HRA 05/06/2010 - 6252WWj
MAY 6, 2010
HRA Meeting
Regular Meeting Agenda
7.30 P.M.
City Hall, Council Chambers
Call to order
Roll call.
Action Items
1. Approval of expenditures
2. Approval of March 23, 2010, Meeting Minutes
3. Public Hearing to consider the proposed sale of property to Fridley Assisted
Living, LLC
Informational Items
1. HRA Fund Balances for Planning Purposes
2. Housing Replacement Program
3. Home Remodeling Demonstration Program
4. Housing Loan Program Update
Adjournment
PLEASE NOTE:
The annual Council /Commission Survey meeting will start at 6PM in the lower level
meeting rooms. Dinner will be provided.
The regular HRA meeting will then follow at 7:30PM.
H:WIy Documents\HRA12010 AGENDASWIay 6 -2010 Agenda Outline.docH:Wiy Documents\HRA\2010 AGENDASVWay 6 -2010
Agenda Outline.doc
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AY 6, 2010
HRA Meeting
Regular Meeting Agenda
7:30 p.m.
City Hall, Council Chambers
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Call to order ���4 1v
Roll call. ` b
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Action Items
1. Approval of expenditures
2. Approval of March 23, 2010, Meeting Minutes
3. Public Hearing to consider t osed sale of property to Fridley Assisted
Living, LLC —A
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Informational Items
1. HRA Fund Balances for Planning Purposes
2. Housing Replacement Program
3. Home Remodeling Demonstration Program
4. Housing Loan Program Update
Adjournment
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PLEASE NOTE:
The annual Council /Commission Survey meeting will start at 6PM in the lower level
meeting rooms. Dinner will be provided.
The regular HRA meeting will then follow at 7:34PM.
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CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION
MARCH 23, 2010
CALL TO ORDER:
Chairperson Commers called the HRA Meeting to order at 7:00 p.m.
ROLL CALL:
MEMBERS PRESENT: William Holm
Pat Gabel
Larry Commers
Stephen Eggert
John Meyer
NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director
Scott Hickok, Community Development Director
Jim Casserly, Development Consultant
Richard Pribyl, Finance Director
ACTION ITEMS:
1. Approval of Expenditures
MOTION by Commissioner Holm to approve the expenditures as presented. Seconded by
Commissioner Gabel.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
2. Approval of February 4, 2010, Meeting Minutes
MOTION by Commissioner Holm to approve the minutes as presented. Seconded by
Commissioner Meyer.
Commissioner Gabel asked for corrections on pages 2 and 4 of the minutes.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MINUTES APPROVED AS AMENDED.
3. Approval of Resolution Designating Official Depositories
Richard Pribyl, Finance Director, said that annually the City and HRA designates an official
bank. Wells Fargo has been the official bank for the both the City and HRA for a number of
n years. Wells Fargo is responsive and easy to work with and flexible with investment
management. Staff recommends approval of the resolution designating Wells Fargo as the
official depository for the Authority.
MOTION by Commissioner Gabel to approve the resolution designating official depositories.
Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
4. Approval of 2010 Mowing Contract
Paul Bolin, HRA Assistant Executive Director, said that the HRA has contracted with Complete
Grounds Maintenance since 2004. The service has been reliable and responsive. 2010 service
rates will continue at the 2009 rates. Staff Recommends the HRA continue with Complete
Grounds Maintenance for mowing services for 2010.
Chairperson Commers asked if there would be any mowing services needed where the
buildings were demolished.
Mr. Bolin said that currently there is black dirt and the area will be seeded and once it is grown,
those properties will be mowed as well.
Commissioner Gabel asked how fees for the mowing are determined.
Mr. Bolin said th eve hing is priced on a per hour basis, $36 dollars per hour, and an
estimated time is iv �p lot that is mowed.
MOTION by Com i oner Meyer to approve the 2010 Mowing Contract. Seconded by
Commissioner Gabel.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
5. Approval of Realtor and Contractor for Home Improvement Demonstration Project
Paul Bolin, HRA Assistant Executive Director, said that HRA purchased a rambler at 831
Mississippi Street NE consisting of 3 bedrooms, 2 baths, 1,028 sq. ft, built in 1959. The home is
approximately 1,028 square feet and HRA acquired the property for $128,573.29. The current
average list price for comparables was $179,959 and the average sales price for recent
comparable homes is $156,333. The home at 871 Mississippi listed for $194,900.
Mr. Bolin said that this program will spur reinvestment in Fridley's housing stock by
showcasing a wide array of potential upgrades / improvements to make older homes more
livable, demonstrating home energy efficiency, encouraging reinvestment in Single Family
housing stock and promoting our loan program and remodeling advisor services.
o.
Mr. Bolin said that a Remodeling Contractor was selected after a thorough process. 16
Contractors provided their qualifications; the top three were interviewed and then submitted their
remodeling ideas and estimated costs. Lennox Builders were the unanimous staff choice.
Lennox Builders has experience with the Coon Rapids program and a depth of expertise.
Mr. Bolin said that the real estate broker was also selected through a similar process. 15
Realtors supplied statements of qualifications /interest; the top three were interviewed and Tim
Van Auken of Counselor Realty had the most innovative marketing ideas and demonstrated
interest in participating in the entire project.
Mr. Bolin said that staff recommends that the Authority approves the selection of Lennox
Builders to be the contractor for the program and Tim Van Auken/Counselor Realty be the
realtor for the program. Staff further recommends the Board Chair and Executive Director be
authorized to sign the necessary agreements on behalf of the Authority. Pending approval, the
following timeline has been developed with the Contractor and Realtor.
Pre - remodel open house and kick -off event held Sunday April 1 I`h
Remodeling work begins on April 12`x'.
Mid -point open houses held Sunday May 23rd and Wednesday May 26`x'.
Websites will be updated regularly
Series of open houses held after completion and home listed for sale, starting on Saturday
July 17t'.
L �issioner Gabel asked who this home would be marketed to. She had concerns about the
only being two bedrooms on the main floor which would not make it attractive to a young
y
Mr. Bolin said that was a concern but as the home was looked at closer, it was decided that for a
showcase home and the greatest appeal to a wide variety of residents it would be best to have a
larger bedroom and the option for additional bedrooms in the basement.
Commissioner Gabel asked about the area underneath the addition.
Mr. Bolin said that area would be for storage. There is not a way to find a home that will suit
everyone's needs. There is also a single garage that isn't ideal for everyone. The home has a lot
of plusses to balance out any negatives. This proposal offered the best variety of all the designs
that were presented.
Commissioner Gabel asked if there was room to expand the garage.
Mr. Bolin answered no but said that a detached double garage could be built behind the home.
If that is something the homeowner would need, that option is available.
Scott Hickok, Community Development Director, added that one of the things in the
Comprehensive Plan is that there is a desire for more opportunities for seniors to stay in their
home and this would offer that opportunity.
ba
Commissioner Gabel asked if the laundry was on the main level.
Mr. Bolin said that there is room for that where the panty is located or in the walk in closet.
Commissioner Meyers said that he is amazed what they are going to do for the money. He
thought the designer did a great job and was very impressed.
MOTION by Commissioner Holm to approve the realtor and contractor for home improvement
demonstration project. Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
Tim VanAuken, Counselor Reality, said that he has a history of selling homes in Fridley and
has represented numerous sellers. Recently he developed a twin home where he currently
resides. He has worked with an investor in Fridley and did similar project by rehabilitating a
dated home and resold the property.
Commissioner Meyers asked if he had any experience with Lennox Builders.
Mr. VanAuken answered no, but he did meet them today and was impressed with ideas of the
remodel and the direction they are taking. The bonus this home has is the marketing capability. �..�
Lennox Builders has a good grasp on the marketing and working together as a whole, not just the _
property itself. This home renovation has potential to be very successful.
Mr. VanAuken addressed the concern with the two bedrooms which was also his concern but
agreed with Mr. Hickok that there are aging residents that want to stay in Fridley and this home
would meet their needs. Also there are aging families that will be able to see that extra
bedrooms can be added to the lower level. A lot of homeowners cannot sell their homes and this
will help them be able to stay in Fridley. The loan programs available to the residents will help
people to stay in their homes.
Chairperson Commers said that it sounded like Mr. VanAuken has a lot of experience and the
HRA would like this to be successful so another home rehabilitation program could be started.
6. Approval to Set Public Hearing for Potential Land Sale
Paul Bolin, HRA Assistant Executive Director, said that HRA has received an offer, from Jim
Faulkner / Faulkner Construction, to purchase two vacant properties the HRA has owned since
early 2000. The properties are located at 6352 Old Central Avenue and1271 E. Moore Lake
Drive.
Mr. Bolin said that HRA purchased the two parcels in early 2000 for a total price of $143,000.
The parcels are not buildable in their current state due to the depth of organic soils. Over
$500,000 is needed to correct the soils and the properties have been off tax roles for 10 years.
Mr. Bolin said that the Faulkner Group is seeking to obtain parcels for $100,000. Faulkner will
correct soils on both sites upon closing of the sale; will construct a senior assisted living project
upon completion of soil corrections, which will generate nearly $15,000 / year to the City in
property tax and will construct a commercial building in near future, generating an additional
$7,000 / year in City tax revenue.
Mr. Bolin said that Faulkner will need City approval on the "master plan" for the site as it is
located in an S -2 Redevelopment District. Staff recommends the Authority set May 61' as the
date to hold a public hearing on the potential land sale. Staff also recommends that the Authority
authorize the Board Chair to sign on to the "master plan" land use application as the property
owner.
Chairperson Commers asked if ponding was needed for this property. .
Scott Hickok, Community Development Director, said that the property was originally
purchased because it had soil issues. This property would sit there and be undeveloped for a
long period of time. Each site in that neighborhood would not be required to have their own
pond and it was thought that if a pond wasn't developed on each site the projects could do a
regional pond concept. The project at the Sandy Site and Select Development Site could have
their own ponding which does prove that the properties can develop without the regional pond
concept.
Commissioner Holm asked what it meant to have the ability to get the property back.
Mr. Bolin said that once the soil corrections are done if the HRA wanted the property back some
of the expenses would need to be reimbursed. Staff hopes to avoid all of that by requiring all soil
corrections be completed upfront.
Jim Casserly, Development Consultant, said that once the agency has financing for the senior
project secured, the city would require all soil corrections be done throughout the site. If the
commercial project is not completed in 3-4 years the property would be in default of the
agreement and HRA would have the right to get the property back. HRA would have provisions
in the agreement to protect them from certain circumstances.
Chairperson Commers asked if HRA would get the property back by default.
Mr. Casserly said that HRA would get the property back by default and if the developer doesn't
perform. This provision has been used in a number of projects but HRA has never had to
exercise that option.
Commissioner Eggert asked what the time frame is for the project.
Attorney Casserly said that the time frame has not been set; but given the cost of the soil
correction they would probably not move forward unless they have financing for the senior
r'n'� housing project. A reasonable period of time will need to be built in just for the soil correction.
Chairperson Commers asked if money could be saved on the soil correction.
Attorney Casserly said that bids came in the mid $600,000 for all soil correction but they are
using specifications from the city on max cubic yards of soil that needs to be taken out and
replaced. Because of the expense involved, they will try to find cheaper soil through a project
with excess soil available.
Commissioner Gabel asked if the area had to be dug out 12'.
Commissioner Meyers said that he would be surprised if it is that deep and would like to see the
soil borings.
Mr. Hickok said that pilings were considered and it was determined they would prefer soil
corrections.
Chairperson Commers asked if the taxes would start in 2013 or if it would get pushed back.
Attorney Casserly said he didn't know. This project is market driven and they have tried to be
optimistic.
Commissioner Holm asked if the soil issue was throughout the site.
Mr. Bolin said that it appears to be throughout both sites and is well distributed.
Commissioner Holm asked about ponding on the hard surface and if it was a good space on
both sites to combine.
Mr. Hickok said that they have been speaking with the Public Works Director on that issue to
see what ponding requirements would be in that area. If needed they could consider subsurface
holding facilities rather than an open pond. That is preferred when the area for a ponding is tight.
MOTION by Commissioner Holm to set public hearing for potential land sale. Contract.
Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
INFORMATIONAL ITEMS:
Housing Loan Program Update
Paul Bolin, HRA Executive Assistant Director, said that in February/March two RLF loans were
closed which makes a total of three year to date. No remodeling advisor visits have been made
so far this year. A direct mailing will go out to residents the first week in May to promote these
programs.
Mr. Bolin said that the Home and Garden Show was held on February 26 and over 1,000 people
attended. Positive comments have been heard from those who attended. The next HRA meeting
is on May 6, 2010.
NONAGENDA UPDATE:
None
ADJOURNMENTS:
MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT
8:45 P.M.
Respectfully Submitted,
�,,1 Krista Monsrud, Recording Secretary
ACTION ITEM
ON HRA MEETING OF MAY 65 2010
CITY OF
FRIDLEY
Date: May 6, 2010
To: William Bums, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Subiect: Public Hearinq For & Authorization of Potential Land Sale
Mr. James Faulkner, a builder /architect/developer of specialized senior housing, has made an
offer to purchase two lots currently owned by the HRA. The two sites Mr. Faulkner wishes to
purchase are adjacent to each other and located at 6352 Old Central Avenue and at 1271 E.
Moore Lake Drive. Mr. Faulkner plans to develop a 40 unit assisted living / memory care
building for seniors on the Old Central property and a 19 unit memory care facility on the E.
Moore Lake Drive site.
The HRA purchased these two sites in the spring of 2000 for a total of $143,000. As indicated in
a report prepared for the HRA prior to the purchase, the properties are not buildable in their
current condition due to the excessive depth of organic soils. It is because of these soil
conditions that Mr. Faulkner is offering a price of $100,000 for the land.
Mr. Faulkner has also made an application to the City for a "master plan" approval for the site, as
it is zoned S -2 Redevelopment District. The Planning Commission reviewed and approved the
item during their meeting on April 21 st. The City Council will act on the "master plan" during
their May 10th meeting.
Recommendation:
Staff recommends the Authority hold a public hearing on the potential land sale, to the Faulkner
Group. Staff further recommends that the HRA authorize sale of land to Faulkner group.
WHITE PINE SENIOR LIVING
FRIDLEY, MINNESOTA
MASTER PLAN NARRTIVE
We are pleased to present a narrative of our proposed Assisted Living and Memory Care
Facility.
SITE: We have made a purchase offer to the Fridley HRA for three parcels of adjacent land at
the comer of Moore Lake Drive and Central Avenue. The sites are collectively 105,069
square feet and will support 25,584 square foot Phase I and a 10,135 square foot Phase II
buildings.
Our Master Plan application has been submitted using the C 1 Zoning Ordinance for site
planning standards. Included in our submittal are a Master Plan, Site Plan, Building Floor
Plans, Building Elevations and Landscaping Plan with exterior improvements. The Phase II
building and parking pads will be completely prepared, including utilities, ready for
construction. The site will be seeded and maintained by our staff until construction.
BUILDING PHASE I: Our Phase I project will be a forty resident Assisted Living and
Memory Care Facility. The "building is one story with pitched roofs, composite lap siding and
n stone veneer. Eighteen seniors will reside in the assisted living wing and twenty seniors will
reside in the memory care wing. Each wing has dining and leisure time space as well as
support services including office space, common toilet rooms with showers, personal care and
laundry.
BUILDING PHASE U: Our Phase II will include nineteen additional memory care resident
rooms and support services. Dining for the residents will be within this facility with food
prepared in Phase I kitchen. Occupancy of the Phase I community will determine the schedule
of construction of Phase II.
FACILITY MANAGEMENT: Our facility will be managed by Comforts of Home White
Pine Management Company. COHWP is located in Mendota Heights, Minnesota and also
manage our 42 resident WBL facility. Please visit their website at www.cohseniorliving.com.
RESIDENTS: We are especially pleased to offer our senior community to the residents and
families of the City of Fridley. Market study indicates a substantial need within the
community and we are prepared to meet this need with our development plans and experience
in the design, construction and management of six Minnesota based Assisted Living and
Memory Care Facilities.
Prepared by:
Jim Faulkner, Partner
Fridley Assisted Living, LLC
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CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION
MARCH 23, 2010
CALL TO ORDER:
Chairperson Commers called the HRA Meeting to order at 7:00 p.m.
ROLL CALL:
MEMBERS PRESENT: William Holm
Pat Gabel
Larry Commers
Stephen Eggert
John Meyer
NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director
Scott Hickok, Community Development Director
Jim Casserly, Development Consultant
Richard Pribyl, Finance Director
ACTION ITEMS:
1. Approval of Expenditures
MOTION by Commissioner Holm to approve the expenditures as presented. Seconded by
Commissioner Gabel.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
2. Approval of February 4, 2010, Meeting Minutes
MOTION by Commissioner Holm to approve the minutes as presented. Seconded by
Commissioner Meyer.
Commissioner Gabel asked for corrections on pages 2 and 4 of the minutes.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MINUTES APPROVED AS AMENDED.
3. Approval of Resolution Designating Official Depositories
Richard Pribyl, Finance Director, said that annually the City and HRA designates an official
bank. Wells Fargo has been the official bank for the both the City and HRA for a number of
years. Wells Fargo is responsive and easy to work with and flexible with investment
management. Staff recommends approval of the resolution designating Wells Fargo as the
official depository for the Authority.
MOTION by Commissioner Gabel to approve the resolution designating official depositories.
Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
4. Approval of 2010 Mowing Contract
Paul Bolin, HRA Assistant Executive Director, said that the HRA has contracted with Complete
Grounds Maintenance since 2004. The service has been reliable and responsive. 2010 service
rates will continue at the 2009 rates. Staff Recommends the HRA continue with Complete
Grounds Maintenance for mowing services for 2010.
Chairperson Commers asked if there would be any mowing services needed where the
buildings were demolished.
Mr. Bolin said that currently there is black dirt and the area will be seeded and once it is grown,
those properties will be mowed as well.
Commissioner Gabel asked how fees for the mowing are determined.
Mr. Bolin said that everything is priced on a per hour basis, $36 dollars per hour, and an
estimated time is give per lot that is mowed.
MOTION by Commissioner Meyer to approve the 2010 Mowing Contract. Seconded by
Commissioner Gabel.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
5. Approval of Realtor and Contractor for Home Improvement Demonstration Project
Paul Bolin, HRA Assistant Executive Director, said that HRA purchased a rambler at 831
Mississippi Street NE consisting of 3 bedrooms, 2 baths, 1,028 sq. ft, built in 1959. The home is
approximately 1,028 square feet and HRA acquired the property for $128,573.29. The current
average list price for comparables was $179,959 and the average sales price for recent
comparable homes is $156,333. The home at 871 Mississippi listed for $194,900.
Mr. Bolin said that this program will spur reinvestment in Fridley's housing stock by
showcasing a wide array of potential upgrades / improvements to make older homes more
livable, demonstrating home energy efficiency, encouraging reinvestment in Single Family
housing stock and promoting our loan program and remodeling advisor services.
11�
Mr. Bolin said that a Remodeling Contractor was selected after a thorough process. 16
Contractors provided their qualifications; the top three were interviewed and then submitted their
remodeling ideas and estimated costs. Lennox Builders were the unanimous staff choice.
Lennox Builders has experience with the Coon Rapids program and a depth of expertise.
Mr. Bolin said that the real estate broker was also selected through a similar process. 15
Realtors supplied statements of qualifications /interest; the top three were interviewed and Tim
Van Auken of Counselor Realty had the most innovative marketing ideas and demonstrated
interest in participating in the entire project.
Mr. Bolin said that staff recommends that the Authority approves the selection of Lennox
Builders to be the contractor for the program and Tim Van Auken/Counselor Realty be the
realtor for the program. Staff further recommends the Board Chair and Executive Director be
authorized to sign the necessary agreements on behalf of the Authority. Pending approval, the
following timeline has been developed with the Contractor and Realtor.
Pre - remodel open house and kick -off event held Sunday April 1 It'.
Remodeling work begins on April l2`h.
Mid -point open houses held Sunday May 23`d and Wednesday May 26th.
Websites will be updated regularly
Series of open houses held after completion and home listed for sale, starting on Saturday
July 17`h.
Commissioner Gabel asked who this home would be marketed to. She had concerns about the
home only being two bedrooms on the main floor which would not make it attractive to a young
family. Liu nv L4.-
Mr. Bolin said that was a concern but as the home was looked at closer, it was decided that for a
showcase home and the greatest appeal to a wide variety of residents it would be best to have a
larger bedroom and the option for additional bedrooms in the basement.
Commissioner Gabel asked about the area underneath the addition.
Mr. Bolin said that area would be for storage. There is not a way to find a home that will suit
everyone's needs. There is also a single garage that isn't ideal for everyone. The home has a lot
of plusses to balance out any negatives. This proposal offered the best variety of all the designs
that were presented.
Commissioner Gabel asked if there was room to expand the garage.
Mr. Bolin answered no but said that a detached double garage could be built behind the home.
If that is something the homeowner would need, that option is available.
Scott Hickok, Community Development Director, added that one of the things in the
Comprehensive Plan is that there is a desire for more opportunities for seniors to stay in their
home and this would offer that opportunity.
Commissioner Gabel asked if the laundry was on the main level.
Mr. Bolin said that there is room for that where the panty is located or in the walk in closet.
Commissioner Meyers said that he is amazed what they are going to do for the money. He
thought the designer did a great job and was very impressed.
MOTION by Commissioner Holm to approve the realtor and contractor for home improvement
demonstration project. Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
Tim VanAuken, Counselor Reality, said that he has a history of selling homes in Fridley and
has represented numerous sellers. Recently he developed a twin home where he currently
resides. He has worked with an investor in Fridley and did similar project by rehabilitating a
dated home and resold the property.
Commissioner Meyers asked if he had any experience with Lennox Builders.
Mr. VanAuken answered no, but he did meet them today and was impressed with ideas of the
remodel and the direction they are taking. The bonus this home has is the marketing capability.
Lennox Builders has a good grasp on the marketing and working together as a whole, not just the
property itself. This home renovation has potential to be very successful.
Mr. VanAuken addressed the concern with the two bedrooms which was also his concern but
agreed with Mr. Hickok that there are aging residents that want to stay in Fridley and this home
would meet their needs. Also there are aging families that will be able to see that extra
bedrooms can be added to the lower level. A lot of homeowners cannot sell their homes and this
will help them be able to stay in Fridley. The loan programs available to the residents will help
people to stay in their homes.
Chairperson Commers said that it sounded like Mr. VanAuken has a lot of experience and the
HRA would like this to be successful so another home rehabilitation program could be started.
6. Approval to Set Public Hearing for Potential Land Sale
Paul Bolin, HRA Assistant Executive Director, said that HRA has received an offer, from Jim
Faulkner / Faulkner Construction, to purchase two vacant properties the HRA has owned since
early 2000. The properties are located at 6352 Old Central Avenue and1271 E. Moore Lake
Drive.
Mr. Bolin said that HRA purchased the two parcels in early 2000 for a total price of $143,000.
The parcels are not buildable in their current state due to the depth of organic soils. Over
$500,000 is needed to correct the soils and the properties have been off tax roles for 10 years.
n
Mr. Bolin said that the Faulkner Group is seeking to obtain parcels for $100,000. Faulkner will
correct soils on both sites upon closing of the sale; will construct a senior assisted living project
upon completion of soil corrections, which will generate nearly $15,000 / year to the City in
property tax and will construct a commercial building in near future, generating an additional
$7,000 / year in City tax revenue.
Mr. Bolin said that Faulkner will need City approval on the "master plan" for the site as it is
located in an S -2 Redevelopment District. Staff recommends the Authority set May 6,' as the
date to hold a public hearing on the potential land sale. Staff also recommends that the Authority
authorize the Board Chair to sign on to the "master plan" land use application as the property
owner.
Chairperson Commers asked if ponding was needed for this property. .
Scott Hickok, Community Development Director, said that the property was originally
purchased because it had soil issues. This property would sit there and be undeveloped for a
long period of time. Each site in that neighborhood would not be required to have their own
pond and it was thought that if a pond wasn't developed on each site the projects could do a
regional pond concept. The project at the Sandy Site and Select Development Site could have
their own ponding which does prove that the properties can develop without the regional pond
concept.
'� Commissioner Holm asked what it meant to have the ability to get the property back.
Mr. Bolin said that once the soil corrections are done if the HRA wanted the property back some
of the expenses would need to be reimbursed. Staff hopes to avoid all of that by requiring all soil
corrections be completed upfront.
Jim Casserly, Development Consultant, said that once the agency has financing for the senior
project secured, the city would require all soil corrections be done throughout the site. If the
commercial project is not completed in 3-4 years the property would be in default of the
agreement and HRA would have the right to get the property back. HRA would have provisions
in the agreement to protect them from certain circumstances.
Chairperson Commers asked if HRA would get the property back by default.
Mr. Casserly said that HRA would get the property back by default and if the developer doesn't
perform. This provision has been used in a number of projects but HRA has never had to
exercise that option.
Commissioner Eggert asked what the time frame is for the project.
Attorney Casserly said that the time frame has not been set; but given the cost of the soil
correction they would probably not move forward unless they have financing for the senior
housing project. A reasonable period of time will need to be built in just for the soil correction.
Chairperson Commers asked if money could be saved on the soil correction.
Attorney Casserly said that bids came in the mid $600,000 for all soil correction but they are
using specifications from the city on max cubic yards of soil that needs to be taken out and
replaced. Because of the expense involved, they will try to find cheaper soil through a project
with excess soil available.
Commissioner Gabel asked if the area had to be dug out 12'.
Commissioner Meyers said that he would be surprised if it is that deep and would like to see the
soil borings.
Mr. Hickok said that pilings were considered and it was determined they would prefer soil
corrections.
Chairperson Commers asked if the taxes would start in 2013 or if it would get pushed back.
Attorney Casserly said he didn't know. This project is market driven and they have tried to be
optimistic.
Commissioner Holm asked if the soil issue was throughout the site.
Mr. Bolin said that it appears to be throughout both sites and is well distributed.
Commissioner Holm asked about ponding on the hard surface and if it was a good space on
both sites to combine.
Mr. Hickok said that they have been speaking with the Public Works Director on that issue to
see what ponding requirements would be in that area. If needed they could consider subsurface
holding facilities rather than an open pond. That is preferred when the area for a ponding is tight.
MOTION by Commissioner Holm to set public hearing for potential land sale. Contract.
Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY
INFORMATIONAL ITEMS:
Housing Loan Program Update
Paul Bolin, HRA Executive Assistant Director, said that in February/March two RLF loans were
closed which makes a total of three year to date. No remodeling advisor visits have been made
so far this year. A direct mailing will go out to residents the first week in May to promote these
programs.
n
Mr. Bolin said that the Home and Garden Show was held on February 26 and over 1,000 people
attended. Positive comments have been heard from those who attended. The next HRA meeting
is on May 6, 2010.
NONAGENDA UPDATE:
None
ADJOURNMENTS:
MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT
8:45 P.M.
Respectfully Submitted,
Krista Monsrud, Recording Secretary
1�'
MONROE
MOxNESS
BERG
8000 Norman Center Drive 7 952.885.5999
Suite 1000 F 952.885.5969
Minneapolis, MN 55437 -1178 www.MMBLawF!rm.com
James R. Casserly
jcasserly@krassmonroe.com
Direct 952.885.1296
MEMORANDUM
To: City of Fridley Housing and Redevelopment Authority
Attn: Paul Bolin, HRA Assistant Executive Director
From: James R. Casserly, Esq.
Date: April 29, 2010
Re: Contract for Private Redevelopment between the HRA and Faulkner
Our File No. 9571 -75
Attached is a Contract for Private Redevelopment between the HRA and Faulkner
Construction, Inc. (the "Contract ") and a Resolution for the HRA to adopt the Contract.
The Contract acts as a purchase agreement whereby the HRA sells its property to
Faulkner Construction, Inc. (the "Redeveloper"). However, the HRA is requiring that
certain improvements take place or it wants its property returned. Because of these
additional requirements, the format for a contract for private redevelopment has been
followed.
In short, the Contract does the following:
• The HRA sells its property (the "Redevelopment Property") for $100,000.
• The Redeveloper agrees to perform Site Improvements, which is
principally soil correction, that will allow for the construction of the
Minimum Improvements.
• The Minimum Improvements are in two phases with Phase I being a 40-
unit assisted living and memory care facility and Phase II being a 19 -unit
memory care facility.
• Improvements to the site are to commence on or before September 1,
2010 and to be completed by December 31, 2011.
• While the Contract is very clear that the project contemplates both
Phases, the Redeveloper meets the requirements of the Contract if (i)
Phase I is completed and (ii) the soil corrections are completed that will
allow for the construction of Phase II Minimum Improvements.
One of the Authority's goals is to increase the market valuation of the City
and generate additional property taxes. As a result, the Contract prohibits
the Redevelopment Property from becoming tax exempt until the year
2033.
Please let me know if there are any questions or issues that should be addressed. I will
be available at the HRA meeting to respond to any concerns.
J RC /al
Enclosures
cc: Faulkner Construction, Inc.
Attn: James A. Faulkner
KM: 4813 - 7566 -8485, V. 1
2
111�
RESOLUTION NO.
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A
CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY FRIDLEY, AND
FAULKNER CONSTRUCTION, INC.
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a Contract for Private Redevelopment (the
"Contract ") with Faulkner Construction, Inc., a limited liability company (the "Redeveloper").
Section 2. Findings.
2.01. The Authority hereby finds that the Contract promotes the objectives as outlined in its
Redevelopment Plan established pursuant to Minnesota Statutes, Section 469.001 et seq.
Section 3. Authorization for Execution and Delivery.
3.01. The Chairman and the Executive Director (the "Officers") are hereby authorized to execute
and deliver the Contract when the following conditions are met:
Substantial conformance to the Contract presented to the Authority as of this date with such
r"1 additions and modifications as the Officers may deem desirable or necessary as evidenced by the
execution thereof;
Adopted by the Board of Commissioners of the Authority this day of , 2010.
Lawrence R. Commers, Chairman
ATTEST:
William W. Bums, Executive Director
KM: 484398145798, v. 1
DRAFT: As of April 27, 2010
CONTRACT FOR PRIVATE REDEVELOPMENT
by and between the
HOUSING AND REDEVELOPMENT AUTHORITY
in and for
THE CITY OF FRIDLEY, MINNESOTA
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This document was drafted by:
Monroe Moxness Berg PA
8000 Norman Center Drive, Suite 1000
Minneapolis, MN 55437
Section 1.1
Section 2.1
Section 2.2
Section 3.1
Section 3.2
Section 3.3
Section 4.1
Section 4.2
Section 4.3
Section 5.1
Section 5.2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Definitions.................... ...............................
ARTICLE H
..................... ..............................2
REPRESENTATIONS, WARRANTIES AND COVENANTS
Representations, Warranties and Covenants by the Authority ...........................4
Representations, Warranties and Covenants by the Redeveloper ......................5
ARTICLE III
CONVEYANCE OF THE REDEVELOPMENT PROPERTY;
UNDERTAKINGS OF AUTHORITY AND REDEVELOPER
Conveyance of the Redevelopment Property 7
Letterof Credit . ............................... ............................. .............................10
Conditions Precedent to Conveyance ............................... ...............................
ARTICLE IV
CONSTRUCTION OF SITE IMPROVEMENTS,
PUBLIC IMPROVEMENTS AND MINIMUM IMPROVEMENTS
Construction of Site Improvements and Minimum Improvements .................10
Preliminary Plans and Construction Plans ...................... .........................•....I
Certificates of Completion ........................................... ...............................
ARTICLE V
INSURANCE
Redeveloper Insurance ........................................................ .............................12
Subcontractor Insurance ...................................................... .............................12
1
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,
ARTICLE VI
PROHIBITIONS AGAINST ASSIGNMENT
AND TRANSFER; INDEMNIFICATION
Section 6.1. Representation as to Redevelopment .................................. .............................13
Section 6.2. Prohibition Against Transfer of Property
and Assignment of Agreement .............................
Section 6.3. Release and Indemnification Covenants ............................. .............................13
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1
Events of Default Defined ................................................... .............................14
SCHEDULE B
Section 7.2
Remedies on Default ........................................................... .............................15
SCHEDULE C
Section 7.3
No Remedy Exclusive ......................................................... .............................16
SCHEDULED
Section7.4
No Implied Waiver .............................................................. .............................16
SCHEDULE E
Section 7.5
Agreement to Pay Attorney's Fees and Expenses ............... .............................16
SCHEDULE F
Section 7.6
Revesting Title in Authority Upon Happening of
Prohibition Against Tax Exemption ............................. .............................30
Event Subsequent to Conveyance to Redeveloper ........... .............................16
Section 7.7
Resale of Reacquired Property; Disposition of Proceeds ... .............................17
Section7.8
Subordination ...................................................................... .............................17
ARTICLE VIII
ADDITIONAL PROVISIONS
Section 8.1 Conflict of Interest .............................................................. .............................19
Section 8.2 Restrictions on Use ............................................................. .............................19
Section 8.3 Provisions Not Merged With Deed . ...............................
Section 8.4 Notices and Demands ......................................................... .............................19
Section8.5 Counterparts ........................................................................ .............................19
Section 8.6 Law Governing ................................................................... .............................19
Section 8.7 Termination ...................... ...............................
Section 8.8 Provisions Surviving Termination ...................................... .............................20
SIGNATUREPAGES ...................................................................................... .............................21
SCHEDULE A
Description of Redevelopment Property .......................... .............................23
SCHEDULE B
Form of Redevelopment Property Deed .......................... .............................24
SCHEDULE C
Form of Certificate of Completion and Release of Forfeiture
......................26
SCHEDULED
Site Plan ........................................................................... .............................28
SCHEDULE E
Site Improvements ........................................................... .............................29
SCHEDULE F
Declaration of Restrictive Covenants and
Prohibition Against Tax Exemption ............................. .............................30
ii
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT is made as of the day of , 2010 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 Faulkner Construction, 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, the Project contemplated by this Agreement promotes the following objectives
of the Redevelopment Plan: _
1. Promote and secure the prompt redevelopment of certain property in the Proj ect 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. 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;
3. Create a desirable and unique character within the Project Area through quality land
use alternatives and design quality in new or remodeled buildings;
4. Stimulate private activity and investment to stabilize and balance the City's housing
supply; and
5. Encourage and provide maximum opportunity for private redevelopment of existing
areas and structures which are compatible with the Project Area; and
,11�.
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 accordance 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:
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 respective dates on which a portion of the
Redevelopment Property is conveyed by the Authority to the Redeveloper pursuant to Article III.
"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
1.,4 following for each building: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4)
2
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.
"Declaration of Restrictive Covenants and Prohibition Against Tax Exemption" means those
restrictive covenants substantially in the form of Schedule F.
"Event of Default" means an event of default as defined in Section 7.1.
"Minimum Improvements" means 59 assisted living and memory care units to be constructed
by the Redeveloper on the Redevelopment Property as illustrated on the Site Plan. The Minimum
Improvements are to be constructed in two phases. Phase I consists of an approximately 25,584
square foot building containg a 40 -unit assisted living and memory care facility (approximately 22 of
the units are for memory care) and space for support services. There will be 21 parking stalls are
also included in Phase I (the Phase I Minimum Improvements). In Phase 11, there will be 19 memory
care units and 10 parking stalls (the Phase Il Minimum Improvements).
"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.
"Phase I Minimum Improvements" and "Phase H Minimum Improvements" (see Minimum
Improvements above).
"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 Schedule D.
"Purchase Price" means $100,000.
"Redeveloper' ' means Faulkner Construction, 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.
"Redevelopment Property" means the real property described in Schedule A attached hereto.
3
,/"�
"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.
"Site Plan" means the Site Plan illustrating the Minimum Improvements described in
Schedule D attached hereto.
"State" means the State of Minnesota.
"Termination Date" means the date on which the City issues the final Certificate of
Completion or this Agreement is terminated pursuant to Section 7.2(b).
"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 severe weather which prevents or 'delays construction of Minimum
Improvements, acts of God, fire or other casualty to the Project.
ARTICLE II
Representations, Warranties and Covenants
Section 2.1. Representations, Warranties and Covenants by the Authori ty. 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.
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(b) The Authority has approved the Redevelopment Plan in accordance with the terms of
the Act.
(c) The Authority, subject 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.
(d) The Authority will cooperate with the Redeveloper with respect to any litigation
commenced by third parties in connection with this Agreement.
(e) The Authority has no Imowledge 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
specifically including petroleum and related hydrocarbons and their byproducts, asbestos, and
polychlorinated biphenyls) in, on or under the Redevelopment Property.
(f) The Authority shall provide the Redeveloper with all existing environmental reports,
including any Phase I and Phase II 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.
(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.
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 Authority
pursuant to Article III and, in the event the Redevelopment Property is conveyed to the Redeveloper,
the Redeveloper will construct 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
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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.
(f) Except as specifically set forth herein, the Redeveloper is purchasing 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 Redeveloper agrees that it will cooperate with the Authority with respect to any
litigation commenced by third parties in connection with this Agreement.
(h) 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.
(i) 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 before December 21, 2032.
0) The Redeveloper agrees that it will not assign, convey or lease any interest in the
Redevelopment Property or any portion 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.
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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 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.
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 of record 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 and Survey 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.
(b) Surve . The Authority will not provide a survey of the Redevelopment Property.
(c) Title Not Marketable. If the title to the Redevelopment Property is not marketable as
evidenced by the Commitment, together with any appropriate endorsements, and is not made so by
the Closing Date, the Redeveloper may either:
(i) Terminate this Agreement by giving written notice to the Authority, in which
event this Agreement shall become null and void; or
111"�
(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
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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 amount of such
holdback 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 at the Closing. The conveyance of title to 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 the Redevelopment Property Deed.
The Closing shall take place at the principal offices of the Authority or the title company unless the
parties mutually agree that the Closing shall take place at another location.
The Purchase Price shall be paid at the Closing.
(e) Ins ection. At the Redeveloper's expense, the Redeveloper and its agents are hereby
granted the right at any time or times after the date hereof 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.
(f) Taxes; Special 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
the 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
party shall pay all sums in cleared funds on the Closing Date.
(g) Plat; Covenants; Easements. 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. Conditions Precedent to Conveyance.
(a) The obligation of the Authority to convey the Redevelopment Property to the
Redeveloper at the 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 Redeveloper shall have provided evidence satisfactory to the Authority
that the Redeveloper has obtained financing or a commitment for financing sufficient to finance the
construction of the Minimum Improvements;
(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 of the Purchase Price as described in Section
3.1;
(vi) The Redeveloper shall have executed and recorded the Declaration of
Restrictive Covenants and Prohibition Against Tax Exemption in the form attached as Schedule F
with respect to the Redevelopment Property and evidence thereof shall have been provided to the
Authority; and
(vii) 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 Redevelopment Property at the
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 be in material compliance with all 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
Closing.
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r� Section 3.3. Documents at Closing.
(a) At the 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,
(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:
3.2(a)(vii).
(i) The Purchase Price in cleared funds,
(ii) A Certificate of Real Estate Value, and
(iii) The certification as to representations and warranties described in Section
ARTICLE IV
Construction of Site Improvements and Minimum Improvements
Section 4.1. Construction of Site Improvements and Minimum Improvements. The
Redeveloper agrees that it will construct the Site Improvements and Minimum Improvements on
the Redevelopment Property in accordance with this Agreement and the Construction Plans
approved by the City and the Authority. Subject to Unavoidable Delays, the Redeveloper shall
r"'� commence construction of the Minimum Improvements on or before October 1, 2010.
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Section 4.2. Completion of Construction.
(a) Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the
construction of the Site Improvements and the Phase I Minimum Improvements by December 31,
2011. All work with respect to the Minimum Improvements to be constructed or provided by the
Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as
submitted by the Redeveloper and approved by the City and the Authority.
(b) The Redeveloper agrees for itself, its successors and assigns, and every successor in
interest to the Redevelopment Property, or any part thereof, and the Redevelopment Property Deed
shall reference the covenants contained in this Section 4.2 and in Section 7.3 of this Agreement,
that the Redeveloper, and its successors and assigns, shall promptly begin and diligently prosecute
to completion the redevelopment of the Redevelopment Property through the construction of the
Minimum Improvements thereon, and that such construction shall in any event be completed within
the period specified in this Section 4.2.
Section 4.3. Certificate of Completion.
(a) Promptly after completion of the Phase I Minimum Improvements in accordance
with the provisions of this Agreement relating to the obligations of the Redeveloper to construct
such improvements (including the date for completion thereof), the Authority will furnish the
Redeveloper with a Certificate of Completion. 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
obligations of the Redeveloper, and its successors and assigns, to construct the Minimum
Improvements and the date for the completion thereof.
(b) If the Authority shall refuse or fail to provide the Certificate of Completion in
accordance with the provisions of this Section 4.3 the Authority shall, within twenty (20) days after
written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in
adequate detail in what respects the Redeveloper has failed to complete the Minimum
Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and
what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to
take or perform in order to obtain a Certificate of Completion.
(c) The construction of the Phase I Minimum Improvements shall be deemed to be
completed when the City has issued its Certificate of Completion.
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/-11,
\ ARTICLE V
Real Property Taxes and Insurance
Section 5.1. Real Property Taxes. Prior to the Authority issuing its Certificate of
Completion, the Redeveloper shall pay when due, prior to the attachment of penalty, all real
property taxes payable with respect to the Redevelopment Property in the years subsequent to the
delivery of the Redevelopment Property Deed.
Section 5.2. 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 in this Article V shall be taken out and maintained in
responsible insurance companies selected by the Redeveloper which are authorized under the laws
of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the
Authority policies evidencing all such insurance, or a certificate or certificates or binders of the
respective insurers stating that such insurance is in force and effect. Unless otherwise provided in
this Article V each policy shall contain a provision that the insurer shall not cancel nor modify it
without giving written notice to the Redeveloper and the Authority at least thirty (30) days before
the cancellation or modification becomes effective.
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ARTICLE VI
Prohibitions Against Assignment and Transfer; Indemnification
Section 6.1. Representation as to Redevelopment. The Redeveloper represents and agrees
that its purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement,
are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for
speculation in land holding. The Redeveloper further recognizes that, in view of (a) the importance of
the redevelopment of the Redevelopment Property to the general welfare of the Authority; (b) the
substantial financing and other public aids that have been made available by 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 parties in control of the Redeveloper or the
degree of their control is for practical purposes a transfer or disposition of the property,then owned by
the Redeveloper, the qualifications and identity of the Redeveloper are of particular concern to the
Authority. The Redeveloper further recognizes that it is because of such qualifications and identity that
the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing
to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings
and covenants hereby by it to be performed.
Section 6.2. Prohibition ALYainst 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 Certificate of Completion or the termination of this Agreement, the Redeveloper shall
comply with the following: Except for the purpose of obtaining financing necessary to enable the
Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform
its obligations with respect to constructing the Minimum Improvements under this Agreement, and any
other purpose authorized by this Agreement, the Redeveloper has not made or created and will not
make or create or suffer to be made or created any total or partial sale, assignment, conveyance, 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. Notwithstanding the foregoing,
the Redeveloper may transfer the Redevelopment Property to any entity controlling, controlled by or
under common control with the Redeveloper.
Section 6.3. Release and Indemnification Covenants.
(a) The Redeveloper covenants and agrees that the City and the Authority and the
governing body members, officers, agents, servants and employees thereof shall not be liable for
and agrees to indemnify and hold harmless the City and the Authority and the governing body
members, officers, agents, servants and employees thereof against any loss or damage to property
or any injury to or death of any person occurring at or about or resulting from any defect in the
Minimum Improvements, except for any loss resulting from negligent, willful or wanton
misconduct of any such parties, and provided that the claim therefore is based upon the acts of the
Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper.
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(b) Except for any negligent or willful misrepresentation or any negligent, willful or
wanton misconduct of the following named parties, the Redeveloper agrees to protect and defend
the City, the Authority and the governing body members, officers, agents, servants and employees
thereof, now and forever, and further agrees to hold the aforesaid harmless from any claim,
demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or
purportedly arising from this Agreement or the transactions contemplated hereby or the acquisition,
construction, installation, ownership, and operation of the Minimum Improvements, except for the
use of eminent domain if exercised by the Authority to acquire the Redevelopment Property, and
provided that the claim therefore is based upon the acts of the Redeveloper or of others acting on
the behalf or under the direction or control of the Redeveloper.
(c) The City and the Authority and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the persons or
property of the Redeveloper or its officers, agents, servants or employees or any other person who
may be about the Redevelopment Property or the Minimum Improvements due to any act of
negligence of any person, other than the negligence and misconduct of the City or the Authority
employees or those employed or engaged by the City or the Authority.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
(e) Nothing in this Section or this Agreement is intended to waive any municipal
liability limitations contained in Minnesota Statutes, particularly Chapter 466.
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 Site Improvements and the Phase I
Minimum Improvements pursuant to the terms, conditions and limitations of this Agreement. Site
Improvements and the Phase H Minimum Improvements shall not be an Event of Default.
(c) Failure by the Redeveloper to substantially observe or perform any other material
covenant, condition, obligation or agreement on its part to be observed or performed under this
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Agreement, following notice of default to the Redeveloper, as discussed herein, and the expiration of
thirty (30) days to cure said alleged default.
(d) 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 ofDefault 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 (30) days after the Authority provides written notice to the Redeveloper of
such Event of Default. Notice of default shall specify the nature of the default under this Agreement
and the actions necessary to cure the default.
(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 the Certificate of Completion. Upon cure of such Event
of Default, and provided that Redeveloper is in compliance with this Agreement, the Authority shall
release the Certificate of Completion that was withheld pursuant to this subsection.
(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 (30) days, if the Redeveloper provides the Authority with written assurances
15
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(d).
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. Ageement 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. Revesting Title in Authority pon 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 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, 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 after 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 further responsibility to the Redeveloper hereunder with respect to that or
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 Lender may require a first mortgage
or other lien ( "Mortgage ") on the Redevelopment Property or a portion thereof which have been
conveyed to the Redeveloper 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 l�1
17
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 Project.
(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 Deed 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,
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.
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 carrier, or delivered personally to the following
addresses:
(a) If to the Redeveloper: Faulkner Construction, Inc., 2350 County Road J.
White Bear Lake, MN 55110, Attention: James A. Faulkner. Fax: (651) 426 -0045.
With a copy to:
, Attention: , Esq. Fax: (_)
(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: Monroe Moxness Berg PA, 8000 Norman Center Drive, Suite 1000,
Minneapolis, MN 55437, Attention: James R. Casserly, Esq. Fax: (952) 885 -5969.
Section 8.5. Counterparts. This Agreement may be 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.
19
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. Termination of this Agreement shall not
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 addition, termination of this Agreement shall not terminate
any Declaration of Restrictive Covenants and Prohibition Against Tax Exemption which has been
recorded against the Redevelopment Property.
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.
(Signature pages follow)
20
Dated: 92010
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 }
W
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
21
( Dated:
W
2010
FAULKNER CONSTRUCTION, INC.
Its
STATE OF MINNESOTA )
)ss
COUNTY OF )
On this day of
appeared James A. Faulkner, the
James A. Faulkner
20_, before me, a Notary Public, personally
of Faulkner Construstion, Inc., a Minnesota
corporation, and acknowledged the foregoing instrument on behalf of said corporation.
Notary Public
Redeveloper Signature Page - Contract for Private Redevelopment
22
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
Lots 2 and 3, Block 1, Herwal Rice Creek Terrace, subject to easement of record.
Lot 5, Block 1, Herwal Rice Creek Terrace, subject to easement of record.
23
� SCHEDULE B
W
FORM OF REDEVELOPMENT PROPERTY DEED
THIS INDENTURE, made this — day of , 20_, between the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and
politic (the "Grantor "), and Faulkner Construction, 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 Faulkner Construction, Inc., dated (the "Contract "); and (b) all other matters
of record.
The Grantor further states that:
The Grantee has committed to construct certain improvements pursuant to Section 4.1 of the
Contract and the Grantor has a right of re -entry in accordance with Section 7.6 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.
24
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its
behalf by its Chairman and Executive Director as of the first date above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY,
MINNESOTA
By
Its Chairman
RV
Its Executive Director
STATE OF MINNESOTA )
)ss
COUNTY OF ANOKA )
On this day of , 20_ before me, a Notary Public, personally
appeared and 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, and acknowledged the foregoing
instrument on behalf of said Authority.
This instrument was drafted by:
MONROE MOXNESS BERG PA
8000 Norman Center Drive, Suite 1000
Minneapolis, MN 55437
(952) 885 -5999
25
Notary Public
Tax statements for the real property
described in this instrument should be
sent to:
Faulkner Construction, Inc.
2350 County Road J.
White Bear Lake, MN 55110
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 Faulkner
Construction, Inc., a Minnesota corporation (the "Redeveloper ") certain real property described on
Exhibit 1.
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
i-� 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.
N
Dated: , 200_
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY, MINNESOTA
LIMA
Its Chairman
By
Its Executive Director
26
STATE OF MINNESOTA )
)ss
COUNTY OF ANOKA )
On this day of , 20_ before me, a Notary Public, personally
appeared and 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, apolitical subdivision of the
State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority.
This instrument was drafted by:
MONROE MOXNESS BERG PA
8000 Norman Center Drive, Suite 1000
Minneapolis, MN 55437
(952) 885 -5999
27
Notary Public
n
r"\
SCHEDULE D
SITE PLAN
SCHEDULE E
SITE RyTPROVEMENTS
The improvements identified in the City Development Agreement with the Redeveloper.
Landscaping according to a City- approved overall landscaping plan.
• Grading and import/export of soil necessary for the construction of the Phase I and Phase II
Minimum Improvements.
Retaining walls and fences, if needed.
29
SCHEDULE F
DECLARATION OF RESTRICTIVE COVENANTS
AND PROHIBITION AGAINST TAX EXEMPTION
This Declaration is made and executed as of the day of , 20
by Faulkner Construction, Inc., a Minnesota corporation ( "Declarant ").
A. Declarant is fee owner of the premises located in the County of Anoka, State of
Minnesota described below (the "Property "):
B. The Housing and Redevelopment Authority in and for the City of Fridley, Minnesota,
a public body corporate and politic (the "Authority") has entered into a Contract for Private
Redevelopment dated (the "Redevelopment Agreement "), with the
Declarant. The Redevelopment Agreement provides for certain assistance, financial and otherwise,
to be provided by the Authority in connection with the construction of single - family homes (the
"Building ") on the Property.
NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself and its
successors and assigns, does hereby declare that the Property shall be owned, used, occupied, sold
and conveyed subject to the following covenants and restrictions:
1. No part of the Property shall become tax exempt from the levy of ad valorem property
taxes, or any statutorily authorized alternative, until December 31, 2032.
2. The covenants and restrictions herein contained shall run with the title to the Property
and shall be binding upon all present and future owners and occupants of the Property; provided,
however, that the covenants and restrictions herein contained shall inure only to the benefit of the
Authority and may be released or waived in whole or in part at any time, and from time to time, by
the sole act of the Authority, and variances may be granted to the covenants and restrictions herein
contained by the sole act of the Authority. These covenants and restrictions shall be enforceable only
by the Authority, and only the Authority shall have the right to sue for and obtain an injunction,
prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein contained, or
to enforce the performance or observance thereof.
3. The covenants and restrictions herein contained shall remain in effect until December
31, 2032 and thereafter shall be null and void.
Im
4. If any one or more of the covenants or restrictions contained in this Declaration are
held to be invalid or enforceable, the same shall in no way affect any of the other provisions of this
Declaration, which shall remain in full force and effect.
FAULKNER CONSTRUCTION, INC.,
a Minnesota corporation
Its
STATE OF MINNESOTA )
)ss
COUNTY OF )
James A. Faulkner
On this day of , 20_, before me, a Notary Public, personally
appeared James A. Faulkner, the of Faulkner Construction, Inc., a Minnesota
corporation, and acknowledged the foregoing instrument on behalf of said corporation.
This Instrument Drafted By:
MONROE MOXNESS BERG
8000 Norman Center Drive, Suite 1000
Minneapolis, MN 55437 -1178
(612) 885 -5999
KM: 485M948 -8646, v. 1
31
Notary Public
CITY OF FRIDLEY
HRA
2010 HRA CASH FLOW PROJECTIONS UPDATE
Over the past 3 years, TIF district 1, 2 & 3 have been decertified, adding 2,830,000
of additional tax capacity to the City (7.9% of 2009 total)
2 HRA repaid final amounts owed on loan from City in Jan, 2009
3 HRA paid off remaining Tax Increment G.O. bonds in Feb, 2010
4 Remaining funds in TIF #1 will be returned to County this year which will result in a
one -time return of funds to the City based on its share of the local tax rate.
5 Other 2008 / 2009 Financial Activity
a. Purchased Northstar Station Land
b. Purchased property in Gateway NE area
6 Other 2010 Financial Activity
a. Additional purchases in Gateway NE area
b. Home remodel demo
c. Planned sale of land to Faulkner for new development (no TIF District created)
d. Planned sale of remaining lots in Gateway West TIF District q u Tc' q-zal ( —
7 By the end of 2010, HRA cash balances are projected to have dropped 47% from
12/31/2006.
8 2010 Legislature re- authorized Housing Replacement Program for Fridley
9 Future happenings:
a. Creation of new TIF District in Gateway NE area
b. Redevelopment of area surrounding Northstar Station, with emphasis on transit
oriented development (JLT site opportunities)
� Opportunity to redevelop Columbia Arena site
C)- .Additional 200,000 of tax capacity added to City in 2012 from Medtronic
development. W kw'v� L �' &acitly �k UV
e. TIF #7 decertified in 2012, adding approximatdly 63,000 off ax ca to City
f. Expansion of Housing Replacement Program
g. Continuing promotion and use of Revolving Loan Funds gyp,
KM: 4816-8253 -4662, v. 1
��r
t
ri INFORMATIONAL ITEM
HRA MEETING OF MAY 612010
CRY of
FRIDLEY
Uaie: /'lpnl zo, LUIU
To: William Bums, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Subiect: Re- Authorization of Scattered Site Housinq Replacement Proaram
After nearly being approved the past 2 sessions, staff was optimistic that our scattered site
housing replacement bill would finally be approved this year. On April 6th the Governor signed
legislation giving the City of Fridley, along with seven other cities, the ability to create multi-
phased scattered site housing replacement Tax Increment Districts. The attached memo and
summary from Attorney Casserly provide more detail on the program.
Staff has been working with Attorney Casserly to determine the best and most efficient approach
to implement and run this program. Because there is currently so much competition for
foreclosed properties, Staff is investigating a partnership with the non -profit Twin Cities
Community Land Bank. The partnership would provide an opportunity to purchase foreclosures
directly from the lenders before they hit the open market through their "First Look" program.
The "First Look" program requires some quick turnaround times for the HRA to make decisions
on whether or not to move forward with a purchase. We are still studying this option and will
present more details to you at your meeting next week. This program would require that staff be
given some general authority to make purchase offers on properties meeting specific criteria.
Staff will continue to analyze the most efficient way to move forward with the Housing
Replacement Plan and bring a recommendation forward at the June 3rd HRA Meeting. Because
of the strange market conditions and desire to minimize the HRA's expense and staff time, we
simply need to spend a bit more time examining the implementation of the program.
MONROE
BERG
James R. Casserly
jcasserly @krassmonroe.com
Direct 952.886.1296
MEMORANDUM
ro
8000 Norman Center Drive T 952.885.5999 a
Suite 1000 F 952.885.5969
Minneapolis, MN 55437 -1178 www.MMBLawFlrrn.com
To: City of Fridley Housing and Redevelopment Authority
Attn: Paul Bolin, HRA Assistant Executive Director
From: James R. Casserly, Esq.
Date: April 29, 2010
Re: Fridley Housing Replacement Program
Our File No. 9571 -13
On April 6, 2010, the Fridley Housing Replacement Program was reauthorized by Laws
of Minnesota 2010, Chapter 216, Section 42, a copy of which is attached (Attachment I).
Also attached are the original sections contained in Laws of Minnesota 1995 as
amended for the last 15 years up to and including this most recent Legislation
(Attachment II). The new changes are blacklined and are shown on Page 2.
Fridley originally adopted a Housing Replacement District Plan on October 23, 1995
which incorporated a Phase I of the Plan identifying the specific parcels to be included
in that Phase. The Housing Replacement District Plan was amended three additional
times as shown by the summary of the Municipal Action Taken which is also attached
(Attachment III). In all, 22 parcels have been included in the Fridley Program.
The Legislation authorizing the Program allows it to have a number of unique features
which include the following:
The Program is a market rate housing program unlike other housing
programs that utilize tax increment. The housing must not exceed 150%
of the average market value of single family housing in Fridley.
The Program is designed to deal with vacant sites, parcels containing
vacant houses or parcels containing houses that are structurally
substandard (using the redevelopment definition contained in the Tax
Increment Act).
• Tax increment is calculated by determining the value of the improvements
on the parcel. The value of any existing improvements are ignored. As a
result, the value of the entire structure is used in the calculation to
determine the tax increment (this allows the HRA to buy structures to be
demolished or to buy homes that need substantial rehabilitation without
being penalized).
A simpler process is allowed to amend a housing replacement plan to
include additional parcels. Both the HRA and the City Council must still
approve any amendments.
The Housing Replacement Program is extremely flexible and has been designed to
promote market rate housing which would appeal to those of average income. While
the Program will not generate huge revenues, tax increment can only be collected for 15
years, it will help defray many costs and will allow the HRA the use of another tool in
addressing housing issues and needs in the City of Fridley.
JRC /al
Enclosures
KM: 4822 - 1402 -8038, v. 1
I11-�
2
ATTACHMENT
LAWS OF MINNESOTA 2010, CHAPTER 216, SECTION 42
49.6 Sec. 42. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by
49.7 Laws 1996, chapter 471, article 7. section 22, and Laws 1997, chapter 231, article 10,
49.8 section 13, and Laws 2002, chapter 377, article 7, section 6, and Laws 2008, chapter 154,
49.9 article 9, section 19, is amended to read:
49.10 Subdivision 1. Creation of projects. (a) An authority may create a housing
49,11 replacement project under sections 44 to 47, as provided in this section.
49.12 (b) For the cities of Crystal, Fridley, Richfield, =4 Columbia Heights. and Brooklyn
49.13 Park the authority may designate up to 16 100 parcels in the city to be included in a
ct over the fife of a district or districts.
49,14 housing replacement distri
49.15
49.16 - mlcrvf-���ftn add ti—ral I= cis added
For the cities of St Paul and Duluth,
49.17 each authority may designate not more than 200 parcels in the city to be included in a
49.1 s housing replacement district over the life of the district For the-city.of Minneapolis, the
49.19 authority may designate not more than 400 parcels in the city to be included in housing
49.20 replacement districts over the life of the districts. The only parcels that may be included
4921 in a district are (1) vacant sites, (2) parcels containing vacant houses, or (3) parcels
497 houses that are structurally substandard, as defined in Minnesota Statutes,
49:3 section 469.174, subdivision 10.
49.24 (c) The city in which the authority is located must pay at least 25 percent of the
49.25 housing replacement project costs from its general fund, a property tax levy, or other
49.26 unrestricted money, not including tax increments.
4927 (d) The housing replacement district plan must have as its sole object the acquisition
49.28 of parcels for the purpose of preparing the site to be sold for market rate housing. As
49.29 used in this section, "market rate housing" means housing that has a market value that
4930 does not exceed 150 percent of the average market value of single - family housing in that
49.31 municipality.
49.32 EF'F'ECTIVE DATE. This section is effective the day following final enactment
49.33 and app lies to the affected cities without local a roval under Minnesota Statutes. section
49.34 Y5.023. subdivision I paraErauh (a)•
�1
Sec. 42. 49
ij
r ATTACHMENT Il
I�
LAWS 1995, CHAPTER 2.64, ARTICLE 5, SECTION 44 THROUGH SECTION 47
(UPDATES INCLUDED THROUGH SPECIAL LAWS 010)
Sec. 44. CITIES OF CRYSTAL, FRIDLEY, ST. PAUL, AND MINNEAPOLIS;
HOUSING REPLACEMENT DISTRICTS; DEFINITIONS.
Subdivision 1. .CAPTURED NET TAX CAPACITY. "Captured net tax
capacity" means the amount by which the current net tax capacity in a housing
replacement district exceeds the original net tax capacity, including the value of
property normally taxable as personal property by reason of its location on or over
property owned by a tax - exempt entity.
Subd. 2. ORIGINAL NET TAX CAPACITY. "Original net tax capacity" means
the net tax capacity of all taxable real property within a housing replacement district as
certified by the commissioner of revenue for the previous assessment year less the
net tax capacity attributable to existing improvements, provided that the request by
the authority for certification of a new housing replacement district has been made to
the county auditor by June 30. The original net tax capacity of housing replacement
districts for which requests are fled after June 30 has an original net tax capacity
based on the current assessment year. In any case, the original net tax capacity must
be determined' together with subsequent adjustments as set forth in Minnesota
Statutes, section 469.177, subdivision 1, paragraph (c). In determining the original
net tax capacity, the net tax capacity of real property exempt from taxation at the time
of the request shall be zero, except for real property which is tax exempt by reason of
public ownership by the requesting authority and which has been publicly owned for
less than one year prior to the date of the request for certification, in which event the
net tax capacity of the property shall be the net tax capacity as most recently
determined by the commissioner of revenue.
Subd. 3. PARCEL. "Parcel' means a tract or plat of land established prior to
the certification of the housing replacement district as a single unit for purposes of
assessment.
Subd. 4. AUTHORITY. For housing replacement projects in the city of
Crystal, "authority" means the Crystal economic development authority. For housing
replacement projects in the city of Fridley, "authority" means the housing and
redevelopment authority in and for the city of Fridley or a successor in interest. For
housing replacement projects in the city of Minneapolis, "authority" means the
Minneapolis community development agency or its successors and assigns. For
housing replacement projects in the city of St. Paul, "authority" means the St. Paul
housing and redevelopment authority. For housing replacement projects in the city of
Duluth, "authority" means the Duluth economic development authority. For housing
replacement projects in the city of Richfield, "authority" is the authority as defined in
Minnesota Statutes, section 469.174, subdivision 2, that is designated by the
governing body of the city of Richfield. For housing replacement projects in the city of
Columbia Heights, "authority" is the authority as defined in Minnesota Statutes,
section 469.174, subdivision 2, that is designated by the governing body of the city of
Columbia Heights.
Sec. 45. ESTABLISHMENT OF HOUSING REPLACEMENT DISTRICTS.
Subdivision 1. CREATION OF PROJECTS. (a) An authority may create a
housing replacement project under sections 44 to 47, as provided in this section.
(b) For the cities of Crystal, Fridley, Richfield, ate- Columbia Heights, and
Brooklyn Park. the authority may designate up to S9= parcels in the city to be
included in a housing replacement district. No FneFe than 1' j + r., y be i lded
4: 9Re 9f the
of !he fell 9wiR9 Rine yea over the life of a district or districts. For the cities of St.
Paul and Duluth, each authority may designate not more than 2D0 parcels in the city to
be included in a housing replacement district over the life of the district. For the city of
Minneapolis, the authority may designate not more than 400 parcels in the city to be
included in housing replacement districts over the life of the districts. The only parcels
that may be included in a district are (1) vacant sites, (2) parcels containing vacant
houses, or (3) parcels containing houses that are structurally substandard, as defined
in Minnesota Statutes, section 469.174, subdivision 10.
(c) The city in which the authority is located must pay at least 25 percent of
the housing replacement project costs from its general fund, a property tax levy, or
other unrestricted money, not including tax increments.
(d) The housing replacement district plan must have as it sole object the
acquisition of parcels for the purpose of preparing the site to be sold for market rate
housing. As used in this section, market rate housing means housing that has a
market value that does not exceed 150 percent of the average market value of
single - family housing in that municipaiity.
Subd. 2. HOUSING REPLACEMENT DISTRICT PLAN. To establish a
housing replacement district under- sections 44 to 47, an authority shall adopt a
housing replacement district plan which contains:
(1) a statement of the objectives and a description of the housing
replacement projects proposed by the authority for the housing replacement district;
(2) a statement of the housing replacement district plan, demonstrating the
coordination of that plan with the city's comprehensive plan;
(3) estimates of the following:
(i) cost of the program, including administrative expenses;
(ii) sources of revenue to finance or otherwise pay public costs;
(iii) the most recent net tax capacity of taxable real property within the
housing replacement district; and
(iv) the estimated captured net tax capacity of the housing replacement
district at completion;
(4) statements of the authority's alternate estimates of the impact of the
housing replacement district on the net tax capacities of all taxing jurisdictions in
which the housing replacement district is located in whole or in part. For purposes of
one statement, the municipality shall assume that the estimated captured net tax
capacity would be available to the taxing jurisdictions without creation of the housing
replacement district, and for purposes of the second statement, the county shall
assume that none of the estimated captured net tax capacity would be available to the
taxing jurisdictions without creation of the housing replacement district; and
(5) identification of all 'parcels to be included in the district, to the extent
known at the time the original housing replacement district plan is prepared. At a
minimum, the parcels that will be included in the housing replacement district during
its first year must be identified in the original housing replacement district plan. If
parcels for subsequent years are not specifically identified, the original housing
replacement district plan must include the criteria that will be used by the authority to
select parcels to be included in the later years.
Subd. 3. PROCEDURE. The provisions of Minnesota Statutes, section
469.175, subdivisions 3, 4, 5, and 6, apply to the establishment and operation of the
housing replacement districts created under sections 44 to 47, except as follows:
(1) the determination specified in Minnesota Statutes, section 469.175,
subdivision 3, clause (1), is not required; and
(2) addition of parcels not identified in the original housing replacement
district plan is not treated as a modification of that plan requiring an approval process
provided that the parcels added are consistent with the criteria described in
subdivision 2, clause (5).
Sec. 46. LIMITATIONS.
Subdivision 1. DURATION LIMITS. No tax increment may be paid to the
authority on each parcel in a housing replacement district after 15 years from date of
receipt by the county of the first tax increment from that parcel.
Subd. 2. LIMITATION ON USE OF TAX INCREMENTS. (a) All revenues
derived from tax increments must be used in accordance with the housing
replacement district plan. The revenues must be used solely to pay the costs of site
acquisition, relocation, demolition of existing structures, site preparation, and
pollution abatement on parcels identified in the housing replacement district plan, as
well as public improvements and administrative costs directly related to those parcels.
(b) Notwithstanding paragraph (a), the city of Minneapolis may use revenues
derived from tax increments from its housing replacement district for activities related
to parcels not identified in the housing replacement plan, but which would qualify for
inclusion under section 45, subdivision 1, paragraph (b), clauses (1) to (3):
(c) Notwithstanding paragraph (a), or any other provisions of sections 44 to
47, the Crystal Economic Development Authority may use revenues derived from tax
increments from its housing replacement districts numbers one and two as if those
districts were housing districts under Minnesota Statutes, section 469.174,
subdivision 11, provided that eligible activities may be located anywhere in the city
without regard to the boundaries of housing replacement district numbers one and two
or any project area.
Sec. 47. APPLICATION OF OTHER LAWS.
Subdivision 1. COMPUTATION OF TAX INCREMENT. The provisions of
Minnesota Statutes, section 469.177, subdivisions la, and 5 to 10, apply to the
computation of tax increment for the housing replacement districts created under
sections 44 to 47. The original local tax rate is the rate for the year a parcel is certified
for inclusion in a housing replacement district.
Subd. 2. OTHER PROVISIONS. References in Minnesota Statutes to tax
increment financing districts created and tax increments generated under Minnesota
Statutes, sections 469.174 to 469.179, other than references in Minnesota Statutes,
section 273.1399, include housing replacement districts and tax increments subject to
sections 44 to 47, provided that Minnesota Statutes, sections 469.174 to 469.179,
apply only to the extent specified in sections 44 to 47.
Subd. 3. MINNEAPOLIS SPECIAL LAW. Laws 1980, chapter 595, section 2,
subdivision 2, does not apply to a district created under sections 44 to 47.
KM: A 9a &4 9&4 `x - S -64 9 V. 1
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ATTACHMENT III
MUNICIPAL ACTION TAKEN
Based upon the statutory authority provided by Laws of Minnesota 1995, Chapter 264, Article '5,
Sections 44 through 47, the Housing Replacement District Plan was approved and Housing
Replacement District No. 1 was created.
The following municipal action was taken in connection therewith:
October 23, 1995: The Housing Replacement District Plan, including Phase I, was
adopted.
November 24,1997: The Housing Replacement District Plan was amended to include
Phase II.
May 3, 2001: The Housing Replacement District Plan was amended to include
Phase III,
July 1, 2004 The Housing Replacement District Plan was amended to include
Phase IV.
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CRY OF
RIDLEY
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INFORMATIONAL ITEM
HRA MEETING OF MAY 6, 2010
va«. MPI 11 LO, LV 1 V
To: William Bums, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Subject: Home Remodeling Program Update
The remodeling project has been moving forward even better than expected. The builder / realtor
team selected by the HRA have been excellent to work with and the attendance at the pre -
remodel open house was almost overwhelming.
Open House Update
Despite the fact that the Star Tribune ran an article listing the wrong day for the open house
(Saturday vs. Sunday), we still had over 250 people walk through the home on Sunday April
11th. Sean Lennox also brought 40 -50 people through the home on Saturday the 10th.
People are very excited about this project and all we received were positive comments from all
who attended the event. The bulk of the attendees were Fridley residents and a large number of
them left with information on our home loan program.
The 1/2 way to completion open houses will be held on Sunday, May 23, from 11 a.m. to 4 p.m.,
and Wednesday, May 26, from 4:30 p.m. to 6:30 p.m.
Remodel Update
A building permit has been issued and work is well underway. Portions of interior walls have
been removed and the footings for the addition are in place. More pictures will be provided on
Thursday.
W
Fridley HRA
Housing Program Summary
Cover Page
May 6, 2010 HRA Meeting
Report
Loan Application Summary
Loan Origination Report
Remodeling Advisor
Description
Loan application activity (e.g. mailed
out, in process, closed loans) for April
and year -to -date.
Loan originations for April and year -to-
date.
Shows the number of field appointments
scheduled and completed for the
Remodeling Advisor Services
administered by Center for Energy and
Environment.
M— Paul's Documents\HRAViRA Agenda Items\2010WIay 6, 2010\Housing Program CoverMay.doc
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Fridley HRA
Loan Origination Report
April 26, 2010
Loan Originations
This Previous
Month Months
Since 111/2010
HRA Loans (incl. CFUF Discount Ic
2 2
4
HRA Deferred Loans
-
Other Loans (non -HRA)
1
1
Total
2 3
5
Fundina Sources
This Previous
Month Months
Since 1h /2010
Fridley HRA
$ - $ -
$
MHFA FUF /CFUF
$ 41,908.00 $ 19,877.92
$ 61,785.92
Fridley Discount portion for CFUF
$ 810.76 $ 125.89
$
936.65
Met Council
$ - $ -
$
-
CDSG/HOME
$ $ -
$
-
CEE
$ $ -
$
-
Other
$ $
$
Total
$ 42,718.76 $ 20,003.81
$ 62,722.57
Types of Units Improved*
*some households receive more than 1 loan, so the # of loans may not equal # of units improved
�..�
This Previous
Month Months
Since 1/1/2010
Single Family
2 3
5
Duplex
-
-
Tri -Plex
4 to 9 Units
- -
10 to 20 Units
_
20+ Units
Total
2 3
5
Types of Improvements
Interior
All of Projects
% of Total
Bathroom remodel
-
0 %,
Kitchen remodel
-
0 %,
General plumbing
-
0 %,
Heating system
2
40%
Electrical system
-
0%
Basement finish
0 %
Insulation
-
0%
Room addition
-
0 %,
Misc. interior projects
-
0 %,
Foundation
_
0 %
F_xterior
Siding/Fascia/Soffit
-
0 %
Roofing
-
0 %,
Windows/Doors
3
60%
Garage
-
0%
Driveway /sidewalk
0%
Landscaping
_
0%
Misc. exterior projects
_
0 %
-
0%
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FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY
May 6, 2010
I40-*�
1. Gateway Northeast Update
TKD
Nothing has changed with the status of the Tae Kwon Do center. Mr. Kim continues to look for
properties suiting his needs.
Sikh Society
DJ Sikka, representative for the Sikh Society stopped in to see Scott Hickok and I on Thursday April
29th. Mr. Sikka reported that the group has made an offer to purchase a new worship space in
Bloomington. He stated that the group was now ready to move forward with a sale of their property
on University Avenue.
We asked that Mr. Sikka put together a letter outlining price, contingencies, and timeframes. If a
letter is received in a timely fashion, the purchase of the Sikh Society may end up as an agenda item
on Thursday night.
Demolition
The work has now been completed. Landwehr returned to the site in early April to remove the concrete
and bituminous parking lots from the sites. The properties have now been hydro - seeded and we should
see grass sprouting up soon.
2. Northstar
The special trains being run for Twins games have exceeded all expectations and have been standing
room only. It is hoped that those using the train for these games will continue to ride it regularly for
commuting as well