAM M. NTER, J
� , DANIEL D. GATERR.
BEVERLY K. DODGE
ATTORNEYS AT LAW GREGG V. HERRICK
400 Northtown Financial Plaza JAMES D. HOEFT
JOAN M.
200 Coon Rapids Boulevard SCOTT M. LEPDAK
Minneapolis, MN 55433 STEVEN L MACKEY
OF COUNSEL
(612) 780 -8500 FAX (612) 780 -1777 PETER BARNA
Barbara Dacy
Planning Coordinator
City of Fridley
Civic Center
6431 University Avenue Northeast
Fridley, MN 55432
RE: Parking Lease Between HRA And Columbia Park Properties
Fridley Office Plaza Building
Dear Barb:
As you may recall back in February of this year I did a Third
Amendment To Leasehold Agreement regarding the above referenced
matter which I presented to the HRA and which Larry and Bill
signed on behalf of the HRA on February 14, 1992. A copy is
enclosed for your reference.
As you will note, no one on behalf of Columbia Park Properties
has executed the Third Amendment. In discussing this matter with
the attorney for Columbia Park Properties there has been a
concern expressed to me that the enclosed document is confusing
and calls for reference to various other existing documentation.
Quite honestly, I agree that the enclosed is a bit confusing in
that you have to refer to several outside documents in order to
make the enclosed understandable. As a result, Columbia Park
Properties would prefer that we simply redraft.the document as an
amended and restated leasehold agreement incorporating all of the
existing outside documents into one self - contained document,
including all provisions of each of the previous Leasehold
Agreements that are still applicable.
I have worked up a very rough draft of such an amended and
restated leasehold agreement which I will be cleaning up in the
next couple of days. I just wanted to let you know what I am
doing and why so that when I submit the amended and restated
leasehold agreement for the HRA's signature, everyone understands
what we are doing and why.
Columbia Heights Office Anoka Office
3959 Central Avenue NE 403 Jackson Street
Minneapolis, MN 55421 Anoka, MN 55303
An Equal Opptirtunity Employer
"6 -A
Barbara Dacy
July 1, 1992
Page Two
As always, if you should have any questions or concerns regarding
the above, please do not hesitate in contacting me.
Sincerely,
D. Hoeft
JDH:jjh
Enclosure
THIRD AMENDMENT TO LEASEHOLD AGREEMENT
FIRST AMENDMENT TO MEMORANDUM OF LEASEHOLD AGREEMENT
//This Amendment, entered into this �? day of
`'rI, -&tI , 1992, by. and between THE HOUSING AND
DEVELOPM NT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA
(hereinafter called the "HRA "), and COLUMBIA PARK PROPERTIES, ,a
Minnesota Partnership (hereinafter called "Redeveloper ").
WHEREAS, on the 20th day of September, 1982, the HRA and the
Fridley Plaza Office Building Partnership entered into a
Leasehold Agreement which required the HRA to provide the Fridley
Plaza Office Building Partnership with the non - exclusive right to
a 166 car parking lot; and
WHEREAS, the Leasehold Agreement was amended pursuant to
Amendment to Leasehold Agreement, dated January 31, 1989,
providing for the construction of a parking ramp on the site of
the parking lot; and
WHEREAS, the Leasehold Agreement was further amended by
instrument, dated February 22, 1989, to revise the legal
description of the property subject to the Leasehold Agreement to
afford the Fridley Plaza Office Building Partnership additional
vehicle ingress and egress access to the parking ramp parcel; and
WHEREAS, the HRA and the Fridley Plaza Office Building
Partnership entered into that certain Memorandum of Leasehold
Agreement, dated February 22, 1989, filed March 9, 1989, in the
Office of the Anoka County Recorder as Document No. 842658, to
establish the Leasehold Agreement of record; and
WHEREAS, the Fridley Plaza Office Building Partnership
assigned its interest in the Leasehold Agreement to Performance
Investments, a Minnesota Partnership, by Assignment, dated March
3, 1989; and
WHEREAS, Performance Investments assigned its interest in
the Leasehold Agreement to "Redeveloper" by Assignment of
Leasehold Interests, dated August 29, 1991; and
WHEREAS, the parties have discovered that the new legal
description is not correct and the parties agree that the
Leasehold Agreement, as amended, should be further amended.
NOW, THEREFORE, the parties to this Agreement, in
consideration of the promises, covenants and agreements made by
each to the other, do hereby agree as follows:
B -C m
1. That Exhibit A -1 attached to the Second Amendment to
Leasehold Agreement and Exhibit A attached to.the
Memorandum of Leasehold Agreement shall be deleted in
their entirety and replaced by the following legal.
description:
Lot 15 and all that part of Lot 7, Block 1,
Fridley Plaza Center, Anoka County, Minnesota,
lying easterly of the following described line:
Commencing at the northwest corner of Lot 14, said
Block 1; thence North 89 degrees 58 minutes 45 .
seconds East, along the north line of said Lot 14,
a distance of 13.00 feet, to the point of
beginning of the line to be described; thence
North 0 degrees 47 minutes 15 seconds East a
distance of 213.23 feet to a point on the line
common to Lots 6 and 7, said Block 1, said point
being 3.00 feet westerly from the southeasterly
corner of said Lot 6, and said line there
terminating.
2. That except as amended herein, said-Leasehold
Agreement, as amended, and Memorandum of Leasehold
Agreement are hereby confirmed as modified.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed as of the day and year first above
written.
THE HOUSING AND REDEVELOPMENT
AUTHOR�TY IN AND FOR
THE CI.y F FRID 'MI ESOTA
BY i
Lawrence R. Commers
Its Chairman
A
BY:
William W. Burns
Its Executive Director
STATE OF MINNESOTA )-
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this
day of r LG��Lu_ah 1992, by Lawrence R. Commers,
Chairman, and William W. Burns, Executive Director, of The
Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota, a political subdivision of the State of
Minnesota, on behalf of said Authority.
ua& ,
ROBERTA COU INS `•
� NOMWPJ"- UltaWTA
�ry (*M rV. Oa. 21. Igo
rw�nrrmr
6 -D
COLUMBIA PARK PROPERTIES
BY:
A Partner
BY:
A Partner
STATE OF MINNESOTA )
)ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of , 1992, by
and by , two of the Partners of
Columbia Park Properties, a Partnership under the laws of the
State of Minnesota, on behalf of the Partnership.
THIS INSTRUMENT WAS DRAFTED BY:
BARNA, GUZY & ST.EFFEN, LTD. (JDH)
400 Northtown Financial Plaza
200 Coon Rapids Boulevard
Minneapolis, MN 55433 -5894
(612) 780 -8500
Vi
r �
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: August 5, 1992
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Rapit Printing Lease Termination
Rapit Printing has submitted its sixty day notice to vacate its
tenant space at Rice Plaza,. effective October 1, 1992. At the
September 10, 1992, meeting of the HRA, we should schedule a
discussion item analyzing whether or not we should continue to
operate Rice Plaza.
In the meantime, I will contact Jim Kordiak and get his recom-
mendation as to whether or not the Rapit Printing space will be
able to be reoccupied by a new tenant.
BD:rsc
July 31, 1992
Mr. William Burns
HRA Director
6431 University Ave. NE
Fridley, MN 55432
Re: 250 Mississippi St. NE Lease
Dear Mr. Burns:
� - d
AUG 0 3 1992 7 -A
Regarding our lease with you at the above noted address, we hereby give
you notice of our intent to vacate within the following sixty days, pursuant to our
lease extension and amendment agreement dated August 30, 1991.
If you have any questions, do not hesitate to contact me.
Sincerely,
C�
Raymond Holloway Jr.
Vice President
RHJ /clb
1415 -1 ST AVENUE N.W. - NEW BRIGHTON, MINNESOTA 55112 • 633 -4600
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PAI
Community Development Department
PLANNING DIVISION
City of Fridley
DATE: July 31, 1992
TO: William Burns, City Manager
FROM:- L,.-'Barbara Dacy, Community Development Director
SUBJECT: Request by Tim Werner Regarding Lake Pointe
Site
Tim Werner of 6424 Able Street N.E. is running against Alice
Johnson in the upcoming election. He stopped to see me earlier
this week to ask some questions about Fridley. One of his main.
issues is the concern over the proposed light rail transit "system.
Because he believes that the metro area should pursue better bus
service,. he has inquired as to whether or not the HRA would be
willing to establish a park -and -ride site at the immediate
intersection of Highway .65 and West Moore Lake Drive (where the
bank, hotel, and restaurant. buildings were proposed in the original
Lake Pointe plan). Despite the effort that I made to explain.to
him the current situation with the Lake Pointe site, he is
persistent in his request.
While there is no question in my mind that some type of park -and -.
ride facility will be established along with the Lake Pointe
development anyway, he seems more concerned about the interim time
frame prior to its development.
Please contact me with your comments. Thank you.
BD /dn
M -92 -504
RENTAL LICENSE
INFORMATION July
21, 1992
(SURROUNDING
SUBURBS)
City
_Inspection Frequency
Staff Involved No.
of Units
Brooklyn
Goal: Each unit every
1 full -time Housing
3,500
Center
2 yrs. (So far,
Inspector (2 part -
reality is just
time Building Inspec-
slightly behind
tors are available if
this pace.)
necessary, but rarely
do housing inspection).
Brooklyn
Goal:. Each unit every
2 full -time Housing
7,000
Park
2 yrs. (Reality
Inspectors & 1 intern.
is that only
(One of the Housing
common areas are
Inspectors spends over
inspected that
1/2 of her time in the
often.)
office on administrative
work.)
Columbia
Goal: Each unit every
2 part -time Inspectors
2,500
Heights
1 yr. (Reality
(16 hrs /wk. each).
so far is about
These are fire dept.
1 1/2 -2 yrs /unit.)
personnel who have been
cross- trained for housing
code.)
Richfield
Goal: "Single family
2 full -time Housing
4,500
point -of- sale"
Inspectors + Fire Dept.
+ each unit every
personnel do some
2 yrs. (Reality
common area inspections
since 10/1/90,
(1 full -time clerical
they've only done
also).
0
120.)
ALTERNATIVE FEE SCHEDULES FOR MULTIPLE DWELLINGS
EXISTING SCHEDULE: Single Family - $12.00.
Double Units - $12.00 Each
Three to Seven Units - $36.000 Total
Eight to 12 Units - $49.00
Over 12 Units - $49.00 per Building
Plus $2.00 for Each Unit over 12
FEES COLLECTED NOW: 72 Single Units - $864.00
258 Double Units - $3,960.00
3,278 Three and Up Units - $12,718.00
430 Condo Units - $1,292.00
-----------------------------------
Total Presently Collected- $18,834.00
PROPOSED FEE SCHEDULE: $50.00 for First Unit; $8.00 for Each
Additional Unit
4t�- 72 Single Units - $3,600.00
258 Double Units - $7,482.00
3,278 Three and Up Units - $36,178. 00
430 Condo Units $6,170.00
-----------------------------------
Total* Proposed Collected - $53,430.00
PROPOSED FEE SCHEDULE: $100.00 for First Unit; $10.00 for
Each Additional Unit
72 Single Units - $7,200.00
258 Double Units - $14,190.00
3,278 Three and Up Units - $74,480.00
430 Condo Units - $12,700.00
-----------------------------------
Total Proposed Collected- $108,570.00
s
TO: Barb Dacy; Community Development Director PW92 -087
Chuck McKusick, Fire Chief
FROM: ` ;ice Jon Thompson, mental Housing Inspector
DATE: March 30, 1992
SUBJECT:- Rental Housing Inspection Program
On December 3, 1991, 1 was asked to start a random rental. housing inspection program
for the City of Fridley. Fridley has approximately 4,000 rental units, of which 3,250 are
on a multiple housing list of three plex and four plexes on up to a 462 unit complex
(Georgetown Apartments). The remainder are duplexes; single family rental units and
condominium rentals.
Our plan the first year was to randomly inspect 10 to 1.5 percent of the members of the
multiple -unit list. As of April 10, 1992, 1 will have completed inspecting 390 units out of
a possible 2,925 units on the multiple -unit list. This is 13% of the units in the complexes
sampled. In essence, I will have completed inspecting all of the buildings on the
multiple list larger than a four -plex. I also have been assisting Dick Larson with
complaint inspections and will continue to clear up re- inspections with Dick as my time
permits.
My intent is to resume the random rental unit inspection program next December 1,
1992 for another 41h months.
In the course of my duties, I feel the response from landlords has been quite positive.
Some of the problem buildings have new caretakers and I can see progress being
made.
In general, I feel the program is necessary and is working as anticipated.
JT: cz
r�.
FIRE DEPARTMENT
s
���yyt
FWD
MEMORANDUM
92 -7 -3
TO: BARB DACY, COMMUNITY DEVELOPMENT DEPARTMENT
FROM: RICHARD H. LARSON, DEPUTY FIRE CHIEF
RE: RENTAL HOUSING INSPECTIONS ON PROPERTY OWNED BY
FLOYD & LINDA RUGGLES IN FRIDLEY
DATE: JULY 13, 1992
The three rental housing properties owned by Floyd & Linda Ruggles from 716190 to 4128192 (property taken from Ruggles
and given back to contract holder on 4128192) are:
106 77th Way 4 unit building
7673 E. River Rd. 4 unit building
5770 2 112 St. 11 unit building
The Department received 27 complaints in the 24 month period which resulted in a minimum of 74 inspections and
approximately 58 hours of time spent on inspections and follow -ups. This did not include any secretarial time for typing,
filing, mailing, etc.
Mr. Ruggles was extremely difficult to deal with, made many promises and generally did not follow through. On October
11 Mr. & Mrs. Ruggles were issued a citation to appear in court for failure to comply with written orders. At this time it was
to remove garbage from 7673 E. River Rd. & 106 77th Way. At Mr. Ruggles first court appearance, which was October 25
at Columbia Heights City Hall, he plead not guilty with his attorney. He was then rescheduled for December 11, 1991 at
the Anoka County Courthouse for a jury trial. At this time Mr. Ruggles did plead guilty with an explanation. The sentence
by Judge Gibbs was 10 days in jail suspended for 6 months with no further violations. Mr. Ruggles received no fine, only
a suspended sentence.
The license fees Mr. Ruggles paid for the rental property he owned and managed in Fridley are as follows: $36.00 fee for
each of the 4- plexes and $49.00 fee for the 11 unit building, which totals up to be $121.00 in fees paid. This amount
divided by the minimum 58 hours turns out to be $2.08 per hour for the inspections of these units. It also shows that the
courts have little knowledge of rental laws that a person with this many complaints and inspections gets a 10 days sentence
suspended.
If you need any further information please contact me. I have all records on this subject.
RENTAL COMPLAINTS ON PROPERTIES OWNED BY RUGGLES
106 77th Way
Rental Complaint 616190
Cleared 7131190
Rental Complaint 9110190
Cleared 1019190
Rental Complaint 10112190
Cleared 10115190
Rental Complaint 11115190
Reinspected 12120190
Ordinance Violation 12126190
Rental Complaint 1114191
Cleared 3126191
Rental Complaint 12118190
Reinspected 12120190
Rental Complaint 12130191
Ordinance Violation 12126190
Rental Complaint 4128192
Reinspected 1110191
5770 2.1
Cleared 3126191
Rental Complaint 8114191
Cleared 916191
Rental Complaint 8122191
Cleared 10124191
Rental Complaint 1017191
Ordinance Violation 1017191
Cleared 10114191
Rental Complaint 1018191
Rental Complaint 10121191 Ordinance Violation 10121191
Cleared 11115191
Rental Complaint 2120192 Cleared 2120192
7673 E. River Rd.
Rental Complaint 3118191
Cleared 3118191
Rental Complaint 1018191
Rental Complaints 9126191
Ordinance Violation 1013
Cleared 11115
Rental Complaint 1114191
Ordinance Violation 1116191
Cleared 11120
Rental Complaint 12130191
Cleared 1117192
Rental Complaint 4128192
Cleared 4129192
5770 2.1
Rental Complaint 7125191
Ordinance Violation 7129191
Cleared 10124191
Rental Complaint 7125191
Ordinance Violation 7129191
Cleared 10124191
Rental Complaint 8128191
Cleared 10124191
Rental Complaint 916191
Reinspected 10124191
Cleared 1116191
Rental Complaint 9118191
Ordinance Violation 9119191
Cleared 10124191
Rental Complaint 9118191
Ordinance Violation 9119191
Rental Complaint 9118191
Rental Complaint 9118191
Rental Complaint 9118191
Rental Complaint 9118191
Rental Complaint 9124191
Rental Complaint 1013191
Rental Complaint 9124191
Cleared 10124191
Ordinance Violation 9119191
Cleared 10124192
Ordinance Violation 9119191
Cleared 10124191
Ordinance Violation 91191911
Cleared 10124191
Ordinance Violation 9119191
Cleared 10124191
Cleared 10124191
Cleared 1019191
Cleared 10124191
Community Development Department
PLANNING DIVISION
City of Fridley
DATE: July 14, 1992
TO: Barbara Dacy,..Community Development Director
FROM: Steven Barg, Planning Assistant
SUBJECT: Report on Suburban Code Enforcement Officials'
Meeting of July 9, 1992
At last week's meeting of our organization in St. Louis Park, Judge
Lange of Hennepin County spoke with us regarding prosecution of
code enforcement violations. Our goal was to gain a judge's
perspective of such cases and learn how to better use the court
system to our advantage in resolving these matters.
During the discussion, several members of our group expressed
frustration over the court system's apparent lack of interest and
concerD about issues pertaining to zoning, housing, property
maintenance, and related areas. Judge Lange stated that the amount
of concern that such cases receive varies greatly based on the
particular judge. However, he suggested that the legal system is
not well equipped to address these issueded that cities would
be best served by developing administrative procedures to deal with
these problems outside of the, typical court process. He cited
examples such as tough rental licensing procedures with admini-
strative enforcement and nuisance abatement procedures as two
methods in which cities can act to resolve problems without
obtaining the court's assistance.
Based on Judge Lange's comments, it seems as though administrative
procedures which could provide more strict enforcement might be
appropriate in addressing some of the concerns raised in the
Strategic Planning Task Force meetings on housing. Perhaps we can
discuss this further at some future time or consider this at an
upcoming task force meeting.
SB:ls
CEM -92 -54
POTENTIAL SITES FOR INITIAL SCATTERED SITE ACQUISITION
The
following
properties are those which may be
a good start for
a scattered
site acquisition program. They
are located in
Neighborhoods
#3, #4, #6, and #7. We believe that
these sites have
not
been attractive in the
private market and recommend
that the
City
step in to help enable
a sale and new construction.
Parcel
Neighborhood
Purbose
Value
Number
Number
1.
3A
3
New multiple family
$ 24,600
construction
2.
4E
4
Adding to potential
$ 13,300
redevelopment site
for Frank's Used
Cars
3.
4J
4
Single family
$ 22,100
construction
4.
4L
4
Single family
$ 24,100
subdivision
5.
6A
6
Single family
$ 29,700
subdivision
6.
6H & 6I
6
Tax forfeit parcel
$ 36,700
for a twin home
7.
7C, 7D,
7
Single family home
$ 5,600
& 7E
8. 7J, 7K,
7L, & 7M
9. 7N & 70
10. 532
Janesville
11. 576
Ironton
7 Single family home $ 100
7 Single family home
7 Remove blight and
sell property to
adjacent home
owners
7 Remove blight and
sell property to
adjacent home
owners
$ 200
$ 49,600
$ 47,100
Parcel Neighborhood Purpose Value
Number Number
12. 683 7 Remove blight and $ 25,400
Glencoe sell property to
adjacent home
owners
13. 389 Hugo 7 Remove blight and $ 50,800
sell property to
adjacent home
owners
TOTAL $329,300
The Great Minnesota Fix -Up Fund
Minnesota Housing
Finance Agency
Contact:
Kathy Dipprey Aanerud 612 - 297 -3121
Description:
Property improvement loans from the Fix-Up Fund assist homeowners in increasing the livability
and energy efficiency of existing housing.
Program Start Date:
1975
Program Size:
$18,000,000 per year
Eligible Applicants:
Low and moderate income homeowners who occupy the property to be improved, are credit-
worthy, and have the ability to repay the loan.
Type of Assistance:
Installment loans
Finance Terms:
Loan interest rate of 3 0/6,5 %,7 %, 9% or 9.75% is fixed, based on the projected income of the house-
hold at time of loan application. Maximum loan amount is $15,000; maximum loan term is 15
years. Loans are not assumable, and are due upon the sale of the property. Loans over $2,500
must be secured with a mortgage.
• Type of Housing:
Owner— occupied, one to four living units, real property
Other Requirements:
Most improvements to the livability or energy efficiency of a home are eligible. Ineligible im-
provements include: fireplaces, decks, patios, swimming pools, and other recreational or enter-
tainment facilities. Mobile homes and trailers are not eligible to receive home improvement
financing unless they are fixed on a permanent foundation and taxed as real property.
5/92
400 Sibley Street, Suite 300, St. Paul, h1N 55101 Equal Opportunity Housing and Equal Opportunity Employment
Home Energy. Loan Program
Minnesota Housing
Finance Agency
Contact:
Kathy Dipprey Aanerud 612 - 297 -3121
Description:
The Home Energy Loan Program enables homeowners to increase the energy efficiency of the
existing housing stock.
Program Start Date:
October, 1983
Program Size:
Approximately $12.5 million in taxable bond proceeds, available annually
Eligible Applicants:
Credit = worthy homeowners who occupy the property to be improved. (This program does not
have maximum borrower income limits for eligibility.)
Type of Assistance:
Installment loans
Finance Terms:
The loan interest rate is 8.875 percent for a maximum term of five years. Minimum loan amount is
$1,000 and maximum loan amount is $5,000.
Type of Housing:
Single family, owner —occupied homes, including mobile homes assessed either as real or per-
sonal property, and manufactured housing.
Other Requirements:
A mortgage may be required, at the lender's discretion.
5/92
400 Sibley Street, Suite 300, St. Paul, MN 55101 Equal Opportunity Housing and Equal Opportunity Employment
Minnesota City Participation Program
Minnesota Housing
Finance Agency
Contact:
Gene Aho 612 - 297 -3129
Description:
This program provides a set -aside of mortgage revenue bond funds for a period of six to nine
months to assist communities in meeting identified local homeownership goals.
Program Start Date:
July 3, 1991
Program Size:
$44 million in 1992
Eligible Applicants:
Any "city" as defined in Minnesota Statutes § 462C.02, subdivision 6. This includes cities, city and
county housing and redevelopment authorities, port authorities, and economic development
authorities.
Type of Assistance:
Below— market interest rate financing and access to HAF for downpayment and monthly payment
assistance.
Finance Terms:
Mortgage revenue bond funds, typically 1 V, percent below- market rates.. Interest rates are fixed
and loan term is 30 years. HAF loans are without interest.
Type of Housing:
One and two family residences, attached and detached
Other:
Local governments may obtain set -asides of $250,000 to $4 million, depending upon state —wide
demand. Cities have the ability to "target" funds to specific types of properties, area, or popula-
tion groups to meet locally identified needs. Cities may also petition MHFA for higher property
purchase price or borrower income limits than normally offered under other MHFA mortgage
revenue bond programs, if supported with local real estate data.
5/92
400 Sibley Street, Suite 300, St. Paul, MN 55101 Equal Opportunity Housing and Equal Opportunity Employment
Blighted Residential Property Acquisition
and Rehabilitation Program
Minnesota Housing
Finance Agency
Contact:
Reed Erickson 612 - 296 -8843
Description:
This program will assist communities in improving and preserving designated neighborhoods.
Loans /grants will be made available in participating communities for the acquisition or removal of
blighted properties. Financing also may be available to cover the gap between rehab /new
construction costs and the value of the property at the time of sale.
Program Start Date:
March, 1992
Program Size:
$1,750,000 appropriated by the Minnesota Legislature for the 1992 -1993 biennium
Eligible Applicants:
Any entity meeting the definition of a city as defined in Minnesota Statutes §462C.O2, Subdivision
6. (This may include cities, city and county housing authorities, port authorities, and economic
development authorities).
Type of Assistance:
Grants to cities, loans /grants are made by participating cities to eligible mortgagors
Type of Housing:
Single or multifamily housing
5/92
400 Sibley Street, Suite 300, St. Paul, MN 55101 Equal Opportunity Housing and Equal Opportunity Employment
New Construction Tax Credit
Mortgage /Bridge Loans
Minnesota Housing
Finance Agency
Contact:
Glory Hill 612- 296 -9827
Description:
Financing under this program provides for the construction or substantial rehabilitation of units to
be rented to families or individuals with incomes of up to 60 percent of the area median income.
Program Start Date:
February, 1988
Program Size:
Taxable bond sale proceeds and MHFA reserves of $10,000,000 annually will finance approxi-
mately 400 to 650 units, subject to congressional extension of the federal Low Income Housing
Tax Credit.
Eligible Applicants:
Limited dividend or nonprofit sponsors
Type of Assistance:
First mortgage and bridge loans
Finance Terms:
First mortgage loans at taxable bond rates, 30 —year term, two percent financing fee. Bridge loans
at seven percent or eight percent depending on the loan term, with two percent financing fee,
depending on the loan term.
Type of Housing:
New construction or substantially rehabilitated units, single or multifamily
Other Requirements:
Rent and tenant incomes are to remain at federally — mandated levels for the term of the mortgage.
5/92
400 Sibley Street, Suite 300, St. Paul, MN 55101 Equal Opportunity Housing and Equal Opportunity Employment
Low Income Large Family Rental
Housing Program
Minnesota Housing
Finance Agency
Contact:
Glory Hill 612 -296 -9827
Description:
Financing is for the construction of large (predominantly three- bedroom) units to be rented to
families with incomes of up to 60 percent of area median income. Housing is privately owned
and managed.
Program Start Date:
June, 1990
Program Size:
$2,400,000 for the 1992 -1993 biennium
Eligible Applicants:
Local governments and limited dividend and nonprofit owner /sponsors
Type of Assistance:
Underlying long -term, fixed rate financing may be provided by the MHFA or other public or
private lenders. Economic viability will require additional sources of subsidy such as Community
Development Block Grant funds, HUD Rental Rehabilitation Grants, city or county funds, etc.,
?`?w and/or qualifying the development for federal Low Income Housing Tait Credits. The state
subsidy would in effect be used to bridge the gap between the total development costs and an
owner's remaining proposed financing and subsidy package.
Finance Terms:
No interest or one percent interest, 30 -year term, deferred mortgage loans. Maximum loan
amount is $24,000 per unit or $360,000 per development in the metro area, and $30,000 per unit
and $450,000 per development in Greater Minnesota.
Type of Housing:
New construction or substantially rehabilitated three- bedroom single family homes, townhouses,
duplexes; one to two story structures.
Other Requirements:
Funds will be allocated on a geographic basis to ensure that funds are distributed statewide.
Buildings located in neighborhoods eligible to participate in the targeted neighborhoods revital-
ization and financing program are not eligible (URAP areas).
5/92
400 Sibley Street, Suite 300, St. Paul, MN 55101 Equal Opportunity Housing and Equal Opportunity Employment
Casserly Molzahn & Associates, Inc.
215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403
Office (612) 342 -2277 • Fax (612) 332 -4765
M E M O R A N D U M
TO: City of Fridley
Attention: Wi l�iam Burns, City Manager
rbara Dacy, Development Director
FROM: James R. Casserly
Mary E. Molzahn
DATE: July 27, 1992
RE: Financing the Fridley Housing Rehab Loan Program
INTRODUCTION
We have been asked to analyze the most efficient mechanism to
provide housing rehabilitation loans ( "Rehab Loans ") for
residents of the City of Fridley (the "Fridley Rehab Loan
Program" or "F.R.L.P. "). This memo describes three categories of
Rehab Loans:
1. A purchase rehabilitation loan ( "Purchase Rehab ") in
which a home is purchased and rehabilitated. The
purchaser /homeowner provides a first mortgage.
2. A refinance rehabilitation loan ( "Ref Rehab ") in which
an existing homeowner pays off the existing debt,
rehabilitates the home and provide a new first
mortgage.
3. A home improvement loan ( "Home Improvement Loan ") in
which an existing homeowner rehabilitates the home and
provides a second mortgage.
The most cost effective way to provide Rehab Loans is to do the
following:
1. Banks and mortgage companies (a "Lender ") originate the
Rehab Loans.
2. The Fridley Housing and Redevelopment Authority (the
"H.R.A. ") writes down the interest rate; pays the
inspection fees and closing costs; assumes construction
risk; and acts as a mortgage insurer (M.I.).
3. The Federal National Mortgage Association (the
"F.N.M.A. ") purchases the loans from a Lender.
4. A F.N.M.A. Lender services the loans.
The balance of this memo will describe the problems with issuing
bonds and the mechanics of the F.R.L.P.
PROBLEMS WITH ISSUING BONDS
Ideally, the H.R.A. should issue tax exempt bonds for its
F.R.L.P. If the bond term was long enough and the interest rate
low enough, the H.R.A. would have the potential of using a
minimal amount of its funds to finance such a program. However,
because the H.R.A. would not own the homes being rehabilitated,
it cannot issue an essential function bond. For the H.R.A. to
issue tax exempt bonds.it is necessary to receive an allocation
from the State of Minnesota's tax exempt bond pool. To receive
the allocation, the City would have to comply with the single
family mortgage bond requirements of both the Federal and State
government and would have to compete with any other authorities
attempting to issue this type of bond as well as the State
itself. The H.R.A. could not depend on having an allocation each
year and the cost of setting up a program with such an uncertain
future would seem to be prohibitive.
To eliminate the problems with tax exempt bonds; an apparent
solution is to issue taxable bonds.. One of the problems of issuing
taxable debt is to issue it for a period that would coincide with
loan repayments. It is difficult to market taxable debt issued for
more than 10 years. Assuming we overcome this problem we are then
confronted with the problems of negative arbitrage and market rate
risk. The concerns of negative arbitrage are particularly acute
with a taxable bond issue. The H.R.A. would probably issue bonds
only once a year. While it is holding the bond proceeds, the
H.R.A. will be investing at an interest rate in today's market of
approximately 4 %. The interest rate on the bonds, however, will
probably exceed 80. This difference would have to be paid from
H.R.A. revenues. Second, the problem of interest rate risk is
simply that if the H.R..A. sells bonds in February to make loans
throughout the remainder "of the year, it has the risk of the
interest rates declining further, thus making the H.R.A. loan
program even less attractive. To resolve this problem, the H.R.A.
would have to write down the interest rates on the loans or be
stuck with an even longer period of negative arbitrage.
0
When issuing bonds, the City also has the issue of providing a
general obligation pledge. If the City does not, then the H.R.A.
.will have to issue a revenue bond and pay for the appropriate
credit enhancements. The H.R.A. has done this previously, but it
does add a cost and additional complexity to this program.
All of these issues have solutions for a cost. The final problem
is simply the size of the program. It would not be prudent for the
H.R.A. to incur all the issuance expenses plus all the program
costs to issue $1 million worth of bonds. While doing a joint
issue with other jurisdictions is technically possible, it raises
another set of problems, not the least of which is having a
consensus on the type of loan and the financial condition of the
borrowers.
THE FRIDLEY REHAB LOAN PROGRAM
Ideally, the H.R.A. wants as few risks and restrictions as
possible in the development of its program: no market rate risk
with fluctuating interest rates, no negative arbitrage, minimal
costs for raising the funds to provide the loans and the
participation of local Lenders in the origination, inspection and
servicing of the loans. There is a program presently being
developed that accomplishes.most of these objectives. Elements
of such a program have to be adapted for use by the H.R.A. but
the major components for the F.R.L.P. would include the
following:
1. Lenders, local if possible, provide the funds to make
Purchase Rehab and Ref Rehab and Home Improvement Loans
in accordance with the H.R.A. guidelines. The Lenders
take a first or second mortgage, as the case maybe,
as a security interest.
2. The Lenders will originate loans which they know will
meet the F.N.M.A. guidelines. The guidelines allow the
first mortgage loans for as long as 30 years and second
mortgages for 15 years. (Thirty years is the term
being considered by Minneapolis and St. Paul for first
mortgage and both are using a 15 year term second
mortgage.) A Lender can sell the loan to F.N.M.A. when
the rehab construction is completed on the first
mortgage and must wait until all work is done when
using a second mortgage. A Purchase Rehab or Ref Rehab
can have a maximum loan amount of $202,300 and a
maximum loan to value of 95 %; however, the loan must be
insured by a M.I. company down to 80% of value. A
seond mortgage maximum loan amount is $101,150 and the
combined maximum loan to value (any firsts and second)
is 95% but must be insured down to a combined 70% loan
to value. The mortgages are sold to the F.N.M.A.
3
3. The Lender handles the origination of the loan and an
origination fee will have'to be negotiated. In
addition, there are processing fees, inspection fees
and closing costs all of which must either be funded
out of the loan proceeds or paid by the H.R.A. In
other jurisdictions the authorities appear willing to
absorb those fees in order to make the program more
attractive. The typical Lender has most of its
problems with Home Improvement Loans because of the
inspection requirements. If the H.R.A. is willing to
assume those inspection requirements, and it probably
wants that oversight, then the Lender will be more
favorably disposed to participate in the program.
4. After the loan is closed, the servicing of the loan can
be performed by the Lender, the H.R.A. or any approved
servicer. The rights to service these loans actually
have a value which may be sold to raise additional
funds for the F.R.L.P.
5. To market the F.R.L.P. and to provide additional
subsidy, the H.R.A. would writedown the market interest
rate 1 %. For example, if a $10,000 twenty year loan
had its interest rate reduced from 11% to 10 %, it would
cost the H.R.A. $650.72 to provide the 1% interest
writedown. (See accompanying chart attached which
shows the costs of writing down different interest
rates 1% in a range from 7% to 20 %). There is no
market rate risk to the H.R.A. or negative arbitrage
since the borrower's interest rate is always reduced 1%
below market rate.
6. The H.R.A. must also be willing to take the
construction period risk on first mortgages since the
Lender cannot sell a loan to F.N.M.A. before the
construction is completed. In reality, the lender will
make the payments and if the work is not completed or
some other problem arises, the Lender will have the
right to put the loan to the H.R.A. who will then have
the responsibility of correcting the problem.
7. In order to meet the F.N.M.A. requirements of a second
mortgage loan, the H.R.A. will have to either act as a
M.I. or pay a M.I. for the insurance. Since the H.R.A.
has substantial reserves, it would probably be more
cost efficient if the H.R.A. acted as its own M.I. The
H.R.A. will need to dedicate some reserves and can look
to the default rates experienced by similar programs to
determine the amount of the reserve.
4
Listed below is a very rough summary of program costs.
These costs will vary greatly depending on the number
of loans (more loans should create more efficiencies),
the marketplace (origination fees will vary), the
interest writedown (this is a function of the interest
rate, the amount it is being written down and the term
of the loan) and M.I. insurance and reserve
requirements. For illustrative purposes only, outlined
are the F.R.L.P. costs for a $10,000 twenty year 9%
Rehab Loan.
Activity
Interest writedown
Origination fees
Inspection /processing
Closing costs (including
title insurance and
recording fees)
Insurance and reserve
Administrative costs
Total
Cost Should
Not Exceed
$700 or 7.0%
150 or 1.5%
200 or 2.0%
150 or 1.5%
250 or 2.5%
150 or 1.55
$1,600 or 16.0%
If the above numbers are reasonable, then the cost to
the H.R.A. for each $1 million of loans would be 16% of
$1 million or $160,000. The H.R.A. might recover some
Of its costs if it required reimbursement in the event
the property was sold within a five to seven year
period.
CONCLUSION
A Lender should find the F.R.L.P. program attractive because it
will be dealing with customary F.N.M.A. requirements, have
minimal risk, and have inspections being conducted by the City.
The H.R.A. should find the program attractive because it has
eliminated any market rate risk and can increase or decrease its
financial contribution to the program on an annual basis.
Furthermore, the H.R.A. and the City are achieving their desired
goals of maintaining and improving the City's aging housing
stock. The homeowner /borrower should find F.R.L.P. attractive
because all of the money they are borrowing is for
rehabilitation. The H.R.A. is paying all of the other fees. In
addition, the homeowner is getting an interest rate that is
always 1% lower than the market rate at the time the loan was
originated. We recommend that the H.R.A. continue to explore the
development of a F.R.L.P. as described in this memorandum.
5
14- Jul -92
-------------------------------------------------------------------------
.....MARKET.....
....DISCOUNT....
PRINCIPAL
-------------------------------------------------------------------------
TERM
RATE
PAYMENT
RATE
PAYMENT
WRITEDOWN
10,000
20
7.0%
77.53
6.0%
71.64
759.29
10,000
15
7.0%
89.88
6.0%
84.39
611.59
10,000
10
7.0%
116.11
6.0%
111.02
438.21
10,000
20
8.0%
83.64
7.0%
77.53
730.97
10,000
15
8.0%
95.57
7.0%
89.88
594.61
10,000
10
8.0%
121.33
7.0%
116.11
430.17
10,000
20
9.0%
89.97
8.0%
83.64
703.39
10,000
15
9.0&
101.43
8.0%
95.57
577.90
10,000
10
9.0%
126.68
8.0%
121.33
422.19
10,000
20
10.0%
96.50
9.0%
89.97
676.62
10,000
15
10.0%
107.46
9.0%
101.43
561.49
10,000
10
10.0%
132.15
9.0%
126.68
414.30
10,000
20
11.0%
103.22
10.0%
96.50
650.72
10,000
15
11.0%
113.66
10.0%
107.46
545.42
10,000
10
11.0%
137.75
10.0%
132.15
406.48
10,000
20
12.0%
110.11
11.0%
103.22
625.73
10,000
15
12.0%
120.02
11.0%
113.66
529.69
10,000
10
12.0%
143.47
11.0%
137.75
398.75
10,000
20
13.0%
117.16
12.0%
110.11
601.66
10,000
15
13.0%
126.52
12.0%
120.02
514.32
10,000
10
13.0%
149.31
12.0%
143.47
391.12
10,000
20
14.0%
124.35
13.0%
117.16
578.56
10,000
.15
14.0%
133.17
13.0%
126.52
499.34
10,000
10
14.0%
155.27
13.0%
149.31
383.58
10,000
20
15.0%
131.68
14.0%
124.35
556.42
10,000
15
15.0%
139.96
14.0%
133.17
484.76
10,000
10
15.0%
161.33
14.0%-
155.27
376.14
10,000
20
16.0%
139.13
15.0%
131.68
535.25
10,000
15
16.0%
146.87
15.0%
139.96
470.58
10,000
10
16.0%
167.51
15.0%
161.33
368.82
10,000
20
18.0%
154.33
17.0%
146.68
495.76
10,000
15
18.01;
161.04
17.0%
153.90
443.47
10,000
10
18.0%
180.19
17.0%
173.80
354.50
10,000
20
20.0%
169.88
19.0%
162.07
459.96
10,000
15
20.0o
175.63
19.0%
168.29
418.04
10,000
10
20.0%
193.26
19.0%
186.67
340.65
PREPARED BY CASSERLY MOLZAHN & ASSOCIATES
graphic displays on the SRI of Rights at the St. Paul Ch►k Center on Friday, part of a traveling exhibit that Includes a
of the document. The exhibit can be seen from 10 a.m. to 8 p.m. today, Sunday and Monday.
soviets to stop
� -A-f1 Wa.1' -
ASHI IGTON WREAU
LEN NISM, u.s.s -R-
tes and Soviet Union settled one of
political disputes Friday by agreeing
}applies to Afghanistan by Jan. 1 in
ie country's long civil war.
lent marks the third major political
h the United States that the Soviets
emove or narrow since last month's
der to clear the way for receiving
U.S. economic aid.
new Soviet State Council formally
:ace to the three Baltic republics, a
ited by the United States. And on
A President Mikhail Gorbachev an-
withdraw troops from Cuba as part of
AFGHAN CONTINUED ON SA ►
Home loan idea. airns
at middle incomes
WALTER PARKER sTA" nlWS
Attention, baby boomers looking to move up the
housing ladder or empty- nesters scaling back: The city
of St. Paul wants yon to think twice before calling that
real estate agent in the suburbs.
And it may be sweetening the proposition by early
next year, with below- market mortgages home rehabiL
���7�t�e or both for middle-
income both for middle -
e families a families and�,les.
That's of o a proposed $20 million lending
program unveiled Friday by the city's Planning and-
Economic Development Department. Unlike most other
public assillAD" ventures in the housing area, this
program would target families and singles who make
more than 13+.000 a year — up to $55,000.
Some of the estimated 350 borrowers in the program
HOMES c oNnNuEO ON 3A ►
Trump deal off after 7 months of talks
JEFF COLE STAFF WRITER
Northwest Airlines' big at tgi play
control of the Trump S
Friday after seven months of dickering.
The Machinists union blocked the deal
by ad insisting million in costs to No
added = rthwest
over five years, said several sources fa-
miliar with the talks. They said banks -
behind Trump refused to cover the extra
cost, and negotiations were dissolved.
The proposed deal would have put
Northwest in the heart of an important
business - travel market that some experts
say is crucial to the carrier's long -term
survival. The shuttle runs hourly betweeso
New York City, Washington, D.C., gad
Boston.
The turn of events rth
the jockeying e best public P06-
tare, and it left workers at both carriers
feeLng let down.
"We're disappointed," said Pete Dodge,
chairman of the 5,600 -member North -
west Air Line Pilots Association Union,
which had hustled its end of labor negoti-
ations along to speed the deal.
Northwest blamed a falling out with
Trump's banks over finances, but the big
• celis� Sst,113t
uo VtJ -panupuo Io
1
NWA CONTINUED ON 6A ►
aura; ;v� V� Sll
rrV
o;Herat Kabul
ANISTAN
•
iAhoree
' Qandahar
Arabian Sea -�
AMERICA„ ASIA
.
Atknft AFRICA
'. =i8aft
--OdWn n
Ocean
& AMERICA _
PIONEER PRESS GRAPHIC
Home loan idea. airns
at middle incomes
WALTER PARKER sTA" nlWS
Attention, baby boomers looking to move up the
housing ladder or empty- nesters scaling back: The city
of St. Paul wants yon to think twice before calling that
real estate agent in the suburbs.
And it may be sweetening the proposition by early
next year, with below- market mortgages home rehabiL
���7�t�e or both for middle-
income both for middle -
e families a families and�,les.
That's of o a proposed $20 million lending
program unveiled Friday by the city's Planning and-
Economic Development Department. Unlike most other
public assillAD" ventures in the housing area, this
program would target families and singles who make
more than 13+.000 a year — up to $55,000.
Some of the estimated 350 borrowers in the program
HOMES c oNnNuEO ON 3A ►
Trump deal off after 7 months of talks
JEFF COLE STAFF WRITER
Northwest Airlines' big at tgi play
control of the Trump S
Friday after seven months of dickering.
The Machinists union blocked the deal
by ad insisting million in costs to No
added = rthwest
over five years, said several sources fa-
miliar with the talks. They said banks -
behind Trump refused to cover the extra
cost, and negotiations were dissolved.
The proposed deal would have put
Northwest in the heart of an important
business - travel market that some experts
say is crucial to the carrier's long -term
survival. The shuttle runs hourly betweeso
New York City, Washington, D.C., gad
Boston.
The turn of events rth
the jockeying e best public P06-
tare, and it left workers at both carriers
feeLng let down.
"We're disappointed," said Pete Dodge,
chairman of the 5,600 -member North -
west Air Line Pilots Association Union,
which had hustled its end of labor negoti-
ations along to speed the deal.
Northwest blamed a falling out with
Trump's banks over finances, but the big
• celis� Sst,113t
uo VtJ -panupuo Io
1
NWA CONTINUED ON 6A ►
aura; ;v� V� Sll
&ATUIWAY: WT13M111111a K 1191 -SA
HOMES/$20 Ilion loan program -proposed ,
i the program would be kmilies
Voold have boomea as `may
in ' = =:sad . - - , 1
� are
foods w6e v to ' fiat the b � a s g'o'wn
Wmulate a hog am -Loeb to low- and.moderate-
' Gloria Baetran, the ieparlmeat's ' .laeome . qty 10
-Gloria - a tax tiaaeb.
lb" directoir.
Ake, added. Be noted, for
Ibe aid the maximum "lee of - Cr7 fa - asam that 44 Pei t of Min -
ereapo� base js in downtown
- a' home for the program would be .. -Bat they said that for the city to to only !4
lbout $150,000. Sydsting i ---- -- aoetain 415, afreng -a boehoed property. St. Pa where ndg 4
moderate - income families have a �' It ala0 most Ii+de� �y a bigger e0000mk
mks price .cap of :104.010, she are one
•' "All areas cf the city have iolid &
tMy sold.
t1dghborboods &t ve "flight _
itirting �� h � � sue. - mousiness
to addrms of spreading the bans' th ----- - ,t - James Salem, commissioner of do - Equipment
the city, bowever, the department ''MOD0Obyyooa�B Finim Liquidation
,Mould focus an homes b a handful A^ mews a lo�eboices far to live of areas in an effort m create a to �Pbo hood. effect � �Sb- � This '' .wholew��ompetition .ia -
"We're not '.a,:irg about the that h tl�g to be a �� Furniture •Files •Sates
P � S- Um Phone System
lincoiffi, 13nwooda, Summits a� � m � �.�•
Video Security system
C�od<iches (avenues) = t3oae u- He said other hates are trying Retail Displays • Shelving
was have done well and tbeyW not sboilar Perms to engage f3bss d. Mirton; Scales AgdglecIns the thrust here," said Robert Spra- geode to remain in ' •
gae, department director. Areas to - cities, but he - hadn't board of a� Warehouse Racks • Misc
be stance have for the S ntifie l V and sales price gotde- Bargains GA/ore 1
esistance haven't been identified am as high as tbosep�opased for
Money for the program would �°l' t�� awn
cow hm a reRnane- .Soobvm scid the �
Ing later Ibis t of and --would ptw " .pakdole Mail
�-b94 at 10th St.
ONWMDg the !� - g'0j01 ' ad 4w . Oakdale 738 -8351 .
J.N.. Imq
was set bi.*____
iiuclear anna
WWV MW& .-.i
the UWW TItt10oo to cdocjo&
� that - IMI vow Aaft U
at least two ar Irm wei 00ppoot 01
�oisetl�on.'ptiata iced tit i� Aa"
by aiBed boeobMB ds:ieB
off litar-
Tills 4- .1f.
or Ainft aid
i
S1
I
NC
Iasi ..d a'ys to. save
(Semi- annual
K� �
i
I
0
7
0
'fl 9
I i '
i
city of
Fridley
Neighborhood Boundaries
E
k
0
'fl 9
I i '
i
city of
Fridley
Neighborhood Boundaries
I`
NEIGHBORHOOD
STATUS SUMMARY
• ABANDONED HOMES
• REHAB - SINGLE FAMILY
• VACANT LAND
IV . - OREFRESENT GENERAL AREAS
HOUSING STUDY WINDSHIELD SURVEY
COMMENT CODE
A = Roof, soffits, eaves need repair or replacement
B = Siding in need of repair or replacement
C = Garage in need of repair or replacement
D = Miscellaneous repairs: windows, paint, yard, junk, etc.
E = Driveway needs to be-paved
F = Deferred maintenance
Combine = Houses are very small and could be acquired to combine
into larger lots and houses
HOUSING STUDY NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 1
VACANT LOTS ABANDONED HOMES
REHABILITATION SITES
caggw
(Single
Family)
Hillwind Dr
5900
Hackman
4- Ail
East of 1365
5850
Hackman
4- A,D
South of 5560
Fillmore
1021
Hackman Circle
5- A,B
East of 1140
1048
Hackman Circle
A
Regis Lane
5692
Regis Trail
C
2 Lots
East Danube
1100
Lynde Drive
A,B
Outlot near
1070
Lynde Drive
A,C
Trapp Court
1202
Hathaway Lane
A
West Brenner
Pass
1280
Hathaway Lane
B
South of
1535
Gardena
6020 Stinson
5800
Tennison
D
1080
Hathaway Lane
A
975 Hathaway Lane
D,E
5715
Polk Street
B
1331
Hillcrest
4- C
6116
Old Central
Two
homes
Rice Creek Road 4
HOUSING STUDY NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 2
VACANT LOTS ABANDONED HOMES REHABILITATION SITES OUII'
(Single Family)
1401 73rd Avenue C
7360 Stinson 5
7677 Bacon Drive 4
1401 76th Avenue 4
.7440 Bacon Drive Trashy
1295 -97 Norton Avenue 3
(Multiple Family
940, 950, 990
Lynde Drive 4- A,D
5650, 5660 Polk St. 4- B,D
South Fridley Apts. 4- AC
5535 East Oberlin C
5519, 1553, 1545, 1541.
East Oberlin C
5547 East Bavarian Pass
5534, 5577, 5583
East Bavarian Pass B,C
5510 East Bavarian Pass B,C
Black Forest Condos Parking
Lot
6074, 6070 Old Central B
1631 Rice Creek Road 4- F
6375 Kerry Lane 3- A,F
1323 73rd Avenue 3- F
HOUSING STUDY
NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 3
VACANT LOTS ABANDONED
HOMES REHABILITATION SITES
Ca4au
(Single Family)
East of
226 Rice Creek Blvd
A
University,
near 74th
7565 4th Street
D
7450 Able Street
D
7497 Able Street
B
Multiple Family)
7323 University Avenue
D
7579 Able Street
A,D
7565 -67 Able Street
D
7431 -33 Able Street
B
HOUSING STUDY NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 4
VACANT LOTS ABANDONED HOMES
Alice Wall
Addition
6th Street
and 57 1/2
5th Street
and 58th
Starlite
Circle
Lot south of
5680 3rd Street
Lot north of
5849 3rd Street
South of 5847 Main
Lot north of 5.917
2nd Street
Lots near 61st
Way and East River
Road
REHABILITATION SITES
(Single Family)
390 66th Avenue
351 67th Avenue
710 Rice Creek
Terrace
1021 Rice Creek
Terrace
6830 Brookview
6820 Oakley Street
772 Mississippi
6342 Baker Avenue
6425 Baker Street
6440 Baker Street
6501 Van Buren
620 Mississippi Street
630 Mississippi Street
5601 5th Street
6014 2 1/2 Street
6007 60th Avenue
6011 3rd Street
218 57th Place
100 Main Street
5825 Main Street
5925 Main Street
5961 Main Street
a
E
E
F
F
D
E
F
C,D
C
F
5- F
C
Junk
E
Neighborhood 4
Page 2
VACANT LOTS ABANDONED HOMES REHABILITATION SITES .Ccnvm
(Single Family)
5813, 5817, 2 1/2 Street Ombim
5821, 5825, 2 1/2 Street 03"m
5845, 5849, 2 1/2 Street Combine
5817 2nd Street
5834 2nd Street
(Multiple Family)
5860 -62 4th Street F
4th Street Duplexes F
6th Street Duplexes F
343 -49 57 1/2 Avenue
Cherrywood /Satelite
5608 -10 5th Street
6060 2 1/2 Street
59 1/2 Way, all
5980 3rd Street
5974 3rd Street D
262 57th Place
5981 Main Street
6061 2nd Street F
6008 2nd Street D
5866 2nd Street
5851 2nd Street
5801, 03, 05 2nd Street
5770 2nd Street
Neighborhood 4
Page 3
VACANT LOTS ABANDONED HOMES REHABILITATION SITES
Multiple Family)
5761 2nd Street
5770 2 1/2 Street
5900 2 1/2 Street
5908 2 1/2 Street
5916 2 1/2 Street
5924 2 1/2 Street.
HOUSING STUDY NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 5
VACANT LOTS ABANDONED HOMES
REHABILITATION SITES
0244M
(Single
Family)
5312
Horizon Drive
B
4720
3rd Street
D
4641
2 1/2 Street
C
4632
2nd Street
B
4050
Main Street
B,D
(Multiple Family)
4901
3rd Street
D
4021 California Street 4- F
HOUSING STUDY NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 6
VACANT LOTS ABANDONED HOMES REHABILITATION SITES O1tiN m
(Single Family)
64th /Ashton.
Ashton /Miss
Charles Street /East
River Road Aquire
41 Rice Creek Terrace
6551 East River Road
(Multiple Family)
140, 142 Charles Street Start
over
179, 180 Charles Street Start
over
101 Charles.Street
Mississippi Place
HOUSING STUDY NEIGHBORHOOD WINDSHIELD SURVEY
NEIGHBORHOOD 7
VACANT LOTS ABANDONED HOMES REHABILITATION SITES Oaffw
Single Family)
Lot next to 725 Kimball Street 725 Kimball Street
275 Ironton
532 Janesville * 7595 Broad Avenue
576 Ironton.*
Corner house at
Janesville /East River
Road
540 Hugo
560 Hugo Street
683 Glencoe
573 Hugo Street
389 Hugo Street
641 Glencoe Street
C
647 Glencoe Street
Junk
513 Fairmont
8031 Riverview Terrace
684 Ely Street
650 Ely Street
600 Buffalo Street
630 Buffalo Street
D
641 Buffalo Street
541 79th Way
379 79th Way
371 79th Way
133 79th Way
6806 Locke Lake Road
7029 East River Road
F
7125 Ashton Avenue
F
7135 Ashton Avenue
F
Neighborhood 7
Page 2
VACANT LOTS
ABANDONED HOMES REHABILITATION SITES CU44M
Single Family)
91 Osborne Road F
420 Ironton F
(Multiple Family)
Meadow'Run Apartments F, no
lights
7673 East River Road F
NEIGHBORHOOD
PLANNING
4
g
h
H
a
f•
0
a
N
F'
7
I
a
SINGLE FAMILY UNI
(SF) N
VS }
MULTIPLE - FAWKY
UNITS (MF)
SF
rf7:�MF
el
h*°Y 694
v
52 2i, �TOTAL SINGLE - FAMILY UNITS
III 1980 6964
I
AF �f' �aa 1990 7046
�1 9 TOTAL MULTIPLE - FAMILY UNITS
1980 3363 of 1990 3749
C ity
Fri dley
`RIA99MCTSUM HOMES 334
CULTURAL
DIVERSITY
TOTAL WHITE
1980 29,308
1990 27,104
TOTAL OTHER
1990 1209
Fri" dley
OWNER- OCCUPANCY
(OWN -OC) N
VS I
RENTER - OCCUPANCY
(REN -OC)
OWN -OC
TOTAL OWNER OCCUPANCY (OWN -0C)
TOTAL RENTER OCCUPANCY (REN -OC)
POPULATION
AND N
HOUSEHOL�S
TOTAL POPULATION
1980 30,228
1990 28,335
TOTAL HOUSEHOLDS
1980 10,660
1990 11,418
it v ®f
VACANT
ELS
TOTAL VALUE
$811,800
TOTAL PARCELS
......._ ....
Ir
I
I
19 20-34 35-54 II I
22 aim 01"D
- 65 I
Mn i
r 74k
V,
AV RON-
w !1
Ilt�■
I
(() L19
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City of
F r i d I e y
O'
N
893
H
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I
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970
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313
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300
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I90
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9S
s
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City of
F r i d I e y
O'
Y
•t
The City Council and HRA evaluated their level of agreement with
the 11 general recommendations identified in. the Maxfield study.
A. High levels of agreement were indicated for the following
recommendations:
1. Encourage maintenance and upgrading of older single
family and multiple family housing stock.
2. Provide information regarding housing rehabilitation and
development programs to families and smaller multiple
family property owners.
3. Consider redevelopment of areas where housing and /or
commercial businesses are vacant, substandard, or beyond
economic benefit or repair.
4. Identify potential sites for housing and develop a
prioritization plan.
5. Work to maintain buffers between residential areas and
large scale commercial and industrial land uses.
B. There was a "medium" level of agreement for:
1. Pursuing housing code enforcement to insure the retention
of tax base and to remove negative visual image.
2. Encourage the development of new housing for single
family and multiple family use to accommodate the needs
of moderate and higher income families.
C. Recommendations which received a low level of agreement
include:
1. Encouraging the development of new housing specifically
targeted to meet the needs of low to moderate income
families. Specifically, the study suggested the need to
address three and four bedroom rental units.
2. Work toward. increasing east /west public transportation
for Fridley.
3. Encourage the development of new multiple family housing
to meet the housing needs of empty nesters and seniors.
Concurrently, this will create available starter homes
for first time home buyers.
4. Encourage additional retail development where appropriate
to serve surrounding neighborhoods.
Draft of July 1, 1992
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY, MINNESOTA
And
This document was drafted by:
Casserly Law Office, P.A.
215 South 11th Street
Minneapolis, Minnesota 55403
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.1 Definitions 3
ARTICLE II
Representations and Warranties
Section 2.1 Representations by the Authority 6
Section 2.2 Representations and Warranties by the
Redeveloper 6
ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Loan to Redeveloper for Site Improvements 8
Section 3.2 Limitations on Undertaking of the City 8
Section 3.3 Conditions Precedent to Authority Loan 8
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements 10
Section 4.2 Completion of Construction 10
Section 4.3 Certificate of Completion 10
ARTICLE V
Events of Default
Section
5.1
Events of Default Defined
12
Section
5.2
Remedies on Default
13
Section
5.3
No Remedy Exclusive
13
Section
5.4
No Implied Waiver
13
Section
5.5
Agreement to Pay Attorney's Fees and Expenses
13
ARTICLE VI
Prohibitions Against Assignment and Transfer
Section 6.1 Representation as to Redevelopment 14
Section 6.2 Prohibition Against Transfer of Property
and Assignment of Agreement 14
ARTICLE VII
Additional Provisions
Section
7.1
Conflict of Interests
15
Section
7.2
Restrictions on Use
15
Section
7.3
Titles of Articles and Sections
15
Section
7.4
Notices and Demands
15
Section
7.5
Indemnification of Authority
16
Section
7.6
Counterparts
16
Section
7.7
Law Governing
1.6
Section
7.8
Expiration
16
Section
7.9
Provisions Surviving Rescission
SCHEDULE
A
Description of Redevelopment Property
or Expiration
16
ARTICLE VIII
Mortgage Financin
Section
8.1
Limitation Upon Encumbrance of Property
17
Section
8.2
Approval of Mortgage
17
Section
8.3
Notice of Default; Copy to Mortgagee
18
Section
8.4
Mortgagee's Option to Cure Defaults
18
Section
8.5
Authority's Option to Cure Default on
Mortgage
18
Section
8.6
Subordination and Modification for the
Benefit of Mortgagees
19
SIGNATURES
20
SCHEDULE
A
Description of Redevelopment Property
22
SCHEDULE
B
Site Improvements
23
SCHEDULE
C
Certificate of Completion
24
SCHEDULE
D
Note
26
SCHEDULE
E
Authority Mortgage
29
SCHEDULE
F
Guarantee
33
SCHEDULE
G
Permitted Encumbrances
37
CONTRACT FOR PRIVATE REDEVELOPMENT
.THIS AGREEMENT, made on or as of the day of July, 1992
by and between the Housing and Redevelopment Authority in and for
the City of Fridley, Minnesota (the "Authority "), a political
subdivision of the State of Minnesota organized under the
Constitution and laws of the State of Minnesota and
, a Minnesota corporation (the "Redeveloper "),
WITNESSETH:
WHEREAS, the Board of Commissioners (the "Board ") of the
Authority has determined that there is a need for development and
redevelopment within the corporate limits of the City to provide
employment opportunities, to provide adequate housing in the
City, including low and moderate income housing and housing for
the elderly, to improve the tax base and to improve the general
economy of the City and the State of Minnesota;
WHEREAS, in furtherance of these objectives, the Authority
has established, pursuant to.Minnesota Statutes, Sections 469.001
et seg. (the "Act "), the development program known as the
Modified Redevelopment Plan for its Redevelopment Project No. 1
(which program, as amended, and-as it may be amended, is
hereinafter referred to as the "Redevelopment Program ") in the
City to encourage and provide maximum opportunity for private
development and redevelopment of certain property in the City
which is not now in its highest and best use;
WHEREAS, major objectives.in establishing the Redevelopment
Program are to:
1. Promote and secure the prompt redevelopment of certain
property in the Redevelopment Program, which property is not now
in its highest and best use in a manner consistent with the
City's Comprehensive Plan and with a minimum adverse impact on
the environment, and thereby promote and secure the redevelopment
of other land in the City.
2. Provide additional employment opportunities within the
Redevelopment Program and the City for residents of the City and
the surrounding area, thereby improving living standards,
reducing unemployment and the loss of skilled and unskilled labor
and other human resources in the.City.
3. Prevent the deterioration and secure the increase of
commercial /industrial property subject to taxation by the City,
the Independent School Districts, Anoka County, and the other
taxing jurisdictions in order to better enable such entities to
pay for governmental services and programs required to be
provided by them.
4. Provide for the financing and construction for public
improvements in and adjacent to the Redevelopment Program
necessary for the orderly and beneficial redevelopment of the
Redevelopment Program and adjacent areas of the City.
5. Promote the concentration of new desirable industrial,
office, and other appropriate redevelopment in the Redevelopment
Program so as to maintain the area in a manner compatible with
its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, and
redevelopment, whenever possible.
7. Create a desirable and unique character within the
Redevelopment Program through quality land use alternatives and
design quality in new or remodeled buildings.
8. Encourage and provide maximum opportunity for private
redevelopment of existing areas and structures which are
compatible with the Redevelopment Program; and
WHEREAS, in order to achieve the objectives -of the Authority
and City in creating the Redevelopment Program the Authority is
prepared to acquire that certain real property located in the
Redevelopment Program (such real property is more particularly
described in Schedule A to this Agreement) and to convey said
real property to the Redeveloper for development and
redevelopment in accordance with this Agreement; and
WHEREAS, the Authority believes that the development and
redevelopment of the Redevelopment Property pursuant to this
Agreement, and fulfillment generally of the terms 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 applicable
federal, state and local laws under which the development and
redevelopment are being undertaken and assisted;
NOW, THEREFORE, in consideration of the premises and the
mutual obligations of the parties hereto, each of them does
hereby covenant and agree with the other as follows:
2
ARTICLE I
Definitions
Section 1.1 Definitions. In this Agreement, unless a
different meaning clearly appears from the context:
"Act" means Minnesota Statutes, Section 469.001 et sea.
"Agreement" means this Agreement, as the same may be from
time to time modified, amended, or-supplemented.
"Authority" means the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota.
"Authority-Mortgage " ,means a mortgage which is secured by
the Redevelopment Property, the form of which is attached hereto
as Schedule E and may be subordinate to the Mortgage.
"Certificate of Completion" means the certification, in the
form of the certificate contained in Schedule C attached to and
made a part of this Agreement, provided to the Redeveloper,
pursuant to Section 4.4 of this Agreement.
"City" means the City of Fridley, Minnesota.
"Construction-Plans" means the plans, specifications,
drawings and related documents on the construction work to be
performed by the Redeveloper on the Redevelopment Property which
(a) shall be as detailed as the plans, specifications, drawings
and related documents which are submitted to the building
inspector or the City, and (b) shall include at least the
following for each building: (1) site plan; (2) foundation plan;
(3) basement plans; (4) floor plan for each floor; (5) cross
sections of each (length and width); (6) elevations (all sides,
except as to a side of existing structure where no construction
is to take place); (7) facade and landscape plan; and (8) such
other plans of supplements to the foregoing plans as the City may
reasonably request.
"Council" means the Council of the City.
"County" means the County of Anoka, Minnesota.
"Guarantee" means the guarantee of payment of the Note and
performance of this Agreement, which is attached hereto as
Schedule F.
"Holder" means the owner of a Mortgage.
3
"Minimum Improvements" means the construction of an office
warehouse building of approximately 100,000 square feet on the
Redevelopment Property with a total project cost of approximately
$2,500,000.
"Minnesota Environmental
located at Minnesota Statutes,
amended.
"Minnesota Environmental
located at Minnesota Statutes,
amended.
Policy Act" means the statutes
Sections 116D.01 et se q., as
Rights Act" means the statutes
Sections 116B.01 et sec., as
"Mortgage" means any mortgage or security agreement in which
the Redeveloper has granted a security interest in the
Redevelopment Property, or any portion thereof, or any
improvements constructed thereon, and which is a permitted
encumbrance pursuant to the provisions of Article VIII.
"National Environmental Policy Act" means the federal law
located at 42 U.S.C. Sub. Sect. 4331 et seg., as amended.
"Note" means the note in the principal amount of Two Hundred.
Thousand and no /hundredths Dollars ($200,000.00) or the cost of
the Site Improvements, whichever is less, substantially in the
form of Schedule D attached to this Agreement, and to be made by
the Redeveloper payable to the.order of the Authority in
accordance with the terms of this Agreement. If the Note
principal is less than $200,000, then the Payment Schedule
attached as Exhibit A to the Note shall be reduced
proportionately.
"Permitted Encumbrances" means the encumbrances described on
Schedule G to this Agreement.
"Project Area" means Redevelopment Project No. 1,'as
amended, established in accordance with the Act.
"Redeveloper" means , a
corporation organized under the laws of the State of Minnesota.
"Redevelopment Program" means the modified redevelopment
program adopted by the Authority for its Redevelopment Project
No. 1, as amended.
"Redevelopment Project" means the Redevelopment Property and
the Minimum Improvements.
"Redevelopment Property" means the real property described
in Schedule A of this Agreement.
4
"Site Improvements" means those costs described on-Schedule
B as qualified improvements of the Redevelopment Property.
"State" means the State of Minnesota.
"Unavoidable Delays" means delays which are the direct
result of strikes, delays which are the direct result of
unforeseeable and unavoidable casualties to the Minimum
Improvements, the Redevelopment Property or the equipment used to
construct the Minimum Improvements, delays which are the direct
result of governmental actions, delays which are the direct
result of judicial action commenced by third parties, citizen
opposition or action affecting this Agreement or adverse weather
conditions or acts of God.
ft
61
ARTICLE II
Representations and Warranties
Section 2.1 Representations by the Authority. The Authority
makes the following representations as the basis for the
undertaking on its part herein contained:
(a) The Authority is a public body duly organized and
existing under the laws of the State. Under the provisions of
the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The Authority has approved the Redevelopment Program in
accordance with the terms of the Act.
(c) To finance the costs of the activities to be undertaken
by the Redeveloper, the Authority proposes, in accordance with
the provisions of this Agreement, to loan to the Redeveloper the
Note principal for Site Improvements.
(d) The Authority will cooperate with the Redeveloper with
respect to any litigation commenced by third parties in
connection with this Agreement.
Section 2.2 Representations and Warranties by the
Redeveloper. The Redeveloper represents and warrants that:
(a) The Redeveloper will construct, operate and maintain
the Minimum Improvements in accordance with the terms of this
Agreement, the Redevelopment Plan and all local, state and
federal laws and regulations (including, but not limited to,
environmental, zoning, building code and public health laws and
regulations).
(b) The Minimum Improvements will be an allowed used under
the zoning ordinance of the City.
(c) As of the date of execution of this Agreement, the
Redeveloper has received no notice or communication from any
local, state or federal official that the activities of the
Redeveloper or the Authority in the Project Area may be or will
be in violation of any environmental law or regulation.
As of the date of execution of this Agreement, the Redeveloper is
aware of no facts, the existence of which would cause it to be in
Violation of any local, state or federal environmental law,
regulation or review procedure or which would give any person a
valid claim under the Minnesota Environmental Rights Act.
11
(d) The Redeveloper will use its best efforts to obtain, in
a timely.manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all
applicable local, state and federal laws and regulations which
must be obtained or met before the Minimum Improvements may be
lawfully constructed.
(e) The Redeveloper is a corporation, organized and
existing under the laws of the State of Minnesota.
(f) The Redeveloper agrees that it will cooperate with the
Authority and shall indemnify the Authority against all costs,
including the costs of defense incurred by the Authority through
an attorney of its choosing, with respect to any litigation
commenced by third parties in connection with this Agreement.
(g) The financing arrangements which the Redeveloper has
obtained or will obtain, to finance acquisition or construction
of the Minimum Improvements, together with financing provided by
the Authority pursuant to this Agreement, will be sufficient to
enable the Redeveloper to successfully complete the Minimum
Improvements as contemplated in this Agreement.
(h) The construction of the Minimum Improvements, in the
opinion of the.Redeveloper, would not reasonably be expected to
occur solely through private investment within the reasonably
foreseeable future without the use of tax increment financing
provided by the City pursuant to this Agreement.
(i) For the construction of the Minimum Improvements the
Redeveloper will pay wages in accordance with the prevailing wage
rate as that term is defined in Minnesota Statutes, Section
177.42, Subdivision 6 and in the City Resolution No. 25 - 1990.
The City's Public Works Department shall be responsible for
monitoring Redeveloper's compliance of this requirement.
(j) The Redeveloper represents that the completed
Redevelopment Project is reasonably expected to have a market
value of approximately $1,900,000 for purposes of real estate
property taxation.
rA
ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Loan to Redeveloper for Site Improvements. As
consideration for.the execution of this Agreement and the
construction of the Minimum Improvements by the Redeveloper,
subject to the further provisions of this Agreement, the
Authority agrees to loan to the Redeveloper for Site Improvements
the Note principal as provided in Section 3.3 and Article VIII.
Section 3.2 Limitations on Undertaking of the City.
(1) The Authority shall have no obligation to the
Redeveloper under this Agreement to loan the Note principal to
the Redeveloper for the Site Improvements if the Authority, at
the time the loan is to be made is entitled under Section 5.2 to
exercise any of the remedies set forth therein as a result of an
Event of Default which has not been cured. If the Authority has
not exercised its remedies under Section 5.2(b) and if the loan
is withheld due to an Event of Default which is later cured, such
loan shall be made after such Event of Default has been cured.
(2) The Authority shall have no obligation to loan the Note
principal to the Redeveloper for the Site Improvements unless the
Redeveloper has submitted to the Authority the original purchase
agreement whereby it acquired the Redevelopment Property from
Glacier Park Company and invoices for the Site Improvements along
with a certification signed by the Redeveloper's project
architect to the effect that the costs for which payment was made
have been incurred in connection with construction documents
previously reviewed by the Authority. The Redeveloper shall also
provide lien waivers from the contractors, subcontractors and /or
construction managers for the Site Improvements. The Authority
shall indicate its acceptance of the amounts for the loan,
assuming the conditions of this section.have been complied with
and there is no Event of Default, when it issues a Certificate of
Completion in accordance with Section 4.3.
Section 3.3 Conditions Precedent to Authority Loan. The
Authority's obligation to loan the Note principal in accordance
with Section 3.1 shall be contingent upon the satisfaction by the
Redeveloper of the following conditions precedent:
(a) The Redeveloper shall be in material compliance with
all of the terms and provisions of this Agreement.
(b) The Redeveloper shall have received a Certificate of
Completion from the Authority, pursuant to Section 4.3 of this
Agreement.
(c) There shall have been obtained from the-City all
special -use permits and zoning approvals necessary.for the
construction of the Minimum Improvements.
(d) That the Redeveloper shall be in compliance with all
ordinances of the City.
(e) The execution by the Redeveloper of the Note attached
as Schedule D.
(f) The execution by the Redeveloper of the Authority
Mortgage attached as Schedule E.
(g) The execution of the Guarantee attached as Schedule.F.
9
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements. The
Redeveloper agrees that it will construct the Minimum
Improvements on the Redevelopment Property in accordance with the
Construction Plans approved by the City.
Section 4.2 Completion of Construction. Subject to
Unavoidable Delays, the Redeveloper shall achieve substantial
completion of the construction of the Minimum Improvements by.
June 30, 1993. All work with respect to the Minimum Improvements
to be constructed or provided by the Redeveloper on the
Redevelopment Property shall be in conformity with the
Construction Plans.
The Redeveloper agrees for itself, its successors and
assigns, and every successor in interest to the Redevelopment
Property, or any part thereof, that the Redeveloper, and such
successors and assigns, shall diligently prosecute to completion
the development of the Redevelopment Property through the
construction of the Minimum Improvements thereon, and that such
construction shall in any event be completed within the period
specified in this Section 4.2 of this Agreement.
Section 4.3 Certificate of Completion.
(a) Promptly after substantial completion of the Minimum
Improvements in accordance with those provisions of the Agreement
relating to the obligations of the Redeveloper to construct the
Minimum Improvements (including the date for completion thereof),
the Authority will furnish the Redeveloper with an appropriate
instrument so certifying. Such certification by the Authority
shall be (and it shall be so provided in the certification
itself) a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement with
respect to the obligations of the Redeveloper, and its successors
and assigns, to construct the Minimum Improvements and the date
for the completion thereof.
(b) If the Authority shall refuse or fail to provide any
certification in accordance with the provisions of this Section
4.3 of this Agreement, the Authority shall, within ten (10) days
after written request by the Redeveloper, provide the Redeveloper
with a written statement, indicating in adequate detail in what
respects the Redeveloper has failed to complete the Minimum
Improvements in accordance with the provisions of the Agreement,
or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the Authority, for the Redeveloper
to take or perform in order to obtain such certification.
10
(c) The construction of the Minimum Improvements shall be
deemed to be substantially completed when the Redeveloper has
received an occupancy permit from the City's building inspector,
which permit shall not be unreasonably withheld.
11
ARTICLE V
Events of Default
Section 5.1 Events of Default Defined. The following shall
be "Events of Default" under this Agreement and the term "Event
of Default" shall mean whenever it is used in this Agreement any
one or more of the following events:
(a) Failure by the Redeveloper to timely pay all ad valorem
real property taxes assessed with respect to the Redevelopment
Property.
(b) Failure by the Redeveloper to complete the Minimum
Improvements pursuant to the terms, conditions and limitations of
this Agreement.
(c) The holder of any mortgage on the Redevelopment
Property or any improvements thereon, or any portion thereof,
commences foreclosure proceedings as a result of any default
under the applicable mortgage documents.
(d) Failure by the Redeveloper to substantially observe or
perform any other covenant, condition, obligation or agreement on
its part to be observed or performed.under this Agreement.
(e) If the Redeveloper shall
(A) file any petition in bankruptcy or for any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under the United
States Bankruptcy Act of 1978, as amended or under any
similar federal or state law; or
(B) make an assignment for the benefit of their
creditors; or
(C) admit in writing their inability to pay their
debts generally as they become due; or
(D) be adjudicated as bankrupt or insolvent; or if a
petition or answer proposing the adjudication of the
Redeveloper, as bankrupt or its reorganization under any
present or future federal bankruptcy act or any similar
federal or state law shall be filed in any court and such
petition or answer shall not be discharged or denied within
ninety (90) days after the filing thereof; or a receiver,
trustee or liquidator of the Redeveloper, or if the Minimum
Improvements, or part thereof, shall be appointed in any
proceeding brought against the Redeveloper, and shall not be
discharged within ninety (90) days after such appointment,
12
ARTICLE VI
Prohibitions Against Assignment and Transfer
Section 6.1 Representation as to Redevelopment. The
Redeveloper represents and agrees that its purchase of the
Redevelopment Property, and its other undertakings pursuant to
this Agreement, are, and will be used, for the purpose of
redevelopment of the Redevelopment Property and not for
speculation in land holding. The Redeveloper further recognizes
that, in view of (a) the importance of the redevelopment of the
Redevelopment Property to the general welfare of the Authority,
and (b) the substantial financing that has been made available by
the Authority for the purpose of making such redevelopment
possible, the qualifications and identity of the Redeveloper are
of particular concern to the Authority. The Redeveloper further
recognizes that it is because of such qualifications and identity
that the Authority is entering into this Agreement with the
Redeveloper, and, in so doing, is further willing to accept and
rely on the obligations of the Redeveloper for the faithful
performance of all undertakings and covenants hereby by it to be
performed.
Section 6.2 Prohibition Against Transfer of Property and
Assignment of Agreement. Also, for the foregoing reasons the
Redeveloper represents and agrees that prior to the Termination
Date, except for the purpose of obtaining financing necessary to
enable the Redeveloper or any successor in interest to the
Redevelopment Property, or any part thereof, to perform its
obligations with respect to making the Minimum Improvements under
this Agreement, and any other purpose authorized by this
Agreement, the Redeveloper has not made or created and will not
make or create or suffer to be made or created any total or
partial sale, assignment, conveyance, or lease, or any trust or
power, or transfer in any other mode or form of or with respect
to this Agreement or the Redevelopment Property or any part
thereof or any interest therein, or any contract or agreement to
do any of the same, without the prior written approval of the
Authority unless the Redeveloper remains liable and bound by this
Redevelopment Agreement in which event the Authority's approval
is not required. Any such transfer shall be subject to the
provisions of this Agreement. Notwithstanding the foregoing, the
Redeveloper may transfer the Redevelopment Property to any
corporation controlling, controlled by, or under common control
with the Redeveloper or to any corporation or entity controlled
by parties or their heirs who presently control the Redeveloper.
14
ARTICLE VII
Additional Provisions
Section 7.1 Conflict of Interests. No member, official, or
employee of the Authority shall have any personal interest,
direct or indirect, in the Agreement, nor shall any such member,
official or employee participate in any decision relating to the
Agreement which affects his personal interests or the interests
of any corporation, partnership, or association in which he is,
directly or indirectly, interested.
Section 7.2 Restrictions on Use. The Redeveloper shall not
discriminate upon the basis of race, color, creed, sex or
national origin in the sale, lease, or rental or in the use or
occupancy of the Redevelopment Property or any improvements
erected or to be erected thereon, or any part thereof.
Section 7.3 Titles of Articles and Sections. Any titles of
the several parts, Articles and Sections of the Agreement are
inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 7.4 Notices and Demands. Except as otherwise
expressly provided in this Agreement, a notice, demand, or other
communication under this Agreement by either party to the other
shall be sufficiently given or delivered if it is dispatched by
registered or certified mail, postage prepaid, return receipt
requested, transmitted by facsimile, delivered by a recognized
overnight courier or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or
delivered personally to the mailing or delivery address the
Redeveloper will, from time to time, furnish to the Authority.
The Redeveloper's current address is as follows:
112 19th Avenue N.E.
Minneapolis, Minnesota 55418
(b) in the case of the Authority, is addressed to or
delivered personally to:
Housing and Redevelopment Authority
in and for the City of Fridley
6431 University Avenue N.E.
Fridley, Minnesota 55432
Attention: Executive Director
15
Section 7.5 Indemnification of Authority.
(1) The Redeveloper releases from and covenants.and agrees
that the Authority, the City and its governing.body members,
officers, agents, including the independent contractors,
consultants and legal counsel, servants and employees thereof
(hereinafter, for purposes of this Section, collectively the
"Indemnified Parties ") shall not be liable for and agrees to
indemnify and hold harmless the Indemnified Parties against any
loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the
Minimum Improvements or the Redevelopment Property.
(2) Except for any willful misrepresentation or any willful
or wanton misconduct of the Indemnified Parties, the Redeveloper
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 arising or purportedly arising
from the actions or inactions of the Redeveloper (or if other
persons acting on its behalf or under its direction or control)
under this Agreement, or the transactions contemplated hereby or
the acquisition, construction, installation, ownership, and
operation of the Minimum Improvements or the Redevelopment
Property; provided, that this indemnification shall not apply to
the warranties made or obligations undertaken by the Authority in
this Agreement.
(3) All covenants, stipulations, promises, agreements and
obligations of the Authority contained herein shall be deemed to
be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body
member, officer, agent, servant or employee of the Authority.
Section 7.6 Counterparts. This Agreement is executed in any
number of counterparts, each of which shall constitute one and
the same instrument.
Section 7.7 Law Governina. This Agreement will be governed
and construed in accordance with the laws of the State.
Section 7.8 Expiration. This Agreement shall expire when
the Note is paid in full.
Section 7.9 Provisions Surviving Rescission or Expiration.
Sections 5.5 and 7,=5 shall survive any rescission, termination or
expiration of this Agreement with respect to or arising out of
any event, occurrence or circumstance existing prior to the date
thereof.
16
ARTICLE VIII
Mortgage Financing
Section 8.1 .Limitation Upon Encumbrance of Property. Prior
to the completion of the Minimum Improvements, as certified by
the Authority, neither the Redeveloper nor any successor in
interest to the Redevelopment Property or any part thereof shall
engage in any financing or any other transaction creating any
mortgage or other encumbrance or lien upon the Redevelopment
Property, other than Permitted Encumbrances, whether by express
agreement or operation of law, or suffer any encumbrance or lien
to be made on or attach to the Redevelopment Property, other than
Permitted Encumbrances, except:
(a) For the purposes of obtaining funds only to the extent
necessary for construction of Minimum Improvements including, but
not limited to, labor and materials, equipment, professional
fees, real estate taxes, construction interest, organizational
and other indirect costs of development, costs of constructing
the Minimum Improvements, an allowance for contingencies,
acquisition cost of the Redevelopment Property, costs of
originating the Mortgage and customary financing costs.
(b) Only upon the prior written approval of the Authority
in accordance with Sections 8.1 and 8.2.
The Authority shall not approve any Mortgage which does not
contain terms that conform to the terms of Section 8.5, except as
provided in Section 8.6 of this Agreement.
Section 8.2 Approval of Mortgage. The Authority shall
approve a Mortgage if:
(a) The Authority first receives a copy of all mortgage
documents.
(b) The Mortgage loan, together with other funds available
to the Redeveloper, will, in the reasonable judgment of the
Authority, be sufficient to construct the Minimum Improvements;
however, the Mortgage and Authority Mortgage shall not secure an
amount greater than 90% of the costs described in Section 8.1(a).
(c) The Authority is not entitled under Section 5.2 to
exercise any of the remedies set forth therein'as a result of an
Event of Default.
(d) The Authority determines that the terms of the Mortgage
conform to the terms of Section 8.5.
17
However, the approval of a Mortgage by the Authority shall not be
unreasonably withheld. Any Mortgage which is subordinated to the
rights of the Authority under this Agreement may be granted in
all or any part of the Redevelopment Property without the
approval of the Authority.
Section 8.3 Notice of Default; CODs to Mortgagee. Whenever
the Authority shall deliver any notice or demand to the
Redeveloper with respect to any breach or default by the
Redeveloper in its obligations or_ covenants under this Agreement,
the Authority shall at the same time forward a copy of such
notice or demand to each Holder of any Mortgage authorized by
this Agreement at the last address of such Holder shown in the
records of the Authority.
Section 8.4 Mortgagee's Option to Cure Defaults. After any
breach or default referred to in Section 8.3, each such Holder
shall (insofar as the rights of the Authority are concerned) have
the right, at its option, to cure or remedy such.breach or
default (or such breach or default to the extent that it relates
to the part of the Redevelopment Property covered by its
mortgage) and to add the cost thereof to the Mortgage debt and
the lien of its Mortgage; provided, however, that if the breach
or default is with respect to construction of the Minimum
Improvements, nothing contained in this Section or any other
Section of this Agreement shall be deemed to require such Holder,
either before or after foreclosure or action in lieu thereof, to
undertake or continue the construction or completion of the
Minimum Improvements, provided that any such Holder shall not
devote the Redevelopment Property to a use inconsistent with the
Redevelopment Plan or this Agreement without the agreement of the
Authority.
Section 8.5 Authority's Option to Cure Default on Mortgage.
Any Mortgage, unless such requirement is waived by the Authority,
executed by the Redeveloper with respect to the Redevelopment
Property or any improvements thereon shall provide that, in the
event that the Redeveloper is in default under any Mortgage
authorized pursuant to this Article VIII, the Holder shall notify
the Authority in writing of:
(a) The fact of the default.
(b) The elements of the default.
(c) The actions required to cure the default.
If the default is an "Event of Default" under such Mortgage,
which shall entitle such Holder to foreclose upon the
Redevelopment Property, the Minimum Improvements or any portion
thereof, and any applicable grace periods have expired, the
Authority shall have, and each Mortgage executed by the
18
Redeveloper with respect to the Redevelopment Property or any
improvements thereon shall provide that the Authority shall have
such an opportunity to cure the "Event of Default" within such
reasonable time period as the Holder shall deem appropriate.
Section 8.6 Subordination and Modification for the Benefit
of Mortgagees.
(a) in addition to.the subordination of the Authority
Mortgage, in order to facilitate the obtaining of financing for
the construction of the Minimum Improvements by the Redeveloper,
the Authority agrees to subordinate its rights under this
Agreement to the Holder of a Mortgage for the purposes described
in Section 8.1(a) of this Agreement.
(b) In order to facilitate the obtaining of financing for
the construction of the Minimum Improvements, the Authority
agrees that it shall agree to any reasonable modification of this
Article VIII or waiver of its rights hereunder to accommodate the
interests of the Holder of a Mortgage, provided, however, that
the Authority determines, in its reasonable judgment, that any
such modification(s) will adequately protect the legitimate
interest and security of the Authority with respect to the
Redevelopment Property.
19
IN WITNESS WHEREOF, the Authority has caused this Agreement
to be duly executed in its name and behalf and the Redeveloper
has caused this Agreement to be duly executed as of the date
first above written.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
On this day of , 199_ before me, a
notary public within and for Anoka County, personally appeared
and to me
personally known who by me.duly sworn, did say that they are the
Chairman and Executive Director of the Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota, a political
subdivision of the State of Minnesota, and acknowledged the
foregoing instrument on behalf of said Authority.
Notary Public
This is a signature page to the Redevelopment Agreement dated as
of , by and between the Housing and
Redevelopment Authority In and For the City of Fridley, Minnesota
and
20
By
Its
By
Its
STATE OF MINNESOTA )
)ss
COUNTY'OF )
On this day of , 199_ before me, a
notary public within and for County, personally appeared
and the
and respectively, of
, a Minnesota corporation, and
acknowledged the foregoing instrument on behalf of said
corporation.
Notary Public
This is a signature page to the Redevelopment Agreement dated as
of , by and between the Housing and
Redevelopment Authority In and For the City of Fridley, Minnesota
and
21
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
PARCEL 1: (Abstract)
That portion of Lot 4, Auditor's Subdivision No. 78, City of
Fridley, Anoka County, Minnesota, described as follows, to -wit:
Beginning at the intersection of the West right -of -way line of
Main Avenue, according to the recorded plat thereof, with the
North line of said Lot 4; thence Southerly along said West right -
of -way line of Main Avenue to the point of intersection with the
South line of said Lot 4; thence Westerly.along said South line
of Lot 4 to the point of intersection with a line drawn parallel
with and distant 75.0 feet Southeasterly of, as measured at right
angles to, Burlington Northern Railroad Company's (formerly Great
Northern Railway Company) hereinafter described Main Track
centerline to the point of intersection with said North line of
Lot 4; thence Easterly along said North line to the Point of
Beginning.
Main Track Centerline Description:
Commencing at the Northeast corner of Section 22, Township 30
North, Range 24 West of the 4th P.M.; thence Westerly along the
North line of said Section 22 a distance of 633.5 feet to the
Point of Beginning of the line to be described; thence deflecting
in a Southerly direction 86 degrees 35; to the point of
intersection with the South line of the Northeast 1/4 Northeast
1/4 of said Section 22 and there terminating.
22
SCHEDULE B
SITE IMPROVEMENTS
Acquisition of Redevelopment Property
Removal of Excess Soils, Fill Material,
Correction and Preparation
Soils Tests and Environmental Audit
Construction Supervision /Engineering/
Inspection /Permits
TOTAL COSTS
23
SCHEDULE C
CERTIFICATE OF COMPLETION
WHEREAS, the Housing and Redevelopment Authority in and for
the City of Fridley, Minnesota, a Minnesota municipal corporation
(the "Authority ") and
Minnesota corporation (the "Redeveloper ") have entered into a
Contract for Private Redevelopment (the "Agreement ") dated as of
, 1992, regarding certain real property referred to in
the Agreement as the "Redevelopment Property" located in
Redevelopment Project No. 1 in the City; and
WHEREAS, the Agreement contains certain conditions and
provisions requiring the Redeveloper to construct improvements
upon the Redevelopment Property (hereinafter referred to and
referred to in the Agreement as the "Minimum Improvements "); and
WHEREAS, Section 4.3 of the Agreement requires the Authority
to provide an appropriate instrument promptly after the
substantial completion (as defined in the Agreement) of the
Minimum Improvements so certifying said substantial completion;
NOW, THEREFORE, in compliance with said Section 4.3 of the
Agreement, this is to certify that the Redeveloper has
substantially completed the Minimum Improvements in accordance
with the conditions and provisions of the Agreement relating
solely to the obligations of the Redeveloper to construct the
Minimum Improvements (including the dates for beginning and
completion thereof), and this certification shall be a conclusive
determination of satisfaction and termination of the agreements
and covenants in the Agreement with respect to the obligations of
the Redeveloper, and its successors and assigns, to construct the
Minimum Improvements and the dates for the beginning and
completion thereof.
Dated: , 19
24
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
On this day of , 199_ before me, .a
notary public within and for Anoka County, personally appeared
and to me
personally known who by me duly sworn, did say that they are the
Chairman and Executive Director of the Housing and Redevelopment
Authority in.and for the City of Fridley, Minnesota, a political
subdivision of the State of Minnesota, and acknowledged the
foregoing instrument on behalf of said Authority.
Notary Public
25
SCHEDULE D
NOTE
US $200,000.00
Fridley, Minnesota
(Date)
FOR VALUE RECEIVED, the undersigned (the "Borrower ")
promises to pay to the Housing and Redevelopment Authority in and
for the City of Fridley, Minnesota (the "Note Holder "), or order
the principal sum of Two Hundred Thousand Dollars ($200,000.00)
with interest from February 1, 1995 on the unpaid principal
balance until paid, at the rate of 5% percent per annum, and with
payments due on the 1st day of each February and August in
installments set forth on the payment schedule attached as
Exhibit A. The entire unpaid principal balance together with
accrued interest shall be due in full on February 1, 2002.
Payments shall first be applied to interest with any excess
applied to principal. A late payment penalty of five
percent (5%) shall be charged on any payments not received
at the mailing address designated by the Note Holder by 5:00
P.M. on the 15th day following the date on which the payment
is due; interest will be calculated based on a 360 day year
and charged on a per diem basis in.each month.
Principal and interest shall
and Redevelopment Authority,
Fridley, Minnesota, 55432 or
may designate.
be payable at the Fridley Housing
6432 University Avenue N.E.,
such other place as the Note Holder
If said installment under this Note is not paid when due and
remains unpaid after a date specified by a notice to Borrower,
which date shall not be less than thirty (30) days after the date
such notice is mailed, the Note Holder may exercise this option
to accelerate during default by Borrower regardless of any prior
forbearance. If suit is brought to collect this Note, the Note
Holder shall be entitled to collect all reasonable costs and
expenses of suit, including, but not limited to, reasonable
attorney's fees.
Borrower may prepay the principal amount outstanding in
whole or in part. Any partial prepayment shall be applied
against the principal amount outstanding.
26
Presentment, notice of dishonor, and protest are hereby
waived by all makers, sureties, guarantors and endorsers hereof.
This Note shall be the joint and several obligation of all
makers, sureties, guarantors and endorsers, and shall be binding
upon them and their successors and assigns.
Any notice to Borrower provided for in this Note shall be
given by mailing such notice by certified mail addressed to
Borrower at:
112 19th Avenue N.E.
Minneapolis, Minnesota 55418
or to such other address as Borrower may designate by notice to
the Note Holder. Any notice to the Note Holder shall be given by
mailing such notice by certified mail, return receipt requested,
to the Note Holder at the address stated in the first paragraph
of this Note, or at such other address as may have been
designated by notice to Borrower.
The indebtedness evidenced by this Note is secured by a
Mortgage, dated the day of ' and reference
is made to the Mortgage for rights as to acceleration of the
indebtedness evidenced by this Note.
Property Address
By
Its
By
Its
27
Exhibit A
Payment Schedule
August 1, 1995
February 1, 1996
August 1, 1996
February 1, 1997
August 1, 1997
February 1, 1998
August 1, 1998
February 1, 1999
August 1; 1999
February 1, 2000
August 1, 2000
February 1, 2001
August 1, 2001
February 1, 2002
August 1, 2002
February 1, 2003
28
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
15,320
SCHEDULE E
AUTHORITY MORTGAGE
This Indenture, made this day of ,
between , a corporation organized
under the laws of the State of Minnesota (the "Mortgagor "), and
the Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota (the "Mortgagee "):
WITNESSETH:
That Mortgagor, in consideration of the Mortgagee's
covenants and agreements made under that certain Contract for
Private Redevelopment by and between the Mortgagee and
dated as of , 1992,
(the 'Agreement ") and in order to secure the payment by the
Mortgagor of all amounts required to be paid under Section 3.3 of
the Agreement and the Note as provided in the Agreement, and
further in consideration of the sum of One Dollar ($1.00), to
Mortgagor in hand paid by Mortgagee, the receipt whereof is
hereby acknowledged, does hereby convey unto Mortgagee, forever,
real property in Anoka County Minnesota, described as follows:
PARCEL 1: (Abstract)
That portion of Lot 4, Auditor's Subdivision No. 78, City of
Fridley, Anoka County, Minnesota, described as follows, to -wit:
Beginning at the intersection of the West right -of -way line of
Main Avenue, according to the recorded plat thereof, with the
North line of said Lot 4; thence Southerly along said West right -
of -way line of Main Avenue to the point of intersection with the
South line of said Lot 4; thence Westerly along said South line
of Lot 4 to the point of intersection with a line drawn parallel
with and distant 75.0 feet Southeasterly of, as measured at right
angles to, Burlington Northern Railroad Company's (formerly Great
Northern Railway Company) hereinafter described Main Track
centerline to the point of intersection with said North line of
Lot 4; thence Easterly along said North line to the Point of
Beginning.
Main Track Centerline Description:
Commencing at the Northeast corner of Section 22, Township 30
North, Range 24 West of the 4th P.M.; thence Westerly along the
North line of said Section 22 a distance of 633.5 feet to the
Point of Beginning of the line to be described; thence deflecting
in a Southerly direction 86 degrees 35; to the point of
intersection with the South line of the Northeast 1/4 Northeast
1/4 of said Section 22 and there terminating.
29
together with all hereditaments and appurtenances belonging
thereto (the "Property ").
TO HAVE AND TO HOLD THE SAME, to Mortgagee forever.
Mortgagor covenants with Mortgagee as follows: That Mortgagor is
lawfully seized of the Property and has good right to convey the
same; that the Property is free from all encumbrances, except as
follows:
that Mortgagee shall quietly enjoy and possess the same; and that
Mortgagor will warrant and defend the title to the same against
all lawful claims not hereinbefore specifically excepted.
PROVIDED, NEVERTHELESS, that if Mortgagor shall pay.
Mortgagee all amounts payable by the Mortgagor under the
Agreement and the Note in an amount not exceeding Two Hundred
Thousand Dollars ($200,000.00), and shall repay to Mortgagee, at
the times and with interest as specified, all sums advanced in
protecting the lien of this Mortgage, in payment of taxes on the
Property and assessments payable therewith, insurance premiums
covering buildings thereon, principal or interest on any prior
liens, expenses and attorney's fees herein provided for and sum
advanced for any other purpose authorized herein, and shall keep
and perform all-the covenants and agreements herein contained,
then this Mortgage shall be nulland void, and shall be released
at Mortgagor's expense.
AND MORTGAGOR covenants with Mortgagee as follows:
1. To pay the amounts as specified in the Agreement and
the Note.
2. To pay all taxes and assessments now due or that may
hereafter become liens against the Property before penalty
attaches thereto;
3. To keep all buildings, improvements and fixtures now or
later located on or a part of the Property insured against loss
by fire, extended coverage perils, vandalism, malicious mischief
and, if applicable, steam boiler explosion, for at least the
amount of the Mortgage at all times while any amount remains
unpaid under this Mortgage. If any of the buildings,
improvements or fixtures are located in a federally designated
flood prone area, and if flood insurance is available for that
area, Mortgagor shall procure and maintain flood insurance in
amounts reasonably satisfactory to Mortgagee. Each insurance
policy shall contain a loss payable clause in favor of Mortgagee
30
affording all rights and privileges customarily provided under
the so- called standard mortgage clause. The insurance shall be
issued by an insurance company or companies licensed to do
business in the State of Minnesota and acceptable to the
Mortgagee. the insurance policies shall provide for not less
than ten (10) days written notice to Mortgagee before
cancellation, non- renewal, termination, or change in coverage,
and Mortgagor shall deliver to Mortgagee a duplicate original or
certificate of such insurance policies.
4. To pay, when due, both principal and interest of all
prior liens or encumbrances, if any, and keep the Property free
and clear of all prior liens or encumbrances.
5. To commit or permit no waste on the Property and to
keep it in good repair.
.6. To complete forthwith any improvements which may
hereafter be under course of construction on the Property; and
7. To pay any other expenses and attorney's fees incurred
by Mortgagee by reason of litigation with any third party for the
protection of the lien of this Mortgage.
8. To immediately pay the Note balance if the Property is
sold or transferred except that the Property may be transferred
to any corporation controlling, controlled by or under common
control of the Mortgagor; or the Property may be transferred to
the Guarantors under the
Guarantee Agreement as provided for in the Agreement.
In case of failure to pay said taxes and assessments, prior
liens or encumbrances, expenses and attorney's fees as above
specified, or'to insure said buildings, improvements, and
fixtures and deliver the policies as aforesaid, Mortgagee may pay
such taxes, assessments, prior liens, expenses and attorney's
fees and interest thereon, or obtain such insurance, and the sums
so paid shall bear interest from the date of such payment at the
same rate of 5% per annum, and shall be impressed as an
additional lien upon the Property and be immediately due and
payable from Mortgagor to Mortgagee and this Mortgage shall from
date thereof secure the repayment of such advances with interest.
In case of default in any of the foregoing covenants,
Mortgagor confers upon the Mortgagee the option of declaring the
unpaid balance of the Note and the interest accrued thereon,
together will all sums advanced hereunder, immediately due and
payable without notice, and hereby authorizes and empowers.
Mortgagee to foreclose this Mortgage by judicial proceedings or
to sell the Property at public auction and convey the same to the
purchaser in fee simple in accordance with the statute, and out
of the moneys arising from such sale to retain all sums secured
31
hereby, with interest and all legal costs and charges of such
foreclosure and the maximum attorney's fees permitted by law,
which costs, charges and fees Mortgagor agrees to pay.
The terms of this Mortgage shall run with the Property and
bind the parties hereto and their successors in interest.
IN TESTIMONY WHEREOF, Mortgagor has hereunto set its hand
the day and year first above written.
By
Its
By
STATE OF MINNESOTA )
)ss
COUNTY OF )
Its
On this day of 199 before me, a
notary public within and for County, —personally
and the appeared
and , respectively, of
, a Minnesota corporation, and
acknowledged the foregoing instrument on behalf of said
corporation.
This document was drafted by:
Casserly Law Office., P.A.
215 South 11th Street
Minneapolis, Minnesota 55403
32
Notary Public
SCHEDULE F
GUARANTEE
This Guarantee is being made as of this day of ,
1992 by Jerome J. Myers (the "Guarantor ") for the benefit of the
Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota (the "Authority ").
RECITALS:
The Authority as of the date hereof has entered in a
Contract for Private Redevelopment (the "Agreement ") with
(the "Redeveloper "), a
corporation organized under the laws of the State of Minnesota.
The Authority and the Guarantor intend that the Guarantor
shall fully guarantee the-performance by the Redeveloper of all
obligations of the Redeveloper under the Agreement.
NOW, THEREFORE, the Guarantor, in consideration for the
Authority entering into the Agreement with the Redeveloper,
covenants and agrees with the Authority as follows:
1. Payment Guarantee. The Guarantor unconditionally
guarantees to the Authority, its successors and assigns, the
prompt and full payment when due of all present and future
payments due from the Redeveloper to the Authority and from the
Redeveloper to the Authority under this Agreement.
2. Performance Guarantee. The Guarantor agrees that in
the event the Redeveloper fails to perform any of its obligations
under the Agreement, the Guarantor shall perform such obligations
on behalf of or in lieu of the Redeveloper.
3. Consents, Waivers. The Guarantor agrees that the
Authority at any time and from time to time, without notice to
further consent of the Guarantor, may extend the time for making
any payment due from the Redeveloper to the Authority or the time
for performance by the Redeveloper of any other obligation under
the Agreement, and may also make any agreement with the
Redeveloper for the extension, payment, compromise or discharge
of any payment or other obligation of the Redeveloper under the
Agreement without in any way impairing or affecting this
Guarantee.
33
4. Expenses. The Guarantor agrees to pay on demand all
out -of- pocket expenses (including reasonable fees and expenses of
the Authority's counsel) of the Authority in any way relating to
enforcement or protection of the rights of the Authority hereunder.
5. Continuing Guarantee. This Guarantee is absolute and
unconditional and shall remain in full force and effect and be
binding on the Guarantor, their successors and assigns until all
obligations of the Redeveloper under the Agreement have been
satisfied in full.
6. No Waiver. No failure on the part of the Authority to
exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof; nor shall any.single
or partial waiver of any obligation of Guarantor hereunder
operate as a waiver of any other obligation or preclude any other
or future exercise of any right, remedy and power.
7. Representations and Warranties.
(a) The Guarantor owns 100% of the outstanding shares of
the Redeveloper.
(b) This Guarantee constitutes the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' right and to
general equity principals.
B. Assignment. The Guarantor may not assign its rights,
interests or obligations hereunder to any other persons without
the prior written consent of the Authority.
9. Notices. Except as otherwise expressly provided in the
Agreement, a notice, demand, or other communication under the
Agreement by either party to the other shall be sufficiently
given or delivered if it is dispatched by registered or certified
mail, postage prepaid, return receipt requested, transmitted by
facsimile, delivered by a recognized overnight courier or
delivered personally; and
(a) in the case of the Guarantor, is addressed to or
delivered personally to the mailing or delivery address the
Guarantor will, from time to time, furnish to the Authority. The
Guarantor's current address is as follows:
Jerome J. Myers
112 19th Avenue N.E.
Minneapolis, Minnesota 55418
34
(b) in the case of the Authority, is addressed to or
delivered personally to:
The Housing and Redevelopment Authority
in and for the City of Fridley
6432 University Avenue N.E.
Fridley, Minnesota 55110
Attention: Executive Director
10. Governing Law. This Guarantee shall be governed by,
and construed in accordance with the laws of the State of
Minnesota applicable to contracts made and to be performed within
the State of Minnesota.
IN WITNESS WHEREOF., this Guarantee has been duly executed
and delivered by the Guarantor to the Authority as of the date
first written above.
JEROME J. MYERS
This is a signature page to the Guarantee dated as of this
day of , 1992, by and between the Housing and Redevelopment
Authority In and For the City of Fridley, Minnesota and Jerome J.
Myers.
35
ACCEPTANCE OF GUARANTEE
This Guarantee is accepted as of this day of ,
1992 by the Housing and Redevelopment Authority in and for the
City of Fridley, Minnesota.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Director
This is a signature page to the Guarantee dated as
day of , 1992, by and between the Housing and
Authority In and For the City of Fridley, Minnesota
Myers.
36
of this
Redevelopment
and Jerome J.
ti
SCHEDULE G,'
TED ENCUMBhNCiS
The following shall be permitted encumbrances on the title
to the Redevelopment Property:
(a) Such encumbrances as are mutually agreed to in writing
by the Authority and the Redeveloper.
(b) Governmental regulations, if any affecting the use and
occupance of the Redevelopment Property and Minimum Improvements.
(c) Zoning laws of the City, County an State.
(d) All rights in public highways upon the land.
(e) Reservations to the State, in trust for the tax
districts concerned, of minerals and mineral rights in those
portions of the Redevelopment Property the title to which may
have at any time heretofore been forfeited to the State for
nonpayment of real estate taxes.
(f) The lien of unpaid special assessments, if any, not
presently payable but to be paid as a part of the.annual taxes to
become due.
(g) The lien of unpaid real estate taxes, if any, not
presently payable but to be paid as a part of the annual taxes to
become due.
(h) A Mortgage as permitted under Section 8.2.
.(g) Any Mortgage subordinate to the Authority Mortgage as
permitted under Section 8.2.
19VA