IP #964Request for Action Agenda Section
EDA
February 27, 2017
Approved by: Kirk McDonald, City Manager Item Number
Originating Department: Community Development 4
By: Jeff Sargent, Director
Agenda Title
Motion to approve an amendment to the Alatus Development Agreement in relation to terms concerning the
financing of a Variable Refrigerant Flow system for the building (project no. 964)
Requested Action
Staff and the city's redevelopment consultant from Ehlers requests that the Economic Development Authority
(EDA) approve a motion to amend the Development Agreement between the EDA and Alatus, LLC in relation
to terms concerning the financing of a Variable Refrigerant Flow (VFR) system for the building.
Policy/Past Practice
It is a practice of the EDA to approve amendments to Development Agreements when conditions change that
warrant the amendment.
Background
Bob Lux, Principal of Alatus, LLC, approached the city with an idea to incorporate a state-of-the-art heating
and cooling system for the project in New Hope. Instead of incorporating individual "MagicPak" systems in
each apartment unit, Alatus is looking to utilize a VRF system for the building. VRF systems achieve extremely
high efficiencies by modulating the flow of the refrigerant according to the exact demands of specific areas
throughout the building. By coupling the boiler/chiller VRF system with solar power, the new apartment
building in New Hope would be able to achieve close to zero emissions, meaning that the building would
generate no carbon footprint. This would allow the building to achieve LEER certification, making it a model
project for the future of heating and cooling needs of similar buildings in the metro area. Support of this project
would also align with the city's goals of striving for a "green" environment, as it does with the GreenStep
Program.
The benefits of the VRF HVAC system include the nearly 100% efficiency rating, the fact that there will be no
carbon footprint for the building, as well as better control of heating and cooling needs throughout the
development. The VRF system uses roughly 50% of the energy that the MagicPak systems use, saving an
equivalent in emissions of 615,000 gallons of gasoline over a 20 -year period. Each apartment unit would have
its own meter to monitor heating and cooling usage, but would no longer need to have individual MagicPak
systems in each unit, adding to the aesthetics of the building as well. Having a LEED certified building within
city limits is also beneficial to the city.
The challenge facing Alatus to incorporate the VRF system is the cost. Alatus received a quote of $688,000 for
the installation of the VRF HVAC system. Mr. Lux is excited to install the VRF system because of the positive
impacts it would have on the building and the city, however he stated that the cost would be too prohibitive
for Alatus to pursue on its own. He has asked if the City Council would be amenable to cover half the cost of
the system (up to $350,000) to help with the project. This proposal was brought to the City Council's attention
at the February 21, 2017 work session meeting.
I:\RFA\COMM DEV \Development\ EDA -Amended to Alatus Dev Agr - VRF System 2-27-17.docx
Request for Action, Page 2
Funding
Ehlers conducted a TIF analysis of this proposal, and has indicated that if the Council would like to pursue this
project, TIF generated from the project could be used to help pay for the VRF system. The effect on the TIF note
would be an increase to the agreed upon terms from 23 years of assistance to 23.5 years.
Another option would be for Alatus to agree to accept a monetary contribution from the city in the form of a
loan. Terms and conditions of the loan would be worked out and presented to the EDA when a resolution
approving the amendment to the Development Agreement would be considered.
Attachments
a VRF System Benefits Memo provided by Alatus, LLC
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KY
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19 111 1f a
Memo
To: Jeff Sargent, Director of Community Development
City of New Hope
From: Robert Lux
Ashley Bisner
Alatus LLC
Date: February 15, 2017
Re: VRF System Benefits
Alatus' goal for 8400 Bass Lake Road Apartments ("8400 Bass Lake") is to create an exceptional
experience not only for the building's residents, but also for the citizens of New Hope and the citizens of
the surrounding area; every aspect of the building has been designed with this goal in mind. Alatus
strives to set the new standard when developing buildings — specifically, to incorporate designs and
features that others are compelled to emulate. One way Alatus seeks to achieve this goal at 8400 Bass
Lake is with the building's mechanical system.
There are currently three mechanical systems utilized in apartment buildings: (1) MagicPak, (2) Water
sourced heat pumps, and (3) Variable Refrigerant Flow (VRF). A vast majority of apartment buildings use
separate gas-fired MagicPaks in each individual unit for heating and cooling because the system has the
lowest up -front investment cost and the technology is familiar (it has been around for over 40 years).
Fortunately, there is a better option.
A VRF system presents an opportunity to utilize and benefit from the newest and highest efficiency
technology. The VRF system requires a larger up -front investment cost compared to the other options,
but significantly reduces environmental impact and improves the resident experience. The system also
allows the building to achieve LEED certification and positions it to reach close to a net zero emissions,
making it a model project for future developments in the Twin Cities metro area.
Key Benefits:
1) VRF currently leads the industry as the most energy efficient heating and cooling system
available.
2) A VRF system will vastly improve tenant comfort, system controllability, and building aesthetic
compared to traditional MagicPak systems.
3) VRF technology is built to last.
1) Energy Efficiency and Lifetime Cost of Energy
The most recent energy survey by the U.S. government (conducted in 2012) shows a use of 6,963 trillion
BTUs of energy each year to operate commercial buildings.' Almost seven quadrillion BTUs is an
enormous amount of energy and clearly indicates that developers and City officials need to work to
ensure future buildings are built to be more efficient. The easiest and most significant way to improve
energy usage is to invest in high efficiency heating and cooling systems because these systems account
for almost 40% of the energy used by commercial buildings. VRF technology is a full building heating
and cooling system solution that currently leads the industry in energy efficiency and would significantly
reduce the lifetime energy use at 8400 Bass Lake.
VRF systems include the most recent advancements in controls, energy recovery, and heating and
cooling technology. Through these advancements, the VRF system proposed for 8400 Bass Lake will use
50% less energy than the baseline MagicPak system. To put this into perspective, the proposed VRF
system will save the equivalent of 615,000 gallons of gasoline over a 20 -year period; that is enough
gasoline for a car to drive around the entire globe 617 times.
Lifetime Equivalent CO2
Emissions (metric tons)
Lifetime Equivalent gasoline
consumed (Gallons)
14,054 8,588 5,466(39%)
1,581,418 966,356 615,063 (39%)
Based on a full-scale energy model completed by LG Electronics USA to compare a VRF heat recovery
system to a baseline gas fired MagicPak system, the VRF system will cost $66,000 less per year to
operate than a MagicPak system at 8400 Bass Lake (using current rates). This equates to a heating and
cooling savings of roughly $400 per unit per year. Additionally, VRF systems only use electricity for both
heating and cooling, thus completely replacing unsustainable energy sources with renewable energy.
2) Improved Tenant Comfort, System Controllability. and Building Aesthetic
VRF systems utilize variable speed technology, which is a significant reason the system leads the
industry in energy efficiency. While MagicPak units have two speeds, 100% on or 100% off, the VRF
system has the ability to vacillate between 10% and 100% in order to exactly match the heating or
cooling load a space requires at any given moment. The variable speed technology allows the VRF
system to more accurately maintain space temperature compared to a MagicPak unit. With a VRF
system, each resident can maintain the exact temperature setting they desire using the precise amount
of energy necessary to do so. Comparatively, MagicPak systems have to constantly cycle on and off in
attempts to maintain a desired temperature. The VRF system's variable speed blower fan that circulates
air in each apartment also provides an additional level of comfort for residents and produces
significantly less noise compared to a MagicPak fan.
' https://www.eia.gov/consumption/commercial/reports/2012/energyusage/
AL
VRF systems use a centralized plant of equipment located in a mechanical room that feeds the terminal
units in each apartment. When compared to a decentralized MagicPak system, the three major benefits
include (1) ease of maintenance, (2) system controllability, and (3) building aesthetic. By centralizing all
of the major equipment in a maintenance room, any service or routine maintenance can be completed
without requiring access to tenants' apartments. A centralized VRF system includes a central controller
that monitors the entire building and allows the building service personnel to proactively maintain the
system. Lastly, the VRF central plant eliminates the need for the wall penetration a MagicPak unit
requires on the exterior wall of each apartment (see example in Figure 1 below). The large opening
required to install a MagicPak unit detracts from the overall aesthetic of a building and has a tendency
to both rust and allow moisture into the building envelope.
Figure 1 -Flux Apartments in Uptown, Minneapolis. Picture from: http://Bkvgroup.com/wp-
content/uploads/2015/01/flux img3.jpg
3) Cost implications of utilizing VRF Technology
As outlined above, there are many benefits of utilizing a VRF system. As stated, Alatus' goal for 8400
Bass Lake is to position the development to be the most advanced suburban apartment product in the
marketplace. As is the case with most leading-edge technology, the up -front costs associated with the
system's implementation is often times a deterrent to making the better long-term choice. The
additional initial cost of the VRF system as programmed in the building compared to a MagicPak system
is $688,000. Alatus would like to join with the City of New Hope in bringing this technology to 8400 Bass
Lake and would like to propose sharing this additional expense 50% / 50% with the City by reducing the
purchase price on the land by $344,000. We view this as a joint partnership between Alatus and the City
of New Hope to achieve a truly best in class product that demonstrates our values and will serve
residents and citizens into the future.
AL4tlS-1
Request for Action
September 19, 2016
Approved by: Kirk McDonald, City Manager
Originating Department: Community Development
By: Jeff Sargent, Director
Agenda Title
Review updated terms for purchase and development agreement with Alatus (project No. 964)
Agenda Section
Work Session
Item Number
11.5
Requested Action
Staff and the city's redevelopment consultant from Ehlers requests to review the updated terms for the
purchase and development agreement with Alatus with the City Council.
Policy/Past Practice
It is a practice of staff to review term sheets with the City Council prior to signing purchase and development
agreements.
Background
At the February 16, 2016, City Council work session meeting, staff presented the Council with the preliminary
term sheet for the purchase and development agreement with Alatus. Since that time, the developer has gained
access to the property to conduct further soil tests, and has also been approached by city staff for the potential
of replacing the aging lift station along 58th Avenue and burying the overhead utility lines along Bass Lake
Road from Yukon Avenue to Winnetka Avenue.
When further ground tests were performed, it was determined that the water table level was four feet higher
than originally estimated. This will result in the use of engineered foundation slabs for the construction of the
building, and would also require the building to be raised four feet higher than originally designed in order to
compensate for the water table level. These are added expenses.
The added costs attributed to the modifications of the construction plans because of the water table, the
replacement of the city's lift station and the burial of the overhead utility lines amount to $3,721,000. For this
reason, the developer requested that the terms of the purchase and development agreement be amended in
order to make the project feasible. Two main changes are requested:
1. The developer will purchase the land for $1,443,000, which is $15,600 more than originally agreed upon,
and will pay the city at the time of closing.
2. The developer would like the pay-as-you-go TIF note to be increased from $4,600,000 to $6,574,000, and
for the TIF note to extend from 15 years to 23 years. It should be noted that the cost increase of the TIF
note of $1,974,000 only covers approximately half of the increased project costs of $3,721,000. The
developer will absorb the remaining costs through a reconfiguration of their business model.
A memorandum from Ehlers is attached, which further explains the updated terms. A representative from
Ehlers will also be in attendance to help answer any questions.
Attachments
• Ehlers Memo (9/19/16)
f:\RFA\COMM DEV\ Development\ WS- Review Updated Term Sheet for Alatus 9-19-16.docx
Memo
To: Kirk McDonald — Executive Director
From: Stacie Kvilvang & Jason Aarsvold
Date: September 19, 2016
Subject: Updated Terms For Purchase and Development Agreement — Golf
Course Site
On February 16, 2016, the EDA approved the terms for a Development Agreement (DA)
with Alatus Yukon LLC. for the development of the above referenced site into 182 -units of
higher -end market rate rental units. Since that time, the developer was allowed access on
site to complete additional soils testing, staff requested they replace the aging lift station
adjacent to the site and they continued work on refining development plans.
Based upon the additional soil borings and tests completed, it was determined that soil
conditions were worse than anticipated and the water table was four (4) feet higher than
originally thought. In addition, costs to bury the power and cable lines increased and the lift
station costs increased due to poor soils. Based upon these factors, following are the
additional costs identified:
1. Additional footings, soil corrections and structural slab required for the building
2. Additional piles required to bring utilities to the site
3. Increased costs for retaining walls to raise the building by five (5) feet
4. Construct a new lift station for the City
5. Install geo piers for the City's lift station
The total increase in costs is noted below:
10 EHLERS
LEADERS IN PUBLIC FINANCE
www.ehlers-inc.com
Minnesota phone 651-697-8500 3060 Centre Pointe Drive
Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22
toll free 800-552-1171
Use
12' piles with structural slab
Cost
$2,664,161
Additional piles to bring utilities to the site
$
141,750
5' site raise and retaining wall modifications
$
170,109
Construct City's lift station
$
360,000
Geo piers for lift station
$
300,000
Increased burial costs for cable lines
$
85,000
Total
$ 3,721,020_,
www.ehlers-inc.com
Minnesota phone 651-697-8500 3060 Centre Pointe Drive
Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22
toll free 800-552-1171
Kirk McDonald
Updated Terms For Purchase and Development Agreement — Golf Course Site
September 19, 2016
Page 2
Based upon these factors, the Developer has proposed the following two (2) changes in the
terms to the DA to address these issues:
The Developer will purchase the land for $1,443,000 (increase of $15,600) and will
pay the City at closing instead of at stabilization of the project.
2. Increase the pay-as-you-go TIF note from $4,600,000 to $6,574,000, or $1,974,000
to cover approximately half of the increased costs. This will require the TIF note to
extend from 15 years to 23 years.
As you recall, the EDA approved an interfund loan to repay itself for the difference in their
land assembly costs of $2,363,100 and the purchase price by the Developer. The amount
of the IFL would decrease by $15,600 to $920,100 due to the increased land acquisition
price. It should be noted that it is anticipated the IFL will still be paid prior to the end of the
TIF district.
Please contact either of us at 651-697-8500 with any questions.
Request for Action Agenda Section
Development &
June 26, 2017 Planning
Approved by: Kirk McDonald, City Manager Item Number
Originating Department: Community Development
8.4
By: Jeff Sargent, Director
Agenda Title / -/0
Amended resolution approving rezoning to PUD, Planned Unit Development District No. 17-06,
Development Stage Plans, and Final Plat for Alatus New Hope, LLC Development - 8400 Bass Lake Road
(New Hope Planning Cases 16-02 and 17-06).
Requested Action 411
Staff requests the City Council approve the attached amended resolution approving rezoning to PUD, Planned
Unit Development District No. 17-06, Development Stage Plans, and Final Plat for Alatus New Hope, LLC
Development - 8400 Bass Lake Road (New Hope Planning Cases 16-02 and 17-06).
Policy/Past Practice
The City Council has approved amendments to resolutions when necessary.
Background
The City Council approved the land use requests for Alatus, LLC (Alatus), on March 28, 2016. On February
27, 2017, the Final Plat was also approved. Since that time, Alatus has been working with the city to finalize
all agreements needed to close on the property. Given the changing nature of redevelopment projects, there
have been a few small changes made to the site plan since the time of the final land use approvals. Typically,
these changes could be taken care of administratively, but staff felt that it was necessary to address these
changes with the City Council in order for the Council to remain informed on the project.
As the Council is aware, Alatus and the New Hope Village Golf Course will share a driveway access and some
maintenance responsibilities once the project is complete. Initially, it was determined that Alatus would jointly
use the trash enclosure with the golf course in the same general location where the golf course trash enclosure
is currently located. Since the land use approvals, it is now Alatus' intent to keep the trash on their property
and not co -locate with the city on the golf course property. It was also determined that the land use condition
of approval that a pedestrian connection be made between Alatus' project and the golf course would also not
be feasible given the changes made to the driveway entrance off of Bass Lake Road.
After the land use approvals, it was also discovered that the water table on the property was approximately
four feet higher than originally estimated. This caused Alatus to redesign the building to accommodate for an
engineered foundation, ultimately raising the building four feet. As a result, the elevations for the building
have changed slightly.
When Alatus' lender reviewed all of the resolutions approving the project, they were not satisfied that some
of the resolutions included conditions of approval that the project would not be able to meet, namely the trash
enclosure, pedestrian connection, etc. Alatus requested that the resolutions be amended in order to ensure
compatibility with the approved development agreement. The attached resolution outlines the changes, which
include:.
1. The requirement for a shared trash enclosure is hereby deleted in its entirety.
I: \RFA\ COMM DEV \Planning\Q & R - Alatus Amended Resolution 6-26-17.docx
Request for Action, Page 2
2. As there is no longer a requirement for a shared trash enclosure, any requirements relating
specifically to said shared trash enclosure, including, but not limited to, an access easement are
deleted in their entirety.
3. The current plans submitted for the full building permit will be the City's final approval.
4. The requirement for a pedestrian connection to the golf course is deleted in its entirety.
5. The City approves the exterior building finishes as proposed on the current elevation plans
submitted for full building permit as the City's final approval.
6. The remaining conditions set forth in Resolutions Nos. 2016-53, 2016-54, 2017-26 and
Ordinance No. 17-05, remain in full force and effect.
Recommendation
Staff recommends approval of the amended resolution approving rezoning to PUD, Planned Unit
Development District No. 17-06, Development Stage Plans, and Final Plat for Alatus New Hope, LLC
Development — 8400 Bass Lake Road (New Hope Planning Cases 16-02 and 17-06).
Attachments
• Amended Resolution
• City Attorney Memo
• Resolution 2016-53
• Resolution 2016-54
• Resolution 2017-26
• Ordinance 17-05
RESOLUTION NO. 2017-86
AMENDED RESOLUTION APPROVING REZONING TO PUD, PLANNED UNIT
DEVELOPMENT DISTRICT NO. 17-06, DEVELOPMENT STAGE PLANS, AND
FINAL PLAT FOR ALATUS NEW HOPE LLC DEVELOPMENT —
8400 BASS LAKE ROAD
(New Hope Planning Cases 16-02 and 17-06)
BE IT RESOLVED by the City Council of the City of New Hope as follows:
WHEREAS, Alatus New Hope I LLC ("Developer") has received approval for
development plans for the construction of a 182 -unit high amenity apartment complex with
underground parking ("Project") on a certain vacant parcel of land of approximately 3.53 acres
located at the corner of Bass Lake Road and Yukon Avenue North (8400 Bass Lake Road) in the
City of New Hope, and legally described as follows:
Lots 1, 2, 3, 4 and 5, Block 1, Gervais and Hunter Replat, according to the recorded plat
thereof, Hennepin County, Minnesota.
to be replatted as:
Lot 1, Block 1, Hemken Addition, Hennepin County, Minnesota ("Property"); and
WHEREAS, Developer has received preliminary and final plat approval to facilitate the
construction of the Project; and
WHEREAS, the Property was rezoned to PUD District 17-06 pursuant to Ordinance No.
17-05 adopted by the City Council at its regular meeting on February 27, 2017, and
WHEREAS, the Development Stage Plan Approval of the Project was not complete until
February 27, 2017, when the vacation of all existing easements on the Property and final plat
were approved as set forth in Resolution 2017-26, as well as adoption of the Ordinance No. 17-
05 amending the zoning map to re -zone the Property to PUD District 17-06; and
WHEREAS, Developer and the City staff have determined that certain minor
amendments to the conditions of approval are necessary and warranted and are hereby presenting
those amendments to the City Council for its approval; and
WHEREAS, the required public hearings regarding this Project occurred at the Planning
Commission meetings on March 2, 2016 and February 2, 2017, and the City Council meeting on
February 27, 2017.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New
Hope that development stage plans for Planned Unit Development approval and final plat for the
Project identified in Planning Cases 16-02 and 17-06, previously approved by the City Council
shall be subject to the following amended conditions as hereby adopted:
1. The requirement for a shared trash enclosure is hereby deleted in its entirety.
2. As there is no longer a requirement for a shared trash enclosure, any requirements
relating specifically to said shared trash enclosure, including, but not limited to,
an access easement are deleted in their entirety.
3. The current plans submitted for the full building permit will be the City's final
approval.
4. The requirement for a pedestrian connection to the golf course is deleted in its
entirety.
5. The City approves the exterior building finishes as proposed on the current
elevation plans submitted for full building permit as the City's final approval.
6. The remaining conditions set forth in Resolutions Nos. 2016-53, 2016-54, 2017-
26 and Ordinance No. 17-05, remain in full force and effect.
Dated the 26th day of June, 2017.
Kathi ft=_ken, Mayor
Attest: sw�- Z71 -e-1
Valerie Leone, City Clerk
P:\Attomey\SAS\l Client Files\2 City of New Hope\99-21706 Alatus, LLC\Amended Resolution approving final stage pud development. docx
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JENSEINSONDRALL
PERSELLIN&WOODS
P.A., ATTORNEYS AT LAW
8525 EDINBROOK CROSSING, STE. 201
BROOKLYN PARK, MINNESOTA 55443-1968
TELEPHONE (763) 424-8811 ■ TELEFAX (763) 493-5193
www.jsp\maw.com
M EMORAN DU M
Date:
June 20, 2017
To:
Jeff Sargent
From:
Stacy Woods, Assistant City Attorney, City of New Hope
File:
99.21706
Re:
Alatus New Hope I LLC
Alatus New Hope I LLC ("Alatus") has requested some minor changes to conditions set forth in
the following Resolutions:
1. Resolution No. 2016-53 Approving Preliminary Plat for Alatus LLC Development dated
March 28, 2016; and
2. Resolution No. 2016-54 Approving Development Stage Approval for Alatus LLC
Development dated March 28, 2016.
Alatus has been working extensively with City staff in the past year regarding finalizing all
necessary platting, zoning and development stage approvals for the Property located at 8400
Bass Lake Road.
Alatus has received preliminary and final plat approval to facilitate the construction of the
Project. The Property was rezoned to PUD District 17-06 pursuant to Ordinance No. 17-05
adopted by the City Council at its regular meeting on February 27, 2017.
For purposes of ensuring all deadlines are met under City Code Section 4-34(h)(7), the
Development Stage Plan Approval of the Project was not complete until February 27, 2017. See
City Code Section 4-34(h)(5) for the required development stage submission information which
includes zoning and final plat approval. As of February 27, 2017, the vacation of all existing
easements on the Property and the final plat were approved as set forth in Resolution No. 2017-
26, as well as adoption of Ordinance No. 17-05 amending the City zoning map to re -zone the
Property to PUD District No. 17-06.
Accordingly, the Project is on track with the PUD deadlines set forth in City Code Section 4-
34(h)(7). The 6 month deadline for filing a final plan began running on February 27, 2017. In
other words, the final plan should be filed no later than August 27, 2017. If necessary, City
Council can extend the filing deadline for the final plan for up to an additional 6 months under
Code Section 4-34(h)(7).
Alatus' lender is requesting confirmation that certain minor changes to the conditions set forth in
the earlier Resolutions are formally approved. Typically these sorts of final stage approvals are
addressed at the City staff level on an administrative basis. While City staff has already
administratively approved these requested revisions to the plans, in order to accommodate
Alatus' lender's request in this case, the optimal way to handle this is to seek City Council
review and approval. In light of the longer time -frame for planning and developing of the
Property, it is prudent to obtain City Council approval for these minor changes to the plans and
to ensure that the City Council is fully aware of the details associated with this Project. The
necessary public hearings have already occurred, and another public hearing is not required
under the City Code.
RESOLUTION NO. 2016- 53
RESOLUTION APPROVING PRELIMINARY PLAT
FOR ALATUS LLC DEVELOPMENT — 8400 BASS LAKE ROAD
(New Hope Planning Case 16-02)
BE IT RESOLVED by the City Council in and for the City of New Hope as follows:
WHEREAS, Alatus LLC, a Minnesota limited liability company ("Developer") has
submitted development plans for the construction of a four story, 183 unit high amenity luxury
apartment complex with underground parking ("Project") on a certain vacant parcel of land of
approximately 3.53 acres located at the corner of Bass Lake Road and Yukon Avenue North (8400
Bass Lake Road) in the City of New Hope, and legally described as follows:
Lots 1, 2, 3, 4 and 5, Block 1, Gervais and Hunter Replat, according to the recorded plat
thereof, Hennepin County, Minnesota ("Property"); and
WHEREAS, Developer has petitioned the City as part ofNew Hope Planning Case 16-02 for
subdivision and preliminary plat approval to facilitate the development and construction of the
Project; and
WHEREAS, the preliminary plat of "Hemken Addition" has been submitted to the City in
the manner required for platting of land under the New Hope City Code and under Chapter 462 of
the Minnesota Statutes and all proceedings have been duly had thereunder; and
WHEREAS, the Property is currently zoned R-4, High Density Residential District, but the
City intends to amend the City Ordinance zoning code and rezone the Property as Planned Unit
Development (PUD) District; and
WHEREAS, upon the Property being rezoned as Planned Unit Development (PUD) District,
said plat will be in all respects consistent with the City's Comprehensive Plan, zoning and platting
code and the regulations and laws of the State of Minnesota; and
WHEREAS, the Planning Commission held apublic hearing and considered the matter at its
meeting on March 2, 2016; and
WHEREAS, the Planning Commission, after a complete review of the issues involved,
recommended the City Council approve the request with conditions; and
. WHEREAS, the City Council has considered Planning Case 1-6-02 for the Project at its
meeting of March 28, 2016.
—1—
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New Hope
that the preliminary plat is hereby approved for "Hemken Addition" as identified in New Hope
Planning Case 16-02 is hereby approved subject to the following conditions:
1. The plat and title are subject to review by the City Attorney and shall be in compliance with
all conditions for the final plat required therein.
2. Developer shall pay a park dedication in the amount of $17,650 prior to recording the
final plat.
3. All existing easements running through the Property shall be vacated.
The final plat must establish all necessary new easements. Easement locations and sizes
must be approved by the City Engineer and City Attorney.
5. An easement for Developer to extend storm sewer across the Property line into the golf
course pond must be created and recorded separate from the plat.
6. An access easement between Developer and the City for the shared curb cut and
driveway must be created and recorded separate from the plat.
7. An access easement must be created and recorded separate from the plat outlining the
shared usage of the trash enclosure with the golf course.
8. Compliance with all requirements set forth in Resolution No. 2016- 54 , or as
subsequently amended by motion, approving the rezoning of the Property from R-4, High
Density Residential District to Planned Unit Development District, and development
stage approval for the Project, which shall be part of this resolution by the herein
reference and which shall be on file for examination in the office of the City Clerk.
9. Hennepin County's approval of the preliminary and final plat.
10. Submission of a CAD copy of the plat.
Dated the 28tli day of March, 2016.
ems,
Kathi emken, Mayor
Attest: _
Valerie Leone, City Clerk
P:\Attomey\SAS\I Client Files\2 City of New Hope\99-21602 Alatus PUD -Subdivision -Easement Vacation\Resolution approving preliminary plat.doc
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RESOLUTION NO. 2016- 54
RESOLUTION APPROVING REZONING TO PLANNED UNIT DEVELOPMENT
AND DEVELOPMENT STAGE APPROVAL FOR ALATUS LLC DEVELOPMENT —
8400 BASS LAKE ROAD
(New Hope Planning Case 16-02)
BE IT RESOLVED by the City Council in and for the City of New Hope as follows:
WHEREAS, Alatus LLC, a Minnesota limited liability company ("Developer") has
submitted development plans for the construction of a four story, 183 unit high amenity luxury
apartment complex with underground parking ("Project") on a certain vacant parcel of land of
approximately 3.53 acres located at the corner of Bass Lake Road and Yukon Avenue North (8400
Bass Lake Road) in the City of New Hope, and legally described as follows:
Lots 1, 2, 3, 4 and 5, Block 1, Gervais and Hunter Replat, according to the recorded plat
thereof, Hennepin County, Minnesota ("Property"); and
WHEREAS, the Property is currently zoned R-4, High Density Residential District; and
WHEREAS, Developer has petitioned the City as part of New Hope Planning Case 16-02
for: (1) approval of rezoning of the Property from R-4, High Density Residential District to Planned
Unit Development (PUD) District; and (2) Site Plan and Development Stage approval; and
WHEREAS, Developer has also petitioned the City as part of New Hope Planning Case 16-
02 for preliminary plat approval to facilitate the development and construction of the Project; and
WHEREAS, the City community development staff, City Planner, and City Engineer have
studied the matter, made reports and provided other information to the Planning Commission and
City Council; and
WHEREAS, the City has determined that Developer's redevelopment plan will meet many
of the stated goals in the Comprehensive Plan. The PUD zoning is the appropriate implementation
tool to facilitate the proposed redevelopment plan; and
WHEREAS, the Planning Commission held a public hearing and considered the matter at its
meeting on March 2, 2016; and
WHEREAS, the Planning Commission, after a complete review of the issues involved,
recommended the City Council approve the request with conditions; and
—1—
WHEREAS, the City Council has considered Planning Case 16-02 for the Project at its
meeting of March 28, 2016.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New Hope
that rezoning to Planned Unit Development District and development stage approval for the Project
identified in New Hope Planning Case 16-02 are hereby approved subject to the following
conditions:
1. Developer shall enter into a development agreement and a Planned Unit Development
agreement with the City. This agreement will include, but not be limited to the following:
• The plan set may be amended that defines the physical composition of the site and
building.
• Language allowing easements and right-of-way encroachments.
• Language for shared use of the proposed trash enclosure.
• Language for maintenance of shared facilities.
• Language indemnifying the City from any damage to private improvements located in
easements or rights-of-way.
• Language that outlines the responsibility of Developer to restore private
improvements located in easements and rights-of-way should they be damaged.
• Language that addresses any of the agreed upon operations that are integral to this
development.
2. The City approves the development stage plans dated 2-19-16 for a 183 unit apartment
building with a parking ratio of 1.41 stalls per unit for the Property.
3. The City approves the requested setback encroachments for the decks located on the south
and east side of the building.
4. The City approves the requested setback encroachment for the drive isles, service drive and
parking lot on the east side of the building.
5. The access onto Bass Lake Road is approved by Hennepin County.
6. The site plans be revised to provide seven disability parking stalls.
—2—
7. Developer provides a snow removal plan for the Property that includes provisions for
clearing snow from the public sidewalks surround the Property.
8. The location of the proposed trash enclosure shall not interfere with the design, location or
operation of the City sanitary sewer project along the Property's east property line.
9. Developer shall provide a description of how disability parking users in the east parking lot
will access the building.
10. The site plan shall provide a pedestrian connection to the golf course.
11. The overhead utilities on the perimeter of the Property shall be buried.
12. The City Engineer and Watershed District shall review and approve the site grading and
storm water management plans.
13. Developer shall enter into a storm water maintenance and management agreement with the
City (to be prepared by the City Attorney).
14. The site utility plan shall be subject to review and final approval by the City Engineer, Fire
Marshal, and Public Works.
15. Developer will work with the City and City Engineer to coordinate the proposed sanitary
sewer improvements along the eastern Property line.
16. The City shall approve the exterior building finishes as proposed on the elevation plans dated
2-19-16.
17. Developer shall submit a new cross section illustrating rooftop equipment screened from a
point across the street from the Project site.
18. Developer shall shift the freestanding sign north to provide for the required 10 -foot setback.
19. Developer shall provide sign details for the proposed traffic control signs.
20. Developer will agree to work with the City to develop plans for enhancements of the shared
storm water pond located on the golf course.
21. Developer shall provide financial guarantee and performance bond for landscaping and site
improvements (amount to be determined by City Engineer and building official).
22. Developer will provide record plans or as -built drawings to the City following Project
completion.
Isis
23. Compliance with all requirements set forth in Resolution No. 2016- 53 , or as subsequently
amended by motion, approving preliminary plat of the Property, for the Project which shall
be part of this resolution by the herein reference and which shall be on file for examination in
the office of the City Clerk.
24. As this PUD proceeds to Final Stage, Developer will be required to provide a final plat and
final development plans that incorporate the conditions of approval tied to the development
stage. Additionally, Developer must provide for City review and approval of all easements,
cross access easements, utilities and storm water facilities. The City will also require
development and PUD agreements that will be recorded against the Property along with the
final plat. All elements related to the Final Stage PUD, and all required easements and
documents shall be submitted and approved prior to the issuance of a building permit.
Dated the 28th day of March, 2016.
Kathi Hemken, Mayor
Atte_.. Y�
Valerie Leone, City Clerk
P:\ARorney\SAS\1 Client Fiies\2 City of New Hope\99-21602 Alatus PUD -Subdivision -Easement Vacation\Resolution approving rezoning to PUD.doc
S�
RESOLUTION NO. 2017- 26
RESOLUTION APPROVING VACATION OFALL EXISTING EASEMENTS
AND FINAL PLAT FOR ALATUS LLC DEVELOPMENT — 8400 BASS LAKE ROAD
(New Hope Planning Case 17-06)
BE IT RESOLVED by the City Council in and for the City of New Hope as follows:
WHEREAS, on March 28, 2016, the City approved the development plans submitted by
Alatus LLC, a Minnesota limited liability company ("Developer") for the construction of a four
story, 182 unit high amenity luxury apartment complex with underground parking ("Project") on
a certain vacant parcel of land of approximately 3.53 acres located at the corner of Bass Lake
Road and Yukon Avenue North in the City of New Hope at the property addresses and legal
description as follows:
Lots 1, 2, 3, 4 and 5, Block 1, Gervais and Hunter Replat, Hennepin County, Minnesota.
Address
8400 Bass Lake Road
8420 Bass Lake Road
8401 58th Avenue North
8411 58th Avenue North
8421 58th Avenue North
(the "Property")
Property Tax I.D. Nos.:
06-118-21-42-0012
06-118-21-42-0011
06-118-21-42-0008
06-118-21-42-0009
06-118-21-42-0010
WHEREAS, certain easements are recorded against the Property as shown on the
Gervais and Hunter Replat attached hereto as Exhibit A, including the following: drainage,
utility and driveway easements, an access easement and utility easements; and
WHEREAS, a storm sewer easement is also recorded against the Property as Document
Number T1092096, a copy of which is attached hereto as Exhibit B; and
WHEREAS, because of the planned replatting, it is necessary to first vacate the
drainage, utility and driveway easements, access easement and utility easements dedicated in the
Gervais and Hunter Replat as well as vacating the storm sewer easement recorded against the
Property as Document Number T1092096; and
WHEREAS, Developer has petitioned the City as part of New Hope Planning Case 17-
06 for vacation of all existing easements on the Property and final plat approval to facilitate the
development and construction of the Project; and
—1—
WHEREAS, the final plat of "Hemken Addition" has been submitted to the City in the
manner required for platting of land under the New Hope City Code and under Chapter 462 of
the Minnesota Statutes and all proceedings have been duly had thereunder, a copy of which is
attached hereto as Exhibit C; and
WHEREAS, the Property was previously zoned R-4, High Density Residential District,
but the City has amended the City Ordinance zoning code and rezoned the Property as Planned
Unit Development (PUD) District by a separate ordinance as of the date of this Resolution; and
WHEREAS, said plat is in all respects consistent with the City's Comprehensive Plan,
zoning and platting code and the regulations and laws of the State of Minnesota; and
WHEREAS, the Planning Commission held a public hearing and considered the matters
of vacating the easements and approval of the final plat at its meeting on February 7, 2017; and
WHEREAS, the Planning Commission, after a complete review of the issues involved,
recommended the City Council approve the request with conditions; and
WHEREAS, the City Council held a public hearing and has considered Planning Case
17-06 for the Project at its meeting of February 27, 2017; and
WHEREAS, at the request of the Developer, and pursuant to its authority under Minn.
Stat. §412.851 and New Hope Code §6-9, this Council hereby determines that the vacation of the
drainage, utility and driveway easements, access easement and utility easements dedicated in the
Gervais and Hunter Replat as shown in Exhibit A as well as vacation of the storm sewer
easement recorded against the Property as Document Number T1092096 with the Hennepin
County Registrar of Titles as shown in Exhibit B will benefit the public interest by eliminating
easements which are duplicative in nature or not serving a purpose for which they were intended
in that they are being replaced by new easements in the Hemken Addition plat of the Property.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New
Hope as follows:
That the request of the Developer to vacate all existing easements located on the Property
including drainage, utility and driveway easements, access easement and utility
easements dedicated in the Gervais and Hunter Replat as shown in Exhibit A as well as
vacating the storm sewer easement recorded against the Property as Document Number
T1092096 with the Hennepin County Registrar of Titles as shown in Exhibit B are
hereby approved and all existing easements shall be vacated.
2. The final plat is hereby approved for "Hemken Addition" as identified in New Hope
Planning Case 17-06 subject to the following conditions:
a. The plat and title are subject to review by the City Attorney and shall be in
compliance with all conditions for the final plat required therein.
—2—
b. Developer shall pay a park dedication in the amount of $17,650 prior to recording
the final plat.
c. All existing easements recorded against the Property shall be vacated.
d. The final plat must establish all necessary new easements. Easement locations and
sizes must be approved by the City Engineer and City Attorney.
e. An easement for Developer to extend storm sewer across the Property line into
the golf course pond must be created and recorded separate from the plat.
f. Developer shall enter into a storm water maintenance and management agreement
with the City (to be prepared by the City Attorney).
g. Developer shall enter into a development and PUD agreement that will be
recorded against the Property along with the final plat (to be prepared by the City
Attorney).
h. Developer shall provide for City review and approval of all easements, cross
access easements, utilities and storm water facilities.
i. Developer shall provide financial guarantee and performance bond for
landscaping and site improvements (amount to be determined by City Engineer
and building official).
j. An access easement between Developer and the City for the shared curb cut and
driveway must be created and recorded separate from the plat.
k. Hennepin County's approval of the final plat.
1. Submission of a CAD copy of the plat.
3. That the Mayor and City Manager are hereby authorized and directed to take all
necessary steps and actions to implement the intent of this Resolution to vacate the herein
described easements and approve the final plat of the "Hemken Addition."
4. That all conditions of approval set forth in the Resolution No. 2016-54 shall be
incorporated herein.
Dated the 27h day of February, 2017. /
Kathi He en, Mayor
Attest:
Valerie Leone, City Clerk
—3—
Exhibit A
Existing Easements Dedicated in the Plat of Gervais and Hunter Replat
See attached Plat of Gervais and Hunter Replat with the following dedicated easements:
1. Drainage, utility and driveway easement
2. Access easement
3. Utility easement
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Exhibit B
Storm Sewer Easement
See attached Storm Sewer Easement recorded as Document Number T1092096 with the
Hennepin County Registrar of Titles.
—5—
10921►96
Form No. 31-M.
1 iss li CiCti10E, made ........lay ? A......_........._., 19.73._,
a corporation under the laws of the State of._,,,__ Minnesota - party of the #M part, and
a corporntlon under the laws of the Sfiate
party of the semnd• part,
OneDo ittttg ¢!(!, Th�t tho as,d nart� of �d %n consideration o the sum o
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to a ' to hand paid by the said party of the second part, the receipt whereof is hereby acknowledged,
does hereby Oram, Bargain, Quitoiainy and Convey unto the said party of 4he sscond part, its successors
and 9djg��,,,,.lrever, all the tract ,..........or panel-_.. of land lying and being in the County of..w..,._.
_�..•_�Y. _`_ of'dflnnesota, described as follows, to -wits
A permanent easement for storm sewer purposes, including the full and free
� right and authority to enter upon and maintain said storm sewer upon, over
?and under the following described property, to -wit:
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That part of Lot 6, Block 1, Gervais and Hunter Raplat described
i. `i as follows: Commencing at the Southeast corner of said Lot 5;
Vthence North along the East line of said Lot 5, a distance of 200
_ V feet; thence Southwesterly 200 feet, more or less, to a point on
the South line of said Lot 5,distant 60 feat West of the Southeast
1 L corner thereof; thence Easterly along said South line 6D feet to
the point of beginning.
Certificate of Title No. 428286,
State Deed Tax dud hereon: Exempt TRAN$FER ENTERED
-W 16,1973,
FINANCE VISION
1 C f MINN.
ey
X0 3W3abe 40 to alb the 95>011e, Together udth all the hereditaments and appartenam" there-
unto belonging or in anyv4o appertatnring, to the said party of the second part, its suooeseors and assigns;
Ohertot, The said fret party )wt; caused these
presents to be exeeated in its corporate name by
President ixd3 aocy._ _.. ..___.,...........,_.__-and its oorporate seal to
be hereunto afJited the day and year first above written,
MAR-JIL CORPORATION
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and for said County, personally appeared
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I the avaZ of xad. to said instrument is the corporate &=I of said corporation,
signed and sealed In behalf of said corporation by. authority of. ifs Board
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in this instrument should be sent to:
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2620 Joppa Avenue South 55416
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Plat of Hemken Addition
See attached.
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ORDINANCE NO. 17-05
AN ORDINANCE AMENDING THE ZONING MAP OF NEW HOPE ESTABLISHED
BY NEW HOPE CODE SECTION 44(b) BY REZONING CERTAIN PROPERTIES AT
8400 AND 8420 BASS LAKE ROAD AND 8401, 8411, AND 8421 58TH AVENUE NORTH
FROM R4, HIGH DENSITY RESIDENTIAL DISTRICT TO PUD, PLANNED UNIT
DEVELOPMENT DISTRICT NUMBER 17-06
THE CITY COUNCIL OF THE CITY OF NEW HOPE ORDAINS:
Section 1. Section 44(b) "Zoning map" of the New Hope City Code is hereby amended by
rezoning or changing the zoning district designation of the following described properties having
property addresses of 8400 and 8420 Bass Lake Road and 8401, 8411, and 8421 58th Avenue
North, New Hope, Minnesota, 55428, and legally described below from R4, High Density
Residential District to PUD, Planned Unit Development District 17-06 under Section 4-24 of the
New Hope Code:
Lots 1, 2, 3, 4 and 5, Block 1, Gervais and Hunter Replat, Hennepin County, Minnesota.
Address
8400 Bass Lake Road
8420 Bass Lake Road
8401 58th Avenue North
8411 58th Avenue North
8421 58th Avenue North
(the "Property")
Property Tax I.D. Nos.:
06-118-21-42-0012
06-118-21-42-0011
06-118-21-42-0008
06-118-21-42-0009
06-118-21-42-0010
Section 2. The Property is rezoned to PUD, Planned Unit Development District 17-06 and
the allowed use shall be a market -rate apartment community.
Section 3. Pursuant to Section 4-24(c) of the New Hope City Code, the approval of any
development or redevelopment within Planned Unit Development District 17-06 shall be subject
to the requirements set forth in New Hope City Code Sections 4-30 and 4-34 including, but not
limited to, the following performance and design standards and site and building plan approval:
The Property shall be developed or redeveloped in accordance with the final stage PUD
master plans approved by the City ("Final Plans"), which include site plans, grading,
drainage and storm water management plans, utility plans, lighting and photometric
plans, landscape plans, floor plans, building elevations and comprehensive sign plans.
The Final Plans outline all of the performance standards for development of the Property,
including, at a minimum, the following design standards for the Property as set forth
below:
Lot Area
3.53 acres
Maximum Number of Unit
182 units
Density Allowed
52 units per acre maximum
Lot Width
278 feet
Setbacks required:
Front Yard Local Street (West)
42 feet
Side Yard Local Street (North)
20 feet
Side Yard Arterial Street (South)
20 feet
Rear Yard (East)
28 feet
Building Height
Not to exceed 4 stories
Green Space
44% (not including hard surface
atio and pool space)
Recreational Area — Amenity
10,217 square feet
Deck
2. Any applicant for an approval of a development plan or building permits within PUD,
Planned Unit Development 17-06 shall meet the following minimum parking
requirements which are included in the Final Plans:
Minimum Parking Required
235 underground parking stalls
23 surface parking stalls
Total: 258 Parking Stalls*
(1.41 stalls per unit)
*7 of Total Stalls Shall Be
Disability Stalls
3. Any applicant for an approval of a development plan or building permit within PUD,
Planned Unit Development District 17-06 shall submit development and final stage PUD
plans for City review and approval. The City reserves the right to adjust any performance
standards set forth in this ordinance if deemed necessary to improve the site and building
design for the purpose of compatibility, public health, or public safety.
4. Any applicant for an approval of a development plan or building permit within PUD,
Planned Unit Development District 17-06 shall submit a detailed landscape plan with the
PUD development and final stage PUD plans for City review and approval that complies
with the following requirements:
a. Mandatory burial of overhead utilities along perimeter of the Property;
b. Traffic visibility setbacks at the parking entrances which shall not be impeded by
landscaping.
2
5. Development and final stage building plans shall address building security related to
building entrances and balconies/decks.
6. Development and final stage building plans shall be subject to the following minimum
sign standards, regarding which the Final Plans approved by the City are in compliance:
a. A maximum of one (1) freestanding sign which shall meet the following criteria:
1. The total sign face of the free standing sign shall not exceed 70 square feet.
2. The total sign height of the freestanding sign shall not exceed 8 feet.
3. The freestanding sign must be set back at least 10 feet from all lot lines.
b. Signs that comply with the aforementioned sign criteria shall be subject to. sign
permit review and approval by City staff. Any variation, change or addition
beyond the aforementioned criteria shall require an amendment to the approved
Sign Plan and shall be subject to the review of the Planning Commission and
approval of the City Council.
7. Development and final stage building plans shall detail a stormwater management system
that satisfies the watershed requirements.
8. Any development or redevelopment plans for the Property including, but not limited to
the Final Plans, that fail to meet the design and performance standards set forth herein
shall require a PUD amendment approved by the City.
9. All conditions of approval set forth in Resolution No. 2016-54 shall be incorporated
herein.
10. Effective Date. This zoning map amendment shall become effective and be formally
imposed on the New Hope Zoning Map upon the approval of the PUD Agreement and
Development Agreement pursuant to Planning Case Nos. 16-02 and 17-06. This zoning
map amendment shall be published thereafter and shall be in full force upon final
publication.
APPROVED by the New Hope City Council this 27th day of Febru y, 2017.
Kathi He n, Mayor
ATT T:
Valerie Leone, City Clerk
(Published in the New Hope -Golden Valley Sun -Post the 9th day of March
2017)
P:\Attomey\SAS\l Client Files\2 City of New Hope\99-81705 Amending Zoning Map to PUD - Alatus\Ordinance amending Alatus property to
PUD.docx
3
Ori
Request for Action
March 20, 2017
Approved by: Kirk McDonald, City Manager
Originating Department: Community Development
By: Jeff Sargent, Director
Agenda Section
EDA
Item Number
3
Agenda Title
Resolution authorizing the execution of a purchase and development agreement with Alatus New Hope, LLC
Requested Action
At the February 27 Economic Development Authority (EDA) meeting, Alatus stated that they would be
agreeable to the city funding a portion of the cost for the Variable Refrigerant Flow (VRF) HVAC system
through a loan instead of an increase in TIF funding. The majority of the EDA approved the concept of a loan,
subject to the terms and conditions being presented at a later date. Subsequent to that meeting, staff and Ehlers
have negotiated terms of the loan with Alatus, and staff requests to present the terms of the loan to the EDA
for consideration. The action taken by the EDA would be to authorize the execution of the purchase and
development agreement, which will be amended to reflect the terms and conditions of the proposed loan.
Policy/Past Practice
It is a practice of staff to present loan terms to the EDA for consideration.
Background
Bob Lux, Principal of Alatus, LLC, approached the city with an idea to incorporate a state-of-the-art heating
and cooling system for the project in New Hope. Instead of incorporating individual "MagicPak" systems in
each apartment unit, Alatus is looking to utilize a Variable Refrigerant Flow (VRF) system for the building.
VRF systems achieve extremely high efficiencies by modulating the flow of the refrigerant according to the
exact demands of specific areas throughout the building. By coupling the boiler/chiller VRF system with solar
power, the new apartment building in New Hope would be able to achieve close to zero emissions, meaning
that the building would generate no carbon footprint. This would allow the building to achieve LEED
certification, making it a model project for the future of heating and cooling needs of similar buildings in the
metro area. Support of this project would also align with the city's goals of striving for a "green" environment,
as it does with the GreenStep Program.
The benefits of the VRF HVAC system include the nearly 100% efficiency rating, the fact that there will be no
carbon footprint for the building, as well as better control of heating and cooling needs throughout the
development. The VRF system uses roughly 50% of the energy that the MagicPak systems use, saving an
equivalent in emissions of 615,000 gallons of gasoline over a 20 -year period. Each apartment unit would have
its own meter to monitor heating and cooling usage, but would no longer need to have individual MagicPak
systems in each unit, adding to the aesthetics of the building as well. Having a LEED-certified building within
city limits is also beneficial to the city.
The challenge facing Alatus to incorporate the VRF system is the cost. Alatus received a quote of $688,000 for
the installation of the VRF HVAC system. Mr. Lux is excited to install the VRF system because of the positive
impacts it would have on the building and the city, however he stated that the cost would be prohibitive for
Alatus to pursue on its own. He has asked if the City Council would be amenable to cover half of the cost of
the system (up to $350,000) to help with the project. Ehlers conducted a TIF analysis of this proposal and has
I:\RPA\COMM DEV\ Development\ EDA -Approve VRF Loan Structure for Alatus 3-20-17.docx
Request for Action, Page 2
indicated that if the Council would like to pursue this project, TIF generated from the project could be used to
help pay for the VRF system. The effect on the TIF note would be an increase to the agreed upon terms from 23
years of assistance to 23.5 years.
The City Council reviewed the proposal at the February 21 work session meeting and inquired whether Alatus
would be amenable to a loan rather than using TIF money to support the project. Staff had conversations with
Alatus, and they were in favor of exploring a loan option to help finance the VRF system. At the February 27
EDA meeting, the majority of the commissioners approved the concept of the loan, subject to its terms and
conditions. Subsequently, staff and Ehlers negotiated the terms with Alatus and now would like to present the
terms of the loan to the EDA for approval.
A special EDA meeting was requested in order for Alatus to meet their closing schedule in a timely manner.
Once the loan is approved, Alatus' legal counsel will work with the city's redevelopment attorney to add the
terms of the loan into the purchase and development agreement. Once complete, Alatus will then sign the
purchase and development agreement and close on the property.
Loan Terms
The loan amount to Alatus from the New Hope EDA would be for $350,000. The payback of this loan would
be over 5 years, with 4% interest. The payback is structured in a way that Alatus would pay the city interest -
only payments during years 1-4, with a balloon payment in year 5 for the remainder. Staff and representatives
from Ehlers feel that these are very good terms, and recommend approval of the loan. A more detailed analysis
of the loan structure is included in the attached memo from Ehlers & Associates.
Attachments
• EDA Resolution
• Ehlers Memo
• Draft Purchase and Development Agreement
• VRF System Benefits Memo provided by Alatus, LLC
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 17-05
RESOLUTION AUTHORIZING THE EXECUTION OF A PURCHASE AND DEVELOPMENT
AGREEMENT WITH ALATUS NEW HOPE, LLC
BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") AS FOLLOWS:
WHEREAS, the Authority and the City of New Hope, Minnesota (the "City") have created Tax
Increment Financing District No. 11-1 (the "District") pursuant to the Minnesota Tax Increment Financing
Law, Minnesota Statutes, sections 469.174-469.1794 (the "Tax Increment Act"); and
WHEREAS, the Authority has received a proposal from Alatus New Hope, LLC (the "Developer")
pursuant to which the Developer would construct a rental housing development (the "Improvements") on
certain real property in the District to be conveyed by the Authority to the Developer (the "Property");
and
WHEREAS, the Developer has also proposed that the Authority provide certain financial assistance
to the Developer using tax increment revenues from the District; and
WHEREAS, the Authority's Board of Commissioners previously reviewed and approved a
development agreement between the Authority and the Developer, but subsequent to that approval
Authority staff and the Developer negotiated changes to certain provisions of that agreement; and
WHEREAS, there has been presented to the Authority's Board of Commissioners a revised
proposed Purchase and Development Agreement (the "Contract") between the Authority and the
Developer setting forth the terms of the Authority's conveyance of the Property to the Developer and its
provision of financial assistance to the Developer in connection with the construction of the
Improvements.
NOW, THEREFORE, be it hereby resolved by the Board of Commissioner of the Authority as
follows:
1.02. Execution and Performance of Contract and Issuance of the Note. The appropriate officers of
the Authority are hereby authorized to execute the Contract in substantially the form presented to the
Board of Commissioners, subject to such non -substantive changes as may be approved by the Executive
Director and the Authority's legal counsel, to cause the Authority's obligations under the Contract to be
performed, including its obligation to convey the Property to the Developer, to execute the Note at the
time stated in the Contract and to issue and deliver the Note described therein at the time provided in the
Contract.
Section 2. Form of Note. The Note shall be substantially in the form contained in the Contract, with
the blanks properly filled in.
Section 3. Terms, Execution and Delivery.
3.01. Dates, Interest Payment Dates. The Note shall be dated as of the date it is issued. Principal of
and interest on the Note shall be payable to the owner of record thereof as of the close of business on the
fifteenth day of the month preceding each Scheduled Payment Date, whether or not such day is a business
day.
3.02. Registration. The Authority appoints the Executive Director as Note Registrar. The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as
follows:
(a) Register. The Registrar shall keep at his/her principal office a Note register in which the
Registrar shall provide for the registration of ownership of the Note and the registration of transfers or
exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered
owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar,
duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner
in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or
transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor.
The Registrar may close the books for registration of any transfer after the fifteenth day of the month
preceding each interest payment date and until such interest payment date. The Note shall not be
transferred to any person other than an affiliate or other related entity of the Developer, unless the a has
been provided with an opinion of counsel, acceptable to the Authority, that such transfer is exempt from
registration and prospectus delivery requirements of federal and applicable state securities laws.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly canceled by the
Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer,
the Registrar may refuse to transfer the same until it is satisfied that the endorsement on the Note or
separate instrument of transfer is valid and genuine and the requested transfer is legally authorized. The
Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment,
deems improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose
name the Note is at any time registered in the Note register as the absolute owner of the Note, whether the
Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of
or interest on the Note and for all other purposes, and all such payments so made to any such registered
owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the
Authority upon the Note to the extent of the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may
impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other
governmental charge required to be paid with respect to such transfer or exchange and reasonable legal
fees and other costs incurred in connection therewith.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case the Note shall become mutilated or be
lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor
in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in
substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and
charges of the Registrar in connection therewith; and, in the case of a Note lost, stolen, or destroyed, upon
filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen or destroyed, and of
the ownership thereof, and upon furnishing to the Registrar of an appropriate indemnity in form, substance,
and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees.
Any Note so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall
be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been
called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to
payment.
3.03. Preparation and Delivery. The Note shall be prepared under the direction of the Executive
Director of the Authority and shall be executed on behalf of the Authority by the manual signatures of its
Executive Director and President. In case any officer whose signature, or a facsimile of whose signature,
shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature or
facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had
remained in office until delivery. Notwithstanding such execution, the Note shall not be valid or
obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a
certificate of authentication on such Note has been duly executed by the manual signature of an authorized
representative of the Registrar. The executed certificate of authentication on the Note shall be conclusive
evidence it has been authenticated and delivered under this resolution. When the Note have been so
executed and authenticated, it shall be delivered by the Executive Director to the Developer.
Section 4. Pledge of Available Tax Increment. The Authority hereby pledges to the payment of the
principal of and interest on the Note Available Tax Increment, as defined in the Contract.
Section 5. Certification of Proceedings.
5.01 Certification of Proceedings. The officers of the Authority are hereby authorized and directed
to prepare and furnish to the Developer certified copies of all proceedings and records of the Authority,
and such other affidavits, certificates, and information as may be required to show the facts relating to the
legality and marketability of the Note as the same appear from the books and records under their custody
and control or as otherwise known to them, and all such certified copies, certificates and affidavits,
including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited
therein.
Adopted this 20th day of March, 2017.
— Z��ed-
Kathi He n P s
Attest:
Kirk McDonald, Executive Director
Memo
To: Kirk McDonald — Executive Director
From: Stacie Kvilvang - Ehlers
Date: March 20, 2017
Subject: Updated Development Agreement Terms With Alatus New Hope LLC
On February 21, 2017, the City Council met with staff and the Developer in a work session
to discuss their request that the EDA provide a grant or loan to the project for $344,000.
The request was to assist in paying for half (1/2) the increased costs of installing a VRF
mechanical system instead of utilizing a traditional magic pack system. The City Council
was split on the idea and discussed that a loan seemed more appealing due to the large
investment the EDA was already making with TIF. On March 27, 2017, the EDA met to
discuss the request again and a majority of the members agreed a loan would be
acceptable and directed staff and the Developer to come back with terms for their review
and consideration.
Based upon this, staff and the developer have formulated the following terms for
consideration (Section 3.11 of the Agreement):
1. EDA Loan
a. EDA will loan the Developer up to $344,000 for increased costs of the
project's mechanical system (VRF)
i. Loan term is 5 years
ii. Funds are drawn only when 100% of developer's equity and loan
proceeds have been expended
iii. Interest rate is 4% (maximum statutory interfund loan rate)
1. Interest is payable upon draw of funds
2. Paid annually on the anniversary of the first disbursement
iv. Principal amount is to be paid in full on or before the fifth (5'h)
anniversary date of the draw of funds
In addition, updated improvements to the storm water pond located on the City's Golf
Course and utilized by both the City and the development will require improvements (rip rap
along the ponds edge) on the City's portion as well. Alatus will undertake these
improvements as part of their project, but the City will be required to reimburse them for
ISEHLERS
LEADERS IN PUBLIC FINANCE
It
J*
www.ehlers-inc.com
Minnesota phone 651-697-8500 3060 Centre Pointe Drive
Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22
toll free 800-552-1171
Kirk McDonald
Updated Development Agreement Terms With Alatus New Hope LLC.
March 20, 2016
Page 2
their share of the costs (estimated at approximately $70,000). Based upon this, we have
included this information within Section 4.3 (h) of the Development Agreement:
(h) In connection with the development of the Improvements the Owner will
construct certain storm water pond upgrades on the City's golf course, including but
not limited to installation of rip rap along the pond edge on the City's portion of the
pond. The City has agreed to pay the costs of such improvements. The City has
reviewed plans for such upgrades, and the Owner agrees that it will not make
changes to such plans without the City's prior written approval.
Finally, the agreement was also updated since the trash enclosure on the Golf Course
property no longer needed to be relocated, but the joint entrance did as well as some minor
modifications to the current Golf Course parking lot. Therefore, Section 4.3 (d) of the
Agreement has been updated as follows:
(d) As a part of its construction of the Improvements the Owner will
construct a new joint entrance into the Property and the City's golf course and
construct required changes to the golf course parking lot due to the relocation of the
entrance. The location and nature of the entrance and golf course parking lot
improvements will be as shown on the Owner's approved Construction Plans. The
City and the Owner will enter into an access agreement, which access agreement will
be in the form attached to this Agreement as Schedule F.
If these terms are acceptable to the EDA, the attached resolution would approve the
updated Development Agreement and issuance of the TIF Note. The Developer is ready to
proceed with closing on the land transaction with the City upon approval of the updated
Agreement.
Please contact me at 651-697-8506 with any questions.
Draft
4—x-93-16-17 (v2-)
PURCHASE AND DEVELOPMENT AGREEMENT
By and Between
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
and
ALATUS NEW HOPE, LLC
Dated as of: .2017
This document was drafted by:
BRADLEY & DEIKE, P. A.
4018 West 656 Street, Suite 100
Edina, MN 55435
Telephone: (952) 926-5337
Request for Action
March 28, 2016
Approved by: Kirk McDonald, City Manager
Originating Department: Community Development
By: Jeff Sargent, Director
Agenda Title
Resolution authorizing the sale of land to Alatus Yukon, LLC. (improvement project no. 964)
Agenda Section
EDA
Item Number
4
Requested Action
Staff requests the Economic Development Authority (EDA) to approve the resolution authorizing the sale of
land located at 8400 Bass Lake Road, 8420 Bass Lake Road, 8401— 58th Avenue, 8411 — 58th Avenue, and 8421
— 58th Avenue to Alatus Yukon, LLC (Alatus) for the redevelopment of the property into an 183 -unit
apartment project
Policy/Past Practice
It is common practice for the EDA to authorize the sale of city -owned property to developers for
redevelopment projects.
Background
On September 28, 2015, the Economic Development Authority (EDA) entered into a preliminary development
agreement with Alatus, LLC, ensuring the developer exclusive negotiation with the city for the possible
purchase of the property. The City Council reviewed the proposed term sheet for this development at the
February 16, 2016 work session meeting. The term sheet outlined that Alatus would acquire the parcels from
the EDA for $1.4 million, based on a market -rate price for land and a discount of nearly $400,000 to
accommodate soil corrections on the site. The preliminary term sheet is attached for the EDA's review.
The EDA is requested to approve the resolution that would authorize the sale of the parcels to Alatus. This is
subject to the approval and execution of a purchase and development agreement between the EDA and
Alatus, which will take place at a future date. Authorizing the sale of the parcels to Alatus in no way
obligates the EDA to sell the land to Alatus if the purchase and development agreement is not executed.
However, authorization of the sale of the land is required before the purchase and development agreement
can be finalized.
Recommendation
Staff recommends that the Council approve the attached resolution.
Attachments
• Resolution
• Public Hearing Notice
• Term sheet (2/16/16)
• Site Map
I:\RFA\COMM DEV\Development\Q & R EDA Land Sale to Alatus 3-28-16.docx
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
CITY OF NEW HOPE
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 16- 06
RESOLUTION AUTHORIZING THE SALE OF LAND TO ALATUS YUKON LLC
BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") AS FOLLOWS:
WHEREAS, the Authority has received a proposal from Alatus Yukon LLC (the
"Developer") pursuant to which the Authority would convey to the Developer certain real
property owned by the Authority and located in the City of New Hope (the "City) in order to
allow the Developer to construct a 183 -unit market rate apartment building with underground
parking (the "Improvements"); and
WHEREAS, the Authority has determined that construction of the Improvements is in the
best interests of the Authority and the City and that it will result in the construction of new rental
housing units currently not available in the City; and
WHEREAS, the Authority has held a public hearing on the sale of the property to the
Developer as required by Minnesota Statutes, section 469.105; and
WHEREAS, there has been presented to the Board of Commissioners of the Authority the
terms of the sale of land to the Developer.
NOW, THEREFORE, the Board of Commissioners of the Authority does hereby approve
the sale of the property to the Developer, subject to the approval and execution of a purchase and
development agreement between the Authority and the Developer.
Adopted this 28th day of March, 2016.
Kathi fternken, President
1`
Attest7��
Kirk McDonald, Executive Director
AFFIDAVIT OF PUBLICATION
STATE OF MINNESOTA ) ss
COUNTY OF HENNEPIN
Charlene Vold being duly sworn on an oath,
states or affirms that he/she is the Publisher's
Designated Agent of the newspaper(s) known
as:
SP Robb/Crystal/NewHope/GoldV
with the known office of issue being located
in the county of:
HENNEPIN
with additional circulation in the counties of:
HENNEPIN
and has full knowledge of the facts stated
below:
(A) The newspaper has complied with all of
the requirements constituting qualifica-
tion as a qualified newspaper as provided
by Minn. Stat. §331A.02.
(B) This Public Notice was printed and pub-
lished in said newspaper(s) once each
week, for 1 successive week(s); the first
insertion being on 03/17/2016 and the last
insertion being on 03/17/2016.
MORTGAGE FORECLOSURE NOTICES
Pursuant to Minnesota Stat. §580.033
relating to the publication of mortgage
foreclosure notices: The newspaper complies
with the conditions described in §580.033,
subd. 1, clause (1) or (2). If the newspaper's
known office of issue is located in a county
adjoining the county where the mortgaged
premises or some part of the mortgaged
premises described in the notice are located,
a substantial portion of the newspaper's
circulation is in the latter county.
By: V��L
Designated Agent
Subscribed and sworn to or affirmed before
me on 03/17/2016 by Charlene Vold.
1-t-ikn�A c-z�� �
Notary Public
VVVVvwV-
'4D""NE MARIE MO EW'
Notary Public -Minnesota
' My c., jut",
Expl►ee Jen 31, 2016
Rate Information:
(1) Lowest classified rate paid by commercial users
for comparable space:
$46.90 per column inch
Ad ID 513725
City of New Hope
(Official Publication)
NOTICE OF PUBLIC HEARING
NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY
CITY OF NEW HOPE
HENNEPIN COUNTY
STATE OF MINNESOTA
NOTICE IS HEREBY GIVEN that
the Board of Commissioners of the
New Hope Economic Development
Authority (the "EDA'), Hennepin
County, State of Minnesota, will
hold a public hearing on March 28,
2016, at approximately 7:30 P.M. at
the City of New Hope City Council
Chambers in City Hall, 4401 Xylon
Ave N, New Hope, Minnesota, to
consider the proposed sale of cer-
tain land to Alatus Yukon LLC (the
"Recipient'). The subject land con-
sists of the following PID #'s:
06-118-21-42-0008
06-118-21-42-0009
06-118-21-42-0010
06-118-21-42-0011
06-118-21-42-0012
It is proposed that the EDA will
convey the land to the Recipient in
furtherance of the EDA's goals for
its Redevelopment Project No. 1.
At the hearing, the EDA will meet
to decide if the sale is advisable. A
copy of all documents relating to the
proposed sale of land will be on file
and available for inspection at City
Hall during regular business hours.
All interested persons may ap-
pear at the hearing and present their
views orally or prior to the meeting
in writing.
Dated: March 17, 2016
BY ORDER OF THE BOARD
OF COMMISSIONERS OF THE
NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY
CITY OF NEW HOPE, MINNESOTA
/s/ Jeff Sargent
Director of Community Development
3/17/16, 3SP2, PHN
EDA Land Sale, 513725
To: Kirk McDonald — Executive Director
From: Stacie Kvilvang & Jason Aarsvold
Date: February 16, 2016
Subject: Term Sheet for Purchase and Development Agreement — Golf Course
Site
On September 8, 2015, the EDA approved entering into a preliminary Development
Agreement (PDA) with Alatus LLC. for the development of the above referenced site into a
higher -end market rate rental development. Since that time, the developer has been
working with staff on refinement of the site plans, hosting required neighborhood meetings
and working on terms for the acquisition and TIF assistance for the project. The Developer
is proposing to construct a 180 -unit market rate apartment complex at a total development
cost of approximately $38 million.
The existing PDA is set to expire on April 1 st and will be replaced with a final Purchase and
Development Agreement. Following are the main points for review and comment on the
terms for the above referenced agreement by the EDA:
1. General
a. Purchase and Development Agreement will replace the existing Preliminary
Development Agreement with Alatus, LLC
i. New name will be Alatus Yukon LLC
2. Acquisition
a. The Developer will acquire the five (5) existing parcels from the EDA for
$1,427,400. This equates to approximately $7,800/unit and is discounted
slightly from market to account for nearly $400,000 in required soils
corrections for the site (if those were not required purchase price would have
been approximately $1,800,000 or $10,000/unit). The purchase and the
transfer of the land will be under the following terms:
i. EDA will deed the land to the Developer for $1 at closing
The Developer will pay the EDA for the land after construction is
complete, and the property is leased to a state that the Developer can
refinance the construction loan and/or obtain permanent financing (2
to 3 years)
m/mehlers-inc.com
E H L E RS --------------__ --
Minnesota phone 651-697-8500 3060 Centre Pointe Drive
LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22
toll free 800-552-1171
Kirk McDonald
Term Sheet For Purchase and Development Agreement — Golf Course Site
February 16, 2016
Page 2
iii. If proceeds from a refinancing (or sale) are not adequate to fully pay
the acquisition price, then the EDA will be paid from 20% of the annual
cash flow from the property until paid in full (80% of the cash flow will
go to the developer).
1. The split in cash flow was determined by the amount of equity
invested by each party (i.e. land is the EDA's equity investment
and the developer is investing approximately $6.3 million in
cash)
b. The EDA will hold a public hearing on the sale of the land on the evening the
Purchase and Development Agreement is to be approved (anticipated to be
March 28, 2016)
c. Closing will happen on or before June 1, 2016 and EDA will provide "clean"
title to the property
3. Deferral of Developer Fee
a. The developer will receive a developer fee of $1,262,700 (3.43% of total
development costs and in line with industry standards)
i. Developer is deferring approximately $826,000 of their fee (only receive
$400,000 of it during construction and lease up)
ii. Remaining is paid to developer from 80% of available cash flow
4. Development and Timing of Construction
a. Construction of 180 market rate apartments and related amenities and
underground and surface parking
b. Developer to construct new joint access off Bass Lake Road for the
development and the Golf Course
c. Developer to construct a new joint garbage enclosure for the development
and the Golf Couse to be located on the Golf Course property
i. Developer will store their garbage bin in their property, but will move it
to the joint trash enclosure on garbage pick-up day
d. Must commence construction June 1, 2016 and substantial completion by
December 31, 2017 (may be extended to June 1, 2018)
5. Platting and Zoning
a. Developer will plat property into one (1) parcel
b. Developer will prepare and obtain City approval of a planned unit development
("PUD") and Plat of the Property at their cost and subject to all City ordinances
and procedures
Kirk McDonald
Term Sheet For Purchase and Development Agreement — Golf Course Site
February 16, 2016
Page 3
c. Developer will prepare cross access agreements for the new combined
entrance for the development and the Golf Course, and for access onto the Golf
Course property where the new trash enclosure will be constructed
6. Burial of Power Lines
a. The developer will pay for the burial of the power lines from Yukon Avenue to
Winnetka Avenue
i. The EDA will reimburse the developer for $125,000 of the costs
associated with the burial of the power lines (this number may change
as final costs are determined, determining cost to bury line to existing
lift station pump and to assure the estimates include cable and
telephone lines as well)
7. Park Dedication Fees
a. The developer will pay $17,700 in park dedication fees per the City's policy
8. Payment of Authority Costs
a. Developer is required to reimburse EDA for costs of consultants in negotiating
and drafting development agreement (fiscal and legal).
9. Tax Increment
a. The EDA has created TIF district 11-1
b. The Developer will receive a pay-as-you-go note in the amount of $4.6 million
i. Term of the TIF note will be for 15 years
ii. Interest will be at the lesser of 4.75% or the Developer's actual
financing rate
iii. Developer will receive 95% of the tax increment generated
c. The EDA will be reimbursed for the difference in their land assembly costs of
$2,363,100 ($2,250,000 was acquisition and the remainder was relocation
and demolition costs) and the purchase price by the Developer, which
equates to $935,700
i. In August 2015, the EDA approved an interfund loan to allow for this
repayment. It is estimated that it will be repaid (with interest at 4%)
within two to three years after the TIF Note is done (district term would
be 17 to 20 years)
10.Lookback
a. The developer will be required to submit audited financial to the City's
Financial Advisor at a specified time for review. Based upon actual costs,
sources of funding and revenues generated, the TIF note would be adjusted
down to the extent certain thresholds were exceeded (the details of the look
back are still being finalized)
Please contact either of us at 651-697-8500 with any questions.
8400 Bass Lake Road
Subject Property
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59th
Request for Action Agenda Section
EDA
November 28, 2016
Approved by: Kirk McDonald, City Manager Item Number
Originating Department: Community Development
4
By: Jeff Sargent, Director
Agenda Title ✓ -a/) L,,e d (V
Resolution Authorizing the Execution of a Purchase and Development Agreement with Alatus New Hope,
LLC. (project No. 964)
Requested Action
Staff requests the Economic Development Authority (EDA) to approve a resolution authorizing the execution
of a contract for private redevelopment with Alatus New Hope, LLC.
Policy/Past Practice
It is a past practice of the staff to get EDA approval/authorization for a development agreement with a private
third -party owner of a land when a TIF District has been established on the property to make improvements
to the land.
Background
At the February 16, 2016, City Council work session meeting, staff presented the Council with the preliminary
term sheet for the purchase and development agreement with Alatus. Since that time, the developer has gained
access to the property to conduct further soil tests, and has also been approached by city staff for the potential
of replacing the aging lift station along 58th Avenue and burying the overhead utility lines along Bass Lake
Road from Yukon Avenue to Winnetka Avenue.
When further ground tests were performed, it was determined that the water table level was four feet higher
than originally estimated. This will result in the use of engineered foundation slabs for the construction of the
building, and would also require the building to be raised four feet higher than originally designed in order to
compensate for the water table level. These are added expenses. At the September 19, 2016 work session, the
Council accepted updated terms with the developer to cover a portion of the increased costs associated with
the soil and environmental conditions of the site and increased cost to the developer to construct the new lift
station for the city.
The added costs attributed to the modifications of the construction plans because of the water table, the
replacement of the city's lift station and the burial of the overhead utility lines amount to $3,721,000. For this
reason, the developer requested that the terms of the purchase and development agreement be amended in
order to make the project feasible. Two main changes are requested:
The developer will purchase the land for $1,443,000, which is $15,600 more than originally agreed upon,
and will pay the city at the time of closing.
2. The developer would like the pay-as-you-go TIF note to be increased from $4,600,000 to $6,574,000, and
for the TIF note to extend from 15 years to 23 years. It should be noted that the cost increase of the TIF
note of $1,974,000 only covers approximately half of the increased project costs of $3,721,000. The
developer will absorb the remaining costs through a reconfiguration of their business model.
I:\RFA\COMM DEV\Development\Q & R Approve Alatus Purchase and Development Agreement 11-28-16.docx
Request for Action, Page 2
A representative from Ehlers & Associates will be in attendance at the EDA meeting to help answer any
questions that the EDA may have.
Attachments
• Resolution
• Ehlers Memo (11/28/16)
• Purchase and Development Agreement
• February 16, 2016 work session minutes
• September 19, 2016 work session minutes
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 16- 21
RESOLUTION AUTHORIZING THE EXECUTION OF A PURCHASE AND
DEVELOPMENT AGREEMENT WITH ALATUS NEW HOPE, LLC
BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") AS FOLLOWS:
WHEREAS, the Authority and the City of New Hope, Minnesota (the "City") have created
Tax Increment Financing District No. 11-1 (the "District") pursuant to the Minnesota Tax
Increment Financing Law, Minnesota Statutes, sections 469.174-469.1794 (the "Tax Increment
Act"); and
WHEREAS, the Authority has received a proposal from Alatus New Hope, LLC (the
"Developer") pursuant to which the Developer would construct a rental housing development
(the "Improvements") on certain real property in the District to be conveyed by the Authority to
the Developer (the "Property"); and
WHEREAS, the Developer has also proposed that the Authority provide certain financial
assistance to the Developer using tax increment revenues from the District; and
WHEREAS, there has been presented to the Authority's Board of Commissioners a
proposed Purchase and Development Agreement (the "Contract") between the Authority and the
Developer setting forth the terms of the Authority's conveyance of the Property to the Developer
and its provision of financial assistance to the Developer in connection with the construction of
the Improvements.
NOW, THEREFORE, be it hereby resolved by the Board of Commissioner of the Authority
as follows:
1.02. Execution and Performance of Contract and Issuance of the Note. The appropriate
officers of the Authority are hereby authorized to execute the Contract in substantially the form
presented to the Board of Commissioners, subject to such non -substantive changes as may be
approved by the Executive Director and the Authority's legal counsel, to cause the Authority's
obligations under the Contract to be performed, including its obligation to convey the Property
to the Developer, to execute the Note at the time stated in the Contract and to issue and deliver
the Note described therein at the time provided in the Contract.
Section 2. Form of Note. The Note shall be substantially in the form contained in the
Contract, with the blanks properly filled in.
Section 3. Terms, Execution and Deliver-.
3.01. Dates; Interest Payment Dates. The Note shall be dated as of the date it is issued.
Principal of and interest on the Note shall be payable to the owner of record thereof as of the close
of business on the fifteenth day of the month preceding each Scheduled Payment Date, whether
or not such day is a business day.
3.02. Registration. The Authority appoints the Executive Director as Note Registrar. The
effect of registration and the rights and duties of the Authority and the Registrar with respect
thereto shall be as follows:
(a) Register. The Registrar shall keep at his/her principal office a Note register in which
the Registrar shall provide for the registration of ownership of the Note and the registration of
transfers or exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory
to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized
by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of
the designated transferee or transferees, a new Note of a like aggregate principal amount and
maturity, as requested by the transferor. The Registrar may close the books for registration of any
transfer after the fifteenth day of the month preceding each interest payment date and until such
interest payment date. The Note shall not be transferred to any person other than an affiliate or
other related entity of the Developer, unless the a has been provided with an opinion of counsel,
acceptable to the Authority, that such transfer is exempt from registration and prospectus
delivery requirements of federal and applicable state securities laws.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly canceled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar
for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement
on the Note or separate instrument of transfer is valid and genuine and the requested transfer is
legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make
transfers which it, in its judgment, deems improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the Note register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal of or interest on the Note and for all other purposes, and all such
payments so made to any such registered owner or upon the owner's order shall be valid and
effectual to satisfy and discharge the liability of the Authority upon the Note to the extent of the
sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax,
fee, or other governmental charge required to be paid with respect to such transfer or exchange
and reasonable legal fees and other costs incurred in connection therewith.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case the Note shall become mutilated
or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity
dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note
or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the
reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a
Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that
such Note was lost, stolen or destroyed, and of the ownership thereof, and upon furnishing to the
Registrar of an appropriate indemnity in form, substance, and amount satisfactory to it, in which
both the Authority and the Registrar shall be named as obligees. Any Note so surrendered to the
Registrar shall be canceled by it and evidence of such cancellation shall be given to the Authority.
If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption
in accordance with its terms, it shall not be necessary to issue a new Note prior to payment.
3.03. Preparation and Delivery. The Note shall be prepared under the direction of the
Executive Director of the Authority and shall be executed on behalf of the Authority by the
manual signatures of its Executive Director and President. In case any officer whose signature,
or a facsimile of whose signature, shall appear on the Note shall cease to be such officer before
the delivery of the Note, such signature or facsimile shall nevertheless be valid and sufficient for
all purposes, the same as if such officer had remained in office until delivery. Notwithstanding
such execution, the Note shall not be valid or obligatory for any purpose or entitled to any
security or benefit under this Resolution unless and until a certificate of authentication on such
Note has been duly executed by the manual signature of an authorized representative of the
Registrar. The executed certificate of authentication on the Note shall be conclusive evidence it
has been authenticated and delivered under this resolution. When the Note have been so
executed and authenticated, it shall be delivered by the Executive Director to the Developer.
Section 4. Pledge of Available Tax Increment. The Authority hereby pledges to the payment
of the principal of and interest on the Note Available Tax Increment, as defined in the Contract.
Section 5. Certification of Proceedings.
5.01 Certification of Proceedings. The officers of the Authority are hereby authorized and
directed to prepare and furnish to the Developer certified copies of all proceedings and records
of the Authority, and such other affidavits, certificates, and information as may be required to
show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed
representations of the Authority as to the facts recited therein.
Adopted this 28th day of November, 2016.
Kathi en, President
Atte
Kirk McDonald, Executive Director
Memo
To: Kirk McDonald — Executive Director
From: Stacie Kvilvang & Jason Aarsvold
Date: November 28, 2016
Subject: Updated Terms For Purchase and Development Agreement — Golf
Course Site
On February 16, 2016, the EDA approved the terms for a Development Agreement (DA)
with Alatus New Hope LLC. for the development of the above referenced site into 182 -units
of higher -end market rate rental units. On September 19, 2016, the EDA approved updated
terms with the Developer to cover a portion of the increased costs associated with the soil
and environmental conditions of the site and increased cost to the Developer to construct a
new lift station for the City.
Following is a summary of the Development Agreement terms:
1. General
a. Purchase and Development Agreement with Alatus New Hope LLC
2. Acquisition
a. The Developer will acquire the five (5) existing parcels from the EDA for
$1,443,000 (this equates to approximately $7,900).
b. Closing will happen on or before February 28, 2017 and EDA will provide
"clean" title to the property
3. Development and Timing of Construction
a. Construction of 182 market rate apartments and related amenities and
underground and surface parking
b. Developer to construct new joint access off Bass Lake Road for the
development and the Golf Course
c. Developer to construct a new joint garbage enclosure for the development
and the Golf Couse to be located on the Golf Course property
i. Developer will store their garbage bin in their property, but will move it
to the joint trash enclosure on garbage pick-up day
d. Developer to construct a new lift station for the City adjacent to the site
www,ehlers-inc.com
E H L E RS Minnesota phone 651-697-8500 3060 Centre Pointe Drive
LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 55113-1122
toll free 800-552-1171
Kirk McDonald
Updated Terms For Purchase and Development Agreement — Golf Course Site
November 28, 2016
Page 2
e. Must commence construction April 1, 2017 and substantial completion by
August 30, 2018
4. Platting and Zoning
a. Developer will plat property into one (1) parcel
b. Developer will prepare and obtain City approval of a planned unit development
("PUD") and Plat of the Property at their cost and subject to all City ordinances
and procedures
c. Developer will prepare cross access agreements for the new combined
entrance for the development and the Golf Course, and for access onto the Golf
Course property where the new trash enclosure will be constructed
5. Burial of Power and Cable Lines
a. The developer will pay for the burial of the power and cable lines from Yukon
Avenue to Winnetka Avenue
b. The EDA will reimburse the developer for $125,000 of the costs associated
with the burial of the power and cable lines
6. Park Dedication Fees
a. The developer will pay $17,700 in park dedication fees per the City's policy
7. Payment of Authority Costs
a. Developer is required to reimburse EDA for costs of consultants in negotiating
and drafting development agreement (fiscal and legal).
8. Tax Increment
a. The EDA has created TIF district 11-1
b. The Developer will receive a pay-as-you-go note in the amount of $6.574
million
i. Term of the TIF note will be for 23 years
ii. Interest will be at the lesser of 4.50% or the Developer's actual
financing rate
iii. Developer will receive 95% of the tax increment generated
c. The EDA will be reimbursed for the difference in their land assembly costs of
$2,363,100 ($2,250,000 was acquisition and the remainder was relocation
and demolition costs) and the purchase price by the Developer, which
equates to $920,100
i. In August 2015, the EDA approved an interfund loan to allow for this
repayment. It is estimated that it will be repaid (with interest at 4%)
within 1 '/2 to 2 years after the TIF Note is done.
Kirk McDonald
Updated Terms For Purchase and Development Agreement — Golf Course Site
November 28, 2016
Page 3
9. Lookback
a. Once the project is stabilized (90% occupied), the Developer is required to
submit to the City audited financials detailing the actual Total Development
Costs (TDC), along with actual income and expenses. To the extent the
Developers annual Cash -on -Cash (COC) return (equity invested divided by
cash flow) exceeds 10%, the TIF Note amount will be reduced to reflect a
projected annual COC return of not more that 10%.
Please contact either of us at 651-697-8500 with any questions.
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
City Council Minutes February 16, 2016
Work Session Meeting Parks and Recreation Conference Room
CALL TO ORDER The New Hope City Council met in work session pursuant to due call and notice
thereof; Mayor Hemken called the meeting to order at 6:30 p.m.
ROLL CALL Council present: Kathi Hemken, Mayor
John Elder, Council Member
Andy Hoffe, Council Member
Eric Lammle, Council Member
Jonathan London, Council Member
Staff present: Kirk McDonald, City Manager
Jeff Alger, Community Development Assistant
Jerry Beck, Communications Coordinator
Aaron Chirpich, Community Development Specialist
Rich Johnson, Director of HR/Admin. Services
Valerie Leone, City Clerk
Shawn Markham, City Contract Manager/Forester
Bob Paschke, Director of Public Works
Michelle Robinson, Admin. Specialist
Jeff Sargent, Director of Community Development
Stacy Woods, Assistant City Attorney
Also present: Jean McGann, Abdo, Eick, Meyer (AEM)
STREET LIGHTING Mayor Hemken introduced for discussion item 11.1, Discuss Xcel Energy community
UPGRADES wide street lighting upgrades and staff updates on lights out response data base.
Item 11.1
Mr. Bob Paschke, director of public works, introduced Ed Bieging of Xcel Energy.
Mr. Bieging explained Xcel Energy's plan to replace existing HPS (high pressure
sodium) systems with LED (light emitting diode) systems throughout the city at a
cost of approximately $111,000. Mr. Bieging explained the LED fixtures have a 20+
year life and require less maintenance. He noted lighting energy costs will be reduced
by approximately five percent after the LED upgrade, and residents will realize a two
to seven percent reduction in their monthly bill.
Mr. Bieging indicated there are 503 HPS fixtures in New Hope that will be replaced
with LED fixtures. He noted the wooden poles would not be replaced. He added that
an exact schedule will be determined after the rate change is implemented. Mr.
Bieging stated at this time Xcel Energy is only advising cities of the project.
Mr. Paschke asked Ms. Robinson to explain public works' database for calls received
regarding lighting outages. Ms. Michelle Robinson, Administrative Specialist, stated
City Council Work Session February 16, 2016
Page 1
Mr. McDonald asked Jason Aarsvold of Ehlers if he had thoughts on the city's credit
rating. Mr. McDonald cited from the report: "If the city is able to improve its debt
and contingent liability score and demonstrate and sustain improved economic
indicators, we could raise the rating".
Mr. Aarsvold commented that each indicator is identified and improving the factors
provides the opportunity to raise the city's score.
The majority of the Council supported the proposal by AEM. Mr. McDonald stated
he would place the item on the February 22, 2016, agenda for Council consideration.
IMP. PROJECT 96Mayor Hemken introduced for discussion item 11.5, Review preliminary term sheet
Item 11.5 /1 for purchase and development agreement with Alatus (project no. 964).
Mr. Jeff Sargent, director of community development, stated city staff have been
working closely with Alatus since the city entered into a preliminary development
agreement. He stated Alatus has already submitted an application for land use
approval.
Mr. Jason Aarsvold, Ehlers, reviewed the redevelopment term sheet for 183 units and
the $38 million project. He stated the major aspects of the proposal includes purchase
of land, deferred developer fee, TIF request, analysis of request, minor aspects of
proposal, and items to be finalized.
He stated the purchase of the land for $1,427,400 with a public hearing to take place
on March 28, 2016. He stated the TIF request is a $4.6 million pay as you go 15 -year
TIF note. He pointed out the existing redevelopment TIF district was established in
2011 under special law but hasn't generated any TIF since the land is tax exempt. He
stated the city's portion of the taxes will be approximately $12,000 annually.
Mr, Aarsvold reviewed a sources and uses statement and a proforma confirming the
project is justified. He also reviewed the operating projections for years 1, 2, and 3.
He reviewed other aspects of the proposal for the project to commence June 1, 2016
and be completed by December 31, 2017; construct joint access off Bass Lake Road;
construct new trash enclosure on golf course property; developer to pay required
park dedication fee and 100% of EDA costs; developer to replat the property into one
parcel, burial of power lines with EDA paying no more than $125,000; a lookback
provision for financial information; and a determination on the responsible party for
cost of the lift station improvements.
Mr. Aarsvold stated after the 15 year note is paid, the city can choose to pay itself
back for the $900,000 shortfall for the city's costs, He stated the city has the ability to
create an interfund loan (plus interest) to replenish the redevelopment fund. He
recommended the city preserve the option to pay itself back.
Mayor Hemken pointed out the city has collected no taxes in the past eight years.
Mr. Sargent noted the project will change the character of the city.
City Council Work Session February 16, 2016
Page 5
Mayor Hemken suggested the March 28 public hearing be posted on the golf course
reader board
2040 Mayor Hemken introduced for discussion item 11.6, Update on 2040 Comprehensive
COMPREHENSIVE Plan.
PLAN
Item 11.6 Council Member Elder returned to the meeting at 9:02 p.m.
Mr. Jeff Alger, community development assistant, explained the city is required to
update the comprehensive plan every 10 years. He stated the comprehensive plan is
intended to define the natural environment, land use, transportation, and
infrastructure goals of the community as a means of defining New Hope's future
community growth and vision of development and/or redevelopment. Mr. Alger
stated staff will work with the city's professional planning consultant, Northwest
Associated Consultants (NAC), on the update.
Director Sargent noted because the city is fully developed there will not be significant
changes between the 2030 and 2040 comprehensive plan.
Mr. Alger explained that community meetings will be held for public feedback on the
proposed comp plan.
City Manager McDonald reviewed the next steps: attempt to reduce the $34,000
proposal by completing some work in-house; present the proposal to the Council;
form a comp plan committee; hold community ,meetings for input on and future
redevelopment opportunities. Council will be kept apprised during the process.
POTENTIAL Mayor Hemken introduced for discussion item 11.7, Discussion on potential
REDEVELOPMENT commercial and residential redevelopment opportunities and objectives.
OPPORTUNITIES
Item 11.7 Mr. Aaron Chirpich, community development specialist, and Jeff Alger, community
development assistant, illustrated potential redevelopment sites of commercial, low
density residential, medium and high density residential properties.
Staff commented on various strategies for property acquisition and redevelopment to
support goals outlined in the Comprehensive Plan.
Council Member Lammle inquired whether the streetscape design could be done at
other locations such as Bass Lake Road, Director Sargent stated the streetscape
criteria could be expanded. Input was also received from Council regarding the
District 281 and Gethsemane Cemetery sites.
IMP. PROJECT 911 Mayor Hemken introduced for discussion item 11.8, Discuss redevelopment update
Item 11.8 for Centra Homes (project no. 911).
Mr. Jeff Sargent, director of community development, stated Centra Homes is
concerned the city cannot keep pace with their inspection needs this spring. Staff
recommends hiring an outside company to handle the Parkview development for
plan reviews and inspections. Mr. Sargent stated the city received two quotes and a
contractual arrangement would require approximately 90% of the revenue received
City Council Work Session February 16, 2016
Page 6
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
City Council Minutes September 19, 2016
Work Session Meeting Parks and Recreation Conference Room
CALL TO ORDER The New Hope City Council met in work session pursuant to due call and notice thereof;
Mayor Hemken called the meeting to order at 6:30 p.m.
ROLL CALL Council present: Kathi Hemken, Mayor
John Elder, Council Member (arrived at 7:05 pm)
Andy Hoffe, Council Member
Eric Lammle, Council Member (arrived at 6:35 pm)
Jonathan London, Council Member
Staff present: Kirk McDonald, City Manager
Jerry Beck, Communications Coordinator
Tim Fournier, Director of Police
Rich Johnson, Director of HR/Admin. Services
Valerie Leone, City Clerk
Chris Long, City Engineer
Eve Lomaistro, Human Resources Coordinator
Bob Paschke, Director of Public Works
Susan Rader, Director of Parks & Recreation
Jeff Sargent, Community Development Director
Bernie Weber, Operations Manager
Stacy Woods, Assistant City Attorney
Also present: Joel Dunning, Wold Architects
Cosette Hannula, Wold Architects
Stacie Kvilvang, Ehlers
Vicki Holthaus, AEM
PERSONNEL BOARD Mayor Hemken introduced for discussion item 11.1, Dialogue between City Council
Item 11.1 and Personnel Board.
Mr. Rich Johnson, staff liaison, introduced Personnel Board Members Eric Galstad
(chair) and Tony Brown. He stated Mary Arnold was unable to attend the meeting.
The Personnel Board reported on recruitment activities over the past year, culture of
the city, policy discussions, and low staff turnover. Chair Galstad commented on the
need for a compensation study to be undertaken in the next year or so to ensure salaries
remain competitive in the market.
Council inquired of the hiring process including interview questions and whether
anyone has declined a position based on the benefit package. Chair Galstad reported
the questions are tailored to the specific job and are typically a collaborative effort
between the human resources department and the director of the department that is
City Council Work Session September 19, 2016
Page 1
• Increase due to equipment and technology changes.
• Central Garage expenses increased $92,000.
• CIP $113,000 to $133,000 for second half of portable radio cost, riot gear/training,
and replacement of K-9.
• Training budget includes tuition reimbursement.
• Decrease of $12,000 in IT charges.
Council Member Lammle inquired whether the police department has invested in rifle
plates and helmets. Director Fournier indicated all officers have helmets, and SWAT
members have rifle plates. He noted five rifle plates could be on site for the shift.
Director Fournier shared the department's 2015 Annual Report. Council Member
London expressed his gratitude for the statistical information.
Council Member Hoffe noted the worthiness of the de-escalation training program for
officers.
In response to an inquiry by Council Member Elder, Director Fournier explained the
status of the crime analyst position that was approved in the 2015 budget. He noted an
existing position may be combined with the new position.
Police Reserves
Budget increase of $1,500:
• $6,000 increase in central garage calculations.
• Decrease in training budget.
Animal Control
Budget increase of $6,000:
• Majority of increase is due to central garage calculations.
• Receive 50% reimbursement from Crystal.
Mr. McDonald advised Council the enterprise and utility fund budgets will be
presented at the October 17 work session. Council thanked the department heads for
their presentations.
IMP PROJECT 964( Mayor Hemken introduced for discussion item 11.5, Review updated terms for
Item 11.5 \J purchase and development agreement with Alatus (project no. 964).
Mr. Jeff Sargent, director of community development, explained at the February 16,
2016, work session meeting, staff presented the Council with the preliminary term
sheet for the purchase and development agreement with Alatus. He stated since that
time the developer has gained access to the property to conduct further soil tests and
has also been approached by city staff for the potential of replacing the aging lift station
along 58th Avenue and burying the overhead utility lines along Bass Lake Road from
Yukon Avenue to Winnetka Avenue.
Mr. Sargent reported on additional expenses that will be necessary since further
ground tests revealed the water table level was four feet higher than originally
estimated. He stated engineered foundation slabs for the construction of the building
City Council Work Session September 19, 2016
Page 9
are required and to compensate for the water table level, the building must be raised
four feet higher than originally designed.
The total added costs of $3,721,000 include modifications of the construction plans
because of the water table, the replacement of the city's lift station and the burial of the
overhead utility lines. He stated the developer has requested two main changes to the
terms of the purchase and development agreement:
1. The developer will purchase the land for $1,443,000, which is $15,600 more
than originally agreed upon, and will pay the city at the time of closing.
2. The developer would like the pay-as-you-go TIF note to be increased from
$4,600,000 to $6,574,000, and for the TIF note to extend from 15 years to 23
years. It should be noted that the cost increase of the TIF note of $1,974,000
only covers approximately half of the increased project costs of $3,721,000. The
developer will absorb the remaining costs through a reconfiguration of their
business model.
Ms. Stacie Kvilvang, Ehlers, was recognized. She stated she believes the request is
reasonable and the development is a true public/private partnership.
Council Member London noted concern with the county's land valuations. He also
requested cash on cash return and analysis for determining TIF need.
Ms. Kvilvang reported on the method utilized to capture the tax increment. She stated
the proforma analysis contains both cash on cost and cash on cash basis.
Council Member Elders commented on the property's challenges and the city's
gratefulness to have Alatus as a partner.
Mr. Bob Lux was recognized. He indicated $165,000 has been expended in architectural
design and predicated on soil borings by Braun Engineering. He noted they have
learned the site was a wetland pond at one time. He indicated the building will be
constructed on pilings and structural slab and will be a higher cost, but the quality of
project remains the same.
Mr. Lux spoke of the fluctuation in debt markets and his objective to achieve 6 to 6.5%
yield on cost.
Mr. McDonald recommended the consideration of the revised Development
Agreement by the EDA on September 26.
Council Member Lammle spoke of Mr. Lux's good reputation and noted the city looks
forward to completion of the project.
Mr. Lux spoke of the importance of proper timing and stated the project will be
completed in 15 months from commencement. He noted the latest start date would be
approximately March of 2017.
Council Member Lammle inquired of the pilings causing potential problems in the
neighborhood. Mr. Lux explained that they will meet with each surrounding property
owner and take photos of basements before the work commences.
City Council Work Session September 19, 2016
Page 10
4401 Xylon Avenue • New Hope, MN 55428 • Phone (763) 531-5100 • Fax (763) 5314-5136
APPLICATION FOR PUBLIC FINANCING
Applicant Information
1. Applicant Name:
2.
3.
Alatus, LLC
(Name should be the officially registered name of the business entity.)
Address: 800 Nicollet Mall, Ste 2850, Minneapolis, MN 55416
Telephone:
612-455-0700
Email Address:
Name of Person Completing the application: Dan Werry
Address: 800 Nicollet Mall, Ste 2850, Minneapolis MN 55402
Telephone: 612-455-0704
Email Address: dlwerry@alatusllc.om
Names and Addresses of Attorney, Architect, Engineer, and General Contractor
for this project: Judy Krow
Attorney Name:
Address: Alatus, LLC
Telephone: 612-455-0709 Email Address: lekrow@alatusllc.com
Architect Name: Doran Companies
Address: 7803 Glenroy Rd #200, Minneapolis, MN 55439
Telephone: 952-288-2000 Email Address:
Engineer Name:
Address:
Telephone:
TBA as directed by Doran Construction
Email Address:
General Contractor Name: Doran Construction attn.: Paul Kolias
Address: 7803 Glenroy Rd #200, Minneapolis, MN 55439
Telephone: 952-288-2058 Email Address: Paul. kolias(abdorancompanies.corn
4. If the applicant is a corporation, please name officers, directors, or stockholders
holding more that 5% of the stock of the corporation. If the corporation is not
formed, provide as much information as possible concerning potential officers,
directors, or stockholders:
Robert Lux
4a. If the applicant is a general partnership, name of the general partners and if a
limited partnership, state the general partners and limited partners with more
than 5% interest in the limited partnership. If the partnership is not formed,
provide as much information as possible concerning potential officers, directors or
stockholders.
4b. Has the applicant ever been in bankruptcy? If yes, please describe the
circumstances.
Yes (please Explain):
No: X
4c. Has the applicant ever been convicted of a felony? Is yes, please describe the
circumstances.
Yes (please Explain):
No: X
4d. Has the applicant ever defaulted on any bond or mortgage commitment?
Yes (please Explain):
No: X
Project Information
1. PID#'s, legal description, address, and size of project site:
PID#: 0611821420012, 0611821420011, 0611821420010, 061182142009, 061182142008
Address: 8400, 8420, 8421, 8411, 8401 Bass Lake Rd
Legal Description: Lots 1, 2, 3, 4, and 5, Block 1, GERVAIS AND HUNTER
Size of Project Size (Acres): 3.53
2. Current ownership of the site: Economic Dev Authority Cityof New Hope
3. Do you have current control of the site:
Yes:
No:
X
4. Project description.
See attached description
5. If property is to be subdivided or replatted, please describe.
Assemble 5 parcels into 1 re -zone as a PUD
6. Estimated project costs: (Please enclose detailed sources and uses and 15 -year
operating Pro Fonna).
a.
Land Acquisition: $
See attached
b.
Environmental/ Soil Corrections:
$400K
C.
Surveys:
$16K
d.
Public Improvements:
$125K (line burial)
e.
Site Development:
$29.6M
f.
Demolition:
NA
g.
Building(s):
see site development
Shell (if applicable)
see site development
Tenant Improvements
see site development
(if applicable)
h.
FF&E:
$40K
i.
Architectural & Engineering Fees:
$676K
j.
Legal Fees/Other Consulting Fees:
$202K
k.
Financing Costs:
$205K
1.
Construction Interest:
$243K
m.
Title Insurance:
$30K
n.
Mortgage Registration:
$30K
o.
Bank/ Borrower Legal:
NA
p.
Recording/ Closing:
Incl
q.
Construction Loan Fees:
Incl
r.
SAC/WAC:
$454K
s.
Park Dedication:
$17,650
t.
Appraisal:
Incl
u.
Taxes:
Incl
v.
Contingencies (construction):
$1.48M
w.
Contingencies (soft):
$90K
x.
Other:
$2.69M
TOTAL $
36.3M
7. Source of Financing
a.
u
Eq Yit: $
6.1 M
b.
Bank Financing:
$25AM
c.
Public Assistance:
(TIF or Tax Abatement)
$4.4M
d.
Other governmental loans/grants:
e.
Deferred Developer Fees:
$400K
f.
Other:
TOTAL $
36.3M
Terms of Financing (years): 35
Rate of Financing: 4.75
Cap Rate: 5.5
8. Project Construction Schedule:
a. Construction Start Date:
b. Construction Completion Date:
c. If Phased Project:
January 2, (year)
January 2, (year)
7/1/16
% Completed
% Completed
9. Total Estimated Market Value of Project upon completion $ 39.1M (at stabilization)
10. How many full-time equivalent jobs will be created as a result of the project
4
11. Please list the number of jobs projected to be created in each salary range (do not
include benefits in salary calculations):
$27,000 to $33,500 per year
$33,501 to $39,700 per year
$39,701 to $46,000 per year
4 over $46,000 per year
12. Will any public official of the City, either directly or indirectly, benefit from the
issuance of public assistance within the meaning of Minnesota Statutes, Section
412.311 or 471.87? If yes, please explain the circumstances.
Yes (please Explain):
No: X
Public Assistance Request
1. Amount of assistance and term.
Amount: $4.4M
Term (years): 5
2. Describe the purpose for which Public Assistance (TIF or Tax Abatement) is
required.
Construction and Development
3. Please submit an itemized list of project costs for which TIF assistance is being
requested.
Please see previously submitted financial data.
4. State specific reasons why, "but for" the use of public assistance, this project
would not be possible.
e type ot product eing ottered would not generally be supported
in the market, but for the use of the public assistance.
Application Process
1. The following documents must accompany the Application:
A. A detailed sources & uses statement and 15 -year project Pro Forma
Please see attached Pro Forma
B. Parcel Map depicting the proposed redevelopment area
Please see previously submitted Re -Plat Drawing
C. Site plans and floors plans (as available)
Please see previously submitted plans
D. Significant additional information may be requested at any time by the
City/EDA and may be in addition to the materials outlined in this application.
The Applicant shall be required to submit any and all information as requested
by the City/ EDA.
2. Applicant acknowledges and agrees to pay the $3,000 Public Assistance Application
Fee and is non-refundable (Payable to the City of New Hope).
3. At the time of acceptance by staff of the Public Financing Application, the applicant
shall deposit $10,000 with the City/EDA to cover attorney and consultant costs
incurred as part of establishing a TIF district or abatement, drafting and negotiating
a development agreement, and conducting any fiscal analysis that may be required
to meet the requirements of utilizing any public financing. If additional expenses are
incurred beyond the $10,000, prior to the execution of a development agreement, the
City/EDA shall notify the applicant in writing and the applicant will be required to
deposit additional funds upon notice.
4. The Applicant shall hold the City/EDA, its officers, consultants, attorneys, and
agents harmless from any and all claims arising from or in connection with the
Project or Public Assistance Application, including but not limited to, any legal or
actual violations of any State or Federal securities laws.
5. The Applicant recognizes and agrees that the City/EDA reserves the right to deny
any application for Public Assistance at any stage of the proceedings prior to
adopting the resolution approving the public assistance, that the Applicant is not
entitled to rely on any preliminary actions by the City/EDA prior to the final
resolution, and that all expenditures, obligations, costs, fees, or liabilities incurred by
the Applicant in connection with the Project are incurred by the Applicant at its sole
risk and expense and not in reliance on any actions of the City/EDA.
The undersigned, a duly authorized representative of the Applicant, hereby certifies
that the foregoing information is true, correct, and complete as of the date hereof and
agrees that the Applicant shall be bound by the terms and provisions herein.
Robert Lux
APPLIC TI S AME
CITY ACCEPTANCE OF APPLICATION
$ 20,000
FEE AMOUNT REMITTED
3/2/16
DATE
DATE
3/2/16
DATE
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6. Estimated project costs:
a. Land Acquisition: $1
b. Environmental/Soil Corrections:
c. Surveys:
d. Public Improvements:
e. Site Development:
f. Demolition:
g. Building(s): Shell (if applicable) Tenant Improvements (if applicable)
h. FF&E:
:'II Bass Lake
Road
ope,
T
Total Cost
Per NRS F
Per Unit
Hard Construction Cos is
Land Acquisition Costs
$ 1
$
-
$
-
Base Building Costs
$ 31,196,249
$
179
$
170,471
Construction Contingency
4.8%
$ 1,481,964
$
9
$
8,098
Total Hard Construction Costs
$ 32,678,215
$
188
$
178,569
Soft Costs
Design
3.1%
$ 1,121,080
$
6
$
6,126
Governmental
2.0%
$ 734,004
$
4
$
4,011
Legal
0.6%
$ 202,347
$
1
$
1,106
Property Management & Lease Up
0.8%
$ 308,000
$
2
$
1,683
Other Soft Costs
3.2%
$ 1,164,504
$
7
$
6,363
Developer Fee
1.1%
$ 400,000
$
2
$
2,186
Contingency - Soft Cost
2.5%
$ 90,000
$
1
$
492
Total Soft Cost
$ 4,019,934
$
23
$
21,967
Financing Costs
Loan Origination Fee
0.5%
$ 127,033
$
1
$
694
Closing Costs - Loan
0.3%
$ 63,516
$
0
$
347
Placement Fee - Loan
0.5%
$ 127,033
$
1
$
694
Placement Fee, Misc. Fees - TIF
2.0%
$ 88,000
$
1
$
481
Placement Fee - Equity
0.0%
$ -
$
-
$
-
Interest Reserve - Const Period - 1st
$ 583,048
$
3
$
3,186
Interest Reserve - Const Period - Mez
$ -
$
-
$
-
Interest Reserve - Const Period - TIF Mort
$ 243,833
$
1
$
1,332
Interest Reserve - Lease -Up Period
$ -
$
-
$
-
Total Financing Costs
$ 1,232,464
$
7
$
6,735
Total Dewlo ment Costs
Construction Mortgage - A Note
70.0%
$ 25,406,592
$
146
$
138,834
TIF Proceeds
12.1%
$ 4,400,000
$
25
$
24,044
Grant - Power Line Burial
0.3%
$ 125,000
$
1
$
683
Equity
17.5%
$ 6,363,539
$
37
$
34,773
TOTAL DEVELOPMENT SOURCES
$ 36,295,131
$
208
$
198,334
a. Land Acquisition: $1
b. Environmental/Soil Corrections:
c. Surveys:
d. Public Improvements:
e. Site Development:
f. Demolition:
g. Building(s): Shell (if applicable) Tenant Improvements (if applicable)
h. FF&E:
EDA
Request for Action
Originating Department
Approved for Agenda
Agenda Section
Community Development
August 10, 2015
EDA
Item No.
By: Jeff Sargent, Director of CD
By: Kirk McDonald, City Manager
4
Resolution Authorizing an Interfund Loan for Advance of Certain Costs in Connection With Tax
Increment Financing District 11-1 (improvement project no. 964)
Requested Action
Staff requests that the Economic Development Authority (EDA) approve a resolution authorizing an internal
(interfund) loan to Tax Increment Financing District 11-1, located at 8400 Bass Lake Road.
Policy/Past Practice
It is the practice of the EDA to require the approval of resolutions authorizing internal loans.
Background
Ehlers is recommending that the City should approve an interfund loan resolution to cover the costs of the
redevelopment associated with the city -owned redevelopment property located next to the golf course at 8400
Bass Lake Road. The EDA has been expending funds for soil borings, marketing and administration in
preparation for future redevelopment of the site. State Statute requires that the City approve a resolution
authorizing an internal (interfund) loan to a TIF district and set the terms for reimbursement of the qualified
TIF costs to be repaid with tax increments from the TIF district. Bob Deike, the city's EDA attorney, has
prepared the attached resolution for approval. The amount recommended for the loan is $100,000.
Recommendation
Staff recommends approval of the Resolution.
Attachments
• Resolution for Interfund Loan
• Ehlers Memo
Second by
To: � � f�A
I: \ RFA\ COMM DEV \ Develo ment\ Q &R - Interfund Loan Resolution -8400 Bass Lake Road 8-10-15.doc
Memo
To: Kirk McDonald — EDA Executive Director
From: Stacie Kvilvang
Date: August 10, 2015
Subject: Interfund Loan Resolution — TIF District 11-1 (BLR Apartments)
The EDA will be expending funds for the soil borings and various administrative costs for
legal and financial advisors for the above referenced property. Since the TIF district is not
currently generating any funds (property is still tax exempt), the EDA will need to "front"
these costs. If the City and EDA want to be reimbursed for these costs at a future date from
TIF funds, then an interfund loan is required before the expenditures are made.
Attached is a resolution authorizing an interfund loan of up to $100,000 from the EDA's
Development Fund. The EDA will reimburse this Fund for the above referenced costs (as
they are advanced) in the current principal amount, together with interest at the rate of 4%
per annum, as TIF funds become available. The interest rate is set at the statutory
maximum and will not be adjusted annually.
Please contact me at 651-697-8506 with any questions.
EHLERS
LEADERS IN PUBLIC FINANCE
ON
v wv.ehlers-inc.com
Minnesota phone 651-697-8500 3060 Centre Pointe Drive
Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 55113-1122
toll free 800-552-1171
NEW HOPE ECONONOMIC DEVELOPMENT AUTHORITY
CITY OF NEW HOPE
HENNEPIN COUNTY
STATE OF MINNESOTA
Commissioner Lammle introduced the following resolution and moved its
adoption:
RESOLUTION NO. 2015-09
RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN
COSTS IN CONNECTION WITH A TAX INCREMENT FINANCING DISTRICT
CREATED BY THE CITY OF NEW HOPE AND THE NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY.
BE IT RESOLVED by the Board of Commissioners (the 'Board") of the New Hope
Economic Development Authority (the "Authority"), as follows:
Section 1. Background.
1.01. The Authority and the City of New Hope (the "City") have created Tax Increment
Financing District No. 11-1 (the "TIF District") in order to provide a funding source to assist in
the redevelopment of certain real property in the City (the "Property").
1.02. The Authority has determined to pay for certain costs identified in the TIF Plan
consisting of administrative and pre -development expenses, including but not limited to, fees
of attorneys, financial advisors and other consultants, and interest (collectively, the "Qualified
Costs"), which costs may be financed on a temporary basis from Authority funds available for
such purposes.
1.03. Under Minnesota Statutes, Section 469.178, Subd. 7, the Authority is authorized to
advance money from the Authority's general fund or any other fund from which such
advances may be legally authorized, in order to finance the Qualified Costs.
1.04. The Authority intends to reimburse itself for the funds advanced for Qualified
Costs from tax increments derived from the TIF District in accordance with the terms of this
resolution (which terms are referred to collectively as the "Interfund Loan").
Section 2. Terms of Interfund Loan.
2.01. The Authority hereby authorizes the advance of up to $100,000 from the EDA
Fund or other funds or so much thereof as may be paid as Qualified Costs. The Authority shall
be reimbursed for such advances together with interest at the rate stated below. Interest
accrues on the principal amount from the date of each advance. The maximum rate of interest
permitted to be charged is limited to the greater of the rates specified under Minnesota
Statutes, Section 270C.40 or Section 549.09 as of the date the loan or advance is authorized,
unless the written agreement states that the maximum interest rate will fluctuate as the interest
rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are from time to
time adjusted. The interest rate shall be 4% and will not fluctuate.
2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on each August 1 and February 1 (each a 'Payment Date"), commencing on the first
Payment Date on which the Authority has Available Tax Increment (defined below), or on any
other dates determined by the Authority's Executive Director, through the date of last receipt
of tax increment from the TIF District.
2.03. Payments on this Interfund Loan are payable solely from "Available Tax
Increment," which shall mean, on each Payment Date, tax increment available after other
obligations have been paid, or as determined by the Executive Director, generated in the
preceding six (6) months with respect to the property within the TIF District and remitted to
the Authority by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174
to 469.1799, all inclusive, as amended. Payments on this Interfund Loan may be subordinated
to any outstanding or future bonds, notes or contracts secured in whole or in part with
Available Tax Increment, and are on parity with any other outstanding or future interfund
loans secured in whole or in part with Available Tax Increment.
2.04. The principal sum and all accrued interest payable under this Interfund Loan are
pre -payable in whole or in part at any time without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise required
to be made under this Interfund Loan.
2.05. This Interfund Loan is evidence of an internal borrowing by the Authority in
accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation
payable solely from Available Tax Increment pledged to the payment hereof under this
resolution. This Interfund Loan and the interest hereon shall not be deemed to constitute a
general obligation of the State of Minnesota or any political subdivision thereof, including,
without limitation, the City and Authority. Neither the State of Minnesota, nor any political
subdivision thereof shall be obligated to pay the principal of or interest on this Interfund Loan
or other costs incident hereto except out of Available Tax Increment, and neither the full faith
and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is
pledged to the payment of the principal of or interest on this Interfund Loan or other costs
incident hereto. The Authority shall have no obligation to pay any principal amount of the
Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment
Date.
2.06. The Authority may amend the terms of this Interfund Loan at any time by
resolution of the Board of Commissioners, including a determination to forgive the outstanding
principal amount and accrued interest to the extent permissible under law.
Section 3. Effective Date. This resolution is effective upon the date of its approval.
The motion for the adoption of the foregoing resolution was duly seconded by
Commissioner Hof fe , and upon a vote being taken thereon, the following voted in
favor thereof: Hemken, Hoffe, Lammle
and the following voted against the same: London
Absent: Elder
Dated: August 10, 2015
1v� 11,a�c�
Kirk McDonald, Executive Director
ATTEST:
6d
Kathi Hemken, President
'44 C) b4
Request for Action Agenda Section
Consent
July 23, 2018
Approved by: Kirk McDonald, City Manager Item Number
6.8
Originating Department: Parks & Recreation
By: Susan Rader, Director of Parks & Recreation
Agenda Title
Resolution approving agreement with Alatus, LLC for use of the New Hope Village Golf clubhouse for leasing
space
Requested Action
Staff recommends that the City Council approve an agreement with Alatus, LLC (Alatus) for use of the New
Hope Village Golf clubhouse. They are seeking permission to use space in the clubhouse from August 1 -
November 30, 2018 as their office space for the leasing of the Ironwood property.
The usage will occur during golf course open hours, with Alatus using a designated space of approximately
200 square feet within the merchandise area. The amount for this usage will be $3,750 per month, totaling
$15,000 for the four month agreement. The first two month's rent will be paid by August 1, with the remainder
balance being paid on or before November 30, 2018. Alatus will also provide a certificate of insurance. Staff
recommends approval.
Background
Several months ago, staff met with representatives of Alatus to discuss several items including their plans for
a leasing trailer. With the leasing program proposed to start during the golf season, staff did not feel that
there was space available in the golf course parking lot to locate an additional trailer, plus the necessary
parking for leasing staff and prospective clients.
At the meeting, Recreation Facilities Manager Mark Severson asked the representatives from Alatus if they
would be interested in using space within the clubhouse. After further discussion, everyone agreed that it
would be a beneficial arrangement for both sides.
For the golf course, it would be a good source of additional revenue, the space used for the lease wouldn't
impact golf course business and the use would take place before the busy holiday season rentals in
December. In addition, both sides could benefit from the added walk -by traffic generated by each business.
Staff recommends approval of this agreement.
Attachments
• Resolution
• Agreement with Alatus, LLC — drafted by the city attorney
I:\RFA\P&R\Golf Course\2018\Alatus\Q&R- Alatus Use Agreement.docx
City Of New Hope
Resolution No. 2018- 84
Resolution approving agreement with Alatus, LLC for use of the
New Hope Village Golf clubhouse for leasing space
WHEREAS, the city of New Hope operates the golf course as a business and is seeking additional sources of
revenue for the facility; and
WHEREAS, Alatus, LLC wishes to use a designated space in the New Hope Village Golf clubhouse to provide
a leasing office for their Ironwood Apartments property; and
WHEREAS, the amount for this usage will be $3,750 per month, totaling $15,000 for the four month
agreement. The first two month's rent will be paid by August 1, with the remainding balance
due on or before November 30, 2018; and
WHEREAS, the agreement will run for a period of August 1, 2018 through November 30, 2018.
NOW, THEREFORE, BE IT RESOLVED that the city of New Hope approves the agreement with Alatus, LLC for
use of the New Hope Village Golf clubhouse.
Adopted by the City Council of the city of New Hope, Hennepin County, Minnesota, 23rd day of July, 2018.
,-4 1-/ �if
Mayor
Attest: fvz-l�-e
City Clerk
CITY OF NEW HOPE GOLF COURSE CLUBHOUSE USE CONTRACT
NEW HOPE VILLAGE GOLF COURSE, NEW HOPE, MN
This Golf Course Clubhouse Use Contract ("Contract') is between the City of New Hope (City) and
Alatus, LLC (Lessee). In consideration of the covenants and agreements contained herein, the City
and Lessee agree as follows:
USE OF LEASED SPACE WITHIN CLUBHOUSE: The City hereby grants Lessee the non-exclusive
right to enter the Golf Course Clubhouse and use a designated cubicle space of approximately 200
square feet located inside the City of New Hope Golf Course Clubhouse, 8130 Bass Lake Road, New
Hope ("Leased Space") for purposes of a leasing office for the Alatus apartments. The City shall
designate the exact space within the Clubhouse that Lessee may occupy for leasing purposes only.
Lessee shall also have reasonable non-exclusive access to the restroom facilities in the Clubhouse
and the Clubhouse parking lot.
RULES OF USE: Lessee and its members, employees, agents and invitees will obey the instructions
of the Facilities' Manager, Facilities Supervisor, and the Golf Course staff, and will obey the
published rules and regulations of the City for the Leased Space. In particular, Lessee shall not do or
allow the following: utilize the areas of the Clubhouse that are deemed outside the scope of this
Contract; disturb the customers using the Clubhouse; disturb the Golf Course staff; smoke in the
Clubhouse; alter or add to the existing structure, the electrical, plumbing, and heating systems, or the
existing Clubhouse furnishings in any way. Violations of these rules will result in Lessee being in default,
and being required to vacate the Leased Space and forfeit to the City all rent.
TERM: Lessee may use the Leased Space between the dates of August 1, 2018 through November
30, 2018 during the hours of 9:00 a.m. to 7:00 p.m.
RENT: Lessee shall pay rent of $3750.00 per month during the Term of the Contract in the following
installments: 2 months' rent due on or before August 1, 2018. 2 months' rent due on or before
November 30, 2018.
RELEASE: The City is hereby expressly released and discharged by Lessee and its members,
employees, agents and invitees from any and all liability for any loss, injury or damage to persons or
property that may be sustained by reason of the occupancy of the Leased Space under this Contract.
ASSIGNMENT AND SUBLETTING: That Lessee will not assign this Contract nor sublet any part of
the Leased Space without the consent in writing of the City, which consent shall be in the sole discretion
of the City.
HOLD HARMLESS & INDEMNIFICATION: Lessee assumes full responsibility for its own actions and
for any personnel or invitees. Lessee agrees to indemnify City and hold City and its respective
officials and employees harmless from and against any and all losses or damage which City may
sustain on account of any claim or demand brought against City, arising out of any property damage,
injury or death suffered by acts, omissions or defaults of Lessee or any of Lessee's personnel or
invitees, including, but not limited to third party actions for property damage or for injury or death.
Lessee agrees to protect and indemnify City against any loss or damage suffered by anyone arising
through negligence of Lessee and to bear any expense which City may have by reason thereof, or on
account of being charged therewith, including reasonable attorney's fees.
INSURANCE: Lessee shall have comprehensive liability insurance during the Term of this Contract
in an amount satisfactory to City. Lessee shall deliver a Certificate of Insurance to the City naming
City as an additional insured.
IMPORTANT: Keep one copy; sign the other one, return immediately. No changes in above schedule
permitted without mutual agreement in writing by Lessee and the City.
By Jess! i, Lessee
Alatus, 800 Nicollet Mall Suite 2850, Minneapolis MN 55402
(Address)
(Date)
City ofew Mope
City Manager
(Date)
CiC . of "yew 116
Pe
WINTHROP&WEINSTINE
March 04, 2020 Emily Leal
Direct Dial: (612)604-6454
eleal@winthrop.com
VIA MESSENGER
Jeff Sargent
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
Re: New Hope - Ironwood
Dear Jeff:
Enclosed regarding the above-entitled matter, please find two (1) original of the Investment
Letter regarding the Taxable Limited Revenue Tax Increment Note.
This original document is being forwarded solely for the purposes of confirming the execution
thereof and to facilitate a timely closing.These documents have not been released and do not create
a binding agreement on the part of any of them and shall be held in escrow until you receive
authorization from John Stern or Scott Jahnke.
Very truly yours,
WINTHROP &WEINSTINE, P.A.
emetv
Emily C. Lea
Legal Assistant
Enclosures
I8824007v1
CAPE L L A TOWER I SUITE 3500 225 South 6th Street Minneapolis,MN 55402 P 612,604.6400 F 612.604.6000 W/winthrop.cem A Professional Association
L L C
To: New Hope Economic Development Authority("Authority")
Attention: Executive Director
Re: $6,574,000 Taxable Limited Revenue Tax Increment Note(Alatus New Hope I LLC Project)
The undersigned,Alatus New Hope I LLC,as Purchaser of$6,574,000 in principal amount of the above
captioned Note ("Note") pursuant to Resolution No. 17-05 of the Authority adopted on March 20, 2017
("Resolution"), hereby represents to you and to Kennedy & Graven, Chartered, Minneapolis, Minnesota,
Bond Counsel,as follows:
1. We understand and acknowledge that the Note is being delivered to the Purchaser pursuant
to the Resolution and the Purchase and Development Contract by and between the Authority and Purchaser
dated as of July 11,2017("Contract").
2. The Note is payable as to principal and interest solely from Available Tax Increment pledged
to the Note as defined therein.
3. We have sufficient knowledge and experience in financial and business matters, including
purchase and ownership of municipal obligations,to be able to evaluate the risks and merits of the investment
represented by the purchase of the above stated principal amount of the Note.
4. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering statement containing material information with respect to the Authority and the
Note has been issued or prepared by the Authority,and that,in due diligence,we have made our own inquiry
and analysis with respect to the Authority, the Note and the security therefor, and other material factors
affecting the security and payment of the Note.
5. We acknowledge that we have either been supplied with or have access to information,
including financial statements and other financial information,to which a reasonable investor would attach
significance in making investment decisions, and we have had the opportunity to ask questions and receive
answers from knowledgeable individuals concerning the Authority,the Note and the security therefor, and
that as a reasonable investor we have been able to make our decision to purchase the above stated principal
amount of the Note.
L L C
6. We have been informed that the Note (i) is not being registered or otherwise qualified for
sale under the"Blue Sky"laws and regulations of any state,or under federal securities laws or regulations,(ii)
will not be listed on any stock or other securities exchange,and(iii)will carry no rating from any rating service.
7. We acknowledge that neither the Authority nor Kennedy & Graven, Chartered, as bond
counsel, has made any representations or warranties as to the status of interest on the Note for the purpose
of federal or state income taxation.
8. We represent to you that we are purchasing the Note for our own accounts and not for resale
or other distribution thereof.
9. All capitalized terms used herein have the meaning provided in the Contract unless the
context clearly requires otherwise.
10. We acknowledge that we presented evidence of Reimbursable Costs to the Authority in
March 2019, which Reimbursable Costs were approved by the Authority's fiscal consultant, Ehlers and
Associates,on March 26,2019.
11. We agree to constructive receipt of the Note as of August 15,2019,and to actual receipt on
the date of delivery.
12. Our federal tax I.D. Number is 82-1510074.
ALATUS NEW HOPE I LLC
By
Its P/Y.f,/i17_
Dated: February2, 2020.
C IMMERCIALPARTNERS
TIT L E, L LC
March 9, 2020
Jeff Sargent
New Hope Economic Development Authority
4401 Xylon Avenue North
New Hope, MN 55428
Re: Our File No. 51366A
Dear John,
Enclosed please find an original Escrow Agreement between New Hope Economic Development
Authority, Alatus LLC and Commercial Partners Title, LLC.
Please let me know if you need anything further at this time.
Sincerely,
Karla . . Jordan
Commercial Closer
Enc.
Representing:
Stewart Title Guaranty Company•Old Republic Title Insurance Company
200 South Sixth Street• Suite 1300•Minneapolis, Minnesota 55402•612/337-2470• FAX:612/337-2471
Escrow Agreement
This Escrow Agreement ("Agreement") is entered into as of )14 ailth S , 2020 by and
among NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY, a public body politic
and corporate under the laws of the State of Minnesota ("Authority"), ALATUS LLC, a
Minnesota limited liability company ("Developer"), and COMMERCIAL PARTNERS
TITLE, LLC, a Minnesota limited liability company("Escrow Agent").
WHEREAS, Authority has sold and conveyed unto Alatus New Hope I LLC, a
Minnesota limited liability company ("Owner") certain real property located at 8400 Bass Lake
Road in the City of New Hope, Hennepin County, Minnesota, and legally described as follows
(the"Property"):
Lot 1, Block 1, Hemken Addition, Hennepin County, Minnesota.
Torrens Property
WHEREAS, in connection with the Owner's development of the Property, Owner and
Authority entered into that certain Purchase and Development Agreement dated as of July 11,
2017 (the "Development Agreement") and Owner and the City of New Hope, Minnesota (the
"City") entered into that certain Planned Unit Development Site Improvement Agreement (PUD
Development District 17-06) dated as of July 11, 2017 ("Site Improvement Agreement").
WHEREAS, both the Development Agreement and Site Improvement Agreement
provide for, inter alia, the completion of certain Improvements by Owner, and the furnishing of
Certificates of Completion for the Improvements (as such terms are defined in the Development
Agreement and Site Improvement Agreement) to Owner by the Authority and the City
respectively.
WHEREAS, pursuant to that certain Site Improvement Agreement between Owner and
the City, Owner provided a letter of credit (the "Letter of Credit") as security for the
performance of the Secured Work.
WHEREAS, as of the present date, certain improvements required by the Development
Agreement and Site Improvement Agreement have not yet been completed by Owner to
Authority's and City's satisfaction. These items are set forth in Stantec's Memorandum dated
February 21, 2020 ("Stantec's Memorandum").
WHEREAS, at Developer's and Owner's request, the Authority and City have agreed to
(1) issue the respective Certificates of Completion to Owner, and (2) cause the City to release
and return the Letter of Credit to Owner on the condition that the parties enter into this
Agreement and Developer deposit the funds set forth below with the Escrow Agent to ensure
satisfactory completion of the Secured Work as set forth in the Development Agreement and Site
Improvement Agreement.
NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereby
agree as follows:
1. Recitals; Definitions. The Recitals set forth above are incorporated and a part of this
Agreement. Capitalized terms used but not defined herein shall have their respective meanings
as used in the Development Agreement or Site Improvement Agreement, as applicable.
2. Deposit; Certificate of Completion; Release of Letter of Credit. Escrow Agent
hereby acknowledges receipt from Developer of the cash sum of Twenty-Five Thousand and
No/100 Dollars ($25,000.00) (the "Deposit"). Upon the full execution of this Agreement,
Authority and City shall (1) issue the respective Certificates of Completion to Owner, and (2)
cause the City to release and return the Letter of Credit to Owner on the condition that the parties
enter into this Agreement.
3. Disbursement of the Deposit.
(a) Except as set forth in Section 3(b) below, Escrow Agent shall disburse the
Deposit or portions thereof from time to time solely in accordance with the following
provisions of this Section 3(a).
(i) Authority has identified the following punchlist work that has not been
completed to its satisfaction, as set forth in Stantec's Memorandum (the "Punch-
List Work"):
A. Repair or replacement of the spalling concrete walk; and
B. Gate valve adjustment.
(ii) In the Spring of 2020, Developer and City representatives agree to review
the condition of the Punch-List Work. If Authority determines, in its reasonable
discretion, that Developer is responsible for completing some or all of the Punch-
List Work (such portion the "Developer Punch-List Work"), Developer shall have
until June 1, 2020 to complete the Developer Punch-List Work. If Authority
determines there is no Developer Punch-List Work, then the Deposit shall be
released to Developer. Developer shall be reimbursed from the Deposit for all
Developer Punch-List Work it performs or causes to be performed (such costs
"Punch-List Costs"). Developer shall provide invoices or other materials
reasonably acceptable to Escrow Agent and Authority supporting the Punch-List
Costs.
(iii) If the Developer Punch-List Work is completed on or before June 1, 2020,
then Authority shall direct Escrow Agent to release the remaining balance of the
Deposit to Developer. If the Developer Punch-List Work has not been completed
by June 1, 2020 to Authority's satisfaction, , then Authority shall provide
Developer a written notice itemizing the Punch List Work items remaining to be
completed. Developer shall have 30 days from the receipt of the letter to
complete the Punch List Work items. If Developer fails to complete the
remaining Punch List Work items by the end of the 30 day period, then Authority
shall direct Escrow Agent to release the remaining balance of the Deposit, less an
amount equal to any requested but unpaid reimbursements for Punch-List Costs,
to Authority, all pursuant to Authority's direction.
(b) Escrow Agent shall not disburse or release the Deposit or any portion thereof,
unless and until Escrow Agent receives written instructions executed by Authority (a
"Direction").
4. Notices. Notices hereunder shall be deemed properly delivered when and if delivered as
provided in the Development Agreement.
5. Escrow Obligations. The parties agree that, except as otherwise expressly provided herein,
the actions of, and the relationship between, Owner and Authority shall be governed by the terms
of the Development Agreement and Site Improvement Agreement. In the event of any conflict
between the terms and provisions of the Development Agreement, Site Improvement Agreement
and this Agreement with respect to the escrow established hereby, the terms and provisions of
this Agreement shall control. Notwithstanding the existence of the Development Agreement and
Site Improvement Agreement or any references herein to the Development Agreement or Site
Improvement Agreement, the parties agree that the obligations of Escrow Agent (but not
Authority and Developer) shall be governed solely by the terms and provisions of this
Agreement. Subject to Sections 2 and 3 above, the parties furthermore agree that Escrow Agent
is hereby expressly authorized to regard, comply with and obey any and all orders,judgments or
decrees entered or issued by any court, and, in case Escrow Agent obeys and complies with any
such order,judgment or decree of any court, it shall not be liable to either of the parties hereto or
to any other person, firm or corporation by reason of such compliance. Authority and Developer
jointly and severally agree to pay Escrow Agent, upon demand, all out of pocket costs and
expenses incurred by Escrow Agent in fulfilling its obligations under this Agreement only in the
event of litigation or other controversy by reason of or arising out of this Agreement, including,
but not limited to, reasonable attorney's fees and legal expenses, incurred by Escrow Agent in
connection with any litigation or other controversy by reason of or arising out of this Agreement,
other than litigation, threatened litigation or other controversy which arises out of Escrow
Agent's gross negligence, intentional misconduct, or failure to comply with the provisions of
Sections 2 or 3 above. Developer shall be solely responsible for paying Escrow Agent for all
other fees, out-of-pocket costs and expenses, including, but not limited to, reasonable attorney's
fees and legal expenses incurred by Escrow Agent for all matters not relating to any litigation or
other controversy by reason of or arising out of this Agreement, other than litigation, threatened
litigation or other controversy which arises out of Escrow Agent's gross negligence, intentional
misconduct, or failure to comply with the provisions of Sections 2 or 3 above
6. Attorneys' Fees. In the event of any litigation, threatened litigation or other controversy
between Authority and Developer concerning this Agreement, the prevailing party shall be
entitled to receive from the non-prevailing party its reasonable costs incurred in connection with
such litigation, threatened litigation or other controversy, including (but not limited to)
reasonable attorneys' fees, and the prevailing party's share of all costs relating to the disputed
matter for which the prevailing party is responsible to Escrow Agent under Section 5
7. Counterparts; Fax and PDF Signatures. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall constitute one and the
same instrument. Signature pages of this Agreement transmitted to any party via facsimile or
Portable Document Format(PDF) shall be deemed to be originals for all purposes hereunder.
8. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their respective duly authorized representatives effective as of the date and year first above
written.
AUTHORITY: DEVELOPER:
NEW HOPE ECONOMIC DEVELOPMENT ALATUS LLC
AUTHORITY
By:
By: Robert C. Lux
Its President Its President
By:
Its Executive Director
ESCROW AGENT:
COMMERCIAL PARTNERS TITLE, LLC
By: i.j1 A +•"
Its:
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21602 Alatus PUD-Subdivision-Easement Vacation\Escrow Agreement-New Hope_
Alatus(Punch List Work)(002)-final.docx
7. Counterparts; Fax and PDF Signatures. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall constitute one and the
same instrument. Signature pages of this Agreement transmitted to any party via facsimile or
Portable Document Format(PDF) shall be deemed to be originals for all purposes hereunder.
8. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their respective duly authorized representatives effective as of the date and year first above
written.
AUTHORITY: DEVELOPER:
NEW HOPE ECONOMIC DEVELOPMENT ALATUS LLC
AUTHORITY
By: �`-�---
By: Robert C. Lux
Its President Its President
By:
Its Executive Director
ESCROW AGENT:
COMMERCIAL PARTNERS TITLE, LLC
By:
Its:
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21602 Alatus PUD-Subdivision-Easement Vacation\Escrow Agreement-New Hope_
Alatus(Punch List Work)(002)-final.docx