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082619 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, August 26, 2019 President Kathi Hemken Commissioner John Elder Commissioner Cedrick Frazier Commissioner Andy Hoffe Commissioner Jonathan London 1. Call to order – EDA Meeting of August 26, 2019 2. Roll call 3. Approval of Minutes:  August 12, 2019 4. Resolution approving purchase agreement for the acquisition of 6027 West Broadway (improvement project no. 1038) 5. Adjournment EDA Meeting Page 1 August 12, 2019 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes August 12, 2019 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:52 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Staff Present: Kirk McDonald, City Manager Jeff Alger, Community Development Specialist Tim Fournier, Police Chief Valerie Leone, City Clerk Jeff Sargent, Director of Community Development Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Elder, seconded by Commissioner Frazier, to approve the minutes of June 10, 2019. All present voted in favor. Motion carried. IMP. PROJECT 1025 Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving purchase and redevelopment agreement with Novak-Fleck Incorporated for the sale of 5212 Pennsylvania Avenue North (Improvement Project No. 1025). Mr. Jeff Alger, Community Development Specialist, requested the EDA to conduct a public hearing to consider the sale of the city-owned property at 5212 Pennsylvania Avenue North to Novak-Fleck, Inc. He explained that Requests for Proposals marketing the lot were sent to a number of builders and the city received four proposals from three builders. The city manager and staff reviewed the proposals and selected Novak-Fleck as the preferred proposal as the proposal contained more finished square footage and a higher lot purchase price. He reviewed the proposals submitted by Novak-Fleck, Houston Homes, and Great Buy Homes. He stated the RFP criteria included a non- negotiable minimum sales price of $60,000 and that the new home be owner- occupied for at least two years. Mr. Alger stated Novak-Fleck’s projected sales price is $401,600. He noted the city has worked with Novak-Fleck on five past projects and the builder has demonstrated they can meet their targeted sales price. He reviewed financial details including the project budget and tax revenue. He pointed out the primary focus of the scattered site program is to target distressed single-family properties throughout the city, with the goal of improving residential neighborhoods. It is EDA Meeting Page 2 August 12, 2019 understood that potential losses are incurred on each project, as the cost to acquire the distressed properties and redevelop often exceeds the value of the new vacant lot or rehabilitated home. Mr. Alger stated staff is working with AEM on a template that can be used to calculate internal rate of return for future scattered site housing projects and the topic will be discussed at the August 19 work session. Mr. Alger stated a purchase and redevelopment agreement has been prepared with a lot sales price of $65,000 and assurance that the provisions set forth in the RFP will be met. Staff anticipates that closing of the lot sale will take place in September, 2019. Mr. Dale Anderson, Novak-Fleck’s realtor, was recognized. He responded to questions from the EDA and indicated there is no pre-arranged buyer for the home but he does not anticipate any difficulty in selling the property. President Hemken thanked Mr. Anderson and asked him to relay the EDA’s appreciation to Novak-Fleck. CLOSE HEARING Item 4 Motion was made by Commissioner Elder, seconded by Commissioner Frazier, to close the public hearing. All present voted in favor. Motion carried. RESOLUTION 2019-03 Item 4 Commissioner Elder introduced the following resolution and moved its adoption “RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH NOVAK-FLECK INCORPORATED FOR THE SALE OF 5212 PENNSYLVANIA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1025)”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Frazier, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. IMP. PROJECT 1020 Item 5 President Hemken introduced for discussion EDA Item 5, Resolution awarding the contract for rehabilitation work in association with the EDA-owned property located at 3924 Utah Avenue North (Improvement Project No. 1020). Mr. Jeff Alger, Community Development Specialist, explained the EDA purchased the property for $190,100 as part of the city’s scattered site housing program. He stated the house is in disrepair and substantial exterior and interior work is needed in order to make it habitable and desirable. Mr. Alger illustrated the condition of the property and reviewed the proposed scope of work (interior and exterior). He stated bids were sought for the rehab work and only one contractor, Day Construction, submitted a bid for the work. The base bid is $158,794 and there were two alternate bids. Staff recommends awarding the base bid and alternate number 1 for $14,877 for a master suite to increase marketability. He stated alternate number 2 was $7,128 for cultured stone accent wall on the front of the home. He stated the total cost (base bid and alternate 1) is $173,671. He stated the proceeds from the sale of the property will cover the majority of the costs and funding for the EDA Meeting Page 3 August 12, 2019 gap would be covered by the EDA budget. Factors include the housing market, any unforeseen expenses, and whether the property can be sold without realtor fees. It was noted the city will benefit from an increased property value and corresponding taxes. The EDA discussed the fact that Day Construction completed a very nice rehab at 3984 Zealand Avenue North which sold quickly. Mr. Matthew Day of Day Construction was recognized. He addressed questions from the EDA. He noted the cost of the project is approximately 50 percent materials and 50 percent labor. The EDA expressed support for the project. RESOLUTION 2019-04 Item 5 Commissioner Frazier introduced the following resolution and moved its adoption “RESOLUTION AWARDING THE CONTRACT FOR REHABILITATION WORK IN ASSOCIATION WITH THE EDA-OWNED PROPERTY LOCATED AT 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020)”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Elder, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe; and the following voted against the same: None; Abstained: London; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. ADJOURNMENT Motion was made by Commissioner Frazier, seconded by Commissioner Elder, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:27 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\2019\EDA\Scattered Site Housing\Q - 6027 West Broadway Acquisition 08-26-19.docx Request for Action August 26, 2019 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Alger, Community Development Specialist; Jeff Sargent, Director of Community Development Agenda Title Resolution approving purchase agreement for the acquisition of 6027 West Broadway (improvement project no. 1038) Requested Action Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for the acquisition of 6027 West Broadway for a purchase price of $141,000. The city and seller would split the closing costs associated with the sale evenly (estimated total closing costs $2,623). Policy/Past Practice The Economic Development Authority has acquired vacant distressed properties in the past as part of the city’s scattered site housing program. Background The Economic Development Authority (EDA) has directed community development staff to pursue the acquisition of distressed and functionally obsolete single-family homes as part of the city’s scattered site housing program. The property at 6027 West Broadway is located in a priority redevelopment neighborhood and is the lowest valued single-family home in the city. The 2018 assessed value of the property was $93,000 and the 2019 assessed value of the property was $115,000. The home includes less than 800 square feet of living space above grade, two bedrooms, and one bathroom. It is located on a 0.25-acre parcel of land. Staff believes the property is a good candidate for a demolition and rebuild project. Since 2014, the city has acquired and demolished five homes in the neighborhood where the subject property is located. One of the lots was split and six new homes have been constructed: Address Year City Purchase Price Lot Sale Price New Home Sale Price 6059 West Broadway 2014 $115,000 $40,000 $226,150 6065 Louisiana Ave N 2015 $130,000 (lot split) $55,000 $325,000 6067 Louisiana Ave N 2015 $55,000 $323,900 7303 62nd Ave N 2017 $132,900 $55,000 $311,000 7311 62nd Ave N 2018 $130,000 $55,000 $319,900 7215 62nd Ave N 2018 $138,000 $61,000 $350,821 After learning that the property owner was interested in selling, staff ordered an appraisal that was completed on June 11, 2019. The appraisal indicated the property is valued at $145,000. Staff proceeded to meet with the property owner on multiple occasions. Several offers and counter offers were exchanged and both parties eventually reached an agreement for the purchase of the home, contingent upon approval by the EDA. The city would purchase the home for $141,000 and split closing costs evenly with the owner. The assistant city attorney estimated the total closing costs to be $2,623, or $1,311.50 per party. Agenda Section EDA Item Number 4 Request for Action, Page 2 Return on Investment It is anticipated that expenses associated with the project will be approximately $163,512. Revenue from the sale of the lot is estimated at $60,000, resulting in a loss of $103,512. The proposed improvements would result in an increase in the taxable property value for the subject property. If the property were to be valued at $315,000 in 2020, it is estimated that taxes allocated and payable to the city in 2021 would represent an increase of $1,611.66, or 377.54%, as compared to those that were payable in 2019. Estimated Market Value 2018, Payable 2019 Projected Market Value 2020, Payable 2021 $93,000 $315,000 Taxable Market Value 2018, Payable 2019 Projected Taxable Value 2020, Payable 2021 $64,130 $306,110 Net Taxes 2018, Payable 2019 Projected Net Taxes 2020, Payable 2021 $1,200.96 $5,406.96 Taxes Allocated to City 2018, Payable 2019 Taxes Allocated to City 2020, Payable 2021 $426.89 $2,038.55 The following table demonstrates the tax benefit to the city associated with the projected increase in taxable market value for the property in the future: Additional Taxes Collected By City Year # of Years $1,611.66 2021 1 $3,223.32 2022 2 $4,834.98 2023 3 $6,446.64 2024 4 $8,058.30 2025 5 $16,116.60 2030 10 $24,174.90 2035 15 $32,233.20 2040 20 $40,291.50 2045 25 $48,349.80 2050 30 $104,757.90 2085 65 The increase in property taxes allocated to the city would not cover the shortfall for 65 years, unless other substantial improvements were made to the property. The primary focus of the scattered site program is to target distressed single-family properties throughout the city, with the goal of improving residential neighborhoods. It is understood that potential losses are incurred on each project, as the cost to acquire the distressed properties and redevelop often exceeds the value of the new vacant lot or rehabilitated home. Staff is working with AEM on a template that can be used for future scattered site housing projects to calculate the Internal Rate of Return for potential projects. Upon completion, it will be included in future reports to the City Council. Request for Action, Page 3 Funding Funding for this project would come from the EDA budget. Recommendation Staff recommends that the EDA approve a resolution approving a purchase agreement for the acquisition of 6027 West Broadway at a purchase price of $141,000 with closing costs split evenly with the owner. Attachments  Resolution  Purchase Agreement  Property summary  Sample layout  Budget & Return on Investment  Appraisal CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 19-___ RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 6027 WEST BROADWAY (IMPROVEMENT PROJECT NO. 1038) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City Council meeting authorizing City community development staff to actively pursue the acquisition of distressed single family homes for potential purchase by the EDA, as part of the City’s scattered site housing program; WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to the City and EDA, and the execution of purchase agreements so as to secure purchase rights for these real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements; WHEREAS, City staff have identified the opportunity to purchase certain real property located at 6027 West Broadway, New Hope, MN, 55428, P.I.D. 05-118-21-21-0033, and legally described as “Tract D, Registered Land Survey No. 21, Hennepin County, Minnesota” (the “Property”) from Thomas R. Manke (“Seller”); WHEREAS, the house located on the Property was built in 1952 and has a functionally obsolete floor plan and is in need of substantial rehabilitation and renovation due to deferred maintenance and general lack of upgrades; WHEREAS, City staff believes that the best use of the Property is demolition in order to maximize the tax base by making the lot available for the development of a new residential housing unit; WHEREAS, the Property will be acquired with EDA funds; WHEREAS, the EDA has reviewed the proposed acquisition of Property and has determined that it has no effect or relationship with the New Hope Comprehensive Plan. The Property is, and will remain zoned as R-1 single family residential district following the EDA’s purchase of the Property and ultimate re-sale of the Property; WHEREAS, it is in the best interest of the EDA to purchase the Property from Thomas R. Manke, in order to redevelop the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and 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. It is in the best interest of the EDA to purchase the Property for demolition and redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the purchase of the Property by EDA from Seller, for a sum of $141,000.00, plus equally dividing the closing costs between EDA and Seller, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the purchase of the Property. 4. The proposed acquisition of Property is consistent with the New Hope Comprehensive Plan. 5. The City and EDA shall use due diligence for demolishing the structure located on the Property and conducting any necessary cleanup of the Property to pursue redevelopment and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 6. The President and Executive Director and the 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 purchase of the Property in accordance with the Purchase Agreement. Dated the 26th day of August, 2019. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11435 6027 West Broadway\Resolution approving purchase of 6027 West Broadway.docx Exhibit A Purchase Agreement See attached. 1 PURCHASE AGREEMENT Date: August____, 2019 BUYER(S): 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 Seller agrees to sell and Buyer agrees to purchase the real property located at: Street Address: 6027 West Broadway City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described as “Tract D, Registered Land Survey No. 21, Hennepin County, Minnesota” and PID 05-118-21-21-0033. Said purchase shall include all improvements, fixtures, and appurtenances on the property, if any, including but not limited to, the following (collectively the "Property"): garden bulbs, plants, shrubs, trees, and lawn watering system; shed; storm sash, s torm doors, screens and awnings; window shades, blinds; traverse, curtain, and drapery rods, valances, drapes, curtains, window coverings and treatments; towel rods; attached lighting and bulbs; fan fixtures; plumbing fixtures; garbage disposals; water sof tener; water treatment system; water heating systems, heating systems; air exchange system; radon mitigation system; sump pump; TV antenna/cable TV jacks and wiring/TV wall mounts; wall/ceiling-mounted speakers and mounts; carpeting; mirrors; garage door o peners and all controls; smoke detectors; fireplace screens, door and heatilators; BUILT-INS: dishwashers; refrigerators; wine/beverage refrigerators; trash compactors; ovens; cook -top stoves; warming drawers; microwave ovens; hood fans; shelving; work benches; intercoms; speakers; air conditioning equipment; electronic air filter; humidifier/dehumidifier; liquid fuel tanks (and controls); pool/spa equipment; propane tank (and controls); security system equipment; TV satellite dish; AND the following personal property shall be transferred with no additional monetary value, and free and clear of all liens and encumbrances: ______________________________________________ Notwithstanding the foregoing, leased fixtures are not included. Notwithstanding the foregoing, the following item(s) are excluded from the purchase: _________________________________________________________________________ Seller has agreed to sell the Property to Buyer for the sum of One Hundred Forty One Thousand and 00/100 Dollars ($141,000.00), which Buyer agrees to pay in the following manner: 1. CASH of 100 percent (100%) of the sale price. The date of closing shall be on or before January 31, 2020, and shall occur at Midland Title, 7760 France Avenue South #140, Bloomington, MN 55435 or at the offices of the City Attorney for City of New Hope: Jensen, Sondrall, Persellin & Woods, P.A., 8525 Edinbrook Crossing, Suite 201, Brooklyn Park, MN 55443. SALE OF BUYER'S PROPERTY CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase Agreement: Sale of Buyer's Property Contingency . (If answer is IS, see attached Addendum.) (If answer is IS NOT, the closing of Buyer's property, if any, may still affect Buyer's ability to obtain financing, if financing is applicable.) This Purchase Agreement IS NOT subject to cancellation of a previously written purchase agreement dated _______________________, 20__. (If answer is IS, said cancellation shall be obtained no later than _____________, 20__. If said cancellation is not obtained by said date, this Purchase Agreement is canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation.) Buyer has been made aware of the availability of Property inspections. Buyer does not elect to have a Property inspection performed at Buyer's expense. INSPECTION CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase Agreement: Inspection Contingency. (If answer is IS, see attached Addendum.) DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a (check one): Warranty Deed joined in by spouse, if any, conveying marketable title, subject to (a) building and zoning laws, ordinances, and state and federal regulations; 2 (b) restrictions relating to use or improvement of the Property without effective forfeiture provisions; (c) reservation of any mineral rights by the State of Minnesota; (d) utility and drainage easements which do not interfere with existing improvements; (e) rights of tenants as follows (unless specified, not subject to tenancies) _____________; and (f) others (must be specified in writing): ___________________________________________ REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payab le in all prior years including all penalties and interest. Buyer shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year 2019. Seller shall pay PRORATED TO DAY OF CLOSING real estate taxes due and payable in the year 2019. If the closing date is changed, the real estate taxes paid shall, if prorated, be adjusted to the new closing date. If the Property tax status is a part- or non-homestead classification in the year of closing, Seller SHALL NOT pay the difference between the homestead and non-homestead. Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment of which is not otherwise herein provided. No representations are made concerning the amount of subsequent real esta te taxes. DEFERRED TAXES/SPECIAL ASSESSMENTS: SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green Acres) or special assessments, payment of which is required as a result of the closing of this sale. SELLER SHALL PAY on date of closing all installments of special assessments certified for payment, with the real estate taxes due and payable in the year of closing. SELLER SHALL PAY on date of closing all other special assessments levied as of the date of this Purchase Agreement. SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of the date of this Purchase Agreement for improvements that have been ordered by any assessing authorities. (Seller's provision for payment shall be by payment into escrow of two (2) times the estimated amount of the assessments or less, as required by Buyer's lender.) Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the payment of which is not otherwise herein provided. As of the date of this Purchase Agreement, Seller represents that Seller HAS NOT received a notice regarding any new improvement project from any assessing authorities, the costs of which project may be assessed against the Property. Any such notice received by Seller after the date of this Purchase Agreement and before closing shall be provided to Buyer immediately. If such notice is issued after the date of this Purchase Agreement and on or before the date of closing, then the parties may agree in writing, on or befo re the date of closing, to pay, provide for the payment of or assume the special assessments. In the absence of such agreement, either party may declare this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. POSSESSION: Seller shall deliver possession of the Property no later than date of closing. Seller agrees to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the Property by possession date. LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access or service to any device or system on or serving the property that is connected or controlled wirelessly, via internet protocol ("IP") to a rou ter or gateway or directly to the cloud no later than delivery of possession as specified in this Purchase Agreement. PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer, electricity and natural gas shall be prorated between the parties as of date of closing. Buyer sha ll pay Seller for remaining gallons of fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by Seller. 3 TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this Purchase Agreement: a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by Midland Title (“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, th en 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 the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exer cise following the cancellation or other termination of this Agreement; or (ii) 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 Perm itted Encumbrances. Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay all costs and fees necessary to convey marketable title including obtaining and recording all required documents, subject t o the following: In the event Seller has not provided marketable title by the date of closing, Seller shall have an additional 30 days to make title marketable, or in the alternative, Buyer may waive title defects by written notice to Seller. In addition to the 30-day extension, Buyer and Seller may, by mutual agreement, further extend the closing date. Lacking such extension, either party may declare this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. SUBDIVISION OF LAND, BOUNDARIES, AND ACCESS: If this sale constitutes or requires a subdivision of land owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental approvals. Seller warrants that the legal description of the real property to be conveyed has been or shall be approved for recording as of the date of closing. Seller warrants that the buildings are or shall be constructed entirely within the boundary lines of the Property. S eller warrants that there is a right of access to the Property from a public right-of-way. MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closi ng in connection with construction, alteration or repair of any structure on, or improvement to, the Property. NOTICES: Seller warrants that Seller has not received any notice from any governmental authority as to condemnation proceedings, or violation of any law, ordinance or regulation. If the Property is subject to restrictive covenants, Seller warrants that Seller has not received any notice from any person or authority as to a breach of the covenants. Any such notices received by Seller shall be provided to Buyer immediately. DIMENSIONS: Buyer acknowledges any dimensions, square footage or acreage of land or improvements provided by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify the accuracy of info rmation to Buyer's satisfaction, if material, at Buyer's sole cost and expense. ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any surveys or inspections agreed to herein. 4 RISK OF LOSS: If there is any loss or damage to the Property between the date hereof and the date of closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on Seller. If the Property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. TIME OF ESSENCE: Time is of the essence in this Purchase Agreement. CALCULATION OF DAYS: Any calculation of days begins on the first day (calendar or Business Days as specified) following the occurrence of the event specified and includes subsequent days (calendar or Business Days as specified) ending at 11:59 P.M. on the last day. BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays or state or federal holidays unless stated elsewhere by the parties in writing. DEFAULT: If Buyer defaults in any of the agreements herein, Seller may cancel this Purchase Agreement, and Buyer and Seller shall affirm the same by a written cancellation agreement. If Buyer defaults in any of the agreements hereunder, S eller may terminate this Purchase Agreement under the provisions of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer or Seller defaults in any of the agreements hereunder or there exists an unfulfilled condition afte r the date specified for fulfillment, either party may cancel this Purchase Agreement under MN Statute 559.217, Subd. 3. Whenever it is provided herein that this Purchase Agreement is canceled, said language shall be deemed a provision authorizing a Declar atory Cancellation under MN Statute 559.217, Subd. 4. If this Purchase Agreement is not canceled or terminated as provided hereunder, Buyer or Seller may seek actual damages for breach of this Purchase Agreement or specific performance of this Purchase Agreement; and, as to specific performance, such action must be commenced within six (6) months after such right of action arises. DESCRIPTION OF PROPERTY CONDITION: Buyer and Seller hereby waive the written disclosure requirements set forth in Minnesota Statutes §§513.52 - 513.60. BUYER HAS RECEIVED THE INSPECTION REPORTS, IF REQUIRED BY MUNICIPALITY. BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OF THE PROPERTY AND ITS CONTENTS. SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED TO: CITY SEWER-YES / CITY WATER-YES SUBSURFACE SEWAGE TREATMENT SYSTEM SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure. Statement: Subsurface Sewage Treatment System.) PRIVATE WELL SELLER DOES NOT KNOW OF A WELL ON OR SERVING THE PROPERTY. (If answer is DOES and well is located on the Property, see Disclosure Statement: Well.) THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer is IS, see attached Addendum.) IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM. 5 NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory offender registry and persons registered with the predatory offender registry under MN Statute 243.166 may be obtained by contacting the local law enforcement offices in the community where the Property is located or t he Minnesota Department of Corrections at (651) 361-7200, or from the Department of Corrections web site at www.corr.state.mn.us. HOME PROTECTION/WARRANTY PLAN: Buyer and Seller are advised to investigate the various home protection/ warranty plans available for purchase. Different home protection/warranty plans have different coverage options, exclusions, limitations and service fees. Most plans exclude pre-existing conditions. (Check one.) A Home Protection/Warranty Plan will be obtained by BUYER SELLER and paid for by BUYER SELLER to be issued by _____________________________________ at a cost not to exceed $________. No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement. However, Buyer may elect to purchase a Home Protection/Warranty Plan. NOTICE is Seller’s Agent Buyer’s Agent Dual Agent Facilitator (Licensee) (Real Estate Company Name) is Seller’s Agent Buyer’s Agent Dual Agent Facilitator (Licensee) (Real Estate Company Name) THIS NOTICE DOES NOT SATISFY MINNESOTA STATUTORY AGENCY DISCLOSURE REQUIREMENTS. DUAL AGENCY REPRESENTATION Dual Agency representation DOES NOT apply in this transaction. Broker represents both the Seller(s) and the Buyer(s) of the Property involved in this transaction, which creates a dual agency. This means that Broker and its salespersons owe fiduciary duties to both Seller(s) and Buyer(s). Because the parties may have conflicting interests, Broker and its salespersons are prohibited from advocating exclusively for either party. Broker cannot act as a dual agent in this transaction without the consent of both Seller(s) and Buyer(s). Seller(s) and Buyer(s) acknowledge that (1) confidential information communicated to Broker which regards price, terms, or motivation to buy or sell will remain confidential unless Seller(s) or Buyer(s) instructs Broker in writing to disclose this information. Other information will be shared; (2) Broker and its salespersons will not represent the interest of either party to the detriment of the other; and (3) within the limits of dual agency, Broker and its salespersons will work diligently to facilitate the mechanics of the sale. With the knowledge and understanding of the explanation above, Seller(s) and Buyer(s) authorize and instruct Broker and its salesperson to act as dual agents in this transaction. Seller Buyer Date Date CLOSING COSTS: Buyer and Seller agree to each be responsible for paying for ½ of the closing costs incurred in this sale, which may effectively increase the cash outlay at closing or reduce the proceeds from the sale. 6 FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section 1445 of the Internal Revenue Code. Seller shall represent and warrant, under the penalties of perjury, whether Seller is a "foreign person" (as the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to this issue shall survive the closing and delivery of the deed. Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their respective federal taxpayer identification numbers or Social Security numbers. Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer 's responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax advice regarding FIRPTA compliance, as the respective licensee's representing or assisting either party will be unable to assure either party wheth er the transaction is exempt from FIRPTA withholding requirements. ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties shall constitute the entire agreement between Buyer and Seller. Any other written or oral comm unication between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed to be United States currency for purposes of this Purchase Agreement. ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document related to this transaction constitute valid, binding signatures. FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties and a copy must be delivered. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract for deed. OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on the following: (1) Review and approval of the terms of the Purchase Agreement by the Economic Development Authority in and for the City of New Hope to the terms of the Purchase Agreement. If the above contingenc y is not met, Buyer may declare this Purchase Agreement cancele d by written notice to Seller in which case this Purchase Agreement is canceled. If Buyer declares this Purchase Agreement canceled due to the failure of one of the above contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Ag reement confirming said cancellation. Seller will not be required to complete the City of New Hope Point of Sale inspection. ADDENDA AND PAGE NUMBERING: Attached addenda are a part of this Purchase Agreement. Enter total number of pages of this Purchase Agreement, including addenda: __ pages. 7 NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement and should not be part of the page numbering. I, the owner of the Property, accept this Purchase Agreement and authorize the listing broker to withdraw said Property from the market, unless instructed otherwise in writing. I have reviewed all pages of this Purchase Agreement. If checked, this Agreement is subject to attached Addendum to Purchase Agreement: Counteroffer. FIRPTA: Seller represents and warrants, under penalty of perjury, that Seller IS NOT a foreign person (i.e., a non-resident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate for purposes of income taxation. This representation and warranty shall survive the closing of the transaction and the delivery of the deed. I agree to purchase the Property for the price and on the terms and conditions set forth above. I have reviewed all pages of this Purchase Agreement 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 Thomas R. Manke By: ______________ (Seller’s Signature) (Date) (Buyer’s Signature) (Date) __Thomas R. Manke______________________ EDA in and for the City of New Hope (Seller’s Printed Name) (Buyer’s Printed Name) (Marital Status) Single Kirk McDonald Its: Executive Director THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11435 6027 West Broadway\Purchase Agreement.docx 6027 West Broadway Owner: Thomas Manke Size: 0.25 acres Sale Date: July 1993 Sale Price: $51,900 Assessed 2018, Payable 2019 Assessed 2019, Payable 2020 Market Value: $93,000 (lowest in city) Market Value: $115,000 Total Tax: $1,201 Combined size of subject parcel, parcel to north, and parcel to south: 0.86 acres Previous correspondence: Letter from Aaron Chirpich December 20, 2017, expressing interest in property, offering contract for an appraisal to be completed to establish fair market value. 6027 West Broadway Recent scattered site housing project (since 2014) 6027 West Broadway R-1, Single-family residential Side setback = 10’/5’ for garage 150’ Potential Home R e a r s e t b a c k = 2 5 ’ 110.8’ 8 8 . 6 8 1 0 6 . 8 3 F r o n t s e t b a c k = 3 0 ’ Side setback = 10’/5’ for garage Budget & Return on Investment for 6027 West Broadway EXPENSES AMOUNT Appraisal (350.00)$          Acquisition (including closing costs)(142,312.00)$   Legal costs for purchase (estimated)(1,500.00)$       Demolition survey (650.00)$          Demolition and site prep (estimated)(13,000.00)$     Well sealing (estimated)(2,000.00)$       Real estate taxes (estimated)(700.00)$          Lawn services (estimated)(200.00)$          Utility billing (estimated)(150.00)$          Public hearing notice (estimated)(150.00)$          Closing costs for sale (estimated)(1,500.00)$       Legal costs for sale (estimated)(1,000.00)$       TOTAL (163,512.00)$   REVENUE AMOUNT EDA (estimated lot sale proceeds) 60,000.00$      TOTAL 60,000.00$      RETURN ON INVESTMENT TOTAL COST/REVENUE (103,512.00)$  ‐63.31% PROJECTED ADDITIONAL TAX REVENUE AMOUNT TOTAL COST/REVENUE Year 1 (2021) 1,611.66$        (101,900.34)$                   ‐62.32% Year 2 (2022) 3,223.32$        (100,288.68)$                   ‐61.33% Year 3 (2023) 4,834.98$        (98,677.02)$                     ‐60.35% Year 4 (2024) 6,446.64$        (97,065.36)$                     ‐59.36% Year 5 (2025) 8,058.30$        (95,453.70)$                     ‐58.38% Year 10 (2030) 16,116.60$     (87,395.40)$                     ‐53.45% Year 15 (2035) 24,174.90$     (79,337.10)$                     ‐48.52% Year 20 (2040) 32,233.20$     (71,278.80)$                     ‐43.59% Year 25 (2045) 40,291.50$     (63,220.50)$                     ‐38.66% Year 30 (2050) 48,349.80$     (55,162.20)$                     ‐33.74% Year 65 (2085) 104,757.90$    1,245.90$                         0.76% *Based on new home valued at $315,000 Appraisal Professionals of MN LLC Jayne Preusse Minneapolis, MN 55431 (612)267-5269 06/18/2019 Jeff Alger City of New Hope 4401 Xylon Ave N New Hope, MN 55428 Re:Property:6027 W Broadway Ave New Hope, MN 55428 Borrower:N/A File No.:AP90224 Opinion of Value: $145,000 Effective Date:06/11/2019 In accordance with your request, we have appraised the above referenced property. The report of that appraisal is attached. The purpose of the appraisal is to develop an opinion of market value for the property described in this appraisal report, as improved, in unencumbered fee simple title of ownership. This report is based on a physical analysis of the site and improvements, a locational analysis of the neighborhood and city, and an economic analysis of the market for properties such as the subject. The appraisal was developed and the report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The opinion of value reported above is as of the stated effective date and is contingent upon the certification and limiting conditions attached. It has been a pleasure to assist you. Please do not hesitate to contact me, if we can be of additional service to you. Sincerely, Jayne Preusse License or Certification #: 20559939 State: MN Expires: 08/31/2019 jstrikos@msn.com APPRAISAL OF REAL PROPERTY 6027 W Broadway Ave New Hope, MN 55428 REGISTERED LAND SURVEY NO. 0021 HENNEPIN COUNTY, MINNESOTA City of New Hope 4401 Xylon Ave N New Hope, MN 55428 $145,000 06/11/2019 Jayne Preusse Appraisal Professionals of MN LLC Certified Residential Appraiser Minneapolis, MN 55431 (612)267-5269 jstrikos@msn.com Form GA1V - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE LOCATED AT FOR OPINION OF VALUE AS OF BY Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE 6027 W Broadway AP90224 6027 W Broadway Ave New Hope MN 55428 REGISTERED LAND SURVEY NO. 0021 HENNEPIN COUNTY, MINNESOTA Hennepin 05-118-21-21-0033 2019 1,201 0 N/A Thomas R Manke N/A New Hope 33460 0215.01 N/A N/A N/A City of New Hope 4401 Xylon Ave N, New Hope, MN 55428 Jayne Preusse Eden Prairie MN 55344 80 20 140 420 235 0 119 59 70 3 3 12 Other 12 Int 694 to the north, CR 81 to the east, CR 9 to the south, and State Highway 169 to the west. Market trends analysis was from a 1 mile radius from the subject property, not crossing major boundaries. Under present land use, 12% indicates "Other". The primary portion of this amount includes parks, miscellaneous, water and undeveloped land. This does not indicate any negative impact on the Subject's value & marketability at this time. Market data indicates overall property values have been increasing for the previous 12 month period prior to the effective date of this appraisal. Market times are deemed to be in the "0-3 months" range at this time. 107x150x89x111 11,038 sf R1 - Single Family Asphalt None None Yes None Generally Level Average Irregular Average A;Com/Con/PL Average Dirt Typical Easements X 11/04/2016 27053C0203F Subject is located with a busier street of W Broadway to the front, commercial to the front and condominiums to the one side and rear. External is considered from the noise and view of the traffic and any external associated from the commercial, condominiums and apartments. External is considered in the Sales Comparison Grid. 1 1 Detached Rambler Existing 67 45 Concrete/Avg Stuc/W/Avg Asphalt/Avg Aluminum/Avg DH/Hg/GB/Avg Yes/Avg N/A N/A N/A Yes/Full None None Yes/See Attach None 793 50 Finished SR/Wd/A Cpt/Con/A None Unkn Unkn Unkn Unkn 1 1 793 1 1 1 1 2 1 793 5 2 1.0 793 Cp/Wd/Vyl/Avg SR/Pl/W/Avg Wood/Avg Tile/Avg Tile/Avg Wood/Avg Yes FWA Gas Avg None N/A N/A N/A None None None None CL None Yes 0 1 0 0 6 Typical energy efficient items circa 1952. Unable to determine continued upkeep, however furnace was observed to be in average condition. See attached addendum. The subject is a "rambler" detached single family home reflecting overall average condition as compared to competing properties of a similar age and design. The subject property does not exhibit any functional obsolescence. See attached addendum and photo addendum. External is observed from the busier street of West Broadway and commercial to the front, along with condos/parking lot to the rear. None known. Jayne Strikos Property Description File No.UNIFORM RESIDENTIAL APPRAISAL REPORT S U B J E C T Property Address Legal Description Assessor's Parcel No. Borrower Property rights appraised Neighborhood or Project Name Sale Price $ Lender/Client Appraiser Location Built up Growth rate Property values Demand/supply Marketing time City State Zip Code County Tax Year R.E. Taxes $Special Assessments $ Current Owner Occupant:Owner Tenant Vacant Fee Simple Leasehold Project Type PUD Condominium (HUD/VA only)HOA $/Mo. Map Reference Census Tract Date of Sale Description and $ amount of loan charges/concessions to be paid by seller Address Address N E I G H B O R H O O D Predominant occupancy Single family housing Present land use %Land use change Note: Race and the racial composition of the neighborhood are not appraisal factors. Predominant Urban Over 75% Rapid Increasing Shortage Under 3 mos. Suburban 25-75% Stable Stable In balance 3-6 mos. Rural Under 25% Slow Declining Over supply Over 6 mos. Owner Tenant Vacant (0-5%) Vac.(over 5%) PRICE AGE $(000)(yrs) Low High One family 2-4 family Multi-family Commercial Not likely In process Likely To: Neighborhood boundaries and characteristics: Factors that affect the marketability of the properties in the neighborhood (proximity to employment and amenities, employment stability, appeal to market, etc.): Market conditions in the subject neighborhood (including support for the above conclusions related to the trend of property values, demand/supply, and marketing time -- such as data on competitive properties for sale in the neighborhood, description of the prevalence of sales and financing concessions, etc.): P U D Project Information for PUDs (If applicable) - - Is the developer/builder in control of the Home Owners' Association (HOA)?Yes No Approximate total number of units in the subject project Approximate total number of units for sale in the subject project Describe common elements and recreational facilities: S I T E Dimensions Site area Specific zoning classification and description Zoning compliance Highest & best use as improved: Corner Lot Yes No Legal Legal nonconforming (Grandfathered use)Illegal No zoning Present use Other use (explain) Utilities Off-site Improvements Electricity Gas Water Sanitary sewer Storm sewer Public Other Type Public Private Street Curb/gutter Sidewalk Street lights Alley Topography Size Shape Drainage View Landscaping Driveway Surface Apparent easements FEMA Special Flood Hazard Area FEMA Zone FEMA Map No. Map Date Yes No Comments (apparent adverse easements, encroachments, special assessments, slide areas, illegal or legal nonconforming zoning use, etc.): D E S C R I P T I O N O F I M P R O V E M E N T S GENERAL DESCRIPTION No. of Units No. of Stories Type (Det./Att.) Design (Style) Existing/Proposed Age (Yrs.) Effective Age (Yrs.) EXTERIOR DESCRIPTION Foundation Exterior Walls Roof Surface Gutters & Dwnspts. Window Type Storm/Screens Manufactured House FOUNDATION Slab Crawl Space Basement Sump Pump Dampness Settlement Infestation BASEMENT Area Sq. Ft. % Finished Ceiling Walls Floor Outside Entry INSULATION Roof Ceiling Walls Floor None Unknown ROOMS Basement Level 1 Level 2 Finished area above grade contains:Rooms;Bedroom(s);Bath(s);Square Feet of Gross Living Area Foyer Living Dining Kitchen Den Family Rm.Rec. Rm.Bedrooms # Baths Laundry Other Area Sq. Ft. INTERIOR Materials/Condition Floors Walls Trim/Finish Bath Floor Bath Wainscot Doors HEATING Type Fuel Condition COOLING Central Other Condition KITCHEN EQUIP. Refrigerator Range/Oven Disposal Dishwasher Fan/Hood Microwave Washer/Dryer ATTIC None Stairs Drop Stair Scuttle Floor Heated Finished AMENITIES Fireplace(s) # Patio Deck Porch Fence Pool CAR STORAGE: None Garage Attached Detached Built-In Carport Driveway # of cars C O M M E N T S Additional features (special energy efficient items, etc.): Condition of the improvements, depreciation (physical, functional, and external), repairs needed, quality of construction, remodeling/additions, etc.: Adverse environmental conditions (such as, but not limited to, hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property.: Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6/93PAGE 1 OF 2 Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE 35,000 793 793 213 35,000 6027 W Broadway AP90224 Estimated economic life based on 100 total years. The most recent and similar land sales to the subject per RMLS include the following: RMLS #4816981 $32,000, #4779014 $55,000 and #4780925 $75,000. Estimated Remaining Economic Life: 55 6027 W Broadway Ave New Hope, MN 55428 N/A RMLS/HennCA Inspect/Owner A;BS/Com/Con/PL Fee Simple 11,038 sf A;Com/Con/PL Rambler Q5 67 C4 5 2 1.0 793 780sf390sfwu 1rr0br0ba1o Average FWA None 1gd6dw None None CL Notable Extras None 9/93-51,900 RMLS/HenneCA 06/11/2019 7911 59th Ave N New Hope, MN 55428 0.38 miles SW 167,500 168.34 RMLS#4970742/29DOM RMLS/HenneAssessWeb/Dr-B ArmLth Cash;0 0 s07/18;Unk +5,583 B;Res/GC -5,000 Fee Simple 10125 sf 0 B;Res/GC -4,000 Rambler Q5 63 0 C4 4 2 1.0 0 995 -5,050 995sf692sfwo -7,040 1rr1br1ba1o 0 Average FWA C/Air -2,000 None 1ga4dw 0 Deck -1,000 2 FP -2,000 None 0 None -20,507 Net 12.2 % Gross 18.9 %146,993 RMLS/HenneCtyAssesWeb 06/11/2019 5900 Elmhurst Ave Crystal, MN 55428 0.57 miles E 146,500 196.38 RMLS#4979463/406DOM RMLS/HenneAssessWeb/Dr-B REO Conv;4395 0 s08/18;Unk +3,906 A;Airport/BsR 0 Fee Simple 12353 sf 0 A;BsR/Eql 0 Rambler Q5 66 0 C4 4 2 1.0 0 746 0 0sf +7,800 0 Average FWA C/Air -2,000 None 2gd6dw -4,000 None None CL None 5,706 Net 3.9 % Gross 12.1 %152,206 RMLS/HenneCtyAssesWeb 06/11/2019 6817 52nd Ave N Crystal, MN 55428 1.12 miles SE 192,000 213.33 RMLS#5206292/25DOM RMLS/HenneAssessWeb/Dr-B ArmLth FHA;5760 0 s06/19;Unk 0 A;RR -2,000 Fee Simple 6023 sf 0 B;Woods -4,000 Rambler Q5 -6,000 65 0 C4 -4,000 4 2 1.0 0 900 -2,675 0sf +7,800 0 Average FWA C/Air -2,000 None 1gd6dw Dk/OPor -2,000 None Wd 0 None -14,875 Net 7.7 % Gross 15.9 %177,125 RMLS/HenneCtyAssesWeb 06/11/2019 See attached addendum. No other sales of the subject were noted within the last three years. There were no other previous sales within the past 12 months for the comparables, except for Comparable #1 which was transferred for an affidavit $0, on 09/15/2017 and Comparable #2 transferred on 06/06/2017 $0 for a quit claim deed. 145,000 N/A See Attached Addendum. Most emphasis was placed on the Sales Comparison Approach to Value. The Income (GRM) Approach and Cost Approach were both considered with the Sales Comparison Approach weighing in as the most viable approach to value/opinion of value. 06/2019 06/11/2019 145,000 Jayne Preusse 06/18/2019 20559939 MN Valuation Section File No.UNIFORM RESIDENTIAL APPRAISAL REPORT C O S T A P P R O A C H ESTIMATED SITE VALUE ESTIMATED REPRODUCTION COST-NEW-OF IMPROVEMENTS: Dwelling Garage/Carport Total Estimated Cost New Less Depreciation Depreciated Value of Improvements "As-is" Value of Site Improvements INDICATED VALUE BY COST APPROACH Sq. Ft. Sq. Ft. Sq. Ft. @ @ @ $ $ $ Physical Functional External = = = = = $ $ = = = = = $ $ $ $ $ Comments on Cost Approach (such as, source of cost estimate, site value, square foot calculation and for HUD, VA and FmHA, the estimated remaining economic life of the property): S A L E S C O M P A R I S O N A N A L Y S I S //// ITEM SUBJECT COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3 ITEM SUBJECT COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3 DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.– Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Sq. Ft.Sq. Ft.Sq. Ft.Sq. Ft. +–+–+– $ $$ $ $ $ $ $ $ $ $ $ $ $ $ $$ Address Proximity to Subject Sales Price Price/Gross Living Area Data and/or Verification Source VALUE ADJUSTMENTS Sales or Financing Concessions Date of Sale/Time Location Leasehold/Fee Simple Site View Design and Appeal Quality of Construction Age Condition Above Grade Room Count Gross Living Area Basement & Finished Rooms Below Grade Functional Utility Heating/Cooling Energy Efficient Items Garage/Carport Porch, Patio, Deck, Fireplace(s), etc. Fence, Pool, etc. Net Adj. (total) Adjusted Sales Price of Comparable Comments on Sales Comparison (including the subject property's compatibility to the neighborhood, etc.): Date, Price and Data Source, for prior sales within year of appraisal Analysis of any current agreement of sale, option, or listing of subject property and analysis of any prior sales of subject and comparables within one year of the date of appraisal: INDICATED VALUE BY SALES COMPARISON APPROACH INDICATED VALUE BY INCOME APPROACH (if Applicable) Estimated Market Rent /Mo.x Gross Rent Multiplier = R E C O N C I L I A T I O N This appraisal is made "as is"subject to the repairs, alterations, inspections or conditions listed below subject to completion per plans & specifications. Conditions of Appraisal: Final Reconciliation: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report, based on the above conditions and the certification, contingent and limiting conditions, and market value definition that are stated in the attached Freddie Mac Form 439/FNMA form 1004B (Revised ). Signature Name Date Report Signed State Certification #State Or State License #State Signature Name Date Report Signed State Certification #State Or State License #State Inspect Property Did Did Not I (WE) ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT, AS OF (WHICH IS THE DATE OF INSPECTION AND THE EFFECTIVE DATE OF THIS REPORT) TO BE $ APPRAISER:SUPERVISORY APPRAISER (ONLY IF REQUIRED): Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6-93PAGE 2 OF 2 Form UA2.(AC) - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE 6027 W Broadway Ave New Hope, MN 55428 N/A RMLS/HennCA Inspect/Owner A;BS/Com/Con/PL Fee Simple 11,038 sf A;Com/Con/PL Rambler Q5 67 C4 5 2 1.0 793 780sf390sfwu 1rr0br0ba1o Average FWA None 1gd6dw None None CL Notable Extras None 9/93-51,900 RMLS/HenneCA 06/11/2019 6714 58th Ave N Crystal, MN 55428 0.51 miles SE 140,000 148.46 RMLS#4972116/3DOM RMLS/HenneAssessWeb/Dr-B ArmLth Conv;0 0 s07/18;Unk +4,666 N;Res -4,000 Fee Simple 9382 sf 0 N;Res -2,000 Rambler Q5 64 0 C4 +2,000 -2,000 6 3 1.0 0 943 -3,750 0sf +7,800 0 Average FWA None 1ga4dw 0 Patio -1,000 None Wd/Wire 0 None 1,716 Net 1.2 % Gross 19.4 %141,716 RMLS/HenneCtyAssesWeb 06/11/2019 7105 Cartisian Ave Brooklyn Park, MN 55428 0.55 miles NE 195,000 202.70 RMLS#5236441/10DOM RMLS/HenneAssessWeb/Dr-B Listing O;L/S Ratio 0 Active/Pending 0 B;Comm/BsR 0 Fee Simple 19602 sf -4,000 N;Res -2,000 Rambler Q5 -6,000 61 0 C3 -4,000 -2,000 5 3 1.0 0 962 -4,225 962sf863sfwu -9,460 0rr1br1ba1o 0 Average FWA C/Air -2,000 None 1gd6dw None None None 0 None -33,685 Net 17.3 % Gross 17.3 %161,315 RMLS/HenneCtyAssesWeb 06/11/2019 7624 59th Pl N Crystal, MN 55428 0.13 miles SW 179,000 204.57 RMLS#5226207/39DOM RMLS/HenneAssessWeb/Dr-B Listing O;L/S Ratio 0 Active 0 N;Res -4,000 Fee Simple 10489 sf 0 N;Res -2,000 Rambler Q5 +2,000 68 0 C4 +2,000 -2,000 5 3 1 0 875 0 875sf270sfwu +2,400 1rr0br0.1ba1o 0 Average FWA C/Air -2,000 None 1gd6dw Deck -1,000 None CL Lender Owned +2,000 -2,600 Net 1.5 % Gross 10.8 %176,400 RMLS/HenneCtyAssesWeb 06/11/2019 4 5 6 S A L E S C O M P A R I S O N A N A L Y S I S UNIFORM RESIDENTIAL APPRAISAL REPORT MARKET DATA ANALYSIS These recent sales of properties are most similar and proximate to subject and have been considered in the market analysis. The description includes a dollar adjustment, reflecting market reaction to those items of significant variation between the subject and comparable properties. If a significant item in the comparable property is superior to, or more favorable than, the subject property, a minus (-) adjustment is made, thus reducing the indicated value of the subject. If a significant item in the comparable is inferior to, or less favorable than, the subject property, a plus (+) adjustment is made, thus increasing the indicated value of the subject. //// ITEM SUBJECT COMPARABLE NO. COMPARABLE NO. COMPARABLE NO. DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.– Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Sq. Ft.Sq. Ft.Sq. Ft.Sq. Ft. +–+–+– $ $$ $ $ $ $ $ $ $ $ $ $ $ Address Proximity to Subject Sales Price Price/Gross Living Area Data and/or Verification Sources VALUE ADJUSTMENTS Sales or Financing Concessions Date of Sale/Time Location Leasehold/Fee Simple Site View Design and Appeal Quality of Construction Age Condition Above Grade Room Count Gross Living Area Basement & Finished Rooms Below Grade Functional Utility Heating/Cooling Energy Efficient Items Garage/Carport Porch, Patio, Deck, Fireplace(s), etc. Fence, Pool, etc. Net Adj. (total) Adjusted Sales Price of Comparable Date, Price and Data Source for prior sales within year of appraisal C O M M E N T S Comments: Market Data Analysis 6-93 6027 W Broadway AP90224 Form UADDEFINE1A - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE File No. UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM (Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements) Condition Ratings and Definitions C1 The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new and the dwelling features no physical depreciation. Note: Newly constructed improvements that feature recycled or previously used materials and/or components can be considered new dwellings provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been rehabilitated/remanufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without adequate maintenance or upkeep). C2 The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category are either almost new or have been recently completely renovated and are similar in condition to new construction. Note: The improvements represent a relatively new property that is well maintained with no deferred maintenance and little or no physical depreciation, or an older property that has been recently completely renovated. C3 The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained. Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of short-lived building components have been replaced but not to the level of a complete renovation. C4 The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate. Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however, they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property. C5 The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains useable and functional as a residence. Note: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many of its short-lived building components are at the end of or have exceeded their physical life expectancy but remain functional. C6 The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components. Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements. Quality Ratings and Definitions Q1 Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality exterior refinements and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes throughout the dwelling are of exceptionally high quality. Q2 Dwellings with this quality rating are often custom designed for construction on an individual property owner’s site. However, dwellings in this quality grade are also found in high-quality tract developments featuring residence constructed from individual plans or from highly modified or upgraded plans. The design features detailed, high quality exterior ornamentation, high-quality interior refinements, and detail. The workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality. UAD Version 9/2011 (Updated 1/2014) Form UADDEFINE1A - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM (Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements) Quality Ratings and Definitions (continued) Q3 Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been upgraded from “stock” standards. Q4 Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades. Q5 Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades. Q6 Dwellings with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical systems and equipment may be minimal or non-existent. Older dwellings may feature one or more substandard or non-conforming additions to the original structure Definitions of Not Updated, Updated, and Remodeled Not Updated Little or no updating or modernization. This description includes, but is not limited to, new homes. Residential properties of fifteen years of age or less often reflect an original condition with no updating, if no major components have been replaced or updated. Those over fifteen years of age are also considered not updated if the appliances, fixtures, and finishes are predominantly dated. An area that is ‘Not Updated’ may still be well maintained and fully functional, and this rating does not necessarily imply deferred maintenance or physical/functional deterioration. Updated The area of the home has been modified to meet current market expectations. These modifications are limited in terms of both scope and cost. An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not include significant alterations to the existing structure. Remodeled Significant finish and/or structural changes have been made that increase utility and appeal through complete replacement and/or expansion. A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of) square footage). This would include a complete gutting and rebuild. Explanation of Bathroom Count Three-quarter baths are counted as a full bath in all cases. Quarter baths (baths that feature only a toilet) are not included in the bathroom count. The number of full and half baths is reported by separating the two values using a period, where the full bath count is represented to the left of the period and the half bath count is represented to the right of the period. Example: 3.2 indicates three full baths and two half baths. UAD Version 9/2011 (Updated 1/2014) Form UADDEFINE1A - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM (Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements) Abbreviations Used in Data Standardization Text Abbreviation Full Name Fields Where This Abbreviation May Appear A Adverse Location & View ac Acres Area, Site AdjPrk Adjacent to Park Location AdjPwr Adjacent to Power Lines Location ArmLth Arms Length Sale Sale or Financing Concessions AT Attached Structure Design (Style) B Beneficial Location & View ba Bathroom(s)Basement & Finished Rooms Below Grade br Bedroom Basement & Finished Rooms Below Grade BsyRd Busy Road Location c Contracted Date Date of Sale/Time Cash Cash Sale or Financing Concessions Comm Commercial Influence Location Conv Conventional Sale or Financing Concessions cp Carport Garage/Carport CrtOrd Court Ordered Sale Sale or Financing Concessions CtySky City View Skyline View View CtyStr City Street View View cv Covered Garage/Carport DOM Days On Market Data Sources DT Detached Structure Design (Style) dw Driveway Garage/Carport e Expiration Date Date of Sale/Time Estate Estate Sale Sale or Financing Concessions FHA Federal Housing Authority Sale or Financing Concessions g Garage Garage/Carport ga Attached Garage Garage/Carport gbi Built-in Garage Garage/Carport gd Detached Garage Garage/Carport GlfCse Golf Course Location Glfvw Golf Course View View GR Garden Design (Style) HR High Rise Design (Style) in Interior Only Stairs Basement & Finished Rooms Below Grade Ind Industrial Location & View Listing Listing Sale or Financing Concessions Lndfl Landfill Location LtdSght Limited Sight View MR Mid-rise Design (Style) Mtn Mountain View View N Neutral Location & View NonArm Non-Arms Length Sale Sale or Financing Concessions o Other Basement & Finished Rooms Below Grade O Other Design (Style) op Open Garage/Carport Prk Park View View Pstrl Pastoral View View PwrLn Power Lines View PubTrn Public Transportation Location Relo Relocation Sale Sale or Financing Concessions REO REO Sale Sale or Financing Concessions Res Residential Location & View RH USDA - Rural Housing Sale or Financing Concessions rr Recreational (Rec) Room Basement & Finished Rooms Below Grade RT Row or Townhouse Design (Style) s Settlement Date Date of Sale/Time SD Semi-detached Structure Design (Style) Short Short Sale Sale or Financing Concessions sf Square Feet Area, Site, Basement sqm Square Meters Area, Site Unk Unknown Date of Sale/Time VA Veterans Administration Sale or Financing Concessions w Withdrawn Date Date of Sale/Time wo Walk Out Basement Basement & Finished Rooms Below Grade Woods Woods View View Wtr Water View View WtrFr Water Frontage Location wu Walk Up Basement Basement & Finished Rooms Below Grade UAD Version 9/2011 (Updated 1/2014) Twelve Month Listing History of Subject Property An extensive search of the subject property was completed and there were no listings of the subject in the previous twelve months. Sources used were Hennepin County Records and Northstar Multiple Listing Service. Neighborhood Description The subject property is located in the north section of the City of New Hope MN within the County of Hennepin. The immediate neighborhood consists primarily of detached single family homes all that generally conform with one another in style, size and price range. Along with commercial, condominiums and apartment buildings. All neighborhood conveniences including shopping public schools, parks and highway access are within reasonable distances. There has traditionally been an average demand for housing in this neighborhood. The City of Brooklyn Park is adjacent to the subject neighborhood to the north and the City of Crystal is adjacent to the subject neighborhood to the east. Subjects neighborhood is mainly a residential neighborhood with easy access to other suburban areas via State Highway 169/Interstate 694, CR 9/Hwy 100 and connecting to other main arteries. No adverse conditions were observed other than typical external commercial and busy roads. Subject Site The subject is an interior site that is typical in parcel size of the neighborhood. The subject is located on a busier street to its front of W Broadway Avenue, commercial to its front and a condominium complex to the rear with a parking lot associated. The topography is generally level from the front to the rear and does not allow for a walkout basement. There is a dirt driveway that is entered from the busier street of W Broadway Avenue at the front to the detached garage. The subject views commercial to the front, the condominium complex/parking lot/garage to the rear beyond a fence with some mature trees, and detached single family homes on both sides. There are no apparent easements or encroachments, other than typical utility easements. In making this appraisal report, we are not aware of any testing for the existence of presence of radon, asbestos, toxic substances, or other environmental pollutants in the building, land, or other surrounding areas, and that the value assigned herein to the land and buildings assume that no such contaminants exist. We further recommend that if you have knowledge of or reason to subject the existence of such pollutants, that you obtain an environmental assessment of the property. To the best of our knowledge, there are no environmental risk factors which may affect the real estate being appraised. Additional Features Exterior features include a chain link fence around much of the backyard. The first level consists of a foyer, living room, kitchen, kitchen dining, full bath, and two bedrooms. The basement is full, partially finished and is not a walkout. The basement consists of a family room, and a laundry/utility room. The appraiser manually measured the subject with 793 GLA. The most recent RMLS listing for the subject indicates GLA of 840. "This assignment was completed in full compliance with the appraisal independence regulations". Highest and Best Use The subject property is currently being utilized as a residential single family home and is being appraised as a residential single family home. Highest and best use for the subject property due to the commercial, and other external uncommon in a residential single family home setting, may be of other uses unknown to the appraiser. This would require other market analysis which was not part of the scope of work for this assignment and may require a higher appraiser designation for commercial or other potential uses. Overall, highest and best use is present use. Comments on Sale Comparison Your appraiser has performed a detailed search for comparables to the subject in location, design, utility and appeal. After extensive research, the comparable sales chosen were deemed the best available. The appraiser has researched, reviewed, analyzed and documented the sales. The appraiser has made peer acceptable, unbiased, and impartial adjustments for items of significant variation. Search parameters included the following: - location of being in the City of New Hope and within one mile from the subject property - similar design style, age, condition and amenities Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP90224 N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. - similar design style, age, condition and amenities - similar parcel size and view. The subject is a rambler designed style detached single family home. The subject is considered to be in overall average condition with potential evidence of microbial in the basement concrete foundation. Four sold comparables were utilized for the overall opinion of value and two active/pending listings were utilized for the current market conditions. The overall values vary by more than 15% from the lowest to the highest comparable. This was due to locating inferior and superior comparables for the grid. The additional fourth sold comparable was added to support the opinion of value. Locating other comparables with external obsolescence was necessary to measure the overall external for adjustments in the Sales Comparison Grid for the subject. Recommended guidelines were exceeded and unavoidable considering net adjustments, GLA and distance from the subject. Comparables #2, #3, #4 and #6 are from the neighboring City of Crystal and Comparable #5 is from the neighboring City of Brooklyn Park. All comparables are within the same school district as the subject - #281-Robbinsdale. Comparables #1-3 were observed to be the most viable comparables to the subject, many of the search parameters, and being close in proximity to the subject. These comparables are considered to be equal in weighing of the comparables and in being most similar to the subject. Comparables #1 and #2 appear to be the most similar to the subject with location/external, design style, GLA, and condition. All four sold comparables combined contributed to the overall opinion of value. Adjustments TIME ADJUSTMENTS: Comparables #1, #2 and #4 have been adjusted to current market conditions. LOCATION: The location adjustments, if any, considered accessibility, degree of conformity to adjoining properties, and the overall appeal and marketability of the respective neighborhoods in relation to the subject. Comparable #1 is slightly superior in location being located with a slight portion of the parcel adjacent to a golf course at its rear. Comparable #3 is close in proximity of railroad tracks to the rear with some external associated but less than the subject's. Comparables #4 and #6 both are located within residential neighborhoods and with no external. SITE/VIEW: Adjustments for site/view were made on the basis of lot value and the availability of public utilities rather than size alone. Comparable #5 has a slightly larger parcel size to the subject. Comparable #1 has a superior golf course view to the rear. Comparable #3 has superior wooded views. Comparables #4, #5 and #6 all have superior residential views with no external. DESIGN/STYLE: Adjustments are made on the basis of interior and exterior appeal characteristics. QUALITY/CONDITION: Adjustments are made on the basis of MLS photos, an inspection from the street and the appraiser's experience and judgment. Comparables #3 and #5 are observed to be superior in overall quality updates and condition per the RMLS description and photos to the subject. Comparable #6 is observed to be inferior in quality updates and condition per the RMLS description and photos. Comparable #4 is observed to be overall inferior in condition to the subject per the RMLS description and photos. ROOM COUNT/PROPERTY FEATURES: Adjustment were made based on the price-point of the residence and on the appraiser's experience and judgment. GLA 25.00, Finished basement sf 20.00, Walk-out 1000.00 ACTIVE LISTINGS: The active listing were not adjusted based on the List to Sale Ratio estimated at 100%. Assessed Market Value for Tax Purposes According to Hennepin County Assessor Website records the subjects 2019 estimated assessed value is as follows: Land $26,000, Building $67,000 with a total of $93,000. Cost Approach The cost approach has not been developed by the appraiser as an analysis to support the opinion of the property's market value. The cost approach may not be a reliable indication of replacement or reproduction cost due to changing costs of labor and materials, due to changing building codes, governmental regulations and requirements, age of the subject and speculative depreciation. Intended Used of Appraisal The Intended User of this appraisal report is the Client only. The Intended Use is to evaluate the property that is the subject of this appraisal for a full appraisal per the client request for market value only, subject to the stated Scope of Work, purpose of the appraisal, reporting requirements of this appraisal report form, and Definition of Market Value. No additional Intended Users are identified by the appraiser. Scope of the Appraisal Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP90224 N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. Scope of the Appraisal The appraiser has viewed all readily accessible areas of the dwelling (and any other building structure located on the property). This complete visual inspection is not intended to be the same depth or for the same purpose as a home inspection. The appraiser has viewed the property solely for the valuation purposes and to observe property characteristics that a typical purchaser would consider in their decision making process, as well as those items outlined in the assumptions and limited conditions and certifications to this appraisal. Personal property or chattel was not included in the appraised value. Zoning Comments about the zoning compliance of the subject property are intended by the appraiser to be in general terms. A detailed analysis about every aspect of the subject property's improvements and the site characteristic with respect to current zoning and building codes are beyond the scope of this assignment and was not performed. The subject is considered to be in compliance with current zoning requirements in a general sense. It is a Single family residential improvement in an area zoned for single family residential use. Site Conditions No obvious adverse site conditions or external factors were observed. Unless otherwise stated, typical drainage, utility and right of way easements do not adversely impact value. However, the discovery of many site related issues often require special expertise or data sources not customary or available in the performance of an appraisal. A fundamental site analysis such as this is beyond the scope of this assignment. A detailed site or location survey, which may reveal adverse easements, encroachments, zoning violations, environmental issues or other matters that could impact the analysis or opinions, was not available to the appraiser. Sketch The subject's sketch is used for representational purposes only. The subject's sketch is to comply with The American National Standard Institute process for calculating gross living area; however, due to the complexity of the subject property and the limitations of the appraisal software it is not possible to develop a blue print of the subject property. The subject's sketch is not intended to be used for any other purpose. The subject's sketch and actual dimensions will very. The appraiser is not a structural engineer. If the lender requires a precise blue print of the subject property it is the lenders responsibility to have the building surveyed by a structural engineer. See Statement Of Assumptions And Limiting Conditions. At the time of inspection, the appraiser physically measured the exterior/interior of the improvement. The appraiser's measurements may differ from that of the assessor's and/or builder's documentation for the subject's gross living area. The appraiser has no knowledge as to if the assessor physically measured the subject property or used blueprint documentation for the gross living area. Since the appraiser physically measured the subject property on the effective date of this report, the appraiser deems their calculations to be accurate and reliable. The subject's sketch is used for representational purposes only. The subject's sketch is to comply with The American National Standard Institute process for calculating gross living area; however, due to the complexity of the subject property, and the limitations of the appraisal software, it is not possible to develop a blue print of the subject property. The subject's sketch is not intended to be used for any other purpose. The subject's sketch and actual dimensions will vary. The appraiser is not a structural engineer. If the lender requires a precise blue print of the subject property it is the lenders responsibility to have the building surveyed by a structural engineer. See Statement Of Assumptions And Limiting Conditions. Land Value Development of a land value has been attempted by the appraiser . The use of this data, in whole or in part, for other purposes is not intended by the appraiser. Nothing set forth in the appraisal should be relied upon for the purpose of determining the amount or type of insurance coverage to be placed on the subject property. The appraiser assumes no liability for and does not guarantee that any insurable value estimate inferred from this report will result in the subject property being fully insured for any loss that may be sustained. Further, the land value may not be reliable indication of replacement or reproduction cost for any date other than the effective date of this appraisal due to changing costs of labor and materials and due to changing building codes and governmental regulations and requirements. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP90224 N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. Form PICPIX.SR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Photo Page N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Subject Front Sales Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 6027 W Broadway Ave N/A 793 5 2 1.0 A;BS/Com/Con/PL A;Com/Con/PL 11,038 sf Q5 67 Subject Rear Subject Street Borrower Lender/Client Property Address City County State Zip Code Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Living Room Kitchen Foyer Bathroom Bedroom Bedroom Borrower Lender/Client Property Address City County State Zip Code Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Dining Basement Family Basement Laundry HVAC Electrical Panel Garage Borrower Lender/Client Property Address City County State Zip Code Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Rear Entrance Backyard View to the Rear Beyond Fence of Condominium Buildings/Parking Lot Front/Side Potential Microbial in Basement Concrete Foundation Potential Microbial in Basement Concrete Foundation Borrower Lender/Client Property Address City County State Zip Code Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Commercial at Front Borrower Lender/Client Property Address City County State Zip Code Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Photo Page N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Comparable 1 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 7911 59th Ave N 0.38 miles SW 167,500 995 4 2 1.0 B;Res/GC B;Res/GC 10125 sf Q5 63 Comparable 2 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 5900 Elmhurst Ave 0.57 miles E 146,500 746 4 2 1.0 A;Airport/BsR A;BsR/Eql 12353 sf Q5 66 Comparable 3 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 6817 52nd Ave N 1.12 miles SE 192,000 900 4 2 1.0 A;RR B;Woods 6023 sf Q5 65 Borrower Lender/Client Property Address City County State Zip Code Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Photo Page N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Comparable 4 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 6714 58th Ave N 0.51 miles SE 140,000 943 6 3 1.0 N;Res N;Res 9382 sf Q5 64 Comparable 5 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 7105 Cartisian Ave 0.55 miles NE 195,000 962 5 3 1.0 B;Comm/BsR N;Res 19602 sf Q5 61 Comparable 6 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 7624 59th Pl N 0.13 miles SW 179,000 875 5 3 1 N;Res N;Res 10489 sf Q5 68 Borrower Lender/Client Property Address City County State Zip Code Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Location Map N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Form SKT.BLDSKI - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Building Sketch N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client 2 6 ' 30.5' 2 6 ' 30.5' 2 6 ' 30.5' 2 6 ' 30.5' 12.5' 1 7 ' 12.5' 1 7 ' First Floor Living Foyer Kitchen Dining Bath Bedroom Bedroom Garage Basement Family Unfinished Utility TOTAL Sketch by a la mode, inc.Area Calculations Summary Living Area Calculation Details First Floor 793 Sq ft 30.5 × 26 = 793 Total Living Area (Rounded):793 Sq ft Non-living Area 1 Car Detached 212.5 Sq ft 17 × 12.5 = 212.5 Basement 793 Sq ft 30.5 × 26 = 793 Property Address City County State Zip Code Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Aerial N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Aerial N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code zoning map Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Location Map N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code 6027 W Broadway AP90224 N/A 6027 W Broadway Ave New Hope Hennepin MN 55428 City of New Hope None. None. Sources for data were from RMLS and Hennepin County Assessor Website. 0-90 0-90 Jayne Preusse 06/18/2019 20559939 MN 08/31/2019 06/11/2019 Form ID14EC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Borrower Lender/Client USPAP Compliance Addendum Loan # File # Property Address City County State Zip Code APPRAISAL AND REPORT IDENTIFICATION This Appraisal Report is one of the following types: Appraisal Report This report was prepared in accordance with the requirements of the Appraisal Report option of USPAP Standards Rule 2-2(a). Restricted Appraisal Report This report was prepared in accordance with the requirements of the Restricted Appraisal Report option of USPAP Standards Rule 2-2(b). The intended user of this report is limited to the identified client. This is a Restricted Appraisal Report and the rationale for how the appraiser arrived at the opinions and conclusions set forth in the report may not be understood properly without the additional information in the appraiser's workfile. ADDITIONAL CERTIFICATIONS I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The report analyses, opinions, and conclusions are limited only by the reported assumptions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or specified) personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. This appraisal report was prepared in accordance with the requirements of Title XI of FIRREA and any implementing regulations. PRIOR SERVICES I have NOT performed services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. I HAVE performed services, as an appraiser or in another capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Those services are described in the comments below. PROPERTY INSPECTION I have NOT made a personal inspection of the property that is the subject of this report. I HAVE made a personal inspection of the property that is the subject of this report. APPRAISAL ASSISTANCE Unless otherwise noted, no one provided significant real property appraisal assistance to the person signing this certification. If anyone did provide significant assistance, they are hereby identified along with a summary of the extent of the assistance provided in the report. ADDITIONAL COMMENTS Additional USPAP related issues requiring disclosure and/or any state mandated requirements: MARKETING TIME AND EXPOSURE TIME FOR THE SUBJECT PROPERTY A reasonable marketing time for the subject property is day(s)utilizing market conditions pertinent to the appraisal assignment. A reasonable exposure time for the subject property is day(s). APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED) Signature Name Date of Signature State Certification # or State License # State Expiration Date of Certification or License Effective Date of Appraisal Signature Name Date of Signature State Certification # or State License # State Expiration Date of Certification or License Supervisory Appraiser Inspection of Subject Property Did Not Exterior-only from Street Interior and Exterior USPAP Compliance Addendum 2014 Page 1 of 1 Appraisal License Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE E & O Insurance Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE