HRA 09/10/1992 - 6374HOUSING AND REDEVELOPMENT AUTHORITY
THURSDAY, SEPTEMBER 10, 1992
7:30 P.M.
William Burns, Executive Director
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 SOUTHWEST QUADRANT . . . . . . . . . . . . . . . . . 8 - 8D
FRIDLEY TOWN SQUARE UPDATE . . . . . . . . . . . . . . . 9
OTHER BUSINESS
ADJOURNMENT
FA
rud
I
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 3, 1992
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 $2 million.
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 Executive Director
development agreement
BD:ls
M -92 -571
the HRA approve the resolution authorizing
and Chairperson of the HRA to execute the
with Sheet Metal Connectors.
612 334 3382 =
C 12 `;4 X82 �� ASSERLl'f lOL %AHNFL I t�T 2 po ZO2 JUN 09'92 1 G : 4C
METAL2 CITY OF FRIDLEY, MINNESOTA 09- Jun -92
---------------------------------__--------------------------------------
PROPOSED METAL CONNECTORS PROJECT - 10 YEAR
LOAN SCHEDULE
BEGINNING
TOTAL
ENDING
BALANCE
PRINCIPAL
INTEREST
PAYMENT
BALANCE
12
/
1992
-----------------------------------------------------
200,000
0
0
0
200,000
6
/
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
2001000
6
/
1995
200,000
10,320
5,000
15,320
189,680
12
/
1995
189,680
10,578
4,742
15,320
179,102
6
/
1996
179,102
10,842
4,478
15,320
168,260
12
/
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
3,352
15,320
122,112
12
/
1998
122,112
12,267
3,053
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
/
2000
71,173
13,540
1,779
15,320
57,633
6
/
2001
57,633
13,879
1,441
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
5,46%
YEARS 1 - 2
NO
INTEREST
YEARS 3 - 10
AMORTIZED
16 SEMI ANNUAL
PAYMENTS
PREPARED BY CASSERLY MOLZAHN & ASSOCIATES
1 -A
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
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
Contract 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 et seg.
2.02. The Authority hereby finds that the Contract
promotes the objectives as outlined in its Redevelopment program.
Section 3. Authorization for Expcuti.on 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.
Chairman
ATTEST:
Executive Director
1C
Casserly Molzahn & Associates, Inc.
215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403
Office (612) 342 -2277 9 Fax (612) 332 -4765
M E M O R A N D U M
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 HRA and MSCJ, Inc. (the "Agreement "). This Agreement
adheres to the concept approved by the HRA 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 will 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 dote on page 28).
.
1D
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
K
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: Distribution List
From: James R. Casserly
Mary E. Molzahn
Date: September,2, 1992
RE: Contract for Private Redevelopment by
Housing and Redevelopment Authority in
of Fridley (the "Authority ") and East
(the "Redeveloper ")
and between the
and for the City
Ranch Estates
Enclosed please find a copy of the Contract for Private
Redevelopment by and between the Housing and Redevelopment
Authority in and for the City of Fridley and East Ranch Estates
(the "Agreement "). The concept behind this Agreement is basic.
The Authority agrees to provide assistance to the Redeveloper for
the costs of site improvements, demolition, disposal, soil
corrections and related costs up to $145,732. If East Ranch
Estates constructs the improvements it has agreed to build, there
will be adequate additional taxes to pay the $145,732 plus
interest at 9.5 %.
The Agreement addresses a problem which we have only briefly
discussed. When a City creates a tax increment district, it
loses a certain amount of its Local Government Aid Assistance
from the State of Minnesota. And, whenever property within that
increment district is developed, a City has certain additional
costs relating to public safety, maintenance, fire protection and
so forth. In Article III of the Agreement (Section 3.5) the
Redeveloper is charged a development fee of $1,002 every six
months commencing February 1, 1994, to assist the City in funding
these additional costs.
Because the Authority is asking the Redeveloper for a development
fee, the Authority is prepared to provide additional TIF
Assistance. As a result, the principal amount of the Revenue
Note is $156,618 (see Schedule D of the Agreement) instead of the
$145,732 discussed originally. The actual Revenue Note payments
are shown on Exhibit 1 to Schedule D of the Agreement.
Attached are four Exhibits which reflect these calculations.
Exhibit 1 illustrates the total amount of tax increment generated
($273,447) and, ultimately, what revenue is available for
Revenue Note. Based on the assumptions listed on the bottom of
the Exhibit, approximately $261,694 is available for principal
and interest payments to the Redeveloper.
Exhibit 2 duplicates the revenue stream available for Revenue
Note Payments from Exhibit 1 and, in addition, provides the
present value of that revenue stream. Assuming a 9.5% present
value rate, the present value of $261,694 is $156,618. This
present value figure also represents the principal amount of the
Revenue Note.
From the revenue stream totalling $261,694, Developer Payments of
$1,002 semi annually are deducted. The result represents the net
amount of assistance available to the Redeveloper, which totals
$243,731 through December, 2002. Over the same period of time,
the present value of this net amount of assistance, also 9.5 %, is
$145,731 - the agreed upon TIF Assistance amount from the
Authority to the Redeveloper.
Exhibit 3 illustrates a sample form of a revenue note based on a
principal amount of $156,618 and payable through December, 2002
at 9.5 %. The Total Payment Column is the same as Exhibit A to
Schedule D which lists the Note Payments.
Exhibit 4 illustrates the impact of the Local Government Aid
(L.G.A.) deductions to the city. The total amount of these
deductions total $19,993 and have a present value, at 5.0%, of
$13,687. The Developer Payment is determined by matching the
present value of the L.G.A. Adjustment ($13,687) with the present
value of the Developer Payment $13,689).
The structure of this Agreement is almost identical to agreements
recently approved by the Authority. If there are any questions
please give us a call.
JRC,MEM /db
enclosures
W
CITY OF FRIDLEY HRA /EAST RANCH ESTATES PROJECT
DISTRIBUTION LIST
City of Fridley HRA
wil iam Burns, City Manager
rbara Dacy, Dev Director
6431 University Ave NE
Fridley, MN 55432
571 -3450
571 -1287 FAX
Development Consultants to HRA
James R. Casserly, Atty at Law
Mary E. Molzahn, Fin Consultant
Casserly Molzahn & Associates, Inc.
215 South 11th Street
Suite 300
Minneapolis, MN 55403
342 -2277
334 -3382 FAX
Redeveloper
Robert H. Schroer
East Ranch Estates
7620 University Ave NE
Fridley, MN 55432
571 -6620
571 -5477 FAX
Attorney to Redeveloper
David P. Newman, Atty at Law
Nedegaard Construction
1814 Northdale Boulevard
Coon Rapids, MN 55433
757 -2926
757 -0649 FAX
EXHIBIT 1
6064 CITY OF FRIDLEY, MINNESOTA
SCHEDULE I:
CASSERLY MOLZAHN & ASSOCIATES
2 -C
02- Sep-92
ORIGINAL
ESTIMATED
CAPTURED
ESTIMATED
LESS:
[.....AVAILABLE
TAX INCREMENT......]
/ OF PERIOD
TAX
TAX
TAX
TAX
ADMIN
TOTAL AVAILABLE
AVAILABLE
YEARS ENDING
-------------------------------------------------------------------------------------------------------------------
CAPACITY
CAPACITY
CAPACITY
INCREMENT
EXPENSES
AVAILABLE FOR CITY
FOR NOTE
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
1.0 12 / 1992
25,254
25,254
0
0
0
0
0
0
1.5 6/ 1993
25,254
43,315
0
0
0
0
0
0
2.0 12 / 1993
25,254
43,315
0
0
0
0
0
0
2.5 6 / 1994
25,254
59,875
18,061
9,300
930
8,370
0
8,370
3.0 12 / 1994
25,254
59,875
18,061
9,300
930
8,370
0
8,370
3.5 6 / 1995
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
4.0 12 / 1995
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
4.5 6 / 1996
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
5.0 12 / 1996
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
5.5 6 / 1997
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
6.0 12 / 1997
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
6.5 6 / 1998
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
7.0 12 / 1998
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
7.5 6 / 1999
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
8.0 12 / 1999
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
8.5 6 J 2000
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
9.0 12 / 2000
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
9.5 6 / 2001
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
10.0 12 / 2001
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
10.5 6 / 2002
25,254
59,875
34,621
17,827
1,783
16,044
0
16,044
11.0 12 / 2002
-------------------------------------------------------------------------------------------------------------------
25,254
59,875
34,621
17,827
1,783
16,044
11,753
4,291
303,831
30,383
273,447
11,753
261,694
ORIGINAL MARKET VALUE
566,400
TOTAL CONSTRUCTION COSTS
1,285,635
ORIGINAL TAX CAPACITY
25,254
1992 - BOBS
835,635
11- 30 -24 -22 -0020
VACANT LAND
67,100
3,187
1993 -
LYNDALE GARDEN
450,000
11- 30 -24 -22 -0018
LAND /BLDG
468,200
20,590
ESTIMATED
MARKET VALUE - BUILDING
02- 30 -24 -33 -0026
VACANT LAND
31,100
1,477
CONST
1992; PAY 1994
668,508
CERTIFIED TAX CAPACITY
RATE
1.02984
CONST
1993; PAY 1995
360,000
INFLATION
(PAY 1996)
0.002
1991 MARKET VALUE - LAND
307,900
ADMIN EXPENSES
10.002
TOTAL ESTIMATED
MARKET VALUE
PRESENT VALUE RATE
(12/92)
9.502
CONST
1992; PAY 1994
976,408
CONST
1993; PAY 1995
1,336,408
ESTIMATED TAX CAPACITY
BOB'S PRODUCE
18,000
CONST
1992; PAY 1994
43,315
LYNDALE GARDEN STORE
15,000
CONST
1993; PAY 1995
59,875
TOTAL SQUARE FEET
33,000
TOTAL ESTIMATED
TAXES
CONST
1992; PAY 1994
44,607
CONST
1993; PAY 1995
61,661
TIF ASSISTANCE
145,732
ESTIMATED TAXES /SQUARE FOOT
CONST
1992; PAY 1994
2,48
CONST
1993; PAY 1995
1.87
CASSERLY MOLZAHN & ASSOCIATES
2 -C
02- Sep-92
BOB4
SCHEDULE II:
EXHIBIT 2
CITY OF FRIDLEY, MINNESOTA
CASSERLY MOLZAHN & ASSOCIATES
2 -D
02- Sep -92
REVENUE
[PV OF GROSS REVENUE NOTE]
LESS:
NET
[.PV OF NET
REVENUE NOTE.]
OF
PERIOD
NOTE
SEMI ANNUAL
CUMULATIVE
DEVELOPER
REVENUE
SEMI ANNUAL
CUMULATIVE
YEARS
--------------------------------------------------------------------------------------------------------------------
ENDING
PAYMENT
BALANCE
BALANCE
PAYMENT
NOTE
BALANCE
BALANCE
0.0
12
/ 1991
0
0
0
0
0
0
0
0.5
6/
1992
0
0
0
0
0
0
0
1.0
12
/ 1992
0
0
0
0
0
0
0
1.5
6/
1993
0
0
0
0
0
0
0
2.0
12
/ 1993
0
0
0
0
0
0
0
2.5
6
/ 1994
8,370
7,282
7,282
1,002
7,368
6,410
6,410
3.0
12
/ 1994
8,370
6,952
14,234
1,002
7,368
6,120
12,530
3.5
6
/ 1995
16,044
12,722
26,956
1,002
15,042
11,927
24,457
4.0
12
/ 1995
16,044
12,145
39,101
1,002
15,042
11,386
35,844
4.5
6
/ 1996
16,044
11,594
50,695
1,002
15,042
10,870
46,714
5.0
12
/ 1996
16,044
11,068
61,763
1,002
15,042
10,377
57,091
5.5
6
/ 1997
16,044
10,567
72,330
1,002
15,042
9,907
66,998
6.0
12
/ 1997
16,044
10,087
82,417
1,002
15,042
9,457
76,455
6.5
6
/ 1998
16,044
9,630
92,047
1,002
15,042
9,029
85,484
7.0
12
/ 1998
16,044
9,193
101,241
1,002
15,042
8,619
94,103
7.5
6
/ 1999
16,044
8,776
110,017
1,002
15,042
8,228
102,331
8.0
12
/ 1999
16,044
8,378
118,395
1,002
15,042
7,855
110,186
8.5
6
/ 2000
16,044
7,998
126,394
1,002
15,042
7,499
117,685
9.0
12
/ 2000
16,044
7,636
134,030
1,002
15,042
7,159
124,844
9.5
6
/ 2001
16,044
7,290
141,319
1,002
15,042
6,834
131,678
10.0
12
/ 2001
16,044
6,959
148,278
1,002
15,042
6,524
138,203
10.5
6
/ 2002
16,044
6,643
154,922
1,002
15,042
6,229
144,431
11.0
--------------------------------------------------------------------------------------------------------------------
12
/ 2002
4,291
1,696
156,618
1,002
3,289
1,300
145,731
261,694
156,618
156,618
18,036
243,658
145,731
145,731
CASSERLY MOLZAHN & ASSOCIATES
2 -D
02- Sep -92
BOB4
EXHIBIT 3
CITY OF FRIDLEY, MINNESOTA
SCHEDULE IV:
-------------------------------------------------------------------------------
PERIOD
BEGINNING
ACCRUED
TOTAL
- - - - --
ENDING
ENDING
-------------------------------------------------------------------------------------
BALANCE
INTEREST
PRINCIPAL
INTEREST
PAYMENT
BALANCE
12
/ 1991
156,618
0
0
0
0
156,618
6/
1992
156,618
0
0
0
0
156,618
12
/ 1992
156,618
0
0
0
0
156,618
6
/ 1993
156.618
7,439
0
0
0
164,057
12
/ 1993
164,057
7,793
0
0
0
171,850
6
/ 1994
171,850
207
8,163
8,370
171,643
12
/ 1994
171,643
217
8,153
8,370
171.426
6
/ 1995
171,426
7,901
8,143
16,044
163,525
12
/ 1995
163,525
8,277
7,767
16,044
155,248
6
/ 1996
155,248
8,670
7,374
16,044
146,578
12
/ 1996
146,578
9,082
6,962
16,044
137,496
6
/ 1997
137,496
9,513
6,531
16,044
127,983
12
/ 1997
127,983
9,965
6,079
16,044
118,018
6
/ 1998
118,018
10,438
5,606
16,044
107,579
12
/ 1998
107,579
10,934
5,110
16,044
96,645
6
/ 1999
96,645
11,454
4,591
16,044
85,192
12
/ 1999
85,192
11,998
4,047
16,044
73,194
6
/ 2000
73,194
12,568
3,477
16,044
60,626
12
/ 2000
60,626
13,164
2,880
16,044
47,462
6
/ 2001
47,462
13,790
2,254
16,044
33,672
12
/ 2001
33,672
14,445
1,599
16,044
19,227
6
/ 2002
19,227
15,131
913
16,044
4,096
12
-------------------------------------------------------------------------------------
/ 2002
4,096
4,096
195
4,291
(0)
15,232
171,850
89,844
261,694
REVENUE NOTE
RATE
9.50%
CASSERLY MOLZAHN & ASSOCIATES
2 -E
02- Sep -92
BOB4
SCHEDULE III:
EXHIBIT 4
CITY OF FRIDLEY, MINNESOTA
PRESENT VALUE RATE 5.00%
CASSERLY MOLZAHN & ASSOCIATES
2 -F
02- Sep -92
PRESENT VALUE ANALYSIS
PRESENT VALUE ANALYSIS
i OF
PERIOD
L.G.A.
SEMIANNUAL CUMULATIVE
DEVELOPER
SEMIANNUAL CUMULATIVE
YEARS
-------------------------------------------------------------------------------------------------
ENDING
ADJUSTMENT
BALANCE
BALANCE
PAYMENT
BALANCE
BALANCE
0.0
12
/ 1991
0
0
0
0
0
0
0.5
6/
1992
0
0
0
0
0
0
1.0
12
/ 1992
0
0
0
0
0
0
1.5
6/
1993
0
0
0
0
0
0
2.0
12
/ 1993
0
0
0
0
0
0
2.5
6
/ 1994
0
0
0
1,002
930
930
3.0
12
/ 1994
0
0
0
1,002
908
1,838
3.5
6
/ 1995
0
0
0
1,002
886
2,724
4.0
12
/ 1995
0
0
0
1,002
864
3,588
4.5
6
/ 1996
357
300
300
1,002
843
4,431
5.0
12
/ 1996
357
293
593
1,002
822
5,253
5.5
6
/ 1997
714
572
1,165
1,002
802
6,056
6.0
12
/ 1997
714
558
1,723
1,002
783
6,838
6.5
6
/ 1998
1,071
816
2,539
1,002
764
7,602
7.0
12
/ 1998
1,071
796
3,336
1,002
745
8,347
7.5
6
/ 1999
1,428
1,036
4,372
1,002
727
9,074
8.0
12
/ 1999
1,428
1,011
5,382
1,002
709
9,783
8.5
6
/ 2000
1,785
1,233
6,615
1,002
692
10,475
9.0
12
/ 2000
1,785
1,203
7,817
1,002
675
11,150
9.5
6
/ 2001
2,142
1,408
9,225
1,002
659
11,808
10.0
12
/ 2001
2,142
1,373
10,599
1,002
642
12,451
10.5
6
/ 2002
2,499
1,563
12,162
1,002
627
13,078
11.0
-------------------------------------------------------------------------------------------------
12
/ 2002
2,499
1,525
13,687
1,002
611
13,689
19,993
13,687
13,687
18,036
13,689
13,689
PRESENT VALUE RATE 5.00%
CASSERLY MOLZAHN & ASSOCIATES
2 -F
02- Sep -92
2 -G
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
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 EAST
RANCH ESTATES.
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 Contract For Private Redevelopment (the "Contract ") with East
Ranch Estates (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 et seq.
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.
1
Adopted by the Board of Commissioners of the Authority this
day of , 1992,
Chairman
ATTEST:
Executive Director
2. fl
a° 0
a
Community Development Department
HOVsiNG AND REDEVELOPMENT AUTHORITY
City of Fridley
VATS: September 3, 1992
TO: 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
i
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 130 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.
3 -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. We have
identified two more abandoned homes which could be acquired
since the City Council meeting. Initial authorization to
proceed this year on two of these properties is requested.
Estimated total cost is less than $100,000.
3 -B
Housing Programs Memo
Page - 3
Those lots to be acquired will need to be incorporated into
the redevelopment project area. The appropriate hearings will
be scheduled as needed.
If there are only two or three properties acquired a year, a
consultant may not need to be hired. However, an aggressive
acquisition program may dictate the need for outside help.
In any case, we will develop a ranking system of properties
to acquire and review our recommendations with the City
Council and HRA on an annual basis.
3. Actively pursue MHFA programs.
Sinale 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
3 -C
Housing Programs Memo
Page - 4
later.
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
At the City Council meeting on July 27, 1992, we reviewed a
general outline of how Fridley would create a rehab program
for single family homes. In essence, area lenders would be
asked to make rehabilitating loans under general guidelines
dictated by the HRA to Fridley residents. The lenders,
though, would have a previous agreement with the Federal
National Mortgage Association (FNMA) to buy the loans once
construction is completed. The City Council liked the concept
and asked us to pursue it. They also asked us to pursue some
type of grant program for low income elderly persons and to
find a mechanism to recover that grant upon sale of the
property.
Since the Council meeting, we have asked Fay Wegner of Miller
Schroeder Financial, Inc., to assist us in developing a
program. She has worked extensively with Minneapolis and St.
Paul to develop their programs, as well as with area lenders.
She has put together information for us on both programs. We
are currently evaluating both in an attempt to take the best
from both worlds and create our own program.
We have done a lot of research and Fay seems to be very
qualified to help us on, this complicated topic. At a future
meeting, we will recommend that the HRA retain Miller
Schroeder to help us define the program, meet with lending
institutions, and complete the necessary work to establish a
3-D
Housing Programs Memo
Page - 5
program. We are in the process of negotiating the terms of
a consultant contract.
There are a number of financing options using the FNMA guide-
lines. Bill Burns has written a summary memo of the current
programs in St. Paul and Minneapolis (enclosed at end of this
memo) . We believe annual costs to the HRA will probably range
between $150, 000 to $200, 000.
Multiple Family
MHFA funding for programs for rental properties is not as
plentiful as it was earlier in the decade. Futther, 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.
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.
3 -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.
3 -F
Housing Programs Memo
Page - 7
F. The City should make sure that public improvements, such
as repaying 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.
XG
Housing Programs Memo
Page - 8
Estimated Costs and Proposed Implementation
We have prepared a matrix showing the costs of the primary programs
and a potential implementation timeframe. Also identified is
whether the cost would be borne by the HRA or by the City.
Summary of Future Issues
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
3 -H
Housing Programs Memo
Page - 9
computer system), and how is information coordinated?
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 Budaet Imnact
In last month's agenda, we had developed a chart to analyze the
impact of about $500,000 a year. Since then, we have made further
refinements. We will present the revised analysis at the meeting.
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.
3.1
Housing Programs Memo
Page - 10
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 /ls
M -92 -572
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Proposed Costs and Implementation of Secondary Strategies 3'K
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
$30,000
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
$5,000
53,500
MEMORANDUM 3 -L
Municipal Center
1 7j 6431 University Avenue N.E. Office of the City Manager
Fridley, MN 55432
William W. Burns
CITYOF (612) 571 -3450
FWDLEY
TO: File
FROM: William W. Burns, City Manage
DATE: August 19, 1992 0
SUBJECT: Housing Programs
On Tuesday, August 18, 1992, from 2:00 p.m. to 4:30 p.m., Barbara Dacy and I met
with Fay Wegner and Brad Wirt of Miller & Schroeder Financial, Inc. The
meeting lasted until 4:30 p.m.
Fay . outlined a list of Fannie Mae closing costs, which included:
1. An origination fee of 1 to 1.5 percent and title insurance, which is
based on the size of the loan. If the loan was $100,000, title insurance
would be $450.
2. $50 for assessment and title searches.
3. Hazard insurance for fire and theft when a purchase is involved.
4. Recording fees of $30.
5. Right now, there are no points at 8 1/8 percent.
6. PMI insurance would be required if the loan devalue ratio was higher
than 80 percent.
7. Appraisal fees of about $350.
8. Typically, closing costs run about 2 percent of the mortgage.
Fay described the Minneapolis and St. Paul programs. Under the Minneapolis
program, the City of Minneapolis will pay 2 percent on purchase loans and 5
percent on purchase rehab loans.or refinancing rehab loans. They will also pay 5
percent on home improvement loans. The amount of the City's participation is
payable at the end of 30 years, when the home is sold, or if the borrower no longer
occupies the house. The term of the loan is 15 years for home improvements, and
15, 20 or 30 years for the other options.
3 -M
Housing Programs
August 20, 1992
Page Two
St. Paul underwrites a 7.55 percent interest rate for purchases or purchase rehab
projects, or refinancing rehab projects. The term of the loan is 30 years, and may
range from $20,000 to $180,000. For home improvement projects or second
mortgage projects, the interest rate is 7.75 percent, and the loan runs for 15 years.
The value of the loan may range from $5,000 to $60,000. The interest rate is fixed
for only three years.
We also talked about which program is better. Fay felt that the best program
allowed the banks to stay as close to their normal process as possible. She seemed
to like the Minneapolis program better because of its flexibility. She also pointed
out that the refinancing option is a very attractive option right now because of the
low interest rates on refinancing home mortgages.
If the purchase or rehab loan is sold to Fannie Mae, Fannie Mae requires an
appraisal on the house, and the Fannie Mae appraiser also has to be given a scope
of work description. The appraiser then computes what the "after" appraisal value
of the property is likely to be. When the work is done, the appraiser inspects the
work to make sure that the house is really worth what it is supposed to be. The
appraiser may do interim inspections if interim draws are needed (i.e., for electrical
work). Alternatively, the escrow agent for the bank and Fannie Mae will let the
City do the inspections.
The Minneapolis program works as follows:
1. The borrower applies for the loan with the lender.
2. Once the lender has approved the loan, the lender sends the payment
form to the City of Minneapolis two weeks before the closing on the
property.
3. A copy of the loan application, the property appraisal, and the
mortgage submission voucher (guarantees that the loan is in
accordance with the City's program guidelines) is submitted. A
buyer /seller information sheet is also required (includes information
such as where the borrower lives, where the buyer lived previously,
race, number of children, occupation, and other demographic data).
4. Minneapolis requires that the work be done by an approved list of
licensed and bonded contractors.
3 -N
Housing Programs
August 20, 1992
Page Three
5. Minneapolis will send a program inspector out at the time an
application is applied for if the scope of the work warrants it. For
smaller projects, an inspector is not sent. The inspector makes sure
that the loan money is being used to address housing maintenance
code violations.
6. Minneapolis also has rehab inspectors who conduct the inspections on
rehab work.
7. The maximum amount of the loan under the Minneapolis program is
$168,000. The minimum amount is $15,000.
8. Minneapolis is generous in allowing a variety of improvements. They
do allow jacuzzis, but not swimming pools. They allow decks, garages,
attachments, but not sheds.
9. Eligible recipients in Minneapolis include those with household
incomes of $89,000 or less. In addition, the $89,000 may be $750
higher for each adult in the family, and $500. higher for each child. In
the St. Paul program household income can be $96,000.
10. Under Fannie Mae, the loans can apply to duplexes, triplexes or
fourplexes, if one of the units is owner occupied.
11. In Minneapolis, the house may not have a value higher than $168,000;
in St. Paul, $190,000.
12. Minneapolis has a special credit standard that they have negotiated
with the banks and Fannie Mae.. Normally, the lending institutions use
a 33/38 credit standard. That is, the PITI can be no higher than 33
percent of the family's gross income, and PITI plus long -term debt may
be no higher than 38 percent of the family's gross income.
Minneapolis raised that to a 36/41 standard.
13. Fay will get me a list of eligible improvements for both programs.
We also discussed advertising. Fay suggested that we use utility bills, local papers,
contractor contacts (including meetings with contractors), and the City newsletter
and videotape to advertise our program.
Housing Programs
August 20, 1992
Page Four
! 3 -O
We also spoke about things that needed to be done. We need a contract with the
banks we are going to use for a loan program. We also need to have a contract
with whoever is servicing the loan (the bank or satellite organization, usually a
mortgage company). We need a housing maintenance code. Fay will get back to
me by Friday with a list of things to do, as well as with information from the
Minneapolis and St. Paul programs.
Finally, I asked Fay to think about what we might do for people who do not qualify
for either the MIFA or our loan program. She suggested that we do something
similar to St. Paul's home to ownership program. We should be doing some further
thinking on that topic.
WWB:rsc
cc: Barbara Dacy, Community Development Director
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TO: FRIDLEY H.R.A.
FROM: CITY OF FRIDLEY
RE: BILLING FOR OPERATING EXPENSES FOR AUGUST, 1992
AND AUGUST 1992 ADMINISTRATIVE EXPENSES
ADMINISTRATIVE BILLING:
AUGUST ADMINISTRATIVE PERSONAL SERVICES 13,631.00
AUGUST ADMINISTRATIVE OVERHEAD 252.25
TOTAL ADMINISTRATIVE BILLING 13,883.25
AUGUST OPERATING EXPENSES:
POSTAGE
21.37
PARKING
3.50
AIRFARE TO WASH DC - BURNS
203.00
SEMI ANNUAL - COPIER ALLOCATION
298.49
COPIES - REDUCTIONS
11.41
INSURANCE ALLOCATION - AUGUST
929.00
INSURANCE ALLOCATION - JULY
929.00
REGISTRATION NAT DEVELOP COUNCIL - BURNS
625.50
JULY MANAGEMENT FEE - KORDIAK
196.97
INSURANCE ALLOCATION - AUGUST
40.00
INSURANCE ALLOCATION - JULY
40.00
NSP - RICE CREEK PLAZA
165.43
MINNEGASCO - RICE CREEK PLAZA
11.06
UTILITY BILLING - RICE CREEK PLAZA
241.03
MINNEGASCO - RICE CREEK PLAZA
8.82
STRIP/WAX FLOOR - RICE CREEK PLAZA
75.00
INSURANCE ALLOCATION - AUGUST
52.00
INSURANCE ALLOCATION - JULY
52.00
NSP - LAKE POINTE
71.23
MCGLYNN - GLEN CREEK POND
10.50
MCGLYNN - GLEN CREEK POND
1,857.24
TOTAL OPERATING EXPENSES FOR AUGUST 5,842.55
TOTAL EXPENDITURES 19,725.80
5
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
JULY ADMINISTRATIVE OVERHEAD
13,631.00
252.25
TOTAL ADMINISTRATIVE BILLING 13,883.25
JULY OPERATING EXPENSES:
ADVERTISING - FOCUS NEWSPAPER
125.29
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. G1,�71
BERNARD L. S I I PEN
RICH ARDA_AfLkMI-L
f-TTRTC. HYNES
RICEIARI)A. hFFNS
RONAI_I713 1111 1\S,)N
1)ARRF1_1 A. J1 N <EN
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RUSSELL H_ (T) \VDFR
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LA \C KI NCE: R. k01 INSON
DAVIT) A. COJSI
TI R)M.AS P. MALONE
MICHAEL F- HURLEY
SHARON L. HALL
July 1, 1992
5
VIRCIL C. 1 IERRICK
HERMAN L. TAI Lf
THOMAS L. Ik)NtOV'VN
J PA�AfE -A A4. HARRIS
1iARLFS M. SEYKt >RA
Barna Guz & Steffen Ltd. DINT HANFN
� DANIEL I). G.ANTLR, JR.
BEVERLY K. DOIX;L
ATTORNEYS AT LAW GKEGG V I IEIt1,1( :K
400 Northtown Financial Plaza JAMES u. HOEFT
JOAN M. QUADF
200 Coon Rapids BOUlewf"d SCOTT M. LEPAK
Minneapolis, MN 55433 STEVEN L. MACKEY
OF COUNSEL
(612) 780 -8500 FAX (612) 780 -1777 PETER BAKNA
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
3059 Ccntr i Accnuc NF 4C3 Jaek,nn tinecr
Lifnncaholis, MN 5,421 An(,ka, MN 55303
An Lyual C)hp munit) I1n1'low,
5 -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,
names D. Hoeft
JDH:jjh
Enclosure
5 -B
THIRD AMENDMENT TO LEASEHOLD AGREEMENT
AND
FIRST AMENDMENT TO MEMORANDUM OF LEASEHOLD AGREEMENT
�- f 6 �
J This Amendment, entered into this day of
1992, by and between THE HOUSING AND
R 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:
5 -C
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 CITY F FRIDL MII ESOTA
EY:� �
Lawrence R. Commers
Its Chairman
BY:
William W. Burns
Its Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this
day of [ (�2u_ .a�� , 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.
:< 111 111, 111 IL1IILIILIjA"AXUUA"A.U1
®ROBERTA COg
.t' NOTAAYPU6L►C•y
ANOKA co Ary Cann, E�. OmY�
5 -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 & STEFFEN, LTD. (JDH)
400 Northtown Financial Plaza
200 Coon Rapids Boulevard
Minneapolis, MN 55433 -5894
(612) 780 -8500
r �
L
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September. 4, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Impact of Rapit Printing Lease Termination on
Rice Plaza Operation
In the last agenda packet, I included the copy of Rapit Printing's
notice to vacate its tenant space at Rice Plaza effective October
1, 1992. Jim Kordiak does not believe we will be successful in re-
leasing the space unless we improve the appearance of the building.
He recommends we strongly consider demolition.
Because we will be minus Rapit Printing's income for only three
months, the HRA will probably break even this year. Next year,
however, will be a different story. I will prepare a revised
income and expenses analysis prior to next Thursday's meeting.
Of the remaining four tenants, three of them have month -to -month
lease arrangements. Hong Kong Kitchen has a lease in place until
October 1993. Hong Kong Kitchen, however, has apparently been
approached by the management of Holly Center to move their
facilities. If we were to demolish in 1993, we would simply give
a 30 day notice to the month -to -month tenants. If Hong Kong
Kitchen does not break its lease first, we would potentially be
obligated to assist Hong Kong Kitchen in relocating. Further, I
had previously estimated demolition costs of about $25,000 (based
on a demolition contractor's estimate).
Again, I will have an expense and revenue analysis for 1993 prior
to the meeting, as well as list of carrying costs for the property
if we were to demolish the building.
BD:ls
M -92 -575
July 31, 1992
Mr. William Burns
HRA Director
6431 University Ave. NE
Fridley, MN 55432
Re: 250 Mississippi St. NE Lease
Dear Mr. Burns:
6 -A
AUG 0 3 199L
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.
Si�ncerely,,��j
V 7
Raymond Holloway Jr.
Vice President
RHJ /clb
1415 -1 ST AVENUE N.W. - NEW BRIGHTON, MINNESOTA 55112 - 633 -4600
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1992 RICE PLAZA OPTIONS
EXISTING STATUS:
1. Eight rental days
2. Three vacant; five occupied
3. One of five on a lease to 10/31/93; remainder on
month -to -month
4. Balance of revenues - Expenditures since Aug. 1,
1990, (acquisition) through Dec. 31, 199fi,
equals $47,021.14
THREE OPTIONS:
1. Existing status, with tenant improvements
2. Demolish 3/1/92
3. Gradual phase -out * Chosen option in 1992
1993 RICE PLAZA OPTIONS
CURRENT STATUS:
1. Eight rental bays
2. Five vacant; three occupied on 10/1/92
3. One of three on lease to 10/31/93; remainder on
month -to -month basis
4. As of 12/31/91; revenues - expenditures =
$471021.00.
Projected to 12/31/92; revenues - expenditures
_ $9,598.00.
5. Projected 1993; revenues - expenditures = -
$165099.
EXPENDITURES
1. Kordiak
mgmt. fee
2. Real estate
taxes
3. Insurance
4. Maintenance
expenses
Kordiak
5. City expenses
(mow, repair,
plow)
6. Tenant
improvements
7. Relocation
8. Demolition
TOTALS
#1 #2
Current tenants Demolish
w /improvements 1993
#3
Gradual
Phase -out
$ 3,300
$ 550
$ 3,300
27,584
29,119
29,119
4,000
667
4,000
10,000
2,050
4,000
4,000
2,500
4,000
(mow,plow)
10,000
-0-
-0-
(Norge Village)
5,000
(general)
-0-
40,000
-0-
(1 tenant to
break lease)
-0-
25,000
-0-
$63,884
$99,886
$44,419
CARRYING COSTS AFTER DEMOLITION
Taxes $18,000
Mow /plow 2,500
$20,500
$28,320
- 44,419
$16,099
FINDINGS:
1. Without spending about $151000 in building
improvements to be competitive with other centers,
Kordiak believes we will not lease any more space.
2. Fridley Town Square redevelopment could take
remaining tenants.
3. Holly Center has approached Hong Kong Kitchen.
4. HRA could terminate two of these leases with a 30 day
notice.
5. HRA would be responsible for relocation costs if
lease is broken with Hong Kong Kitchen.
RECOMMENDATION:
1. Determine if any of the tenants can be relocated in
Fridley Town Square.
2. If not, identify demolition date - possibly prior to
Mississippi Street reconstruction next spring.
3. Meet with tenants, issue notices to vacate by end of
1992.
4. 1993 Budget should include:
a. Cost to relocate $40,000 ?
b. Cost to demolish $25,000
C. Cost to maintain $20,500
$85,500
r9
r �
Community Development Department
PLANNING DIVISION
City of Fridley
DATE: July 31, 1992
TO: William Burns, City Manager
FROM: /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
6 C% Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 3, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Temporary Signage Request for Southwest Quadrant
At its conference meeting on August 31, 1991, the City Council
reviewed the attached memo. The Council requested that the signage
directing traffic to businesses in the southwest quadrant during
reconstruction of Mississippi Street be installed this fall and
should remain until the completion of the street reconstruction.
It should not remain until redevelopment of the southwest quadrant.
Anoka County has advised us that the street reconstruction will
occur next spring. There may be installation of underground
utilities this fall. The Council also indicated that the sign
costs should be part of the costs that the City pays Anoka County
for the street improvement project.
No action is needed by the HRA on this item.
BD:ls
M -92 -573
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VA
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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 King 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.
9V
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.
Sign 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
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Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 3, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Status of Redevelopment of Fridley Town Square
Scott Ericson has advised us that Norma Swanson of Theisen
Partnership, owner of the 10,000 Auto Parts property, and the two
single family owners are close to executing a purchase agreement.
Ericson stated that he has found a private financial source to
complete the Fridley Town Square project all in one phase, 28,000
sq. ft., as originally approved by the City Council. While we do
not have written confirmation, we believe that he has an agreement
with the Burger King franchise owner in Fridley. It is Ericson's
hope to purchase all the properties within 90 days and then begin
construction next spring.
Another developer by the name of Lowell Wagner was interested in
the property. He apparently had an agreement with Don Fitch of
the Dairy Queen, and they also submitted an offer to the property
owners. It appears, however, that the property owners are going
to execute the deal with Ericson.
Ericson has agreed to provide us with monies to have Jim Casserly
review a revised proforma and to bring the concept of assistance
back to the HRA for review. If approved by the HRA, a development
contract would be scheduled for HRA approval.
BD:ls
M -92 -570
Draft of July 1, 1992 including changes of August 6, 1992
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY, MINNESOTA
And
MSCJ, Inc.
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
16
Section
7.8
Expiration
16
Section
7.9
Provisions Surviving Rescission
20
SCHEDULE
A
or Expiration
16
ARTICLE VIII
Mortgage Financing
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 ,
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 MSCJ,
Inc., 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 seq. (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 sec.
"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
$2,000,000.
"Minnesota Environmental
located at Minnesota Statutes,
amended.
"Minnesota Environmental
located at Minnesota Statutes,
amended.
Policy Act" means the statutes
Sections 116D.01 et seq., as
Rights Act" means the statutes
Sections 116B.01 et seq., 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 seq., 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 MSCJ, Inc., 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.
5
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.
0
(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.
7
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.
i
(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.
X
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
or if the Redeveloper shall consent to or acquiesce in such
appointment.
Section 5.2 Remedies on Default. Whenever any Event of
Default referred to in Section 5.1 occurs and is continuing, the
Authority, as specified below, may take any one or more of the
following actions after providing thirty (30) days' written
notice to the Redeveloper, but only if the Event of Default has
not been cured within said thirty (30) days.
(a) The Authority may suspend its performance under this
Agreement until it receives assurances from the Redeveloper,
deemed adequate by the Authority, that the Redeveloper will cure
its default and continue its performance under this Agreement.
(b) The Authority may cancel and rescind the-Agreement.
(c) Withhold the Certificate of Completion.
Section 5.3 No Remedy Exclusive. No remedy herein conferred
upon or reserved to the Authority is intended to be exclusive of
any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission
to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient.
Section 5.4 No Implied Waiver. In the event any agreement
contained in this Agreement should be breached by any party and
thereafter waived by any other party, such waiver shall be
limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent
breach hereunder.
Section 5.5 Agreement to Pay_ Attorney's Fees and Expenses.
Whenever any Event of Default occurs and the Authority shall
employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or
performance or observance of any obligation or agreement on the
part of the Redeveloper herein contained, the Redeveloper agrees
that it shall, on demand therefor, pay to the Authority the
reasonable fees of such attorneys and such other expenses so
incurred by the Authority.
13
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 date of
expiration as provided in Article VII, 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 which shall not be unreasonably
withheld 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:
MSCJ, Inc.
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 Governing. 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 financing of the 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; Copy 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
W-1
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
Lo
And by
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
Its Chairman
Its Executive Director
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 J, by and between the Housing and
Redevelopment Authority In and For the City of Fridley, Minnesota
and MSCJ, Inc.
20
STATE OF MINNESOTA
)ss
COUNTY OF
MSCJ, INC.
By
Its
By
Its
On this day of , 199_ before me, a
notary public within and for County, personally appeared
and , the
and , respectively, of
MSCJ, Inc., a Minnesota corporation, and acknowledged the
foregoing instrument on behalf of said corporation.
This is a signature pag
of
Redevelopment Authority
and MSCJ, Inc.
Notary Public
to the Redevelopment Agreement dated as
_, by and between the Housing and
In and For the City of Fridley, Minnesota
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 MSCJ, Inc., a 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 (5g) 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 be payable at the Fridley Housing
and Redevelopment Authority, 6432 University Avenue N.E.,
Fridley, Minnesota, 55432 or such other place as the Note Holder
may designate.
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.
Krol
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:
MSCJ, Inc.
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
MSCJ, INC.
By
Its
By
Its
27
Exhibit A
Payment Schedule
August 1,
1995
15,320
February
1, 1996
15,320
August 1,
1996
15,320
February
1, 1997
15,320
August 1,
1997
15,320
February
1, 1998
15,320
August 1,
1998
15,320
February
1, 1999
15,320
August 1,
1999
15,320
February
1, 2000
15,320
August 1,
2000
15,320
February
1, 2001
15,320
August 1,
2001
15,320
February
1, 2002
15,320
August 1,
2002
15,320
February
1, 2003
15,320
SCHEDULE E
AUTHORITY MORTGAGE
This Indenture, made this day of ,
between MSCJ, Inc., 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 MSCJ, Inc.
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:
Those encumbrances of record as of
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 null and 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
Jerome J. Myers or Sheet Metal Connectors, Inc. the Guarantor
under the Guarantee Agreement as provided for in the Agreement;
or the property may be transferred to the heirs of Jerome J.
Myers in the event of his death.
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
31
purchaser in fee simple in accordance with the statute, and out
of the moneys arising from such sale to retain all sums secured
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.
MSCJ, INC.
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
MSCJ, Inc., 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 and Sheet Metal Connectors,
Inc., a Minnesota corporation (collectively 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 MSCJ,
Inc. (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.
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(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
SHEET METAL CONNECTORS, INC.
By
Its
By
Its
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, Jerome J. Myers and Sheet Metal Connectors, Inc.
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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
And by
This is a signature page to
day of , 1992, by
Redevelopment Authority In
Minnesota, Jerome J. Myers
Its Chairman
Its Director
the Guarantee dated as of this
and between the Housing and
and For the City of Fridley,
and Sheet Metal Connectors, Inc.
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SCHEDULE G
PERMITTED ENCUMBRANCES
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.
(i) Any Mortgage subordinate to the Authority Mortgage as
permitted under Section 8.2.
(j) Unrecorded permit in favor of Northwestern Bell
Telephone Company dated March 9, 1987.
(k) Encumbrances of record as of May 14, 1992.
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