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HRA 06/07/2012 t June 7, 2012 HRA Meeting Regular Meeting Agenda 7:00 a.m. Call to order Roll call Action Items 1. Approval of expenditures 2. Approval of May 3, 2012, Meeting Minutes 3. Election of Officers 4. Approval of Redevelopment Agreement- 551 Hugo Street 5. Public Hearing and Consideration of Resolution Authorizing Sale of 561 Hugo Street NE 6. Public Hearing and Consideration of Resolution Authorizing Sale of 434 Liberty Street NE Informational Items 1. Housing Loan Program Update Adjournment n K:\COMMISSION AGENDAS\2012 HRA Commission Agendas\12 06 07.docxK:\COMMISSION AGENDAS\2012 HRA Commission Agendas\12 06 07.docx May,2017 Fridley HF )cking Acco sayable • ///Register Date Check# Vendor Invoice# Description Code Amount 5/7/2012 29396 Center for Energy&Environment 10954 Loan Origination Fees-Stachowski 265-0000-430-4340 550.00 Remodeling Advisor Visit-Addison,Lamere,Wagner 265-0000-430-4340 390.00 940.00 5/7/2012 29396 Center for Energy&Environment 10954 Revolving Loan-5649 5th St NE-Stachowski 265-0000-127-0000 12,442.00 12,442.00 5/10/2012 29397 City of Fridley Billing for Administrative&Operating Expenses 100-0000-430-4107 50,425.00 100-0000-430-4220 80.80 100-0000-430-4332 23.37 100-0000-430-4336 2,877.48 100-0000-430-4337 9.00 100-0000-430-4340 448.98 100-0000-219-1001 4,713.12 100-0000-219-1004 323.05 100-0000-219-1100 362.25 100-0000-219-1200 162.00 100-0000-219-1700 2,406.41 100-0000-219-2300 98.28 100-0000-219-2400 1,155.74 100-0000-219-2500 1,305.72 64,391.20 5/7/2012 29400 Passau,Inc. 5074 Miscellaneous Mowing Various 1,305.00 Mowed week of 5/4 Tax 100-0000-430-4340 89.72 1,394.72 4/30/2012 29398 HLB Tautges Redpath,LTD 2011 Audit porgress billing 100-0000-430-4330 5,600.00 5,600.00 5/20/2012 29401 Sun Newspapers Public Notice-Sale of 561 Hugo St NE 501-0000-430-4334 47.03 47.03 5/21/2012 29400 Passau,Inc. 5078 Miscellaneous Mowing Various 1,305.00 Mowed week of 5/17 Tax 100-0000-430-4340 89.72 1,394.72 5/14/2012 29400 Passau,Inc. 5076 Miscellaneous Mowing Various 1,305.00 Mowed week of 5/10 Tax 100-0000-430-4340 89.72 1,394.72 1 of 2 May,2012 Fridley HRA Checking Accounts Payable Register 5/24/2012 29399 Monroe Moxness Berg 130544 Adminsitration Fees 100-0000-430-4330 1,380.00 100-0000-430-4330-4606 13,609.39 14,989.39 Total May Invoices $ 101,653.78 l '\ 2 of 2 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION May 3,2012 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:04 p.m. ROLL CALL: MEMBERS PRESENT: Larry Commers William Holm Pat Gabel Stephen Eggert John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Becky Kiernan, Accountant William Burns, City Manager Jeff Johnson, ACCAP Developing Consultant Dave Anderson, Realtor for Novak-Fleck Builders ACTION ITEMS 1. Approval of Expenditures MOTION by Commissioner Gabel to approve the expenditures as presented. Seconded by Commissioner Meyer. Chairperson Commers asked about the administrative expenses and how that stood in regards to the developments, if it included Council fees or if it all related to Real Estate Recycling (RER). Paul Bolin, HRA Assistant Executive Director, answered no, it didn't. The $11,083 is for RER expenses which RER will reimburse half of that amount. The $585 is for the Housing Replacement Program. Chairperson Commers asked when or how they would get the reimbursement from RER. Mr. Bolin answered that per the agreement RER will send checks in increments of$10,000. William Burns, City Manager, asked if HRA is getting a FEMA reimbursement for last year's tornado damage. Becky Kiernan, Accountant, said that staff received a letter that there is a reimbursement coming but she was not sure it was for the property on Mississippi Street; that reimbursement is forthcoming. Dr. Burns said the General Fund is getting $100,000 € City of Fridley Housing and Redevelopment Meeting of May 3,2012 2 Chairperson Commers asked if that is part of the insurance coverage. Ms. Kiernan answered yes, that is part of it. Commissioner Meyer said that staff didn't have to list all the mowing fees separately, a lump sum would be acceptable. UPON VOICE VOTE,ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of April 5, 2012 Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Gabel. Commissioner Gabel noted the following corrections: • Page two, fourth paragraph, second sentence from bottom, change now to not • Page five, first two sentences should read;Mr. Hyde said that there was a short fuse timeframe with the seller that was driven by the lender and they had an unrealistic approach. Now that we are lying laying out what is involved, they now have an... • Page five, third paragraph. second sentence, should read;just the beginning of our journey. UPON VOICE VOTE,ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED 3. Public Hearing and Consideration of Resolution Authorizing sale of 6000 2nd Street NE MOTION by Commissioner Gabel to open the Public Hearing. Seconded by Commissioner Eggert. UPON VOICE VOTE,ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING OPENED AT 7:05 P.M. Paul Bolin, HRA Assistant Executive Director, said that this Public Hearing is to authorize the sale of 6000 2nd Street NE to Anoka County Community Action Program(ACCAP). ACCAP has great history and reputation with the HRA. The proposed use is consistent with the HRA and ACCAP mission. This would create a new investment in the neighborhood. Staff recommends authorization of this sale. Mr. Bolin said that in 2012 ACCAP paid over$3,000 in property taxes. When the building is complete it will likely be valued$1.5-1.6M which will increase the taxes that will come into the City and the Authority. Jeff Johnson, ACCAP Development Consultant, said that he has worked with ACCAP since 1992. The schematic phase is completed but the full plans or specs have not been submitted to City of Fridley Housing and Redevelopment Meeting of May 3,2012 3 the City. Additional work needs to be done regarding colors and elevation. Stairs and retaining walls may be included in the final development plan. Commissioner Eggert asked how many properties ACCAP owned. Mr. Johnson answered 500 units in 50 locations. William Burns asked if the home would have any energy conservation features. Mr. Johnson answered yes; they will be incorporated in a substantial way and many are required. This home will exceed the Minnesota Energy Codes for energy conservation, heating, cooling and water usage. Commissioner Meyer asked what was wrong with the current property as it sits. Mr. Bolin answered that currently there is a vacant corner lot the Authority owns that is 40' wide and unbuildable due to its small size. Commissioner Meyer asked what other lots were in violation of code in the city or if this was the only one. Mr. Bolin said that there are a number of lots that are substandard in size and this is one that the Authority happens to own. In this case there is a nonprofit group that owns property next door that has interest in purchasing this lot. HRA has many parcels out there and if the Authority owns them long term they are missing out on taxes that could be paid and missing out on an opportunity to put properties to good use. Mr. Bolin said that in this situation, ACCAP approached staff a few months back and many thought this parcel was owned by ACCAP as they have maintained it over the years. ACCAP can go after grant money for this building. It makes sense for ACCAP to ask the Authority to sell this property to increase their building from 4 units to 12 units. This also gives ACCAP room to help more people through their programs. Commissioner Meyer was concerned that the Authority may set some kind of legal precedent for future action against other properties. Chairperson Commers said that the HRA has taken down other homes where the Authority splits lots or combined two lots because generally standing by themselves they are too small or large to build on. This makes sense to make a bigger project and doesn't obligate the Authority for other parcels the Authority owns. Dr. Burns said that this isn't anything new; the City has sold property to adjoining property owners in the past. Commissioner Gabel noted that in this case the Authority is not taking over; ACCAP wants to build on this lot to better meet their needs. They are just asking the Authority to sell the property and the HRA is holding it at a substantial loss. This is a great opportunity; if someone wants to buy the parcel it is our best interest to sell and get the lot developed. Commissioner Eggert noted that they are offering to pay the greater of the appraised value. City of Fridley Housing and Redevelopment Meeting of May 3,2012 6 but they have always had one. If the Authority doesn't have one,money will be given based on certain assumptions so it wouldn't hurt to have one in place. Mr. Bolin said that he has had that conversation He had a meet meeting with Paul Hyde,1Darin Nelson veloper and he would assessment agreement in the term sheet as well and Mary Smith and everyone agrees they want this type of agreement. 2. Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director, said that there were no loans this past month but two loans closed in the past week. They are running into a proble coming through but not credit or owe too much on their home to borrow money. App lications are o qualify. Chairperson Commers asked if CEE was doing the loan application approvals. Mr. Bolin answered yes; they do that on our behalf. Chairperson Commers asked what their policy was regarding credit; is a loan easier to get from them rather than a bank. Mr. Bolin was not sure, he could provide more detail next month. Chairperson Commers said that may be a good idea. Commissioner Gabel asked if staff could bring forth an aging account report, she doesn't think one has been submitted in a while. ti; Mr. Bolin said that one was done for a recent audit and staff can share that the Authority. There are not many loans outstanding. Mr. Bolin said that Dr. Burns put together an article to run in the future newsletter to promote the loan program and CEE will also do a direct want t o do energythmprovement to their homers out there. CEE has a 2.99%loan for those who term of up to 60 months with a$10,000 max. There is also 4.9% loan for up to 120 months with a max of$20,000. These loans can be used for heating, air, light fixtures,windows, doors, attic, ceiling insulation etc., are improvements all eligible. homes Staff is trying to do a push tdo g g a lot of construction projects and modifications to their this information to residents about the loan programs. Chairperson Commers added that there is quite a bit of funds available for these kinds of home improvement projects. Mr. Bolin said that is correct. There are also very few delinquencies in the portfolio. People good about paying loans back so the money available for this program keeps growing. Mr. Bolin said that the remodeling advisor had three visits in the past month. They continue to get more calls and questions. People are doing some remodeling and smaller projects and paying for them as they go. City of Fridley Housing and Redevelopment Meeting of May 3,2012 7 Mr. Bolin had a conversation with realtor Tim Golie who works with Torkelson Builders. Last fall they had asked for marketing rights on a lot in the Gateway West area. He is not as upbeat as Mr. Anderson about the shape of the housing market right now. They have not had much luck with marketing the house design they put together for that site. They may be overpriced for the market at this time but will continue to market the property. The Gateway Northeast Properties had a showing to a developer this morning who has done some housing by the Elk River Rail Station and they are starting the second phase. Some developers are starting to do construction in Big Lake specific to senior housing. They will do more home work and come back to meet with staff in the next week to talk about the sites down there. Scott Hickok, Community Development Director, said he has take'both representatives from Faulkner and Trident Development and they expressed interest to doing something on the Gateway Northeast Project. He has heard from brokers and a few others interested in putting in office and medical buildings. The market for financing for those types of projects is pretty tight. Banks are not willing to loan a lot of money for those types of projects;but there is interest and in a few months something may be brought forward. Mr. Bolin said that earlier this week there was a purchase offer for the lot at 561 Hugo street; staff will bring a formal presentation to the HRA next month. Mr. Hickok said that staff is meeting with folks who are interested in the JLT site. Most recently the broker indicated he would like to meet with Council regarding a vision for what that site may bring. Chairperson Commers asked staff to run a projection on what is needed out of that property for the transit station. They must have some idea on what type of minimum project can be put on that site and what it will generate; show what is needed to generate sufficient funds to do the rest of the work down there. Mr. Bolin said staff can update those figures and get back to the Authority. Mr. Hickok said that other projects that are out there include the sale of the property to Faulkner on Old Central; they recently indicated they are ready to go to phase two of that project that includes 19 more units. The Sandy Site developer handed over the keys and will have a grand opening in October. There is a question when the Cub Foods redevelopment is going to happen. The plans are done and have been reviewed by staff, the permit is ready to issue and the leases are signed. The architectural plans are being developed and we should see construction some time soon. The Columbia Arena currently has some pipes on the site; construction is not happening. Center Point Energy is doing a project and has an agreement with the land owner to stage equipment and pipes on that site for six months. In exchange Center Point Energy will take out the parking lot for the site owner. The access to the fire training center and northern parking lot will be removed. ADJOURNMENT MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Meyer. UPON VOICE VOTE,ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:05 P.M. City of Fridley Housing and Redevelopment Meeting of May 3,2012 8 Respectfully Submitted, Krista Monsrud Recording Secretary Fridley Housing and Redevelopment Authority FRIDLEY Action Item DATE: May 24, 2012 TO: William W. Burns, HRA Executive Director FROM: Paul Bolin, Assistant HRA Director SUBJECT: Election of Officers Article V, Section 3 of the Authority's by-laws requires the Board of Commissioners to annually elect a Chair and Vice Chair. Below is a list of the commissioners and the i-. length of their current appointments. Commissioner End of Term Bill Holm June 2011-1 Pat Gabel (Vice Chair) June 2013 Larry Commers (Chair) June 2014 Stephen Eggert June 2015 John Meyer June 2016 Recommendation Staff recommends that the Authority elect a Chair and Vice Chair as required by the Authority's by-laws to serve through June 2013. w 6((1))\ '' • , � , , , ,,,.. ACTIO J N ITEM HRA MEETING OF JUNE 7, 2012 pj cir OF FRIDLEY Date: June 1, 2012 To: William Burns, Executive Director From: Paul Bolin, Asst. Executive HRA Director Subject: Approval of Redevelopment Agreement - 551 Hugo Street NE - HRP Last month the Authority agreed to sell the property located at 551 Hugo Street NE to Novak-Fleck Builders (NFB). NFB will construct and sell a home on the lot as part of the Authority's Housing Replacement Program. „ - e ;�� h`� x 3k ��, + . s 4 Due to timing issues the "Contract for Private Redevelopment" was not able to be reviewed and signed by NFB prior to last month's meeting. The Redevelopment Agreement is amulti-purpose document. In addition to spelling out the obligations of the builder, it is also the purchase agreement. The agreement attached to this document is the standard format that the Authority has used for a number of years in selling lots to builders. The agreement was originally ^ developed in the original phase of the Housing Replacement Program, reviewed by Counsel on a number of occasions. The agreement assures the Authority gets quality homes built on the HRP lots and contains a clause giving the land back to the Authority if that is not the case. When timing permits, staff will provide the Contract for approval on the same night that the Public Hearing for the approval of the sale of the lot is held. You will see this same agreement, with particular details changed, attached to the next two agenda items in this packet. Staff recommends approval of the attached Contract for Private Redevelopment between the Authority and Novak-Fleck, Inc.. CONTRACT FOR PRIVATE REDEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY In and For THE CITY OF FRIDLEY,MINNESOTA And Novak-Fleck,Inc. FOR PROPERTY LOCATED AT 551 HUGO STREET N.E. This document was drafted by: Housing and Redevelopment Authority in and for the City of Fridley 6431 University Avenue N.E. Fridley,MN 55432 1st COPY (4-30-2012) CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the day of , 2012 by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), a public body corporate and politic organized under the laws of the State of Minnesota and Novak-Fleck, Inc., a corporation organized and existing under the laws of the State of Minnesota (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 et seq. (the "Act"), the redevelopment plan known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Project Area") which plan, as amended, and as it may be amended, is hereinafter referred to as the "Redevelopment Plan" in the City to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, in order to achieve the objectives of the Redevelopment Plan and particularly to make specified land in the Project Area and in the Authority's area of operation available for development by private enterprise for and in accordance with the Redevelopment Plan, the Authority has determined to provide substantial aid and assistance to finance public development costs in the Project Area and in the Authority's area of operation; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1 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, et seq. "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. "Certificate of Completion" means the certification, in a form substantially similar to the certificate contained in Schedule C attached to and made a part of this Agreement, provided to the Redeveloper,pursuant to Section 4.3 of this Agreement. "City" means the City of Fridley, Minnesota, or its successors or assigns. "Construction Plans" means the plans, specifications, drawings and related documents for the construction of the Minimum Improvements that are required by the City for the issuance of its building permit. The Authority shall approve said Constructions Plans before the City issues any building permits. "County" means the County of Anoka,Minnesota. "Date of Closing" means the date or dates set forth in Section 3.1(b). "Event of Default" means an action by the Redeveloper described in Section 7.1 of this Agreement. "Homeowner"means the person(s)who purchase the Project from the Redeveloper. "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property as specified in the Construction Plans approved by the Authority and attached to Exhibit D. "Party" means a party to this Agreement. "Permitted Encumbrances" means those encumbrances as defined in Section 8.7 of this ,-� Agreement. 2 "Project" means the Redevelopment Property and the Minimum Improvements. "Purchase Price" means the sum of Thirty Thousand and No/100 Dollars ($30,000), payable on the Date of Closing. "Redeveloper" means Novak-Fleck, Inc., a Minnesota corporation, and it's permitted successors or assigns. "Redevelopment Plan" means the Modified Redevelopment Plan adopted by the Authority in connection with its Redevelopment Project No. 1. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described on Schedule A attached to and made a part of this Agreement. "Redevelopment Property Deed" means a quit claim deed, substantially in the form of the deed in Schedule B attached to and made a part of this Agreement, used to convey the Redevelopment Property from the Authority to the Redeveloper. "Sales Price" means an amount equal to or greater than $140,000 and which is to be used on the certificate of real estate value when the Project is conveyed to the Homeowner. "State"means the State of Minnesota. "Unavoidable Delays" means delays which are the direct result of strikes or shortages of material; delays which are the direct result of casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements; delays which are the direct result of governmental actions (except that the City may not create an Unavoidable Delay by virtue of its own action); delays which are the direct result of judicial action commenced by third parties; or delays which are the direct result of citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority represents and warrants that: (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. 3 �., (b) The Authority will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Redeveloper and will cooperate with the efforts of Redeveloper to secure the granting of any permit, license, or other approval required to allow the construction of the Minimum Improvements; provided, however, that nothing contained in this Section 2.1(b) shall be construed to limit in any way the reasonable and legitimate exercise of the Authority's discretion considering any submittal or application. (c) The Authority makes no representation,guarantee, or warranty, either express or implied, and hereby assumes no responsibility or liability as to the Redevelopment Property or its condition(regarding soils,pollutants,hazardous wastes or otherwise). Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper will purchase the Redevelopment Property from the Authority pursuant to Article III hereof and in the event the Redevelopment Property is conveyed to the Redeveloper, then the Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Program and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (b) The Redeveloper is a corporation organized under the laws of the State of Minnesota, is authorized to transact business in the State, and has duly authorized the execution of this Agreement and the performance of its obligations hereunder. (c) The financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (b) The Redeveloper shall prepare the Construction Plans and construct the Minimum Improvements in accordance with all of the appropriate building and zoning codes, as well as House Plans that are shown in Exhibit D and the List of Materials in Exhibit E. (c) The Redeveloper shall have the Construction Plans prepared by an architectural designer or a licensed architect. (f) The Redeveloper shall sell the Project to the Homeowner for no less than the Sales Price. 4 ARTICLE III Conveyance of Property Section 3.1. Conveyance of the Redevelopment Property. (a) Title. The Authority shall, subject to the Permitted Encumbrances, 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 of this Agreement. The conveyance of title to the Redevelopment Property pursuant to the Redevelopment Property Deed and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants,restrictions and limitations imposed by this Agreement and the Redevelopment Property Deed. At its expense,the Redeveloper shall obtain and pay for any title policy and endorsements it deems necessary. The Authority agrees to obtain and shall deliver to the Redeveloper a commitment for an owner's title insurance policy, in the ALTA form requested by the Redeveloper, issued by a title insurance company acceptable to the Authority and Redeveloper, naming the Redeveloper as the proposed owner-insured of the Redevelopment Property in the amount of the Purchase Price (the "Commitment"). The Commitment shall have a current date as its effective date and shall, subject to the Permitted Encumbrances, commit to insure marketable title in the Redeveloper, 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. The Commitment shall set forth all levied real estate and special assessments relating to the Redevelopment Property. Said commitment shall have attached copies of all instruments of record, which create any easements or restrictions, which are referred to in its Schedule B. The Redeveloper will be allowed 20 days after receipt of the Commitment to make an examination thereof and to make any objections to the marketability of the title to Redevelopment Property, other than the Permitted Encumbrances, said objections to be made by written notice or to be deemed waived. If the title to the Redevelopment Property, as evidenced by the Commitment, together with any appropriate and available endorsements, is not good and marketable of record(subject only to the Permitted Encumbrances) in the Authority and is not made so by the Date of Closing,Redeveloper may either: (i) Terminate this Agreement by giving written notice to the Authority in which event this Agreement shall become null and void and neither Party shall have any further rights or obligations hereunder; or (ii) Elect to accept the title in its marketable condition by giving written notice to the Authority, in which event the Redeveloper may hold back adequate funds from 5 r-. the portion of the Purchase Price payable at the closing to cure the defects and apply said holdback funds of the cost of curing such defects, including attorneys' fees, and pay the unexpended balance to the Authority. (If the amount of said holdback cannot be mutually agreed to by the Authority and the Redeveloper, the issuer of the Commitment shall determine the amount of said holdback.) (d) Time of Conveyance. The Authority shall execute and deliver to the Redeveloper the Redevelopment Property Deed for the Redevelopment Property on or before August 1, 2012 or on such date as the Authority and the Redeveloper shall mutually agree in writing (the "Date of Closing"). The Redeveloper shall take possession of the Redevelopment Property on the Date of Closing. (c) Price and Payment. The Authority agrees to sell and the Redeveloper agrees to purchase the Redevelopment Property for the Purchase Price. Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all closing documents and the payment of the Purchase Price shall be made either at the principal offices of the Authority or offices of a licensed title company agreed upon by the parties. (d) Taxes and Special Assessments. 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 prorated as of the Date of Closing based upon each Party's respective period n 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. On or prior to the Date of Closing,the Authority shall pay all pending or levied special assessments. (e) Survey. The Authority will not provide a survey. (e) Inspection. At the Redeveloper's expense, the Redeveloper, its agents and designees, are hereby granted the right at any time or times after the date hereof to inspect, analyze, and test the Redevelopment Property. The Redeveloper shall hold the Authority and the City harmless from any liability resulting solely from the entering upon the Redevelopment Property or the performing of any of the tests or inspections referred to in this Section by the Redeveloper, its agents or designees. (0 Permits and Fees. The Redeveloper shall be responsible for all permits and fees including,but not limited to building, electrical,mechanical,plumbing, sewer,water, and park dedication fees. Section 3.2. Conditions Precedent to Conveyance. The obligations of the Authority to convey the Redevelopment Property to the Redeveloper shall be subject to the following conditions precedent: 6 (a) On the Date of Closing, the Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement; (b) The Redeveloper shall have provided evidence satisfactory to the Authority that the Redeveloper is capable of financing or has obtained financing or a commitment for financing sufficient to finance the construction of the Minimum Improvements. The Redeveloper will be deemed to have provided adequate evidence of such financial commitment and ability if the Redeveloper provides evidence satisfactory to the Authority of a mortgage commitment; (c) The Authority and the City shall have approved the Construction Plans; (d) The Redeveloper shall have received the appropriate permits for the construction of the Minimum Improvements; ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this Agreement,the Housing Design and Site Development Criteria and the Construction Plans approved by the City and the Authority and will maintain,preserve and �--� keep the Minimum Improvements or cause the Minimum Improvements to be in good repair and condition until sale of the Project to the Homeowner. Subject to Unavoidable Delays,the Redeveloper shall commence construction of the Minimum Improvements on or before August 15, 2012. Section 4.2. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Minimum Improvements by December 1, 2012. 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 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. 7 ,� Section 4.3. Certificate of Completion. (a) Promptly after completion of the 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 Minimum Improvements shall be deemed to be completed when the City has issued its Certificate of Occupancy; provided that the Authority shall retain the right to withhold the Certificate of Completion in the event that the City's Certificate of Occupancy issues with conditions, and to continue to withhold the Certificate of Completion until such conditions are fully satisfied. 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: 8 (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. 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 9 f. Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2. Prohibition Against Transfer of Property and Assignment of Agreement. Also,for the foregoing reasons the Redeveloper represents and agrees that prior to the earlier of the issuance of the Certificate of Completion or the Termination Date 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 the Homeowner. Section 63. 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. (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 10 property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person, other than the negligence and misconduct of the City or Authority employees or those employed or engaged by the City or 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. Subject to Unavoidable Delays, the following shall be "Events of Default" under this Agreement and the term"Event of Default" shall mean,whenever it is used in this Agreement(unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper to pay when due all real property taxes assessed against the Redevelopment Property. (b) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this Agreement. (c) Failure by the Redeveloper to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (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 11 (iv) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper as a 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 Redevelopment Property, or part thereof, shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. Section 7.2. Remedies on Default. Whenever any Event of Default referred to in Section 7.1 of this Agreement occurs,the Authority may take any one or more of the following actions after providing thirty days'written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty days, or if the Event of Default is by its nature incurable within said thirty day period, and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority,that the Event of Default will be cured as soon as reasonably possible: (a) 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 n and continue its performance under this Agreement. (b) Terminate this Agreement. (c) Withhold the Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 7.3. Re-vesting Title in the Authority Upon Happening of Event Subsequent to Conveyance to the Redeveloper. In the event that subsequent to conveyance of the Redevelopment Property to the Redeveloper and prior to the receipt by the Redeveloper of the Certificate of Completion: (a) subject to Unavoidable Delays,the Redeveloper fails to carry out its obligations with respect to the construction of the Minimum Improvements(including the nature and the date for the commencement and 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 thirty (30) days after written demand from the Authority to the Redeveloper to do so; or 12 (b) the Redeveloper fails to pay real estate taxes or assessments on the Redevelopment • Property or any part thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the Redevelopment Property which is unauthorized by this Agreement or shall suffer any levy or attachment to be made, or any materialmen's or mechanic's lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision 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 mechanic's or other lien filed or established and in such event the Authority shall permit such mechanic's 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 lien, in a form satisfactory to the Authority pursuant to which the bank or other obligor will pay to the Authority the amount of any lien in the event that 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 or distribution thereof of the Redeveloper, or with respect to the identity of the parties in control of the Redeveloper or the degree thereof, and such violation shall not be cured within thirty (30) days after written demand by the Authority to the Redeveloper; Then the Authority shall have the right to re-enter and take possession of the Redevelopment Property and to terminate (and revest in the Authority) the estate conveyed by the Redevelopment Property Deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, 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, end, or abrogate 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 of all the rights and interests 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 7.3(a)-(c) have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this Section 7.3, the Authority shall have no right to re-enter or retake title to and possession of any part of the Redevelopment Property for which a Certificate of Completion has been issued. 13 Section 7.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Authority of title to any parcel of the Redevelopment Property or any part thereof as provided in Section 7.3,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 shall in its sole discretion determine, without reimbursement of any sums paid by the Redeveloper to the Authority under this Agreement. Section 7.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof,but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VII. Section 7.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either 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 7.7. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the Authority or the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement,the Redeveloper agrees that it shall,within ten(10)days of written demand by the Authority,pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority or the City. ARTICLE VIII Mortgage Financing Section 8.1. Limitation Upon Encumbrances of Property. Prior to the substantial completion of the Minimum Improvements, as certified by the Authority,neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property, other than the Permitted Encumbrances, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Redevelopment Property, other than Permitted Encumbrances, except: 14 (a) For the purposes of obtaining funds only to the extent necessary for financing of the Minimum Improvements including, but not limited to, labor and materials, equipment, professional fees, real estate taxes, construction interest, organizational and other indirect costs of development, costs of constructing the Minimum Improvements, an allowance for contingencies, acquisition cost of the Redevelopment Property, costs of originating the Mortgage and customary financing costs. (b) Only upon the prior written approval of the Authority in accordance with Sections 8.1 and 8.2. The Authority shall not approve any Mortgage, which does not contain terms that conform to the terms of Section 8.5, except as provided in Section 8.6 of this Agreement. Section 8.2 Approval of Mortgage. The Authority shall approve a Mortgage if: (a) The Authority first receives a copy of all Mortgage documents. (b) The Mortgage loans,together with other funds available to the Redeveloper, will, in the reasonable judgment of the Authority, be sufficient to acquire the Redevelopment Property and construct the Minimum Improvements. (g) The Authority is not entitled under Section 7.2 to exercise any of the remedies set forth therein as a result of an Event of Default. (h) The Authority determines that the terms of the Mortgage conform to the terms of Section 8.5. However, the approval of a Mortgage by the Authority shall not be unreasonably withheld. Any Mortgage, which is subordinated to the rights of the Authority under this Agreement, may be granted in all or any part of the Redevelopment Property without the approval of the Authority. Section 8.3 Notice of Default; Copy to Mortgagee. Whenever the Authority shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations or covenants under this Agreement, the Authority shall at the same time forward a copy of such notice or demand to each holder of any Mortgage authorized by this Agreement at the last address of such holder shown in the records of the Authority. Section 8.4 Mortgagee's Option to Cure Defaults. After any breach or default referred to in Section 8.3, each such holder of a Mortgage shall (insofar as the rights of the Authority are concerned)have the right, at its option,to cure or remedy such breach or default (or such breach or default to the extent that it relates to the part of the Redevelopment Property 15 covered by its Mortgage) and to add the cost thereof to the Mortgage debt and the lien of its Mortgage;provided,however,that if the breach or default is with respect to construction of the Minimum Improvements,nothing contained in this Section or any other Section of this Agreement shall be deemed to require such holder, either before or after foreclosure or action in lieu thereof,to undertake or continue the construction or completion of the Minimum Improvements,provided that any such holder of a Mortgage shall not devote the Redevelopment Property to a use inconsistent with the Redevelopment Plan or this Agreement without the written consent of the Authority. Section 8.5 Authority's Option to Cure Default on Mortgage. Any Mortgage, unless such requirement is waived by the Authority,executed by the Redeveloper with respect to the Redevelopment Property or any improvements thereon shall provide that, in the event that the Redeveloper is in default under any Mortgage authorized pursuant to this Article VIII, the holder of the Mortgage shall notify the Authority in writing of: (a) The fact of the default. (b) The elements of the default. (c) The actions required to cure the default. If the default is an "Event of Default" under such Mortgage, which shall entitle such holder to foreclose upon the Redevelopment Property, the Minimum Improvements or any portion thereof, and any applicable grace periods have expired, the Authority shall have, and each Mortgage executed by the Redeveloper with respect to the Redevelopment Property or any improvements thereon shall provide that the Authority shall have such an opportunity to cure the "Event of Default" within such reasonable time period as such holder shall deem appropriate. Section 8.6 Subordination and Modification for the Benefit of Mortgagees. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements, the Authority agrees that it shall agree to any reasonable modification of this Article VIII or waiver of its rights hereunder to accommodate the interests of a holder of a Mortgage, provided, however, that the Authority determines, in its reasonable judgment, that any such modification(s) will adequately protect the legitimate interest and security of the Authority with respect to the Redevelopment Property. Section 8.7 Permitted Encumbrances. The following shall be permitted encumbrances on the title to the Redevelopment Property: (a) Such encumbrances as are mutually agreed to in writing by the Authority and the Redeveloper. 16 (b) Governmental regulations, if any, affecting the use and occupancy of the Redevelopment Property and Minimum Improvements. (c) Zoning laws of the City, County and State. (d) All rights in public highways upon the land.Reservations to the State, in trust for the tax districts concerned, of minerals and mineral rights in those portions of the Redevelopment Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. (e) The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due. (f)The lien of unpaid real estate taxes, if any, not presently payable but to be paid as a part of the annual taxes to become due. (g) A Mortgage as permitted under Section 8.2 ARTICLE IX Additional Provisions Section 9.1. Conflict of Interest; Authority Representatives Not Individually Liable. No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation,partnership, or association in which he or she is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 9.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement that it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 9.3. 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. 17 •-�. '"•N Section 9.4. Titles of Articles and Sections. Any titles of the several parts, articles, and sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.5. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is(1)dispatched by registered or certified mail,postage prepaid,return receipt requested, (2)transmitted by facsimile, (3)delivered by a recognized overnight courier or(4)delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 8857 Zealand Avenue North, Brooklyn Park, Minnesota 55445, Attention: Mr. Novak; (b) in the case of the Authority, is addressed to or delivered personally to the Housing and Redevelopment Authority in and for the City of Fridley at 6431 University Avenue Northeast,Fridley,Minnesota, 55432,Attention: Assistant Executive Director; or at such other address with respect to either party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 9.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.7 Termination. This Agreement shall terminate upon the Authority issuing its Certificate of Completion or in accordance with the provisions of Article VIII and the discharge of all of the Authority's and Redeveloper's other respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred and was continuing prior to such termination. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. 18 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairperson And by Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) On this day of , 20 before me, a Notary Public, personally appeared Lawrence R. Commers and William W. Bums to me personally known and who by me duly sworn did say that they are the Chairperson and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and politic organized under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: Authority Signature Page --Redevelopment Contract 19 r� ' Dated: 5/2_1 /zii- Novak-Fleck, INC. By Its ,�� STATE OF MINNESOTA ) ) ss. COUNTY OF Fk '1 pi 11 ) On this 2( day of l , 20 1,2 before me, a Notary Public,personally appeared PAC'UY�IVC �VCJLto me personally known and who by me duly sworn did say that s/he is the V r ew of Novak-Fleck,Inc., a Minnesota corporation, and acknowledged the foregoing instrument on behalf of said corporation. I °'''W11'.CANDICE L.TRAUTMAN _,t ,IA , - -) --A() ' . !'11A 'A t. :1 Notary Public-Minnesota Notary Public '°+=.:;:vv' M Commission Expires Jan 37,2015 j °` y My Commission Expires: 13 1 ii l 2A 15 Redeveloper Signature Page-- Contract for Private Redevelopment n 20 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY Lots 19-21, Block G,Riverview Heights,Anoka County,Minnesota. 21 .-� SCHEDULE B REDEVELOPMENT PROPERTY DEED STATE DEED TAX DUE HEREUNDER$ 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 under the laws of the State of Minnesota (the "Grantor"), and Novak-Fleck, Inc., a corporation organized under the laws of the State of Minnesota (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration the receipt whereof 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: Lots 19-21, Block G,Riverview Heights,Anoka County,Minnesota. 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 Novak-Fleck, Inc., dated , 20 (the "Contract") and (b) all matters of record. Grantor covenants and represents that: Grantee has committed to construct certain improvements pursuant to the Contract and Grantor has a right of re-entry in accordance with Sections 4.2 and 7.3 respectively of the Contract. Title is conveyed hereby subject to the following conditions subsequent: In the event that Grantee defaults on its obligations in the Contract and fails to properly cure said default, Grantor may declare a termination of all right, title and interest conveyed herein and all right, title and interest in the premises described above in this deed reverts to Grantor. Upon performance of Grantee's obligations in the Contract, including completion of the improvements, the release of the right of re-entry and reverter shall be evidenced by the recording of the Certificate of Completion and Release of Forfeiture attached as Exhibit 1 to this deed. The Grantor certifies that the Grantor does not know of any wells on described real property. 22 IN WITNESS WHEREOF, the Grantor has caused this deed to be duly executed in its behalf by its Chairperson and its Executive Director the day and year written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by 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 and who by me duly sworn did say that they are the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: Property Tax Statements should be sent to: 23 SCHEDULE C CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE WHEREAS, the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota (the "Grantor"), by a Deed recorded in the Office of the County Recorder and/or the Registrar of Titles in and for the County of Anoka and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to Novak-Fleck, Inc., a Minnesota corporation organized under the laws of the State of Minnesota (the "Grantee"), the following described land in County of Anoka and State of Minnesota,to-wit: Lots 19-21, Block G,Riverview Heights,Anoka County,Minnesota. WHEREAS, said Deed contained certain covenants and restrictions,the breach of which by Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by Grantor, its successors and assigns, said covenants and restrictions being set forth in said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed have been performed by the Grantee therein and that the provisions for forfeiture of title and right to re-entry for breach of condition subsequent by the Grantor therein is hereby released absolutely and forever insofar as it applies to the land described herein, and the County Recorder and/or the Registrar of Titles in and for 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 said Deed, the breach of which would result in a forfeiture and right of re-entry. 24 Dated: , 20 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by 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 Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: 25 SCHEDULE D HOUSE PLANS Full size house plans are attached. 26 SCHEDULE E LIST OF BUILDING MATERIALS 27 ACTION ITEM HRA MEETING OF JUNE 7, 2012 CITY OF FRIDLEY Date: May 30, 2012 To: William Burns, Executive Director From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing - Sale of 561 Hugo Street NE - HRP Jason Wiehle, a realtor representing Boulder Builders, submitted a lot reservation agreement to build and sell a new home at 561 Hugo Street. Boulder Builders made an offer of $30,000 for the lot, a price justified by comparable sales, the recent sale approval of the neighboring lot, and the City Assessor. t Nugo,st NE.Mississipp National Riverand 0 C)3) tot; The Authority purchased the property, with house and garage in August of 2011, for $65,000. The home was demolished in November of 2011 and the property split in 2 separate lots in February 2012. The property is included in the Authority's HRP TIF District. The Authority will collect the increment generated from the new construction for the next 15 years. Using rough numbers, it is estimated this increment will total $1,200 to $1,500 per year to help defray the Authority's investment. ,,."N Boulder Contracting plans to build a 1,020 sq.ft. split level home. The home will have 2 finished bedrooms, 1 and 3/4 finished bathrooms and room for additional bedrooms and living space in the lower level. The exterior of the home will utilize a blend of maintenance free materials and will incorporate stone and shakes on the front of the home. ^ � � , :� A , 4� a : ' �, p' a � .� ",y'4s - a 1 {: % t 9 r .� � � s� s��� ';:,,,,"5:1.14-.',7,-",:t-1°...4.!T-..".r.:%,s °° n •-., .;ate • sw a _..° ,__ s A Boulder Contracting has 23 years of building experience, mostly in the northern suburbs '�' and exurbs. Their contractor's license is current and there are no issues noted in the records of the Department of Labor and Industry. Staff recommends approval of the attached resolution and contract for •redevelopment, authorizing the sale of this lot to Boulder Contracting for$30,000. /'■ HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA HRA RESOLUTION NO. 2012-14# A RESOLUTION AUTHORIZING THE SALE OF RESIDENTIAL PROPERTY BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the Board of Commissioners(the"Commissioners")of the Housing and Redevelopment Authority in and for the City of Fridley,Minnesota(the "Authority") as follows: Section 1. Recitals. 1.01. It has been proposed that the Authority sell certain residential property (the "Property") described below: Legal Description: Street Address Hugo St.NE Lots 22-24, Block G,Riverview Heights 561 Hu g Section 2. Findings. 2.01. The Authority hereby finds that it has approved and adopted a development program known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment Program") pursuant to Minnesota Statutes, Section 469.001 et seq. 2.02. The Authority hereby finds that it has approved and adopted a Housing Replacement District Plan(the "Plan") and created Housing Replacement District No. 1,pursuant to and in accordance with Laws of Minnesota 1995,Chapter 264,Article 5,Sections 44 through 47;Laws of Minnesota 1996,chapter 471, article 7, section 22; Laws of Minnesota 1997,chapter 231, article 10,section 13;Laws of Minnesota 2002, chapter 377, article 7, section 6;Laws of Minnesota 2008,chapter 154,article 9, section 19,and Laws of Minnesota 2010, Chapter 216, Section 42 (collectively"The Act"). 2.03. The Authority hereby finds that it has performed all actions required by Minnesota Statutes for the sale of the Property. 2.04. The Authority hereby finds that the sale of the Property promotes the objectives as outlined in its Redevelopment Program and the Plan. Section 3. Approval of the Sale. 3.01 The sale of the Property is hereby approved for a price of not less than$30,000. HRA Resolution 2012- Page 2 Section 4. Authorization for Execution and Delivery. 4.01. The Chairman,the Executive Director and Assistant Executive Director are hereby authorized to execute and deliver any documents necessary to effect the sale of the Property in accordance with the Authority's Housing Replacement Program. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 7TH DAY OF JUNE, 2012. LAWRENCE R. COMMERS - CHAIRMAN ATTEST: WILLIAM W. BURNS - EXECUTIVE DIRECTOR CONTRACT FOR PRIVATE REDEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY In and For THE CITY OF FRIDLEY, MINNESOTA And BOULDER CONTRACTING, LLC FOR PROPERTY LOCATED AT 561 HUGO STREET N.E. This document was drafted by: Housing and Redevelopment Authority in and for the City of Fridley 6431 University Avenue N.E. Fridley, MN 55432 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the day of , 2012 by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), a public body corporate and politic organized under the laws of the State of Minnesota and Novak-Fleck, Inc., a corporation organized and existing under the laws of the State of Minnesota (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 et seq. (the "Act"), the redevelopment plan known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Project Area") which plan, as amended, and as it may be amended, is hereinafter referred to as the "Redevelopment Plan" 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; 2 WHEREAS, in order to achieve the objectives of the Redevelopment Plan and particularly to make specified land in the Project Area and in the Authority's area of operation available for development by private enterprise for and in accordance with the Redevelopment Plan, the Authority has determined to provide substantial aid and assistance to finance public development costs in the Project Area and in the Authority's area of operation; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 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, et seq. "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. "Certificate of Completion" means the certification, in a form substantially similar to the certificate contained in Schedule C attached to and made a part of this Agreement, provided to the Redeveloper, pursuant to Section 4.3 of this Agreement. "City" means the City of Fridley, Minnesota, or its successors or assigns. 3 "Construction Plans" means the plans, specifications, drawings and related documents for the construction of the Minimum Improvements that are required by the City for the issuance of its building permit. The Authority shall approve said Constructions Plans before the City issues any building permits. "County" means the County of Anoka, Minnesota. "Date of Closing" means the date or dates set forth in Section 3.1(b). "Event of Default" means an action by the Redeveloper described in Section 7.1 of this Agreement. "Homeowner"means the person(s)who purchase the Project from the Redeveloper. "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property as specified in the Construction Plans approved by the Authority and attached to Exhibit D. "Party" means a party to this Agreement. "Permitted Encumbrances" means those encumbrances as defined in Section 8.7 of this Agreement. "Project"means the Redevelopment Property and the Minimum Improvements. "Purchase Price" means the sum of Thirty Thousand and No/100 Dollars ($30,000), payable on the Date of Closing. "Redeveloper" means Boulder emit LLC, a Minnesota corporation, and it's permitted successors or assigns. Cor.-r ct t,'n "Redevelopment Plan" means the Modified Redevelopment Plan adopted by the Authority in connection with its Redevelopment Project No. 1. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described on Schedule A attached to and made a part of this Agreement. 4 "Redevelopment Property Deed" means a quit claim deed, substantially in the form of the deed in Schedule B attached to and made a part of this Agreement, used to convey the Redevelopment Property from the Authority to the Redeveloper. "Sales Price" means an amount equal to or greater than $140,000 and which is to be used on the certificate of real estate value when the Project is conveyed to the Homeowner. "State" means the State of Minnesota. "Unavoidable Delays" means delays which are the direct result of strikes or shortages of material; delays which are the direct result of casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements; delays which are the direct result of governmental actions (except that the City may not create an Unavoidable Delay by virtue of its own action); delays which are the direct result of judicial action commenced by third parties; or delays which are the direct result of citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority represents and warrants that: (a) The Authority is a public body duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Redeveloper and will cooperate with the efforts of Redeveloper to secure the granting of any permit, license, or other approval required to allow the construction of the Minimum Improvements; provided, however, that nothing contained in this Section 2.1(b) shall be construed to limit in any way the reasonable and legitimate exercise of the Authority's discretion considering any submittal or application. 5 n (c) The Authority makes no representation, guarantee, or warranty, either express or implied, and hereby assumes no responsibility or liability as to the Redevelopment Property or its condition(regarding soils, pollutants, hazardous wastes or otherwise). Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper will purchase the Redevelopment Property from the Authority pursuant to Article III hereof and in the event the Redevelopment Property is conveyed to the Redeveloper, then the Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Program and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (b) The Redeveloper is a corporation organized under the laws of the State of Minnesota, is authorized to transact business in the State, and has duly authorized the execution of this Agreement and the performance of its obligations hereunder. (c) The financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (b) The Redeveloper shall prepare the Construction Plans and construct the Minimum Improvements in accordance with all of the appropriate building and zoning codes, as well as House Plans that are shown in Exhibit D and the List of Materials in Exhibit E. (c) The Redeveloper shall have the Construction Plans prepared by an architectural designer or a licensed architect. (f) The Redeveloper shall sell the Project to the Homeowner for no less than the Sales Price. ARTICLE III 6 Conveyance of Property Section 3.1. Conveyance of the Redevelopment Property. (a) Title. The Authority shall, subject to the Permitted Encumbrances, 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 of this Agreement. The conveyance of title to the Redevelopment Property pursuant to the Redevelopment Property Deed and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement and the Redevelopment Property Deed. At its expense, the Redeveloper shall obtain and pay for any title policy and endorsements it deems necessary. The Authority agrees to obtain and shall deliver to the Redeveloper a commitment for an owner's title insurance policy, in the ALTA form requested by the Redeveloper, issued by a title insurance company acceptable to the Authority and Redeveloper, naming the Redeveloper as the proposed owner-insured of the Redevelopment Property in the amount of the Purchase Price ,., (the "Commitment"). The Commitment shall have a current date as its effective date and shall, subject to the Permitted Encumbrances, commit to insure marketable title in the Redeveloper, 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. The Commitment shall set forth all levied real estate and special assessments relating to the Redevelopment Property. Said commitment shall have attached copies of all instruments of record, which create any easements or restrictions, which are referred to in its Schedule B. The Redeveloper will be allowed 20 days after receipt of the Commitment to make an examination thereof and to make any objections to the marketability of the title to Redevelopment Property, other than the Permitted Encumbrances, said objections to be made by written notice or to be deemed waived. If the title to the Redevelopment Property, as evidenced by the Commitment, together with any appropriate and available endorsements, is not good and marketable of record(subject only to the Permitted Encumbrances) in the Authority and is not made so by the Date of Closing, Redeveloper may either: (i) Terminate this Agreement by giving written notice to the Authority in which event this Agreement shall become null and void and neither Party shall have any further rights 7 or obligations hereunder; or ii Elect to accept the title in its marketable condition by giving written notice to the Authority, in which event the Redeveloper may hold back adequate funds from the portion of the Purchase Price payable at the closing to cure the defects and apply said holdback funds of the cost of curing such defects, including attorneys' fees, and pay the unexpended balance to the Authority. (If the amount of said holdback cannot be mutually agreed to by the Authority and the Redeveloper,the issuer of the Commitment shall determine the amount of said holdback.) (d) Time of Conveyance. The Authority shall execute and deliver to the Redeveloper the Redevelopment Property Deed for the Redevelopment Property on or before August 1, 2012 or on such date as the Authority and the Redeveloper shall mutually agree in writing (the "Date of Closing"). The Redeveloper shall take possession of the Redevelopment Property on the Date of Closing. (c) Price and Payment. The Authority agrees to sell and the Redeveloper agrees to purchase the Redevelopment Property for the Purchase Price. Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all closing documents and the payment of the Purchase Price shall be made either at the principal r� offices of the Authority or offices of a licensed title company agreed upon by the parties. (d) Taxes and Special Assessments. 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 prorated as of the Date of Closing based upon each Party's 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. On or prior to the Date of Closing, the Authority shall pay all pending or levied special assessments. (e) Survey. The Authority will not provide a survey. (e) Inspection. At the Redeveloper's expense, the Redeveloper, its agents and designees, are hereby granted the right at any time or times after the date hereof to inspect, analyze, and test the Redevelopment Property. The Redeveloper shall hold the Authority and the City harmless from any liability resulting solely from the entering upon the Redevelopment Property or the performing of any of the tests or inspections referred to in this Section by the Redeveloper, its agents or designees. 8 (f) Permits and Fees. The Redeveloper shall be responsible for all permits and fees including,but not limited to building, electrical,mechanical, plumbing, sewer, water, and park dedication fees. Section 3.2. Conditions Precedent to Conveyance. The obligations of the Authority to convey the Redevelopment Property to the Redeveloper shall be subject to the following conditions precedent: (a) On the Date of Closing,the Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement; (b) The Redeveloper shall have provided evidence satisfactory to the Authority that the Redeveloper is capable of fmancing or has obtained financing or a commitment for financing sufficient to finance the construction of the Minimum Improvements. The Redeveloper will be deemed to have provided adequate evidence of such financial commitment and ability if the Redeveloper provides evidence satisfactory to the Authority of a mortgage commitment; (c) The Authority and the City shall have approved the Construction Plans; (d) The Redeveloper shall have received the appropriate permits for the construction of the Minimum Improvements; ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this Agreement,the Housing Design and Site Development Criteria and the Construction Plans approved by the City and the Authority and will maintain,preserve and keep the Minimum Improvements or cause the Minimum Improvements to be in good repair and condition until sale of the Project to the Homeowner. Subject to Unavoidable Delays,the Redeveloper shall commence construction of the Minimum Improvements on or before August 15,2012. 9 r-� Section 4.2. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Minimum Improvements by December 1, 2012. 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 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 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 Minimum Improvements shall be deemed to be 10 completed when the City has issued its Certificate of Occupancy; provided that the Authority shall retain the right to withhold the Certificate of Completion in the event that the City's Certificate of Occupancy issues with conditions, and to continue to withhold the Certificate of Completion until such conditions are fully satisfied. 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 11 n 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. 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 Against Transfer of Property and Assignment of Agreement. Also, for the foregoing reasons the Redeveloper represents and agrees that prior to the earlier of the issuance of the Certificate of Completion or the Termination Date the Redeveloper shall comply with the following: Except for the purpose of obtaining fmancing 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 12 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 the Homeowner. 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. (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 Minimum Improvements due to any act of negligence of any person, other than the negligence and misconduct of the City or Authority 13 employees or those employed or engaged by the City or 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. Subject to Unavoidable Delays,the following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement(unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper to pay when due all real property taxes assessed against the Redevelopment Property. (b) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this Agreement. (c) Failure by the Redeveloper to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (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 14 • (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 a 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 Redevelopment Property, or part thereof, shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. Section 7.2. Remedies on Default. Whenever any Event of Default referred to in Section 7.1 of this Agreement occurs,the Authority may take any one or more of the following actions after providing thirty days'written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty days, or if the Event of Default is by its nature incurable within said thirty day period, and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority,that the Event of Default will be cured as soon as reasonably possible: (a) 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) Terminate this Agreement. (c) Withhold the Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 7.3. Re-vesting Title in the Authority Upon Happening of Event Subsequent to Conveyance to the Redeveloper. In the event that subsequent to conveyance 15 r-� of the Redevelopment Property to the Redeveloper and prior to the receipt by the Redeveloper of the Certificate of Completion: (a) subject to Unavoidable Delays, the Redeveloper fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for The commencement and 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 thirty (30) 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, or creates, suffers, assumes, or agrees to any encumbrance or lien on the Redevelopment Property which is unauthorized by this Agreement or shall suffer any levy or attachment to be made, or any materialmen's or mechanic's lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision 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 mechanic's or other lien filed or established and in such event the Authority shall permit such mechanic's 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 lien, in a form satisfactory to the Authority pursuant to which the bank or other obligor will pay to the Authority the amount of any lien in the event that 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 or distribution thereof of the Redeveloper, or with respect to the identity of the parties in control of the Redeveloper or the degree thereof, and such violation shall not be cured within thirty (30) days after written demand by the Authority to the Redeveloper; Then the Authority shall have the right to re-enter and take possession of the Redevelopment Property and to terminate (and revest in the Authority) the estate conveyed by 16 the Redevelopment Property Deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, 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, end, or abrogate 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 of all the rights and interests 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 7.3(a)-(c)have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this Section 7.3, the Authority shall have no right to re-enter or retake title to and possession of any part of the Redevelopment Property for which a Certificate of Completion has been issued. Section 7.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Authority of title to any parcel of the Redevelopment Property or any part thereof as provided in Section 7.3, 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 shall in its sole discretion determine, without reimbursement of any sums paid by the Redeveloper to the Authority under this Agreement. Section 7.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every. other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VII. Section 7.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and 17 • shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 7.7. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the Authority or the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement,the Redeveloper agrees that it shall, within ten(10)days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority or the City. ARTICLE VIII Mortgage Financing Section 8.1. Limitation Upon Encumbrances of Property. Prior to the substantial completion of the Minimum Improvements, as certified by the Authority, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall engage in any fmancing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property, other than the Permitted ..� Encumbrances, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Redevelopment Property, other than Permitted Encumbrances, except: (a) For the purposes of obtaining funds only to the extent necessary for financing of the Minimum Improvements including, but not limited to, labor and materials, equipment, professional fees, real estate taxes, construction interest, organizational and other indirect costs of development, costs of constructing the Minimum Improvements, an allowance for contingencies, acquisition cost of the Redevelopment Property, costs of originating the Mortgage and customary fmancing costs. (b) Only upon the prior written approval of the Authority in accordance with Sections 8.1 and 8.2. The Authority shall not approve any Mortgage, which does not contain terms that conform to the terms of Section 8.5, except as provided in Section 8.6 of this Agreement. 18 Section 8.2 Approval of Mortgage. The Authority shall approve a Mortgage if. (a) The Authority first receives a copy of all Mortgage documents. (b) The Mortgage loans,together with other funds available to the Redeveloper, will, in the reasonable judgment of the Authority, be sufficient to acquire the Redevelopment Property and construct the Minimum Improvements. (g) The Authority is not entitled under Section 7.2 to exercise any of the remedies set forth therein as a result of an Event of Default. (h) The Authority determines that the terms of the Mortgage conform to the terms of Section 8.5. However, the approval of a Mortgage by the Authority shall not be unreasonably withheld. Any Mortgage, which is subordinated to the rights of the Authority under this Agreement, may be granted in all or any part of the Redevelopment Property without the approval of the Authority. ,.� Section 8.3 Notice of Default; Cony to Mortgagee. Whenever the Authority shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations or covenants under this Agreement,the Authority shall at the same time forward a copy of such notice or demand to each holder of any Mortgage authorized by this Agreement at the last address of such holder shown in the records of the Authority. Section 8.4 Mortgagee's Option to Cure Defaults. After any breach or default referred to in Section 8.3, each such holder of a Mortgage shall (insofar as the rights of the Authority are concerned)have the right, at its option,to cure or remedy such breach or default (or such breach or default to the extent that it relates to the part of the Redevelopment Property covered by its Mortgage)and to add the cost thereof to the Mortgage debt and the lien of its Mortgage; provided, however,that if the breach or default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other Section of this Agreement shall be deemed to require such holder, either before or after foreclosure or action in lieu thereof,to undertake or continue the construction or completion of the Minimum Improvements,provided that any such holder of a Mortgage shall not devote the Redevelopment Property to a use inconsistent with the Redevelopment Plan or this Agreement without the written consent of the Authority. 19 Section 8.5 Authority's Option to Cure Default on Mortgage. Any Mortgage, unless such requirement is waived by the Authority, executed by the Redeveloper with respect to the Redevelopment Property or any improvements thereon shall provide that, in the event that the Redeveloper is in default under any Mortgage authorized pursuant to this Article VIII, the holder of the Mortgage shall notify the Authority in writing of a The fact of the default. a The elements of the default. a The actions required to cure the default. If the default is an "Event of Default" under such Mortgage, which shall entitle such holder to foreclose upon the Redevelopment Property, the Minimum Improvements or any portion thereof, and any applicable grace periods have expired, the Authority shall have, and each Mortgage executed by the Redeveloper with respect to the Redevelopment Property or any improvements thereon shall provide that the Authority shall have such an opportunity to cure the "Event of Default" within such reasonable time period as such holder shall deem appropriate. r. Section 8.6 Subordination and Modification for the Benefit of Mortgagees. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements, the Authority agrees that it shall agree to any reasonable modification of this Article VIII or waiver of its rights hereunder to accommodate the interests of a holder of a Mortgage, provided, however, that the Authority determines, in its reasonable judgment, that any such modification(s) will adequately protect the legitimate interest and security of the Authority with respect to the Redevelopment Property. Section 8.7 Permitted Encumbrances. The following shall be permitted encumbrances on the title to the Redevelopment Property: a Such encumbrances as are mutually agreed to in writing by the Authority and the Redeveloper. a Governmental regulations, if any, affecting the use and occupancy of the Redevelopment Property and Minimum Improvements. 20 (c) Zoning laws of the City, County and State. (d) All rights in public highways upon the land. Reservations to the State, in trust for the tax districts concerned, of minerals and mineral rights in those portions of the Redevelopment Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. (e) The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due. (f)The lien of unpaid real estate taxes, if any, not presently payable but to be paid as a part of the annual taxes to become due. g A Mortgage as permitted under Section 8.2 ARTICLE IX Additional Provisions Section 9.1. Conflict of Interest; Authority Representatives Not Individually Liable. No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement,nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 9.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement that it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 9.3. 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 21 the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.4. Titles of Articles and Sections. Any titles of the several parts, articles, and sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.5. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is (1)dispatched by registered or certified mail, postage prepaid, return receipt requested, (2)transmitted by facsimile, (3)delivered by a recognized overnight courier or(4)delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 2322 171st Lane, Ham Lake,Minnesota 55304, Attention: Mr. Jansen; (b) in the case of the Authority, is addressed to or delivered personally to the Housing and Redevelopment Authority in and for the City of Fridley at 6431 University Avenue Northeast, Fridley,Minnesota, 55432, Attention: Assistant Executive Director; or at such other address with respect to either party as that party may, from time to time, �.., designate in writing and forward to the other as provided in this Section. Section 9.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.7 Termination. This Agreement shall terminate upon the Authority issuing its Certificate of Completion or in accordance with the provisions of Article VIII and the discharge of all of the Authority's and Redeveloper's other respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred and was continuing prior to such termination. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. 22 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by Its Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF ANOKA ) On this day of , 20 before me, a Notary Public, personally appeared Lawrence R. Commers and William W. Burns to me personally known and who by me duly sworn did say that they are the Chairperson and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and politic organized under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: 23 Authority Signature Page--Redevelopment Contract r-. 24 Dated: a- Boulder Contracting, LLC. Its iP ,( STATE OF MINNESOTA ) ss. COUNTY OFoK_Cx._ ) On this 9%t day of t eUj , 20 13_ before me, a Notary Public, personally appearedkLe.J t ( e "1-cuc.s-e v o me personally known and who by me duly sworn did say that s/he is the C_V:3 v mss; of Boulder Contracting, LLC., a Minnesota corporation, and acknowledged the foregoing instrument on behalf of said corporation. - - - - - - - - - - t \ra-- KELLEY L.VANTASSEL o i Notary Public ' Minnesota ► Notary Pu . M Ommission Ex Tres Jenua 31 2015 ' My Commission Expires: 1--1 (-S 25 Redeveloper Signature Page--Contract for Private Redevelopment r-� 26 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY Address: 561 Hugo Street PIN: 03-30-24-31- (to be assigned). Legal: LOTS 22 THRU 24 BLK G RIVERVIEW HEIGHTS, SUBJ TO EASE OF REC, ANOKA COUNTY,MINNESOTA. Easement: Westerly 1' of Lot 24,Block G-Granted April 5, 2012 to recognize fact that a small portion of neighbors driveway encroaches approximately 5" onto Lot 24, as depicted on Certificate of Survey. 27 r � aew14`weyroftt lI,Il ' to . J 0 as.god..d e. ti..• .,�A >an I r •% o I 1 o I a • PARCEL "3" o • t # i I I i t - - -►, -{{J., �•-. ; ,' , .,' L • 1... 1 '_• 1 • A 5 . I e I W • .� jibe ' r _T �t—r -—w ,--. � � } .1. Y } Y Y }� HUGO STREET SCHEDULE B REDEVELOPMENT PROPERTY DEED STATE DEED TAX DUE HEREUNDER$ 28 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 under the laws of the State of Minnesota(the "Grantor"), and Novak- Fleck,Inc., a corporation organized under the laws of the State of Minnesota(the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration the receipt whereof 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: LOTS 22 THRU 24 BLOCK G RIVERVIEW HEIGHTS, SUBJECT TO EASEMENTS OF RECORD,ANOKA COUNTY,MINNESOTA. 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 Boulder Contracting, LLC., dated , 20 (the "Contract") and �., (b)all matters of record. Grantor covenants and represents that: Grantee has committed to construct certain improvements pursuant to the Contract and Grantor has a right of re-entry in accordance with Sections 4.2 and 7.3 respectively of the Contract. Title is conveyed hereby subject to the following conditions subsequent: In the event that Grantee defaults on its obligations in the Contract and fails to properly cure said default, Grantor may declare a termination of all right, title and interest conveyed herein and all right, title and interest in the premises described above in this deed reverts to Grantor. Upon performance of Grantee's obligations in the Contract, including completion of the improvements, the release of the right of re-entry and reverter shall be evidenced by the recording of the Certificate of Completion and Release of Forfeiture attached as Exhibit 1 to this deed. The Grantor certifies that the Grantor does not know of any wells on described real property. IN WITNESS WHEREOF, the Grantor has caused this deed to be duly executed in its behalf by its Chairperson and its Executive Director the day and year written above. 29 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairperson And by 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 and who by me duly sworn did say that they are the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: Property Tax Statements should be sent to: 30 SCHEDULE C CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE WHEREAS, the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota (the "Grantor"), by a Deed recorded in the Office of the County Recorder and/or the Registrar of Titles in and for the County of Anoka and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to Boulder Contracting, LLC., a Minnesota corporation organized under the laws of the State of Minnesota (the "Grantee"), the following described land in County of Anoka and State of Minnesota,to-wit: LOTS 22 THRU 24 BLOCK G RIVERVIEW HEIGHTS, SUBJECT TO EASEMENTS OF RECORD,ANOKA COUNTY,MINNESOTA. WHEREAS, said Deed contained certain covenants and restrictions, the breach of which by Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by Grantor, its successors and assigns, said covenants and restrictions being set forth in said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed have been performed by the Grantee therein and that the provisions for forfeiture of title and right to re-entry for breach of condition subsequent by the Grantor therein is hereby released absolutely and forever insofar as it applies to the land described herein, and the County Recorder and/or the Registrar of Titles in and for 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 said Deed, the breach of which would result in a forfeiture and right of re-entry. 31 n Dated: , 20 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by 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 Chairperson and 32 Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: 33 n SCHEDULE D HOUSE PLANS Full size house plans are attached. 34 SCHEDULE E LIST OF BUILDING MATERIALS 35 ACTION ITEM HRA MEETING OF JUNE 7, 2012 CITY OF FRIDLEY Date: May 30, 2012 To: William Burns, Executive Director •• From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing - Sale of 434 Liberty Street NE - HRP Dale Anderson, representing Novak-Fleck Builders (NFB), submitted a lot reservation agreement to build and sell a new home at 434 Liberty Street. NFB made an offer of $30,000 for the lot, a price justified by comparable sales and the City Assessor. ■ t 2 1 ti J7 r 43 .LGberty St NE Mississ ppi National giver and Re eat ort Y A 55 q9 L � Gl)Ogle,Bart l The Authority purchased the property, with a small home and outbuilding in October of 2010, for $65,000. The home was demolished in April of 2011 leaving a level, building lot. The property is included in the Authority's HRP TIF District. The Authority will collect the increment generated from the new construction for the next 15 years. NFB has a contingent purchase agreement with a buyer for the home to be built on this site. The proposed home has been custom designed for NFB's client and exceeds the conditions and intent of the Authority's HRP Guidelines. A set of plans is attached to this memorandum. � .. �_ _ _ .. -1 ti*Ut ,t 1 — — _ 1111411111111 Wi i t _ga. — riff tt11 o 1115111 ;111111 :E::: j M .•fit■e i lint van se.. I il Emir 1111111 11111 1111 ti. 111111 `4111 1r 1111 1111111r1s 1i111iiii €u aW' - _. . ill} aasasawcses:asss.1.1”.=mom um..amass asomas:.a L« animals ELE= it :mil 1 1f � EMI 11111V=,i_ ' f 1 1 10111 =a..'"-` :' 111 11 rw--r® } _ .. . ... Li n, c. P x� � �d��° , Attached you will also find a copy of the contract for redevelopment that, in essence, is the purchase agreement for the property. This form is the standard format that he Authority has used for a number of years in selling lots to builders. • Staff recommends approval of the attached resolution and contract for redevelopment, authorizing the sale of this lot to Novak-Fleck Builders for$30,000. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA HRA RESOLUTION NO. 2012- A RESOLUTION AUTHORIZING THE SALE OF RESIDENTIAL PROPERTY BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the Board of Commissioners(the"Commissioners")of the Housing and Redevelopment Authority in and for the City of Fridley,Minnesota(the "Authority") as follows: Section 1. Recitals. 1.01. It has been proposed that the Authority sell certain residential property (the "Property") described below: Legal Description: LOTS 34 THRU 36 INCL BLK 7 SPRING BROOK PARK, SUBJ TO EASE OF REC Street Address 434 Liberty St. NE Section 2. Findings. 2.01. The Authority hereby finds that it has approved and adopted a development program known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment Program") pursuant to Minnesota Statutes, Section 469.001 et seq. 2.02. The Authority hereby finds that it has approved and adopted a Housing Replacement District Plan(the "Plan") and created Housing Replacement District No. 1,pursuant to and in accordance with Laws of Minnesota 1995,Chapter 264,Article 5, Sections 44 through 47;Laws of Minnesota 1996,chapter 471, article 7, section 22; Laws of Minnesota 1997, chapter 231, article 10, section 13;Laws of Minnesota 2002,chapter 377, article 7, section 6; Laws of Minnesota 2008,chapter 154,article 9, section 19,and Laws of Minnesota 2010, Chapter 216, Section 42 (collectively"The Act"). 2.03. The Authority hereby finds that it has performed all actions required by Minnesota Statutes for the sale of the Property. 2.04. The Authority hereby finds that the sale of the Property promotes the objectives as outlined in its Redevelopment Program and the Plan. Section 3. Approval of the Sale. 3.01 The sale of the Property is hereby approved for a price of not less than $30,000. Section 4. Authorization for Execution and Delivery. 4.01. The Chairman,the Executive Director and Assistant Executive Director are hereby authorized to execute and deliver any documents necessary to effect the sale of the Property in accordance with the Authority's Housing Replacement Program. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FR1DLEY,MINNESOTA, THIS 7TH DAY OF JUNE, 2012. LAWRENCE R. COMMERS - CHAIRMAN ATTEST: WILLIAM W. BURNS - EXECUTIVE DIRECTOR ) ) ) • 'NI . MOP VIM PO RIM POOP wens do Rom SONO ICI- °�,. ! ilit Ill I - - -- - w _�- ■N _ _ — - - f ICI LEFT ELEVATION - 1111.—'=,... 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Fridley, MN 55432 1st COPY (5-18-2012) CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the day of , 2012 by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), a public body corporate and politic organized under the laws of the State of Minnesota and Novak-Fleck, Inc., a corporation organized and existing under the laws of the State of Minnesota (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 et seq. (the "Act"), the redevelopment plan known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Project Area") which plan, as amended, and as it may be amended, is hereinafter referred to as the "Redevelopment Plan" in the City to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, in order to achieve the objectives of the Redevelopment Plan and particularly to make specified land in the Project Area and in the Authority's area of operation available for development by private enterprise for and in accordance with the Redevelopment Plan, the Authority has determined to provide substantial aid and assistance to finance public development costs in the Project Area and in the Authority's area of operation; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1 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, et seq. "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. "Certificate of Completion" means the certification, in a form substantially similar to the certificate contained in Schedule C attached to and made a part of this Agreement, provided to the Redeveloper, pursuant to Section 4.3 of this Agreement. "City" means the City of Fridley, Minnesota, or its successors or assigns. n "Construction Plans" means the plans, specifications, drawings and related documents for the construction of the Minimum Improvements that are required by the City for the issuance of its building permit. The Authority shall approve said Constructions Plans before the City issues any building permits. "County"means the County of Anoka,Minnesota. "Date of Closing" means the date or dates set forth in Section 3.1(b). "Event of Default" means an action by the Redeveloper described in Section 7.1 of this Agreement. "Homeowner"means the person(s)who purchase the Project from the Redeveloper. "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property as specified in the Construction Plans approved by the Authority and attached to Exhibit D. "Party" means a party to this Agreement. "Permitted Encumbrances" means those encumbrances as defined in Section 8.7 of this Agreement. 2 "Project" means the Redevelopment Property and the Minimum Improvements. "Purchase Price" means the sum of Thirty Thousand and No/100 Dollars ($30,000), payable on the Date of Closing. "Redeveloper" means Novak-Fleck, Inc., a Minnesota corporation, and it's permitted successors or assigns. "Redevelopment Plan" means the Modified Redevelopment Plan adopted by the Authority in connection with its Redevelopment Project No. 1. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described on Schedule A attached to and made a part of this Agreement. "Redevelopment Property Deed" means a quit claim deed, substantially in the form of the deed in Schedule B attached to and made a part of this Agreement, used to convey the Redevelopment Property from the Authority to the Redeveloper. "Sales Price" means an amount equal to or greater than $140,000 and which is to be used on the certificate of real estate value when the Project is conveyed to the Homeowner. "State" means the State of Minnesota. "Unavoidable Delays" means delays which are the direct result of strikes or shortages of material; delays which are the direct result of casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements; delays which are the direct result of governmental actions (except that the City may not create an Unavoidable Delay by virtue of its own action); delays which are the direct result of judicial action commenced by third parties; or delays which are the direct result of citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority represents and warrants that: (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. 3 .-. 1 (b) The Authority will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Redeveloper and will cooperate with the efforts of Redeveloper to secure the granting of any permit, license, or other approval required to allow the construction of the Minimum Improvements; provided, however, that nothing contained in this Section 2.1(b) shall be construed to limit in any way the reasonable and legitimate exercise of the Authority's discretion considering any submittal or application. (c) The Authority makes no representation, guarantee, or warranty, either express or implied, and hereby assumes no responsibility or liability as to the Redevelopment Property or its condition(regarding soils,pollutants,hazardous wastes or otherwise). Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper will purchase the Redevelopment Property from the Authority pursuant to Article III hereof and in the event the Redevelopment Property is conveyed to the Redeveloper, then the Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Program and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and /,■ public health laws and regulations). (b) The Redeveloper is a corporation organized under the laws of the State of Minnesota, is authorized to transact business in the State, and has duly authorized the execution of this Agreement and the performance of its obligations hereunder. (c) The financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this. Agreement. (b) The Redeveloper shall prepare the Construction Plans and construct the Minimum Improvements in accordance with all of the appropriate building and zoning codes, as well as House Plans that are shown in Exhibit D and the List of Materials in Exhibit E. (c) The Redeveloper shall have the Construction Plans prepared by an architectural designer or a licensed architect. (f) The Redeveloper shall sell the Project to the Homeowner for no less than the Sales Price. 4 • ARTICLE III Conveyance of Property Section 3.1. Conveyance of the Redevelopment Property. (a) Title. The Authority shall, subject to the Permitted Encumbrances, 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 of this Agreement. The conveyance of title to the Redevelopment Property pursuant to the Redevelopment Property Deed and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants,restrictions and limitations imposed by this Agreement and the Redevelopment Property Deed. At its expense,the Redeveloper shall obtain and pay for any title policy and endorsements it deems necessary. The Authority agrees to obtain and shall deliver to the Redeveloper a commitment for an owner's title insurance policy, in the ALTA form requested by the Redeveloper, issued by a title insurance company acceptable to the Authority and Redeveloper, naming the Redeveloper as the proposed owner-insured of the Redevelopment Property in the amount of the Purchase Price (the "Commitment"). The Commitment shall have a current date as its effective date and shall, subject to the Permitted Encumbrances, commit to insure marketable title in the Redeveloper, 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. The Commitment shall set forth all levied real estate and special assessments relating to the Redevelopment Property. Said commitment shall have attached copies of all instruments of record, which create any easements or restrictions, which are referred to in its Schedule B. The Redeveloper will be allowed 20 days after receipt of the Commitment to make an examination thereof and to make any objections to the marketability of the title to Redevelopment Property, other than the Permitted Encumbrances, said objections to be made by written notice or to be deemed waived. If the title to the Redevelopment Property, as evidenced by the Commitment, together with any appropriate and available endorsements, is not good and marketable of record(subject only to the Permitted Encumbrances) in the Authority and is not made so by the Date of Closing,Redeveloper may either: (i) Terminate this Agreement by giving written notice to the Authority in which event this Agreement shall become null and void and neither Party shall have any further rights or obligations hereunder; or (ii) Elect to accept the title in its marketable condition by giving written notice to the Authority, in which event the Redeveloper may hold back adequate funds from 5 the portion of the Purchase Price payable at the closing to cure the defects and apply said holdback funds of the cost of curing such defects, including attorneys' fees, and pay the unexpended balance to the Authority. (If the amount of said holdback cannot be mutually agreed to by the Authority and the Redeveloper, the issuer of the Commitment shall determine the amount of said holdback.) (d) Time of Conveyance. The Authority shall execute and deliver to the Redeveloper the Redevelopment Property Deed for the Redevelopment Property on or before August 1, 2012 or on such date as the Authority and the Redeveloper shall mutually agree in writing (the "Date of Closing"). The Redeveloper shall take possession of the Redevelopment Property on the Date of Closing. (c) Price and Payment. The Authority agrees to sell and the Redeveloper agrees to purchase the Redevelopment Property for the Purchase Price. Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all closing documents and the payment of the Purchase Price shall be made either at the principal offices of the Authority or offices of a licensed title company agreed upon by the parties. (d) Taxes and Special Assessments. 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 prorated as of the Date of Closing based upon each Party's 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. On or prior to the Date of Closing,the Authority shall pay all pending or levied special assessments. (e) Survey. The Authority will not provide a survey. (e) Inspection. At the Redeveloper's expense, the Redeveloper, its agents and designees, are hereby granted the right at any time or times after the date hereof to inspect, analyze, and test the Redevelopment Property. The Redeveloper shall hold the Authority and the City harmless from any liability resulting solely from the entering upon the Redevelopment Property or the performing of any of the tests or inspections referred to in this Section by the Redeveloper, its agents or designees. (f) Permits and Fees. The Redeveloper shall be responsible for all permits and fees including,but not limited to building, electrical,mechanical,plumbing, sewer, water, and park dedication fees. Section 3.2. Conditions Precedent to Conveyance. The obligations of the Authority to convey the Redevelopment Property to the Redeveloper shall be subject to the following conditions precedent: 6 (a) On the Date of Closing, the Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement; (b) The Redeveloper shall have provided evidence satisfactory to the Authority that the Redeveloper is capable of fmancing or has obtained financing or a commitment for fmancing sufficient to fmance the construction of the Minimum Improvements. The Redeveloper will be deemed to have provided adequate evidence of such financial commitment and ability if the Redeveloper provides evidence satisfactory to the Authority of a mortgage commitment; (c) The Authority and the City shall have approved the Construction Plans; (d) The Redeveloper shall have received the appropriate permits for the construction of the Minimum Improvements; ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this Agreement, the Housing.Design and Site Development Criteria and the Construction Plans approved by the City and the Authority and will maintain,preserve and keep the Minimum Improvements or cause the Minimum Improvements to be in good repair and condition until sale of the Project to the Homeowner. Subject to Unavoidable Delays,the Redeveloper shall commence construction of the Minimum Improvements on or before August 15, 2012. Section 4.2. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Minimum Improvements by December 1, 2012. 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 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. 7 Section 4.3. Certificate of Completion. (a) Promptly after completion of the 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 Minimum Improvements shall be deemed to be completed when the City has issued its Certificate of Occupancy; provided that the Authority shall retain the right to withhold the Certificate of Completion in the event that the City's Certificate of Occupancy issues with conditions, and to continue to withhold the Certificate of Completion until such conditions are fully satisfied. 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: 8 (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. ^� 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 9 ^ Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2. Prohibition Against Transfer of Property and Assignment of Agreement. Also, for the foregoing reasons the Redeveloper represents and agrees that prior to the earlier of the issuance of the Certificate of Completion or the Termination Date 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 the Homeowner. 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. (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 10 • property of the Redeveloper or its officers, agents, servants or employees or any other person r. who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person, other than the negligence and misconduct of the City or Authority employees or those employed or engaged by the City or 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. Subject to Unavoidable Delays,the following shall be "Events of Default" under this Agreement and the term"Event of Default" shall mean,whenever it is used in this Agreement(unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper to pay when due all real property taxes assessed against the Redevelopment Property. (b) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this Agreement. (c) Failure by the Redeveloper to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (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 11 (iv) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper as a 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 Redevelopment Property, or part thereof, shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. Section 7.2. Remedies on Default. Whenever any Event of Default referred to in Section 7.1 of this Agreement occurs,the Authority may take any one or more of the following actions after providing thirty days' written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty days, or if the Event of Default is by its nature incurable within said thirty day period, and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority,that the Event of Default will be cured as soon as reasonably possible: (a) 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) Terminate this Agreement. (c) Withhold the Certificate of Completion. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 7.3. Re-vesting Title in the Authority Upon Happening of Event Subsequent to Conveyance to the Redeveloper. In the event that subsequent to conveyance of the Redevelopment Property to the Redeveloper and prior to the receipt by the Redeveloper of the Certificate of Completion: (a) subject to Unavoidable Delays,the Redeveloper fails to carry out its obligations with respect to the construction of the Minimum Improvements(including the nature and the date for the commencement and 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 thirty (30) days after written demand from the Authority to the Redeveloper to do so; or 12 (b) the Redeveloper fails to pay real estate taxes or assessments on the Redevelopment '~ Property or any part thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the Redevelopment Property which is unauthorized by this Agreement or shall suffer any levy or attachment to be made, or any materialmen's or mechanic's lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision 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 mechanic's or other lien filed or established and in such event the Authority shall permit such mechanic's 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 lien, in a form satisfactory to the Authority pursuant to which the bank or other obligor will pay to the Authority the amount of any lien in the event that 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 or distribution thereof of the Redeveloper, or with respect to the identity of the parties in control of the Redeveloper or the degree thereof, and such violation shall not be cured within thirty (30) days after written demand by the Authority to the Redeveloper; Then the Authority shall have the right to re-enter and take possession of the Redevelopment Property and to terminate (and revest in the Authority) the estate conveyed by the Redevelopment Property Deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, 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, end, or abrogate 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 of all the rights and interests 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 7.3(a)-(c) have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this Section 7.3, the Authority shall have no right to re-enter or retake title to and possession of any part of the Redevelopment Property for which a Certificate of Completion has been issued. 13 ^' Section 7.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Authority of title to any parcel of the Redevelopment Property or any part thereof as provided in Section 7.3,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 shall in its sole discretion determine,without reimbursement of any sums paid by the Redeveloper to the Authority under this Agreement. Section 7.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof,but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VII. Section 7.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either 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 7.7. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the Authority or the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement,the Redeveloper agrees that it shall, within ten(10)days of written demand by the Authority,pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority or the City. ARTICLE VIII Mortgage Financing Section 8.1. Limitation Upon Encumbrances of Property. Prior to the substantial completion of the Minimum Improvements, as certified by the Authority, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property, other than the Permitted Encumbrances, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Redevelopment Property, other than Permitted n Encumbrances, except: 14 • (a) For the purposes of obtaining funds only to the extent necessary for financing of the Minimum Improvements including, but not limited to, labor and materials, equipment, professional fees, real estate taxes, construction interest, organizational and other indirect costs of development, costs of constructing the Minimum Improvements, an allowance for contingencies, acquisition cost of the Redevelopment Property, costs of originating the Mortgage and customary financing costs. (b) Only upon the prior written approval of the Authority in accordance with Sections 8.1 and 8.2. The Authority shall not approve any Mortgage, which does not contain terms that conform to the terms of Section 8.5, except as provided in Section 8.6 of this Agreement. Section 8.2 Approval of Mortgage. The Authority shall approve a Mortgage if: (a) The Authority first receives a copy of all Mortgage documents. (b) The Mortgage loans,together with other funds available to the Redeveloper, will, in the reasonable judgment of the Authority, be sufficient to acquire the Redevelopment Property and construct the Minimum Improvements. (g) The Authority is not entitled under Section 7.2 to exercise any of the remedies set forth therein as a result of an Event of Default. (h) The Authority determines that the terms of the Mortgage conform to the terms of Section 8.5. However, the approval of a Mortgage by the Authority shall not be unreasonably withheld. Any Mortgage, which is subordinated to the rights of the Authority under this Agreement, may be granted in all or any part of the Redevelopment Property without the approval of the Authority. Section 8.3 Notice of Default; Copy to Mortgagee. Whenever the Authority shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations or covenants under this Agreement,the Authority shall at the same time forward a copy of such notice or demand to each holder of any Mortgage authorized by this Agreement at the last address of such holder shown in the records of the Authority. Section 8.4 Mortgagee's Option to Cure Defaults. After any breach or default referred to in Section 8.3, each such holder of a Mortgage shall(insofar as the rights of the Authority are concerned)have the right, at its option,to cure or remedy such breach or default (or such breach or default to the extent that it relates to the part of the Redevelopment Property 15 covered by its Mortgage) and to add the cost thereof to the Mortgage debt and the lien of its Mortgage; provided, however,that if the breach or default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other Section of this Agreement shall be deemed to require such holder, either before or after foreclosure or action in lieu thereof,to undertake or continue the construction or completion of the Minimum Improvements,provided that any such holder of a Mortgage shall not devote the Redevelopment Property to a use inconsistent with the Redevelopment Plan or this Agreement without the written consent of the Authority. Section 8.5 Authority's Option to Cure Default on Mortgage. Any Mortgage, unless such requirement is waived by the Authority, executed by the Redeveloper with respect to the Redevelopment Property or any improvements thereon shall provide that, in the event that the Redeveloper is in default under any Mortgage authorized pursuant to this Article VIII, the holder of the Mortgage shall notify the Authority in writing of: (a) The fact of the default. (b) The elements of the default. (c) The actions required to cure the default. If the default is an "Event of Default" under such Mortgage, which shall entitle such holder to foreclose upon the Redevelopment Property, the Minimum Improvements or any portion thereof, and any applicable grace periods have expired, the Authority shall have, and each Mortgage executed by the Redeveloper with respect to the Redevelopment Property or any improvements thereon shall provide that the Authority shall have such an opportunity to cure the "Event of Default" within such reasonable time period as such holder shall deem appropriate. Section 8.6 Subordination and Modification for the Benefit of Mortgagees. In order to facilitate the obtaining of fmancing for the construction of the Minimum Improvements, the Authority agrees that it shall agree to any reasonable modification of this Article VIII or waiver of its rights hereunder to accommodate the interests of a holder of a Mortgage, provided, however, that the Authority determines, in its reasonable judgment, that any such modification(s) will adequately protect the legitimate interest and security of the Authority with respect to the Redevelopment Property. Section 8.7 Permitted Encumbrances. The following shall be permitted encumbrances on the title to the Redevelopment Property: (a) Such encumbrances as are mutually agreed to in writing by the Authority and the Redeveloper. 16 (b) Governmental regulations, if any, affecting the use and occupancy of the '~ Redevelopment Property and Minimum Improvements. (c) Zoning laws of the City, County and State. (d) All rights in public highways upon the land. Reservations to the State, in trust for the tax districts concerned, of minerals and mineral rights in those portions of the Redevelopment Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. (e) The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due. (f)The lien of unpaid real estate taxes, if any, not presently payable but to be paid as a part of the annual taxes to become due. (g) A Mortgage as permitted under Section 8.2 ARTICLE IX Additional Provisions Section 9.1. Conflict of Interest; Authority Representatives Not Individually Liable. No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement,nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation,partnership, or association in which he or she is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 9.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement that it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 9.3. 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. 17 '� Section 9.4. Titles of Articles and Sections. Any titles of the several parts, articles, and sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.5. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is(1)dispatched by registered or certified mail,postage prepaid,return receipt requested, (2)transmitted by facsimile, (3)delivered by a recognized overnight courier or(4)delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 8857 Zealand Avenue North, Brooklyn Park, Minnesota 55445, Attention: Mr. Novak; (b) in the case of the Authority, is addressed to or delivered personally to the Housing and Redevelopment Authority in and for the City of Fridley at 6431 University Avenue Northeast,Fridley, Minnesota, 55432,Attention: Assistant Executive Director; or at such other address with respect to either party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 9.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.7 Termination. This Agreement shall terminate upon the Authority issuing its Certificate of Completion or in accordance with the provisions of Article VIII and the discharge of all of the Authority's and Redeveloper's other respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred and was continuing prior to such termination. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. 18 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by Its Executive Director STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) On this day of , 20 before me, a Notary Public, personally appeared Lawrence R. Commers and William W. Burns to me personally known and who by me duly sworn did say that they are the Chairperson and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and politic organized under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: Authority Signature Page--Redevelopment Contract 19 ''� Dated: -,2 -//26/ Z Novak-Fleck, INC. By //9.' Its / /7 y4 STATE OF MINNESOTA ) 6 ) ss. ""•\ COUNTY OF ) On this 21 day`o� L9 , 20 \Z before me, a Notary Public,personally appeared kr l�),^6 k.jLto me personally known and who by me duly sworn did say that s/he is the rS j �- of Novak-Fleck, Inc., a Minnesota corporation, and acknowledged the foregoing instrument on behalf of said corporation. ,`81,rf¢CANDICE L.TRAUTMAN AD A' i 3:' ,r. Notary Public-Minnesota ' .i k A. � 7�� N. , ,, f t '-'• T Lary Public •„„. My Commission Expires Jan 31,201 My Commission Expires: 0 I/3 I ) 1 7-° Redeveloper Signature Page-- Contract for Private Redevelopment n 20 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY Address: 434 Liberty Street NE PIN: 03-30-24-31-0077 Legal: Lots 34-36 Inclusive, Block 7, Spring Brook Park,Anoka County, Minnesota. 21 SCHEDULE B REDEVELOPMENT PROPERTY DEED STATE DEED TAX DUE HEREUNDER$ 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 under the laws of the State of Minnesota (the "Grantor"), and Novak-Fleck, Inc., a corporation organized under the laws of the State of Minnesota (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration the receipt whereof 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: Lots 34-36 Inclusive,Block 7, Spring Brook Park,Anoka County,Minnesota. 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 Novak-Fleck, Inc., dated , 20 (the "Contract") and (b) all matters of record. Grantor covenants and represents that: Grantee has committed to construct certain improvements pursuant to the Contract and Grantor has a right of re-entry in accordance with Sections 4.2 and 7.3 respectively of the Contract. Title is conveyed hereby subject to the following conditions subsequent: In the event that Grantee defaults on its obligations in the Contract and fails to properly cure said default, Grantor may declare a termination of all right, title and interest conveyed herein and all right, title and interest in the premises described above in this deed reverts to Grantor. Upon performance of Grantee's obligations in the Contract, including completion of the improvements, the release of the right of re-entry and n 22 reverter shall be evidenced by the recording of the Certificate of Completion and Release of Forfeiture attached as Exhibit 1 to this deed. '~ The Grantor certifies that the Grantor does not know of any wells on described real property. 23 IN WITNESS WHEREOF, the Grantor has caused this deed to be duly executed in its behalf by its Chairperson and its Executive Director the day and year written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by 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 and who by me duly sworn did say that they are the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: Property Tax Statements should be sent to: 24 SCHEDULE C CER'T'IFICATE OF COMPLETION AND RELEASE OF FORFEITURE WHEREAS, the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota (the "Grantor"), by a Deed recorded in the Office of the County Recorder and/or the Registrar of Titles in and for the County of Anoka and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to Novak-Fleck, Inc., a Minnesota corporation organized under the laws of the State of Minnesota (the "Grantee"), the following described land in County of Anoka and State of Minnesota,to-wit: Lots 34-36 Inclusive, Block 7, Spring Brook Park,Anoka County,Minnesota. WHEREAS, said Deed contained certain covenants and restrictions, the breach of which by Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by Grantor, its successors and assigns, said covenants and restrictions being set forth in said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this .-. certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed have been performed by the Grantee therein and that the provisions for forfeiture of title and right to re-entry for breach of condition subsequent by the Grantor therein is hereby released absolutely and forever insofar as it applies to the land described herein, and the County Recorder and/or the Registrar of Titles in and for 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 said Deed, the breach of which would result in a forfeiture and right of re-entry. 25 Dated: , 20 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY,MINNESOTA By Its Chairperson And by Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) On this day of , 20 me, a Notary Public, personally appeared and to me personally known who by me duly sworn, did say that they are the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a body corporate and politic under the laws of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public My Commission Expires: . 26 SCHEDULE D HOUSE PLANS Full size house plans are attached. 27 SCHEDULE E LIST OF BUILDING MATERIALS 28 Fridley HRA Housing Program Summary Cover Page June 7, 2012 HRA Meeting Report Description Loan Application Summary Loan application activity (e.g. mailed out, in process, closed loans) for May and year-to-date. Loan Origination Report Loan originations for May and year-to- date. Remodeling Advisor Shows the number of field appointments scheduled and completed for the Remodeling Advisor Services administered by Center for Energy and Environment. n HA—Paul's Documents\HRA\HRA Agenda Items\2012\dune 7,2012\Housing Program Covn June.doc Fridley HRA Remodeling Advisor Service - 2012 May 15, 2012 Remodeling Advisor Appointments Appointments Month Scheduled Completed Jan-12 0 0 Feb-12 2 2 Mar-12 1 1 Apr-12 3 3 May-12 3 3 Jun-12 0 0 Jul-12 0 0 Aug-12 0 0 Sep-12 0 0 Oct-12 0 0 Nov-12 0 0 Dec-12 0 0 Total 9 9 *Remodeling Advisor monthly amounts may change as paperwork from a visit may not come in until the next month for the previous month. f ''''N Fridley HRA 5/15/2012 Loan Originations Programs This Month Previous Month Since 1/1/2012 HRA Loans(incl.CFUF Discount loans) $ 12,442.00 $ - $ 12,442.00 Leveraged Loans $ 5,400.00 $ - $ 5,400.00 Total $ 17,842.00 $ - $ 17,842.00 Funding Sources This Month Previous Month Since 1/1/2012 Fridley HRA inc Revolving&FRIDLAST $ 12,442.00 $ - $ 12,442.00 MHFA FUF/CFUF $ - $ - $ - Fridley Discount portion for CFUF $ - $ - $ - Met Council $ - $ - $ - CDBG/HOME $ - $ - $ - CEE Energy $ - $ - $ - Other $ 1,398.17 $ - $ 1,398.17 Total $ 13,840.17 $ - $ 13,840.17 Types of Units Improved* *most HH do more than one improvement so the total#will be equal or greater to the number of loans originated This Month Previous Month Since 1/1/2012 /"..■ Single Family 2 - 2 Duplex - - - Tri-Plex - - - 4 to 9 Units 1 - 1 10 to 20 Units - - - 20+Units - - - Total 3 - 3 Types of Improvements Interior #of Projects %of Total Bathroom remodel - 0% Kitchen remodel - 0% General plumbing - 0% Heating system 1 25% Electrical system 1 25% Basement finish - 0% Insulation - 0% Room addition - 0% Misc.interior projects - 0% Foundation - 0% Exterior Siding/Fascia/Soffit - 0% Roofing - 0% • Windows/Doors 2 50% Garage - 0% Driveway/sidewalk - 0% Landscaping - 0% ,\ Misc.exterior projects - 0% Fridley HRA May 15, 2012 Application Summary 4/15-5/15 Year-To-Date New Applications Total Applications Rec'd/ Loans Applications Applications Loans Program Sent Out* in Process Closed Mailed Processed Closed HRA Revolving Loan Fund 2 1 1 6 4 2 HRA- Fridley Last 1 1 0 0 0 0 MHFA Deferred Loan 0 0 0 0 0 0 MHFA Fix-Up Fund 0 0 0 0 0 0 MHFA Community Fix-Up Fund 0 0 0 0 0 0 MHFA Community Fix-Up w/ Discount 0 0 0 0 0 0 CEE Home Energy Loan 2 0 1 3 1 1 Private Bank Loan (through CEE) 0 0 0 0 0 0 Xcel OSES 1 0 1 1 0 1 MHFA Rental Rehab Loan Fund 0 0 0 0 0 0 DOC Rental Energy Fund 0 0 0 0 0 0 Totals: 6 2 3 10 5 4 *Number of applications sent out does not take into account property owners downloading their application from the CEE website ) ) Kiernan, Becky From: Bolin, Paul ^dent: Wednesday, June 13, 2012 10:50 AM o: 'Lawrence R. Commers'; 'patgabel1288©comcast.net'; 'William Holm'; 'mary and stephen eggert'; 'John Meyer' Cc: Burns, Bill; Hickok, Scott; Nelson, Darin; Kiernan, Becky; 'James Casserly' Subject: RER/BAE Environmental Study Update Attachments: Memo to City(BAE 6-12-12).docx Commissioners: Please read the attached letter from Attorney Casserly. After extensive review by legal counsel, it has come down to Paul Hyde's lender requiring platting,that will cause RER to conduct an environmental review before the project can proceed. RER plans to continue pursuing the project, but will be asking to delay their closing until the environmental review is complete. Because of the time delay caused by the review,the Authority does not need to meet on July 19th. We are able to skip a July meeting and just meet again on August 2nd. Sincerely, Pace Paul Bolin,AICP ssistant Executive Director City of Fridley Housing& Redevelopment Authority 6431 University Avenue NE Fridley, MN 55432 Direct-763-572-3591 Fax-763-571-1287 A. . � From: James Casserly [mailto:jcasserlyCa�mmblawfirm.com] _. _.r.�.. .�....w..�_.... ._.mw�.___.__ Sent: Tuesday, June 12, 2012 11:38 AM To: 'Rod Krass'; Bolin, Paul Subject: Draft letter on BAE environmental issues Rod and Paul, please review and see if I have captured the "flavor" of our discussions.Jim James R. Casserly Attorney at Law MONROE MOXNESS BERG PA 8000 Norman Center Drive, Suite 1000 inneapolis, MN 55437 952.885.5999 D 952.885.1296 1 F 952.885.5969 www.MMBLawFirm.com / • confidentiality Notice: The information contained in this email message,and any accompanying attachment.is confidential and privileged.It is intended only for the use of each recipient. if you are not an intended recipient,or the employee or agent responsible to deliver this message to an intended recipient,please notify us immediately by telephone. Circular 230 Notice: Any tax advice contained in this electronic or written communication(including any attachment)is not intended by our firm to be used,and cannot be used,by any person for the purpose of avoiding any penalties imposed under the Internal Revenue Code or applicable state or local tax law provisions.No written advice from our firm may be used in promoting.marketing or recommending any partnership.entity,investment plan or arrangement to any taxpayer without our express consent.This notice is provided pursuant to United States Treasury Department Circular 230. /* 2 - ,.41 MONROE MO (NESS 8000 Norman Center Drive T 952.885.5999 Suite 1000 F 952.885.5969 BERG Minneapolis,MN 55437-1178 www.MMBLawFimi.com James R.Casserly jcasserly@mmblawfirm.com Direct 952.885.1296 MEMORANDUM TO: Fridley Housing Redevelopment Authority Attn: Paul Bolin, HRA Assistant Executive Director Attn: Scott Hickok, Community Development Director Attn: William Burns, Executive Director FROM: Monroe Moxness Berg PA James Casserly, Esq. DATE: June 12, 2012 RE: Environmental Review for the BAE Site Our File No. 9571-77 For the past two weeks we have been working with legal counsel to determine the need for an environmental review of the BAE Site. On June 7, 2012 we reported that it appeared that an environmental review would not be necessary by the City acting as the Responsible Governmental Unit (the "RGU"). Our observation was conditioned on the fact that municipal approvals, other than the issuance of building permits, were not necessary for the project to proceed. However, after further discussions with Real Estate Recycling ("RER"), it was determined that even though governmental approvals, such as plat approval, may not be initially required, such plat approvals will be required in the future. These approvals are necessary for future financing and it is these approvals that trigger the environmental review by the RGU. We spoke at length with Paul Hyde this morning and concluded the following: 1. RER and the City/HRA need to reach a consensus as to the type of environmental review that may be required. We hope to reach some resolution on that matter in the next several days. 2. RER will work with the Seller to secure an extension during the environmental review process. 3. The environmental review process needs to be concluded as expeditiously as possible so that the request for certification of the Hazardous Substance Subdistrict and Redevelopment District can be made this year. Again, within the next several days we hope to have a consensus on the type of environmental review process that the RGU needs to conduct. Please let us know if we can provide any additional information. JRC/rl MMB:4839-2325-4031,v. 1 Fridley Housing and I NW In Redevelopment Authority FRJDLEY Follow Up Informational Items DATE: June 7, 2012 TO: HRA Commisisoners FROM: Paul Bolin, Assistant HRA Director SUBJECT: Follow Up on Non-Agenda Items At the May meeting there were a few items raised that were not part of the agenda, or required additional follow up. Attached to this memorandum are the items/information requested. Item #1 - HRA Loan Guidelines Chairman Commers had asked about the criteria for loan qualification. Attached (on blue paper) is a copy of the "Guidelines"for the loan program. In a nut shell, to qualify for our standard loan one must first meet the income requirements. The applicant must have a "debt to income ratio" less than 50%, a "loan to value ratio" less than 115%, and decent credit. Item #2 - HRA Delinquent Loans Vice-chair Gabel had asked about our outstanding/delinquent loans. We will start to receive and provide these quarterly from Community Reinvestment Fund (our loan servicers). Attached is the report for the quarter that ended on April 1. There are currently 5 loans that have outstanding balances and slow/ no payments being received. Only 2 of the 5 appear to be loans that we are not likely to ever collect. Item #3 - Transit TIF District - JLT During an update from Scott Hickok about the JLT Site (East River Road & 1-694), Chairman Commers had asked what is needed, development wise, from the JLT site to generate increment to do work in the transit of district. There is no easy answer to this question. There are always more improvements that could be made, than increment that can be generated. Attached (on yellow paper) is a copy of the TIF projections done for the Transit District when we were working to get the special legislation to get it established. At the time we were looking to the JLT site to generate the bulk of increment for the district and, based on JLT's plans, the site was going to be very densely developed. While this doesn't necessarily answer the question, it does provide an idea of the type of density we were hoping to get to fund other projects around the JLT site. n SCHEDULE A DESCRIPTION AND GUIDELINES COMPREHENSIVE HOUSING REHABILITATION PROGRAM FOR THE CITY OF FRIDLEY I. SINGLE FAMILY LOAN PROGRAMS A. REVOLVING LOAN PROGRAM 1. • Loan Description This program is intended to address the home improvement financing needs of eligible homeowners residing in the City of Fridley. 2. Funding Source The Revolving Loan Program is funded solely by the Authority. 3. Program Administrator The Center for Energy and Environment will market, administer and close all loans under this program. 4. Qualifications Income Limits: Household income must not exceed 115%of the most current HUD Median Area Income for the Metropolitan Area, adjusted for household size. This means projected annual household income as defined by the MHFA Home Improvement Loan Program Procedural Guide. FAMILY SIZE 115%OF MEDIAN 1 • $67,600 2 $77,300 3 $86,950 4+ $96,500 I'1 SCHEDULE A Page 2 Underwriting: Borrowers shall meet the following underwriting: a. Debt-to-Income Ratios not to exceed 50%. b. Loan-to-Value Ratios not to exceed 115%. c. May have marginal credit,but have the ability to make a monthly payment. CEE shall notify the Authority of any applicants with credit blemishes in advance of closing a loan. Property Type: Owner-occupied, 1 to 4 unit residential properties located in Fridley. 5. Program Specifics The Revolving Loan shall have an annual interest rate equal to the rate established for the MHFA Fix-up Fund,minus 1.25 percent. In no case shall the annual interest rate be less than four(4)percent. All Revolving loans must be repaid in monthly installments. The maximum Revolving Loan shall not exceed$35,000. The maximum term shall not exceed 20 years. All Revolving Loans shall be secured with a separate mortgage. 6. General Requirements This program is available to any homeowner in the City of Fridley who meets the income, credit, and other program requirements in Section I (A)(1-7)or as otherwise approved by the Authority. 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Home Improvement Loan Program Procedural Guide. n r"t SCHEDULE A Page 3 B. LAST RESORT LOAN PROGRAM 1. Loan Description This program is designed for those homeowners who cannot qualify for any other Authority loan or grant programs.Funding shall be provided in the form of a deferred payment loan up to $10,000. The Last Resort Loan is due and payable when the home is sold or after twenty(20)years from the date of the loan note,whichever comes first. The Last Resort Loan may be prepaid at any time. The Authority, at its • discretion,may extend the maturity date of a Last Resort Loan. 2. Funding Source The Last Resort Loan Program is funded solely by the Authority. 3. Program Administrator The Center for Energy and Environment will market, administer and close all loans under this program. 4. Qualifications Income Limits: Household income must not exceed 115%of the most current HUD Median Area Income for the Metropolitan Area, adjusted for household size. This means projected annual household income as defined by the MHFA Home Improvement Loan Program Procedural Guide. FAMILY SIZE 115%OF MEDIAN 1 $67,600 2 $77,300 3 $86,950 4+ $96,500 Underwriting: This is a last resort program and as such applicants may be selected for this program only if they are unable to qualify for fmancing through other Authority,MHFA or federal housing rehabilitation programs. The Authority and the Program Administrator shall work in cooperation to identify SCHEDULE A Page 4 all possible resources before an applicant can be considered for this program. Equity: The Last Resort Loan shall be secured with a separate mortgage. Property Type: Owner-occupied, 1 to 4 unit residential properties located in the City of Fridley. 5. Program Specifics The interest rate for the Last Resort Loan shall be two (2%)percent. Acceptable eligibility criteria include,but are not limited to: a. Borrowers who have existing financial obligations and/or insufficient income to qualify for a loan. b. Debt-to-income ratios in excess of 50%. • c. Loan-to-value ratios in excess of 115%,but not greater than 125%. n d. Borrowers who have had credit problems, such as slow __ payment. e. Borrowers who can't qualify for any CDBG or HOME program funding because their incomes exceed the program guidelines. This program is not available to borrowers with pending bankruptcies or foreclosures,unpaid judgments or liens, or non-payment of real estate taxes/assessments. 6. General Requirements This program is available to homeowners in the City of Fridley that meet the eligibility requirements described in Section B, Subd. 1-5 of this Agreement. 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MI FA Home Improvement Loan Program Procedural Guide. • SCHEDULE A Page 5 All properties shall be inspected prior to the approval of any financing. The Authority will only disburse funds to the contractor/s directly after an inspection has been conducted and the homeowner signs a completion certificate. C. DISCOUNT LOAN PROGRAM 1. Loan Description This program is intended to address the home improvement financing needs of eligible homeowners residing in the City of Fridley. 2. Funding Source The discount portion of the loan is funded by the Authority. The principal portion of the loan is funded by the Minnesota Housing Finance Agency. 3. Program Administrator The Center for.Energy and Environment shall market, administer and close /'1 all loans under this program. 4. Qualifications Income Limits: Household income must not exceed 115% of the most current HUD Median Area Income for the Metropolitan Area, adjusted for household size. This means projected annual household income as defined by the MHFA Home Improvement Loan Program Procedural Guide. FAMILY SIZE 115%OF MEDIAN 1 $67,600 2 $77,300 3 $86,950 4+ $96,500 SCHEDULE A Page 6 Underwriting: Borrowers shall meet the following underwriting: a. Debt-to-Income Ratios not to exceed 48%. b. Loan-to-Value Ratios not to exceed 110%. c. Must demonstrate the ability to repay the loan. Must meet basic credit underwriting guidelines. Property Type: Owner-occupied, 1 to 4 unit residential properties located in Fridley. 5. Program Specifics The Discount Loan shall have an annual interest rate equal to the rate established for the MHFA Fix-up Fund,minus 1.25 percent. In no case shall the annual interest rate be less than four(4)percent. The Discount Loan shall be repaid in monthly installments. The maximum Discount Loan shall not exceed$25,000. For purposes of this program, the Authority shall not provide a discount on loans exceeding a term of 15 years. All loans in excess of$5,000 will be secured with a separate mortgage. The discount portion of the loan(e.g. interest write down)that is paid by the Authority shall be calculated using the methodology approved by MHFA. In no case shall the amount of the discount exceed$2,000. 6. General Requirements This program is available to any homeowner in the City of Fridley who meets the income,credit, and other program requirements in Section I (C)(1-7). 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Home Improvement Loan Program Procedural Guide SCHEDULE A Page 7 II. MULTIPLE FAMILY LOAN PROGRAMS A. LAST RESORT RENTAL LOAN PROGRAM 1. Loan Description This program is designed for those rental property owners who cannot qualify for any other Authority loan or grant programs. Funding will be provided in the form of a deferred payment loan up to $10,000 per unit, not to exceed$50,000 per structure. * For the first ten years, 2% (simple interest) charged on the principal balance. * After ten years,no interest shall be charged. The Last Resort Loan is due and payable when the property is sold or transferred or after twenty(20)years from the date of the loan note, whichever comes first. The Last Resort Loan may be prepaid at any time. The Authority,may, at its discretion, extend the maturity date of a Last Resort Loan. 2. Funding Source The Last Resort Rental Loan Program is funded solely by the Authority. 3. Program Administrator The Center for Energy and Environment shall market, administer and close all Last Resort Rental Loan Program Loans. 4. Qualifications Income Limits: No income limit. Underwriting : This is a last resort program and as such applicants may be selected for this program only if they are unable to qualify for financing through other Authority programs. The Authority and the Program Administrator shall work in cooperation to identify all possible resources before an applicant can be em■ considered for this program. L SCHEDULE A Page 8 Equity The Last Resort Loan shall be secured with a separate mortgage. Property Type: Non-owner-occupied,residential rental properties located in the City of Fridley. 5. Program Specifics The Last Resort Rental Loan Program is designed specifically for rental property owners who can't qualify for a loan or a grant. In general,the following criteria will be used as primary factors: • a. Borrowers whose Debt-to-Income ratio exceeds 50%. b. Borrowers who have no equity in their property and a Loan-to- Value Ratio (with the new debt)that exceeds 100%,but is not greater than 125%. d. Borrowers who have had credit problems, such as slow payment. This program is not available to borrowers with pending bankruptcies or foreclosures,unpaid judgements or liens, or non- payment of real estate taxes/assessments. n 6. General Requirements This program is available to rental property owners on a case-by-case basis. The Authority Board of Commissioners shall specifically approve all Last Resort Rental Loans in excess of$10, 000. 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Rental Rehabilitation Loan Program Procedural Guide. All properties shall be inspected prior to the approval of any financing. The Authority will only disburse funds to the contractor/s directly after an inspection has been conducted and the homeowner signs a completion certificate. r-� 4/1/2012 Community Reinvestment Fund.Inc. Loan Page^ 4/1/2012 AS Of Date Other Late Charge Legal Fee Legal Primary Unapplicd Warning Days Past Last Paid Next Last Pmt Current Loan Loan ID Investor ID Principal Bal Escrow Bal Funds Bel Bel Bal Status Status Loan Type _DueDate _ Bal Status Due Date Recommendation Comment _ Payment Pd DPD Balance Last Contact Updated Comment 0000002326 Frid $28,30413 $0.00 $0.00 $106.00 $0 00 RPAYFB Active Other 12/3/2010 $193.28 LMAprvd 485 2/18/2011 Cash Flowing Borrower was on a repayment plan that was cancelled 5/3/2012 3/1/2012 (32) 25,815.57 3/8/2012 Borrower completed repayment plan- because he pays sporadically. The loan is still cash inquired about a"short sale-pre- flowing property tax records indicate there is no title foreclosure sale".May try to sell transfer and the property is owner occupied property.The loan is current 0000002333 Frid $32,710.93 $0.00 $0 00 $636 I6 80.00 Active Other ###644## $0.00 2350 11/9/2005 Property Comments indicate-A foreclosure sale was held in 10/25/2005 11/9/2005 2,350 32,710.93 2/29/2012 Borrower correspondence-Requesting Search/Charge November 16,2007. Redemption was to expire on we"extinguish her lien under the HAMP off 5/16/2007. It is unclear if the borrower redeemed the Program". City of Fridley responded- property. Anoka County tax information reflects the request was denied owner and tax payer as" Trustee and the property never lost it's homestead designation. We recomend a propety search be performed and an inspection to determine lein and property status. There has been no contact with the borrower since 7/2009 when she contacted our office for a payoff statement. We have been unable to contact the borrower mail is being returned,unable to forward all known and searched phone numbers are either disconnected or she is unlisted. 0000002338 Frid $18,736.06 $0.00 $0.00 $153.36 $0.00 Active Other 2/9/2009 $0.00 1147 12/29/2008 Property 'There has been no contact with the borrowers. They 2/9/2009 12/29/2008 1,147 18,736.06 na No change in status/No contact/No Search/Charge filed chapter 7 on 3/9/2010. They were granted a payments off discharge in June 2010. The senior lender(Chase Home)obtained a Motion for Relief from the stay and initiated foreclosure. We have no evidence the foreclosure was completed and recent Anoka County Property tax information reflects the borrowers are still living in the property. Due to the bankrupcty discharge, collection efforts are limited. It appears City lien is secured,however,there is a first and 2nd mortgage total • amount estimated to be$242K before the City of Fridley. 0000002380 Frid $4,340.34 $0.00 $0.00 $118.09 $0.00 Active Other 12/3/2010 $83.12 485 1/21/2011 Cash Flowing Borrower was on a repayment plan that was cancelled 3/3/2012 2/21/2012 29 2,617.84 2/21/2012 Borrower called and left a message because he pays sporadically. The loan is still cash regarding payments-Using partial flowing property tax records indicate there is no title payments that were previously made we transfer and the property is owner occupied were able to advance his due date by 1 month in February 2012 to March 2012. 0000002324 Frid $3,749.21 $0.00 $0.00 $9.96 $0.00 Active Other 1/4/2012 $0.00 88 12/28/2011 Primary borrower died in November 2010.11154111111111111/r 1/4/2012 12/28/2011 88 3,749.21 2/21/2012 NEW Past due Loan had been handling the affairs while the loan was in Probate-Last contact with asipwas December 2011 when she requested a copy of the payment history. Since then no payments have been received and no contact. [IKtT 1)-6U r Y ken' /40^10"- S 60 + dxys April If 2-012_ . ( ( MMO ROE James R.Casserly jcasserly@krassmonroe.com Direct 952.885.1296 Greg D.Johnson gjohnson @krassmonroe.com Direct 952.885.5994 MEMORANDUM To: City of Fridley Attn: Paul Bolin, HRA Assistant Executive Director Attn: Scott Hickok, Community Development Director Attn: William Burns, City Manager, HRA Director From: James R. Casserly, Esq. • Greg D. Johnson, CPA, Senior Public Finance An st d, Date: May 19, 2009 Re: Tax Increment Potential in the Northstar TIF District Our File No. 9571-74 Attached is a spreadsheet titled Transit TIF District TIF Plan: Tax Increment by Area. We designed this analysis to show the relative amount of tax increment from the different phases. At the top of the page we identify seven different Sites. In three of the Sites, B, E and G, we have assumed no redevelopment; in four of them, A, C, D and F, we have assumed the redevelopment and the resulting market value as shown. For purposes of our analysis, we have assumed Site D (the JLT Land) will be Phase 1. Site A (Islands • of Peace Apartments)will be Phase 2; Site C(West.of Railroad Tracks)will be Phase 3; and Site F (Train Station/Site Land)will be Phase 4. Upon completion of these four Sites, the estimated market value of the entire Northstar TI District will be approximately $239,000,000. The current market value of the District is $84,400,000 which results in a captured tax capacity of$1,950,000 and tax increment upon completion of approximately$1,920,000. The balance of the page reflects the tax increment that is generated by each Phase. These are uninflated numbers. No inflation is captured in any Phase or in the balance of the TI District. As a practical matter, we will have inflation and most of the remaining /'1 8000 Norman Center Drive,Suite 1000 • Minneapolis,Minnesota 55437-1178 • TEL 952.885.5999 FAX 952.885.5969 www.krassmonroe.com parcels in the TI District will, in all likelihood, be included and their inflated value will be captured. The boftom of the page shows the total of the uninflated tax increment for each phase. The JLT land, which is Phase 1, shows potential tax increment in excess of $27,000,000. This Site is approximately 58% of all the tax increment generated in the Northstar District. The other Sites have lesser amounts of increment, with the Train Station Site, Phase 4, having the least amount at just slightly more than $3,000,000. Some conclusions that may be drawn from this analysis include the following: 1. The JLT Land Site is the dominant site for the generation of tax increment. 2. The JLT Site needs the density that allows this amount of increment to be generated. Our assumptions include retail development of 212,000 square feet, office development of 90,000, 125 rental units and 157 owner occupied units for a total market value on this Site of$81,700,000. 3. In all probability, the JLT Site cannot achieve this type of density without parking improvements. It may be advantageous for the HRA to assist with parking improvements to achieve this type of density. 4. The JLT Site will also be instrumental in providing funds to pay for needed infrastructure in the Northstar TI District and to assist with land acquisition in the Islands of Peace and the West of the Railroad Tracks' Sites. In addition, the Train Station Site will need help with parking improvements in order to reduce the footprint of the parking area which will then allow for more intensive development of this Site. With the exception of the JLT Site, all of the redevelopment options in the Northstar TI District appear to be very costly. Without the appropriate development in the JLT Site, it will be extremely difficult to finance other needed infrastructure improvements and redevelopment. JRC/al Enclosures KM:4826-2432-4867,v. 1 Page 2 I CITY OF FRIDLEY .._._ __...._.___.. - - - - Transit TIF District-TIF Plan TAX INCREMENT BY AREA • (a) (b) (c) (d) (e) (Q (II) (81 io (n I t*"" EaRR _ Islands of Georgetown West of RR Train Station Tracts- Pesos Apt' Apartments Trade JLT Land RR Tracks Site Land Commercial Phase 2 No Redev Phase 3 Phase 1 No Redev Phase 4 No Redev SITE A B C D E F G TOTALS Market Value _ Retail 1,500,000 26,500,000 500,000 28,500,000 Office 11,250,000 11,250,000 Rental 14,400,000 13,200,000 12,500,000 40,100,000 Owner Occupied 20,000,000 37,200,000 31,400,000 16,000,000 104,600,000 Existing Cc. mercial 31,895,000 31,895,000 Existing Rental 22,840,400 22,840,400 I Estimated Market Value 34,400.000 22,840,400 51,900,000 81,850,000 0 16,500,000 31,895,000 238,985,400 I Tax Capacity 380,000 283,005 587,000 1,225,250 0 170,000 637,900 3,263,155 I Original Market Value 8,621,400 22,640,400 11,079,300 10,850,100 1,320,900 31,895,000 86,407,100 Original Tax Capacity 95,236 283,005 121,040 162,818 13,609 637,900 1,313,608 <--Present Value--> 1 1 Semi Annual Cumulative Captured Tax Capacity 284,764 0 445,960 1,062,432 0 156,391 0 1,949,547 Balance Balance Tax Increment 0.99092 281,162 0 440,320 1,048,995 0 154,413 0 1,924,890 P.V.of ,) Total of 0) 5.00%06/01/14 12101/13 0 • 1 06/01/14 0 0 524,498 0 524,498 524,498 524,498 12/01/14 0 0 524,498 0 524,498 511,705 1,038,203 2 06/01/15 0 0 624,498 0 524,498 499,224 1,535,427 12/01/15 0 0 524,498 0 524,498 487,048 2,022,475 3 06/01/16 140,581 0 524,498 0 665,079 602,528 2,625,003 12/01/16 140,581 0 524,498 0 685,079 587,833 3,212,836 4 06/01/17 140,581 0 524,498 0 665,079 573,495 3,786,331 12/01/17 140,581 0 524,498 0 665,079 659,508 4,345,839 5 06/01/18 140,581 220,160 524,498 0 885,239 726,557 5,072,395 12/01/18 140,581 220,160 524,498 0 885,239 708,836 5,781,231 6 08/01/19 140,581 220,180 524,498 0 885,239 691,547 6,472,778 12/01/19 140,581 220,160 524,498 0 885,239 674,680 7,147,458 • 7 06/0120 140,581 220,-160 524,498 77,206 962,445 715,832 7,883,090 12/01/20 140,581 220,160 524,498 77,206 982,445 898,177 8,581,287 8 06/0121 140,581 220,180 524,498 77,206 962,445 881,149 9,242,416 i 12/01/21 140,681 220,160 524,498 77,206 982,445 864,535 9,906,951 9 08/0122 140,581 220,160 524,498 77,206 982,445 648,327 10,555,278 12/0122 140,581 220,180 524,498 77,206 962,445 632,514 11,187,792 10 06/01/23 140,581 220,160 524,498 77,206 982,445 817,087 11,804,879 12/0123 140,581 220,160 524,498 77,206 962,445 602,036 12,406,915 111 06/01/24 140,581 220,160 524,498 77,206 982,445 587,352 12,994,267 12/0124 140,581 220,160 524,498 77,206 982,445 573,027 13,567,294 112 06/01/25 140,581 220,160 524,498 77,206 982,445 559,050 14,126,344 12/0125 140,581 220,160 524,498 77,206 982,445 545,415 14,671,759 113 06/01/28 140,581 220,160 524,498 77,206 962,445 532,112 15,203,871 1 MI 1 111111111111111111L MralN-'-U MIOO ill IN i 1111 I 0 0.. 220,160 524,498 77,208 902,44 1 14 • ' � 220180 524 498 77 206 ••' 445 506 472 16 229 477 1 ' 140,581 220,160 524,498 77,206 962,445 494,119 16,723,598 15 06 140,581 220,160 524,498 77,208 962,445 482,067 17,205,663 i 12/01/28 140,581 220,160 524,498 77,206 962,445 470,310 17,675,973 16 06/01/29 140,581 220,160 524 498 77,206 962 445 458,839 18,134,812 1 i 140 581 220160 524,498 77 206 17 F:757711 220160 524 498 - 77 206 -• ::; J.Li 447 647 19 08 188 436 729 19 019 188 : 12/01/30 140,581 220,160 524,498 77,206 962,445 426,077'18 06/01/31 140,581 220,160 524,498 77,206 962,445 415,685 19,860,951 12/01/31 140,581 220,160 524,498 77,206 962,445 405,546 20,266,497 119 06/01/32 140,581 220,160 524,498 77,206 962,445 395,855 20,682,152 I 12/01/32 140,581 220,160 524,498 77,206 962,445 386,005 21,048,157. 20 06/01/33 140,581 220,160 524,498 77,206 962,445 378,590 21,424,748 i I 12/01/33 140,581 220,160 524,498 77,206 982,445 387,405 21,792,153 1 21 08/01/34 140,581 220160 524,498 77,206 962,445 358444 22,150,597 12/01/34 140,581 220,180 524,498 77,206 962,445 349,701 22,500,298 r .22 06/01/35 140,581 220,160 524,498 77,206 982,445 341 172 22,841,470 I I 12/01/35 140,681 220,160 524,498 77,206 962,445 332,851 23,174,32 '23 06/01/36 140,581 220,160 524,498 77,206 982,445 324,733 23,499,054 12/01/36 140,581 220,160 524,498 77,206 962,445 316,812 23,815,868 I24 06/01/37 140,581 220,160 524,498 77,206 962,445 309,085 24,124,951 12/01/37 140,581 220,160 524,498 77,206 962,445 301,546 24,426,498 125 06/01/38 140,581 220,160 524,498 77,206 962,445 294,192 24,720,689 emi ' 12/01/38 140,581 220,160 524,498 77,206 962,445 287,016 25,007,706 126 06/01/39 140,581 220,160 524,498 77,206 962,445 280,016 25,287,722 12/01/39 140,581 220,160 524,498 77206 962,445 273,188 25,560,908 8,747,891 0 9 687 041 27,273,874 = , ® 0 48 797,082 4 25,580,908-0 25,560,908 I i Net Present Value 3,625,804 0 4,906,857 15,549,338 0 1,477,109 0 Transit TIF District 2009a-TIF Plan.xls Prepared by Krass Monroe,PA 5/13/2009 111 i CITY OF FRIDLEY Transit TIF District-TIF Plan ASSUMPTIONS REDEVELOPMENT SUMMARY I. I Development Starts Phase 2 No Redev Phase 3 Phase 1 No Redev Phase 4 No Redev Current Islands of Georgetown West of RR Train Station E of RR Tracts Peace Apts Apartments Tracks JLT Land RR Tracks Site Land Commercial Acres 7.3 31.9 18.3 25.7 20.4 10.1 41.9 155.6 Parcels 1-14 15-24 25-29 30 31-35 3638 39-45 Site A B C D E F G TOTAL Units/Sq.Ft. Retail $ 125 12,000 212,000 4,000 228,000 Office $ 125 90,000 90,000 Rental $100,000 144 132 125_ 401 Owner Occupied $200,000 100 186 157 80 523 Market Value Retail 1,500,000 28,500,000 500,000 28,500,000 Office 11,250,000 11,250,000 Rental 14,400,000 13.200,000 12,500,000 40,100,000 Owner Occupied 20,000,000 7,200,000 31,400,000 18,000,000 104,600,000 34,400,000 0 51,900,000 81,650,000 0 0 18,500,000 0 184,450,000 Existing-No Change 22,640,400 0 _ 31,B95,000 54,535,400 Total Market Value I 34,400,000 22,640,400 .1,900,000 81,650,000 0 0 16,500,000 31,895,000 238,985,400 I I f 0 Original Market Value 8,821,400 22,640,400 11,079,300 10,850,100 0 1,320,900 31,895,000 86,407,100 Increase in Market Value 4.0 4.7 7.5 12.5 New Market Value per acre 4,689,204 2,839,945 3,181,499 1,628,504 Existing Market Value per acre 708,686 0 760,582 1 I - Tax Capac _ - eem"\ I New 1 Construction 2012 2014 2016 2018 I Market I Full Valuation 2013 2015 2017 2019 t Value 1 Taxes Payable 2014 2016 2018 2020 I Starts- 1 Current Phase 1 Phase 2 Phase 3 Phase 4 Commercial/Retail I 1 B I I I C Parcels 25-29 West of RR Tracks Phase 3 I 11,079,300 11,079,300 11,079,300 1,500,000 1,500,000 O Parcels 301 JLT Site I I Phase t A 10,850,100 37,750,000 37,750,000 37,750,000 37,750,000 E Parcels 31-35 Railroad Tracks I No Redev I 0 0 0 0 0 F Parcels 36.38 Transit Station r Phase 4 1 1320 900 1 320 900 1 320 900 1,320 900 500 000 II!!I I!.,11-i ill i• i nn Rental I I I A Parcels 1-14 Island Park Area 1 Phase 2 l 8,621,400 8,621,400 14,400,000 14,400,000 14,400,000 B Parcels 15-24 Georgetown Apt area I No Redev 122,640,400 22,640,400 22,640,400 22,640,400 22,640,400 C Parcels 25-29 West of RR Tracks rPhase 3 r . 13,200,000 13,200,000 D Parcels 301 JLT Site I 1 Phase 1 1 12,500,000 12,500,000 12,500,000 12,500,000 Owner Occupied I 20,000,000 20,000,000 20,000,000 A Parcels 1-14 Island Park Area I Phase 2 I C Parcels 25-29 West of RR Tracks Phase 3 37 200,000 37,200,000 D Parcels 30 JLT Site I Phase I I 31,400,000 31,400,000 31,400,000 31,400,000 F Parcels 36-38 Transit Station ! Phase 4 1 w. - 16,000,000 Total Market Values 86,407,100 157,207,000 182,985,600 223,808,300 238,985,400 0 0 0 0 0 0 Original Tax Capacity 1,493,679 1,375,156 1,309,978 1,204,404 1,179,820 I I I - /—■ Transit TIF District 2009a-TIF Plan.xls Prepared by Kress Monroe,PA 5/13/2009 ii c i ty 0 f t "Ok w s r Fridley .., - .-.7-!.,....-..71, ,,i1--i_i•—iir'rick, ,....., - ,--1%;.:-,:,-:-:'.-":.1''.'.=''.',;-'--,-,-.-,f...'.t:..4,.--V,.-.i.,i..".vk,..:._'_t%.N-"..-,:.-.._,.7-_--=_'--,-4-,-0n.'.,,..,',-.--,4-•-.:4„_.1,-',.F:-.„t;A•s1.-\-i-:'1 T2.4-.,,-,„.:1.:,1.I„'.,.I 1%L,:1.I_1kI..0.i„,1:.,N1B.i..-:.1*. _;-'.1',.•:--4l:I_!.■h-.:s1.,E:i%.ei=-21th..sa:v 1 e0 l:::,.. .. :77,-:.I---.,-1uv.._.,.p,■i0r1-•I 1 L_---_,Lr.-.-__-Ia L-=--,L-,--,.—EmJ...A::l,l15._NS-im i....S:,..,.. •-.!-,•--•----•...=-.:"a.-_P._1''_:-i. Proposed ed Tra n s it TIF District 1 ! - . . „,1 1.i: Legend LI.;1 .. 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