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HRA 06/07/2018 June 7,2018 HRA Meeting Regular Meeting Agenda 7:00 p.m. Call to order Roll call. Action Items 1. Approval of Expenditures 2. Approval of May 3, 2018 Meeting Minutes 3. Annual Election of Officers 4. Approval of TIF District#24 & Development Agreement—Stacks VIII 5. Locke Parkway—Consent to Bid Award Informational Items 1. Potential Changes to Loan Program 2. Housing Program Update Adjournment lir CYryf Fridley HOUSING AND REDEVELOPMENT AUTHORITY MEETING OF JUNE 7, 2018 7:00 p.m. - City Council Chambers Sign-in Sheet Please print name, address and item number you are interested in. Print Name (Clearly) Address Item No. Check Report allir City of Fridley, MN By Check Number c;r.,:d Date Range: 04/20/2018 -05/17/2018 Cy Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Bank Code:APBNK-HRA-APBNK-HRA PPT:107738 FRIDLEY HRA ICMA 401 04/20/2018 EFT 0.00 310.08 246 PPT:307066 FRIDLEY HRA ICMA 457 04/20/2018 EFT 0.00 126.92 247 PPT:107738 FRIDLEY HRA ICMA 401 05/04/2018 EFT 0.00 313.83 248 PPT:307066 FRIDLEY HRA ICMA 457 05/04/2018 EFT 0.00 126.92 249 hra-1113 MONROE MOXNESS BERG PA 04/20/2018 Regular 0.00 15,767.60 30132 HRA-2622 LANDFORM PROFESSIONAL SERVICES 04/20/2018 Regular 0.00 4,357.63 30133 HRA-2627 WENCK ASSOCIATES INC 04/20/2018 Regular 0.00 3,365.50 30134 hra-505 EHLERS&ASSOCIATES,INC 04/20/2018 Regular 0.00 960.00 30135 hra-623 FRIDLEY,CITY OF 05/02/2018 Regular 0.00 1,004.27 30136 hra-1341 METRO NORTH CHAMBER OF COMMERCE 05/08/2018 Regular 0.00 395.00 30137 hra-1601 PASSAU LANDCARE INC. 05/16/2018 Regular 0.00 490.00 30138 HRA-2628 MINN DEPT OF HEALTH 05/16/2018 Regular 0.00 150.00 30139 HRA-2630 PROMO DIRECT 05/16/2018 Regular 0.00 1,174.61 30140 hra-623 FRIDLEY,CITY OF 05/16/2018 Regular 0.00 866.49 30141 Bank Code APBNK-HRA Summary Payable Payment Payment Type Count Count Discount Payment Regular Checks 17 10 0.00 28,531.10 Manual Checks 0 0 0.00 0.00 Voided Checks 0 0 0.00 0.00 Bank Drafts 0 0 0.00 0.00 EFT's 4 4 0.00 877.75 21 14 0.00 29,408.85 5/17/2018 9:20:58 AM Page 1 of 2 Check Report Date Range:04/20/2018-05/17/2018 All Bank Codes Check Summary Payable Payment Payment Type Count Count Discount Payment Regular Checks 17 10 0.00 28,531.10 Manual Checks 0 0 0.00 0.00 Voided Checks 0 0 0.00 0.00 Bank Drafts 0 0 0.00 0.00 EFT's 4 4 0.00 877.75 21 14 0.00 29,408.85 Fund Summary Fund Name Period Amount 099 Pooled Cash-HRA 4/2018 24,887.73 099 Pooled Cash-HRA 5/2018 4,521.12 29,408.85 5/17/2018 9:20:58 AM Page 2 of 2 Check Report City of Fridley, MN By Check Number tc=z ;; Date Range: 05/18/2018- 05/18/2018 .s Fridley Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Bank Code:APBNK-HRA-APBNK-HRA hra-1113 MONROE MOXNESS BERG PA 05/18/2018 Regular 0.00 15,708.75 30142 hra-1320 MINNESOTA POLLUTION CONTROL AGENCY 05/18/2018 Regular 0.00 310.00 30143 HRA-2622 LANDFORM PROFESSIONAL SERVICES 05/18/2018 Regular 0.00 55,423.04 30144 HRA-2627 WENCK ASSOCIATES INC 05/18/2018 Regular 0.00 11,812.68 30145 hra-311 CENTER FOR ENERGY&ENVIRONMENT 05/18/2018 Regular 0.00 520.00 30146 hra-501 E.C.M.PUBLISHERS,INC. 05/18/2018 Regular 0.00 142.80 30147 hra-612 FINANCE AND COMMERCE 05/18/2018 Regular 0.00 124.45 30148 Bank Code APBNK-HRA Summary Payable Payment Payment Type Count Count Discount Payment Regular Checks 7 7 0.00 84,041.72 Manual Checks 0 0 0.00 0.00 Voided Checks 0 0 0.00 0.00 Bank Drafts 0 0 0.00 0.00 EFT's 0 0 0.00 0.00 7 7 0.00 84,041.72 Page 1 of 2 5/18/2018 8:56:13 AM Check Report Date Range:05/18/2018-05/18/2018 All Bank Codes Check Summary Payable Payment Payment Type Count Count Discount Payment Regular Checks 7 7 0.00 84,041.72 Manual Checks 0 0 0.00 0.00 Voided Checks 0 0 0.00 0.00 Bank Drafts 0 0 0.00 0.00 EFT's 0 0 0.00 0.00 7 7 0.00 84,041.72 Fund Summary Fund Name Period Amount 099 Pooled Cash-HRA 5/2018 84,041.72 84,041.72 5/18/2018 8:56:13 AM Page 2 of 2 _4 Check Report lially City of Fridley, MN By Check Number kc=r=t Date Range: 05/21/2018 -05/24/2018 ,, Fridley Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Bank Code:APBNK-HRA-APBNK-HRA hra-1601 PASSAU LANDCARE INC. 05/24/2018 Regular 0.00 400.00 30149 hra-1703 QUICKSILVER EXPRESS COURIER 05/24/2018 Regular 0.00 29.75 30150 HRA-2629 4IMPRINT INC 05/24/2018 Regular 0.00 1,154.35 30151 hra-813 HOISINGTON KOEGLER GROUP INC. 05/24/2018 Regular 0.00 2,427.50 30152 Bank Code APBNK-HRA Summary Payable Payment Payment Type Count Count Discount Payment Regular Checks 4 4 0.00 4,011.60 Manual Checks 0 0 0.00 0.00 Voided Checks 0 0 0.00 0.00 Bank Drafts 0 0 0.00 0.00 EFT's 0 0 0.00 0.00 4 4 0.00 4,011.60 5/24/2018 1:34:17 PM Page 1 of 2 .M1 Check Report Date Range:05/21/2018-05/24/2018 All Bank Codes Check Summary Payable Payment Payment Type Count Count Discount Payment Regular Checks 4 4 0.00 4,011.60 Manual Checks 0 0 0.00 0.00 Voided Checks 0 0 0.00 0.00 Bank Drafts 0 0 0.00 0.00 EFT's 0 0 0.00 0.00 4 4 0.00 4,011.60 Fund Summary Fund Name Period Amount 099 Pooled Cash-HRA 5/2018 4,011.60 4,011.60 5/24/2018 1:34:17 PM Page 2 of 2 • CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION May 3,2018 Chairperson Gabel called the Housing and Redevelopment Authority Meeting to order at 7:00 p.m. MEMBERS PRESENT: Pat Gabel William Holm Stephen Eggert Gordon Backlund MEMBERS ABSENT: Kyle Mulrooney OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Wally Wysopal, City Manager Jim Casserly, Development Consultant Scott Hickok, Community Development Director Action Items: 1. Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures. Seconded by Commissioner Eggert. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of April 5, 2018 Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Backlund. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON GABEL DECLARED THE MOTION CARRIED 3. Redevelopment Agreement—Sherman/NS Rail Station Site Paul Bolin,HRA Assistant Executive Director,stated that the Sherman Group would like to move forward with developing the Fridley Northstar Station site. The project is still planned to have three buildings totaling 248 units. Construction would start in the spring of 2019. Discussions with Metro Transit have reduced the required number of parking stalls dedicated to Northstar from 320 to 80. This provides more flexibility in the design and allows for additional green space. Staff and legal counsel have been working with Metro Transit to identify all of the documents that will need to be amended to allow this change to the original lease agreement. Staff anticipates this may Housing and Redevelopment Authority Meeting of May 3, 2018 2 take until this fall to gather all of the approvals and signatures needed. Staff recommends the Authority approves the redevelopment agreement with the Sherman Group. Shane LaFave, Sherman Group, was here a year ago and wanted to move forward with the low- income building and now he is asking to build the other two buildings first. What changed is a year ago he didn't know what Northstar would do as far as reducing the parking lot requirements. He applied for the MN housing 9%tax credit award and didn't get funded and he also didn't want to compete with the Ciello development that was starting up a year ago. The City wants to see this project succeed and now the plan is to move forward with the first two buildings at the same time. The application will be in a less competitive pool this time and they are only asking for a small deferred loan instead of the 9% tax credit. The project is now designated in a qualified census track which allows for the maximum request. Upon approval, Sherman Group would start designing right away and construction would start about a year from now. If all goes well all three buildings could start construction at the same time as the development targets different demographics. Each building would have one level of underground parking with four levels above grade. Chairperson Gabel asked what a qualified census tract was. Mr. LaFave replied that census tracts are in population areas of lower incomes and provide an incentive up to 30%to developers to build housing in those areas. The construction costs and hard costs are used to qualify for eligible for tax credits. Commissioner Eggert asked if this development would be similar to the one in Maplewood. Mr. LaFave replied that it would be a very similar product creating multiple units of housing on the same site, creating a community. Commissioner Eggert asked for an explanation if the financial assistance was granted and if it wasn't granted. Mr. LaFave replied that there are multiple ways to get this done and they could look elsewhere like through Anoka County or creatively look for other options. One option is to construct more market rate housing or another type of use that presents itself. Commissioner Backlund asked if the underground parking was included in the 80 parking stalls. Mr. LaFave replied that the 80 parking stalls is not part of this development, that is for the Metro Transit requirement. Commissioner Backlund asked if the market rate senior building could stand on their own. Mr. LaFave replied that the 55+rate and non-age doesn't need anything from MN Housing. The TIF and our equity will be enough to move that building forward. It is the low-income building Housing and Redevelopment Authority Meeting of May 3, 2018 3 that is dependent on the award tax credit from MN tax housing. With the low rents and no subsidy, that building would have to convert to market rate housing. Commissioner Eggert asked if Sherman would be retaining ownership on the properties. Mr.LaFave replied that they would manage the property a minimum of 15 years. Their vision is to create a portfolio around urban cores next to transit and in urban areas. This is the center of the target of where they want to be. Commissioner Backlund asked if the exterior would blend with neighborhood and vision of the City plans. Mr. LaFave replied that this is preliminary. When they start to create the design, they will want City input.. The design is flexible and will go through the formal design process. All residents will be able to subscribe to solar energy and receive a discount. Commissioner Holm asked what subscribe meant. Mr. LaFave replied that they can't force people but the option is present in the lease paperwork upfront,no other paperwork is needed but the signature. Commissioner Holm asked which building would be built first. Mr. LaFave replied that both buildings could be built at the same time. First, they would work on the storm water, site utility, ponding and the infrastructure; then both buildings could start at the same time. Commissioner Holm asked how much money was available from the State in tax credits. Mr.LaFave replied$9.0m in credits and$80.0m in bonding capacity. There are ample resources, but they are very competitive. Chairperson Gabel asked if there would be on-site management 24/7. Mr. LaFave replied yes, plus every unit will have a wash and dryer, community rooms, underground parking, rent out areas, outdoor amenities including a pool, green space and playground. Jim Casserly, Development Consultant, said that in the end there will be three separate closings, notes and ownerships. Commissioner Holm asked for explanation of the tax increment above the value from the date it was purchased. Mr. Casserly replied that the property tax is exempt now and when it is sold to a private sector the property will be revalued and that will become the base for that portion of the tax increment Housing and Redevelopment Authority Meeting of May 3, 2018 4 district. Taxes would be paid on the sale price and the value over and above will be captured as tax increment. Each parcel will have a separate tax parcel and the district will end in 2042. Chairperson Gabel said that the land currently does not generate any tax revenue so the value will go from zero to the value of the land plus the building. Mr. Casserly replied that the land will be revalued by the accessor and will probably be amount that the Authority paid for it and that will become the base. When the buildings are built and value is added, that will become the tax increment. Commissioner Backlund asked how the 80 parking spots would be handled with Met Council. Mr.Casserly replied that they are working on sorting that out right now. Right now the Authority owns the property and it's a long term lease. MOTION by Commissioner Holm to approve the Redevelopment Agreement — Sherman / NS Rail Station Site. Seconded by Commissioner Eggert. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON GABEL DELCARED THE MOTION CARRIED UNANIMOUSLY 4. Locke Park Pointe—RFP Phase 2 Paul Bolin, HRA Executive Assistant Director, stated that the Authority issued RFP's for the second phase of the Locke Park Pointe project in January and on February 16th received proposals from the Pulte Group and Alatus. After thoroughly reviewing both of the proposals it became apparent that the Alatus project was not financially viable and that the Pulte project was not architecturally appealing. After follow-up discussions with Pulte, it was det that they do not appear to have much flexibility in the design of their townhome products and that the Authority should take some time to talk with other townhome builders. The Authority and City Staff have met with a number of builders interested in the property. Staff is waiting for more detailed information from them and anticipate brining some very nice options to the Authority shortly. Staff recommends the Authority adopt a motion to "not accept the responses made to the Locke Park Pointe Phase 2 Request for Proposals." MOTION by Commissioner Backlund to not accept the responses made to the Locke Park Point Phase 2 Request for Proposals. Seconded by Commissioner Eggert. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY Informational Items: 1. Housing Programs Update Housing and Redevelopment Authority Meeting of May 3, 2018 5 Paul Bolin,HRA Executive Assistant Director,reported that one CEE loan closed in April making three year to date; there were no remodel advisor visits for a total of two year to date. There were five Home Energy Squad visits for a total of 18 year to date. There will be some changes to the loan programs to encourage more reinvestments in the housing stock and staff will bring that forward to the June meeting. Adjournment: MOTION by Commissioner Eggert to adjourn. Seconded by Commissioner Holm. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:49 P.M. Respectfully submitted, Krista Peterson Recording Secretary ‘ ACTION ITEM WV I HRA REGULAR MEETING CIA nf Fridley JUNE 7, 2018 DATE: May 30, 2018 TO: Wally Wysopal, City Manager/ HRA Executive Director��2;/ 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 Pat Gabel (Chair) June 2023 Bill Holm June 2022 Gordon Backlund June 2021 Stephen Eggert (Vice Chair) June 2020 Kyle Mulrooney June 2019 Recommendation Staff recommends that the Authority elect a Chair and Vice Chair, as required by the Authority's by-laws, to serve through June 2019. „ Fr ACTION ITEM F HRA MEETING OF JUNE 7, 2018 DATE: June 7, 2018 TO: Wally Wysopal, City Manager FROM: Paul Bolin, Assistant Executive HRA Director SUBJECT: Northern Stacks VIII TIF Request Hyde Development has requested the Authority's assistance to clean up contaminated soils, for what will be known as Northern Stacks VIII. This is the building located at 5101 Industrial Boulevard, adjacent to Northern Stacks. t its `: - , 1 . }p x Attached is a memorandum from Attorney Casserly, the TIF Plan, contract for private development, and resolutions for approval of the district and development contract. Staff, Hyde Development and Attorney Casserly will be available to answer questions on Thursday night. MO N ROE 7760 France Avenue South i 952.885.5999 41 MOXNESS Suite 700 F 952.885.5969 Minneapolis,MN 55435-5844 www.MMBLawFirm.com BERG James R.Casserly jcasserly@mmblawfirm.com Direct 962.885.1296 MEMORANDUM To: Housing and Redevelopment Authority in and for the City of Fridley Attn: Wally Wysopal, Executive Director Attn: Paul Bolin, Assistant Executive Director From: James R. Casserly, Esq. Vickie L. Loher-Johnson, Esq. Date: May 31, 2018 Re: Stacks VIII, LLC Our File No. 9571-90 INTRODUCTION Paul Hyde, through his limited liability company, Stacks VIII, LLC (the "Redeveloper") is developing the property at 5101 Industrial Boulevard NE (the former All Temp Building). The site has significant contamination and the building requires major renovation to maximize its potential. To assist with the remediation, the Redeveloper is securing a grant from the Department of Employment and Economic Development ("DEED") in the amount of $432,000 and the Metropolitan Council in the amount of $250,000. The Redeveloper is also contributing $267,000 of its funds for the remediation and is requesting that the Authority contribute $660,000 through a pay-as-you-go Revenue Note. In addition, the Redeveloper is investing approximately $9.7 Million in the acquisition and renovation of the building. The attached documents allow the City and the HRA to create a Tax Increment Financing District and to provide assistance through a Contract for Private Redevelopment. The documents include the following: 1. Tax Increment Financing Plan No. 24 (the "Plan"); 2. An HRA Resolution approving the Plan; 3. City Resolution approving the Plan; 4. Contract for Private Redevelopment between the HRA and the Redeveloper (the "Contract"); and 5. A Resolution authorizing execution of the Contract; 6. A Tax Increment Analysis with no inflation; and 7. A Tax Increment analysis with an inflation of 2.5% per annum. TAX INCREMENT FINANCING PLAN NO. 24 ("TIF Plan") The Plan has the normal provisions but the type of district is unusual in that it is for a Soils Condition District. Revenues from a Soils Condition District may only be spent on the cost of remediation in accordance with a MPCA approved Development Action Response Plan ("DARP" or "RAP") including testing, preparation of the RAP and administrative expenses. Subsection 26.6 of the Plan and the "But For" Analysis attached as an Exhibit XXVI-D describe in detail the use of the funds and the need for assistance. A Soils Condition District has a maximum duration of 21 years and a Tax Increment Analysis prepared for the Plan is Section XXVI.1-C. The budget for the Tax Increment District is Exhibit 1-C. In the Plan we try to use maximum amounts in the event of unforeseen circumstances. Our analysis suggests there is substantially more increment than needed for the Revenue Note and this will be discussed more fully later in the memo. The HRA Resolution is the standard resolution and if the HRA wishes to proceed with creating the Tax Increment Financing District No. 24, it needs to adopt this resolution. The Resolution for the City is also a standard resolution. However, some of the findings are significantly different. Please note Finding Nos. 1 and 2 of Exhibit B on page 6. Finding No. 1 provides the rationale for establishing a Soils Condition District and describes the eligible costs that may be reimbursed with the TIF Plan. Finding No. 2 of Exhibit B on page 7 describes the environmental and redevelopment activities that are anticipated and the increase in the amount of market value as a result of those activities. CONTRACT FOR PRIVATE REDEVELOPMENT ("the Contract") The Contract is very similar to other contracts that the Authority has adopted previously. Particularly the one involving the Northern Stacks project immediately to the south of this project. However, this Contract is much simpler: 1. There is one parcel of land. 2. The Tax Increment may only be spent on very defined eligible expenses which are described in the DARP and are referred to in the Contract as Site Improvements. 3. Only one Revenue Note will be issued as provided for in Section 3.5 of the Contract. That Note will have an interest rate of 5.75% per annum and will be in the maximum amount of$660,000. 2 4837-6574-7559,v.1 4. The Redeveloper must prove up the expenses in order for the Revenue Note to be issued (See Section 3.5(b) of the Contract). 5. The project should be should be completed within a year and the Contract allows for completion to be no later than December 31, 2019 (See Section 4.2 of the Contract). The Authority will also assist the Redeveloper in securing grants from DEED and the Met Council and will supervise the disbursements of those grants. All of this is provided in Section 3.4 of the Contract. When the project is completed and the City issues a Certificate of Occupancy, then the HRA will issue its Certificate of Completion (Section 4.3) provided that the Redeveloper has proven up its expenses in accordance with the Contract. If the Authority wishes to approve the Contract with the Redeveloper, then it needs to adopt the attached Resolution. T.I. ANALYSIS Attached are two tax increment.analyses. One with no inflation and another with 2.5% per annum inflation. Column J in both analyses shows the cumulative balance of the present value. In other words, with the assumptions used in the analysis, the present value of the total TI received would be reflected in Column (1). The assumptions used in the tax increment analyses are that the market value of the parcel will increase approximately$3.8 Million, to a total market value of$10.5 Million, a tax rate of 1.17984, and a present value rate of 5.75%. In the no inflation analysis, $660,000 could be paid off in approximately 13 years (12/01/2033); in the 2.5% inflation analysis, the $660,000 could be paid off in approximately 10 years (12/01/2030). CONCLUSION There is a clear need for the use of tax increment. If the site is not improved, there is little opportunity for any increase in market value given the cost of remediation and renovation. With the grants from the Met Council, DEED, TI from the Authority, and investment by the Redeveloper, then this site should have a substantial increase in market value and allow the Authority and the City to have a remediated site, a more valuable and improved building, and a substantial increase in revenues to all the taxing jurisdictions when the Revenue Note has been paid. JRC/jw 3 4837-6574-7559,v. 1 DRAFT: May 25, 2018 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between the HOUSING AND REDEVELOPMENT AUTHORITY In and For THE CITY OF FRIDLEY, MINNESOTA And STACKS VIII LLC This document was drafted by: James R. Casserly, Esq. Monroe Moxness Berg PA 7760 France Avenue So. Suite 700 Minneapolis, MN 55435 952-885-5999 TABLE OF CONTENTS Page ARTICLE I Definitions Section 1.1 Definitions 6 ARTICLE II Representations and Warranties Section 2.1 Representations by the Authority 9 Section 2.2 Representations and Warranties by the Redeveloper 9 ARTICLE III Undertakings of Authority and Redeveloper Section 3.1 Undertakings 12 Section 3.2 Relocation 12 Section 3.3 Environmental Undertakings 12 Section 3.4 Grant Disbursement 13 Section 3.5 Issuance of Note 14 Section 3.6 Business Subsidy Provisions 15 Section 3.7 Repayment of DEED or Met Council Grants 15 Section 3.8 Other Grants 15 ARTICLE IV Construction of Minimum Improvements; Records; Reports Section 4.1 Construction of Minimum Improvements 16 Section 4.2 Completion of Construction 16 Section 4.3 Certificate of Completion 16 Section 4.4 Reports 17 Section 4.5 Records 17 Section 4.6 Acknowledgments 17 Section 4.7 Contract Requirements 17 ARTICLE V Insurance Section 5.1 Insurance 18 ARTICLE VI Prohibitions Against Assignment and Transfer Section 6.1 Representation as to Redevelopment 19 Section 6.2 Prohibition Against Transfer of Property and Assignment 19 of Agreement Section 6.3 Assignment of Note 19 ARTICLE VII Events of Default Section 7.1 Events of Default Defined 21 Section 7.2 Remedies on Default 22 Section 7.3 No Remedy Exclusive 22 Section 7.4 No Implied Waiver 22 Section 7.5 Agreement to Pay Attorney's Fees and Expenses 22 ARTICLE VIII Tax Increment; Taxes; Assessment Agreement Section 8.1 Pledge of Tax Increment 23 Section 8.2 Right to Collect Delinquent Taxes 23 Section 8.3 Review of Taxes 23 ARTICLE IX Additional Provisions Section 9.1 Conflict of Interests 24 Section 9.2 Restrictions on Use 24 Section 9.3 Titles of Articles and Sections 24 Section 9.4 Notices and Demands 24 Section 9.5 Indemnification of Authority 25 Section 9.6 Counterparts 25 Section 9.7 Law Governing 25 Section 9.8 Expiration 25 Section 9.9 Provisions Surviving Rescission or Expiration 25 Section 9.10 Termination 25 Section 9.11 Authority Event of Default and Remedies 26 SIGNATURES 27 ii SCHEDULE A Description of Redevelopment Property 29 SCHEDULE B Site Plan 30 SCHEDULE C Site Improvements 31 SCHEDULE D Form of Note 32 SCHEDULE E Form of Certificate of Completion 36 SCHEDULE F Draw Request 38 iii CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the day of June,2018 by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), a political subdivision of the State of Minnesota organized under the Constitution and laws of the State of Minnesota and Stack VIII LLC, a Minnesota limited liability company organized 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 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 adopted, pursuant to Minnesota Statutes, Sections 469.001 et seq. (the"Act"), a development program known as the Modified Redevelopment Plan (the "Redevelopment Plan") and established Redevelopment Project No. 1 (the "Project Area") in the City to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, in connection with the Project Area, Tax Increment Financing District No. 24 (the "Tax Increment District") has been approved by the Authority and the City and the Tax Increment Financing Plan will be forwarded to Anoka County and filed with the State, pursuant to the Minnesota Tax Increment Financing Act contained in Minnesota Statutes, Sections 469.174 to 469.1799; WHEREAS, in connection with the Project Area, Hazardous Substance Subdistrict No. 20A (the "HSS") has been approved by the Authority and the City and the Tax Increment Financing Plan will be sent to Anoka County for certification and to the State for filing, pursuant to the Minnesota Tax Increment Financing Act contained in Minnesota Statutes, Sections 469.174 to 469.1799; and WHEREAS, major objectives in establishing the Project Area are to: 1. Promote and secure the prompt redevelopment of certain property in the Project Area, which property is not now in its highest and best use in a manner consistent with the City's Comprehensive Plan and with a minimum adverse impact on the environment, and thereby promote and secure the redevelopment of other land in the City. 2. Provide additional employment opportunities within the Project Area and the City for residents of the City and the surrounding area,thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 4 3. Prevent the deterioration and secure the increase of commercial/industrial property subject to taxation by the City, the Independent School Districts, Anoka County, and the other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs required to be provided by them. 4. Provide for the financing and construction for public improvements in and adjacent to the Project Area necessary for the orderly and beneficial redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirable industrial, office, and other appropriate redevelopment in the Project Area so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, and redevelopment, whenever possible. 7. Create a desirable and unique character within the Project Area through quality land use alternatives and design quality in new or remodeled buildings. 8. Encourage and provide maximum opportunity for private redevelopment of existing areas and structures which are compatible with the Project Area; and WHEREAS, in order to achieve the objectives of the Authority and City in creating the Project Area and adopting the Redevelopment Plan, the Authority is prepared to provide financial and other assistance to the Redeveloper in accordance with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 5 ARTICLE I Definitions Section 1.1 Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Section 469.001 et 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. "Available Tax Increment"means 90%of the Tax Increment from the Tax Increment District. "Certificate of Completion" means the certification, in the form of the certificate contained in Schedule E 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. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector or the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4) cross sections of each (length and width); (5) elevations(all sides, except as to a side of an existing structure where no construction is to take place); (6)facade and landscape plan; and (7)such other plans of supplements to the foregoing plans as the City may reasonably request. "Council" means the Council of the City. "County" means the County of Anoka, Minnesota. "DEED" means the Minnesota Department of Employment and Economic Development. "Development Action Response Plan" or "Development Response Action Plan" or "Voluntary Response Action Plan" or"VRAP" or"DRAP" means the plan approved by the MPCA to protect the public health,welfare and environment in accordance with Minnesota Statutes, Section 469.174, Subdivision 17 and the applicable statues for the MPCA. "Eligible Costs" means the costs of the Site Improvements. 6 "Event of Default"means an action by the Redeveloper described in Section 5.1. of this Agreement. "Grant Eligible Costs"means the costs eligible for payment from grants provided by DEED or the Met Council. "Met Council" means the Metropolitan Council. "Minimum Improvements" means the remediation of the Redevelopment Property and the rehabilitation of an approximately 177,657 sq. ft. office warehouse building for a total project cost of approximately$11.3M as shown on the Site Plan. The square feet are estimates and subject to change as necessary to comply with Council and Planning Commission requirements, or the approved DRAP. "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes, Sections 116D.01 et seq., as amended. "MPCA" means the Minnesota Pollution Control Agency. "National Environmental Policy Act"means the federal law located at 42 U.S.C. Sub. Sect. 4331 et seq., as amended. "Note" means the Limited Revenue Tax Increment Note in the principal amount of $660,000 substantially in the form of Schedule D attached to this Agreement, and to be made by the Authority payable to the order of the Redeveloper or its permitted assigns in accordance with the terms of this Agreement. "Party" means a party to this Agreement. "Project Area" means Redevelopment Project No. 1, as amended, as established in accordance with the Act. "Redeveloper" means Northern Stacks VIII LLC, a limited liability company organized under the laws of the State of Minnesota and its permitted successors and assigns. "Redevelopment Plan" means the modified redevelopment plan adopted by the Authority for its Redevelopment Project No. 1, as amended. "Redevelopment Project" means the Redevelopment Property and the Minimum Improvements. "Redevelopment Property" means the real property described on Schedule A of this Agreement. 7 "Relocation Costs" means the cost of relocation services, benefits, and other costs to which owners, tenants, or others are entitled in accordance with State and Federal laws arising from the acquisition and redevelopment of the Redevelopment Property. "Site Improvements" means those improvements described on Schedule C as qualified improvements of the Redevelopment Property. "Site Plan" means the plans attached hereto on Schedule B showing the proposed nature and location of the Minimum Improvements. "State" means the State of Minnesota. "Tax Increment"means only that portion of the real estate taxes paid with respect to the Redevelopment Property which is remitted to the Authority as tax increment from the Tax Increment District pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended and as it may be amended. "Tax Increment District" means Tax Increment Financing District No. 24 which is located within the Project Area and has been approved by the Authority and the City. "Tax Increment Plan" means the tax increment financing plan adopted by the Authority for its Tax Increment Financing District No. 24. "Termination Date" means the date defined in Section 9.10 of this Agreement. "Unavoidable Delays" means delays which are the result of strikes, unforeseeable and unavoidable casualties to the Minimum Improvements,the Redevelopment Property or the equipment used to construct the Minimum Improvements, delays which are the result of governmental actions, delays which are the result of judicial action commenced by third parties, citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. "Voluntary Response Action Plan"or"VRAP"—see Development Action Response Plan above. 8 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein: (a) The Authority is a public body duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has approved the Redevelopment Plan in accordance with the terms of the Act. (c) The Authority has approved the Tax Increment District and the Tax Increment Plan, pursuant to the Tax Increment Act. (d) The Authority proposes to assist the Redeveloper with the Site Improvement Costs in accordance with the Tax Increment Plan, Redevelopment Plan and this Agreement. (e) The Authority proposes to make the Note payable to the Redeveloper in accordance with the provisions of this Agreement and to pledge Tax Increment generated by the Tax Increment District to the payment of the Note according to its terms. (f) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. (g) The Authority will assist the Redeveloper in seeking available grants and other funding sources. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper will remediate, rehabilitate, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (b) The Minimum Improvements will be an allowed use under the zoning ordinance of the City. (c) As of the date of execution of this Agreement, the Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any 9 environmental law or regulation. As of the date of execution of this Agreement, the Redeveloper is aware of no facts, the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act. (d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper is a limited liability company organized under the laws of the State. (f) The Redeveloper agrees that it will cooperate with the Authority and shall indemnify the Authority against all costs, including the costs of defense incurred by the Authority through an attorney reasonably acceptable to the Authority and Redeveloper, with respect to any litigation commenced by third parties in connection with Redeveloper's failure to perform according to the terms and conditions of this Agreement. (g) The financing arrangements including grants from regional or State authorities which the Redeveloper has obtained or will obtain, to finance acquisition or construction of the Minimum Improvements, together with financing provided by the Authority pursuant to this Agreement, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (h) The construction of the Minimum Improvements, in the opinion of the Redeveloper,would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the use of tax increment financing provided by the City pursuant to this Agreement. (i) For the construction of the Minimum Improvements the Redeveloper will pay wages in accordance with the prevailing wage rate as that term is defined in Minnesota Statutes, Section 177.42, Subdivision 6 and in the City Resolution No. 25 - 2090. The City's Public Works Department shall be responsible for monitoring Redeveloper's compliance of this requirement. (j) The Redeveloper shall not allow any use or occupancy of the Redevelopment Property or Minimum Improvements by a "Sexually Orientated Business" as defined in Ordinance No. 965 of the City's Code. (k) The Redeveloper will reimburse the Authority for Relocation Costs. The Redeveloper may, in lieu of funding such costs, provide a written waiver by the owner or tenant. Such waiver must be in a form acceptable to the Authority, provided that no such waiver shall work to release the Redeveloper from its obligation to reimburse the Authority 10 for all claims for Relocation Costs in the event that such waiver shall be determined invalid. Any Relocation Costs reimbursed by Redeveloper to the Authority are reimbursable Eligible Costs. (I) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. • 11 • ARTICLE III Undertakings of Authority and Redeveloper Section 3.1. Undertakings. (a) The Redeveloper shall seek grants and shall construct or cause to be constructed the Minimum Improvements and the Site Improvements in accordance with the terms of this Agreement. (b) The Authority shall seek grants and disburse the proceeds in accordance with the terms of this Agreement. Section 3.2. Relocation. (a) The Redeveloper warrants and represents that it will pay, or obtain written relocation waivers in a form satisfactory to the Authority regarding all Relocation Costs. Any Relocation Costs paid by the Redeveloper are not reimbursable Site Improvements. (b) Without limiting the Redeveloper's obligations under Section 9.5, the Redeveloper will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, employees, agents, and contractors from any and all claims for benefits or payments arising out of the relocation or displacement of any person from the Redevelopment Property as a result of the implementation of this Agreement. Section 3.3. Environmental Undertakings. (a)The parties acknowledge that MPCA has received the Redeveloper request for one or more VRAPs providing for remediation of hazardous wastes and contaminants on the Redevelopment Property. Redeveloper shall promptly undertake remediation and any other actions required under the VRAPs, subject to the reimbursement as further described in this Agreement. (b) The Redeveloper acknowledges that the Authority makes no representations or warranties as to soil and environmental condition on the Redevelopment Property or the fitness of the Redevelopment Property for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property, and that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Redevelopment Property or poor soil conditions nor imposes any obligation on such parties to participate in any cleanup of the Redevelopment Property and or correction of any soil problems (other than the financing described in this agreement). (c) Without limiting its obligations under Section 9.5 of this Agreement the Redeveloper further agrees that it will indemnify,defend, and hold harmless the Authority, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Redevelopment Property unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnities. Further, Redeveloper expressly agrees that the provisions of the VRAP are incorporated herein by 12 reference. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.4. Grant Disbursement. (a) To finance a portion of the environmental remediation costs on the Redevelopment Property, the Authority intends to obtain grants from DEED and the Met Council. (b) The Authority will pay or reimburse the Redeveloper for Grant-Eligible Costs from and to the extent of the grant proceeds from DEED and the Met Council in accordance with the terms of the DEED Grant Agreement and the Met Council Grant Agreement, respectively, and the terms of this Section. Notwithstanding anything to the contrary herein, if Grant-Eligible Costs exceed the amount to be reimbursed under this Section, such excess shall be the sole responsibility of the Redeveloper except to the extent reimbursable under the Note. (c) All disbursements will be made subject to the conditions precedent that on the date of such disbursement: (1) The Authority has received a written statement from the Redeveloper's authorized representative certifying with respect to each payment: (a)that none of the items for which the payment is proposed to be made has formed the basis for any payment previously made under this Section (or before the date of this Agreement); (b)that each item for which the payment is proposed is a Grant-Eligible Cost, including a statement specifying which grant is the eligible funding source; and (c) the Redeveloper reasonably anticipates completion of the Grant-Eligible Costs and the Minimum Improvements in accordance with the terms of this Agreement. (2) No Event of Default under this Agreement or event which would constitute such an Event of Default but for the requirement that notice be given or that a period of grace or time elapse, shall have occurred and be continuing. (3) No license or permit necessary for undertaking the Grant-Eligible Costs or constructing the Minimum Improvements shall have been revoked, or the issuance thereof subjected to a challenge before any court or other governmental authority having or asserting jurisdiction there over that has been finally determined in a manner adverse to Redeveloper's obligations hereunder. (d) Whenever the Redeveloper desires a disbursement to be made hereunder, which shall be no more often than monthly,the Redeveloper shall submit to the Authority a draw request in the form attached as Schedule F duly executed on behalf of the Redeveloper accompanied by invoices or other comparable evidence that the cost has been incurred and paid, or is payable by Redeveloper. Each draw request shall constitute a representation and warranty by the Redeveloper that all representations and warranties set forth in this Agreement are true and correct as of the date of such draw request. 13 • (e) If the Redeveloper has performed all of its agreements and complied with all requirements theretofore to be performed or complied with hereunder, including satisfaction of all applicable conditions precedent contained in Article III hereof, the Authority shall make a disbursement to the Redeveloper in the amount of the requested disbursement or such lesser amount as shall be approved, within twenty (20) Business Days after the date of the Authority's receipt of the draw request, or, if later, upon receipt of grant proceeds from DEED or the Met Council, as the case may be. Each disbursement shall be paid from the grant designated by the Authority at its discretion, subject to the Authority's determination that the relevant Grant-Eligible Cost is payable from the designated source under the DEED Grant Agreement or the Met Council Grant Agreement and this Agreement. (f) The making of the final disbursement by the Authority under this Section shall be subject to the condition precedent that the Redeveloper shall be in compliance with all conditions set forth in this Section and further, that the Authority shall have received a lien waiver from each contractor for all work done and for all materials furnished by it for the Grant-Eligible Costs attributable to such Phase. (g) The Authority may, in its sole discretion,without notice to or consent from any other party, waive any or all conditions for disbursement set forth in this Article. However, the making of any disbursement prior to fulfillment of any condition therefor shall not be construed as a waiver of such condition, and the Authority shall have the right to require fulfillment of any and all such conditions prior to authorizing any subsequent disbursement. Section 3.5. Issuance of Note. (a) The Redeveloper and Authority agree and understand that Redeveloper expects to incur certain costs in excess of proceeds of the grants described in Section 3.4. In order to reimburse the Redeveloper for such Eligible Costs,the Authority shall issue and the Redeveloper shall purchase the Note.The terms of the Note, including maturity and payment dates, will be substantially those set forth in the form of the Note shown in Schedule D. The Note will bear interest at 5.75% per annum. The Note will be dated as of the date of delivery, and interest will accrue from such date. (b) Before issuance and delivery of the Note, Redeveloper must submit to the Authority a certificate signed by the Redeveloper's duly authorized representative, containing the following: (i) a statement that each cost identified in the certificate is an Eligible Cost, incurred after the date of this Agreement and that no part of such cost has been included in any previous certification under this Section or in any draw request under Section 3.4; (ii)evidence that each identified cost has been paid or incurred by or on behalf of the Redeveloper; (iii) a statement that no uncured Event of Default by the Redeveloper has occurred and is continuing under the Agreement. The Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require. The Authority will deliver the Note upon receipt and approval of certificates evidencing the relevant Eligible Costs in at least the principal amount of the Note. 14 (c) The Redeveloper understands and acknowledges that the Authority makes no representations or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the Note will be sufficient to pay the principal and interest on any Note.Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. If the Eligible Costs exceed the principal amount of the Note, such excess costs are the sole responsibility of Redeveloper. (d) In addition to the limitations above, the following limitations shall apply to the issuance of the Note: (1) Only Available Tax Increment shall be pledged. (2) The term of any Note may not extend more than 32 days beyond the duration of the Tax Increment District. (3) Any amounts unpaid at the maturity date shall be deemed paid in full. Section 3.6. Business Subsidy Provisions. (a) The parties agree and understand that the assistance provided to Redeveloper in this Agreement (including both grant proceeds and issuance of Notes) does not constitute a "business subsidy" under the Business Subsidy Act, because the grants and Note represent assistance that is exempt from the Business Subsidy Act under Sections 116J.993, Subdivision 3, clauses (4) and (8). (b) Redeveloper acknowledges that under Section 116J.994, subdivision 7(c)of the Business Subsidy Act, the Redeveloper is nevertheless required to file annual reports containing the information described therein. If the Redeveloper fails to timely file any required report, the Authority will mail the Redeveloper a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the Authority a penalty of$100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section is $1,000. Section 3.7. Repayment of DEED or Met Council Grants. The Redeveloper shall repay to the Authority any portion of such grants that the Authority is required to repay for DEED or Met Council Grants resulting from Redeveloper's actions in violation of the terms of the applicable grant agreement. Section 3.8. Other Grants. In the event the Authority is able to obtain grants from any other source, the disbursement of such grant proceeds shall be subject to the terms of this Agreement and in particular Section 3.4 Grant Disbursement. 15 ARTICLE IV Construction of Minimum Improvements; Records; Reports Section 4.1. Construction of Minimum Improvements. Subject to the limitations set forth herein, the Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the Construction Plans approved by the City and the Site Plan. Section 4.2. Completion of Construction. Subject to Unavoidable Delays, the Parties anticipate the start of construction by December 31, 2018, and the substantial completion of the construction of the Minimum Improvements by December 31, 2019. 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 and the Site Plan. The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall, subject to the limitations set forth in Section 4.1, diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction is anticipated to be completed within the period specified in this Section 4.2 of this Agreement. Section 4.3. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating to the obligations of the Redeveloper to construct the Minimum Improvements, the Authority will furnish the Redeveloper with a Certificate of Completion. Such certification by the Authority shall be (and it shall be so provided in the certification itself)a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements. (b) If the Authority shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.3 of this Agreement,the Authority shall,within ten (10) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete a building that is part of the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be substantially completed when the Redeveloper has received an occupancy permit from the City's building inspector, which permit shall not be unreasonably withheld. 16 Section 4.4. Reports. The Redeveloper shall submit to the Authority the information necessary to comply with all grant agreements including DEED and the Met Council agreements. Section 4.5. Records. The Authority, the Met Council, DEED, the Legislative Auditor and the State Auditor's office, through any authorized representatives, shall have the right after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to Eligible Costs and the Minimum Improvements. Redeveloper shall also use best efforts to cause the contractor or contractors, all sub-contractors and their agents and lenders to make their books and records relative to such costs to the Authority, upon reasonable notice, for inspection,examination and audit. Redeveloper shall maintain such records and provide such rights of inspection for a period of six years after issuance of the Certificate of Completion for the Minimum Improvements. Section 4.6. Acknowledgments. During work on the Minimum Improvements, Redeveloper must post a sign on the site containing the following or similar language: This project was financed in part through the Fridley Housing and Redevelopment Authority, with grant funds provided by the Metropolitan Council Livable Communities Fund, and by grants from the Minnesota Department of Employment and Economic Development. Section 4.7. Contract Requirements. Redeveloper shall undertake all work related to the Eligible Costs and the Minimum Improvements in compliance with the DEED Grant Agreement, the Met Council Grant Agreement and all applicable federal and state laws, including without limitation all applicable state and federal Occupational Safety and Health Act regulations, especially the federal Hazardous Waste Operations and Emergency Response standards under 29 C.F.R. Sections 1910.120 and 1926.65. Any subcontractors retained by Redeveloper shall be subject to the requirements of this Section, which shall be included in any subcontracts between the Redeveloper and subcontractor. • 17 ARTICLE V Insurance Section 5.1. Insurance. (a) The Redeveloper will provide and maintain or cause to be provided or maintained at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the City, furnish the City with proof of payment of premiums on: (1) 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 City shall be protected in accordance with a clause in form and content reasonably satisfactory to the City; (2) comprehensive general liability insurance together with an owners' and contractors'p protective liability 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 (3) workers' compensation insurance, with statutory coverage. (b) All insurance required by this Article 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 City policies evidencing all such insurance, ora certificate(s)or binder(s) of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to the Redeveloper and the City at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen(15)days prior to the expiration of any policy,the Redeveloper shall furnish the City with evidence satisfactory to the City that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (c) On an annual basis, the Redeveloper shall provide the City with evidence satisfactory to the City that the Redeveloper's subcontractors are maintaining workers' compensation insurance with statutory coverage. 18 ARTICLE VI Prohibitions Against Assignment and Transfer Section 6.1. Representation as to Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. The Redeveloper further recognizes that, in view of(a)the importance of the redevelopment of the Redevelopment Property to the general welfare of the Authority, and (b)the substantial financing that has been made available by the Authority for the purpose of making such redevelopment possible, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper further recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2. Prohibition Against Transfer of Property and Assignment of Agreement. Also, for the foregoing reasons the Redeveloper represents and agrees that prior to the date of the issuance of the Certificate of Completion, except for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority which shall not be unreasonably withheld, unless the Redeveloper remains liable and bound by this Agreement in which event the Authority's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. Notwithstanding the foregoing, the Redeveloper may transfer the Redevelopment Property to any corporation, partnership or entity controlling, controlled by, or under common control with the Redeveloper. Section 6.3. Assignment of Note. The Redeveloper may assign and pledge a Note to secure any loan secured by a portion of the Redevelopment Property, and may transfer a Note to any entity controlling, controlled by or under common control with the Redeveloper. Otherwise, no Note shall be assignable nor transferable without the prior written consent of the Authority; provided, however, that such consent shall not be unreasonably withheld or delayed if: (a)the assignee or transferee delivers to the Authority a written instrument acknowledging the limited nature of the Authority's payment obligations under the Note, and (b)the assignee or transferee executes and delivers to the Authority a certificate, in form and substance satisfactory to the Authority, pursuant to which, among other things, such assignee or transferee represents that (i) the Note is being acquired for investment for such assignee's or transferee's own account, not as a 19 nominee or agent, and not with a view to the resale or distribution of any part thereof, (ii) the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same, (iii) the assignee or transferee is an "accredited investor"within the meaning of Rule 501 of Regulation D under the Securities Act of 2033, as amended, (iv) the assignee or transferee, either alone or with such assignee's or transferee's representatives, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the prospective investment in the Note and the assignee or transferee is able to bear the economic consequences thereof, (v)in making its decision to acquire the Note,the assignee or transferee has relied upon independent investigations and,to the extent believed by such assignee or transferee to be appropriate, the assignee's or transferee's representatives, including its own professional, tax and other advisors, and has not relied upon any representation or warranty from the Authority or the City, or any of their officers, employees, agents, affiliates or representatives with respect to the value of the Note, (vi) neither the Authority nor the City has made any warranty, acknowledgment or covenant, in writing or otherwise, to the assignee or transferee regarding the tax consequences, if any, of the acquisition and investment in the Note, (vii) the assignee or transferee or its representatives have been given a full opportunity to examine all documents and to ask questions of, and to receive answers from, the Authority and its representatives concerning the terms of the Note and such other information as the assignee or transferee desires in order to evaluate the acquisition of and investment in the Note, and all such questions have been answered to the full satisfaction of the assignee or transferee, (viii) the assignee or transferee has evaluated the merits and risks of investment in the Note and has determined that the Note is a suitable investment for the assignee or transferee in light of such party's overall financial condition and prospects, (ix) the Note will be characterized as a "restricted security" under the federal securities laws because the Note is being acquired in a transaction not involving a public offering and that under such laws and applicable regulations such security may not be resold without registration under the Securities Act of 1933, as amended, except in certain limited circumstances, and (x) no market for the Note exists or is intended to be developed. 20 ARTICLE VII Events of Default Section 7.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the following events: (a) Failure by the Redeveloper to timely pay all ad valorem real property taxes assessed with respect to the Redevelopment Property. (b) Failure by the Redeveloper to complete the Site Improvements, or the Minimum Improvements pursuant to the terms, conditions and limitations of this Agreement. (c) Failure by the Redeveloper to submit to the Authority the documents required by Articles III and VI. (d) Failure by the Redeveloper to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (e) If before the issuance of Certificate of Completion the Redeveloper shall. (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or (B) make an assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; or (D) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper, as bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the Redeveloper, or of the Minimum Improvements, or part thereof, shall be appointed in any proceeding brought against the Redeveloper, and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. 21 Section 7.2. Remedies on Default. Whenever any Event of Default referred to in Section 7.1 occurs and is continuing, the Authority, as specified below, may take any one or more of the following actions after providing sixty (60) days' written notice to the Redeveloper, but only if the Event of Default has not been cured within said sixty(60)days. (a) The Authority may suspend its performance under this Agreement including payment of the Notes until it receives assurances from the Redeveloper,deemed adequate by the Authority, that the Redeveloper has cured its default and will continue its performance under this Agreement. (b) The Authority may cancel and rescind the Agreement. (c) The Authority may withhold a Certificate of Completion. Section 7.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 7.4. No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 7.5. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Redeveloper herein contained, the Redeveloper agrees that it shall, on demand therefor, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. 22 Article VIII Tax Increment; Taxes; Assessment Agreement Section 8.1. Pledge of Tax Increment. The Authority shall pledge the Tax Increments to the payment of the Note in accordance with the terms of this Agreement. Section 8.2. Right to Collect Delinquent Taxes.The Redeveloper acknowledges that the Authority is providing substantial aid and assistance in furtherance of the development through the issuance of the Note. The Redeveloper understands that the Tax Increment pledged to payment on the Note is derived from real estate taxes on the Redevelopment Property, which taxes must be promptly and timely paid. To that end, the Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 8.3. Review of Taxes. The Redeveloper agrees that prior to the Termination Date it will not cause a reduction in the real property taxes paid in respect of the Redevelopment Property through willful destruction of the Redevelopment Property or any part thereof; provided that the foregoing restriction shall not apply to Redeveloper's demolition of the existing improvements in the normal course of redeveloping the Redevelopment Property. 23 Article IX Additional Provisions Section 9.1. Conflict of Interests. No member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership,or association in which he is, directly or indirectly, interested. Section 9.2. Restrictions on Use. The Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. Section 9.3. Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.4. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested,transmitted by facsimile, delivered by a recognized overnight courier or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the mailing or delivery address the Redeveloper will,from time to time,furnish to the Authority. The Redeveloper's current address is as follows: Northern Stacks VIII LLC 1350 Lagoon Avenue South #920 Minneapolis MN 55408 Attn: Paul Hyde (b) in the case of the Authority, is addressed to or delivered personally to: Housing and Redevelopment Authority City of Fridley 6431 University Avenue N.E. Fridley, Minnesota 55432 Attention: Executive Director 24 Section 9.5. Indemnification of Authority. (1) The Redeveloper releases from and covenants and agrees that the Authority, the City and its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof(hereinafter, for purposes of this Section, collectively the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements or the Redevelopment Property. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Redeveloper agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Redeveloper(or of other persons acting on its behalf or under its direction or control) under this Agreement, or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements or the Redevelopment Property; provided,that this indemnification shall not apply to the warranties made or obligations undertaken by the Authority in this Agreement. (3) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority. Section 9.6. Counterparts. This Agreement is executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.7. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 9.8. Expiration. This Agreement shall expire when the Note is paid in full. Section 9.9. Provisions Surviving Rescission, Termination or Expiration. Sections 2.2, 3.2 and 7.5 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 9.10. Termination. This Agreement shall terminate on its Expiration as provided in Section 9.8 or as provided in Article VII. 25 Section 9.11. Authority Event of Default and Remedies. (a) Authority Event of Default shall be the failure of the Authority to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under the Agreement. (b) Upon the occurrence of an Authority Event of Default, the Redeveloper may take whatever action, including legal, equitable, or administrative action,which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed as of the date first above written. 26 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairman And by Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ANOKA ) On this day of , 2018 before me, a notary public within and for Anoka County, personally appeared and to me personally known who by me duly sworn, did say that they are the Chairman and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota, and acknowledged the . foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page - Redevelopment Contract 27 Dated: NORTHERN STACKS VIII LLC By Its STATE OF MINNESOTA ) ss COUNTY OF ) On this day of ,2018 before me, a notary public within and for County, personally appeared the of Northern Stacks VIII LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public Redeveloper Signature Page - Redevelopment Contract 28 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY Parcel: 27-30-24-12-0046 29 SCHEDULE B SITE PLAN 30 SCHEDULE C SITE IMPROVEMENTS Subject to reimbursement as Eligible Costs within the limitations set forth herein, the Redeveloper will construct and pay for all Site Improvements, including: • Environmental remediation in accordance with the Development Action Response Plan 31 SCHEDULE D Form of Note US $ Fridley, Minnesota , 20_ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA LIMITED REVENUE TAX INCREMENT NOTE STACKS VIII The Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of (the"Owner"), solely from the Available Tax Increment, to the extent and in the manner hereinafter defined, the principal amount of this Note, being Dollars and /100 ($ )(the"Principal Amount"),together with interest of five and seventy-five hundredths percent(5.75%)per annum commencing from the date of issuance of the Note and payable on the dates described below(the"Scheduled Payment Dates") and in the amounts as hereinafter defined (the "Scheduled Payments"). The Scheduled Payment Dates are August 1, 20_, and on the 1st day of February and August thereafter until and including February 1, 2042, unless earlier paid, in accordance with the terms of this Note. Upon 30 days' prior written notice from the Authority to the Owner, the Principal Amount is subject to prepayment at the option of the Authority in whole or in part at any time. Any payments on this Note shall be applied first to accrued interest and the balance to the reduction of principal. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority,which has been issued by the Authority pursuant to and in full conformity with the 32 Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a project, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1. THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY, THE CITY OF FRIDLEY (THE "CITY") OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Scheduled Payment Date the Available Tax Increment which is defined in the Contract for Private Redevelopment By and Between the Authority and the Owner dated as of October 3, 2013 (the "Agreement"). Defined terms, not otherwise defined in the Note, shall have the meaning assigned to them in the Agreement. The Authority shall pay on each Scheduled Payment Date to the Owner the Available Tax Increment. On February 1, 2042, the maturity date of this Note, any unpaid portion shall be deemed to have been paid in full. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. The Authority makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Agreement the Authority elects to terminate the Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Agreement for a fuller statement of the obligations of the Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. 33 The execution and delivery of this Note by the Authority, and the acceptance thereof by the Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this Note as the"Note"(and shall conclusively constitute discharge of the Authority's obligation to issue and deliver the same to the Redeveloper) under the Agreement. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, by its Commission Members, has caused this Note to be executed by the manual signatures of the President and the Treasurer of the Authority and has caused this Note to be dated , 20_. By By Its President Its Treasurer ATTEST: Secretary 34 CERTIFICATE OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued as of the day of , 20_, was on said date registered in the name of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and politic and that, at the request of said Registered Owner of this Note, the undersigned has this day registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. Name of Date of Signature of Registered Owner Registration Secretary , 20_ a 35 SCHEDULE E Form of Certificate of Completion WHEREAS,the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a Minnesota municipal corporation (the "Authority") and Fridley Land LLC, a Minnesota limited liability company (the "Redeveloper") have entered into a Contract for Private Redevelopment (the "Agreement") dated as of June , 2018, regarding certain real property located in Tax Increment Financing District No. 24 in the City (hereinafter referred to and referred to in the Agreement as the "Redevelopment Property"); and WHEREAS, the Agreement contains certain conditions and provisions requiring the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred to and referred to in the Agreement as the"Minimum Improvements"); and WHEREAS, Section 4.3 of the Agreement requires the Authority to provide an appropriate instrument promptly after the substantial completion (as defined in the Agreement) of any building included in the Minimum Improvements so certifying said substantial completion; NOW, THEREFORE, in compliance with said Section 4.3 of the Agreement, this is to certify that the Redeveloper has substantially completed the Minimum Improvements in accordance with the conditions and provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), and this certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct building the Minimum Improvements and the dates for the beginning and completion thereof. Dated: , 20 36 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairman And by Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ANOKA ) On this day of , 2018 before me, a notary public within and for Anoka County, personally appeared and to me personally known who by me duly sworn, did say that they are the Chairman and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page Certificate of Completion 37 SCHEDULE F DRAW REQUEST TO: Housing and Redevelopment Authority in and for the City of Fridley(the"Authority") 6431 University Avenue N.E. Fridley, Minnesota 55432 Attention: Executive Director DISBURSEMENT DIRECTION The undersigned Authorized Representative of Northern Stacks VIII LLC, a Minnesota Limited Liability company (the "Redeveloper") hereby authorizes and requests you to disburse from proceeds of the DEED grant, or the Met Council grant as the case may be, in accordance with the terms of the Contract for Private Redevelopment between the Authority and the Redeveloper, dated as of June , 2018, (the "Agreement"), the following amount to the person and for the following proper Grant-Eligible Costs: 1. Amount: 2. Payee: 3. Purpose: 4. Grant Source (DEED or Met Council): as all defined and provided in the Agreement. The undersigned further certifies to the Authority that (a) none of the items for which the payment is proposed to be made has formed the bases for any payment previously made under Article III of the Agreement(or before the date of the Agreement) or has been submitted as an Eligible Costs under the Agreement; (b)that each item for which the payment is proposed is a Grant-Eligible Cost, eligible for funding from the grant source(s) identified above; and (c) the Redeveloper reasonably anticipates completion of the Grant-Eligible Costs and the Minimum Improvements in accordance with the terms of the Agreement. Dated: Redeveloper's Authorized Representative 4848-7905-9814,v.1 38 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA RESOLUTION NO. A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY MINNESOTA AND NORTHERN STACKS 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 Contract for Private Redevelopment (the "Contract") with Northern Stacks VIII LLC, a Minnesota limited liability company (the "Redeveloper"). Section 2. Findings. 2.01. The Authority hereby finds that it has approved and adopted a development program known as the Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment Program") pursuant to Minnesota Statutes, Section 469.001 et seq., as amended and supplemented from time to time. 2.02 The Authority hereby finds that the Contract promotes the objectives set forth in its Redevelopment Program. Section 3. Authorization for Execution and Delivery. 3.01. The Chairperson and the Executive Director of the Authority (the "Officers") are hereby authorized to execute and deliver the Contract when the following conditions are met: Substantial conformity of the Contract to the form of Contract presented to the Authority as of this date, with such additions and modifications as the Officers may deem desirable or necessary as evidenced by their execution of the Contract. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY this day of , 2018. Chairperson ATTEST: Executive Director 4840-7549-3222,v. 1 2 SECTION XXVI TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 24 (Stacks VIII) Subsection 26.1. Statement of Objectives. See Section I, Subsection 1.5, Statement of Objectives. Subsection 26.2. Modified Redevelopment Plan. See Section I, Subsections 1.2 through 1.15. Subsection 26.3. Parcels to be Included. The boundaries of Tax Increment Financing District No. 23 (the "TIF District") are described on the attached Exhibit XXVI-A and illustrated on Exhibit XXVI-B. Subsection 26.4. Parcels in Acquisition. The Authority may write down or acquire and re-convey real property, or interests therein, within this TIF District or elsewhere within the Project Area, at the time or times as the Authority may determine to be necessary or desirable to assist or implement development or redevelopment within the Project Area or the TIF District. The Authority may acquire any of the parcels described on Exhibit I-A and illustrated on Exhibit I-B by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of the Redevelopment Plan or the TIF Plan. Subsection 26.5. Development Activity for which Contracts have been Signed. As of the date of adoption of the TIF Plan, the Authority intends to enter into Redevelopment Contracts with developers for the activities discussed below. Subsection 26.6. Specific Development Expected to Occur. At this time it is anticipated that the current parcel will be redeveloped to include the following: Environmental Activities: • Remediation of site soils impacted with volatile organic compounds, polycyclic aromatic hydrocarbons and Resource Conservation and Recovery Act metals and construction debris; • Installation of Vapor Treatment System under the existing building floor; and • Construction of new green spaces and utility corridors by removing contaminated soil. Redevelopment Activities: • Relocate semi trailer storage area against the west building façade; • Create new stormwater pond on SW corner of site (currently semi trailer storage); 26-1 • Paint budding Stacks gray; • Add Architectural elements to building to match it to Northern Stacks' design (See attached elevations); • Remove old Roof top unit; • Demolish former 2-story office; • Rebuild existing parking lots and truck courts; • Improve interior floor slabs in areas that have been damaged; • Upgrade sprinkler system to ESFR; and • Replace roof. Upon completion of these activities the rehabilitated building will have approximately 177,657 square feet with an approximate estimated market value of$10.5M. Subsection 26.7. Prior Planned Improvements. After due and diligent search, the Authority has determined that no building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the Authority. Subsection 26.8. Fiscal Disparities. The Council hereby elects the method of tax increment computation set forth in Minnesota Statutes, Section 469.177, Subdivision 3, clause (a) if and when commercial/industrial development occurs within the TIF District. Subsection 26.9. Estimated Public Improvement Costs. The estimated public improvement costs, including interest thereon to be incurred for the benefit of and within the TIF District and the Project Area are set forth on Exhibit I-C. Subsection 26.10. Estimated Amount of Bonded Indebtedness. It is anticipated that approximately $1,800,000 of bonded indebtedness may be incurred with respect to this portion of the Project Area. Subsection 26.11. Sources of Revenue. Anticipated revenue sources to assist in the financing of the public improvement costs, pursuant to Subsection 21.9. above, include (1) general obligation and/or revenue tax increment obligations with interest; (2) the direct use of tax increments; (3) the borrowing of available funds, including without limitation interest-bearing City short-term or long-term loans; (4) interfund loans or advances; (5) interfund transfers, both in and out; (6) land sale or lease proceeds; (7) levies; (8) grants from any public or private source; (9) developer payments; (10) loan repayments or other advances originally made with tax increments as permitted by Minnesota Statutes; and (11) any other revenue source derived from the City's or Authority's activities within the Project Area as required to finance the costs as set forth in Exhibit I-C. All revenues are available for tax increment eligible expenses within the Project Area as allowed by Minnesota Statutes. Subsection 26.12. Estimated Original and Captured Tax Capacities. The tax capacity of all taxable property in the TIF District, as most recently certified by the Commissioner of Revenue of the State of Minnesota on January 2, 2018, is estimated to be $133,284. 26-2 The captured tax capacity of the TIF District upon completion of the proposed improvements on January 2, 2020 is estimated to be $76,716. The Authority intends to utilize 100% of the captured tax capacity for the duration of the TIF District for purposes of determining tax increment revenues. Subsection 26.13. Tax Increment. Annual tax increment generated from the TIF District has been calculated at approximately $90,513 upon the completion of the improvements. This estimate is provided on the attached Exhibit XXVI-C. Revenue has also been projected for the duration of the TIF District and is shown on Exhibit I-C- 19. Subsection 26.14. Local Tax Rate. The estimated pay 2018 local tax rate is 1.17984. Subsection 26.15. Type of TIF District. The TIF District is a soils condition district pursuant to Minnesota Statutes, Section 469.174, Subdivision 19. Subsection 26.16. Duration of TIF District. The duration of the TIF District is expected to be twenty (20) years from receipt of the first tax increment. The date of receipt of the first tax increment is anticipated to be 2021. Thus, it is estimated that the TIF District, including any modifications for subsequent phases or other changes, would terminate in the year 2041. Subsection 26.17. Estimated Impact on Other Taxing Jurisdictions. The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of the TIF District. If the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact that the financing would not have occurred without the assistance of the Authority, the attached Exhibit XXVI-E reflects (I) the estimated impact of the TIF District if the "but for" test was not met; (ii) the estimated amount of tax increment generated annually and over the duration of the TIF District; and, (iii) the estimated amount of tax increment attributable to the County, School District and other taxing districts. At this time the Authority anticipates there will be no impact on City services due to the creation of the TIF District. Additionally, since the City has no current plan to issue general obligation debt for project costs, it further anticipates that there will be no impact on its borrowing costs due to the creation of the TIE District. Please refer to Exhibit XXVI-D for the narrative "but for" analysis. Subsection 26.18. Modification of the TIF District and/or the T1F Plan. As of June 11, 2018, no modifications to the TIF District or the TIF Plan have been made, said date being the date of initial approval and adoption thereof by the City Council. 26-3 EXHIBIT XXVI—A PARCELS TO BE INCLUDED IN THE TAX INCREMENT FINANCING DISTRICT NO. 24 27-30-24-12-0046 and all adjacent easements, rights-of-way, roads and streets. XXVI-A-1 EXHIBIT XXVI-B Map of Tax Increment Financing District No.24 1.--- - 177*,.---. '''''''' Redevelopment r, Project Area and -, Tax Increment A , - Fridlc) Financing Districts 525051 • ° \N . , . --I , , ,., N t ' -; T...,:,,, ' I 5150 40 30 1 ,,,,/i.510'1/75 t 4.7 ,v '/‘_/ 'L1 3 i ' \f' ' , i 60 40 I , - i 4800 ,AtssissirtiisiNE ''-1 „----11 : r---.- r ' 'i- ''-'1 MROME j - ' . -,---' CI CREEK - -L-....; ''''' iif I f, y 1§V, --. ....„..,,,- ii i' ' - v;.:,,,•:;17 Redevelopment Project Areas in which Tax increment may be Spent Proposed TIF 0 DisMet#24 in may be ;# 1%7i tv_.hreraTatexIncrement Generated, ,, _ 1 1.3 1 -"i'-- 0 0.25 05 01,e.: ' . ....--, 1,"-;:- ' . . Date.5/9/2018 Oton .„,„, ne ,44hs rt'Ors.4,nv.1_°.ern 0.-..^,se T Ph XXVI-B--1 s Page XXVI-C CITY Of ftiioLEY Stacks Val(TIF 1124) ASSUMPTIONS Area of Parcel 2018 EMV!Pay 2019 Original Market Values _.. (Acres). ! (Sq.Feet) Land' Buildinv Total 1 27-30-24-12-0046 5101 indOstnal3cdP46 1166, I 507,910 1.143.5001 5,520.700' 6.664,200 01 — _ 00 fi 7otale TOTAL. 1 '1.66 507,910 $1,143,500 55520,700 $ 6,684,200I 1 225 per sq h _ ] Percent of Site . i- - Original Tax Capacity Class(tate 13328.4 Commeraet/Refer 1000%: 6,664200 - �200%--_ 133.284 I7enfe&Lar+/bbd income 4d 0 0°.6' 0 1 0-1 0 ._.Rental 004 0 : 121k75 G_ _-.. Owner Occupied 0.0%- 0 fg., 1 100`4..= 0 . '000% 6,664.200 i I Phase 1 ,IME _ Esamated Markt Value' 9u41-2019 01„Inds ' S10 500.000 Esumated tax Capacay 2020 177,657jec I 210,000 Eabmated 1 axe-a 2021 1 379.998 Estimated Tax tncrement 90,513 Phase 2(combined) Estimated Market Va,uc' Suitt-2020 0}anita _ - 10,500 000 1.8 emss ires t:i/i. FSRrnated Tax Capacly 2021 177,657 se P. 210,000 _ t Estimated Taxes 2022, 376,998 3.6%Elf Tax Rate Estimated",ax 41cremcnt 90,513 24.0n/01 total taxes Local Tax Rate- Pay 2016 Iso kit Mw'•}.210'3+ 1 17984 Used for Prolec30ns State Tax Rate- Pay 201$ 4 0 43865 (Cd only) ES.Iner.on local tax rate for taxes at P.D.rate 0.09238 (C/I only) . Combined Tax Rate.C!I°rolicrtyOny 1-71087 _ _ .. s ea£er mc.c<r cssr=.as. : - Market Value Referendum Taxes -. 0 16£73%Pay 2018 Admin rets 10 OJT I Stale AuditoFee 0000°t Inflation ` (after 2 yrs of VI,value 2 50°. Present Value Rabe 1211120/e' 5.55% I l XxvI-c-1 Stacks VII,70180 xisx Prepared by Gieg Johnson 517)2008 XXVt-C Page 2 CITY Of FRIDLEY Stacks VIII{TIF 1/24} ASSUMPTIONS __._--_ ___- Pf1AS6 t Total Estimated Market Value $10,500.000 Cammedceal/Rafal! 10,500,000 Core cue -Stacks Vill 177.667 sq ft 59.10 ft = `0.500000 Comma-rear 0 'se' . i Office I Retail 0. ft j 59.10 fsq t = 0 0 sq ft �< 8910 /sq.ti Retail-service 0 sq ft 0 59.10• fsg ft = 0 Restaurant/entertainment 0-sq ft a 59 to isq ft = ; 0 Other 0 sq.ft p'' 59.10 tsq ft = j 0 Rental i a Ph 1-P.taed Income 100 0% 0 units 0 132.268 1 twist>-i 0 _ � Ph 1•Market Rate 0 50 a 0 units 0 132.268 i tune._ 0 Ph 2-Markel Rate 0 0% 0 unas @ 125 000 _ luno 0 CIt.aner Ocrutred f A Smote Fame)Hames 3.0% 0 ants 200,000 /um t= 0 . 6 Ttrxnttorte5-Year, 0 0% 9 ayes 0 140,000 rand= 0 C Toa nhrmws•Year 2 0.0% 0 tants t 140.030 t !unit= _ 0 0 Townhomes-Yew 3 0D%, 0 units 0 140.030 I ! lurrt= 0 0 units 177,657 sq n R Total Estimated Tax Capacity r - , i 210,000 Corimerctaf t Retail z10,©co Commercial'Stir res VIII I 2 03% 210.030 2 03°x. 0 Commercial Offt e i RetaG 2.00% _ 0., _ _ . Retail-service r _ 2.0011 0 Restaurant 1st tertainrson 2.00% 0 Other _.. — 1 2004h 0+ • Reritaf • - — 0._ Ph 1-Mixed Income .. fl 75% Ph 1•Market Rate f ( t 2596; .__ 1 0 ;Ph 2 Market Rate 1 l 1.25% , . ( 0 ' OwnerOccupred 7 1 0. { A Single Farrdy acmes 0 r es 500.000. 0'0.....__ .. 100 ._. 0 .. -. 8 Toanttomes-Year 1 S127.000. 1 00% 0_i 0 a 500.000 125% I C Townhomes-Yew 2 0 {= 500.000 10046. 0 > 503.000 125%: 0 D• To xnhomes-Year 3 0. c, 500.000 1-00% 0 >. 500.000 1 2590: 0+ Total Estimated Taxes Commercvaf/Refa7 376.999` 378.998+. Ccmmerciel-Stacks VIII 177,657 sq.ft.0 2 12 Isq It = 376,998' • Cemmarcial 0 sq-ft.9 003 (sq f• . 0` "'Office t ReIa d 0 sq,ft (�' 000 rsq It = ; 0_ . Retail siiv-Toe 0 sq.-ft-0 t 00'1 _ fi - t . 4 �, _ 0' Restaurant!t rater tnment C sq. 000 fsq ft = 0` { "Otherj 0 so ft 6 1 000. . lsC R s I 0• I Re+rtar .. __ _ 0 Ph I Muted Meanie 1 0 units Q . 0 i �m __, _ 0 Ph 1-Marker Rafe 1 0 units 01 ' hint= 0 --._ -- -- --_–. Ph 2 Market Rate 1 0 units C� 0 /unit- 0 , Owner Occupied 0 P.-Single Family Homes i 0 units 0' 0 I ' !unit= . 0 a 9 Tormhomes-Yes 1 0 units _ 01 lune=- 0 C'Townnarnos Year 11r 0 units 0 0 I /unit= fl 0 Townhomcs-Yaw 3 11 0 Unita 0 0 1 lurid= 0 I , I , Ccrn9ltu- ` 2019 — _--f rut Valuation 2020_ Taxes PayebIt j 2021 ; I XXVl-C-2 Stacks VIII 2018b.xlss Prepared by Greg Johnson 517/2016 XXVI-C Page 3 CITY OF FRIDLEY Stacks VIII(TIF#24) CASH FLOW AND PRESENT VALUE ANALYSIS <---- ANNUAL --- ---> '< -- -,- - - SEMI-ANNUAL--2-,- > (a) i (b) (c) (d) (e) - _ (f) (9) (h) j (i) - G) Original Estimated Captured Est.T.I. • Less- Available Cumulative I a Present Value > 1 Tax Tax Tax (d)x Admin Tax Avail_ Tax Semi Annual Cumulative Date I Capacity Capacity Capacity 1,17984 Fees Increment Increment Balance i Balance 1 _jseeassumptions) _. _.._.Lc):(b)._ ..St Aud_Fee _le)_x __ (eL(1) Totalof.(g)} P.V,of.(9) I Total of(i) 2.5%Inflation (prey.year] 0.000% 10.00% 5.50%12/01/18 12/01/18 06/01/19 0 0! 0' 0 0 12101/191 0 0i - 0 0 06/01120 ' 133,284 210,000 0 0 0 0 0 12/01/20 133284 210,000 0 0' 0 0 0 1 06101/21 133,284 , 210,000 76,716 45,256 4,526 40,731 ' 40,731 35,564 35,664 12/01/21 133,284 210,000 76,716 45,256 4,526 40,731 81,461 34,612 70,176 2 06101122 1• 33,284 215,249 t 76.716 45 ,256 4,526: 40,731 122,192. 33,686 103,862 12101122. 133284 215,249 76,716 45,256 4,526 40731 162,923 32,784 136,647 3' 0• 6/01/23 1• 33,284 220,614 1 81,965 48,353 4,835 43,518 206,440 34,090 170,737 12/01/23 133284 220,614 ' 81,965 48,353 4,835 43,518 249,958 33,178 203,915 4 06/01/24 133,284 226.122 j 87,330 51,518 5,152 46,366 296,324 34,403 238,318 12/01/24 133,284 226,122 1 87,3301 51,518 5,152 46,366 342,690 33:483 271,801 5 0• 6/01/25 133,284 231,771 ; 92,838 i 54,767 5,477 49290 391,981 34,642 306,442 12/01/25 133,284 231,771 92,838 54,767 5,47749,290 441,271 33,714 _ 340,157 6 0• 6/01/26 133,284 237,566 98,4871 58,100 5,8101 52,290 493,560 34.809 374,965 12/01/26 133,284 237,566 I 98,487 ; 58,100 5,810 ! 52,290 545,850 33,877 408,842 7 06/01/27 133,284 243,505 I 104282 1 61 518 6,152 C 55,366 601,216 34,910 443,753 12/01/27 133,284 243,505 104,282# 61,518 6,152 55,366 656,582 33,976 477,728 -8 _-06/01/28 133,284 249,592 110.221 65,021 6,5027 58,519 715,101 34,950 512,678 12/01/28 133284 249,592 110221 65.021 6,502 ' 58,519 773,621 34,014 546,693 9 06/01/29 133,284 255,832 116.308 68,613 6,861 I 61,751 835,372 34,932 ' 581,625 12/01/29 133,284 255.832 116,308 68,613_1 6,861 61,751 897,123 , 33,997 ! 615,622 10 06/01/30 133.284 262,228 122.548 72294 I 7229 65,064 962,188' 34,863! 650,485 12/01/30 133,284 262.228 122.548 72,2941 7,229 65,064 1,027,2521 33,930 684,415 11 106/01/31 133,284 268,784 128,944 76,067 I 7,607 68,460 1,095,712 I 34,745 719,160 1 12/01/31 133284 268,784 128,944 76,067 1 7,607 68460 1,164,172 i 33,815 i 752,975 12 06/01/32 133,284 275,503 135,500 79,934 I 7,993 71,941 1,236,112 , 34,583 787,558 12/01/32 133,284 275,503 135,500 79,934 1 7,993 71,941 , 1,308,053 , 33,6588 I 821,215 13 i 06/01/33 133,284 282,391 142,219 83,898 8,390 75,508 i 1,383,561 34,381 855,596 12/01/33 133,284 282,391 142,219 83,898 8,390 75,506 I 1,459,069 1 - 33,461 889,057 14 L 06/01/34 133,284 289,451 149,107 87,961 ' 8,796 79,165 11,538234 1 34,143 923,200 12/01/34 133284 289,451 149,107 87,961 8796 79,165 ! 1,617399 1 33,229 956,429 15 . 0• 6/01/35 • 133,284 296,687 156,167 92,126 9,213 82,913 1,700,313 33,871 990,299 12/01/35 133,284 296,687 156,167 92.126 9,213 82,913 i 1,783226 32,964 1,023,264 16! 06/01/36 133,284 304,104 163,403 96,395 9,639 86.755, 1,869,981 33,568 1,056,832 12101/36 133,284 304,104 163,403 96,395 9,639 86,755 1,956,736 32,670 1,089,502 17 06/01/37 133,284 311,707 170,820 100,770 10,077 90,693 2,047,429 33,239 1,122,741 12101/37 133,284 _ 311,707 170,820 100,770 10,077 ; 90,693 2,138,123_ 32,349_ 1• ,155,090 -18 06/01/38 133,284 319,499_.. 178,423 105,255 10,526 94,730-2,232,852 32,885 1• ,187,975 12/01138 . 133,2841 319,499 178,423 105,255 10,526 94,730 2,327,582 32,005 1,219,980 19 06/01139 i 133,2841 327,487 186215 109,852 10,985 98,867 2,426,449 32,508 1,252,488 12/01/39 ? 133,284 327.487 1 186215 109,852 10,985 98,867 2,525,316_1 31,638-.__1,284,126 20 0• 6/01/40 133,284 335,6741 194203 :14,564 11,456 103,108 . 2,628,423 32,112 1,316,239 12/01/40 1 133,284 335,674 I 194203 114,564 11,456 103,108 2,731,531 31,253 I 1,347,492 21 06/01/41 i 133,284' 344,066 202,390 119,394 11,939 107,455 2,838,985 31,6991 379,190 12/01/41 133,284 344,066 ' 202,390 119,394 11,939- 107,455 ' 2,946,440' 30,850 . 1,410,041 3,273,822 327,382 2,946,440 2,946,440 1.410,041 1,410,041 XXVI-C-3 Stacks VIII 2018b.xisx Prepared by Greg Johnson 517/2018 EXHIBIT XXVI—D "BUT FOR"ANALYSIS The proposed TIF District is a single parcel of land which requires environmental remediation and significant remodeling of the existing building. The redevelopment and proposed remediation are described in detail in the following documents: 1. Remedial Investigation Report and Response Action Plan for 5101 Industrial Blvd. NE prepared for Fridley Land LLC and dated March 13, 2018 (the cover page and the Introduction are attached; the full report is on file with the Fridley Housing and Redevelopment Authority). 2. RAP Addendum No. 1 for 5101 Industrial Blvd NE, Fridley, MN from Braun Intertec to Ms. Shanna Schmitt, PA, MPCA dated April 16, 2018 (a copy of the RAP Addendum No. 1 is attached). In addition to receiving $660,000 of tax increment to assist with the remediation, the Redeveloper is also anticipating receipt of approximately $432,000 from the Minnesota Department of Employment and Economic Development and approximately $250,000 from the Metropolitan Council. Once the site has been remediated and the building rehabilitated, there should be an additional increase in market valuation of approximately $3.8M. But for the use of tax increment, the Authority and City have determined that this development would not occur in the reasonably foreseeable future if at all. XXVI-D-1 XXVI-D • Remedial Investigation Report and Response Action Plan 5101 Industrial BLVD NE Fridley,Minnesota BF0000627 LS0004750 Prepared for Fridley Land LLC Professional Certification I hereby certify that this plan,specification or report was prepared by me or under my direct supervision and that I am a duly Licensed Professional Geologist under the laws of the State of Minnesota. Mark D.Keefer,PG Senior Scientist License Number:47350 'ttt t4ttth�fl:rl USEfl ROFESSIONL: GEOLOGISTA • 4735CEN0 Project 8711344. BRAUN March 13,2018 02 I I V E E RI E C Braun Intertec Corporation XXVI-D-2 XXVI-D A. Introduction Frill ey Land i,LC(Clienti is planning to redevelop the property located at 5101 Industrial Boulevard NE in Fridley,Minnesota(Site).The location of the Site is shown on Figure L. The redeve-opment of the Site is being completed by Fridley Land L.LC under the guidance of the Minnesota Poi:ution Control Agency(MPCA)Voluntary Investigation Cleanup(VIC)program, The Ste has been enrolled into the tv1PCA's VIC program and assigned as 8F0000627 and Petroleum Program assignee as LS0004750 Braun Intertec completed a Phase I Fnvronmental Site Assessment(ESA)of the property in 2017, which identified a number of Recognized Environmental Conditions(AEC)at the Site.crrdley;.and ILC recently performed an environmental investigation of the Site for the RECs that were identified_The results of the initial envirorenentai investigation identified soil,groundwater and soba vaper:m pacts at the Site.Rased upon the results of the initial environmental investigation a remedial investigation was performed to further delineate the'mpacts identified in the initial environmental investigation.The remedial investigation focused en potential soil and soil vapor contamination.Results of the remedial investigation are included in Section 3 of this Report. his Remedial investigation/Remedial Action Plan(RIRAP)has been developed to describe those response actions that will be undertaken concurrent with the development cf the Site,to remediate and manage contaminated soil,soil vapor and regulated wastes,and to manage potential future impacts to underlying contaminated groundwater at the Site.The Site soils are impacted by volatile organic compounds(VOCs),polycyclic aromatic hydrocarbons(PAHs),characteristic petroleum compounds,and Resource Conservation and Recovery Act(RCRA)metals.Soil vapor at the Site is impacted witn VOCs, roost notably,trichloroethene(TCE). This RIRAP provides a summary of the Site history up to the purchase of the property by Fridley Land ILC A summary of the environmental investigations performed by Braun Intertec Corporation(Braun Intertec)is included in this report.This RIRAP includes a description and summary of the known soil, groundwater and soil vapor impacts at the Site,potential risks to human health and the environment by the known contamination,a description of the planned development and a discussion and description of the planned response actions for approval by the MPCA This RIRAP generally follows the new MPCA Guidance Document c-rerr4-43 Brownfield Progrom Response Action Plains(July 2013),including the inclusion of a Construction Contingency Plan(CCP)for BRAUN INTERTEC XXVI-D-3 XXVI-D Fridley Land LLC Project 8711344.02 March 13, 2018 Page 2 responding to unexpected environmental conditions on the Site,which due to the long industrial history of this Site,could be required.This RIRAP also includes a description of the work required to properly implement and manage the response actions.This additional information provides details on managing the different types of soil at the Site to ensure that the excavation,stockpiling and use of contaminated soil at the Site are protective of human health and the environment,both in the short term during construction and for the long term during subsequent Site use. The proposed development includes the following: • Removal of select existing exterior Site structures; • Demolition of current parking areas; • Removal of select past below-ground industrial process utilities including sewers; • Renovation of the existing commercial/industrial buildings at the Site; • Construction of heavy-duty drive and truck court areas; • Construction of light duty parking and drive areas; • Additions to the permanent storm water conveyance system and construction of a new storm water pond;and • Construction of green space areas. The development will require that the existing grades at the Site be modified. Fridley Land LLC is requesting approval of this R1RAP and a Certificate of Completion from the MPCA upon completion of the response actions. The contact information and project responsibilities for response action construction are as follows. A.1. Project Management Organization A.1.a. Site Owner Name: Fridley Land LLC BRAUN XXVI-D-4 INTERTEC XXVI-D BRAUN Braun Intertec Corporation Phone.952.995.2000 11001 Hampshire Avenue S Fax: 952.495.2020 NT E RT E C Minneapolis,MN 55438 Web. brauninuertec.com The Sn ence You Build Cr,. April 16,2018 Project B1711344.02 Ms.Shauna Schmitt,PG Minnesota Pollution Control Agency 520 Lafayette Road North St.Paul,MN 55155 Re: RAP Addendum No.1 5101 Industrial BLVD NE Fridley,Minnesota MPCA PS Site IDU LS0004750 MPCA VIC Project Mit BF0000627 Dear Ms.Schmitt: Braun Intertec Corporation(Braun Intertec)has prepared this Response Action Plan(RAP)Addendum No. 1 for the redevelopment of the industrial facility located at 5101 industrial BLVD NE,Fridley,Minnesota (Site).This RAP Addendum No.1 is for the development which is the subject of the recent Remedial Investigation Report and Response Action Plan,5101 Industrial BLVD NE,Fridley,Minnesota,dated March 13,2018(2018 RIRAP).The RIRAP is pending approval by the Minnesota Pollution Control Agency (MPCA). The objective of this RAP Addendum No.1 is to provide information to further clarify the proposed Response Actions for the She in regard to identified environmental impacts and the planned development. Proposed Response Actions The 2018 RIRAP included several response actions pertaining to contaminated soils and soil vapor. The following items are hereby added to the RIRAP as components of the proposed Response Actions. • Renovation of the existing commercial/industrial buildings at the Site to allow for'the Vapor Mitigation construction; • Construction of heavy-duty drive and truck court pavements as engineered barriers for contaminated soil; • Construction of light duty parking and drive pavements as engineered barriers for contaminated soil; • Additions to the permanent storm water conveyance system and construction of a new storm water pond to prevent storm water infiltration through contaminated soil; • Construction of green space areas by removal of contaminated soil;and • Modification of the existing grades at the Site through excavation and placement of contaminated soil. XXVi-D-5 XXVI-D RAP Addendum No.1 • 5101 Industrial BLVD NE Project 13171134.02 April 16,2018 Page 2 Additional information for each of these items is is provided below Renovation of the existing commercial/industrial buildings at the Site Portions of the building require vapor mitigation.A sub-slab vapor mitigation system will be installed to address and mitigate those portions of the building with sub-slab vapor concentrations greater than 33X the industrial intrusion values(ISVs).As part of the planned vapor mitigation system installation,interior demolition and renovation will occur to facilitate system installation. Construction of heavy-duty drive and truck court pavements and light duty parking and drive pavements There are contaminated soils onsite,most of these soils will be re-used ons to beneath the planned • heavy-duty drive,truck court areas,and light duty parking and drive areas as defined n the 2018 RiRAP. Additions to the permanent storm water conveyance system and construction of a new storm water pond Construction of the planned storm water conveyance system and new storm water pond will require the removal and management of contaminated soils in order to create these water conveyance features.The contaminated soils will be removed from these areas and managed onsite,or sent off-site for proper disposal,as described in the Soil Management Plan Included as Section H of the 20118 RIRAP. Construction of green space areas Construction of planned greenspace areas will require the removal and management of contaminated soils in order to create the green spaces.The contaminated soils will be removed from these areas and managed on-Site,or sent off-site for proper disposal,as described in the Soil Management Plan included as Section H of the 20118 RIRAP. Modification of the existing grades at the Site As described in the 2018 RIRAP,there are contaminated soils that need to be managed during the planned development.The excavation and management of these soils will require the'existing grades at the site to be modified.All soils disturbed during the development v>i l be handled and managed as described in the Soil Management Plan included as Section H of the 20118 RIRAP. We trust that this Addendum No.1 provides some clarification to the 2018 RIRAP proposed remedial actions for the regulated soli and soil vapor impacts. XXVI-D-6 XXVI-D RAP Addendum No.1 5101 industrial BLVD NE Project 8171134.02 April 16,2018 Page 3 If you have any questions regarding this addendum,please call Chris Thompson at 952.99$.2446 Sincerely, BRAUN INTERTEC CORPORATION / Mary D.Keefer,PG l chlIstopher F.Thompson,PE Senior Scientist . Vice President&Principal Engineer cc: Paul Hyde,Fridley Land,LLC XXVI-D-7 EXHIBIT XXVI-E ESTIMATED IMPACT OF TAX INCREMENT FINANCING DISTRICT NO.24 IMPACT ON TAX BASE ORIGINAL ESTIMATED CAPTURED DISTRICT TAX TAX TAX TAX AS% ENTITY BASE CAPACITY CAPACITY CAPACITY OF TOTAL City of Fridley 30,108,171 133,284 210,000 76,716 0.255% County of Anoka 367,389,894 133,284 210:000 76:716 0.021% ISO#13 22,932.017 133,284 210,000 76,716 0.335% IMPACT ON TAX RATE' TAX %OF TAX TAX RATE ENTITY RATE TOTAL INCREMENT INCREASE City of Fridley 0.47907 40.60% 36,752 0.122% County of Anoka 0.35334 29.95% 27,107 0.007% ISO#13 027900 23.65% 21,404 0.094% Other 0.06843 5.80% 5,250 1.17984 100.00% 90,513 -Assumes construction would have occurred without the creation of a Tax Increment Financing District. If construction is a result of Tax Increment Financing,the impact is$0. XXVI-E- 1 EXHIBIT I-C TIF#24 Cumultive Modified TIF Plan Budget ESTIMATED TAX INCREMENT REVENUES (from tax increment generated by the district) Tax increment revenues distributed from the county $ 3,274,000 Interest and investment earnings 33,000 Sales/lease proceeds Market value homestead credt ------------ Total Estimated Tax Increment Revenues $ 3,307,000 ESTIMATED PROJECT/FINANCING COSTS (to be paid or financed with tax increment) Project Costs Land/building acquisition Site improvements/preparation costs 1,4 39,600 Utilities Other qualifying improvements Construction of affordable housing Small city authorized costs,if not already included above Administrative costs 327,400 Estimated Tax Increment Project Costs $ 1,767,000 Estimated Financing Costs Interest expense 1.540,000 ------------ Total Estimated Project/Financing Costs to be Paid From TI $ 3,307,000 0 ESTIMATED FINANCING Total amount of bonds to be issued 1.800,000 TIF Budgets-Fridley 2018.xlsx 1-C- 19 4811-2936-0485,v. 1 HRA RESOLUTION NO. 2018- A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. 6, 9, 11-13 AND 17-23 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX INCREMENT FINANCING DISTRICT NO. 24 AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO. 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 approve and adopt the proposed modifications to its Redevelopment Plan for Redevelopment Project No. 1 (the "Project Area") reflecting increased project costs and increased bonding authority, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047, inclusive, as amended and supplemented from time to time. 1.02. It has been further proposed that the Authority approve and adopt the proposed modifications to the Tax Increment Financing Plans (the "Existing Plans") for Tax Increment Financing Districts Nos. 6, 9, 11-13 and 17-23 (the "Existing Districts") reflecting increased project costs and increased bonding authority within the Project Area, pursuant to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended and supplemented from time to time. 1.03. It has been further proposed that the Authority approve the creation of proposed Tax Increment Financing District No. 24 (the "Proposed District") within the Project Area and approve and adopt the proposed Tax Increment Financing Plan (the "Proposed Plan") relating thereto, pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, inclusive, as amended and supplemented from time to time. 1.04. The Authority has investigated the facts and has caused to be prepared with respect thereto, a modified Redevelopment Plan for the Project Area and modified Existing Plans for the Existing Districts reflecting increased project costs and increased bonding authority within the Project Area and the Proposed Plan for the Proposed District, defining more precisely the property to be included the public costs to be incurred, and other matters relating thereto. HRA Resolution No. 2018- Page 2 1.05. The Authority has performed all actions required by law to be performed prior to the approval and adoption of the modifications to the Redevelopment Plan and Existing Plans and the approval and adoption of the Proposed Plan. 1.06. The Authority hereby determines that it is necessary and in the best interests of the City and the Authority at this time to approve and adopt the modifications to the Redevelopment Plan and Existing Plans, to create the Proposed District and to approve and adopt the Proposed Plan relating thereto. Section 2. Findings. 2.01. The Authority hereby finds, determines and declares that the assistance to be provided through the adoption and implementation of the modified Redevelopment Plan, modified Plans and Proposed Plan (collectively, the "Plans") is necessary to assure the development and redevelopment of the Project Area. 2.02. The Authority hereby finds, determines and declares that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with the City's comprehensive plan. 2.03. The Authority finds, determines and declares that the Plans afford maximum opportunity consistent with the sound needs of the City as a whole for the development and redevelopment of the Project Area by private enterprise and it is contemplated that the development and redevelopment thereof will be carried out pursuant to redevelopment contracts with private developers. Section 3. Approvals and Adoptions. 3.01. The modifications to the Redevelopment Plan reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Commissioners of the Authority and are forwarded to the Fridley City Council for public hearing, review and approval. 3.02. The modifications to the Existing Plans reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Commissioners of the Authority and are forwarded to the Fridley City Council for public hearing, review and approval. 3.03. The creation of the Proposed District within the Project Area and the adoption of the Proposed Plan relating thereto are hereby approved and adopted by the Commissioners of the Authority and are forwarded to the Fridley City Council for public hearing, review and approval. 2 HRA Resolution No. 2018- Page 3 Section 4. Filing of Plans. 4.01. Upon approval and adoption of the Plans, the Authority shall cause said Plans to be filed with the Minnesota Department of Revenue, the Office of the State Auditor and Anoka County. PASSED AND ADOPTED BY HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA THIS DAY OF , 2018. PATRICIA GABEL - CHAIRPERSON ATTEST: WALLY WYSOPAL - EXECUTIVE DIRECTOR CERTIFICATION I, Wally Wysopal, Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, hereby certify that the foregoing is a true and correct copy of Resolution No. 2018- adopted by the Authority on the day of , 2018. WALLY WYSOPAL - EXECUTIVE DIRECTOR 4851-6292-7717,v.1 3 Page 1 • a1, . LX I e‘) • CITY OF FRIDLEY Stacks VIII(TIF#241 ASSUMPTIONS II 1 J I i.—_L Area of Parcel 2018 EMV I Pay_2019 Original Market Values ---- (Acres) (Sq.Feet) Land Building Total II 1 _ 1 27-30-24-12-0046 5101 Industrial Blvd NE 11.66 507,910 1,143,500 5,520,700 6,664,200 _ . ---i-- - 0 0 0 0 Totals TOTAL 11.66 507,910 $1,143,500 $5,520,700 $ 6,664,200 2.25 per sq.ft. Percent of Site Original Tax Capacity Class Rate 133,284 Commercial/Retail 100.0% 6,664,200 @ 2.00%= 133,284 Rental-Low/Mod Income 4d 0.0% 0 © 0.75%= 0 Rental I i 0.0% 0 @ 125% 0 Owner Occupied 0.0% 0 1.00% 0 i ' 100.0% 6,664,200 Phase 1 I YEAR 0I Estimated Market Value' Built-2019 0 units l $10,500,000 Estimated Tax Capacity 2020 177,657 sq.ft. - 210,000 Estimated Taxes 2021 376,998 Estimated Tax Increment 90,513' I I _ Phase 2(combined) Estimated Market Value' Built-2020 0 units 10,500,000 1.6 times Ina,In MV Estimated Tax Capacity 2021 177,657 sq.ft. 210,000 Estimated Taxes 2022 376,998 3.6%Eff.Tax Rate Estimated Tax Increment 90,513 24.0%of total taxes Local Tax Rate- Pay 2018 Iso/13 MWO-z10131_ 1.17984 Used for Projections _State Tax Rate- Pay 2018 0.43865 (C/I only) Eff.Incr.on local tax rate for taxes at F.D.rate 0.09238 (C/I only) Combined Tax Rate-C/I Property Only 1.71087 ' 1 "used for tax iuraoeet calculations Market Value Referendum Taxes 0.16873%Pay 2018 Admin Fees I 10.00% State Auditor Fee 0.000% Inflation I ;(after 2 yrs of full value 2.50% i-- ---- 4 — - Present Value Rate I 12/1/2018 5.75% I 1 i i 161 Stacks VIII 2018c.xlsx Prepared by Greg Johnson 5/22/2018 Page 2 , CITY OF FRIDLEY Stacks VIII(TIF#24) ASSUMPTIONS . PHASE 1 Total Estimated Market Value $10,500,000 to. Commercial/Retail 10,500,000 Commercial-Stacks VIII 177,657 sq.ft.@ 59.10 /sq.ft.= _ 10,500,000 Commercial 0 sq.ft. n 59.10 /sq.ft.= 0 Office I Retail 0 sq.ft.0 59.10 /sq.ft.= 0 _ Retail-service - 0 sq.ft. n 59.10 __/sq.ft._ 0 _ !Restaurant/entertainment 0 L sq.ft.0 59.10_ /sq.ft.= 0 !Other 0 sq.ft.@ 59.10 /sq.ft.= 0 Rental I 0 rh 1-Mixed Income 0.0% 0 I units t 132,268 /unit= 0 h 1-Market Rate 0.0% 0 units 0 132,268 /unit= 0 Ph 2-Market Rate 0.0% 0 1 units 0 125,000 /unit= 0 0 Owner Occupied A Single Famlty Homes 0.0% 0 units 0 200,000 /unit= 0 B Townhomes-Year 1 0.0% 0 units© 140,000 /unit= 0 C Townhomes-Year 2 0.0% 0 units 0 140,000 !unit= 0 D Townhomes-Year 3 0.0% 0 units 0 140,000 /unit= 0 ! 0 units _ I ' 177,657 sq.ft. Total Estknated Tax Capacity 210,000 Commercial/Retail 210,000 Commercial-Stacks VIII 2.00% 210,000 -- ___ Commercial 2.00% 0 Office/Retail 2.00% 0 Retail-service 2.00% 0 Restaurant/entertainment 2.00% 0 ;Other 2.00% 0 Rental 0 Ph 1-Mixed Income 0.75% 0 Ph 1-Market Rate 125% 0 Ph 2-Market Rate 125% 0 Owner Occupied 0 A Single Family Homes 0 <= 500,000 1.00% 0 I > 500,000 125% 0 BlTownhomes-Year 1 0 <= 500,000 1.00% 0 I I > 500,000 125% 0 C Townhomes-Year 2 0 <= 500,000 1.00% 0 ' > 500,000 1.25% 0 I D Townhomes-Year 3 0 <= 500,000 1.00% 0 > 500,000 1.25% 0 Total Estimated Taxes 376,998 Commercial/Retail 1 376,998 1 !Commercial-Stacks VIII 177,657 aq.ft.@2.12 lsq.ft.= 376,998 Commercial 0 sq.ft. 0.00 /sq.ft.= 0 Office i Retail 0 sq.ft.00.00 /sq.ft.= 0 Retail-service 0 sq.ft.0 0.00 /sq.ft.= 0 Restaurant I entertainment 0 sq.ft.@ 0.00 /sq.ft.= 0 Other I 0 sq.ft.0 0.00 /sq.ft.= 0 -7Rental 0 Ph 1-Mixed Income 0 units 0 0 /unit= 0 Ph 1-Market Rate 0 units 0 0 /unit= 0 Ph 2-Market Rate 0 units© 0 /unit= 0' Owner Occupied 0 A Single Family Homes 0 units© 0 /unit= 0 B Townhomes-Year 1 0 units 0 0 /unit= 0 C Townhomes-Year 2 0 units© 0 !unit= 0 D Townhomes-Year 3 0 units© 0 /unit= 0 Construction 2019 Full Valuation . 2020 1 Taxes Payable . 2021 1 ' Stacks VIII 2018c.xlsx Prepared by Greg Johnson 5/22/2018 i Page 3 1 CITY OF FRIDLEY Stacks VIII(TIF#24) CASH FLOW AND PRESENT VALUE ANALYSIS < ANNUAL > < -- SEMI-ANNUAL--- - > (a) (b) (c) (d) (e) (f) (9) (h) (i) 0) Original Estimated Captured Est.T.I. Less: Available Cumulative <--Prese, Value--- Tax Tax Tax (d)x Admin Tax Avail.Tax Semi Annua Cumulative Date Capacity Capacity Capacity 1.17984 Fees Increment Increment Balance Balance (see assumptions) (c)-(b) •St.Aud.Fee (e)x (e)-(f) Total of(g)- P.V.of(g) Total of(i I 2.5% Inflation (prey.year) 0.000% 10.00% 5.75% • • 12/01/18 1 06/01/19 i 0 0 0 0 0 12/6/19 - - - - 0 0 0 ' 0 0 06/01/20 133,284 210,000 0 0 0 0 0 12/01/20 ; 133,284 210,000 0 0 0 0 0 1 06/01/21 133,284 210,000 76,716 45,256 4,526 40,731 40,731 - 35,349 35,349 12/01/21 133,284 210,000 76,716 45,256, 4,526 40,731 81,461 34,361 69,709 2 06/01/22 I 133,284 215,250_ 76,716 45,256 4,526 40,731 _ 122,192 33,400 103,110 12/01/221 133,284 215,250 76,716 45,256 4,526 40,731 162,923 32,467 135,577 3 06/01/23 ' 133,284 220,631 81,966 48,353 4,835 43,518 206,441 33,719 169,296 12/01/23 133,284 220,631 81,966 48,353 4,835 43,518 249,959 32,777 202,073 I 4 06/01/24 133,284 226,1471 87,347 51,528 5,153 46,375 296,334 33,953 236,026 I 12/01/241 133,284 226,147 87,347 51,528 5,153 46,375 342,709 33,004 269,030 5 06/01/25 ! 133,284 231,801 92,863 54,782 5,478 49,304 392,013 34,108 303,138 12/01/25 < 133,284 231,801 , 92,863 54,782 5,478 49,304 441,316 33,154 336,292 6 06/01/26 • 133,284 237,596 98,517 58,117_ 5,812 52,305 493,621 34,190 370,482 _12/01/26+; _133,284 , 237,596 _98,517 58,117 5,812 52,305 545,927 33,234_ 403,717 7 06/01/271 133,284243,536 104,312 61,536 6,154 55,382 601,309 _ 34,206 437,922 12/01/27 133,284 ' 243,536 104,312 61,536 6,154 55,382 656,691 33,250 471,172 8 06/01/28 133,284 249,624 110,252 65,040 6,504 58,536 715,226 34,161 505,334 12/01/28 133,284 249,624 110,252 65,040 6,504 58,536 773,762 33,207 538,540 9 06/01/29 133,284 255,865 116,340 68,631 6,863 61,768 835,530 34,061 572,601 12/01/29 133,284 255,865 116,340 68,631 6,863 61,768 897,298 33,109 605,710 1llti 06/01/30 133,284 • 262,261 122,581 72,313 7,231 65,081 962,380 33,910 639,621 12/01/30 133,284 262,261 122,581 72,3131 7,231 65,081 1,027,461 32,963 672,583 41. 11 06/01/31 133,284 268,818 128,977 76,086 7,609 68,478 1,095,939 33,713 706,297 12/01/31 133,284, 268,818 128,977 76,086 7,609 68,478 1,164,417 32,771 739,068 12 06/01/32 i 133,284 275,538 135,534 79,954 7,995 71,959 1,236,375, 33,475 772,543 12/01/32 i 133,284 275,538 135,534_ 79,954 7,995 71,959_ 1,308,334 32,539 805,082 13 06/01/33 ' 133,284 282,427 142,254 83,919 8,392 75,527 1,383,861 33,198 838,280 12/01/33 . 133,284 282,427 142,254 83,919 8,392 75,527 1,459,387 32,270 870,551 14 06/01/341 133,284 289,487 149,143 87,982 8,798 79,184 1,538,571 32,888 903,438 12/01/34 133,284 289,4871 149,143 87,982 8,798 79,184 1,617,755 , 31,969 935,407 15 06/01/35 133,284 296,725_ 156,203 92,147'' 9,215 82,933 1,700,688 32,546 967,953 12/01/35 133,284 296,725 156,203 92,147 9,215 82,933 1,783,621 31,637 999,590_ 16 06/01/36 133,284 304,143 163,441 96,417 9,642 86,775 1,870,396 32,177 1,031,767 12/01/36 133,284 304,143 163,441 96,417 9,642 86,775 1,957,171_ 31,278 1,063,045 17 06/01/37 133,284 311,746 170,859_ 100,793 10,079 90,714 2,047,885 31,784 1,094,829 12/01/37 133,284 311,746 170,859 100,793 10,079 90,714 2,138,598 30,896 1,125,725 18 06/01/38 133,284 319,540 178,462 105,278 10,528 94,751 2,233,349 31,369 1,157,094 12/01/38 133,284 ' 319,540 178,462 105,278 10,528 94,751 2,328,100 , 30,492 1,187,586 19 06/01/39 133,284 327,528 186,256 109,876 10,988 98,888 2,426,988 30,934 1,218,520 12/01/39 133,284 327,528 186,256 109,876 10,988 98,888 2,525,876 30,070 1,248,590 20 06/01/40 ' 133,284 335,717 194,244 114,589 11,459 103,130 2,629,006 30,483 1,279,073 12/01/40 133,284 335,717 194,244 114,589 11,459 103,130 2,732,136 29,631 1,308,704 21 06/01/41 133,284 344,109 202,433 119,419 11,942 107,477 - 2,839,613 30,017 1,338,722 12/01/41 _ 133,284 344,109 202,433 119,419_ 11,942 107,477 2,947,090 29,178, 1,367,900 3,274,545 327,454 2,947,090 2,947,090 1,367,900 1,367,900 Stacks VIII 2018c.xlsx Prepared by Greg Johnson 5/22/2018 I �• P e1 I I 1 e'er 1 IVO 1 Nfis+rer 1V a 1 CITY OF FRIDLEY Stacks VIII(TIF#24) ASSUMPTIONS I Ii I I _ l.__�. _--- —_-� Area of Parcel 2018 EMV 1 Pay 2019 Original Market Values- I (Acres) (Sq.Feet) Land Building Total • T I i 1 '27-30-24-12-0046 5101 Industrial Blvd NE 11.66 507,910 1,143,500 5,520,700 6,664,200 i • 0 0 1 0 Totals TOTAL 1t66 507,910 $1,143,500 $5,520,700 $ 6,664,200, 2.25 per sq.ft Percent of Site • • Original Tax Capacity Class Rate 133,284 • Commercial/Retail 100.0% 6,664,200 ft 2.00%= 133,284 i Rental-Low/Mod Income 4d 0.0% 0 0 0.75%= 0 Rental I I 0.0% 0 0 1.25% 0 Owner Occupied 0.0% 0 0 1.00%= 0 1 I 100.0% 6,66.4,200 • 0 Phase 1 YEAR Estimated Market Value' Built-2019 0 units $10,500,000 Estimated Tax Capacity 2020 177,657 sq.ft. 210,000 Estimated Taxes 2021 376,998 Estimated Tax Increment 90,513 I I Phase 2(combined) Estimated Market Value' Built-2020 0 units 10,500,000 1.6 times incr.In MV Estimated Tax Capacity 2021 177,657 sq.ft. 210,000' I Estimated Taxes 2022 376,998 3.6%Eff.Tax Rate I Estimated Tax increment _ 90,513 24.0%of total taxes I I Local Tax Rate- Pay 2018 ISD 813 Mw0-21 o131 1.17984 Used for Projections State Tax Rate-__.1Paj 2018 0.43865 (Cil only) — _ --- .-.-.--..-..__.-. En.incr.on local tax rate for taxes at F.D.rate 0.09238 (C/I only) Combined Tax Rate-C/I Properly Only 1.71087 **used for tax increment calculations Market Value Referendum Taxes 0.16873%Pay 2018 , Admin Fees j 1 10.00% ___State Auditor Fee ; 0.000% Inflatio1(ter 2 yrs of full value) - 0.00% r _ u n Present Value Rate 12/1/2018 5.75% I I I I" . • Stacks VIII 2018c.xisx Prepared by Greg Johnson 5/22/2018 Page 2 CITY OF FRIDLEY Stacks VIII(TIF 1124) ASSUMPTIONS PHASE 1 . Total Estimated Market Value $10,500,000 Commercial/Retail 10,500,000 Commercial-Stacks VIII 177,657 sq.ft. _, 59.10 /sq.ft.= 10,500,000 Commercial 0 sq.ft.© 59.10 /sq.ft.= 0 _ Office/Retail 0 sq.ft.fiti 59.10 /sq.ft.= 0 Retail-service 0 sq.ft.@ 59.10 /sq.ft.= 0 __ Restaurant/entertainment 0 sq.ft.© 59.10 /sq.ft= 0 Other 0 sq.ft.© 59.10 /sq.ft.= 0 Rental 0 IPh 1-Mixed Income 0.0% 0 units @ 132,268 /unit= 0 r Ph 1-Market Rate 0.0% 0 units© 132,268 /unit= 0 IPh 2-Market Rate 0.0% 0 units® 125,000 /unit= 0 Owner Occupied 0 A Single Family Homes 0.0% 0 units© 200,000 funk= 0 B Townhomes-Year 1 0.0% 0 units® 140,000 /unit= 0 C Townhomes-Year 2 0.0% 0 units @ 140,000 /unit= 0 D Townhomes-Year 3 0.0% 0 writs @ 140,000 funk= 0 0 units 1 I 177,657 sq.ft. Total Estimated Tax Capacity 210,000 Commercial/Retail 210,000 _ !Commercial-Stacks VIII 2.00% 210,000 ;Commercial 2.00% 0 'Office/Retail 2.00% 0 'Retail-service 2.00% 0 'Restaurant/entertainment 2.00% 0 Other I 2.00% 0 0 Rental RPh 1-Mixed Income I 0.75% 0 Ph 1-Market Rate � 125% 0 Ph 2-Market Rate 125% 0 Owner Occupied 0 A.Single Family Homes 0 I <= 500,000 1.00% 0 > 500,000 125% 0 B Townhomes-Year 1 0 I <= 500,000 1.00% 0 > 500,000 125% 0 C Townhomes-Year 2 0 —–— – <= 500,000 1.00% 0 > 500,000 125% 0 D Townhomes-Year 3 0 I I <= 500,000 1.00% 0 > 500.000 125% 0 j I • Total Estimated Taxes I 376,998 Commercial/Retail 376,998 iCommenial-Stacks VIII 177,657 sq.ft.® 2.12 /sq.ft.= 376,998 1Commerdal 0 sq.ft.© 0.00 /sq.ft.= 0 Office/Retail 0 sq.ft.@ 0.00 /sq.ft= 0 Retail-service 0 sq.ft.@ 0.00 /sq.ft.= 0 Restaurant/entertainment 0 sq.ft.© 0.00 /sq.ft.= 0 Other 0 sq.ft @ 0.00 /sq.ft._ -- 0 — Rental 0 Ph 1-Mixed Income 0 units @ 0 /unit= 0 Ph 1-Market Rate 0 units© 0 /unit= 0 Ph 2-Market Rate 0 units @I 0 /unit= 0 Owner Occupied 0 AlSingle Family Homes 0 units @ 0 /unit= 0 B Townhomes-Year 1 0 units @ 0 /unit= 0 C Townhomes-Year 2 0 units @ 0 /unit= 0 D Townhomes-Year 3 0 units 0 0 /unit= 0 Construction 2019 Full Valuation 2020 Taxes Payable 2021 Stacks VIII 2018c.xlsx Prepared by Greg Johnson 5/22/2018 i I Page 3 i CITY OF FRIDLEY Stacks VIII(TIF#24) CASH FLOW AND PRESENT VALUE ANALYSIS <. - ANNUAL > < --- SEMI-'ANNUAL -- (a) . (b) (c) (d) (e) (f) (9) (h) (i) (j) Original Estimated Captured Est.T.I. Less: Available Cumulative <-Prase Value---> Tax Tax Tax (d)x Admin Tax Avail.Tax Semi Annual Cumulative Date Capacity Capacity Capacity 1.17984 Fees Increment Increment Balance Balance (see assumptions) (c)-(b) St.Aud.F- (e)x (e)-(f) Total of(g) P.V. of , , Total of i ++' 0.0% Inflation (prey.year) 0.000% 10.00% 5.75% a' • 12/01/18 06/01/19 0 0 0 0 0 12/01/19 ' 0 0 0 0 0 06/01/20 133,284 210,000 0 0 0 0 0 12/01/20 133,284 210,000 0 0 0 0 0 1 06/01/21 133,284 210,000 76,716 45,256 4,526 40,731 40,731 35,349 35,349 12/01/21 1 133,284 210,000 76,716 45,256 4,526 40,731 81,461 34,361 69,709 2 06/01/22 133,284 210,000 76,716 45,256 4,526 40,731 122,192 33,400 103,110 12/01/221 133,284 210,000 76,716 45,256 4,526 40,731 162,923 32,467 135,577 I 3 06/01/23133,284 210,000 76,716 45,256 4,526 40,731 203,653 31,560 167,137 12/01/23 J� 133,284 210,000 76,716 45,256 4,526 40,731 244,384 30,678 197,814 4 06/01/241 133,284 210,000 76,716 45,256 4,526 40,731 285,115 29,820 227,635 12/01/241 133,284 210,000 76,716 45,256 4,526 40,731 325,845 28,987 256,622 5 06/01/251 133,284 210,000 76,716 45,256 4,526 40,731 366,576 28,177 284,799 12/01/251 133,284 210,000 76,716 45,256 4,526 40,731 407,307 27,389 312,188 6 06/01/26 i 133,284 210,000 76,716 45,256 4,526 40,731 448,037 26,624 338,812 ___ 12/01/26 1_133,284 210 000 76,716 __45,256 4,526 40,731 488,768 _ 25,880 364,692 7 06/01/271 133,284 210,000 76,716 45,256 4,526 40,731 529,499 25,157 389,849 12/01/27 133,284 210,000 76,716 45,256 4,526 40,731 570,229 24,454 414,303 8 06/01/28 f 133,284 210,000 76,716 45,256 4,526 40,731 610,960 23,770 438,073 12/01/28 133,284 210,000 76,716 45,256 4,526 40,731 651,691 23,106 461,179 9 06/01/29 133,284 210,000 76,716 45,256 4,526 40,731 692,421 22,460 483,639 12/01/29 133,284 210,000 76,716 45,256 4,526 40,731 733,152 21,833 505,472 10 06/01/30 133,284 210,000 76,716 45,256 4,526 40,731 773,883 21,222 526,694 12/01/30 , 133,284 210,000 76,716 45,256 4,526 40,731 814,613 20,629 547,323 11 06/01/31 ' 133,284 210,000 76,716 45,256 4,526 40,731 855,344 20,053 567,376 12/01/31 133,284 210,000 76,716 45,256 4,526 40,731 896,075 19,492 586,869 12 06/01/32 i 133,284 210,000 76,716 45,256 4,526 40,731 936,805 18,948 605,816 12/01/32 133,284 210,000 76,716 45,256 4,526 40,731 977,536 18,418 624,234 lb 06/01/33 133,284 210,000 76,716 45,256 4,526 40,731 1,018,267 17,903 642,138 Ica 12/01/33 133,284 210,000 76,716 45,256 4,526 40,731 1,058,997 17,403 659,541 14 .06/01/34 133,284 210,000 76,716 45,256 4,526 40,731 1,099,728 16,917 676,458 12/01/34 133,284 210,000 76,716 45,256 4,526 40,731 1,140,459 16,444 692,902 15 06/01/35 133,284 210,000 76,716 45,256 4,526 40,731 1,181,190 15,984 708,886 12/01/35 133,284 210,000 76,716 45,256 4,526 40,731 1,221,920 15,538 724,424 16 06/01/36 133,284 210,000 76,716 45,256 4,526 40,731 1,262,651 15,103 739,527 12/01/36 133,284 210,000 76,716 45,256 4,526 40,731 1,303,382 14,681 754,209 17 06/01/37 133,284 210,000 76,716 45,256 4,526 40,731 1,344,112 14,271 768,480 12/01/37 133,284 210,000 76,716 45,256 4,526 40,731 1,384,843 13,872 782,352 18 06/01/38 . 133,284 210,000 76,716 45,256 4,526 40,731 1,425,574 13,485 795,837 12/01/38 133,284 210,000 76,716 45,256 4,526 40,731 1,466,304 13,108 808,944 19 06/01/39 ; 133,284 210,000 76,716 45,256 4,526 40,731 1,507,035 12,741 821,686 12/01/39 133,284 210,000 76,716 45,256 4,526 40,731 1,547,766 12,385 834,071 20 06/01/401 133,284 210,000 76,716 45,256 4,526 40,731 1,588,496 12,039 846,110 12/01/40 : 133,284 210,000 76,716 45,256 4,526 40,731 1,629,227 11,703 857,813 21 06/01/41 133,284 210,000 76,716 45,256 4,526 40,731 1,669,958 11,376 869,189 12/01/41 133,284 210,000 76,716 45,256 4,526 40,731 1,710,688 11,058 880,246 1,900,765 190,076 1,710,688 1,710,688 880,246 880,246 Stacks VIII 2018c.xlsx Prepared by Greg Johnson 5/22/2018 aINF , HRA ACTION ITEM F�a'ey JUNE 7, 2018 DATE: May 30, 2018 TO: Wally Wysopal, City Manager FROM: Paul Bolin, Assistant Director of HRA SUBJECT: Consent to Bid Award — Locke Parkway The Locke Parkway Construction project is a part of the Fridley Civic Campus project, and is necessary to allow the residential projects on the former Columbia Arena property to be constructed. Pulte Homes will be working simultaneously with the City on building roads and utilities in this area. The project will consist of installing watermain, storm sewer, sanitary sewer, and small utilities, together with constructing a new roundabout in the East University Avenue Service Road, and a divided parkway on the north side of the proposed patio home sites, and a connection to 71St Avenue NE along the east boundary of the Civic Campus property. The low responsive bid was received from Peterson Companies, Inc. of Chisago City, MN in the amount of $1,289,952.22. This is under the final engineer's construction estimate for the project of$1,543,300. The project is intended to be constructed with HRA funding and recovered through TIF funds. Approximately $189,000 of the construction costs are expected to be funded through City of Fridley Utility Funds. On May 29th, the City Council awarded the Locke Parkway Construction Project 2018-02 to Peterson Companies, Inc. of Chisago City, MN in the amount of $1,289,952.22. Recommendation Staff recommends that the Authority authorize the expenditure to install Locke Parkway. The installation of the Parkway is not only TIF eligible, but also the type of necessary infrastructure the Authority typically provides to accommodate redevelopment. ,.., t l INFORMATIONAL ITEM,.,1 I HRA MEETING OF JUNE 7, 2018 Fridley Date: May 30, 2018 To: Wally Wysopal, Executive Director,/ From: Paul Bolin, Asst. Executive HRA Director James Casserly, Attorney Subiect: Changes to Existing Programs/Additions to Programs Over the past few months staff studied potential changes and additions to the HRA's portfolio of loan programs. Though changes approved in 2015 have had some positive affect on the number of loans being issued, we found a few new options that may be popular with Fridley homeowners. Thursday night staff will provide an overview of the proposed changes/additions. Comments and suggestions will be incorporated into the proposed programs and brought back to the Authority for approval on June 28tH Proposed New Loan Programs Senior Deferred loan program summary: The intent of this program is to provide an incentive for Fridley seniors to make improvements to their homes that will allow them to remain in their homes and/or update the homes for a future sale. The loan will be due upon the sale of the home, transfer of ownership or if it is no longer the primary residence. At least one of the homeowners must be at least 62 years old to qualify for this program. If demand for this program becomes overwhelming, the Authority will want to place a cap on the number of deferred loans made per year. The terms for the Senior Deferred revolving loans are as follows: Interest Rate: 0% Loan Limits - $500 minimum / $25,000 maximum Loan Terms — Due upon sale /transfer/ no longer primary residence Eligible Properties — Residential properties Ownership/Occupancy— Owner occupied, one owner at least 62 years old. Loan to Value Ratio — 110% Income Limits— None Eligible Improvements — Most interior and exterior improvements. "Sweat Equity" — Not Allowed Pre-inspection Required —Yes Post Install Inspection Required —Yes Work Completion — 120 days `-a Underwriting — Current on mortgage payments; Current on real estate taxes; No liens or unpaid judgements; No pending bankruptcy or foreclosure. CenterPoint On-Bill Repayment program summary: The intent of this program is to make it easier for homeowners to complete energy efficiency improvements, by including loan payments on their utility bill. Funds will be loaned to residents for eligible energy improvements. The funds that are loaned will be collected by CenterPoint, on the gas bill, and then transferred to the HRA. The terms for the On-bill Repayment program loans are as follows: Interest Rate: 4.5% Loan Limits — Up to $20,000 if credit score over 680; up to $10,000 with credit score greater than 600. Loan Terms — Between 1 and 10 years based on amount borrowed. Eligible Properties — 1-4 unit residential properties Ownership/Occupancy— Must be a Centerpoint Energy Customer. Income Limits — None Eligible Improvements— Furnace >= 92% AFUE Boiler >=83.5% Programmable Thermostat w/eligible heating system Water Heater >=.67 EF Wall Insulation Attic Insulation & Air Sealing (R-Value >=44) Other improvements are eligible to be included as long as at least one eligible energy conservation improvement is being done. These include, but are not limited to: Air conditioning (no window units) Energy Star Windows/Doors Ventilation/Bath Fans Electrical updates required due to energy improvement Asbestos and Radon mitigation HVAC cleaning Other health and safety issues "Sweat Equity"— Not Allowed Pre-inspection Required — No Post Install Inspection Required —Yes Work Completion — 120 days Underwriting — Must be current on CenterPoint Energy bill and not have more than 1 late payment in past 12 months. Mortgage &taxes must be current; must have credit score of at least 600. Changes to Existing Loan Programs Rental Property Revolving loan program summary: There are a number of duplexes and smaller apartment buildings that were built between 1955 and 1970. These units are typically owned by an individual and provide fewer rentable units to share in the costs of improvements. Improvements will be limited to items that correct code violations or are done to the exterior of the property. When this product was added in 2015, it was limited to buildings with 2-4 units. We are proposing to expand the program to include buildings with 1-12 units and change the name of the product to Rental Property Revolving Loans. There are a large number of rental properties, more than 50 years old, which have 8-12 units, and a number of single family homes that have become rentals over the past 10 years. This change will provide additional opportunities to improve the code deficienciesand outward appearances of the City's older rental stock. The terms for the Rental Property revolving loans are as follows: Interest Rate: 4.5% Loan Limits - $1,000 minimum / $50,000 maximum Loan Terms — 1 year minimum / 20 year maximum Eligible Properties— 1- 12 unit residential properties Ownership/Occupancy— Owner Occupancy not required Loan to Value Ratio — 115% Income Limits — None Debt to Income Ratio — Maximum 50% (sole proprieters). LLC's must show positive cash flow. Eligible Improvements — Interior code violation corrections / most exterior "Sweat Equity"— Not Allowed Pre-inspection Required — No Post Install Inspection Required —Yes Work Completion — 120 days Underwriting — No payments more than 60 days late in past 12 months; No bankruptcy in past 18 months; Current on mortgage payments; Current on real estate taxes; Liens and judgements factored in the loan to value calculation. Funding The Authority does have adequate resources in its current loan fund to accommodate the growth that these additions will likely bring. In the event that the "Senior Deferred Loan" program becomes "too successful", we will recommend placing a cap on the total amount of funds that can be loaned out. Fridley HRA Housing Program Summary Cover Page June 7, 2018 HRA Meeting Report Description Loan Summary Report Loan application activity (e.g. mailed out, in process, closed loans)for year- to-date. Also shows the number of field appointments scheduled and completed for the Remodeling Advisor Services administered by Center for Energy and Environment. Home Energy Squad E-mail detailing recent activity and year to date. H:\—Paul's Documents\HRA\HRA Agenda Items\2018\6 June 7,2018\6-Housing Program Cover June 7,2018.docx Fridley Loan Summary Report Activity for Period 4/16/2018- 5/15/2018 cee:' Center for Energy and Environment Application packets requested/mailed: This period: 1 Year-to-Date: 1 Residential Advisor Visits: This period: 4 Year-to-Date: 6 Loans currently in process for residents in your City/Neighborhood: 3 Closed Loans This period: Year-to-Date: Fridley Units Units 0 0 Closed End 31,700.00 1 68,684.00 3 Last Resort 0.00 0 0.00 0 Last Resort Emergency 0.00 0 0.00 0 Deferred Mobile Home Closed End 0 0 • Total 31,700.00 1 68,684.00 3 Leveraged Funds This period: Units Year-to-Date: Units CEE 0.00 0 20,000.00 1 Total 0.00 0 20,000.00 1 Types of Improvements Financed YTD #of Projects %of Total Types of Properties Financed YTE # %of Total Additions/Finishing off unused space 1 16.67 Commercial-Non-residential 1 20.00 Single Family Residence 4 80.00 Air Conditioning 1 16.67 Heating System 1 16.67 Lighting 1 16.67 Other Interior Improvements 2 33.33