Loading...
HRA 12/01/2005 - 6205CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING Thursday, December 1, 2005, 7:30 P.M. AGENDA LOCATION: Council Chambers (upper level) CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: November 3, 2005 CONSENT AGENDA: ConsiderClaims & Expenses .............................................................. ..............................1 ACTION: Review and Approval of Draft Budget for 2006 ....................................... ..............................2 Review & Approve Draft Development Agreement with Blue Print Homes ..... ..............................3 INFORMATIONAL ITEMS: Islandsof Peace Update .................................................................... ..............................4 MonthlyHousing Report ...................................................................... ..............................5 ADJOURNMENT: CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION NOVEMBER 3RD, 2005 CALL TO ORDER Chairperson Schnabel called the Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL Members Present: John Meyer Pat Gabel Virginia Schnabel William Holm Others Present: Paul Bolin, Assistant HRA Director Richard Pribyl, Finance Director/ Treasurer APPROVE HRA COMMISSION MEETING MINUTES — October 6, 2005 APPROVE SPECIAL MEETING MINUTES - October 18 2005 MOTION by Commissioner Holm, seconded by Commissioner Gable, to approve the minutes as presented. Chairperson Schnabel asked if anyone had any corrections on the minutes from the October 6, 2005 meeting or October 18, 2005 meeting. Commissioner Holm noted that on page six, under Mr. Bolin's first paragraph, second bullet point, the time should be changed from 5:00 a.m. to 5:00 p.m., and throughout both minutes (October 6 and October 18) to change Commissioner Burns to Mr. Burns. Chairperson Schnabel asked that on page 7, Mr. Bolin's first comment should say "Mr. Bolin stated" rather than "Mr. Bolin inquired ", and on page 8, Commissioner Schnabel's comment should read "Commissioner Schnabel questioned if a buffer will be built for the existing houses so they would not see the parking lot area." Commissioner Holm asked that on page 5 of the October 18th minutes, for Ms. Ann to be changed to Councilmember Bolkcom. MOTION by Commissioner Holm, seconded by Commissioner Gabel, to approve the minutes with the above mentioned corrections. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED. CONSENT AGENDA: Consider Claims and Expenses MOTION by Commissioner Holm, seconded by Commissioner Gabel to approve the Consent Agenda. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED. HRA meeting November 3rd 2005 Page 2 of 9 ACTION: Review and Approval of Draft Budget for 2006 Mr. Pribyl, Finance Director for the City of Fridley, presented the budget and has asked for additional time to complete the budget packet due to a recent staffing change. He will be working closely with Mr. Bolin to develop the 2006 Budget. The County information and abstract of values are estimates at this time as they do not have the exact amount regarding the tax increment. The 2006 Budget was presented with estimates of expenses and balances. The final 2006 Budget will be available at the December HRA Meeting. Mr. Pribyl stated that the budget is divided into three separate categories, like the 2005 Budget. The General Fund covers the bulk of the administrative and overhead costs of the HRA. The two Special Project Funds include the revolving loan fund and an additional fund for other housing related programs and services (CEE Programs such as Operation Insulation). The Capital Outlay Funds include all of the tax increment (TIF) districts. Summaries for each group and aggregate report were submitted. Mr. Pribyl reported that the estimated revenues of $3.9M budget for 2006. This is a $2.2M decrease or 35.8% less than 2005. The 2005 budget includes a one time expense of $700,000 for the Gateway West Project and $300,000 for the Housing Replacement Program. These numbers represent some of the key differences when comparing the 2006 Budget to the 2005 Budget. The tax levy increment was $22,135 or 14 %. The projected total expense is $3.7M for 2006 which is $1.4M less or 28% decrease from 2005. The revenue reductions and revenue notes are based on tax increments which are not verified to date. We should have updated information shortly. Mr. Pribyl said the 2006 budget consists of a capital outlay of $1,125,231 expenses, $1,857,429 transfer to the City for Debt Services, $261,471 for Personal Services, $226,688 in Other Services and Charges, $675 for Supplies totaling $3,798,923. The significant parts related to capital outlays include Medtronic $410,206, Gateway West $500,000, Shamrock $121,000 and Linn Development for $16,000. Mr. Pribyl reported that the 2006 Budget issues include the Medtronic project values from 2007 and beyond. Our cash position is looking good but we need to carefully look at future redevelopment projects. Future debt obligations need to be paid and if we have sufficient increments we will see if we need to reserve anything out of the General Fund. The TIF Districts 1 -3 will expire during the time of 2007 -2009. The debt service obligation will continue through 2012 and we have $3M reserved in the General Fund which should support our debt services. Mr. Pribyl concluded that looking ahead to 2006 and beyond, we need to monitor HRA resources, evaluate the future redevelopment opportunities and whenever possible try to leverage the local resources with outside funds. We will have an updated budget to present before the HRA at the December meeting for your review. Commissioner Holm questioned the Gateway West project and the $700,000 sale revenue listed in 2005. There is no dollar amount in 2006 and the lots will be sold on a periodic bases, i.e. 2 lots per quarter, so a portion of the sale should go into 2006 at different times depending on the time frame that the lots are sold. Mr. Pribyl stated that part of the income will be reflected in 2006 with the remainder in 2007. Mr. Bolin and Mr. Pribyl will work out the numbers before the final budget is presented. Commissioner Gabel questioned if under all the funds, $174,000 administrative expenses, include the City administrative expenses and prorate the share of heat, lights etc. Mr. Pribyl confirmed that it does include support staff and utilities. Commissioner Gabel asked for clarification if we can transfer funds from one District to another. Mr. Pribyl stated that they use all three Districts (1,2 and 3) together. Page 3 of 9 HRA meeting November 3rd 2005 Commissioner Gabel questioned on the last page, if we used $25,000 transfer out of the operating budget to pay for professional services. Mr. Pribyl stated that the transfer was for the Island of Peace project and should not be in the budget. The Island of Peace project is now set up on its own budget to track expenses. We will isolate those funds to capture them in the future when it becomes a tax increment district. In the beginning of the project, the costs are in the General Fund but once we incur some expenses, we create a new fund to track expenses. The funds were transferred from the General Fund into the Island of Peace as a temporary loan to pay for expenses. We may bring back a resolution with the "Intent to Reimburse" from future tax increment. Commissioner Meyer questioned if they foresaw any future problems, any short or long term issues that should be brought to our attention. Mr. Pribyl responded that we are beginning to look better than they had thought a few years ago. We have sufficient income to not use the General Funds at this time for debt. We just need to look at projects on the horizon and how we will finance those new projects. We have done a good job at protecting our current resources. Chairperson Schnabel questioned the services contracted that are non professional. These funds have fallen from 2004 to 2006. What did the services consist of and why did they drop so dramatically. Mr. Pribyl responded that most of those services were contracted for the Gateway West project and they do not foresee needing those funds for 2006. Mr. Bolin confirmed that the charges were for the Gateway West project and the charges were for mowing the area and boarding up the buildings on the property. They did not think these expenses will apply to the 2006 budget. Chairperson Schnabel questioned the $500,000 deficit in the General Fund under other financial resources Inter Fund loan. Mr. Pribyl responded that this represents movement of cash to Gateway West. The Inter Fund loan from the General Fund to Gateway West is reimbursed once we start receiving funds. Chairperson Schnabel also commented how she likes the budget vs. actual in the new budget. Mr. Pribyl responded that this is the same format they use for the City Budget. Terms Agreement with Blue Print Homes Mr. Bolin stated that back in September HRA approved Blue Print Homes to be the developer of the Gateway West project. The Terms Agreement was discussed on October 6th and October 18th. Changes were made to the Terms Agreement and we have discussed ways to address the structure of the land payment and the developer purchasing the lots. The developer agreed to the Terms Agreement in a non binding agreement but this is the basis upon which the binding development agreement will be drafted. Blue Print Homes attorney has agreed with this new Terms Agreement. Staff recommends the motion to approve and sign the development Terms Agreement, barring any major unfavorable changes to the agreement. This agreement, once signed, will serve as the foundation for the development agreement to be brought forward at the HRA's December meeting. Commissioner Holm questioned the vacation of the public right -of -way. He was not aware of this vacation and wanted to be sure this was correct. Mr. Bolin responded that the vacation would be a 6' strip of property, currently the front yard of an HRA meeting November 3rd 2005 existing home. It does not impact the boulevard or street. Page 4 of 9 Commissioner Gabel commented that the special meeting with Blue Print Homes on October 18th was very helpful to communicate directly with the developers. Everyone felt more confident and now they are very excited to see the development. She questioned if the environmental mediation is standard procedure. Mr. Bolin stated that the liability language is standard language and they do not anticipate any problems on the site. They did find some minor solvents on the property, but this has been cleaned up and pollution control has inspected and approved the property. Commissioner Gabel asked if there were any pending assessments. Mr. Bolin replied that there are no assessments pending at this time. Commissioner Meyer questioned how many dwelling properties would be in this area. Commissioner Gabel clarified that it was stated in the agreement on page three, 16 properties. Chairperson Schnabel agreed with Commissioner Gabel that the October 18th meeting was very informative and everyone left feeling comfortable with 16 homes on the property. Commissioner Gabel stated that she was opposed to building 16 homes on the property prior to the October 18th meeting, but now believes that Blue Print Homes will do a terrific job at putting 16 homes in the area and will be satisfied with the outcome. Chairperson Schnabel agreed with Commissioner Gabel stating that Blue Print Homes was able to demonstrate how the lots will fit within the neighborhood. She was also not in favor of the 16 lots but after seeing the plat drawing and the variety of homes they have to offer, she was comfortable with the layout of the 16 lots. Commissioner Meyer was pleased that it was discussed to everyone's satisfaction and regrets not being able to attend the meeting. He has observed the 14 vs. 16 homes in the area and considered the prices people will pay for these homes and personally thinks this will be very hard to market. The Terms Agreement is very vague, with no square footage requirements etc. Chairperson Schnabel replied that with the new set back requirements, as long as the homeowner maintains 15' between the homes, they can build the home to their desired specifications. That is the only limitation and buyers usually build to the maximum capacity of the lot. Commissioner Meyer questioned the average square footage of the homes and if there are any minimum requirements or specifications for construction. Chairperson Schnabel responded that it depends on the home owner. They can build a two story home or a rambler and the size may depend on their family needs, funds available, size of the lot etc. Mr. Bolin stated that the City Code minimum could be 1100 square feet. It is possible someone would build a minimum square foot home. We need to remember that Blue Print Homes offers quality construction and craftsmanship. It is this quality that will attract buyers to this area. A home listed for $289,000 qualifies for a first home buyer and the developer has done their homework to know there is a special financing program available to these first time home buyers. The average home will sell between $250,000 and $400,000 depending on the floor plan design and upgrades the buyer chooses. The smallest home is around 1200 square feet and many of the designs are between 1400 and 2000 square feet. The interior finishes are driven by the purchaser of the home. This development is not similar to the Gateway East project where we specified the finishes in each unit. We can get more specific with the construction requirements but each buyer will have that listed in their spec sheet. HRA meeting November 3rd 2005 Page 5 of 9 Commissioner Meyer wanted to make sure that if the buyer expects first rate construction, that is what they will receive. A lot of times if specifications are not in writing, i.e. the construction specifications, the buyer doesn't know what they are getting for their money. He feels the agreement is too general and needs to be more specific. Questions arose such as: are we requiring sod, irrigation system, pave driveway etc. How is the buyer going to know what we are expecting them to build on these lots? Mr. Bolin responded that these are all custom homes. The buyer will build 2 -3 models featuring different items in each home. We cannot dictate what a buyer must have in a custom home, but we can assure them top quality construction. Commissioner Meyer replied that he has been in this business for years and the buyer's only resource is in writing and many times the builder does not come through with their promises. Chairperson Schnabel stated that this development is like the early days of Fridley. We bought the land, the developer will put up models and the buyers will chose their custom home. We have not had large enough areas of land to do this type of project with individual homes and this is a unique opportunity. All of us came to the meeting on October 1 e opposed to the density if this development but left confident that this will enhance the neighborhood. This is quality construction and all are in agreement that in the end we will have a great development. Commissioner Meyer agreed that this will be good business, but he wants more details in the Terms Agreement. This property is made possible by the City and we are responsible to ensure the verbal agreement is fulfilled. Commissioner Gabel questioned if there was a way to have the minimum standard listed in the Terms Agreement and the buyer could upgrade if they so desire. Commissioner Meyer mentioned that certain things could be done to the Terms Agreement such as window requirements; minimum electrical amps etc. to give protect the buyer. Commissioner Gabel suggested that Commissioner Meyer see a copy of the spec sheet before the next meeting and in the meantime we should approve this Terms Agreement. Chairperson Schnabel asked if a spec sheet could be included with the Terms Agreement. Mr. Bolin stated that we need flexibility in the Terms Agreement for some items, but the house will be built to code. If we put minimum requirements in the contract, the builder builds to those requirements. We have stated in the Terms Agreement that the builder will build comparable or better homes than that of developments in Hugo, Oak Grove and Blaine. Blue Print Homes has constructed homes of top quality in all of those developments. We can provide Commissioner Meyer with a typical spec sheet. Commissioner Meyer replied that it would be helpful to see a spec sheet. MOTION by Commissioner Gabel, seconded by Commissioner Holm to approve the Terms Agreement with Blue Print Homes. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED. Approval of Contract for Administrative Support for 2006 Home and Garden Show Mr. Bolin stated that HRA is partnering with Blaine, Mounds View and New Brighten for the a year in supporting the Home and Garden Show. The show will be held at the Schwan's Center in Blaine on February 25th from 10 a.m. — 2:00 p.m. Mr. Bolin reported that last year approximately1300 people attended the Home and Garden show and there are a number of administrative tasks that were contracted out with Marsha Wagner of Castle Visions. Marsha worked on mailing lists, lined up vendors and set up sponsors. Through her hard work HRA meeting November 3rd 2005 Page 6 of 9 the show was well attended and she was able to find sponsors plus increase the revenue from booth rentals. The Home and Garden show is free to the public and the revenues are generated from the booth rentals. Our revenues exceeded all costs in the past years. Mr. Bolin said the Home and Garden Show planning group would like to contract Marsha Wagner for the 2006 Home and Garden Show. Marsha's rates are very reasonable and the show generates adequate revenue to cover the cost of contracting with Marsha. Staff recommends approval of the contract between the HRA and Marsha Wagner /Castle Visions to provide assistance with the 2006 Home and Garden Show. MOTION by Commissioner Meyer, seconded by Commissioner Gabel to approve the contract between the HRA and Marsha Wagner /Castle Visions to provide assistance with the 2006 Home and Garden Show. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED. Approval of 2006 HRA Commission Meeting Dates Mr. Bolin suggested scheduling a July meeting date and having the option of canceling the meeting if there are no issues. With the Gateway West project under construction at that time, it would be better to have a meeting scheduled for July in case any issues arise. MOTION by Commissioner Gabel, seconded by Commissioner Holm to approve the 2006 HRA Commission Meeting Dates including a July meeting date. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED. • Approve Purchase Agreement for Sale of Property at 6000 East River Road Mr. Bolin stated that in June, the HRA made an offer to purchase the home at 6000 East River Road. In July the property was appraised at $235,000. In August we authorized staff to offer to purchase the home for $235,000 plus any relocation fees. They will close on the home on March 1, 2006. Staff recommends HRA to accept and authorize the Vice Chairperson and Executive Director to sign the purchase agreement for $235,000 plus $4,900 relocation expenses. MOTION by Commissioner Holm, seconded by Commissioner Gabel to accept and authorize the Vice Chairperson and Executive Director to sign the purchase agreement for $235,000 plus $4,900 relocation expenses. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED. P ►130I7ir>t[e7aI IW,F • Islands of Peace Update Mr. Bolin stated that Bancor Group has begun to explore a number pf potential site designs and potential layouts. They continue to examine different street configurations, park improvements, and potential housing products to make the project feasible. Mr. Bolin stated that Bancor has asked for a joint HRA- Council meeting to be held to discuss some of their early configurations. They want to incorporate as much of HRA's vision and desires into the project, as is practicable, before heading too far down the road of site design and building type. HRA meeting November 3rd 2005 Page 7 of 9 A joint meeting has been set for Monday, November 14"' at 6:00 p.m. The meeting will be held in the lower level meeting rooms in City Hall. A dinner will be served. Commissioner Meyer stated that we have discussed some options and questioned if there would be more rental or owner property. Mr. Bolin responded that currently there are a number of different ideas to be presented. Each person has their own ideas and they would like to hear HRA Councils feedback. Bancor wants to work together with the HRA and discuss what is feasible and what will sell. Commissioner Meyer questioned if we have given Bancor any direction. Mr. Bolin responded that staff has not given any direction. Currently there are 144 rental units in the area and funds may be available to offset costs to offer some affordable units. Currently there is no final plan in the works. Commissioner Meyer shared concerns that a developer could put on new siding, paint and walkway and claim that it is a new building. Is the redevelopment that simple of an idea? Mr. Bolin replied that they have not discussed this in detail as a group. The developer has tried to save an apartment building and build new units between the existing units. A similar situation occurred in St. Paul where they took existing apartment buildings; completely improved the building and they look like new condos. A person would have no idea what the building looked like prior to the reconstruction. All of these issues can be discussed at the joint meeting. • Monthly Housing Report Mr. Bolin reported that in October they were very busy with 38 new applications. Fridley revolving loan applications are at 47 total for the year which includes other programs. Last year we had 16 loans all year and this year we have 19 year to date. Two years ago we only had four loans total so this program has really grown. When people get their gas bills this winter, we may see more loan applications. Currently there is no income limit to qualify for a loan and the interest rate is 5'/4% for all who qualify. The Fridley HRA Funding sources is $329,062, MHFA is $15,677 and CEE $174,187 for a total of $362,157 new investment in this past year. The loan summary report end principal balance is $969,681. There are 80 loans in the portfolio and a servicing fee of $509. We took in $13,000 in payments with two delinquent loans totaling less than 1 %. The Operation Insulation Program is not doing as well as we had anticipated. We had a goal of 50 appointments and to date we are at 14% of our goal or 7 appointments. High energy bills this winter may increase the numbers. On November 9t', the Center for Energy and Environment will put on a program at Coon Rapids City Hall from 5 -8 p.m. We have been advertising this on local cable shows and all Fridley residents should have received an invitation. This may also alert residents of the various loan programs we have to offer. ADJOURNMENT: MOTION by Commissioner Gabel, seconded by Commissioner Holm to adjourn meeting. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MEETING ADJOURNED AT 9:08 P.M. Respectfully Submitted by, Krista Monsrud Recording Secretary To: From: Re: Date: William W. Burns, Executive Director of HRA Paul Bolin, Assistant Director of HRA Richard D. Pribyl, Finance Director 2006 Budget Update November 23, 2005 Due to the County's change in their software that runs the property tax data, they have been unable to run a parcel inventory report for each of our tax increment districts. We use this report to create our TIF related revenues and the pay as you go payments. This information is currently being programmed by their staff and should be available shortly. As you may recall at the November HRA meeting, I informed you that we were missing this very important piece of information related to the budget. At this point we have still not been able to update the 2006 Budget from what was provided to you at the last meeting. We are hoping to have this information within a few days and then update the revenue and expenses and provide to you a final budget towards the middle of next week. RDP /me AMC ACTION ITEM HRA MEETING OF DECEMBER 11 2005 MY OF FRIDLEY Date: NOVEMBLK 1'L, Zuuo To: William Burns, Executive DirectorAAV From: Paul Bolin, Asst. Executive HRA Director Subiect: Gateway West Draft Development Agreement M -05 -151 Based on the information agreed upon in the terms agreement, legal Counsel has drafted the attached development agreement and provided a copy to Blue Print Homes for their review and approval. In addition to the specific terms already agreed upon, the development agreement contains many standard protections typically found in these agreements. At the time of this writing, Blue Print Homes has not requested any changes to the development agreement. It is anticipated that the developer, prior to the HRA meeting on Thursday night, will sign the development agreement. If the developer requests any changes, they will be noted, and an updated copy of the development agreement will be provided at the meeting. Staff requests that the HRA review the development agreement and note any questions or concerns. If there are not any major changes or concerns, Staff would recommend that the development agreement be approved. If there are a number of changes or concerns with the draft agreement, staff & legal counsel can make those changes prior to the January 5th meeting. Draft v1 11 -28 -05 CONTRACT FOR PRIVATE REDEVELOPMENT by and between the HOUSING AND REDEVELOPMENT AUTHORITY in and for THE CITY OF FRIDLEY, MINNESOTA and BLUEPRINT HOMES, INC. This document was drafted by: Krass Monroe, P.A. 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437 TABLE OF CONTENTS ARTICLE I DEFINITIONS Section1.1 Definitions ............................................................................. ............................... ARTICLE H REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1 Representations, Warranties and Covenants by the Authority ............................. Section 2.2 Representations, Warranties and Covenants by the Redeveloper ........................ ARTICLE III CONVEYANCE OF THE REDEVELOPMENT PROPERTY; UNDERTAKINGS OF AUTHORITY AND REDEVELOPER Section 3.1 Conveyance of the Redevelopment Property ............................ ............................... Section3.2 Letter of Credit .......................................................................... ............................... Section 3.3 Conditions Precedent to Conveyance ....................................... ............................... Section 3.4 Documents at Closing ............................................................... ............................... ARTICLE IV CONSTRUCTION OF SITE IMPROVEMENTS, PUBLIC RVIPROVEMENTS AND NT NIMUM IMPROVEMENTS Section 4.1 Public Improvements ................................................................. ............................... Section 4.2 Construction of Site Improvements and Minimum Improvements ........................... ............................... .......... Section 4.3 Preliminary Plans and Construction Plans ............................. ............................... Section 4.4 Certificates of Completion ........................................................ ............................... i ARTICLE V INSURANCE Section 5.1 Redeveloper Insurance .............................................................. ............................... Section 5.2 Subcontractor Insurance ................................. ............................... ........................... PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 6.1. Representation as to Redevelopment .................................... ............................... Section 6.2. Prohibition Against Transfer of Property and Assignment of Agreement ................ ............................ ............................... Section 6.3. Release and Indemnification Covenants ............................... ............................... ARTICLE VII ANWN &C2401 VAN Section 7.1 Events of Default Defined ..................................................... ............................... Section 7.2 Remedies on Default ............................................................. ............................... Section 7.3 No Remedy Exclusive ........................................................... ............................... Section7.4 No Implied Waiver ................................................................ ............................... Section 7.5 Agreement to Pay Attorney's Fees and Expenses ................. ............................... Section 7.6 Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper ............. ............................... Section 7.7 Resale of Reacquired Property; Disposition of Proceeds ..... ............................... Section7.8 Subordination ........................................................................ ............................... ii r ARTICLE VIII ADDITIONAL PROVISIONS Section8.1 Conflict of Interest ................................................................ ............................... Section 8.2 Restrictions on Use ............................................................... ............................... Section 8.3 Provisions Not Merged With Deed ....................................... ............................... Section 8.4 Notices and Demands ........................................................... ............................... Section8.5 Counterparts .......................................................................... ............................... Section8.6 Law Governing ..................................................................... ............................... Section8.7 Termination ........................................................................... ............................... Section 8.8 Provisions Surviving Termination ........................................ ............................... SIGNATUREPAGES ........................................................................................ ............................... SCHEDULE A Description of Redevelopment Property ............................... ............................... SCHEDULE B Form of Redevelopment Property Deed ............................... ............................... SCHEDULE C Form of Certificate of Completion and Release of Forfeiture ............................. SCHEDULE D Public Improvements ............................................................ ............................... SCHEDULE E Site Improvements ................................................................ ............................... SCHEDULE F Prevailing Wage Requirements ............................................. ............................... iii CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT is made on or as of the day of , 2005 by and- between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), a public body corporate and politic of the State of Minnesota, and Blueprint Homes, 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 of Fridley, Minnesota (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 to 469.047 (the "Act "), the Redevelopment Plan (the "Redevelopment Plan") for its Redevelopment Project No. 1 (the "Project Area ") 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, in furtherance of these objectives and in connection with the Project Area the Authority has also established Tax Increment Financing District No. 18 (the "Tax Increment District ") pursuant to Minnesota Statutes, Section 469.174 et seq., as amended (the "Tax Increment Act "); WHEREAS, the major objectives in establishing the Redevelopment Plan are to: 1. Promote and secure the prompt redevelopment of certain property in the Project Area, 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. Secure additional employment opportunities within the Project Area 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 of and secure the increase of commercial/industrial property subj ect 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 Project Area necessary for the orderly and beneficial redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirable industrial, office, and other appropriate redevelopment in the Project Area 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 Proj ect Area through quality land use alternatives and design quality in new or remodeled buildings. 8. Stimulate private activity and investment to stabilize and balance the City's housing supply. 9. Encourage and provide maximum opportunity for private redevelopment of existing areas and structures which are compatible with the Project Area; and WHEREAS, in order to achieve the objectives of the Authority and the City in creating the Project Area and adopting the Redevelopment Plan, the Authority is prepared to provide assistance in accordance with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area 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, Sections 469.001 to 469.047. "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, its successors or its assigns. "Board" means the Board of Commissioners of the Authority. "Certificate of Completion" means a certification in the form of the certificate contained in Schedule C attached hereto and provided to the Redeveloper pursuant to Section 4.4. "City" means the City of Fridley, Minnesota, its successors or its assigns. "Closing" or "Closing Date" means the date of each conveyance of a portion of the Redevelopment Property from the Authority to the Redeveloper. "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 plans (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector or building official of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4) elevations (all sides); (5) landscape plan; (6) cross sections (length and width); and (7) such other plans or supplements to the foregoing plans as the Authority may reasonably request. "Council" means the Council of the City. "County" means the County of Anoka, Minnesota. "Closing" or "Closing Date" means the respective dates on which a portion of the Redevelopment Property is conveyed by the Authority to the Redeveloper pursuant to Article III. "Event of Default" means an event of default as defined in Section 7.1. "Letter of Credit" means the irrevocable letter of credit to be provided by the Redeveloper to the Authority pursuant to Section 3.2 to secure the Redeveloper's obligations to accept conveyance of the Redevelopment Property and pay the Purchase Price. 3 "Minimum Improvements" means 16 single - family homes to be constructed by the Redeveloper on the Redevelopment Property. "Minnesota Environmental Rights Act" means Minnesota Statutes, Section 116B.01 et seq., as amended. "Project" means the Redevelopment Property, the Site Improvements and the Minimum Improvements. "Redeveloper" means Blueprint Homes, Inc., a Minnesota corporation, and its permitted successors and assigns. "Redevelopment Plan" means the Redevelopment Plan adopted by the Authority for its Redevelopment Project No. 1, as amended. "Project" shall mean the Redevelopment Property and the Minimum Improvements. "Project Area' means Redevelopment Project No. 1 established by the Authority. "Public Improvements" means the public improvements to be performed or constructed by the Authority on or adjacent to the Redevelopment Property and described in Exhibit D. "Purchase Price" means $700,000, or $43,750 for each of 16 home lots. "Redevelopment Property" means the real property described in Schedule A attached hereto. "Redevelopment Property Deed" means a quit claim deed substantially in the form appearing in Schedule B attached hereto. "Site Improvements" means the improvements to the Redevelopment Property described in Schedule E attached hereto. "State" means the State of Minnesota. "Tax Increment Act" means Minnesota Statutes, Section 469.174 et seq., as amended. "Tax Increment District" means Tax Increment Financing District No. 18 created by the Council in connection with the Redevelopment Plan. "Tax Increment Plan" means the tax increment financing plan adopted by the Authority in connection with the creation of the Tax Increment District. "Termination Date" means the termination date of this Agreement pursuant to Section 8.7. M "Unavoidable Delays" means delays which are the direct result of strikes or other labor troubles, delays which are the direct result of unforeseeable and unavoidable casualties to the Redevelopment Property, the Project, or the equipment used to construct the Redevelopment Project, delays which are the direct result of governmental 'actions, delays which are the direct result of judicial action commenced by third parties, delays which are the direct result of citizen opposition or action affecting this Agreement, environmental delays which are the direct result of the implementation of an environmental agency- approved work plan for remediation, and delays which are the direct result of unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Project. E ARTICLE II Representations, Warranties and Covenants Section 2.1. Representations Warranties and Covenants 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. This Agreement has been or will be duly authorized by all necessary action on the part of the Authority and has been duly executed and delivered by the Authority. The Authority's execution, delivery and performance of this Agreement will not conflict with or result in a violation of any judgment, order, or decree of any court or government agency. This Agreement is a valid and binding obligation of the Authority and is enforceable against the Authority in accordance with its terms. There is no action, litigation, condemnation or proceeding of any kind pending or, to the best of the Authority's knowledge, threatened which would have a material and adverse affect on the ability of the Authority to perform its obligations under this Agreement or against the Redevelopment Property, or any portion thereof. (b) The Authority has approved the Redevelopment Plan in accordance with the terms of the Act. (c) The Authority has approved the Tax Increment District pursuant to the Tax Increment Act. (d) The Authority, subj ect to Unavoidable Delays, shall convey title to the Redevelopment Property pursuant to Article III to the Redeveloper for the Redeveloper's use in accordance with the Plan and this Agreement. (e) Subject to Unavoidable Delays, the Authority shall complete the Public Improvements as soon as possible. (f) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. (g) Except as set forth below, the Authority makes no representation, guarantee, or warranty, either express or implied, and hereby assumes no responsibility or liability as to the Redevelopment Property or its condition, regarding soils, pollutants, hazardous wastes or otherwise. (h) The Authority has no knowledge of the presence of any hazardous substances (as the same are described in the regulations promulgated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, and/or in the environmental laws of the State of Minnesota, and 31 specifically including petroleum and related hydrocarbons and their byproducts, asbestos, and polychlorinated biphenyls) in, on or under the Redevelopment Property. (i) The Authority shall provide the Redeveloper with all existing environmental reports, including any Phase I and Phase If environmental site assessments, for the Redevelopment Property as well as all existing soil tests and/or reports. The Authority shall share with the Redeveloper any information which comes to the attention of the Authority after the final execution of this Agreement and which relates to hazardous substances on the Redevelopment Property. Section 2.2. Representations Warranties and Covenants by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a corporation organized and existing under the laws of the State, is authorized to transact business in the State, and has duly authorized the execution of this Agreement and the performance of its obligations under this Agreement. None of the execution and delivery of this Agreement, the consummation of the transactions contemplated by this Agreement, or the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with the terms of any indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound. (b) The Redeveloper will purchase the Redevelopment Property from the City pursuant to Article III and, in the event the Redevelopment Property is conveyed to the Redeveloper, the Redeveloper will construct and maintain the Minimum Improvements in accordance with the terms of this Agreement and all applicable local, State and Federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (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 anticipated activities of the Redeveloper with respect to the Redevelopment Property 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. (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 shall pay the normal and customary City fees and expenses for the approval and construction of the Project including, but not limited to, bonding requirements, building permit fees, sewer accessibility charges (SAC), water accessibility charges (WAC) and park dedication fees. The City has agreed to waive its normal fees for right -of -way vacations and for replatting. 7 (f) Except as specifically set forth herein, the Redeveloper is purchasing and leasing the Redevelopment Property "as is ", based solely on the Redeveloper's examination of the Redevelopment Property and with the understanding that there is no warranty by the City that the Redevelopment Property is fit for any particular purpose. (g) The Minimum Improvements, as of the date hereof, constitute an allowed use (either as a permitted use, a special use, or a conditional use) under the zoning ordinance of the City. (h) The Redeveloper agrees that it will cooperate with the Authority with respect to any litigation commenced by third parties in connection with this Agreement. (i) The financing arrangements which the Redeveloper has obtained or will obtain to finance the acquisition of the Redevelopment Property and the construction of the Minimum Improvements, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. 0) Once acquired by the Redeveloper, the Redevelopment Property will not become exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, and any improvements of any kind constructed on the Redevelopment Property will similarly not become exempt until the Termination Date. (k) The Redeveloper agrees that it will not assign, convey or lease any interest in the Redevelopment Property or anyportion thereof, or this Agreement or any portion thereof, to any tax - exempt entity under the U.S. Internal Revenue Code of 1986, as the same may be amended from time to time, without. the prior written approval of the Authority. (1) Purchasers of homes shall be subject to a deed restriction that fencing may not be constructed along University Avenue. [(m) [While the Project is exempt from the prevailing wage requirements of City Ordinance No. 1095 by Subdivision 3 of that ordinance,] the Redeveloper agrees to pay prevailing wages with respect to the Project (or cause prevailing wages to be paid) as though the Project were subject to: (i) City Ordinance No. 1095 and (ii) the Authority's adoption of that ordinance in Authority Resolution No. 13 -1997 (the "HRA Resolution "). The Redeveloper understands that the HRA Resolution provides for the implementation of the prevailing wage policies of the City and the Authority. The Redeveloper shall cooperate with the City, the Authority and any independent contractors or agents retained by the City and/or the Authority to monitor compliance with the prevailing wage requirements. The Redeveloper shall maintain records that will show its compliance with this Subsection. The Redeveloper shall, at the request of the Authority, provide an affidavit to the Authority in a form acceptable to the Authority and which attests to the Redeveloper's compliance with the requirements of this Subsection. The Redeveloper shall inform all Project contractors and subcontractors of the prevailing wage requirements included in this Subsection.] ARTICLE III Conveyance of the Redevelopment Property; Undertakings of Authority and Redeveloper Section 3.1. Conveyance of the Redevelopment Property. (a) Title. The Authority shall convey marketable title to and possession of each portion of the Redevelopment Property to the Redeveloper under a quit claim deed in the form of the Redevelopment Property Deed contained in Schedule B. At its expense, the Redeveloper shall obtain any title insurance and endorsements it deems necessary. The Authority will cooperate with the Redeveloper to ensure that all purchasers of homes are provided with clear and marketable title. At its expense, the Authority agrees to obtain and shall deliver to the Redeveloper a commitment for an owner's title insurance policy (ALTA Form B) issued by a title insurance company acceptable to the Authority and Redeveloper (the "Title Company', naming Redeveloper as the proposed owner - insured of the Redevelopment Property in the amount of the Purchase Price (the "Commitment "). The Commitment shall include removal of or endorsement over general exceptions by means of an extended coverage endorsement. The Commitment shall have a current date as its effective date and shall commit to insure marketable title to the Redevelopment Property in the Redeveloper. Such insurance shall be free and clear of all mechanic's lien claims, questions of survey, unrecorded interests, rights of parties in possession or other exceptions customarily excluded from such insurance. Such insurance shall also be free and clear of all other liens and encumbrances. The Commitment shall set forth all levied real estate and special assessments related to the Redevelopment Property. The Commitment shall include such title policy endorsements as may be reasonably requested by the Redeveloper. The Commitment shall have attached copies of all instruments ofrecord which create any easements or restrictions which are referred to in Schedule B of the Commitment. The Redeveloper will be allowed twenty (20) days after receipt of the Commitment to make an examination thereof and to make any objections to the marketability of the title to the Redevelopment Property, objections to be made by written notice or to be deemed waived. Upon receipt of the Redeveloper's list of written objections, the Authority shall proceed in good faith and with all due diligence to attempt to cause the objections made by the Redeveloper to be cured. A title objection shall be deemed to be cured if the Title Company agrees to issue an endorsement to the owner's title insurance policy affirmatively insuring over such objection. (b) Survey. The Authority agrees to provide and pay for a boundary survey of the Redevelopment Property sufficient to permit conveyance thereof (the "Survey"). The Redeveloper shall pay for any survey(s) necessary to replat or reconvey the Redevelopment Property, or any portion thereof. (c) Title Not Marketable. if the title to the relevant portion of the Redevelopment Property is not marketable as evidenced by the Commitment and the Survey, together with any appropriate endorsements, and is not made so by the Closing Date, the Redeveloper may either: 1 (i) Terminate this Agreement (entirely, or only as to the affected portion of the Redevelopment Property) by giving written notice to the Authority, in which event this Agreement shall become null and void (entirely, or only as to the affected portion of the Redevelopment Property) and neither party shall have any further rights or obligations hereunder; or (ii) Elect to accept the title in its unmarketable or existing condition by giving written notice to the Authority, in which event the Redeveloper shall (A) hold back adequate funds from the amount of the payment due to the Authority on such Closing Date to cure the defects, (B) apply such holdback funds to the cost of curing such defects, including attorneys' fees, and (C) pay the unexpended balance, if any, to the Authority. If the cost to cure the defects exceeds the amount of the payment due to the Authority on such Closing Date, the excess shall be credited against future Purchase Price payments. If the amount of such holdback/credit cannot be mutually agreed to by the Authority and the Redeveloper, the Title Company shall determine the amount. The Authority will fully cooperate with the Redeveloper in attempting to cure any and all such defects. (d) Conveyance, Purchase Price and Closings. Subject to the terms of this Agreement, the Authority agrees to sell and the Redeveloper agrees to purchase the Redevelopment Property for the Purchase Price. The Authority shall execute and deliver to the Redeveloper a Redevelopment Property Deed on each Closing. The conveyance of title to each portion of the Redevelopment Property pursuant to the Redevelopment Property Deed shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement and the Redevelopment Property Deed The Redeveloper shall promptly record each Redevelopment Property Deed. Each Closing shall take place at the principal offices of the Authority unless the parties mutually agree in writing that the Closing shall take place at another location. Closings shall occur according to the following schedule: (i) For the three (3) home lots on 57th Place NE on which the model homes will be constructed as soon as practicable following the Authority's completion of the Public Improvements which are required to be completed before such conveyance and recordation of the final plat; and (ii) For at least an additional two (2) home lots on at least a quarterly basis thereafter. The Purchase Price of $43,750 for each home lot shall be paid at each Closing. (e) Inspection. At the Redeveloper's expense, the Redeveloper and its agents are hereby granted the right for a period of 30 days following execution of this Agreement to inspect and test the Redevelopment Property. The Redeveloper shall hold the Indemnified Parties (as defined in Section 6.3) harmless from and shall indemnify the Indemnified Parties for any liability resulting from entering upon the Redevelopment Property or performing any of the tests or inspections referred to in this Section. 10 (f) Taxes, Assessments; Other Pro Rations. Real estate taxes due and payable prior to the year of Closing shall be paid by the Authority. Real estate taxes due and payable in the year of Closing shall be allocated between the parties based on their respective period of ownership in the year of Closing. Real estate taxes due and payable in the years subsequent to the Closing shall be paid by the Redeveloper. The Authority shall pay all special assessments pending or levied as of each Closing Date. The Redeveloper shall pay all special assessments after the Closing Date. The Redeveloper shall bear all costs of recording the Redevelopment Property Deed except as set forth below. The Authority shall pay the State tax due in connection with conveyance of the Redevelopment Property and shall pay the cost of recording any document necessary to place title in the condition described in this Agreement. The Redeveloper shall pay all other recording costs incurred in connection with this Agreement. The parties shall equally share other closing costs. Each parry shall pay all sums in cleared funds on the Closing Date. (g) Plat, Easements. The Redeveloper at its expense shall replat the Redevelopment Property. The Redeveloper shall pay all costs for plats, replats, lot splits, preparation of restrictive covenants, easements and any other documentation necessary for the construction and sale of the Minimum Improvements and all costs of recording any such documents. Section 3.2. Letter of Credit. (a) At the first Closing, the Redeveloper shall furnish or cause to be furnished to the Authority an irrevocable Letter of Credit reasonably acceptable in form and substance to the Authority from a financial institution reasonably acceptable to the Authority. The amount of the Letter of Credit shall initially be in the amount of $568,750 (which is the total Purchase Price less payment for the first three home lots) and thereafter may be reduced to the balance owing of the Purchase Price as payments are made to the Authority. (b) The Letter of Credit shall be held by the Authority as collateral to ensure that Closings occur and the balance of the Purchase Price is paid as set forth above. If a Closing fails to occur due to no fault of the Authority, the Authority may present the Letter of Credit for payment, and, at the Authority's option, use as much of the proceeds thereof as are necessary to make the delinquent payment(s). Any excess proceeds from the Letter of Credit not needed to make the delinquent payment(s) shall be paid to the Redeveloper. The Letter of Credit shall be released upon payment in full of the Redeveloper's payment obligations hereunder. Section 3.3. Conditions Precedent to Conveyance. (a) The obligation of the Authority to convey the relevant portion of the Redevelopment Property to the Redeveloper at each Closing shall be subject to the following conditions precedent: (i) The Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement; (ii) The Authority shall be satisfied that the Redeveloper's financing is sufficient to complete the Project; 11 (iii) The Authority shall have approved the Construction Plans for the Project; (iv) The Redeveloper shall have obtained building and all other permits required for the construction of the Minimum Improvements; (v) The Redeveloper shall have paid the appropriate portion of the Purchase Price as described in Section 3.1; (vi) The Redeveloper shall have provided the Letter of Credit; and (viii) Each of the Redeveloper's representations and warranties set forth in Section 2.2 shall be true as of the Closing Date and the Redeveloper shall so certify in writing at each Closing. (b) The obligation of the Redeveloper to purchase the relevant portion of the Redevelopment Property at each Closing shall be subject to the following conditions precedent: (i) The environmental condition of the Redevelopment Property to be conveyed not including any required soil corrections, shall be suitable for the construction of the Minimum Improvements; (ii) The Authority shall have completed the Public Improvements required to be completed before such conveyance and shall be in material compliance with all other terms and provisions of this Agreement; (iii) Title to the Redevelopment Property to be conveyed shall be acceptable to the Redeveloper; and (iv) Each of the Authority's representations and warranties set forth in Section 2.1 shall be true as of the applicable Date of Closing and the Authority shall so certify in writing at each Closing. Section 3.4. Documents at Closing. (a) At each Closing, the Authority shall deliver to the Redeveloper: (i) The Redevelopment Property Deed, (ii) All certificates, instruments and other documents necessary to permit the recording of the Redevelopment Property Deed, (iii) A standard Seller's Affidavit properly executed on behalf of the Authority with respect to judgments, bankruptcies, tax liens, mechanics liens, parties in possession, unrecorded interests, encroachment or boundary line questions and related matters, 12 _ (iv) If applicable, the owner's duplicate certificate of title to the Redevelopment Property. The Authority need not provide an abstract of title if the property is classified as abstract property, (v) An affidavit of the Authority in form and content satisfactory to the Redeveloper stating that the Authority is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code, and (vi) The certification as to representations and warranties described in Section 3.3 (b)(iv). (b) At each Closing, the Redeveloper shall deliver to the Authority: 3.3(a)(viii). (i) With respect to the first Closing only, the Letter of Credit, (ii) The relevant portion of the Purchase Price in cleared funds, (iii) A Certificate of Real Estate Value, and (iv) The certification as to representations and warranties described in Section 13 ARTICLE IV Construction of Site Improvements, Public Improvements and Minimum Improvements Section 4.1. Public Improvements. The Authority will construct the Public Improvements set forth on Schedule D as soon as practicable. The Redeveloper shall not be required to accept conveyance of any portion of the Redevelopment Property unless the Authority has completed the Public Improvements required to be completed before such conveyance. Section 4.2. Construction of Site Improvements and Minimum Improvements. (a) Subject to the acquisition of the Redevelopment Property, the Redeveloper shall perform and pay for all Site Improvements described in Schedule E in accordance with City specifications. In addition, the City may request that the Redeveloper perform any required environmental remediation, the cost of which shall be deducted from future payments of the Purchase Price or, to the extent remediation exceeds the Purchase Price, reimbursed by the Authority to the Redeveloper. To the extent such remediation is outside the Redeveloper's expertise, the Redeveloper shall coordinate such remediation and shall be reimbursed for its time. (b) The Minimum Improvements consist of 16 for -sale single- family homes. The first homes to be constructed shall be three model homes on the three home lots on 57b Place NE. The Redeveloper shall use its best efforts to cause the unit sales prices of all homes to average approximately $300,000. Floor plans and home designs will be consistent with the plans included in the Redeveloper's response to the Authority's Request for Proposals. The quality of the Minimum Improvements shall be comparable to or better than that currently being constructed by the Redeveloper at its projects in Hugo, Blaine, and Oak Grove. The Redeveloper shall construct the Minimum Improvements in accordance with the Construction Plans approved by the Authority. Subject to Unavoidable Delays, Redeveloper shall begin construction on or about April 15, 2006 or as soon as the lifting of winter road restrictions permit, and shall complete construction on or about December 31, 2007. Section 4.3. Preliminary Plans and Construction Plans. (a) Preliminar Pte. The Redeveloper shall submit Preliminary Plans to the Authority consisting of typical floor plans and sketches of the typical exterior and interior of the proposed Minimum Improvements which illustrate the size and character of the proposed buildings. The Preliminary Plans shall not be inconsistent with this Agreement or any applicable state and local laws and regulations, insofar as said consistency may be determined at said preliminary stage. If approval of the Preliminary Plans is requested in writing by the Redeveloper at the time of submission thereof to the Authority, the Authority shall approve or reject (in whole or in part) such Preliminary Plans in writing within twenty (20) days after the date of receipt thereof. If no written rejection is made within said twenty (20) days, the Preliminary Plans shall be deemed approved by the Authority. Any rejection shall set forth in detail the reasons therefor. If the Authority rejects the 14 Preliminary Plans, in whole or in part, the Redeveloper shall submit new or revised Preliminary Plans within a reasonable time after receipt by the Redeveloper of the notice of rejection. The provisions of this Section relating to approval, rejection and resubmission of new or revised Preliminary Plans shall continue to apply until the Preliminary Plans have been approved by the Authority. The Authority's approval of the Preliminary Plans shall not be unreasonably withheld. (b) Construction Plans. Prior to the Redeveloper's commencement of construction of the Minimum Improvements, the Redeveloper shall submit Construction Plans to the Authority. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity in all material respects with this Agreement, the Preliminary Plans, and all applicable state and local laws and regulations. The Authority shall approve the Construction Plans in writing if. (i) the Construction Plans conform in all material respects to the terms and conditions of the Preliminary Plans and this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and regulations; (iii) the Construction Plans are adequate to provide for the construction of the Minimum Improvements; and (iv) no Event of Default has occurred and is continuing. No approval by the Authority shall be deemed to relieve the Redeveloper of the obligation to comply with the terms of this Agreement and applicable federal, State and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of any Event of Default. Upon the Redeveloper's submittal of the Construction Plans to the Authority, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after the date of their receipt by the Authority. The Authority's approval shall not be unreasonably withheld. Any rej ection shall set forth in detail the reasons therefor. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within a reasonable time after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. Approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. The Construction Plans shall not be rejected due to any obj ection which could have been raised upon review of the Preliminary Plans and corrected more economically at that time. (c) Changes. If the Redeveloper desires to make any material change in the Preliminary Plans or Construction Plans after their approval by the Authority, then the Redeveloper shall submit the proposed change to the Authority for its approval. If the Preliminary Plans or Construction Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Preliminary Plans or Construction Plans shall, in any event, be deemed approved by the Authority unless rej ected in writing by the Authority, in whole or in part, within twenty (20) days after receipt of the notice of such change, setting forth in detail the reasons therefor. 15 Section 4.4. Certificates of Com 1p etion. (a) Promptly after completion of the Minimum Improvements on each home lot, the Authority will fiunish the Redeveloper with a Certificate of Completion therefor. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the Redeveloper's obligations to construct the Minimum Improvements on such home lot. (b) If the Authority believes the Redeveloper has failed to complete the Minimum Improvements as to any home lot for which a Certificate of Completion is requested by the Redeveloper, the Authority shall, within twenty (20) days after such written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Authority believes the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to perform in order to obtain a Certificate of Completion. (c) The construction of the Minimum Improvements for each home lot shall be deemed to be completed in accordance with the Redeveloper's obligations hereunder when the City has issued a certificate of occupancy for the Minimum Improvements on that home lot. ARTICLE V Insurance Section 5.1. Redeveloper Insurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (i) Builder's risk insurance, written on the so -called `Builder's Risk — Completed Value Basis," in an amount equal to one hundred percent (100 %) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so -called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content reasonably satisfactory to the Authority; (ii) Comprehensive general liability insurance together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above - required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) All insurance required by this Article V shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate(s) or binder(s) of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of anypolicy, the Redeveloper shall fizrnish the Authority with evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. Section 5.2. Subcontractor Insurance. The Redeveloper shall, from time to time, provide the Authority with evidence satisfactory to the Authority that the Redeveloper's subcontractors are maintaining workers' compensation insurance as required by all applicable laws. 17 ARTICLE VI Prohibitions Against Assignment and Transfer; Indemnification Section 6.1. R_pe resentation 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 the qualifications and identity of the Redeveloper are of particular concern to the Authority, in view of (a) the importance of the redevelopment of the Redevelopment Property to the general welfare of the Authority; (b) the substantial financing and other public aids that, have been made available by the City or the Authority for the purpose of making such redevelopment possible; and (c) the fact that any act or transaction involving or resulting in a significant change in the identity of the party or parties in control of the Redeveloper or the degree of such control is for practical purposes a transfer or disposition of the Redevelopment Property then owned by the Redeveloper. 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 willing to accept 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 earlier of the issuance of the final Certificate of Completion for the Minimum Improvements or the Termination Date: (a) Except for the purpose of obtaining financing necessary to enable the Redeveloper to perform its obligations with respect to constructing the Minimum Improvements 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. If the Redeveloper remains liable and bound by this Redevelopment Agreement, 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: (i) Transfer the Redevelopment Property to any corporation, partnership, or limited liability company controlling, controlled by, or under common control with the Redeveloper, or (ii) Enter into purchase agreements for the sale of the homes in the ordinary course of the Redeveloper's business. W. (b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment Property or any portion thereof, seeks to be released from its obligations under this Agreement, the Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary to fulfill the Redeveloper's obligations hereunder. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records, shall, for its and its successors and assigns, and expressly for the benefit of the Authority, have assumed all of the obligations of the Redeveloper under this Agreement and agreed to be subject to all of the conditions and restrictions to which the Redeveloper is subject; provided, however, that the fact that any transferee of, or any other successor in interest to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies with respect to the Redevelopment Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, or any interest therein, whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority with respect to any rights, remedies or controls provided in this Agreement as to the Minimum Improvements that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Redeveloper, or any other party bound by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article shall be in a form reasonably satisfactory to the Authority. If the foregoing conditions are satisfied, then the Redeveloper shall be released from its obligations under this Agreement as to the portion of the Redevelopment Property that is transferred, assigned or otherwise conveyed. Section 6.3. Release and Indemnification Covenants. (a) The Redeveloper covenants and agrees that the City, the Authority and the governing body members, officers, agents, servants and employees of either of them (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 resulting from any defect in the Minimum Improvements, due to any act, including 19 negligence, of the Redeveloper or of others acting on its behalf or under its direction or control; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (a) shall not apply to any loss resulting from negligent, willful or wanton misconduct of any of the Indemnified Parties. (b) The Redeveloper agrees to protect and defend the Indemnified Parties, now or forever, and further agrees to hold the Indemnified Parties harmless, from any claim, demand, suit, action or other proceeding by any person or entity arising or purportedly arising from this Agreement or the transactions contemplated hereby or the construction and ownership of the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (b) shall not apply to any loss resulting from any negligent or willful misrepresentation or any negligent, willful or wanton misconduct of any of the Indemnified Parties. (c) None of the Indemnified Parties shall be liable for any damage or injury to the person or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be on or about the Redevelopment Property or Minimum Improvements due to any act or negligence of any person, other than the negligence or misconduct of an Indemnified Party. (d) None of the Indemnified Parties shall be liable to the Redeveloper or to any third party for any consequential or other damages that may arise out of delays of any kind relating to activities undertaken pursuant to this Agreement, including but not limited to delays due to environmental conditions, court challenges or elements outside the control of the Authority. (e) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (f) Nothing in this Section is intended to waive any municipal liability limitations contained in Minnesota Statutes, particularly Chapter 466. 20 ARTICLE VII - - -- Events of Default Section 7.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean any one or more of the following events: (a) Failure by the Redeveloper, while the owner of all or any portion of the Redevelopment Property, to timely pay all real property taxes assessed with respect thereto. (b) Failure by the Redeveloper to complete the Project pursuant to the terms, conditions and limitations of this Agreement. (c) Failure by the Redeveloper to sign and deliver to the Authority an affidavit as to prevailing wage compliance in compliance with Subsection 2.2(m) when requested by the Authority. (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) The Redeveloper shall: (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Code or under any similar federal or state law; or (ii) make an assignment for the benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) 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 of the Project, 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, or if the Redeveloper shall consent to or acquiesce in such appointment. Section 7.2. Remedies on Default. Whenever any Event of Default referred to in Section 7.1 occurs, the Authority may take any one or more of the actions set forth below if the Event of Default is not cured within thirty (3 0) days after the Authority provides written notice to the Redeveloper of such Event of Default: 21 (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 this Agreement. (c) The Authority may withhold a Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant to the Redeveloper under this Agreement. The Authority may elect to take no such action, notwithstanding an Event of Default not having been cured within said thirty (3 0) days, if the Redeveloper provides the Authority with written assurances satisfactory to the Authority that the Event of Default will be cured as soon as reasonably possible. No notice shall be required with respect to an Event of Default referred to in Section 7.1(e) or if the Event of Default is not reasonably susceptible to being cured within the thirty (30) -day period. Section 7.3. No Remedy Exclusive. No remedy of the Authority hereunder 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. No delay or omission to exercise any right accruing upon any default shall impair any such right or shall be construed to be a waiver thereof, but any such right may be exercised from time to time and as often as may be deemed expedient. Section 7.4. No Implied Waiver. In the event any agreement contained herein should be breached by any party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 7.5. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the Authority employs attorneys or incurs other expenses for the collection of payments due or to become due or for the enforcement or performance 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 reasonable expenses so incurred by the Authority. Section 7.6. Revestina Title in AuthorityUpon Happening of Event Subsequent to Conveyance to Redeveloper. In the event that subsequent to conveyance of the Redevelopment Property to the Redeveloper and prior to the Termination Date: (a) Subject to Unavoidable Delays, the Redeveloper fails to carry out its obligations with respect to the construction of the Project (including the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not 22 be cured, ended, remedied or assurances reasonably satisfactory to the Authority made within ninety (90) days after written demand from the Authority to the Redeveloper to do so; or (b) The Redeveloper fails to pay real estate taxes or assessments on the Redevelopment Property or any part thereof when due from the Redeveloper or creates, suffers, assumes, or agrees to any encumbrance or lien on the Redevelopment Property which is unauthorized by this Agreement and has priority over the Authority's rights under this Agreement, or shall suffer any levy or attachment to be made, or any materialmen's or mechanics' liens, or any other unauthorized encumbrance or lien to attach to the Redevelopment Property, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provisions reasonably satisfactory to the Authority made for such payment, removal, or discharge within thirty (30) days after written demand by the Authority to do so; provided, that if the Redeveloper shall first notify the Authority of its intention to do so, it may in good faith contest any real estate taxes or any mechanics' or other lien and, in such event, the Authority shall permit such taxes or mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal, but only if the Redeveloper provides the Authority with a bank letter of credit or other security in the amount of the taxes or the lien, in a form reasonably satisfactory to the Authority pursuant to which the bank or other obligor will pay to the Authority the amount of such taxes or lien in the event that the taxes or the lien is finally determined to be valid. During the course of such contest the Redeveloper shall keep the Authority informed respecting the status of such defense; or (c) There is, in violation of this Agreement, any transfer of the Redevelopment Property or any part thereof (other than in connection with a sale of a home to a bona fide purchaser), or any change in the ownership of the Redeveloper or the degree thereof, and such violation shall not be cured within ninety (90) days after written demand by the Authority to the Redeveloper; Then the Authority shall have the right to re -enter and re -take possession of the Redevelopment Property and to terminate (and revest in the Authority) the estate conveyed by any Redevelopment Property Deed to the Redeveloper, it being the parties' intent that the conveyance of the Redevelopment Property to the Redeveloper shall be made upon, and that the Redevelopment Property Deed shall contain, a condition subsequent to the effect that in the event of any default on the part of the Redeveloper and failure on the part of the Redeveloper to remedy such default within the period and in the manner stated in such subdivisions, the Authority at its option may declare a termination in favor of the Authority of the title and all the rights and interest in and to the Redevelopment Property conveyed to the Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to and in the Redevelopment Property, shall revert to the Authority, but only if the events stated in Section 7.1 have not been cured within the time periods provided above. The Authority shall have no right to re -enter or retake title to and possession of any part of the Redevelopment Property for which a Certificate of Completion has been issued or following the Termination Date. Section 7.7. Resale of Reacquired Property Disposition of Proceeds. Upon revesting in the Authority of title to any parcel of the Redevelopment Property or any part thereof as provided above, the Authority shall have no fiuther responsibility to the Redeveloper hereunder with respect to that or 23 any subsequent parcel and may sell or otherwise devote said parcels to such other uses as the Authority in its sole discretion determines. Any sum remaining upon resale after payment of all costs and expenses as allowed by this Agreement shall be paid to the Redeveloper. Section 7.8. Subordination. (a) The Authority recognizes that the Redeveloper intends to finance the construction of the Project (the "Construction Loan"), that in order to do so the construction lender (the "Lender ") may require a first mortgage or other lien ("Mortgage ") on the Redevelopment Property which is prior to the Redevelopment Property Deed, and that the Authority will have to subordinate such rights. (b) The Authority will agree that the Lender of the Construction Loan shall have the right to cure or remedy any breach or default of the Redeveloper, provided the Lender has first expressly assumed the obligations to the Authority (by written agreement satisfactory to the Authority) to complete the Minimum Improvements on the Redevelopment Property or the part thereof which is subject to the lien of the Mortgage. Upon request of the Authority, the Lender will agree to notify the Authority of any default of the Redeveloper under the terms of the Construction Loan. The Authority shall have the right, at its option, to cure or remedy any breach or default with respect to the Construction Loan and shall have any redemption rights in the event of foreclosure. (c) Additional conditions for the Authority subordinating its interests in this Agreement and approving a Mortgage include the following: (i) The Construction Loan proceeds will be used solely for the design, development and construction of the Project; (ii) The Construction Loan proceeds will be disbursed by a title company pursuant to a construction loan disbursing or similar agreement among the Redeveloper, the Lender and the title company whereby the title company will coordinate the payment for all work which may give rise to mechanics' liens; (iii) The Authority shall have the right to review the Construction Loan documents to reasonably satisfy itself that sufficient funds are or will be available to complete construction of the Proj ect. (d) Upon the Redeveloper's performing the above conditions, the Authority agrees that any and all rights of the Authority under this Agreement and the Redevelopment Property Deeds shall be subordinate to the rights of the Lender, including without limitation: (i) any and all rights of the Authority to the payment or use of the net proceeds of insurance; and (ii) any and all rights of the Authority to re -enter and retake possession of the Redevelopment Property and to re -vest in the Authority the estate conveyed by any Redevelopment Property Deed, 24 shall be subject and subordinate to the lien of the Mortgage and to the rights, interests and remedies of the Lender and its successors and assigns (including the purchaser at any foreclosure sale or the transferee of any transfer in lieu of foreclosure) under the Mortgage. The Authority further covenants and agrees that a purchaser at a foreclosure sale or the transferee of any transfer in lieu of foreclosure shall take title to the mortgaged property free and clear of all rights of the Authority and its successors and assigns under this Agreement. (e) The Authority further agrees that at the time of closing of the Construction Loan, it will enter into a subordination agreement in accordance with this Section in form and content reasonably acceptable to the Lender. 25 ARTICLE VIII Additional Provisions Section 8.1. Conflict of Interest. 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 8.2. Restrictions on Use. The Redeveloper shall not in marketing or sale of the Redevelopment Property, the Minimum Improvements, or any portion of the such real property or improvements discriminate upon the basis of race, color, creed, sex or national origin or any other basis prohibited by applicable local, State or federal laws or regulations. Section 8.3. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 8.4. Notices and Demands. Any notice, demand, or other communication permitted or required to be given hereunder by either party to the other shall be deemed 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 carver, or delivered personally to the following addresses: (a) If to the Redeveloper: Blueprint Homes, Inc., 1512 - 125th Ave NE, Suite 139, Blaine, MN 55449, Attention: Jeff Magdik. Fax: (763) 862 -9728. With a copy to: Felhaber, Larson, Fenlon & Vogt, 2100 Piper Jaffray Plaza, 444 Cedar Street, St. Paul, MN 55101, Attention: Stephen E. Yoch, Esq. Fax: (651) 222 -8905. (b) If to the Authority: Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, 6431 University Avenue NE, Fridley, MN 55432, Attention: City Manager. Fax: (763) 571 -1287. With a copy to: Krass Monroe, P.A., 8000 Norman Center Drive, Suite 1000, Minneapolis, MN 55437, Attention: Gay L. Cerney, Esq. Fax: (952) 885 -5969. Section 8.5. Counterparts. This Agreement maybe executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 8.6. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. FM Section 8.7. Termination. This Agreement shall expire on its Termination Date if it has not been terminated before such date pursuant to any provision hereof. Section 8.8. Provisions Surviving Termination. No termination of this Agreement shall terminate any indemnification or other rights or remedies under this Agreement due to (i) any Event of Default which occurred and was continuing prior to such termination, or (ii) any cause of action which arose before the termination. 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 on or as of the date first above written. G:\WPDATA\F\FRIDLEY\6l\DOC \CONTRACT BLUEPRINT VI DOC (Signature pages follow) 27 Dated: , 2005 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairman By Its Executive Director STATE OF MINNESOTA ) )ss COUNTY OF ANOKA ) On this day of , 20_ before me, a Notary Public, personally appeared Lawrence E. Commers and William W. Burns, to me personally known who by me duly sworn, did say that they are the Chairman and Executive Director, respectively, 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 Authority Signature Page - Contract for Private Redevelopment Dated: BLUEPRINT HOMES, INC. By Its STATE OF MINNESOTA ) )ss COUNTY OF ) On this day of , 20_, before me, a Notary Public, personally appeared , the of Blueprint Homes, Inc., a Minnesota corporation, and acknowledged-the foregoing instrument on behalf of said corporation. Notary Public Redeveloper Signature Page - Contract for Private Redevelopment 29 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY 30 SCHEDULE B FORM OF REDEVELOPMENT PROPERTY DEED THIS INDENTURE, made this _ day of , 2C , between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and politic (the "Grantor"), and Blueprint Homes, Inc., a Minnesota corporation (the "Grantee "). WITNESSETH, that the Grantor, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, does hereby convey and quit claim to the Grantee, its successors and assigns, forever, all the tract or parcel of land lying and being in the County of Anoka and State of Minnesota described as follows: See Exhibit 1 hereto TOGETHER with all hereditaments and appurtenances belonging thereto, subject to all conditions, covenants, restrictions and limitations imposed by: (a) the Contract for Private Redevelopment by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, and Blueprint Homes, Inc., dated , 2005 (the "Contract "); and (b) all other matters of record. The Grantor further states that: The Grantee has committed to construct certain improvements pursuant to the Contract and the Grantor has a right of re -entry in accordance with Sections 4.2 and 7.6, respectively, of the Contract. Title is conveyed hereby subject to the following conditions subsequent: In the event that the Grantee defaults on its obligations in the Contract and fails to properly cure said default, the Grantor may declare a termination of all right, title and interest conveyed herein and all right, title and interest in the premises described in Exhibit 1 reverts to the Grantor. Upon the performance of the Grantee's obligations in the Contract, including completion of the improvements, with respect to all or a portion of the premises described in Exhibit 1 the release of the right of re -entry and reverter as to all or a portion of that premises shall be evidenced by the recording of a Certificate of Completion and Release of Forfeiture in the form attached as Exhibit 2 to this deed. 31 IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its and the first date above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairman By Its Executive Director STATE OF ME- 4NESOTA ) )ss COUNTY OF ANOKA ) On this day of , 20 before me, a Notary Public, personally appeared and to me personally ]mown who by me duly sworn, did say that they are the and respectively, of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. This instrument was drafted by: KRASS MONROE, P.A. (GLC) 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437 (952) 885 -5999 32 Notary Public Tax statements for the real property described in this instrument should be sent to: Blueprint Homes, Inc. 1512 - 125th Ave NE, Suite 139 Blaine, MN 55449 SCHEDULE C FORM OF CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE WHEREAS, the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota (the "Authority') by a deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Anoka, State of Minnesota, as Deed Document Number has conveyed to Blueprint Homes, Inc., a Minnesota corporation (the "Redeveloper") certain real property described on Exhibit 1 attached to this Certificate; and WHEREAS, the Deed contained certain covenants and conditions, the breach of which by the Redeveloper, its successors and assigns, would result in a forfeiture and right of re -entry by the Authority, its successors and assigns, said covenants and restrictions being set forth in the Deed; and WHEREAS, the Redeveloper has performed said covenants and conditions with respect to the land described on Exhibit 1 insofar as it is able and in a manner deemed sufficient by the Authority to permit the execution and recording of this Certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Redeveloper have been completed and the above covenants and conditions in the Deed have been performed by the Redeveloper therein and that the provisions for forfeiture of title and right to re -entry for breach of condition subsequent by the Authority therein are hereby released absolutely and forever insofar as they apply to the land described herein, and the County of Anoka, State of Minnesota is hereby authorized to accept for recording and to record this instrument, and the filing of this instrument shall be a conclusive determination of the satisfactory termination of the covenants and conditions of the contract referred to in the Deed, the breach of which would result in a forfeiture and right of re -entry. Dated: , 200_ HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairman By Its Executive Director 33 STATE OF MINNESOTA ) )ss COUNTY OF ANOKA ) On this day of appeared personally known who by me duly sworn, did say that they are the Chairman and Executive Director, respectively, 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. _, 20_ before me, a Notary Public, personally and to me This instrument was drafted by: KRASS MONROE, P.A. (GLC) 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437 (952) 885 -5999 34 Notary Public SCHEDULE D PUBLIC RVIPROVEMENTS • Building demolition and removal of demolition debris, basements and driveways • Site clearance, including removal of all foundations and buildings and leaving the sites in a condition with clean fill to level ground • Sanitary sewer to the edge of each of the North and South Sites — the Authority shall ensure there is sufficient sanitary sewer capacity to service the intended redevelopment • Water mains and laterals to the edge of each of the North and South Sites — the Authority shall ensure there is sufficient water capacity to service the intended redevelopment • Construct new sewer and water services to the front property line for all lots • Construct a 6" water main in 3rd Street from 58' Avenue to 57t' Place • Construct an 8" sanitary sewer main in 3rd Street to serve the unsewered lots • Remove and replace concrete curb and gutter as necessary for utilities, utility services, and driveways, and also as required to close vacated streets • Remove existing bituminous pavement on 3rd Street, 57th Place, 58t` Avenue, and 59th Avenue • Construct new bituminous pavement on 3rd Street and on 57th Place as needed • Environmental remediation which shall place the Redevelopment Property in a condition required by law for residential use. Such remediation shall occur if recommended by a licensed environmental engineer • Vacation of the public rights of way indicated on Exhibit A • Ornamental fencing along University Avenue (timing to be coordinated with Redeveloper's construction of the Minimum Improvements) 35 SCHEDULE E SITE IMPROVEMENTS • Utility relocation and connection within. the Redevelopment Property • Landscaping according to a City - approved overall landscaping plan to include screening along University Avenue with a minimum per -unit expenditure of $5,000 • Grading and import/export of soil • Retaining walls and fences, if needed M SCHEDULE F PREVAILING WAGE REQUIREMENTS Exhibit 1— City Ordinance No. 1095 Exhibit 2 — HRA Resolution No. 13 -1997 Exhibit 3 — 2004/2005 prevailing wage rates published by the Minnesota Department of Labor and Industry. 37 AM INFORMATIONAL ITEM ri HRA MEETING OF DECEMBER 11 2005 CrrY of FRIDLEY Date: November 22, 2005 To: William Bums, Executive Director From: Paul Bolin, Asst. Executive HRA Director Subiect: Islands of Peace — Update M -05 -150 At the joint meeting on November 14th, Bancor presented some of their ideas for possible site design and reuse of the Islands of Peace neighborhood. Their ideas included rehabbing the existing apartment buildings along Island Park Drive and constructing additional units between the existing buildings. This concept would provide 140 units of workforce housing and would cost substantially less than removing all buildings and starting from scratch. Bancor was also proposing 160 -200 units of market rate condominiums in 3-4 story buildings and looking to expand across East River Road. The Council and HRA members present seemed to collectively not care for the ideas proposed by Bancor. To sum up all of the comments made, it was quite obvious that all new construction was preferred to rehabbing of rental units. It also appeared that the consensus of the group was to construct high -end, high - valued, multi -story condominiums. There did not appear to be any real interest in purchasing the Tri -star Insulation and Longview Fiber properties to expand the project to the East. After a follow -up meeting with Bancor on November 16th, staff is concerned that Bancor is not taking the Council & HRA comments seriously. Their response to all of the comments was to move the entrance into the development, to the North, so that one would not drive through the rehabbed apartments to get to their market rate condominium. Despite representing to us that they could deliver any desired type of housing product, during the June selection process, Bancor stated on November 16th that, "if the Council & HRA want a high rise, we're not the right developer'. Staff and HRA legal counsel are meeting with Bancor on November 23rd to further discuss and clarify the next steps. It does not make sense to continue with Bancor if they are not able to deliver on the wishes of the HRA and Council. Staff will provide an update next Thursday night. Fridley HRA Housing Program Summary Cover Page December 1, 2005 HRA Meeting Report Description Loan Application Summary Loan application activity (e.g. mailed out, in process, closed loans) for November 2005 and year -to -date. Loan Origination Report Loan Servicing Report Remodeling Advisor & Operation Insulation Loan originations for November 2005 and year -to -date. Loan servicing by Community Reinvestment Fund (CRF) for the month of October 2005. Note, that the loan servicing reports are usually available 10 days after month end. Shows the number of field appointments scheduled and completed the Operation Insulation and Remodeling Advisor Services administered by Center for Energy and Environment. PLEASE NOTE: At the time this packet was put together, staff had not received the monthly housing report numbers from CEE. Staff will provide those numbers at the meeting on Thursday. M Paul's DocumentsWRAMA Agenda Items\2005\December 1, 2005\Housing Program Cover Page(December2005).doc FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY December 1, 2005 1. Viper Motorcycles Last month I reported that Viper Motorcycles was close to moving into BAE (United Defense) building. Since the last update, I was contacted by John Lai (Viper Motorcycles), and informed that they most likely will not be moving into BAE's building. Apparently, sometime late in the negotiations, BAE representatives raised concern over the noise from the testing of engines. Mr. Lai thought that noise may be an ongoing problem with BAE and is no looking at other sites. 2. Search for new Accountant The City stopped taking applications for the HRA Accountant position on November 14th. Staff is currently reviewing the applicants and hopes to begin interviews early in December. 3. Totino -Grace Theater Expansion Totino -Grace met with a number of City staff people to discuss an expansion and remodeling of their existing theater space. The new addition will allow provide T -G with a state of the art theater for their student productions as well as additional meeting /service space. 4. Home & Garden Show With 2 weeks to go, we have over ' /z of our vendor booth spaces spoken for. It is anticipated that this years show will be the largest and best ever. This years show will be held at the Schwan's Event Center in Blaine on Saturday February 25h. 5. Increased Interest Rate for Home Loan I was recently informed by CEE Staff that the interest rate on Fridley's home improvement program would be increasing from 4% to 5.25% on December 1". The Minnesota Housing Finance Agency recently increased their rates from 5.25% to 6.5 %. Our rate is tied to the MHFA interest rate (set to be 1.25% lower) and automatically adjusts without action of the HRA. I will mention this on the air next Thursday so that residents are aware of the change. If there are any items you would like covered in upcoming issues of the Non - Agenda Update please send me an e-mail. bolinp @ci.ftidley.mn.us M