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IP #973Request for Action June 25, 2018 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Section EDA Item Number 5 Agenda Title Resolution approving amendment to purchase and redevelopment agreement for construction of new home by Great Buy Homes, Inc. at 6065 Louisiana Avenue North (improvement project no.973). Requested Action Staff requests the EDA approve a resolution amending the development agreement with Great Buy Homes, Inc. to allow for changes to the proposed building plans for the scattered site lot located at 6065 Louisiana Avenue North. Policy/Past Practice In the past, the city has renegotiated the terms of development contracts related to scattered site properties. Background The EDA sold two side-by-side lots on Louisiana Avenue to Great Buy Homes, Inc. in October of 2016. Great Buy Homes has completed construction of the first home on the north lot, and this home was sold on February 1, 2018 for $324,000. Despite the completion of this sale, the builder reported unexpected difficulties in securing a buyer for the property, as the home sat on the market for several months before the sales contract was secured. The builder indicated that the home received several showings, but many buyers expressed concerns with the location. Under the terms of the original redevelopment contract, Great Buy Homes had until October 27, 2017 to complete the construction of both new homes. Due to the extended marketing period for the first home, the builder was financially unable to start construction of the second home and the deadline for completion of the second home elapsed. As a result, the builder requested a contract extension to allow for more time to complete the project. On February 12 2018, the EDA granted a one year extension to the builder and set a new completion deadline of February 12, 2019. The original proposal from Great Buy Homes contemplated building the same two-story home on both lots, and Great Buy Homes agreed to build the second home as originally proposed as part of the contract extension. However, due to the struggles experienced with the sale of the first home, the builder has concerns with starting construction of the second home, and would now like to change the building plans. The home that the builder would like to construct is a split -entry style design that would be less costly to build and sell at a lower price point. For these reasons, the builder considers the split -entry style a more marketable building type for the location. The original two-story home proposed for the site had an anticipated sales price of $360,000 compared to the split -entry home that is expected to sell for $320,000. The City Council discussed the contract amendment request at the June 18 work session, and the owner of Great Buy Homes was in attendance. The council members present at the meeting were supportive of the builders request to change the building plans for the site and directed staff to seek formal approval of the changes at the next regularly scheduled EDA meeting. I:\RFA\COMM DEV\2018\Council Meetings\6-25-18 6065 Louisiana\Q & R -Approve house plan change for 6065 Louisiana 6-25-18.docx Request for Action, Page 2 Recommendation Staff recommends the EDA approve the attached resolution prepared by the City Attorney, thereby authorizing the development contract amendment to allow Great Buy Homes Inc. the ability to change building plans for the scattered site lot located at 6065 Louisiana Avenue North. Attachments • Resolution • Amendment to Purchase and Redevelopment Agreement • Location map • Excerpt from Work Session minutes — 6/18/18 • Plans for the newly proposed split -entry style home t ve N v Louisiana ave N NO y,e„eisino�: •• Louiisana eve N g r Of#. Ak Kr � ���, i •� � .' fi , J - . c�x�• •`awry : ..•1' "M'� '� • i � �'� ';� IN in lap 10 x +�� a • Si 3 • O ,L J IL 9 1 Z . jj l I 'L)cl T } � •.tel Y k �' IC14 U) *.t'•" Pie ✓rA tw i _ , � �� fled •� ' .. ` o ,ii appropriate organization or provide resources. The program does not require that seniors access or use the internet. Mr. Alger stated regardless of whether or not the partnership materializes, Help At Your Door is requesting that the city help advertise their organization and services through city publications such as In the Pipeline, the quarterly newsletter, and Northwest Community Television. The organization tries to get the word out about their services through social workers and rehab centers, but it is often difficult to reach seniors that are living in single-family homes. One of their goals is to reach and help seniors before they need to leave their homes to enter rehab centers or nursing homes. Being allowed the opportunity to advertise in city publications will help reach seniors in New Hope. Help At Your Door would also advertise opportunities for volunteers to assist seniors in the community with various projects. Mr. Alger introduced Karen Cotch, executive director of Help At Your Door. Ms. Kotch explained their involvement helping seniors for more than 30 years. She noted their main support is food assistance but also includes transportation and home support. She stated each senior is assigned a person to advocate on their behalf. She noted the growing number of older adults and the importance of providing support to allow people to remain healthy and live in their homes. Ms. Cotch indicated Hy -Vee has expressed interest in partnering with the organization. She also explained the need for volunteer outreach. Discussion ensued regarding "for profit" organizations that provide similar services. Ms. Cotch pointed out that Help At Your Door is one of the few non-profit organizations providing services for seniors in the seven county area. She stated 34 percent of clients they have served have income levels below poverty. Council Member London stated the organization is asking the city to advertise on its behalf. He expressed concern of giving fair and equitable treatment to other businesses of the city. Mayor Hemken pointed out the organization is a non-profit and the city advertises for other community groups such as the Lions Club. Council agreed to periodically publish articles in city publications to advertise Help At Your Door's services and to solicit volunteers. 42ND AVE N Mayor Hemken introduced for discussion item 11.4, Discuss banners for new STREETLIGHT streetlights along 42nd Avenue North. BANNERS Item 11.4 Mr. Kirk McDonald, city manager, reported that bids were opened last week for new street lights and bids were substantially higher than anticipated. He stated at the June 25 council meeting staff will recommend rejecting the bids and recommend readvertising the work in early 2019 in anticipation of lower pricing. Mr. McDonald stated quotes for new banners will also be obtained at that time. 6065 LOUISIANA AVE Mayor Hemken introduced for discussion item 11.5, Discuss a request by Great Buy (PROJECT NO. 973) Homes to change the proposed house plans for the scattered site lot located at 6065 Item 11.5 Louisiana Avenue North (Improvement Project No. 973). City ounci or Session June 18, 2018 Page 3 Mr. Aaron Chirpich, community development specialist, and Mr. Jeff Sargent, director of community development, explained that the owner of Great Buy Homes has requested Council's authorization to build a different style home at a scattered site lot than what was agreed upon in the development contract. Mr. Chirpich stated the builder believes a split -entry style home would be more marketable for the location. Council agreed that the location/neighborhood of the proposed home has challenges. Ms. Stacy Woods, assistant city attorney, addressed the terms of the redevelopment contract and pointed out the city extended the construction deadline to February of 2019. Council Member London recommended construction of the two-story home and if it doesn't sell within six months the city could provide assistance to allow the builder to permit a reduced asking price. Mr. Glenn Hammer, Great Buy Homes, noted the difficulty in selling the two-story constructed on the north lot. He stated a split -entry style home could sell for $320,000 compared to $360,000 for a two-story design. He stated most buyers who can afford a $360,000 home will not want to purchase in this neighborhood. Mayor Hemken recommended granting an exception for the alternate house design due to the extenuating circumstances. The majority of the Council concurred. Staff was directed to place the item on the June 25 agenda for formal approval. POTENTIAL Mayor Hemken introduced for discussion item 11.6, Discuss potential purchase of 3856 PURCHASE OF 3856 Maryland Avenue North from city of Crystal. MARYLAND AVE N Item 11.6 Mr. Jeff Sargent, director of community development, illustrated the property at 3856 Maryland Avenue North with Kentucky Park (a Crystal park) to the east and Lions Park (a New Hope park) to the west. He stated the property is owned by the city of Crystal and Crystal is desirous of selling the property for $75,000. He stated Crystal is proposing constructing a trail connection from Kentucky Avenue to Maryland Avenue. He explained staff from New Hope and Crystal discussed the proposed trail easement and support the establishment of a 20 -foot easement to enable construction of an eight -foot wide bituminous trail for connection to both parks. Mr. Sargent inquired of Council's interest in purchasing the parcel for a scattered site housing project. He stated the parcel would change from tax-exempt to a tax -paying property. He noted a two-story home at this location could potentially sell for $400,000. Mr. Sargent commented that $75,000 for a vacant lot may appear excessive compared to the average $50,000 lot price, but the cost for the trail is anticipated to be approximately $25,000 and will be paid by the city of Crystal, and acquisition of the lot gives New Hope control over the type of home that is constructed on it. It was noted that a trail maintenance agreement would be drafted and the trail's maintenance would be shared between the two cities. Mr. Sargent stated the owner of the future home could install fencing to screen the trail. Mr. Sargent pointed out if the New Hope does not buy the property, it will be a good test to see what the market will bear for the lot price and what house design will be City Council Work Session June 18, 2018 Page 4 CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 18-10 RESOLUTION APPROVING AMENDMENT TO PURCHASE AND REDEVELOPMENT AGREEMENT FOR CONSTRUCTION OF NEW HOME BY GREAT BUY HOMES, INC. AT 6065 LOUISIANA AVENUE NORTH IMPROVEMENT PROJECT 973 BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope ("EDA") as follows: WHEREAS, the EDA sold that certain real property located at 6065 Louisiana Avenue North, New Hope, MN which was replatted as the following legal description: "Lot 2, Block 1, McDonalds Addition to City of New Hope, Hennepin County, Minnesota" ("Property"), to Great Buy Homes, Inc. ("Great Buy Homes") on October 27, 2016; and WHEREAS, as required by the Purchase and Redevelopment Agreement, Great Buy Homes executed Restrictive Covenants and Assessment Agreement which required that a new residential home be constructed on the Property no later than one year from the date of closing, or by October 27, 2017; and WHEREAS, Great Buy Homes previously requested and received an extension until February 12, 2019 to complete the construction of the residential home on the Property; and WHEREAS, Great Buy Homes has now requested that the style of the house required by the Purchase and Redevelopment Agreement be modified from a two-story home to a split -entry style home to better enable its marketability and ultimate sale; WHEREAS, the "Minimum Improvements" defined in the Purchase and Redevelopment Agreement as well as Exhibit F — Buyer's Proposed Plans of the Purchase and Redevelopment Agreement would require amendment to enable Great Buy Homes to build this altered house design that it now desires to build; and WHEREAS, it is in the best interest of the EDA to amend the Purchase and Redevelopment Agreement to permit this modified house design in order for Great Buy Homes to successfully complete the construction of a new single family home on the Property in accordance with the City's scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the amendment to the Purchase and Redevelopment Agreement. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the amendment of the Purchase and Redevelopment Agreement between the EDA and Great Buy Homes, in the form attached hereto as Exhibit A, is approved, it being in the best interest of the EDA to assist Great Buy Homes in the successful redevelopment and construction of a single-family home on the Property in accordance with the City's scattered site housing program and policy. 3. That all the other terms of the Purchase and Redevelopment Agreement including Exhibit E — Request for Proposal Guidelines which outline certain required specifications for the quality of construction of the single-family home, remain in full force and effect. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to amend the Restrictive Covenants and Assessment Agreement. Dated the 25' day of June, 2018. Kathi mken/President Attest: y Kirk McDonald, Executive Director P:\Attorno1ASAS\l Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Resolution Approving Amendment to Purchase and redevelopment Agreement.docx AMENDMENT TO PURCHASE AND REDEVELOPMENT AGREEMENT 6065 Louisiana Ave. N. THIS AMENDMENT TO PURCHASE AND REDEVELOPMENTAGREEMENT ("Amendment") is effective the day of June, 2018, by and between the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and Great Buy Homes, Inc., a Minnesota corporation ("Great Buy Homes") (EDA and Great Buy Homes sometimes jointly referred to as the "Parties"). RECITALS: A. The Parties (through documentation hereinafter recited) are parties to that certain Purchase and Redevelopment Agreement dated September 26, 2016 ("Purchase Agreement") imposing certain requirements relating to the sale from EDA to Great Buy Homes of certain real property located at 6065 Louisiana Avenue North, New Hope and legally described as: "Lot 2, Block 1, McDonalds Addition to City of New Hope, Hennepin County, Minnesota" ("Property") and required construction design and guidelines for the single-family home to be constructed by Great Buy Homes. The Purchase Agreement was filed in the office of the County Recorder, Hennepin County, Minnesota on November 2, 2016 as Document No. A10375931. B. The Purchase Agreement is currently in full force and effect according to its terms and conditions and the Parties have agreed to amend the style of the new residential home Great Buy Homes is required to build ("Minimum Improvements") as set forth in the revised "Exhibit F — Buyer's Proposed Plans", attached hereto as "Revised Exhibit F — Buyer's Revised Plans". C. The EDA and Great Buy Homes are mutually desirous of amending the Purchase Agreement as more fully set forth herein. NOW, THEREFORE, for $1.00, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the EDA and Great Buy Homes agree as follows: 1. Adoption by Reference of Recitals. The Recitals above, are incorporated herein by reference, and constitute a material part of this Amendment between the Parties. 2. Amendment of "Minimum Improvements: and "Exhibit F — Buyer's Proposed Plans" of the Purchase Agreement. Paragraph 10. a. and b. and Exhibit F — Buyer's Proposed Plan" of the Purchase Agreement shall be amended to reflect the revised plans attached hereto as "Revised Exhibit F — Buyer's Revised Plans". 3. Representations, Warranties and Covenants. The EDA and Great Buy Homes represent, warrant and covenant as follows: a. With the exception of the modifications recited above and as specified herein, the Purchase Agreement has not been changed, altered, modified or amended in any way prior to the date hereof. b. As modified by this Amendment, the Purchase Agreement constitutes a legal, valid and binding obligation of Great Buy Homes enforceable by the EDA in accordance with its terms. 4. EDA Costs. Great Buy Homes shall pay contemporaneous with the execution of this Amendment the EDA's costs incurred in connection with this Amendment including without limitation attorney's fees. 5. Release of EDA. Great Buy Homes releases and forever discharges the EDA, and the EDA's past and present, representatives, successors and assigns of and from any and all claims, demands, obligations, actions or causes of action, at law or in equity whether arising by contract, statute, common law or otherwise both direct and indirect, known or unknown of whatsoever kind or nature arising out of or by reason of or in connection with the Purchase Agreement, this Amendment or any acts omissions or conduct occurring on or before the effective date of this Amendment. IN WITNESS WHEREOF, the Parties have executed this Amendment effective the date first above written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By: Kathi Hemken Its: President Dated: June , 2018 By: Kirk McDonald Its: Executive Director Dated: June , 2018 GREAT BUY HOMES, INC. M Glenn Hammer Its: President Dated: June , 2018 STATE OF MINNESOTA }ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of June, 2018, by Kathi Hemken and Kirk McDonald, the President and Executive Director of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. (Notary Public Seal) Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of June, 2018, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 Revised Exhibit F Buyer's Revised Plans See attached. P:\Attorney\SAS\l Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Amendment to Purchase and Redevelopment Agreement - 6065 Louisiana Ave N.docx 2 ROOF VENTS A5 KMD REAR ELEVATION LEFT ELEVATION NO 5CALE NO 5CALE RJGHT ELEVATION tYLNI 1 owl v�llLvu�( NO 5CALE r4o / 0, i ,/ 7-0 7o-9 z 4ow6< Z-6V9U. I—,, ri # —5 #/,-, 0 70' moo— u r6 13 D' touw6e aVEG 30 AMENDMENT TO PURCHASE AND REDEVELOPMENT AGREEMENT 6065 Louisiana Ave. N. THIS AMENDMENT TO PURCHASE AND REDEVELOPMENTAGREEMENT ("Amendment") is effective the 104t' day of July, 2018, by and between the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and Great Buy Homes, Inc., a Minnesota corporation ("Great Buy Homes") (EDA and Great Buy Homes sometimes jointly referred to as the "Parties"). RECITALS: A. The Parties (through documentation hereinafter recited) are parties to that certain Purchase and Redevelopment Agreement dated September 26, 2016 ("Purchase Agreement") imposing certain requirements relating to the sale from EDA to Great Buy Homes of certain real property located at 6065 Louisiana Avenue North, New Hope and legally described as: "Lot 2, Block I. McDonalds Addition to City of New Hope, Hennepin County, Minnesota" ("Property") and required construction design and guidelines for the single-family home to be constructed by Great Buy Homes. The Purchase Agreement was filed in the office of the County Recorder, Hennepin County, Minnesota on November 2, 2016 as Document No. Al0375931. B. The Purchase Agreement is currently in full force and effect according to its terms and conditions and the Parties have agreed to amend the style of the new residential home Great Buy Homes is required to build ("Minimum Improvements") as set forth in the revised "Exhibit F — Buyer's Proposed Plans", attached hereto as "Revised Exhibit F — Buyer's Revised Plans". C. The EDA and Great Buy Homes are mutually desirous of amending the Purchase Agreement as more fully set forth herein. NOW, THEREFORE, for $1.00, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the EDA and Great Buy Homes agree as follows: 1. Adoption by Reference of Recitals. The Recitals above, are incorporated herein by reference, and constitute a material part of this Amendment between the Parties. 2. Amendment of "Minimum Improvements: and "Exhibit F — Buyer's Proposed Plans" of the Purchase Agreement. Paragraph 10. a. and b. and Exhibit F — Buyer's Proposed Plan" of the Purchase Agreement shall be amended to reflect the revised plans attached hereto as "Revised Exhibit F — Buyer's Revised Plans". 3. Representations, Warranties and Covenants. The EDA and Great Buy Homes represent, warrant and covenant as follows: a. With the exception of the modifications recited above and as specified herein, the Purchase Agreement has not been changed, altered, modified or amended in any way prior to the date hereof. b. As modified by this Amendment, the Purchase Agreement constitutes a legal, valid and binding obligation of Great Buy Homes enforceable by the EDA in accordance with its terms. 4. EDA Costs. Great Buy Homes shall pay contemporaneous with the execution of this Amendment the EDA's costs incurred in connection with this Amendment including without limitation attorney's fees. 5. Release of EDA. Great Buy Homes releases and forever discharges the EDA, and the EDA's past and present, representatives, successors and assigns of and from any and all claims, demands, obligations, actions or causes of action, at law or in equity whether arising by contract, statute, common law or otherwise both direct and indirect, known or unknown of whatsoever kind or nature arising out of or by reason of or in connection with the Purchase Agreement, this Amendment or any acts omissions or conduct occurring on or before the effective date of this Amendment. IN WITNESS WHEREOF, the Parties have executed this Amendment effective the date first above written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By: Ly.� Kathi Hemken Its: President Dated: July 2018 By: Kirk McDonald Its: Executive Director Dated: July C �, 2018 GREAT UY HOMES, INC. By: 7lean Hammer Its: President Dated: July 32018 STATE OF MINNESOTA I ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this % o� day of July, 2018, by Kathi Hemken and Kirk McDonald, the President and Executive Director of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. (Notary Public Seal) to i r VALERIE J LEON IIA04040%0404M � ON 0%A A0 %0 V vvvw**00-#��l ~' Notary Public-Wneseta My CmnrnkWw EVIG" Mn a11, MW STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN 62 Notary Public The foregoing instrument was acknowledged before me this 10Adayof July, 2018, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) did4 DAVID E WALKER-CRAWFORfl Notary Public State of Minnesota My Commission Expires January 31, 2021 Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 a ( k, , _ Notary Public Revised Exhibit IF Buyer's Revised Plans See attached. P:\Attomey\SAS\l Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Amendment to Purchase and Redevelopment Agreement - 6065 Louisiana Ave N.doex 2 ROOF VEdT5 P5 REQ'D oco 1� REAR ELEVATION LEFT ELEVATION NO 5CALE NO 5CALf RIGHT ELEVATION NO SCALE I SQL 0,! ------------ .5� 7 -0r -9G 4,ou36< Z-6VteU- 73a -514' �,,,s�f r� rb !3 D' rl y �3a sf F-N�s �..o L out orl/e LoevEL. U 30 NIS 1 -3 1, P -rad I Ail I I be Request for Action September 12, 2016 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Section EDA Item Number 5 Agenda Title Public Hearing: Resolution approving purchase and redevelopment agreement with Great Buy Homes, Inc for the sale of 6065 and 6067 Louisiana Avenue North (improvement project no. 973). Requested Action Staff requests that the EDA approve a resolution approving the purchase and redevelopment agreement for the sale of the EDA -owned lots located at 6065 and 6067 Louisiana Avenue North. Staff recommends that the EDA receive the staff presentation, open the public hearing for comments, pass a motion closing the public hearing and then pass a motion approving the resolution. Policy/Past Practice Proposals for the redevelopment of EDA -owned scattered site lots are reviewed by the Council prior to executing a contract with the preferred buyer/builder. Once a builder has been selected, it is a common practice for staff to seek formal approval of purchase and redevelopment agreements to complete the sale of EDA- owned lots. Background In mid-April, RFPs were sent to 20 builders marketing the lots located at 6065 and 6067 Louisiana Avenue. The non-negotiable sales price was set at $55,000 per lot ($110,000 total). The EDA received three proposals from the following builders: • Great Buy Homes • Novak -Fleck • Tollberg Homes The Council reviewed all of the proposals at the 8/15/16 Work Session meeting, and selected Great Buy Homes as the preferred builder for the property. Great Buy Homes is a custom home builder based out of Anoka, and has recently completed projects in Coon Rapids and Anoka. The EDA has not worked with Great Buy Homes in the past. Staff did call community development staff in Coon Rapids to discuss their experience working with the builder. Staff from Coon Rapids gave a positive reference for Great Buy Homes and complimented their quality of work. Summary of the Home Proposed by Great Buy Homes The proposed homes meet all criteria set forth in the RFP guidelines and both homes will feature the following base characteristics: Two-story home design over full basement (same home for both lots) Above-average curb appeal High-end trim package I: \ RFA \ COMM DEV \ Development \ Q & R - Sale of Lots at 6065 and 6067 Louisiana 9-12-16 Project 973.docx Request for Action, Page 2 • Master suite • Three -car garages • 2,992 square feet (1,962 finished) per home • Main floor fireplace • Typical exterior finishes, vinyl siding with cultured stone accents • Anticipated sales price = $320,000 Reimbursement for Curb Cut Related Costs When purchased by the EDA, the Louisiana Avenue property was a single lot that contained a vacant foreclosed home and detached garage. Since acquiring the property, the EDA has subdivided the property into two separate lots. Because the property has been subdivided, there is the need to construct a new curb cut access for the second lot that has been created. Costs related to the curb cut installation were discussed during the review of the proposals at the 8/15 Work Session meeting. The Council agreed to reimburse Great Buy Homes for actual costs (not to exceed $3,500) for costs associated with the curb cut work. Development Agreement and Next Steps Staff has worked with the City Attorney and the buyer to draft a purchase and redevelopment agreement for the sale of the lots. The agreement ensures that the provisions set forth in the RFP will be met and sets the purchase price for both lots at $110,000. The agreement included in the attachments is considered complete by staff and the City Attorney. However, some minor revisions may be necessary once fully reviewed by the buyer. Any substantial changes to the agreement would be brought to the EDA for approval. Once the agreement is fully executed, staff anticipates that the closing of the lot sale will take place sometime in September. Recommendation Staff recommends that the EDA approve the resolution approving the purchase and redevelopment agreement for the sale of 6065 and 6067 Louisiana Avenue North to Great Buy Homes, Inc. Attachments • Resolution and Exhibits (agreements) • Excerpt from the 8/15/16 Work Session Minutes • Great Buy Homes Proposal CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 16-20 RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH GREAT BUY HOMES, INC FOR THE SALE OF 6065 AND 6067 LOUISIANA AVENUE NORTH (IMPROVEMENT PROJECT 973) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope ("EDA") as follows: WHEREAS, the EDA purchased that certain real property located at 6065 Louisiana Avenue North, New Hope, MN, on November 16, 2015, with the intention of razing the existing house and all site improvements in preparation of subdividing the lot into two separate tax parcels followed by the construction of two new single family homes; and WHEREAS, New Hope City staff received an offer from GREAT BUY HOMES, INC., a Minnesota corporation ("Great Buy Homes") regarding the sale and redevelopment of the two newly created lots located at 6065 and 6067 Louisiana Avenue North, New Hope, MN, and legally described as: 6065 Louisiana Ave N: Lot 2 Block 1, McDonalds Addition to City of New Hope, Hennepin County, Minnesota. 6067 Louisiana Ave N: Lot 1 Block 1, McDonalds Addition to City of New Hope, Hennepin County, Minnesota. (The pre -platted legal description is attached as Exhibit A to the Purchase and Redevelopment Agreement.) (collectively referred to as the "Property"). WHEREAS, the EDA arrived at an agreement with Great Buy Homes, to sell the Property for the total purchase price of $110,000.00 (or $55,000 per lot) upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted Great Buy Homes offer and has presented a draft of the Purchase and Redevelopment Agreement to Great Buy Homes, for its review, a copy of which is attached hereto as Exhibit A ("Purchase and Redevelopment Agreement") and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to Great Buy Homes for the total sum of $110,000.00, in order for Great Buy Homes to redevelop and build two new single family homes on the Property in accordance with the City's scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to Great Buy Homes, for the total purchase price of $110,000.00, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Purchase and Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of two single-family homes in accordance with the City's scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to Great Buy Homes, for the construction of two single-family homes, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 12th day of September, 2016. Kathi Hemken, President Attest: Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Resolution Approving Sale of 6065 and 6067 Louisiana Avenue North.doex PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between GREAT BUY HOMES, INC. a Minnesota corporation ("Buyer") and the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, MINNESOTA, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("Seller") effective September , 2016. In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase the vacant parcels of real property located in the City of New Hope at the property addresses of 6065 and 6067 Louisiana Avenue North, New Hope, Minnesota, and legally described on the attached Exhibit A (collectively referred to herein as the "Property"). 1. Purchase Price. The purchase price for the Property is One Hundred Ten Thousand and No/ 100 Dollars ($110,000.00) (the "Purchase Price"), which Buyer shall pay as follows: an initial payment of Two Thousand and No/100 Dollars ($2,000.00) (the "Earnest Money"), which sum shall be paid to Seller upon Buyer and Seller's execution of this Agreement and One Hundred Eight Thousand and No/100 Dollars ($108,000.00) payable by wire, cashier's check or cash on the "Date of Closing", as that term is defined in paragraph 6 below. There are no items of personal property or fixtures included in this sale. 2. Title Conveyed. On the Date of Closing, Seller shall deliver two separate Quit Claim Deeds (the "Deeds") to Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments and restrictions, except for the "Permitted Encumbrances" set forth on Exhibit B and the restrictive covenants referenced below in paragraph 4.b. 3. Representations of Seller. Seller represents and agrees as follows: a. Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, there are no parties other than Seller in possession of any portion of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property. b. Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. C. To the best of Seller's knowledge without inquiry there are no septic systems or wells on the Property. d. Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller's Closing Documents signed by it. e. Seller is not a "foreign person," "foreign partnership," "foreign trust" or "foreign estate" as those terms are defined in Section 1445 of the Internal Revenue Code. f. To the best of Seller's knowledge without inquiry, no above ground or underground tanks are located in or about the Property. g. Seller makes no other warranties as to the condition of the Property. Seller agrees that any breach of Seller's foregoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. Wherever herein a representation is made "to the best of Seller's knowledge," such representation is limited to the actual knowledge of the President and/or Executive Director of Seller. 4. Representations of Buyer. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and sell the Property, Buyer hereby represents to Seller: a. SUBJECT TO THE FOREGOING REPRESENTATIONS BY SELLER, BUYER HEREBY ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN "AS IS" CONDITION AS TO THE USE OF THE PROPERTY. Buyer understands and agrees that the Purchase Price is the fair market value of the Property in its "AS IS" condition. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the homes described in paragraph 10 below. If the soil is determined to be unacceptable Buyer may rescind this Agreement by written notice to Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be refunded to Buyer. b. Buyer agrees the first sales of the two separate homes on the Property will be sold to owner -occupants. An "owner -occupant" shall be defined as an individual(s) that purchases each home from Buyer by warranty deed or a contract for deed and intending to reside in the respective home as a primary residence. To insure the intent of the parties that the homes constructed on the Property are both purchased by an owner -occupant, Buyer will record restrictive covenants and assessment agreements against the Property prohibiting the leasing of the homes for a period of twelve (12) months after the sale of such homes by Buyer to an owner - occupant of each such home, respectively. The restrictive covenants and assessment agreements shall be substantially in the form of the documents attached hereto as Exhibits C and D, respectively. Further, the restrictive covenants and assessment agreements shall provide that the EDA may levy a $20,000.00 assessment on the Property prior to their respective sales if either of the lots are not being sold to an owner -occupant. The EDA shall release the Property from these restrictive covenants and assessment agreements upon the issuance of a certificate of occupancy for the construction of the homes on the 2 Property and upon the receipt by the EDA of an affidavit signed by Buyer and both owner -occupants verifying owner -occupants' intent to reside in the respective homes as their primary residences in compliance with the restrictive covenants described herein in the form attached as Exhibit C. C. Within one (1) year of Closing, Buyer shall complete the construction of the two separate single family homes on the Property (the Improvements). The Improvements must be consistent with all building and zoning requirements and the restrictive covenants applicable to the Property. The representations set forth in this paragraph shall be incorporated into appropriate documents to be recorded against the Property (whether by declaration, restrictive covenants, or development agreement as hereinafter defined) subject to approval by Seller and Buyer as a condition of Closing. 5. Title Commitment and Policy. a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the "Commitment") issued by a title insurance company of Buyer's choice ("Title Company") and covering title to the Property, in the amount of the Purchase Price. Buyer agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner's policy, if any, and the lender's policy, if any, along with the price for any endorsements requested by Buyer or Buyer's lender. b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer's notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon all of the Earnest Money shall be returned to Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or elect to have this Agreement remain in effect, in which event Buyer will be deemed to have approved the previously -cited exception and the same shall be considered part of the Permitted Encumbrances. 6. Closing. a. Closing shall occur on or before October 31, 2016 (the "Date of Closing" or "Closing"), unless both parties agree, in writing, to an earlier or later time. b. Closing shall occur at the office of the Title Company. C. Seller shall deliver at closing the following executed and acknowledged documents: (i) the Deeds; affidavit(s) in industry -standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; Seller is not a foreign person or entity; and addressing such other matters as Buyer may reasonably require. 7. Payments/Prorations. At Closing, Seller shall pay the cost of recording any instrument (other than the Deeds) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. Buyer shall pay at Closing the cost of the owner's policy or lender's policy of title insurance (if any), sales tax (if any) resulting from the Closing, the fees required for recording the Deeds, the Purchase and Redevelopment Agreement, the assessment agreements and restrictive covenants and all customary closing fees charged by the Title Company or other closing agent, if any, utilized to close the transaction contemplated by this Agreement. General real estate taxes payable in the year of closing shall be prorated by Seller and Buyer as of the closing date based upon a calendar year. Each party shall pay its own attorney's fees. 8. Post -Closing Payment Regarding Curb Cut. Seller agrees to reimburse Buyer for actual costs incurred by Buyer associated with the installation of the curb cut at 6065 Louisiana Ave N., not to exceed $3,500.00. Buyer shall submit to Seller proof of actual costs incurred relating to installation of the curb cut on the Property, and Seller will reimburse Buyer, in an amount not to exceed $3,500.00. 9. Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and Seller shall be entitled to any and all condemnation proceeds. 4 10. Construction of Homes. Buyer agrees that it will construct two new single family homes on the Property. This covenant shall survive the delivery of the Deeds. a. The single family homes described in this paragraph are referred to as the "Minimum Improvements." b. The Minimum Improvements shall consist of two new single family homes, and shall be constructed substantially in accordance with the RFP Guidelines attached asci-iibit E and the proposal approved by Seller on September 12, 2016 attached as Exhibit F. C. Construction of the Minimum Improvements must be substantially completed within one (1) year following Closing. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of New Hope building inspector. d. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Buyer to construct such Minimum Improvements (including the date for completion thereof), Seller will furnish Buyer with a Certificate of Completion for such improvements. Such certification by Seller shall be (and it shall be so provided in the Deeds and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the Deeds with respect to the obligations of Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this paragraph of this Agreement shall be in such form as will enable it to be recorded in the Hennepin County Recorder's Office and other instruments pertaining to the Property. If Seller shall refuse or fail to provide any certification in accordance with the provisions of this paragraph, Seller shall, within thirty (30) days after written request by Buyer, provide Buyer with a written statement, indicating in adequate detail in what respects Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of Seller for Buyer to take or perform in order to obtain such certification. e. Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (i) Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person 5 or entity (collectively, a "Transfer"), without the prior written approval of Seller. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (ii) If Buyer seeks to effect a Transfer prior to issuance of the Certificate of Completion, Seller shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by Buyer as to the portion of the Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of Seller, have expressly assumed all of the obligations of Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by Seller) deprive Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by Seller to the contrary, no such transfer or approval by Seller thereof shall be deemed to relieve Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. Con (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subparagraph shall be in a form reasonably satisfactory to Seller. (iii) If the conditions described above are satisfied then the Transfer will be approved and Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (iii) apply to all subsequent transferors. (iv) Upon issuance of the Certificate of Completion, Buyer may transfer or assign the Minimum Improvements and/or Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of Seller. L Buyer agrees that (a) it will use the Minimum Improvements as only two separate single family, owner -occupied homes, (b) it will not seek exemption from real estate taxes on the Property under State law, and (c) it will not transfer or permit transfer of the Property to any entity whose ownership or operation of the property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of New Hope or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for at least 30 years after the Date of Closing. g. Buyer shall comply with all recommendations of the City Engineer. h. Buyer's construction plans shall be approved by the City Building Official. 11. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to Buyer and prior to receipt by Buyer of the Certificate of Completion of the Minimum Improvements, Buyer fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (3 0) days after written demand from Seller to Buyer to do so, then Seller shall have the right to re-enter and take possession of the Property and to terminate (and revert in Seller) the estate conveyed by the Deeds to Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to Buyer shall be made upon, and that the Deeds shall contain a condition subsequent to the effect that in the event of any default on the part of Buyer and failure on the part of Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, Seller at its option may declare a termination in favor of Seller of the title, and of all the rights and interests in and 7 to the Property conveyed to Buyer, and that such title and all rights and interests of Buyer, and any assigns or successors in interest to and in the Property, shall revert to Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this paragraph, Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a Certificate of Completion has been issued. 12. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in Seller of title to and/or possession of the Property or any part thereof as provided in paragraph 11, Seller shall apply the Purchase Price paid by Buyer under paragraph 1 of this Agreement as follows: a. First, to reimburse Seller for all costs and expenses incurred by Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by Seller from the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing Seller by the Buyer and its successor or transferee; and b. Second, to reimburse Buyer for the balance of the Purchase Price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to Buyer upon delivery of executed, recordable warranty deeds to the Property by Buyer to Seller. 13. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; or (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery. Any party shall have the right to designate any other address for notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: 8 SELLER: Economic Development Authority in and for the City of New Hope Kirk McDonald, Executive Director 4401 Xylon Avenue North New Hope, MN 55428-4898 with copy to: Stacy A. Woods, New Hope Assistant City Attorney Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 BUYER: GREAT BUY HOMES, INC. 5790 195th Ave NW Anoka, MN 55303 with copy to: 14. No Broker Involved. Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Seller. 15. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer as provided by law. If Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If Seller defaults under this Agreement, Buyer's only remedy shall be to terminate the Agreement and recover the Earnest Money paid to Seller. Buyer shall not have any right to the remedy of specific performance 16. Assignment/Prohibition Against Transfer of Property. Buyer may not assign its rights and obligations hereunder without the prior written consent of Seller, which consent may be granted or withheld by Seller in its sole discretion. 17. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both Seller and Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. Seller and Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly M acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. 18. Survival. The Parties representations contained herein shall survive the delivery of the Deed. IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the above date ("Effective Date"). SELLER: ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE BUYER: GREAT BUY HOMES, INC. CITY OF NEW PE By: By: �IcijLe� Kathi Hemken Its: President Dated: September , 2016 M Kirk McDonald Its: Executive Director Dated: September , 2016 STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) Glenn Hammer Its: President Dated: September , 2016 The foregoing instrument was acknowledged before me this day of September, 2016, by Kathi Hemken and Kirk McDonald, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. Notary Public 10 STATE OF MINNESOTA ss. COUNTY OF The foregoing instrument was acknowledged before me this day of September, 2016, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. DRAFTED BY - Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424-8811 11 Notary Public 1~)=IT A--- LEGAL DESCR1PT10N T IA TO That part of the North 1l2 of Section. 5, Township 118 North, Range 21,, West of the 5th Principal Meridian, described as follows: Beginning at a point on the North line of said Section 5 where said Norih line is intersected by the center line of the Osseo Road also kaowm as the Old Jefferson Highway; thence East along the North line of said'Section 5 a distance of 1953.5 feet; thenae.to the right at an angle of 104 degrees 40 minutes a distance of 289.8 feet; thence West along a line which if extended would intersect the center line of said Osseo Road at a point of 275.61 feet Southerly measured along said center line of said Osseo Road from its intersection to the North line of said Section. 5, a distance of 573.16 feet more or less to tho East line of -the Northwest 1/4 of said Section'5, being the actual point ofbegi='ng of the land to be described; t5.ence continuing West along said last described Line a distance of 200.00 feet; thence South parallel to the East line of said Northwest 1/4 of Section 5 a distance of 150 feet; thence East to a point on the East line of said Northwest 1/4 distant 150,0 feet South of the point of beginning; thence North along the East line of said Northwest 1/4 to the point of beginning, EXCEPTING therefrom the North 100.0 fee of the above described tract. ALSO: That part of the North 1/2 of Section 5, Township 118 North, Rauge 21, West of the 5th Principal Meridian., described as follows: Beginning at a point on the North line of said Section 5 where said North line is intersected by the center line of the Osseo Road, also known as the Old Jefferson Highway, thence East along the North line of said Section 5 a distance of 1953.5 feet; thence to the right at an angle of 104 degrees 40 minutes a distance of 289.8 feet; thence West along a line, which if extended would intersect the center line of said Osseo Road at a point of 275.61 feet Southerly measured along the center line of said Osseo Road from its intersection to the North line of said Section 5, a distance of 560 feet more or less to the East ]bre of the Northwest 1/4 of said Section 5, being the, actual point of beginning of the land to be desc i -bed; thence continuing Vest along said last descn`bed line a distance of 200.00 feet; thence South parallel to the East line of said Northwest 1/4 of Section 5 a distance of 100 feet; thence, East to a point on fife East line of said Northwest 1/4 distant 100 feet South of the point of beginning; thence North along the East line of said Northwest 1/4 to the point of beginning. Hennepin Comity, Minnesota jj-out? 10 ff II+OPQ-j Exhibit A Legal Description (6065 Louisiana Ave. N.): See attached legal description which property is to be re -platted as: Lot 2 Block 1, McDonalds Addition to City of New Hope, Hennepin County, Minnesota. (6067 Louisiana Ave. N.): See attached legal description which property is to be re -platted as: Lot 1 Block 1, McDonalds Addition to City of New Hope, Hennepin County, Minnesota. 12 Exhibit B Permitted Encumbrances 1. Restrictions, reservations, covenants and easements relating to use or improvement of the Property without effective forfeiture provisions of record on the Effective Date; 2. Building and zoning laws, ordinances, city, state and federal regulations; 3. Governmental regulations, if any, affecting the use and occupancy of the Property; 4. All rights in public highways upon the land; 5. Easements for public rights-of-way and public and private utilities, which do not interfere with present improvements; 6. Reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. 7. The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due; 8. The lien of unpaid real estate taxes, if any, not presently payable but to be paid as part of the annual taxes to become due. 13 Exhibit C Restrictive Covenants See attached. 14 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS ("Agreement") dated effective the day of , 2016, by and between the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and GREAT BUY HOMES, INC., a Minnesota corporation ("Great Buy Homes"). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the EDA and Great Buy Homes dated effective September , 2016 ("Purchase Agreement"), Great Buy Homes purchased the real property located at 6065 Louisiana Avenue North in the City of New Hope from the EDA, which property is legally described as Lot 2, Block 1 McDonalds Addition to City of New Hope, Hennepin County, Minnesota, ("Property") which purchase closed on , 2016; and WHEREAS, Great Buy Homes has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the EDA and Great Buy Homes have agreed Great Buy Homes shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the EDA and Great Buy Homes have agreed the EDA may levy a $20,000.00 assessment against the Property prior to Great Buy Homes sale of the Property with the completed home if it is not being sold to an owner -occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and 1 WHEREAS, compliance with the restrictions imposed by this Agreement are additional consideration for the sale of the Property to Great Buy Homes. NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Great Buy Homes agrees as follows: AGREEMENT 1. Restrictive Covenants. Great Buy Homes hereby covenants and agrees with the EDA that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling ("Dwelling") constructed upon the Property will be only to "Owner-occupant(s)". "Owner -occupant" is defined as an individual that purchases the Property from Great Buy Homes with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner - occupant, and/or by the "Immediate Family Member(s)" of the Owner -occupant for a period of twelve (12) consecutive months commencing on the date of initial conveyance to an Owner -occupant. "Immediate Family Member" shall only mean a parent, step-parent, child, step -child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions. The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the EDA of an Affidavit signed by Great Buy Homes and the Owner -occupant verifying the Owner -occupant's intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the one (1) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by EDA. Notwithstanding the restrictions stated above, the EDA may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Agreement to Assessment. Great Buy Homes acknowledges and agrees the EDA may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before , 2017; and/or (b) if Great Buy Homes sells the Property with the completed home to a non -owner -occupant in violation of paragraph 1(a) above. Further, Great Buy Homes agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 2 5. Waiver by Great Buy Homes. Great Buy Homes expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies. It is further understood that if Great Buy Homes or an Owner - occupant should breach their respective obligations under this Agreement, the EDA will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the EDA shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating -this Agreement. It is further agreed that the EDA's rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the EDA may have. 7. Great Buy Homes' Successors. This Agreement shall not be terminated by: a) The voluntary dissolution of Great Buy Homes or any parent subsidiary or successor of Great Buy Homes; b) Merger whereby Great Buy Homes (or such parent subsidiary or successor of Great Buy Homes) is not the surviving or resulting entity; or C) Any transfer of all or substantially all of the assets of Great Buy Homes. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens. All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the EDA: EDA in and for the City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 3 If to Great Buy Homes kmcdonald(a-4i.new-hope.mn.us GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Ave NW. Anoka, MN 55303 10. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights. Each and all of the various rights, power and remedies of the EDA in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of EDA, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment. This Agreement may be modified or amended only by a written instrument executed by Great Buy Homes and the EDA. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above -written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW POPE Ile By. pati' Kathi Hemken Its: President Dated: , 2016 0 Kirk McDonald Its: Executive Director Dated: , 2016 S GREAT BUY HOMES, INC. ME Dated: Glenn Hammer Its: President 2016 STATE OF MINNESOTA }ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of , 20161 by Kathi Hemken and Kirk McDonald, the President and Executive Director of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. (Notary Public Seal) Notary Public STATE OF MINNESOTA } ss. COUNTY OF The foregoing instrument was acknowledged before me this day of , 2016, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\l Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Restrictive Covenant - 6065 Louisiana Ave.docx RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS ("Agreement") dated effective the day of , 2016, by and between the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and GREAT BUY HOMES, INC., a Minnesota corporation ("Great Buy Homes"), RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the EDA and Great Buy Homes dated effective September , 2016 ("Purchase Agreement"), Great Buy Homes purchased the real property located at 6067 Louisiana Avenue North in the City of New Hope from the EDA, which property is legally described as Lot 1, Block 1 McDonalds Addition to City of New Hope, Hennepin County, Minnesota, ("Property") which purchase closed on , 2016; and WHEREAS, Great Buy Homes has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the EDA and Great Buy Homes have agreed Great Buy Homes shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the EDA and Great Buy Homes have agreed the EDA may levy a $20,000.00 assessment against the Property prior to Great Buy Homes sale of the Property with the completed home if it is not being sold to an owner -occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and WHEREAS, compliance with the restrictions imposed by this Agreement are additional consideration for the sale of the Property to Great Buy Homes. NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Great Buy Homes agrees as follows: AGREEMENT 1. Restrictive Covenants. Great Buy Homes hereby covenants and agrees with the EDA that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling ("Dwelling") constructed upon the Property will be only to "Owner-occupant(s)". "Owner -occupant" is defined as an individual that purchases the Property from Great Buy Homes with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner - occupant, and/or by the "Immediate Family Member(s)" of the Owner -occupant for a period of twelve (12) consecutive months commencing on the date of initial conveyance to an Owner -occupant. "Immediate Family Member" shall only mean a parent, step-parent, child, step -child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions. The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the EDA of an Affidavit signed by Great Buy Homes and the Owner -occupant verifying the Owner -occupant's intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the one (1) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by EDA. Notwithstanding the restrictions stated above, the EDA may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Allreement to Assessment. Great Buy Homes acknowledges and agrees the EDA may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before , 2017; and/or (b) if Great Buy Homes sells the Property with the completed home to a non -owner -occupant in violation of paragraph 1(a) above. Further, Great Buy Homes agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 2 5. Waiver by Great Buy Homes. Great Buy Homes expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies. It is further understood that if Great Buy Homes or an Owner - occupant should breach their respective obligations under this Agreement, the EDA will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the EDA shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating this Agreement. It is further agreed that the EDA's rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the EDA may have. 7. Great Buy Homes' Successors. This Agreement shall not be terminated by: a) The voluntary dissolution of Great Buy Homes -or any parent subsidiary or successor of Great Buy Homes; b) Merger whereby Great Buy Homes (or such parent subsidiary or successor of Great Buy Homes) is not the surviving or resulting entity; or C) Any transfer of all or substantially all of the assets of Great Buy Homes. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens. All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the EDA: EDA in and for the City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 3 If to Great Buy Homes: kmcdonaldkci.new-hope.mn.us GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Ave NW. Anoka, MN 55303 10. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights. Each and all of the various rights, power and remedies of the EDA in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of EDA, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment. This Agreement may be modified or amended only by a written instrument executed by Great Buy Homes and the EDA. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above -written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW YOPE By: ac'�'VL Kathi 14emken Its: President Dated: al 2016 Kirk McDonald Its: Executive Director Dated: , 2016 II GREAT BUY HOMES, INC. Dated: Glenn Hammer Its: President 2016 STATE OF MINNESOTA }ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of , 2016, by Kathi Hemken and Kirk McDonald, the President and Executive Director of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. (Notary Public Seal) Notary Public STATE OF MINNESOTA } ss. COUNTY OF The foregoing instrument was acknowledged before me this day of , 2016, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Restrictive Covenant - 6067 Louisiana Ave.doexc 5 Exhibit D Assessment Agreements See attached. 15 ASSESSMENT AGREEMENT THIS AGREEMENT dated as of the day of , 2016, by and between the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and GREAT BUY HOMES, INC., a Minnesota corporation ("Great Buy Homes"). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between EDA and Great Buy Homes dated effective September , 2016 ("Purchase Agreement") Great Buy Homes purchased the real property located at 6065 Louisiana Avenue North in the City of New Hope from EDA, which property is legally described as Lot 2, Block 1 McDonalds Addition to City of New Hope, Hennepin County, Minnesota, ("Property") with a closing on September , 2016; and WHEREAS, Great Buy Homes has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the EDA and Great Buy Homes have agreed Great Buy Homes shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the EDA and Great Buy Homes have further agreed the EDA may levy a $20,000.00 assessment against the Property prior to Great Buy Homes sale of the Property with the completed home if it is not being sold to an owner -occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project. Great Buy Homes hereby covenants and agrees with the EDA that the new home on the Property shall be fully completed on or before , 2017. Fully completed shall mean the Property shall be improved with a new single family house. 1 2. Agreement to Assessment. Great Buy Homes acknowledges and agrees the EDA may levy a $20,000.00 assessment against the Property if. (a) the Property is not improved with a single family house on or before , 2017; and/or (b) if Great Buy Homes sells the Property with the completed home to a non -owner -occupant. Further, Great Buy Homes agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by Great Buy Homes. Great Buy Homes expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Assessment Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. Great Buy Homes' Successors. This Agreement shall not be terminated by: a) The voluntary dissolution of Great Buy Homes or any parent subsidiary or successor of Great Buy Homes; b) Merger whereby Great Buy Homes (or such parent subsidiary or successor of Great Buy Homes) is not the surviving or resulting entity; or C) Any transfer of all or substantially all of the assets of Great Buy Homes. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the EDA: EDA in and for the City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428-4898 kmcdonald@ci.new-hope.mn.us If to Great Buy Homes: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Ave N. Anoka, MN 55303 0 6. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 7. Cumulative Rights. Each and all of the various rights, power and remedies of the EDA in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the EDA, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 8. Amendment. This Agreement may be modified or amended only by a written instrument executed by Great Buy Homes and the EDA. IN AGREEMENT, the parties have executed this Restrictive Covenant effective the day and year first above -written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW OPE B ll�� &-2, `� Y JL Kathi Hemken Its: President Dated: I� , 2016 Kirk McDonald Its: Executive Director Dated: , 2016 STATE OF MINNESOTA }ss. COUNTY OF HENNEPIN GREAT BUY HOMES, INC. 0 Dated: Glenn Hammer Its: President , 2016 The foregoing instrument was acknowledged before me this day of , 20165 by Kathi Hemken and Kirk McDonald, the President and Executive Director of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. (Notary Public Seal) Notary Public STATE OF MINNESOTA I ss. COUNTY OF The foregoing instrument was acknowledged before me this day of , 2016, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Assessment Agreement - 6065 Louisiana Ave. N.doex 11 ASSESSMENT AGREEMENT THIS AGREEMENT dated as of the day of , 2016, by and between the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and GREAT BUY HOMES, INC., a Minnesota corporation ("Great Buy Homes"). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between EDA and Great Buy Homes dated effective September , 2016 ("Purchase Agreement") Great Buy Homes purchased the real property located at 6067 Louisiana Avenue North in the City of New Hope from EDA, which property is legally described as Lot 1, Block 1 McDonalds Addition to City of New Hope, Hennepin County, Minnesota, ("Property") with a closing on September , 2016; and WHEREAS, Great Buy Homes has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the EDA and Great Buy Homes have agreed Great Buy Homes shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the EDA and Great Buy Homes have further agreed the EDA may levy a $20,000.00 assessment against the Property prior to Great Buy Homes sale of the Property with the completed home if it is not being sold to an owner -occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project. Great Buy Homes hereby covenants and agrees with the EDA that the new home on the Property shall be fully completed on or before , 2017. Fully completed shall mean the Property shall be improved with a new single family house. 1 2. Agreement to Assessment. Great Buy Homes acknowledges and agrees the EDA may levy a $20,000.00 assessment against the Property if. (a) the Property is not improved with a single family house on or before , 2017; and/or (b) if Great Buy Homes sells the Property with the completed home to a non -owner -occupant. Further, Great Buy Homes agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by Great Buy Homes. Great Buy Homes expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Assessment Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. Great Buy Homes' Successors. This Agreement shall not be terminated by: a) The voluntary dissolution of Great Buy Homes or any parent subsidiary or successor of Great Buy Homes; b) Merger whereby Great Buy Homes (or such parent subsidiary or successor of Great Buy Homes) is not the surviving or resulting entity; or C) Any transfer of all or substantially all of the assets of Great Buy Homes. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the EDA: EDA in and for the City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428-4898 kmcdonald@ci.new-hope.mn.us If to Great Buy Homes: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Ave N. Anoka, MN 55303 2 6. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 7. Cumulative Rights. Each and all of the various rights, power and remedies of the EDA in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the EDA, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 8. Amendment. This Agreement may be modified or amended only by a written instrument executed by Great Buy Homes and the EDA. IN AGREEMENT, the parties have executed this Restrictive Covenant effective the day and year first above -written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW H - PE Y B "�" Kathi Hemken Its: President Dated: , 2016 Kirk McDonald Its: Executive Director Dated: , 2016 STATE OF MINNESOTA }ss. COUNTY OF HENNEPIN GREAT BUY HOMES, INC. O Glenn Hammer Its: President Dated: , 2016 The foregoing instrument was acknowledged before me this day of , 20165 by Kathi Hemken and Kirk McDonald, the President and Executive Director of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. (Notary Public Seal) 3 Notary Public STATE OF MINNESOTA } ss. COUNTY OF The foregoing instrument was acknowledged before me this day of , 2016) by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\l Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Assessment Agreement - 6067 Louisiana Ave. N.docx M Exhibit E Request for Proposal ("RFP") Guidelines See attached. m City of New Hope 4401 Xylon Ave N 1 New Hope, MN 55428 Office: 763-531-5114 1 Fax: 763-531-5136 ci.new-hope.mn.us The Economic Development Authority in and for the City of New Hope (EDA), is requesting proposals from builders to purchase two vacant lots located at 6065 and 6067 Louisiana Avenue North, for the construction of two new single family homes. The lots are being offered as part of the city's Scattered Site Housing Program that focuses on the removal or rehabilitation of distressed properties. The site was the former location of a vacant home that was razed by the EDA. Enclosed, please find the Proposal Form and Guidelines for making a proposal. To receive consideration, proposals must be submitted on a completed Proposal Form and the required attachments and additional information must be included. Incomplete proposals will not be considered. Proposals are due by 4:30 p.m. on August 9th 2016. If you have questions about the RFP process or the enclosed Guidelines, please contact Aaron Chirpich in the Community Development Department at the City of New Hope, 763-531-5114 or achirpich@ci.new-hope.mn.us Thank you for your interest! Regards, Aaron Chirpich Community Development Specialist General Notes: 1. Only complete proposals will be considered. The EDA retains absolute discretion in deciding whether to accept any particular proposal. Both lots will be sold to the same builder. 2. Proposals must be submitted by state -licensed builders who have built at least three houses in Minnesota in the last five years, or have equivalent experience acceptable to the EDA. The houses may be built speculatively or for a specific buyer. 3. The EDA is interested in proposals that will generate the highest valued homes possible. The new homes must be owner -occupied, single family homes. Owner occupancy restrictions will be documented in the development agreement and secured with a recorded restrictive covenant. The occupancy requirement shall apply to the first buyer only and shall last for a period of one year. Full details regarding the legal language of this requirement are available upon request. 4. No preferred home style has been determined. However, preference will be given to proposals that include high quality exterior materials and upgraded interior amenities. Copies of previously approved proposals are available upon request. 5. Following proposal approval by the EDA, selected builders will be asked to enter into a purchase and development agreement. This agreement will address the sale of the lot and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement, the builder must submit a $2,000 nonrefundable earnest money deposit. Once the purchase and development agreement have been completed, final approval by resolution will take place at the next regularly scheduled EDA meeting. The closing on the purchase of the lots must take place within 60 days of final EDA approval. 6. Construction of the new homes must be completed within one year of closing on the purchase of the lots. Specifications: 1. Utilities and Curb Cuts a) All utility service lines shall be underground. Utilities may locate necessary facilities such as pedestals or boxes in the street right-of-way or utility and drainage easements. b) Any expenses for connection of the houses to private utilities shall be the responsibility of the builder. c) Water service stubs have been provided into both lots. The location of the service stubs are marked onsite. d) Sanitary sewer service stubs have been provided into both lots. The location of the service stubs are marked onsite. e) Curb cuts are the responsibility of the builder. The existing curb cut on the north lot may be used if practical. Driveways must be fully paved from street to garage. The EDA will reimburse builder for costs related to the installation of the curb cut access for the south lot, in an amount not to exceed $3,500. Builder must submit qualified invoices in order to receive reimbursement. 2. Building Standards and Design Guidelines a) All site improvements shall comply with the New Hope City Code. b) Each house shall have at least three (3) finished bedrooms and two (2) finished bathrooms. c) Each house shall have an attached garage that will accommodate a minimum of two vehicles. Three car garages are preferred. d) The design should emphasize the front door as the focal point for the front of the house. A large and usable front porch is desired. Garage door dominance in design should be minimized as much as possible. j Specifications: e) Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permitted. To the extent that southern exposures are present, house designs are expected to enhance wintertime natural light and passive solar heating. f ) No equipment such as air-conditioning cooling structures or condensers that generate noise shall be located within a side setback, or drainage and utility easement. g) Exterior materials (siding, soffit, doors and windows) shall be low maintenance. The use of brick, stone or stucco is preferred. Vinyl or other low maintenance siding materials are generally acceptable and can be made more desirable through the use of shakes, fish scales or other styles to break up the pattern. 3. Landscaping a) The lots shall be landscaped to be aesthetically pleasing in all seasons. Land forms and plant materials shall be used to define the site and blend neatly with adjoining property. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements shall be landscaped using ornamental grass, shrubs, trees or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed is not acceptable. All grass that is planted must be sod. Additionally, all lawn areas must be irrigated with underground irrigation systems. Due to weather limitations, landscaping can be completed after the sale of either home. However, builder will be responsible for completing all after sale landscaping requirements. b) A minimum of two (2) large -species deciduous shade trees shall be planted in the front yard of each home. A minimum of two (2) large -species deciduous shade trees shall be planted in the rear yard of each home. c) Species, size and specific location of all new trees must be approved by the City Forester. Builder must submit a planting plan to the City Forester for review and approval prior to planting. k c� Specifications: 4. Setbacks Front Rear Side House Side Attached Gare 25 Feet 25 Feet 10 feet 5 feet 5. Builder Selection Criteria a) Builder must be licensed in the State of Minnesota as a Residential Building Contractor. b) Builder shall provide the addresses of three houses they have built in Minnesota within the last five years, or evidence of qualification acceptable to the EDA. c) Builder must provide proof of builders risk, comprehensive general liability, and worker's compensation coverage. d) Builder must be capable of closing on the lot purchase within two months of the EDA approved lot sale. Proof of financing may be requested by the EDA. e) Builder must be capable of completing the house within one year of closing on the purchase of the lot. 6. Required Attachments by Builder a) Site plan showing the layout of the homes on the lots. Please include dimensions and setbacks. b) Floor plans with dimensions. Clearly indicate square footages of each floor. c) List overall square footage. d) List total finished square feet. e) Elevations, must indicate types of exterior materials (color elevations preferred). f) Narrative description of the interior trim package. Include description of flooring. g) Estimated sales price of each home. h) Pictures of similar homes (if available). 7. Attachments Provided by EDA ® Survey ® Backfill compaction testing reports These lots are being offered for $55,000 per lot, or $110,000 total. The EDA does not negotiate on lot price. The EDA is interested in selling both lots to the same builder. As such, offers to purchase one lot will not be considered. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to purchase these lots for $110,000 and build two new single family houses in accordance with the RFP guidelines. If a builders proposal is accepted by the EDA, builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lots. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Business Name: State License Number: Telephone: E-mail Address: City/State/Zip: Signature: Date: Print Name and Title: Proposals are due by 4:30 p.m. on August 9th, 2016 Submit this proposal form and required attachments to: Aaron Chirpich City of New Hope I Community Development Specialist 4401 Xylon Ave N I New Hope, MN 55428 Office: 763-531-5114 1 Fax: 763-531-5136 achirpichC>ci.new-hope.mn.us Proposals may be submitted by hand delivery, U.S. Mail, Fax or E-mail Exhibit F Buyer's Proposed Plans See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21605 - 6065 Louisana Ave. N. Rezone and Plat\Purchase and Redevelopment Agreement 6065 Louisiana.docxc 17 Ms. Tripp offered their services including education and awareness to the community. Mayor Hemken suggested a coordinated effort with the DARE programs in the schools. Council expressed concern regarding the statistics contained in the 2010 survey regarding tobacco sales to youth in the Robbinsdale area schools. It was recommended that an updated survey be conducted. Council thanked Mss. Tripp and Garman for their presentation. IMP. PROJECT 913 Mayor Hemken introduced for discussion item 11.2, Continue discussion on DeCola Item 11.2 Ponds/Medicine Lake Road/Winnetka Avenue Flood Mitigation Study (improvement project no. 913). Mr. McDonald, city manager, stated the discussion is in follow up to the tri -city joint council workshop held May 31 regarding options to reduce flooding in the southern part of the city. He commented one project revealed in the study called for demolition of a 12 -unit condo building at 2740 Rosalyn Court for construction of a storm water pond to achieve 3.3 acre feet of storage. He expressed concern regarding the plan and loss of tax base and indicated an alternative could be underground storage tanks. He stated Stantec could complete a feasibility report for $30,500. Mr. Chris Long, city engineer, indicated staff met with representatives of the Rosalyn Court Condo Association and explained the results of the flood mitigation study. He stated Rosalyn Court representatives agreed to cooperate with the city on a long-term plan to reduce the flooding including underground storage in the parking lots. Mr. Long illustrated three conceptual options including underground flood storage near Medicine Lake Road and Winnetka Avenue: Midland Shopping Center (4.81 acre feet); Rosalyn Court (4.84 acre feet); and Terra Linda Park site (1.40 acre feet). He stated the study would include geotechnical exploration and could be completed this fall. He stated the work would qualify for I&I credits, and the city could seek grants for funding. Council Member Lammle expressed support for the study to determine the best course of action for the city. Council Member London suggested postponing the study until the bonding bill is approved by the legislature. The City Council directed Mr. McDonald to place the item on the next council agenda for formal consideration. IMP. PROJECT 973 Mayor Hemken introduced for discussion item 11.3, Review proposals and select a Item 11.3 preferred builder for the redevelopment of the two EDA -owned scattered site lots located on Louisiana Avenue (improvement project no. 973) Mr. Aaron Chirpich, community development specialist, indicated staff received proposals from three builders for the lots located at 6065 Louisiana Avenue North. He reviewed proposals by Great Buy Homes, Novak -Fleck and Tollberg Homes. He stated staff favors the proposal by Great Buy Homes to build two homes in the price range of $320,000 each. He also noted because the property has been subdivided and requires City Council Work Session August 15, 2016 Page 2 another curbcut, staff recommends reimbursing the builder for actual costs (not to exceed $3,500) for costs associated with the curbcut installation for the second lot. Mr. Jeff Sargent, director of community development, stated staff's recommendation is based on determining the best product for the city. Council supported staff's recommendation to select Great Buy Homes as the preferred developer. Mr. Chirpich stated a public hearing would be held on September 12, 2016, for the sale of the lots. IMP. PROJECT 988 Mayor Hemken introduced for discussion item 11.4, Discuss the potential acquisition Item 11.4 of 8115 Bass Lake Road for future redevelopment (improvement project no. 988). Mr. Aaron Chirpich, community development specialist, explained the city was contacted by the owners of the single-family home located at 8115 Bass Lake Road regarding their intent to sell the property. He noted the property owner also owns the nearby Bass Lake Pet Hospital. Mr. Chirpich illustrated the subject property and adjacent properties that may be acquired in the future to assemble a viable commercial redevelopment site. He stated an appraisal of the property is underway to determine the value as the owners have requested $170,000 and the market value set by Hennepin County is $144,000. He pointed out any offer or purchase agreement would be subject to the final approval of the EDA. He inquired whether Council supported the purchase for possible landbank purposes. He also noted the potential for $30,000 in additional expenses such as demolition and tree removal. Mr. Jeff Sargent, director of community development, noted the likelihood of holding the property for a few years before any possible redevelopment. Council Member London pointed out a recent merger involving Family Dollar and many store closures. He questioned whether the Family Dollar site would be on the market soon. Council expressed support for pursuing the potential acquisition of 8115 Bass Lake Road. AWARD PROGRAM Mayor Hemken introduced for discussion item 11.5, Discussion on Outstanding Item 11.5 Business Award program. Mr. Jeff Alger, community development assistant, explained the outstanding business award program was developed in 2006 to recognize businesses in the city. He stated since inception the city has recognized 27 businesses, and staff is asking for direction from the Council on how the program could be enhanced. He suggested possible program modifications. Council supported the following changes: allowing Council to nominate businesses, fillable applications (with new website), more prominent publicity, annual award with City Council Work Session August 15, 2016 Page 3 J These lots are being o6ered for $55,000 per lot, or $110,000 total. The EDA does not negotiate on lot price. The EDA is interested in selling both lotsto the same builder. Assuch, o6ersto purchase one lot will not be considered. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submit ing a proposal to purchase these lots for $110,000 and build two new singlefamily houses in accordance with the RFP guidelines. If a builders proposal is accepted by the EDA, builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lots. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Business Name: •� m ate Lioc-ase N u m ber:.154 31 �✓ Telephone: 263- 75 3 �9 qq 8 E-mail l Address: -5220 /! J 4y /L City/State(Zip:/z'N3oM Inlild � j� 0 Signature: /- Date: % Print Name and Title: G10r.") Proposals are due by 4:30 p.m. on August 9th, 2016 Su bm i t th i s proposal form and required aJachmentsto: Aaron C;trrrpich City of New Hope I Community Development Specialist 4401 Xy lon A ve N I New Hope, MN 55426 40 ca 763-531-5114 1 Fax, 763-531-5136 achir ick .new-hopemn.us Proposals may be submiJed by hand delivery, U.S. M ail, Fax or E-mail Great Buy Homes Inc. 5790 195th Av NW Anoka, MN 55303 RE: 6965 & 6067 Louisiana Av Thank you for your consideration in our plan submission. We'd be grateful for the opportunity to partner with the city in building a great product that is a wonderful addition to the neighborhood and one that the end buyer will truly love. The attached plan is one we feel would be well received in the marketplace. Great Buy Homes build quality homes, not just homes that meet design criteria and look pretty. Great Buy Homes builds homes that add value to communities for generations, not just to meet our annual sales numbers. We've enjoyed working with other municipalities in their neighborhood improvement initiatives with great success and would value the opportunity to partner with you as well. If you have any questions or concerns, we welcome the opportunity to discuss those and do whatever it takes to move this partnership forward. 1130 SF on main floor 830 SF on second floor 1962 TOTAL FINISHED 1030 SF for future expansion in basement SALE PRICE of about $320,000 9 foot high ceilings on the main floor Kitchen/ Dinning - Granit Countertops, Engineered wood floors Front entry — Engineered wood floors, open 2 stories Back entry — the floors Thanks, Glenn Hammer • 9 t -,wt) i �«•,, ry. • r �'F'^�•, ,i' • rte. i yf p 7"r wF, ' „�+ .,r._F fir Sa►e =;'� !r � , mss• tnr`, a "^� i •r Mimi ' ,. � 1 moi. � _' �w�"L.rt•r co Qc) C.) 75.00 LOUISIANA A rt G s0 151051, w15 a 0 PJ1- Of- 1 tfi- Alf- //4, Mi" 1,44 OF Q K c c a c c I � =! �' � � ,_. j .� �� �� sr� ��� r'y JL F LL_ ;t Ile. 12'MK IQ W-01 rr- a -oLK I I mill I m 14M *---------------• - 2AAS FTGlL MA& WALL 2)ofi STJD6 It-- 6' KiLF HIGH I-AS61VE PADM12'.0-A FrG. 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