HRA 07/14/2016
July 14, 2016
HRA Meeting
Regular Meeting Agenda
7:00 p.m.
Call to order
Roll call.
Action Items
1.Approval of Expenditures
2.Approval of May 5, 2016 Meeting Minutes
3.Annual Election of Officers
4.Approval of Resolution Adopting Amendment #3 – Hyde Development/Northern
Stacks
Informational Items
1.Cielo Update
2.Housing Program Update
Adjournment
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ACTION ITEM
HRA MEETING OF JULY 14, 2016
DATE: June 30, 2016
TO: Wally Wysopal, City Manager / 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
length of their current appointments.
Commissioner End of Term
Gordon Backlund June 2021
Stephen Eggert June 2020
Larry Commers (Chair) June 2019
Pat Gabel (Vice Chair) June 2018
Bill Holm June 2017
Recommendation
Staff recommends that the Authority elect a Chair and Vice Chair, as required by the
Authority’s by-laws, to serve through June 2017.
ACTION ITEM
HRA MEETING OF JULY 14, 2016
DATE: July 7, 2016
TO: Wally Wysopal, City Manager / HRA Executive Director
FROM: Paul Bolin, Assistant HRA Director
SUBJECT: Approval of Resolution Adopting Amendment #3 - Hyde
Attached is a detailed email from Attorney Casserly summarizing the changes
necessary to keep the Northern Stacks project moving forward at its current pace.
The success of the project and complicated phasing make these changes necessary.
Recommendation
Staff recommends approval of the resolution amending the redevelopment contract
between the Authority and Fridley Land LLC (Paul Hyde).
Execution:July14,2016
________________________________________________________________________
THIRDAMENDMENT
TOTHE
CONTRACT
FOR
PRIVATEREDEVELOPMENT
ByandBetweenthe
HOUSINGANDREDEVELOPMENTAUTHORITY
InandFor
THECITYOFFRIDLEY,MINNESOTA
And
FRIDLEYLANDLLC
________________________________________________________________________
Thisdocumentwasdraftedby:
JamesCasserly,Esq.
MonroeMoxnessBergPA
7760FranceAveSouth,Suite700
Minneapolis,Minnesota55435
952-885-1296
THIRDAMENDMENT
TOTHE
CONTRACTFORPRIVATEREDEVELOPMENT
th
THISTHIRDAMENDMENTismadeonorasofthis14dayofJuly,2016,byand
betweentheHousingandRedevelopmentAuthorityinandfortheCityofFridley,
Minnesota(the"Authority")andFridleyLandLLC,aMinnesotalimitedliabilitycompany
(the"Redeveloper").
WITNESSETH:
WHEREAS
,theAuthorityandtheRedeveloperenteredintoaContractforPrivate
RedevelopmentdatedasofOctober3,2013,aFirstAmendmenttotheContractfor
PrivateRedevelopmentdatedasofMay1,2014(the“FirstAmendment”),aSecond
AmendmenttotheContractforPrivateRedevelopmentdatedasofNovember6,2014(the
“SecondAmendment”)(collectivelythe"Contract").(Capitalizedtermsnotdefinedinthis
AgreementaredefinedintheContract);and
WHEREAS
,theRedeveloperisperformingallofitsobligationsrequiredbythe
Contract;and
WHEREAS
,theAuthorityisperformingitsobligationsinaccordancewiththe
Contract;and
WHEREAS
,theAuthorityandRedeveloperdesiretoamendtheContracttofurther
thepurposessetforththerein;
NOW,THEREFORE
,inconsiderationofthepremisesandthemutualobligationsof
thepartieshereto,thepartiesherebyagreeasfollows:
Section1.Section1-Definitions.Section1.1isdeletedandthefollowing
substitutedinitsplace:
(a)“ReconciliationDate”meanstheearlierof(i)thedateaNoteis
tobeissuedforthelastbuildingor(ii)December31,2023andisthe
latestdateforcalculatinganyrepaymentofassistancebythe
RedevelopertotheAuthorityandfortheissuanceofanyNote.
Section2.GrantLimitations.
(a)Section3.5(b)(1)isdeletedandthefollowinginsertedinitsplace:
(1)TheAuthority’ssourceoffundsfortheAuthorityGrantsare
interfundloans.Theprincipalbalanceofsuchinterfundloansshall
notexceed$3,500,000onanyinterestpaymentdate.Therepayment
oftheinterfundloansfromthetaxincrementrevenuesgeneratedby
theHSSshallusethefollowingassumptions:interestrate,threeand
ahalfpercent(3.5%)perannum;administrativeexpenses,ten
percent(10.0%)ofavailableHSStaxincrements;payments,
semiannually.TheAuthorityGrantScenariosattachedasScheduleJ
reflecttheinterfundloanbalancesusingSlowBuildoutandFast
Buildoutscenariosasdescribedtherein.
(b)Section3.5(b)(3)isdeleted.
(c)Section3.5(b)(6)isdeletedandthefollowingsubstitutedinitsplace:
(6)ThetotaloftheauthorityGrantstotheRedevelopertobepaid
fromtheHSS,byinterfundloans,shallnotexceed$4,500,000plus
anyrecoveredcosts,withtheprincipaloutstandingbalanceofthe
interfundloansnottoexceed$3,500,000usingtheassumptions
notedabove.
Section3.IssuanceofNotes.Section3.6(d)(9)isdeletedandthefollowing
substitutedinitsplace:
(9)TheReportsrequiredbySection4.4shallhavebeenreceived
bytheAuthorityandtheNoteforthelastPhaseshallnotbeissuedif
itwillresultinan“ExcessPercentage”asdefinedinSection3.12.
Section4.AuthorityGrants:PhaseIV.Section2(c)oftheFirstAmendmentis
deletedandthefollowingsubstitutedinitsplace:
(c)$1,500,000forPhaseIVafterCertificatesofCompletionhave
beenissuedforBuildingIinPhaseIandPhaseII.
Section5.AmendmentSupersedesContract.Thetermsandconditionscontained
inthisThirdAmendmentshallsupersedeanyconflictingprovisionscontainedinthe
Contract.
INWITNESSWHEREOF
,theAuthorityhascausedthisThirdAmendmenttothe
ContractforPrivateRedevelopmenttobedulyexecutedinitsnameandbehalfandthe
RedeveloperhasexecutedthisThirdAmendmenttoContractforPrivateRedevelopment
onorasofthedatefirstabovewritten.
\[SignaturePagesFollow\]
2
Dated:____________________
HOUSINGANDREDEVELOPMENTAUTHORITYIN
ANDFORTHECITYOFFRIDLEY,MINNESOTA
By_____________________________________
Its_______________________________
By_____________________________________
Its_______________________________
STATEOFMINNESOTA)
)ss
COUNTYOFANOKA)
Onthis_____dayof________________________,201___beforeme,anotary
public,personallyappeared____________________________and
____________________________tomepersonallyknownwhobymedulysworn,didsay
thattheyarethe_______________________and_________________________
respectively,oftheHousingandRedevelopmentAuthorityinandfortheCityofFridley,
Minnesota,andacknowledgedtheforegoinginstrumentonbehalfofsaidAuthority.
___________________________________
NotaryPublic
AuthoritySignaturePage
ThirdAmendmenttoContractforPrivateRedevelopment
3
Dated:____________________
FRIDLEYLANDLLC
By
Its
STATEOFMINNESOTA)
)ss.
COUNTYOF)
Onthis_____dayof_____________________________,201____beforeme,a
notarypublic,personallyappeared___________________________________________
ofFridleyLandLLC,aMinnesotalimitedliabilitycompany,andacknowledgedthe
foregoinginstrumentonbehalfofsaidcompany.
__________________________________
NotaryPublic
RedeveloperSignaturePage
ThirdAmendmenttoContractforPrivateRedevelopment
4847-7812-2292
4
RedlinedtoIncorporate
First,Second&ThirdAmendments
ARTICLEIII
UndertakingsofAuthorityandRedeveloper
Section3.1.Undertakings.(a)TheRedevelopershallseekgrantsandshall
constructorcausetobeconstructedtheMinimumImprovements,theSiteImprovements
andthePublicImprovementsinaccordancewiththetermsofthisAgreement.
(b)TheAuthorityshallseekgrantsanddisbursetheproceeds,provide
AuthorityGrants,issueNotesandmayissueBondsinaccordancewiththetermsofthis
Agreement.
Section3.2.Relocation.(a)TheRedeveloperwarrantsandrepresentsthatitwill
pay,orobtainwrittenrelocationwaiversinaformsatisfactorytotheAuthorityregarding
allRelocationCosts.AnyRelocationCostspaidbytheRedeveloperarereimbursable
EligibleCosts.
(b)WithoutlimitingtheRedeveloper'sobligationsunderSection9.5,the
Redeveloperwillindemnify,defend,andholdharmlesstheAuthority,theCity,andtheir
governingbodymembers,employees,agents,andcontractorsfromanyandallclaims
forbenefitsorpaymentsarisingoutoftherelocationordisplacementofanypersonfrom
theRedevelopmentPropertyasaresultoftheimplementationofthisAgreement.
Section3.3.EnvironmentalUndertakings.(a)Thepartiesacknowledgethat
MPCAhasreceivedtheRedeveloperrequestforoneormoreVRAPsprovidingfor
remediationofhazardouswastesandcontaminantsontheRedevelopmentProperty.A
separateVRAPmaybeissuedforeachPhaseorasingleVRAPissuedforthe
RedevelopmentPropertyandthenamendedormodifiedforeachPhase.Redeveloper
shallpromptlyundertakeremediationandanyotheractionsrequiredundertheVRAPs,
subjecttothereimbursementasfurtherdescribedinthisAgreement.
(b)TheRedeveloperacknowledgesthattheAuthoritymakesno
representationsorwarrantiesastosoilandenvironmentalconditiononthe
RedevelopmentPropertyorthefitnessoftheRedevelopmentPropertyforconstruction
oftheMinimumImprovementsoranyotherpurposeforwhichtheRedevelopermaymake
useofsuchproperty,andthattheassistanceprovidedtotheRedeveloperunderthis
AgreementneitherimpliesanyresponsibilitybytheAuthorityortheCityforany
contaminationoftheRedevelopmentPropertyorpoorsoilconditionsnorimposesany
obligationonsuchpartiestoparticipateinanycleanupoftheRedevelopmentProperty
andorcorrectionofanysoilproblems(otherthanthefinancingdescribedinthis
agreement).
(c)WithoutlimitingitsobligationsunderSection9.5ofthisAgreementthe
Redeveloperfurtheragreesthatitwillindemnify,defend,andholdharmlesstheAuthority,
theCity,andtheirgoverningbodymembers,officers,andemployees,fromanyclaimsor
1
actionsarisingoutofthepresence,ifany,ofhazardouswastesorpollutantsexistingon
orintheRedevelopmentPropertyunlessandtotheextentthatsuchhazardouswastes
orpollutantsarepresentasaresultoftheactionsoromissionsoftheindemnities.Further,
RedeveloperexpresslyagreesthattheprovisionsoftheVRAPareincorporatedherein
byreference.Nothinginthissectionwillbeconstruedtolimitoraffectanylimitationson
liabilityoftheCityorAuthorityunderStateorfederallaw,includingwithoutlimitation
MinnesotaStatutesSections466.04and604.02.
Section3.4.GrantDisbursement.(a)Tofinanceaportionoftheenvironmental
remediationcostsontheRedevelopmentProperty,theAuthorityintendstoobtaingrants
fromDEEDandtheMetCounciland,inaddition,willprovideAuthorityGrants.
(b)TheAuthoritywillpayorreimbursetheRedeveloperforGrant-EligibleCosts
fromandtotheextentofthegrantproceedsfromDEED,theMetCouncilandthe
AuthorityGrantsinaccordancewiththetermsoftheDEEDGrantAgreement,theMet
CouncilGrantAgreementandHSSprovisionsoftheTaxIncrementFinancingAct,
respectively,andthetermsofthisSection.Notwithstandinganythingtothecontrary
herein,ifGrant-EligibleCostsexceedtheamounttobereimbursedunderthisSection,
suchexcessshallbethesoleresponsibilityoftheRedeveloperexcepttotheextent
reimbursableundertheNotes.
(c)Alldisbursementswillbemadesubjecttotheconditionsprecedentthaton
thedateofsuchdisbursement:
(1)The.Authorityhasreceivedawrittenstatementfromthe
Redeveloper'sauthorizedrepresentativecertifyingwithrespecttoeachpayment:
(a)thatnoneoftheitemsforwhichthepaymentisproposedtobemadehas
formedthebasisforanypaymentpreviouslymadeunderthisSection(orbefore
thedateofthisAgreement)orhasbeensubmittedasanEligibleCostunder
Section3.5hereof;(b)thateachitemforwhichthepaymentisproposedisaGrant-
EligibleCost,includingastatementspecifyingwhichgrantistheeligiblefunding
source;and(c)theRedeveloperreasonablyanticipatescompletionoftheGrant-
EligibleCostsandtheMinimumImprovementsinaccordancewiththetermsofthis
Agreement.
(2)NoEventofDefaultunderthisAgreementoreventwhichwould
constitutesuchanEventofDefaultbutfortherequirementthatnoticebegivenor
thataperiodofgraceortimeelapse,shallhaveoccurredandbecontinuing.
(3)NolicenseorpermitnecessaryforundertakingtheGrant-Eligible
CostsorconstructingtheMinimumImprovementsshallhavebeenrevoked,orthe
issuancethereofsubjectedtoachallengebeforeanycourtorothergovernmental
authorityhavingorassertingjurisdictionthereoverthathasbeenfinallydetermined
inamanneradversetoRedeveloper’sobligationshereunder.
(d)WhenevertheRedeveloperdesiresadisbursementtobemadehereunder,
whichshallbenomoreoftenthanmonthly,theRedevelopershallsubmittotheAuthority
adrawrequestintheformattachedasScheduleIdulyexecutedonbehalfofthe
Redeveloperaccompaniedbyinvoicesorothercomparableevidencethatthecosthas
beenincurredandpaid,orispayablebyRedeveloper.Eachdrawrequestshallconstitute
arepresentationandwarrantybytheRedeveloperthatallrepresentationsandwarranties
setforthinthisAgreementaretrueandcorrectasofthedateofsuchdrawrequest.
(e)IftheRedeveloperhasperformedallofitsagreementsandcompliedwith
allrequirementstheretoforetobeperformedorcompliedwithhereunder,including
satisfactionofallapplicableconditionsprecedentcontainedinArticleIIIhereof,the
AuthorityshallmakeadisbursementtotheRedeveloperintheamountoftherequested
disbursementorsuchlesseramountasshallbeapproved,withintwenty(20)Business
DaysafterthedateoftheAuthority'sreceiptofthedrawrequest,or,iflater,uponreceipt
ofgrantproceedsfromDEEDortheMetCouncilortheAuthorityGrant,asthecasemay
be.EachdisbursementshallbepaidfromthegrantdesignatedbytheAuthorityatits
discretion,subjecttotheAuthority'sdeterminationthattherelevantGrant-EligibleCostis
payablefromthedesignatedsourceundertheDEEDGrantAgreementandtheMet
CouncilGrantAgreementortheHSSprovisionsoftheTaxIncrementActandthis
Agreement.
(f)ThemakingofthefinaldisbursementbytheAuthorityunderthisSectionfor
eachPhaseshallbesubjecttotheconditionprecedentthattheRedevelopershallbein
compliancewithallconditionssetforthinthisSectionandfurther,thattheAuthorityshall
havereceivedalienwaiverfromeachcontractorforallworkdoneandforallmaterials
furnishedbyitfortheGrant-EligibleCostsattributabletosuchPhase.
(g)TheAuthoritymay,initssolediscretion,withoutnoticetoorconsentfrom
anyotherparty,waiveanyorallconditionsfordisbursementsetforthinthisArticle.
However,themakingofanydisbursementpriortofulfillmentofanyconditiontherefor
shallnotbeconstruedasawaiverofsuchcondition,andtheAuthorityshallhavetheright
torequirefulfillmentofanyandallsuchconditionspriortoauthorizinganysubsequent
disbursement.
Section3.5.AuthorityGrants.(a)TheAuthorityshallprovidetheAuthorityGrants
inthefollowingamountsatthetimesindicated:
(1)$1,000,000forPhaseI:upon(i)CityCouncilFinalRezoningapprovalofthe
RedevelopmentPropertytoS2RedevelopmentDistrict;and(ii)the
RedeveloperexecutinganotetotheAuthority(the“RedeveloperNote”)in
theamountof$1,000,000withinterestatthreeandahalfpercent(3.5%)
perannumguaranteedbyHydeDevelopmentLLCanditsprincipal
shareholder.TheRedeveloperNoteandanyaccruedinterestshallbe
deemedpaidinfulluponthecommencementofthepouringofconcretein
connectionwiththeinstallationofthefootingsorfoundationforthefirst
PhaseIbuilding.
(2)$1,000,000forPhaseII:aftersubstantialcompletionofthePhaseI
MinimumImprovements.theRedeveloperandBAESystemsLand&
ArmamentsLPhaveexecutedaleaseforPhaseII.Inadditionthe
guaranteebyHydeDevelopmentLLCandPaulHydeshallcontinueuntil
thenewwallseparatingthePhaseIIMinimumImprovementsandthe
buildingbeingdemolishedisunderconstructionandacertificateof
completionhasbeenissuedforthefirstPhaseIbuilding.
(3)$1,000,000forPhaseIII:aftersubstantialcompletionofthePhaseII
MinimumImprovementsupontheoccurrenceofeither(A)acertificateof
completionisissuedforaPhaseIbuildingor(B)footingsarecommenced
forbothPhaseIbuildingsandthePhaseIIwalldescribedinSection2(a)
aboveisunderconstruction.
(4)$1,500,000forPhaseIV:aftersubstantialcompletionofthePhaseIII
MinimumImprovements.afterCertificatesofCompletionhavebeenissued
forBuildingIinPhaseIandPhaseII.
(b)TheAuthority’slimitationsinprovidingtheAuthorityGrantsincludethe
following:
(1)TheAuthority’ssourceoffundsfortheAuthorityGrantsareinterfundloans.
Theprincipalbalanceplusaccruedinterestofsuchinterfundloansshallnot
exceed$3,500,000.3,500,000onanyinterestpaymentdate.The
repaymentoftheinterfundloansfromthetaxincrementrevenues
generatedbytheHSSshallusethefollowingassumptions:interestrate,
threeandahalfpercent(3.5%)perannum;administrativeexpenses,fiveten
percent(5.0%)ofavailableHSStaxincrements;reservefund,sevenanda
halfpercent(7.510.0%)ofavailableHSStaxincrements;payments,
semiannually.TheAuthorityGrantScenariosattachedasScheduleJ
reflecttheinterfundloanbalancesusingSlowBuildoutandFastBuildout
scenariosasdescribedtherein.
(2)AnyAuthorityGrantthatresultsinthebalanceexceeding$3,500,000shall
bedelayedandmayonlybemadeonFebruary1orAugust1andinthe
amountthatsuchbalancewillnotbeexceeded.
(3)SubstantialcompletionofaPhaseoccurswhenCertificatesofCompletion
areissuedforeachbuildinginthatPhaseexceptthelastbuildingineach
Phaseneedonlybeenclosed.
(3)(4)AuthorityGrantsnotneededforanearlierPhaseareavailablefora
subsequentPhase.
(4)(5)IntheeventthatGrantEligiblecostsarerecoveredfromathirdparty
andtheAuthorityGrantsarereimbursed,thenadditionalAuthorityGrants
willbeavailableforsubsequentPhasesinaccordancewiththelimitations
notedabove.
(5)(6)ThetotaloftheauthorityGrantstotheRedevelopertobepaidfromthe
HSS,byinterfundloans,shallnotexceed$4,500,000plusanyrecovered
costswiththeprincipaloutstandingbalanceoftheinterfundloans,plus
accruedinterest,nottoexceed$3,500,000usingtheassumptionsnoted
above.
(6)(7)TheHSSshallhavebeencertifiedbytheCounty.
Section3.6.IssuanceofNotes.(a)TheRedeveloperandAuthorityagreeand
understandthatRedeveloperexpectstoincurcertaincostsinexcessofproceedsofthe
grantsdescribedinSection3.4and3.5.InordertoreimbursetheRedeveloperforsuch
additionalcostsandfortheotherEligibleCosts,theAuthorityshallissueandthe
RedevelopershallpurchasetheNotes.ThetermsoftheNotes,includingmaturityand
paymentdates,willbesubstantiallythosesetforthintheformoftheNoteshownin
ScheduleE.TheNoteswillbearinterestatthegreaterof0%perannum,ortheactual
"blendedrate"ontheloanorloansRedeveloperobtainsfromtheStateorlending
institutionstoinitiallyfinancetheEligibleCosts,suchratebeingthe“NoteInterestRate”.
Theblendedrateshallbetheweightedaverageinterestrateontheloans,basedontheir
respectiveratesandoriginalprincipalamounts.TheAuthorityagreesandunderstands
thatRedevelopermaypledgetheNotesascollateraltoRedeveloper'sStateloans,and
agreestoissuetheNotesinsuchdenominationsasRedeveloperrequeststofacilitate
suchpledge;providedthattheminimumdenominationforallNotesshallbe$100,000.
TheNoteswillbedatedasofthedateofdelivery,andinterestwillaccruefromsuchdate.
(b)BeforeissuanceanddeliveryofeachNote,Redevelopermustsubmittothe
AuthorityoneormorecertificatessignedbytheRedeveloper'sdulyauthorized
representative,containingthefollowing:(i)astatementthateachcostidentifiedinthe
certificateisanEligibleCost,incurredafterthedateofthisAgreementandthatnopartof
suchcosthasbeenincludedinanypreviouscertificationunderthisSectionorinanydraw
requestunderSection3.4;(ii)evidencethateachidentifiedcosthasbeenpaidorincurred
byoronbehalfoftheRedeveloper;(iii)astatementthatnouncuredEventofDefaultby
theRedeveloperhasoccurredandiscontinuingundertheAgreement,and(iv)evidence
ofRedeveloper'sinterestrateonStateorprivateloansasdescribedinparagraph(a)of
thisSection.TheAuthoritymay,ifnotsatisfiedthattheconditionsdescribedhereinhave
beenmet,returnanycertificatewithastatementofthereasonswhyitisnotacceptable
andrequestingsuchfurtherdocumentationorclarificationastheAuthoritymay
reasonablyrequire.TheAuthoritywilldelivereachNoteuponreceiptandapprovalof
certificatesevidencingtherelevantEligibleCostsinatleasttheprincipalamountofthe
Note.
(c)TheRedeveloperunderstandsandacknowledgesthattheAuthoritymakes
norepresentationsorwarrantiesregardingtheamountofAvailableTaxIncrement,orthat
revenuespledgedtotheNoteswillbesufficienttopaytheprincipalandinterestonany
Note.AnyestimatesofTaxIncrementpreparedbytheAuthorityoritsfinancialadvisors
inconnectionwiththeTIFDistrictorthisAgreementareforthebenefitoftheAuthority,
andarenotintendedasrepresentationsonwhichtheRedevelopermayrely.IftheEligible
Costsexceedtheprincipal,amountoftheNotes,suchexcesscostsarethesole
responsibilityofRedeveloper.
(d)Inadditiontothelimitationsabove,thefollowinglimitationsshallapplyto
theissuanceoftheNotes:
(1)OnlyAvailableTaxIncrementshallbepledged.
(2)OntheReconciliationDateinterestratesforeachNotewillcontinueatthe
applicableNoteInterestRate.However,anyNotepayabletothe
RedeveloperandnotpledgedorusedassecuritywiththeStateoralending
institutionwillhaveaninitialinterestrateequivalenttotheyieldoftenyear
treasurynotesonthedateofissueplustwopercent(2%);andtheseNotes
willhavetheirinterestratesadjustedontheReconciliationDatetotheyield
of10yeartreasuriesonthatdateplustwopercent(2%).
(3)ThetermofanyNotemaynotextendmorethan32daysbeyondthe
durationoftheTaxIncrementDistrict.
(4)AllNoteswillbeissuedonaparitybasis.
(5)Anyamountsunpaidatthematuritydateshallbedeemedpaidinfull.
(6)ThefirstNote,atRedeveloper’srequest,canbeissueduponthe
commencementofthefirstPhaseIbuilding.Commencementmeansthe
installationofthefootings.
(7)SubsequentNotesshallonlybeissueduponthecompletionofaPhase.A
PhaseiscompletedwheneachbuildinginthatPhasehasreceiveda
CertificateofCompletion.
(8)NotesshallnotbeissuedaftertheReconciliationDate.
(9)TheReportsrequiredbySection4.4shallhavebeenreceivedbythe
AuthorityandnotheNoteforthelastPhaseshallnotbeissuedifitwillresult
inan“ExcessPercentage”asdefinedinSection3.12.
(e)TheAggregateprincipaloftheNotesshallnotexceedthelesserof(i)the
EligibleCostsor(ii)thepresentvalueoftheAvailableTaxIncrementfromthePhase(s)
forwhichCertificatesofCompletionhavebeenissuedor(iii)$20,000,000.The
Authority’sfinancialadvisor,inconsultationwiththeRedeveloper,shallusereasonable
assumptionsinmakingthepresentvalueanalysisincludingNoteInterestRate(s)
describedinSection3.6(d)aboveandwillassumenoinflationandmarketvalues
determinedbytheCountyAssessor.EligibleCostsnotreimbursedbyaNoteissuedfor
anearlierPhasemaybereimbursedbyaNoteissuedinasubsequentPhase.
Section3.7.IssuanceofBonds.TheAuthorityunderstandsthatthemajorityofthe
EligibleCostswillbepaidbyRedeveloperborrowingfundsfromalendinginstitutionand
pledgingNotesandthattherewillbepracticallimitationsontheamountsoffundsthat
canbeobtainedinthismanner.TheRedeveloperwillbeaskingtheAuthority,after
completionofaPhase,toissuesBondstoreplacetheNotestoallowtheRedeveloperto
secureadditionalfunding.Whileacknowledgingtheforegoing,theAuthority,initssole
discretion,mayissuebondsasfollows:
(a)Bondswilleitherbetaxableortaxexemptasallowedbylawinamounts
thatmeetreasonableunderwritingstandardsandupontermsthenavailable
inthepublicmarketplace.
(b)BondproceedsmayonlybeusedtorefundorreplaceNotes.
(c)Bondswillbeissuedonaparitybasis,willbepayableonlyfromAvailable
TaxIncrementandwillnotbeageneralobligationoftheCity,County,State
oranyotherpoliticalsubdivision.
(d)BondsmaybeissuedwitheachPhasebutonlyinthetaxpayableyearin
whichallbuildingsinthatPhasehavetheirfullyconstructedmarketvalue.
(e)TheAuthoritywillcooperatewiththeRedeveloperintheselectionofan
underwriterintheeventBondsareissued.TheAuthoritywillconsultwith
theRedeveloperregardingtiming,terms,coverage,reservesandcostsof
issuanceofanyBonds.
Section3.8.ApplicationofTaxIncrement.Availabletaxincrementwillbeapplied
inthefollowingpriority:
(a)Authority’sadministrativefeeof10%
(b)Bonds
(c)Notes
Section3.9.EPALoans.SubjecttothelimitationsinthisArticleIII,theAuthority
willcooperatewiththeRedeveloperinitseffortstoobtainlowinterestEPAclean-uploans
byissuingNotestothepurchaserorlender.
Section3.10.BusinessSubsidyProvisions.(a)Thepartiesagreeandunderstand
thattheassistanceprovidedtoRedeveloperinthisAgreement(includingbothgrant
proceedsandissuanceofNotes)doesnotconstitutea"businesssubsidy"underthe
BusinessSubsidyAct,becausethegrantsandNoterepresentassistancethatisexempt
fromtheBusinessSubsidyActunderSections116J.993,Subdivision3,clauses(4)and
(8).
(b)RedeveloperacknowledgesthatunderSection116J.994,subdivision7(c)
oftheBusinessSubsidyAct,theRedeveloperisneverthelessrequiredtofileannual
reportscontainingtheinformationdescribedtherein.IftheRedeveloperfailstotimelyfile
anyrequiredreport,theAuthoritywillmailtheRedeveloperawarningwithinoneweek
aftertherequiredfilingdate.If,after14daysofthepostmarkeddateofthewarning,the
Redeveloperfailstoprovideareport,theRedevelopermustpaytotheAuthorityapenalty
of$100foreachsubsequentdayuntilthereportisfiled.Themaximumaggregatepenalty
payableunderthisSectionis$1,000.
Section3.11.RepaymentofDEEDorMetCouncilGrants.TheRedevelopershall
repaytotheAuthorityanyportionofsuchgrantsthattheAuthorityisrequiredtorepayfor
DEEDorMetCouncilGrantsresultingfromRedeveloper’sactionsinviolationoftheterms
oftheapplicablegrantagreement.
Section3.12.RepaymentofAssistance.(a)OntheReconciliationDatethe
RedevelopershalldelivertotheAuthorityevidenceofitsannualizedcumulativeinternal
rateofreturnfromtheRedevelopmentPropertyandtheMinimumImprovementsrelated
thereto(the“IRR”),calculatedasoftheReconciliationDate.TheIRRshallbe
calculatedwithequity,revenuesandexpensesalldeterminedinaccordancewith
generallyacceptedaccountingprinciples,providedthattheamountofRedeveloper’s
equitymustexcludeanydeveloper’sfeeinexcessof7.0percentoftotaldevelopment
costs.TheIRRcalculationshallincludetheEligibleCostspaidbytheRedeveloperand
notreimbursedbygrants,HSSGrantsorNotes.
(b)TheamountbywhichtheIRRexceeds14.0percent(14%)isa
percentagereferredtoas“ExcessPercentage.”Fiftypercent(50%)oftheExcess
Percentageshallbecreditedtothereductionoftheprincipalplusaccruedinterestofthe
NotesinreverseorderoftheirissuanceasoftheReconciliationDate.
(c)ForpurposesofcalculatingrevenuesfortheIRRfromsalesofproperty
thefollowingadjustmentsshallbemade:
(1)Ifproperty(improvedorunimproved)issoldtoanunrelatedpartyinan
arm’slengthtransaction,thosepriceswillbedeterminativeofthesales
price.TheRedeveloperwillcertifytotheCitythatsuchpartywouldbe
consideredunrelatedunderapplicableInternalRevenueCoderegulations.
(2)Ifpropertyissoldtoarelatedparty(asdefinedinInternalRevenueCode
regulations),thepropertysalepricewillbedeterminedbyagreement
betweentheAuthorityandRedeveloperor,ifagreementcannotbereached,
thesalepricewillbethehigherofanappraisalconductedbyanappraiser
mutuallyagreeabletothepartiesortheactualsaleprice.Thisprovisionis
notapplicabletoatransferbetweentheLandLLCandaBuildingLLCas
definedinArticleIaspartofthedefinitionofRedeveloper.
(3)ForpropertystillownedbytheRedeveloperontheReconciliationDate,an
“imputed”salespricebasedonanappraisal,orothermethodacceptableto
bothpartiesforvaluingthepropertyoritsrateofreturn,willbeused.
Section3.13.OtherGrants.IntheeventtheAuthorityisabletoobtaingrants
fromanyothersource,thedisbursementofsuchgrantproceedsshallbesubjecttothe
termsofthisAgreementandinparticularSection3.4GrantDisbursement.
4822-7648-2868
CITY OF FRIDLEY
SIGN-IN SHEET
HOUSING & REDEVELOPMENT AUTHORITY MEETING
Thursday, July 14, 2016
Name and Address Agenda Item of Interest
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO. ___________
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A THIRD
AMENDMENT TO THE CONTRACT FOR PRIVATE REDEVELOPMENT BY AND
BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF FRIDLEY MINNESOTA AND FRIDLEY LAND LLC
BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Housing
and Redevelopment Authority in and for the City of Fridley Minnesota (the “Authority”)
as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a Third Amendment to
the Contract for Private Redevelopment (the “Third Amendment”) with Fridley Land
LLC, a Minnesota limited liability company (the “Redeveloper”).
Section 2. Findings.
2.01. The Board hereby finds that the Third Amendment promotes the
objectives as outlined in its Development Program established pursuant to Minnesota
Statutes, Section 469.001 et seq.
2.02. The Board hereby finds that it has approved and executed (i) a Contract
for Private Redevelopment between the Authority and the Redeveloper dated as of
October 3, 2013 (the “Contract”), (ii) a First Amendment to the Contract dated as of
May 1, 2014, and (iii) a Second Amendment to the Contract dated as of November 6,
2014.
Section 3. Authorizations.
3.01. The Chair and the Executive Director (the “Officers”) are hereby
authorized to execute and deliver the Third Amendment to the Contract when the
following conditions are met:
1. Substantial conformance of a Third Amendment to the Third Amendment
presented to the Authority as of this date with such additions and
modifications as the Officers may deem desirable or necessary as
evidenced by the execution thereof.
Adopted by the Board of the Authority this ______ day of _______________, 2016.
Chair
ATTEST:
Executive Director
MMB: 4814-9636-9972, v. 1
2
INFORMATIONAL ITEM
HRA MEETING OF JULY 14, 2016
DATE: July 7, 2016
TO: Wally Wysopal, City Manager / HRA Executive Director
FROM: Paul Bolin, Assistant HRA Director
SUBJECT: Cielo Update
st
The Cielo project at 61 and University has been a hit with potential renters. Roger Fink
st
reported that as of June 31, 75 of the units were rented and 5 others had renters in the
qualification stage.
Funding has been approved by the lender for Phase 2, the building permit has been
approved and construction is set to start later this summer. Staff continues to hear
many positive comments from residents about this project.
FRIDLEY Loan Summary Report
Activity for Period 5/16/16 - 6/15/16
Application packets requested/mailed:
This period:413Year-to-Date: period:
5
Residential Advisor Visits:This period:1Year-to-Date: period:
Loans currently in process for residents in your City/Neighborhood:
13
Closed Loans
This period:Year-to-Date:
Fridley
UnitsUnits
00
Closed End 38
167,350.20
72,387.12
00
Last Resort
0.00
0.00
Last Resort Emergency
Deferred
Total:
72,387.123167,350.208
Leveraged Funds
This period:UnitsYear-to-Date:Units
00
Total:0
0
#
Types of Improvements Financed YTD# of Projects% of TotalTypes of Properties Financed YTD% of Total
Single Family Residence
8100.00
Additions/Finishing off unused space
111.11
Bathrooms
111.11
Kitchens
111.11
Other Exterior Improvements
222.22
Other Interior Improvements
111.11
Plumbing
222.22
Windows, Doors, Storm Windows, Storm Doors
111.11