The URL can be used to link to this page

111219 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Tuesday, November 12, 2019 President Kathi Hemken Commissioner John Elder Commissioner Cedrick Frazier Commissioner Andy Hoffe Commissioner Jonathan London 1. Call to order – EDA Meeting of November 12, 2019 2. Roll call 3. Approval of Minutes:  October 28, 2019 4. Resolution approving purchase and redevelopment agreements with Great Buy Homes, Inc. for the sale of both lots contained within the plat of Lammle Addition (improvement project no. 1018) 5. Adjournment EDA Meeting Page 1 October 28, 2019 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes October 28, 2019 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:50 p.m. ROLL CALL Present: Absent: Kathi Hemken, President Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner John Elder, Commissioner Staff Present: Kirk McDonald, City Manager Jeff Alger, Community Development Specialist Dan Boyum, City Engineer Tim Fournier, Police Chief Rich Johnson, Director of HR/Administrative Services Valerie Leone, City Clerk Jeff Sargent, Director of Community Development Bernie Weber, Director of Public Works Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Hoffe, seconded by Commissioner London, to approve the minutes of September 23, 2019. All present voted in favor. Motion carried. SNOW REMOVAL AND MAINTENANCE SERVICES Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving renewal of contract with Kenlawn Co. for snow removal and maintenance services. Mr. Jeff Alger, community development specialist, stated this item approves a contract with Kenlawn Company for snow removal and maintenance services for the streetscape area along Xylon Avenue between 42nd and 45th avenues for $32,937. He explained the Public Works department does not have the staff to manage all aspects of the city center streetscape area and the city has utilized outside contractors since 2016. Mr. Alger explained that the contract includes snow removal from the sidewalk on the west side of Xylon, between city hall and the fire station, around the civic center plaza area and the areas around benches, bike racks, and trash receptacles; picking up litter; sweeping of general debris; trimming, pruning, and replacement of dead plants, shrubs, and trees; and installation of wood chips annually (cost of plantings and wood chips to be billed separately). EDA Meeting Page 2 October 28, 2019 Mr. Alger stated Kenlawn Company began servicing the area in November of 2018, and has provided a high quality of work. He recommended renewing the contract for November 1, 2019, through October 31, 2020, at a cost of $32,937 which is an increase of $525 (which reflects a 3% increase for the snow removal portion of the contract). He explained that a significant portion of the area must be shoveled by hand rather than utilizing snow removal equipment. He stated funds are available in the EDA budget for this expenditure. Commissioner London expressed his preference to have the area maintained by staff due to the high cost of outsourcing the work. Mr. Jeff Sargent, director of community development, explained that the contractor has the necessary snow removal equipment and labor to properly maintain the area. He stated Kenlawn provides quality work. Mr. Alger pointed out the contract covers snow removal regardless of the number of snowfalls or service trips. It also covers hauling the snow off site. He noted HyVee removes snow from the boulevard adjacent to their property. Mr. Kirk McDonald, city manager, commented that the city has a large investment on the Xylon Avenue streetscape and it is necessary to adequately maintain the area. RESOLUTION 2019-10 Item 4 Commissioner Frazier introduced the following resolution and moved its adoption “RESOLUTION APPROVING RENEWAL OF CONTRACT WITH KENLAWN CO. FOR SNOW REMOVAL AND MAINTENANCE SERVICES”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Hoffe, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Frazier, Hoffe; and the following voted against the same: London; Abstained: None; Absent: Elder; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. HOLIDAY LIGHTS Item 5 President Hemken introduced for discussion EDA Item 5, Motion to approve low bid from Kenlawn Co. for installation, maintenance, and removal of holiday lights on trees along Xylon Avenue North, between 42nd and 45th avenues, in the amount of $5,480 per year for the next three years. Mr. Jeff Alger, community development specialist, requested the EDA to award a three-year contract to Kenlawn Company for installation, maintenance, and removal of holiday lights on the 49 trees along Xylon Avenue North (between 42nd and 45th avenues) for $5,480 per year. He stated the city has been lighting the trees in the city center area since 2016. Mr. Alger explained that staff solicited bids from four vendors and received bids from two companies. Kenlawn, the company the city has utilized for Xylon Avenue maintenance services, was the low bidder. He stated Kenlawn will be able to monitor the lights and address issues since they will already be on site for snow removal purposes. He stated funds are available in the EDA budget for this expenditure. EDA Meeting Page 3 October 28, 2019 Mayor Hemken stated she receives many positive comments regarding the holiday lights of tree along Xylon Avenue. MOTION Item 5 Motion was made by Commissioner Frazier, seconded by Commissioner Hoffe, to approve the low bid from Kenlawn Co. for installation, maintenance, and removal of holiday lights on trees along Xylon Avenue North, between 42nd and 45th avenues, in the amount of $5,480 pe r year for the next three years. All present voted in favor. Motion carried. ADJOURNMENT Motion was made by Commissioner Frazier, seconded by Commissioner London, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:08 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\2019\EDA\Scattered Site Housing\Q ‐ 5355 Oregon Ave N Lot Sale 11‐12‐19.docx Request for Action November 12, 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 and redevelopment agreements with Great Buy Homes, Inc. for the sale of both lots contained within the plat of Lammle Addition (improvement project no. 1018) Requested Action Staff requests that the Economic Development Authority conduct a public hearing and approve a resolution approving the sale of the scattered site lots located at 5353 and 5355 Oregon Avenue North to Great Buy Homes. Policy/Past Practice The Economic Development Authority reviews proposals for the redevelopment of EDA‐owned scattered site properties prior to executing a contract with the preferred buyer/builder. Background The city acquired the distressed property at 5355 Oregon Avenue North in April of 2018. The City Council approved a lot area variance and the vacation of existing easements and rights‐of‐way to allow the lot to be split and re‐platted as two buildable lots in August of 2018. West Metro Fire completed training exercises at the house and the site was cleared in November of 2018. Throughout 2019, city staff and Stantec have coordinated the relocation and burial of existing overhead utility lines at the property as well as the installation of sewer and water connections. A Request for Proposals (RFP) marketing the two lots was sent to more than 20 builders on September 18, 2019. The non‐negotiable minimum lot sale price was set at $60,000 per lot ($120,000 total) and builders were allowed the opportunity to submit a higher offer in order to make their proposal more competitive. The RFP stipulated that the proposed houses must be owner‐occupied, single‐family homes. The occupancy requirement applies to the first buyer for period of two years. The RFP also stated that designs with attached three‐stall garages were preferred. Proposals were due on October 9, 2019. The EDA received four proposals from the following builders:  Great Buy Homes (preferred)  Houston Homes, Inc.  My Home Source (Alatus)  Novak‐Fleck, Inc. Staff reviewed the proposals with the city manager and selected the submittal from Great Buy Homes as the “preferred” proposal. The proposal included the highest lot purchase price, at $65,000 per lot, the most finished square footage, the most bedrooms, three‐stall garages for both homes, and competitive sale prices. The proposed homes feature split‐level designs with three bathrooms. The homes have a high level of curb appeal with façades that include cultured stone, board and batten siding, and upgrades to the garage doors and front doors. The two homes feature slightly different interior and exterior designs with both garages abutting the center property line between the lots. Agenda Section EDA Item Number 4 Request for Action, Page 2 The base characteristics and attributes of each proposal are summarized as follows: Great Buy Homes (Preferred) Houston Homes My Home Source (Alatus) Novak‐Fleck Lot purchase price $130,000 total ($65,000 per lot) $120,000 total ($60,000 per lot) $120,000 total ($60,000 per lot) $126,000 total ($63,000 per lot) Projected sale price $350,000 per house Higher $300,000s per house $399,900 per house $304,870 per house Front Yard Oregon Avenue North Oregon Avenue North Oregon Avenue North Oregon Avenue North Design Split‐level 2‐story 2‐story 2‐story Finished Space 2,327 SF north lot  1,282 on upper  1,045 in lower 2,191 SF south lot  1,279 on upper  912 in lower 4,518 SF total 1,885 SF both lots  770 on main  1,115 on upper 3,770 SF total 2,249 SF north lot  919 on main  1,330 on upper 2,265 SF south lot  638 on main  1,179 on upper  448 in basement 4,514 SF total 1,929 SF both lots  766 on main  630 on upper  533 in basement 3,858 SF total Bedrooms 5 both lots (3 on upper level, 2 in lower level) 3 both lots (all on upper level) 3 north lot (all on upper level) 4 south lot (all on upper level) 4 both lots (3 on upper level, 1 in basement) Bathrooms 3 both lots (all full) 3 both lots (1 full; 1 ¾; 1 ½) 3 north lot (1 full; 1 ¾; 1 ½) 4 south lot (2 full; 1 ¾; 1 ½) 3 both lots (1 full; 2 ¾) Garage 3‐stall both lots 2‐stall north lot 3‐stall south lot 2‐stall both lots 3‐stall both lots Façade  Cultured stone around lower half of garage & front of house  Board/batten siding  Garage door windows  Covered front porch  Cultured stone around lower half of garage doors  Board/batten siding  Garage door windows  Covered front porch  Cultured stone around lower half of garage doors  Stone pillars on north lot  Board/batten siding  Stone pillars & cultured stone around lower half of garage doors  Vinyl shakes  Accent boards around windows & doors Other  Granite in kitchen  Engineered wood floors in kitchen & dining room  Bathroom connected to bedroom in lower level  Walk‐in closet in lower level bedroom in north lot  Gas fireplace  Maple cabinets  Granite/quartz countertops  Stainless steel appliances  Upgraded hard surface & carpeted floors  Stone countertops  Stainless steel appliances & sinks  TV room in upper level of north lot  Cultured marble vanity tops in bathrooms  Granite or quartz in kitchen  Stainless steel appliances  Vinyl plank flooring in kitchen/dinning/ bathrooms Notes Slightly different designs; garage abuts lot line between both parcels for both homes Identical interior designs for both homes; garage on north lot abuts interior lot line & garage on south lot abuts south lot line Garage on north lot abuts interior lot line & garage on south lot abuts south lot line Mirrored design for both homes; only bathroom upstairs is master; garage abuts lot line between both parcels for both homes Request for Action, Page 3 Experience with Recommended Builder Great Buy Homes is a mid‐sized custom home builder based out of Anoka. The city has sold four lots to Great Buy Homes over the past three years. Each of the homes has sold for higher than the projected sale price. Addresses for those homes, sale price, and year of sale are as follows:  5400 Yukon Ave N: $297,000 (2017)  6065 Louisiana Ave N: $325,000 (2018)  6067 Louisiana Ave N: $323,900 (2018)  7215 62nd Ave N: $350,821 (2019) Cost & Tax Impact of Improvements It is anticipated that expenses associated with the project will be approximately $259,544.55. Revenue from the sale of the lots will be $130,000, resulting in an estimated loss of $129,554.55. The proposed improvements would result in a substantial increase in the taxable value of the property. If the lots were to be valued at $350,000 each in 2020, approximately $529,000 in market value would be added to the property upon completion. Such a valuation would result in an estimated increase of $3,592.29, or 361.53%, in taxes payable to the city in 2021, as compared to those that were payable for the single lot in 2019. 5355 Oregon Ave N (1 lot) 5353 & 5355 Oregon Ave N (2 lots) Estimated Market Value 2018, Payable 2019 Projected Estimated Market Value 2020, Payable 2021 Change % Change $171,000 $700,000 $529,000 309.36% Taxable Market Value 2018, Payable 2019 Projected Taxable Value 2020, Payable 2021 Change % Change $149,150 $688,520 $539,370 361.63% Taxes Payable 2018, Payable 2019 Projected Taxes Payable 2020, Payable 2021 Change % Change $2,674.04 $12,140.44 $9,466 354.01% Taxes Allocated to City 2018, Payable 2019 Projected Taxes Allocated to City 2020, Payable 2021 Change % Change $993.63 $4,585.92 $3,592 361.53% The following table illustrates the Return On Investment (ROI) and tax benefit associated with the estimated increase in taxable property value over the next several years: # of Years (Year) Additional Taxes Collected By City Total Cost/Revenue Return On Investment 0 (present) $0 $(129,554.55) ‐49.91% 1 (2021) $3,592.29 $(125,962.26) ‐48.53% 2 (2022) $7,184.58 $(122,369.97) ‐47.15% 3 (2023) $10,776.87 $(118,777.68) ‐45.76% 4 (2024) $14,369.16 $(115,185.39) ‐44.38% Request for Action, Page 4 # of Years (Year) Additional Taxes Collected By City Total Cost/Revenue Return On Investment 5 (2025) $17,961.45 $(111,593.10) ‐42.99% 10 (2030) $35,922.90 $(93,631.65) ‐36.07% 15 (2035) $53,884.35 $(75,670.20) ‐29.15% 20 (2040) $71,845.80 $(57,708.75) ‐22.23% 25 (2045) $89,807.25 $(39,747.30) ‐15.31% 30 (2050) $107,768.70 $(21,785.85) ‐8.39% 37 (2062) $132,914.73 $3,360.18 1.29% The estimated ROI for the project over 30 years is ‐8.39%. The city’s initial investment of $129,554.55 into the project would result in additional taxes being allocated to the city from the subject property. Estimated at $3,592.29 per year, newly collected property taxes would result in a 37‐year payback period for the city’s original investment (assuming other substantial improvements are not made to the property). The Internal Rate of Return for the project over 30 years is ‐1.15% (calculation attached). 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 and redevelop distressed properties often exceeds the value of the new or rehabilitated home. Development Agreement and Next Steps Staff worked with the assistant city attorney to draft a resolution and Purchase and Redevelopment Agreement for the sale of the lots. The agreement ensures that the provisions set forth in the RFP will be met and sets the purchase price of both lots at $130,000. The agreement included in the attachments is considered complete by staff and the city attorney; however, some minor revisions may be necessary once fully reviewed by the buyer. Any substantial changes to the agreement would be presented to the EDA for approval. Although the RFP stipulates that closing must occur within 60 days of approval of the sale, the developer has requested that it take place in April of 2020 due to the changing seasons. Staff is comfortable with this timeframe and anticipates construction of both homes commencing in the spring of 2020. Both homes would need to be completed within a year of the closing date. Funding Funding for this project would come from the EDA budget. Recommendation Staff recommends that the EDA conduct a public hearing and approve a resolution approving the sale of the scattered site lots located at 5353 and 5355 Oregon Avenue North to Great Buy Homes. Attachments  Resolution  Purchase and Redevelopment Agreements with RFP and proposed plans  Other proposals  Budget  Estimated Tax Impact of Improvements  Estimated Return on Investment  Estimated Internal Rate of Return CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 19-___ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENTS WITH GREAT BUY HOMES, INC. FOR THE SALE OF 5353 AND 5355 OREGON AVENUE NORTH (IMPROVEMENT PROJECT NO. 1018) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain real property located at 5355 Oregon Avenue North, New Hope, MN, and legally described as “Lot 1, Block 2, Sunset Heights, Hennepin County, Minnesota (the “Property”) as evidenced by the Limited Warranty Deed recorded with the Hennepin County Recorder’s Office on April 26, 2018 as Document no. A10548194; WHEREAS, the EDA purchased the Property with the intention of razing the existing house and all site improvements in preparation of re-platting the Property into two separate lots for the sale to a builder to construct two new single family homes; and WHEREAS, the EDA re-platted the Property into 2 separate lots, with the respective addresses: 5353 Oregon Ave. N. – Lot 1, Block 1, Lammle Addition, Hennepin County, Minnesota (“Lot 1”); and 5355 Oregon Ave. N. – Lot 2, Block 1, Lammle Addition, Hennepin County, Minnesota (“Lot 2”) WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff to various builders, the EDA received an offer from GREAT BUY HOMES, INC., a Minnesota corporation (“GREAT BUY”) regarding the sale and redevelopment of the Property; and WHEREAS, the EDA arrived at an agreement with GREAT BUY to sell the Property for the purchase price of $130,000.00, or $65,000 per lot upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted GREAT BUY’s offer and has presented a draft of two separate Purchase and Redevelopment Agreements for Lot 1 and Lot 2 to GREAT BUY for its review, copies of which are attached hereto as Exhibit A (“Purchase and Redevelopment Agreements”) and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to GREAT BUY for the sum of $130,000.00, in order for GREAT BUY to redevelop and build two stand alone single family homes on Lot 1 and Lot 2 respectively in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to GREAT BUY HOMES, INC., for the purchase price of $130,000.00 (or $65,000 per lot), with other terms and conditions as set forth in the Purchase and Redevelopment Agreements attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Purchase and Redevelopment Agreements relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of two single-family homes in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to GREAT BUY HOMES, INC., for the construction of two single-family homes, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 12th day of November 2019. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director Exhibit A Purchase and Redevelopment Agreements See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Resolution Approving Sale of 5353 and 5355 Oregon Ave N.docx 1 PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between GREAT BUY HOMES, INC. a Minnesota corporation (“Buyer") and the Economic Development Authority in and for the City of New Hope, Minnesota, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("Seller") effective November ______, 2019. In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase the vacant parcel of real property located in the City of New Hope at the property address of 5353 Oregon Avenue North, New Hope, Minnesota, and legally described as “Lot 1, Block 1, Lammle Addition, Hennepin County, Minnesota” (the “Property”). 1. Purchase Price. The purchase price for the Property is Sixty-Five Thousand and No/100 Dollars ($65,000.00) (the “Purchase Price”), which Buyer shall pay as follows: an initial payment of One Thousand and No/100 Dollars ($1,000.00) (the “Earnest Money”), which sum shall be paid to Seller upon Buyer and Seller’s execution of this Agreement and Sixty- Four Thousand and No/100 Dollars ($64,000.00) payable by wire, cashier’s check or cash on the “Date of Closing”, as that term is defined in paragraph 6 below. There are no items of personal property or fixtures included in this sale. 2. Title Conveyed. On the Date of Closing, Seller shall deliver a Quit Claim Deed (the "Deed") to Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments, and restrictions, except for the “Permitted Encumbrances” set forth on Exhibit A and the restrictive covenants referenced below in paragraph 4.b. 3. Representations of Seller. Seller represents and agrees as follows: a. Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, there are no parties other than Seller in possession of any portion of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property. b. Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. c. To the best of Seller’s knowledge without inquiry there are no septic systems or wells on the Property other than the sealed well referenced in the Certificate on the attached Exhibit B. d. Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller’s Closing Documents signed by it. e. Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code. 2 f. To the best of Seller’s knowledge without inquiry, no above ground or underground tanks are located in or about the Property. g. Seller makes no other warranties as to the condition of the Property. Seller agrees that any breach of Seller’s foregoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. Wherever herein a representation is made “to the best of Seller’s knowledge,” such representation is limited to the actual knowledge of the President and/or Executive Director of Seller. 4. Representations of Buyer. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and sell the Property, Buyer hereby represents to Seller: a. SUBJECT TO THE FOREGOING REPRESENTATIONS BY SELLER, BUYER HEREBY ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN “AS IS” CONDITION AS TO THE USE OF THE PROPERTY. Buyer understands and agrees that the Purchase Price is the fair market value of the Property in its “AS IS” condition. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the homes described in paragraph 10 below. If the soil is determined to be unacceptable Buyer may rescind this Agreement by written notice to Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be refunded to Buyer. b. Buyer agrees the first sale of the separate homes on the Property will be sold to owner-occupants. An “owner-occupant” shall be defined as an individual(s) that purchases the home from Buyer by warranty deed or a contract for deed and intending to reside in the home as a primary residence. To insure the intent of the parties that the home constructed on the Property is purchased by an owner- occupant, Buyer will record restrictive covenants and assessment agreement against the Property prohibiting the leasing of the home for a period of two (2) years after the sale of such home by Buyer to an owner-occupant of the home. The restrictive covenants and assessment agreement shall be substantially in the form of the documents attached hereto as Exhibits C and D, respectively. Further, the restrictive covenants and assessment agreement shall provide that the EDA may levy a $20,000.00 assessment on the Property prior to the sale if the lot is not being sold to an owner-occupant. The EDA shall release the Property from these restrictive covenants and assessment agreement upon the issuance of a certificate of occupancy for the construction of the home on the Property and upon the receipt by the EDA of an affidavit signed by Buyer and the owner- occupants verifying owner-occupants’ intent to reside in the homes as their primary residence in compliance with the restrictive covenants described herein in the form attached as Exhibit C. 3 c. Within one (1) year of Closing, Buyer shall complete the construction of the single family home on the Property (the Improvements). The Improvements must be consistent with all building and zoning requirements and the restrictive covenants applicable to the Property. The representations set forth in this paragraph shall be incorporated into appropriate documents to be recorded against the Property (whether by declaration, restrictive covenants, or development agreement as hereinafter defined) subject to approval by Seller and Buyer as a condition of Closing. 5. Title Commitment and Policy. a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by a title insurance company of Buyer’s choice (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Buyer agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price for any endorsements requested by Buyer or Buyer’s lender. b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon all of the Earnest Money shall be returned to Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (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 Permitted Encumbrances. 4 6. Closing. a. Closing shall occur on or before April 1, 2020 (the “Date of Closing” or “Closing”), unless both parties agree, in writing, to an earlier or later time. b. Closing shall occur at the office of the Title Company. c. Seller shall deliver at closing the following executed and acknowledged documents: (i) the Deed; (ii) affidavit(s) in industry-standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; Seller is not a foreign person or entity; and addressing such other matters as Buyer may reasonably require. 7. Payments/Prorations. At Closing, Seller shall pay the cost of recording any instrument (other than the Deed) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. Buyer shall pay at Closing the cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the Closing, the fees required for recording the Deed, the Purchase and Redevelopment Agreement, the assessment agreement and restrictive covenants and all customary closing fees charged by the Title Company or other closing agent to both Seller and Buyer, if any, utilized to close the transaction contemplated by this Agreement. General real estate taxes payable in the year of closing shall be prorated by Seller and Buyer as of the closing date based upon a calendar year. Each party shall pay its own attorney’s fees. 8. Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and Seller shall be entitled to any and all condemnation proceeds. 9. Construction of Homes. Buyer agrees that it will construct a new single family home on the Property. This covenant shall survive the delivery of the Deed. 5 a. The single family home described in this paragraph is referred to as the "Minimum Improvements.” b. The Minimum Improvements shall consist of one new single family home, and shall be constructed substantially in accordance with the RFP Guidelines attached as Exhibit E and the proposal approved by Seller on November 12, 2019 attached as Exhibit F. c. Construction of the Minimum Improvements must be substantially completed within one (1) year following Closing. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of New Hope building inspector. d. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Buyer to construct such Minimum Improvements (including the date for completion thereof), Seller will furnish Buyer with a Certificate of Completion for such improvements. Such certification by Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the Deed with respect to the obligations of Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this paragraph of this Agreement shall be in such form as will enable it to be recorded in the Hennepin County Recorder’s Office and other instruments pertaining to the Property. If Seller shall refuse or fail to provide any certification in accordance with the provisions of this paragraph, Seller shall, within thirty (30) days after written request by Buyer, provide Buyer with a written statement, indicating in adequate detail in what respects Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of Seller for Buyer to take or perform in order to obtain such certification. e. Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (i) Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a “Transfer”), without the prior written approval of Seller. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or 6 permanent financing necessary to enable Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (ii) If Buyer seeks to effect a Transfer prior to issuance of the Certificate of Completion, Seller shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by Buyer as to the portion of the Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of Seller, have expressly assumed all of the obligations of Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by Seller) deprive Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by Seller to the contrary, no such transfer or approval by Seller thereof shall be deemed to relieve Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the 7 Property governed by this subparagraph shall be in a form reasonably satisfactory to Seller. (iii) If the conditions described above are satisfied then the Transfer will be approved and Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (iii) apply to all subsequent transferors. (iv) Upon issuance of the Certificate of Completion, Buyer may transfer or assign the Minimum Improvements and/or Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of Seller. f. Buyer agrees that (a) it will use the Minimum Improvements as only a single family, owner-occupied homes, (b) it will not seek exemption from real estate taxes on the Property under State law, and (c) it will not transfer or permit transfer of the Property to any entity whose ownership or operation of the property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of New Hope or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for at least 30 years after the Date of Closing. g. Buyer shall comply with all recommendations of the City Engineer. h. Buyer’s construction plans shall be approved by the City Building Official. 10. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to Buyer and prior to receipt by Buyer of the Certificate of Completion of the Minimum Improvements, Buyer fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from Seller to Buyer to do so, then Seller shall have the right to re-enter and take possession of the Property and to terminate (and revert in Seller) the estate conveyed by the Deed to Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of Buyer and failure on the part of Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, Seller at its option may declare a termination in favor of Seller of the title, and of all the rights and interests in and to the Property conveyed to Buyer, and that such title and all rights and interests of Buyer, and any assigns or successors in interest to and in the Property, shall revert to Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. 8 Notwithstanding anything to the contrary contained in this paragraph, Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a Certificate of Completion has been issued. 11. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in Seller of title to and/or possession of the Property or any part thereof as provided in paragraph 10, Seller shall apply the Purchase Price paid by Buyer under paragraph 1 of this Agreement as follows: a. First, to reimburse Seller for all costs and expenses incurred by Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing Seller by the Buyer and its successor or transferee; and b. Second, to reimburse Buyer for the balance of the Purchase Price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to Buyer upon delivery of executed, recordable warranty deed to the Property by Buyer to Seller. 12. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; or (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery. Any party shall have the right to designate any other address for notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: SELLER: Economic Development Authority in and for the City of New Hope Kirk McDonald, Executive Director 4401 Xylon Avenue North New Hope, MN 55428-4898 9 with copy to: Stacy A. Woods, New Hope Assistant City Attorney Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 BUYER: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 13. No Broker Involved. Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Seller. 14. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer as provided by law. If Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If Seller defaults under this Agreement, Buyer’s only remedy shall be to terminate the Agreement and recover the Earnest Money paid to Seller. Buyer shall not have any right to the remedy of specific performance 15. Assignment/Prohibition Against Transfer of Property. Buyer may not assign its rights and obligations hereunder without the prior written consent of Seller, which consent may be granted or withheld by Seller in its sole discretion. 16. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both Seller and Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. Seller and Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing p arty at the time of signing and together which shall constitute a single document. 17. Survival. The Parties representations contained herein shall survive the delivery of the Deed. 10 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the above date (“Effective Date”). SELLER: Economic Development Authority in and for the City of New Hope By: _______________________________ Kathi Hemken Its: President Dated: November____, 2019 By: _______________________________ Kirk McDonald Its: Executive Director Dated: November_____, 2019 BUYER: GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: November____, 2019 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of November, 2019, by Kathi Hemken and Kirk McDonald, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. _______________________________ Notary Public 11 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of November, 2019, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. _______________________________ Notary Public DRAFTED BY: Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424-8811 12 Exhibit A Permitted Encumbrances 1. Restrictions, reservations, covenants and easements relating to use or improvement of the Property without effective forfeiture provisions of record on the Effective Date; 2. Building and zoning laws, ordinances, city, state and federal regulations; 3. Governmental regulations, if any, affecting the use and occupancy of the Property; 4. All rights in public highways upon the land; 5. Easements for public rights-of-way and public and private utilities, which do not interfere with present improvements; 6. Reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. 7. The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due; 8. The lien of unpaid real estate taxes, if any, not presently payable but to be paid as part of the annual taxes to become due. 13 Exhibit B Well Sealing Certificate See attached. 14 Exhibit C Restrictive Covenants See attached. 1 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS (“Agreement”) dated effective the ____ day of April, 2020, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“GREAT BUY”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the City and GREAT BUY dated effective November ___, 2019 (“Purchase Agreement”), GREAT BUY purchased the real property located at 5353 Oregon Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described as “Lot 1, Block 1, Lammle Addition, Hennepin County, Minnesota” (“Property”) which purchase closed on April 1, 2020; and WHEREAS, GREAT BUY has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and GREAT BUY have agreed GREAT BUY shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and GREAT BUY have agreed the City may levy a $20,000.00 assessment against the Property prior to GREAT BUY’s sale of the Property with the completed home if it is not being sold to an owner-occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and WHEREAS, compliance with the restrictions imposed by this Agreement is an additional consideration for the sale of the Property to GREAT BUY. 2 NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, GREAT BUY agrees as follows: AGREEMENT 1. Restrictive Covenants. GREAT BUY hereby covenants and agrees with the City that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling (“Dwelling”) constructed upon the Property will be only to “Owner-occupant(s)”. “Owner-occupant” is defined as an individual that purchases the Property from GREAT BUY with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner- occupant, and/or by the “Immediate Family Member(s)” of the Owner-occupant for a period of two (2) consecutive years commencing on the date of initial conveyance to an Owner-occupant. “Immediate Family Member” shall only mean a parent, step-parent, child, step-child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions. The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the City of an Affidavit signed by GREAT BUY and the Owner-occupant verifying the Owner-occupant’s intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the two (2) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by City. Notwithstanding the restrictions stated above, the City may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Agreement to Assessment. GREAT BUY acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before April 1, 2021; and/or (b) if GREAT BUY sells the Property with the completed home to a non-owner-occupant in violation of paragraph 1(a) above. Further, GREAT BUY agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 5. Waiver by GREAT BUY. GREAT BUY expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any 3 claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies. It is further understood that if GREAT BUY or an Owner- occupant should breach their respective obligations under this Agreement, the City will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the City shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating this Agreement. It is further agreed that the City’s rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the City may have. 7. GREAT BUY’s Successors. This Agreement shall not be terminated by: a) Voluntary dissolution of GREAT BUY or any parent, subsidiary or successor of GREAT BUY; b) Merger whereby GREAT BUY (or such parent, subsidiary or successor of GREAT BUY) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of GREAT BUY. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens. All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 kmcdonald@ci.new-hope.mn.us 4 If to GREAT BUY: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 glennhammer@q.com 10. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights. Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment. This Agreement may be modified or amended only by a written instrument executed by GREAT BUY and the City. 13. Counterpart Signatures. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above-written. 5 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: April____, 2020 GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: April_____, 2020 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Restrictive Covenant - 5353 Oregon Ave. N.docx 15 Exhibit D Assessment Agreement See attached. 1 ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT (“Agreement”) dated effective as of the ___ day of April, 2020, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“GREAT BUY”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between City and GREAT BUY dated effective November ___, 2019 (“Purchase Agreement”) GREAT BUY purchased the real property located at 5353 Oregon Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described as “Lot 1, Block 1, Lammle Addition, Hennepin County, Minnesota” (“Property”) which purchase closed on April 1, 2020; and WHEREAS, GREAT BUY has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and GREAT BUY have agreed GREAT BUY shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and GREAT BUY have further agreed the City may levy a $20,000.00 assessment against the Property prior to GREAT BUY’s sale of the Property with the completed home if it is not being sold to an owner-occupant to be owned and occupied by the owner-occupant for at least two (2) years. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project. GREAT BUY hereby covenants and agrees with the City that the new home on the Property shall be fully completed on or before April 1, 2021. Fully completed shall mean the Property shall be improved with a new single-family house. 2 2. Agreement to Assessment. GREAT BUY acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single-family house on or before April 1, 2021; (b) if GREAT BUY sells the Property with the completed home to a non-owner-occupant; and/or (c) if the Property is leased to a non-owner-occupant in the first two (2) years after initial conveyance. Further, GREAT BUY agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by GREAT BUY. GREAT BUY expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. GREAT BUY’s Successors. This Agreement shall not be terminated by: a) The voluntary dissolution of GREAT BUY or any parent, subsidiary or successor of GREAT BUY; b) Merger whereby GREAT BUY (or such parent, subsidiary or successor of GREAT BUY) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of GREAT BUY. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Running of Benefits and Burdens. All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 6. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428-4898 kmcdonald@ci.new-hope.mn.us 3 If to GREAT BUY: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 glennhammer@q.com 7. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 8. Cumulative Rights. Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 9. Amendment. This Agreement may be modified or amended only by a written instrument executed by GREAT BUY and the City. 10. Counterpart Signatures. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed this Assessment Agreement effective the day and year first above-written. EXECUTION AND NOTARY PAGE FOLLOWS 4 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: April____, 2020 GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: April___, 2020 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Glenn Hammer the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Assessment Agreement - 5353 Oregon Ave. N.docx 16 Exhibit E Request for Proposal (“RFP”) Guidelines See attached. REQUEST FOR PROPOSALS (RFP) 5353 & 5355 OREGON AVENUE NORTH LOT PRICE: $60,000 PER LOT/$120,000 TOTAL (MINIMUM) The City of New Hope Economic Development Authority (EDA) is requesting proposals from builders to purchase two vacant lots located at 5353 and 5355 Oregon Avenue North, for the construction of two new single-family homes. The lots are being offered as part of the city’s scaĴered site housing program, which focuses on the removal or rehabilitation of distressed properties. The site was previously occupied by a distressed single-family home that was demolished by the EDA. Enclosed, please ﬁnd the Proposal Form and Guidelines for submiĴing a proposal. To receive consideration, proposals must be submiĴed on a completed Proposal Form and the required aĴachments and additional information must be included. Incomplete proposals will not be considered. Proposals are due on Wednesday, October 9, 2019, at noon. If you have questions about the RFP process or the enclosed Guidelines, please contact Jeff Alger in the Community Development Department at the city of New Hope, 763-531-5119 or jalger@newhopemn.gov. Thank you for your interest! Regards, Jeff Alger Community Development Specialist GUIDELINES 5353 & 5355 OREGON AVENUE NORTH General Notes: 1. Only complete proposals will be considered. The city retains absolute discretion in deciding whether to accept any particular proposal. 2. Proposals must be submiĴed by state-licensed builders who have built at least three houses in Minnesota in the last ﬁve years, or have equivalent experience acceptable to the city. The houses may be built speculatively or for speciﬁc buyers. 3. The city is interested in proposals that will generate the highest valued homes possible. The new homes must be owner-occupied, single-family homes. Owner occupancy restrictions will be documented in the development agreement and secured with a recorded restrictive covenant. The occupancy requirement only applies to the ﬁrst buyer and lasts for a period of two years. Full details regarding the legal language of this requirement are available upon request. 4. No preferred home style has been determined for these lots. However, preference will be given to proposals with the most ﬁnished square footage that include high quality exterior materials and upgraded interior amenities. Copies of previously approved proposals are available upon request. 5. Following approval of a proposal by the City Council, the selected builder will be asked to enter into a purchase and development agreement. This agreement will address the sale of the lots and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement the builder must submit a $2,000 nonrefundable earnest money deposit. Once the purchase and development agreement has been completed, ﬁnal approval by resolution will take place at the next regularly scheduled EDA meeting. The closing on the purchase of the lots must take place within 60 days of ﬁnal EDA approval. The buyer will be responsible for paying the following costs associated with purchasing the properties: xPreparation and issuance of the title commitment. xThe cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the closing, the fees required for recording the deed, the purchase and redevelopment agreement, the assessment agreement and restrictive covenants, and all customary closing fees charged by the title company or other closing agent, if any, utilized to close the transaction contemplated by this agreement (paid at closing). 6. Construction of the new homes must be completed within one year of closing on the purchase of the lots. GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: 1. Utilities & Curb Cuts a) All utility service lines shall be underground. Utilities may locate necessary facilities such as pedestals or boxes in the street right-of-way or utility and drainage easements. A new utility easement has been established along the south lot line on the southern lot. The utility pole at the southwest corner of this lot has been replaced and the utility pole at the southeast corner of the lot has been or will be permanently removed. Electrical and communications lines have been or will be buried within easements and the right-of-way. A transformer has been or will be installed within the right-of-way where the properties intersect along Oregon Avenue to supply both lots with electricity. b) Any expenses for connection of the houses to private utilities shall be the responsibility of the builder. c) New curb stop boxes have been or will be provided for both lots prior to the sale of the lots. The locations of the curb stop boxes have been or will be marked on-site prior to the sale of the lots and are depicted on the aĴached sewer and water installation plan. d) Sanitary sewer service stubs have been or will be provided to both lots prior to the sale of the lots. The sewer line for the southern lot previously served the home that was demolished on-site. It has been or will be lined or 4” PVC piping will be installed from the termination point to the main line prior to the sale of the lots. The sewer line for the northern lot is new and will be installed prior to the sale of the lots. Locations of the stubs are depicted on the aĴached sewer and water installation plan. e) The well that previously served the lot has been sealed and the city has a well and boring sealing record on ﬁle. f) The driveways for the new homes must be completely new and fully paved from the street to the garage. A portion of the old driveway remains on Saint Raphael Drive to be used as a construction entrance. This remaining section of the old driveway must be fully removed upon completion of construction of both homes and the curb cut must be replaced with curbing meeting all city standards. Driveways and off-street parking are not allowed within three (3) feet of any property line abuĴing another property. Curb cut accesses for two-car garages may not exceed 24 feet. Curb cut accesses for three-car garages may not exceed 28 feet. Driveways may not be placed above sewer lines. 2. Building Standards & Design Guidelines a) All site improvements shall comply with the New Hope City Code. b) The houses shall have at least three (3) ﬁnished bedrooms and two (2) ﬁnished bathrooms. GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: c) The parcel is located on the corner of Oregon Avenue North and Saint Raphael Drive. Orientation of the house on the southern lot shall be toward Oregon Avenue North. Orientation of the house on the northern lot may face Oregon Avenue North or Saint Raphael Drive, if a design that meets all setback requirements can be achieved. d) The houses shall have an aĴached garage that will accommodate a minimum of two (2) vehicles. Three (3) stall garages are preferred. e) The designs should emphasize front doors as the focal point for the front of the houses. Large and usable front porches are desired. Garage door dominance in design should be minimized as much as possible. f) Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permiĴed. To the extent that southern exposures are present, house designs are expected to enhance wintertime natural light and passive solar heating. f ) No equipment that generates noise, such as air-conditioning cooling structures or condensers, shall be located within the front yard, a side yard setback, or a drainage/utility easement. g) Low maintenance exterior materials (siding, soffit, doors, and windows) must be utilized. The use of brick or stone accents is preferred. Vinyl or other low maintenance siding materials are generally acceptable and can be made more desirable with the use of shakes, ﬁsh scales or other styles to break up the paĴern of lap siding. 3. Landscaping a) The lots must be landscaped to be aesthetically pleasing in all seasons. Land forms and plant materials must be used to deﬁne the site and blend neatly with the adjoining properties. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements must be landscaped using ornamental grass, shrubs, trees or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed or hydro-seed is not acceptable for restoration of disturbed areas. All grass that is planted must be sod. Additionally, all lawn areas must be irrigated with underground irrigation systems. Landscaping must be completed by July 1, 2020 or upon request for a Certiﬁcate of Occupancy, whichever occurs later. b) A minimum of two (2) large-species deciduous shade trees must be planted in each front yard. A minimum of two (2) large-species deciduous shade trees must be planted in each rear yard. Trees should be a minimum of 2” in diameter. A list of prohibited trees is aĴached. GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: 4. Setbacks a) The proposed homes must be designed to meet all setback requirements. A CAD ﬁle will be provided to help expedite the design process for any architect designing houses for the sites. 5. Builder Selection Criteria a) Builder must be licensed in the State of Minnesota as a Residential Building Contractor. b) Builder must provide the addresses of three houses they have built in Minnesota within the last ﬁve years, or evidence of qualiﬁcation acceptable to the EDA. c) Builder must be capable of completing the homes within one year of closing on the purchase of the lots. 6. Required AĴachments by Builder a) Site plan showing the layouts of the homes on the lots. Please include dimensions and setbacks. b) Floor plans with dimensions. Clearly indicate square footages of each ﬂoor. c) List overall square footage. d) List total ﬁnished square feet. e) Elevations, including types of exterior materials (color elevations preferred). f) Narrative description of the interior trim packages. Include description of ﬂooring. g) Estimated sales prices of the homes. h) Pictures of similar homes (if available). Front Yard Rear Yard Side Corner Interior Side Yard Attached Garage Interior Side Yard House Lot 25 feet 25 feet N/A 5 feet 10 feet Southern Northern (Oregon Ave) 25 feet 25 feet (St. Raphael Dr) 20 feet 5 feet 10 feet GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: 7. Drainage Plans a) At the time of submission of a building permit, the builder must submit grading and drainage plans for each lot illustrating site grading, drainage paĴerns, and ﬁrst ﬂoor elevations. These plans will be subject to review and approval by the city engineer. 8. AĴachments xLocation map xDraft ﬁnal plat xUtility relocation map xSewer and water installation plan xProhibited tree list The previously referenced Computer Aided Design (CAD) ﬁle for the lots is available and will be included in the email requesting proposals. PROPOSAL FORM 5353 & 5355 OREGON AVENUE NORTH These lots are being offered at a minimum base price of $60,000 per lot/$120,000 total. The EDA will consider higher offers for the lot. However, submiĴing a higher offer will not guarantee the selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submiĴing a proposal to purchase the two lots for $_____________________ ($120,000 minimum), and build two new single-family houses in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lot. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Company Name:____________________________________ State License Number:_________________ Telephone:_______________________________________ E-mail_________________________________ Address:_______________________________ City/State/Zip:____________________________________ Signature:______________________________________________ Date:____________________________ Print Name and Title:_____________________________________________________________________ Proposals are due by Wednesday, October 9, 2019, at noon Submit this proposal form and required aĴachments to: Jeff Alger Community Development Specialist, City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 763.531.5119 jalger@newhopemn.gov Proposals may be submiĴed by hand delivery, U.S. Mail, or email 17 Exhibit F Buyer’s Proposed Plans See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Purchase and Redevelopment Agreement 5353 Oregon Ave N.docx 1 PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between GREAT BUY HOMES, INC. a Minnesota corporation (“Buyer") and the Economic Development Authority in and for the City of New Hope, Minnesota, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("Seller") effective November ______, 2019. In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase the vacant parcel of real property located in the City of New Hope at the property address of 5355 Oregon Avenue North, New Hope, Minnesota, and legally described as “Lot 2, Block 1, Lammle Addition, Hennepin County, Minnesota” (the “Property”). 1. Purchase Price. The purchase price for the Property is Sixty-Five Thousand and No/100 Dollars ($65,000.00) (the “Purchase Price”), which Buyer shall pay as follows: an initial payment of One Thousand and No/100 Dollars ($1,000.00) (the “Earnest Money”), which sum shall be paid to Seller upon Buyer and Seller’s execution of this Agreement and Sixty- Four Thousand and No/100 Dollars ($64,000.00) payable by wire, cashier’s check or cash on the “Date of Closing”, as that term is defined in paragraph 6 below. There are no items of personal property or fixtures included in this sale. 2. Title Conveyed. On the Date of Closing, Seller shall deliver a Quit Claim Deed (the "Deed") to Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments, and restrictions, except for the “Permitted Encumbrances” set forth on Exhibit A and the restrictive covenants referenced below in paragraph 4.b. 3. Representations of Seller. Seller represents and agrees as follows: a. Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, there are no parties other than Seller in possession of any portion of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property. b. Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. c. To the best of Seller’s knowledge without inquiry there are no septic systems or wells on the Property other than the sealed well referenced in the Certificate on the attached Exhibit B. d. Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller’s Closing Documents signed by it. e. Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code. 2 f. To the best of Seller’s knowledge without inquiry, no above ground or underground tanks are located in or about the Property. g. Seller makes no other warranties as to the condition of the Property. Seller agrees that any breach of Seller’s foregoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. Wherever herein a representation is made “to the best of Seller’s knowledge,” such representation is limited to the actual knowledge of the President and/or Executive Director of Seller. 4. Representations of Buyer. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and sell the Property, Buyer hereby represents to Seller: a. SUBJECT TO THE FOREGOING REPRESENTATIONS BY SELLER, BUYER HEREBY ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN “AS IS” CONDITION AS TO THE USE OF THE PROPERTY. Buyer understands and agrees that the Purchase Price is the fair market value of the Property in its “AS IS” condition. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the homes described in paragraph 10 below. If the soil is determined to be unacceptable Buyer may rescind this Agreement by written notice to Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be refunded to Buyer. b. Buyer agrees the first sale of the separate homes on the Property will be sold to owner-occupants. An “owner-occupant” shall be defined as an individual(s) that purchases the home from Buyer by warranty deed or a contract for deed and intending to reside in the home as a primary residence. To insure the intent of the parties that the home constructed on the Property is purchased by an owner- occupant, Buyer will record restrictive covenants and assessment agreement against the Property prohibiting the leasing of the home for a period of two (2) years after the sale of such home by Buyer to an owner-occupant of the home. The restrictive covenants and assessment agreement shall be substantially in the form of the documents attached hereto as Exhibits C and D, respectively. Further, the restrictive covenants and assessment agreement shall provide that the EDA may levy a $20,000.00 assessment on the Property prior to the sale if the lot is not being sold to an owner-occupant. The EDA shall release the Property from these restrictive covenants and assessment agreement upon the issuance of a certificate of occupancy for the construction of the home on the Property and upon the receipt by the EDA of an affidavit signed by Buyer and the owner- occupants verifying owner-occupants’ intent to reside in the homes as their primary residence in compliance with the restrictive covenants described herein in the form attached as Exhibit C. 3 c. Within one (1) year of Closing, Buyer shall complete the construction of the single family home on the Property (the Improvements). The Improvements must be consistent with all building and zoning requirements and the restrictive covenants applicable to the Property. The representations set forth in this paragraph shall be incorporated into appropriate documents to be recorded against the Property (whether by declaration, restrictive covenants, or development agreement as hereinafter defined) subject to approval by Seller and Buyer as a condition of Closing. 5. Title Commitment and Policy. a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by a title insurance company of Buyer’s choice (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Buyer agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price for any endorsements requested by Buyer or Buyer’s lender. b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon all of the Earnest Money shall be returned to Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (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 Permitted Encumbrances. 4 6. Closing. a. Closing shall occur on or before April 1, 2020 (the “Date of Closing” or “Closing”), unless both parties agree, in writing, to an earlier or later time. b. Closing shall occur at the office of the Title Company. c. Seller shall deliver at closing the following executed and acknowledged documents: (i) the Deed; (ii) affidavit(s) in industry-standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; Seller is not a foreign person or entity; and addressing such other matters as Buyer may reasonably require. 7. Payments/Prorations. At Closing, Seller shall pay the cost of recording any instrument (other than the Deed) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. Buyer shall pay at Closing the cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the Closing, the fees required for recording the Deed, the Purchase and Redevelopment Agreement, the assessment agreement and restrictive covenants and all customary closing fees charged by the Title Company or other closing agent to both Seller and Buyer, if any, utilized to close the transaction contemplated by this Agreement. General real estate taxes payable in the year of closing shall be prorated by Seller and Buyer as of the closing date based upon a calendar year. Each party shall pay its own attorney’s fees. 8. Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and Seller shall be entitled to any and all condemnation proceeds. 9. Construction of Homes. Buyer agrees that it will construct a new single family home on the Property. This covenant shall survive the delivery of the Deed. 5 a. The single family home described in this paragraph is referred to as the "Minimum Improvements.” b. The Minimum Improvements shall consist of one new single family home, and shall be constructed substantially in accordance with the RFP Guidelines attached as Exhibit E and the proposal approved by Seller on November 12, 2019 attached as Exhibit F. c. Construction of the Minimum Improvements must be substantially completed within one (1) year following Closing. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of New Hope building inspector. d. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Buyer to construct such Minimum Improvements (including the date for completion thereof), Seller will furnish Buyer with a Certificate of Completion for such improvements. Such certification by Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the Deed with respect to the obligations of Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this paragraph of this Agreement shall be in such form as will enable it to be recorded in the Hennepin County Recorder’s Office and other instruments pertaining to the Property. If Seller shall refuse or fail to provide any certification in accordance with the provisions of this paragraph, Seller shall, within thirty (30) days after written request by Buyer, provide Buyer with a written statement, indicating in adequate detail in what respects Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of Seller for Buyer to take or perform in order to obtain such certification. e. Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (i) Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a “Transfer”), without the prior written approval of Seller. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or 6 permanent financing necessary to enable Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (ii) If Buyer seeks to effect a Transfer prior to issuance of the Certificate of Completion, Seller shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by Buyer as to the portion of the Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of Seller, have expressly assumed all of the obligations of Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by Seller) deprive Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by Seller to the contrary, no such transfer or approval by Seller thereof shall be deemed to relieve Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the 7 Property governed by this subparagraph shall be in a form reasonably satisfactory to Seller. (iii) If the conditions described above are satisfied then the Transfer will be approved and Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (iii) apply to all subsequent transferors. (iv) Upon issuance of the Certificate of Completion, Buyer may transfer or assign the Minimum Improvements and/or Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of Seller. f. Buyer agrees that (a) it will use the Minimum Improvements as only a single family, owner-occupied homes, (b) it will not seek exemption from real estate taxes on the Property under State law, and (c) it will not transfer or permit transfer of the Property to any entity whose ownership or operation of the property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of New Hope or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for at least 30 years after the Date of Closing. g. Buyer shall comply with all recommendations of the City Engineer. h. Buyer’s construction plans shall be approved by the City Building Official. 10. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to Buyer and prior to receipt by Buyer of the Certificate of Completion of the Minimum Improvements, Buyer fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from Seller to Buyer to do so, then Seller shall have the right to re-enter and take possession of the Property and to terminate (and revert in Seller) the estate conveyed by the Deed to Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of Buyer and failure on the part of Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, Seller at its option may declare a termination in favor of Seller of the title, and of all the rights and interests in and to the Property conveyed to Buyer, and that such title and all rights and interests of Buyer, and any assigns or successors in interest to and in the Property, shall revert to Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. 8 Notwithstanding anything to the contrary contained in this paragraph, Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a Certificate of Completion has been issued. 11. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in Seller of title to and/or possession of the Property or any part thereof as provided in paragraph 10, Seller shall apply the Purchase Price paid by Buyer under paragraph 1 of this Agreement as follows: a. First, to reimburse Seller for all costs and expenses incurred by Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing Seller by the Buyer and its successor or transferee; and b. Second, to reimburse Buyer for the balance of the Purchase Price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to Buyer upon delivery of executed, recordable warranty deed to the Property by Buyer to Seller. 12. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; or (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery. Any party shall have the right to designate any other address for notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: SELLER: Economic Development Authority in and for the City of New Hope Kirk McDonald, Executive Director 4401 Xylon Avenue North New Hope, MN 55428-4898 9 with copy to: Stacy A. Woods, New Hope Assistant City Attorney Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 BUYER: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 13. No Broker Involved. Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Seller. 14. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer as provided by law. If Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If Seller defaults under this Agreement, Buyer’s only remedy shall be to terminate the Agreement and recover the Earnest Money paid to Seller. Buyer shall not have any right to the remedy of specific performance 15. Assignment/Prohibition Against Transfer of Property. Buyer may not assign its rights and obligations hereunder without the prior written consent of Seller, which consent may be granted or withheld by Seller in its sole discretion. 16. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both Seller and Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. Seller and Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. 17. Survival. The Parties representations contained herein shall survive the delivery of the Deed. 10 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the above date (“Effective Date”). SELLER: Economic Development Authority in and for the City of New Hope By: _______________________________ Kathi Hemken Its: President Dated: November____, 2019 By: _______________________________ Kirk McDonald Its: Executive Director Dated: November_____, 2019 BUYER: GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: November____, 2019 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of November, 2019, by Kathi Hemken and Kirk McDonald, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. _______________________________ Notary Public 11 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of November, 2019, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. _______________________________ Notary Public DRAFTED BY: Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424-8811 12 Exhibit A Permitted Encumbrances 1. Restrictions, reservations, covenants and easements relating to use or improvement of the Property without effective forfeiture provisions of record on the Effective Date; 2. Building and zoning laws, ordinances, city, state and federal regulations; 3. Governmental regulations, if any, affecting the use and occupancy of the Property; 4. All rights in public highways upon the land; 5. Easements for public rights-of-way and public and private utilities, which do not interfere with present improvements; 6. Reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. 7. The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due; 8. The lien of unpaid real estate taxes, if any, not presently payable but to be paid as part of the annual taxes to become due. 13 Exhibit B Well Sealing Certificate See attached. 14 Exhibit C Restrictive Covenants See attached. 1 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS (“Agreement”) dated effective the ____ day of April, 2020, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“GREAT BUY”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the City and GREAT BUY dated effective November ___, 2019 (“Purchase Agreement”), GREAT BUY purchased the real property located at 5355 Oregon Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described as “Lot 2, Block 1, Lammle Addition, Hennepin County, Minnesota” (“Property”) which purchase closed on April 1, 2020; and WHEREAS, GREAT BUY has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and GREAT BUY have agreed GREAT BUY shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and GREAT BUY have agreed the City may levy a $20,000.00 assessment against the Property prior to GREAT BUY’s sale of the Property with the completed home if it is not being sold to an owner-occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and WHEREAS, compliance with the restrictions imposed by this Agreement is an additional consideration for the sale of the Property to GREAT BUY. 2 NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, GREAT BUY agrees as follows: AGREEMENT 1. Restrictive Covenants. GREAT BUY hereby covenants and agrees with the City that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling (“Dwelling”) constructed upon the Property will be only to “Owner-occupant(s)”. “Owner-occupant” is defined as an individual that purchases the Property from GREAT BUY with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner- occupant, and/or by the “Immediate Family Member(s)” of the Owner-occupant for a period of two (2) consecutive years commencing on the date of initial conveyance to an Owner-occupant. “Immediate Family Member” shall only mean a parent, step-parent, child, step-child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions. The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the City of an Affidavit signed by GREAT BUY and the Owner-occupant verifying the Owner-occupant’s intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the two (2) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by City. Notwithstanding the restrictions stated above, the City may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Agreement to Assessment. GREAT BUY acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before April 1, 2021; and/or (b) if GREAT BUY sells the Property with the completed home to a non-owner-occupant in violation of paragraph 1(a) above. Further, GREAT BUY agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 5. Waiver by GREAT BUY. GREAT BUY expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any 3 claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies. It is further understood that if GREAT BUY or an Owner- occupant should breach their respective obligations under this Agreement, the City will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the City shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating this Agreement. It is further agreed that the City’s rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the City may have. 7. GREAT BUY’s Successors. This Agreement shall not be terminated by: a) Voluntary dissolution of GREAT BUY or any parent, subsidiary or successor of GREAT BUY; b) Merger whereby GREAT BUY (or such parent, subsidiary or successor of GREAT BUY) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of GREAT BUY. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens. All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisio ns of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 kmcdonald@ci.new-hope.mn.us 4 If to GREAT BUY: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 glennhammer@q.com 10. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights. Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment. This Agreement may be modified or amended only by a written instrument executed by GREAT BUY and the City. 13. Counterpart Signatures. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above-written. 5 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: April____, 2020 GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: April_____, 2020 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Restrictive Covenant - 5355 Oregon Ave. N.docx 15 Exhibit D Assessment Agreement See attached. 1 ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT (“Agreement”) dated effective as of the ___ day of April, 2020, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“GREAT BUY”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between City and GREAT BUY dated effective November ___, 2019 (“Purchase Agreement”) GREAT BUY purchased the real property located at 5355 Oregon Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described as “Lot 2, Block 1, Lammle Addition, Hennepin County, Minnesota” (“Property”) which purchase closed on April 1, 2020; and WHEREAS, GREAT BUY has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and GREAT BUY have agreed GREAT BUY shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and GREAT BUY have further agreed the City may levy a $20,000.00 assessment against the Property prior to GREAT BUY’s sale of the Property with the completed home if it is not being sold to an owner-occupant to be owned and occupied by the owner-occupant for at least two (2) years. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project. GREAT BUY hereby covenants and agrees with the City that the new home on the Property shall be fully completed on or before April 1, 2021. Fully completed shall mean the Property shall be improved with a new single-family house. 2 2. Agreement to Assessment. GREAT BUY acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single-family house on or before April 1, 2021; (b) if GREAT BUY sells the Property with the completed home to a non-owner-occupant; and/or (c) if the Property is leased to a non-owner-occupant in the first two (2) years after initial conveyance. Further, GREAT BUY agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by GREAT BUY. GREAT BUY expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. GREAT BUY’s Successors. This Agreement shall not be terminated by: a) The voluntary dissolution of GREAT BUY or any parent, subsidiary or successor of GREAT BUY; b) Merger whereby GREAT BUY (or such parent, subsidiary or successor of GREAT BUY) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of GREAT BUY. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Running of Benefits and Burdens. All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 6. Notices. Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428-4898 kmcdonald@ci.new-hope.mn.us 3 If to GREAT BUY: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 glennhammer@q.com 7. Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 8. Cumulative Rights. Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 9. Amendment. This Agreement may be modified or amended only by a written instrument executed by GREAT BUY and the City. 10. Counterpart Signatures. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed this Assessment Agreement effective the day and year first above-written. EXECUTION AND NOTARY PAGE FOLLOWS 4 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: April____, 2020 GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: April___, 2020 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of April, 2020, by Glenn Hammer the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Assessment Agreement - 5355 Oregon Ave. N.docx 16 Exhibit E Request for Proposal (“RFP”) Guidelines See attached. REQUEST FOR PROPOSALS (RFP) 5353 & 5355 OREGON AVENUE NORTH LOT PRICE: $60,000 PER LOT/$120,000 TOTAL (MINIMUM) The City of New Hope Economic Development Authority (EDA) is requesting proposals from builders to purchase two vacant lots located at 5353 and 5355 Oregon Avenue North, for the construction of two new single-family homes. The lots are being offered as part of the city’s scaĴered site housing program, which focuses on the removal or rehabilitation of distressed properties. The site was previously occupied by a distressed single-family home that was demolished by the EDA. Enclosed, please ﬁnd the Proposal Form and Guidelines for submiĴing a proposal. To receive consideration, proposals must be submiĴed on a completed Proposal Form and the required aĴachments and additional information must be included. Incomplete proposals will not be considered. Proposals are due on Wednesday, October 9, 2019, at noon. If you have questions about the RFP process or the enclosed Guidelines, please contact Jeff Alger in the Community Development Department at the city of New Hope, 763-531-5119 or jalger@newhopemn.gov. Thank you for your interest! Regards, Jeff Alger Community Development Specialist GUIDELINES 5353 & 5355 OREGON AVENUE NORTH General Notes: 1. Only complete proposals will be considered. The city retains absolute discretion in deciding whether to accept any particular proposal. 2. Proposals must be submiĴed by state-licensed builders who have built at least three houses in Minnesota in the last ﬁve years, or have equivalent experience acceptable to the city. The houses may be built speculatively or for speciﬁc buyers. 3. The city is interested in proposals that will generate the highest valued homes possible. The new homes must be owner-occupied, single-family homes. Owner occupancy restrictions will be documented in the development agreement and secured with a recorded restrictive covenant. The occupancy requirement only applies to the ﬁrst buyer and lasts for a period of two years. Full details regarding the legal language of this requirement are available upon request. 4. No preferred home style has been determined for these lots. However, preference will be given to proposals with the most ﬁnished square footage that include high quality exterior materials and upgraded interior amenities. Copies of previously approved proposals are available upon request. 5. Following approval of a proposal by the City Council, the selected builder will be asked to enter into a purchase and development agreement. This agreement will address the sale of the lots and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement the builder must submit a $2,000 nonrefundable earnest money deposit. Once the purchase and development agreement has been completed, ﬁnal approval by resolution will take place at the next regularly scheduled EDA meeting. The closing on the purchase of the lots must take place within 60 days of ﬁnal EDA approval. The buyer will be responsible for paying the following costs associated with purchasing the properties: xPreparation and issuance of the title commitment. xThe cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the closing, the fees required for recording the deed, the purchase and redevelopment agreement, the assessment agreement and restrictive covenants, and all customary closing fees charged by the title company or other closing agent, if any, utilized to close the transaction contemplated by this agreement (paid at closing). 6. Construction of the new homes must be completed within one year of closing on the purchase of the lots. GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: 1. Utilities & Curb Cuts a) All utility service lines shall be underground. Utilities may locate necessary facilities such as pedestals or boxes in the street right-of-way or utility and drainage easements. A new utility easement has been established along the south lot line on the southern lot. The utility pole at the southwest corner of this lot has been replaced and the utility pole at the southeast corner of the lot has been or will be permanently removed. Electrical and communications lines have been or will be buried within easements and the right-of-way. A transformer has been or will be installed within the right-of-way where the properties intersect along Oregon Avenue to supply both lots with electricity. b) Any expenses for connection of the houses to private utilities shall be the responsibility of the builder. c) New curb stop boxes have been or will be provided for both lots prior to the sale of the lots. The locations of the curb stop boxes have been or will be marked on-site prior to the sale of the lots and are depicted on the aĴached sewer and water installation plan. d) Sanitary sewer service stubs have been or will be provided to both lots prior to the sale of the lots. The sewer line for the southern lot previously served the home that was demolished on-site. It has been or will be lined or 4” PVC piping will be installed from the termination point to the main line prior to the sale of the lots. The sewer line for the northern lot is new and will be installed prior to the sale of the lots. Locations of the stubs are depicted on the aĴached sewer and water installation plan. e) The well that previously served the lot has been sealed and the city has a well and boring sealing record on ﬁle. f) The driveways for the new homes must be completely new and fully paved from the street to the garage. A portion of the old driveway remains on Saint Raphael Drive to be used as a construction entrance. This remaining section of the old driveway must be fully removed upon completion of construction of both homes and the curb cut must be replaced with curbing meeting all city standards. Driveways and off-street parking are not allowed within three (3) feet of any property line abuĴing another property. Curb cut accesses for two-car garages may not exceed 24 feet. Curb cut accesses for three-car garages may not exceed 28 feet. Driveways may not be placed above sewer lines. 2. Building Standards & Design Guidelines a) All site improvements shall comply with the New Hope City Code. b) The houses shall have at least three (3) ﬁnished bedrooms and two (2) ﬁnished bathrooms. GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: c) The parcel is located on the corner of Oregon Avenue North and Saint Raphael Drive. Orientation of the house on the southern lot shall be toward Oregon Avenue North. Orientation of the house on the northern lot may face Oregon Avenue North or Saint Raphael Drive, if a design that meets all setback requirements can be achieved. d) The houses shall have an aĴached garage that will accommodate a minimum of two (2) vehicles. Three (3) stall garages are preferred. e) The designs should emphasize front doors as the focal point for the front of the houses. Large and usable front porches are desired. Garage door dominance in design should be minimized as much as possible. f) Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permiĴed. To the extent that southern exposures are present, house designs are expected to enhance wintertime natural light and passive solar heating. f ) No equipment that generates noise, such as air-conditioning cooling structures or condensers, shall be located within the front yard, a side yard setback, or a drainage/utility easement. g) Low maintenance exterior materials (siding, soffit, doors, and windows) must be utilized. The use of brick or stone accents is preferred. Vinyl or other low maintenance siding materials are generally acceptable and can be made more desirable with the use of shakes, ﬁsh scales or other styles to break up the paĴern of lap siding. 3. Landscaping a) The lots must be landscaped to be aesthetically pleasing in all seasons. Land forms and plant materials must be used to deﬁne the site and blend neatly with the adjoining properties. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements must be landscaped using ornamental grass, shrubs, trees or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed or hydro-seed is not acceptable for restoration of disturbed areas. All grass that is planted must be sod. Additionally, all lawn areas must be irrigated with underground irrigation systems. Landscaping must be completed by July 1, 2020 or upon request for a Certiﬁcate of Occupancy, whichever occurs later. b) A minimum of two (2) large-species deciduous shade trees must be planted in each front yard. A minimum of two (2) large-species deciduous shade trees must be planted in each rear yard. Trees should be a minimum of 2” in diameter. A list of prohibited trees is aĴached. GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: 4. Setbacks a) The proposed homes must be designed to meet all setback requirements. A CAD ﬁle will be provided to help expedite the design process for any architect designing houses for the sites. 5. Builder Selection Criteria a) Builder must be licensed in the State of Minnesota as a Residential Building Contractor. b) Builder must provide the addresses of three houses they have built in Minnesota within the last ﬁve years, or evidence of qualiﬁcation acceptable to the EDA. c) Builder must be capable of completing the homes within one year of closing on the purchase of the lots. 6. Required AĴachments by Builder a) Site plan showing the layouts of the homes on the lots. Please include dimensions and setbacks. b) Floor plans with dimensions. Clearly indicate square footages of each ﬂoor. c) List overall square footage. d) List total ﬁnished square feet. e) Elevations, including types of exterior materials (color elevations preferred). f) Narrative description of the interior trim packages. Include description of ﬂooring. g) Estimated sales prices of the homes. h) Pictures of similar homes (if available). Front Yard Rear Yard Side Corner Interior Side Yard Attached Garage Interior Side Yard House Lot 25 feet 25 feet N/A 5 feet 10 feet Southern Northern (Oregon Ave) 25 feet 25 feet (St. Raphael Dr) 20 feet 5 feet 10 feet GUIDELINES 5353 & 5355 OREGON AVENUE NORTH Speciﬁcations: 7. Drainage Plans a) At the time of submission of a building permit, the builder must submit grading and drainage plans for each lot illustrating site grading, drainage paĴerns, and ﬁrst ﬂoor elevations. These plans will be subject to review and approval by the city engineer. 8. AĴachments xLocation map xDraft ﬁnal plat xUtility relocation map xSewer and water installation plan xProhibited tree list The previously referenced Computer Aided Design (CAD) ﬁle for the lots is available and will be included in the email requesting proposals. PROPOSAL FORM 5353 & 5355 OREGON AVENUE NORTH These lots are being offered at a minimum base price of $60,000 per lot/$120,000 total. The EDA will consider higher offers for the lot. However, submiĴing a higher offer will not guarantee the selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submiĴing a proposal to purchase the two lots for $_____________________ ($120,000 minimum), and build two new single-family houses in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lot. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Company Name:____________________________________ State License Number:_________________ Telephone:_______________________________________ E-mail_________________________________ Address:_______________________________ City/State/Zip:____________________________________ Signature:______________________________________________ Date:____________________________ Print Name and Title:_____________________________________________________________________ Proposals are due by Wednesday, October 9, 2019, at noon Submit this proposal form and required aĴachments to: Jeff Alger Community Development Specialist, City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 763.531.5119 jalger@newhopemn.gov Proposals may be submiĴed by hand delivery, U.S. Mail, or email 17 Exhibit F Buyer’s Proposed Plans See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-21804 Variance for 5355 Oregon Ave N\Purchase and Redevelopment Agreement 5353 Oregon Ave N.docx Houston Homes My Home Source (Alatus) Ǧ Ǥ ǡǡǦ Ǥ ǡǦ ǤǡͻͲ ǦǤ ͸ͷǦǦ ̈́͵ͷͲǡͲͲͲǤǡǡ ͷͲͲǦ͸Ͳ͹Ǧ Ǥ ǡǦ ǡǡǡǤ ʹͶͲǡ ǡǦǡǤ Ǥ ǡ ǡǡǡǦǡ Ǥ PROPOSAL FORM 5353 & 5355 OREGON AVENUE NORTH These lots are being oěered at a minimum base price of $60,000 per lot/$120,000 total. The EDA will consider higher oěers for the lot. However, submiĴing a higher oěer will not guarantee the selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submiĴing a proposal to purchase the two lots for $_____________________ ($120,000 minimum), and build two new single-family houses in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lot. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Company Name:____________________________________ State License Number:_________________ Telephone:_______________________________________ E-mail_________________________________ Address:_______________________________ City/State/Zip:____________________________________ Signature:______________________________________________ Date:____________________________ Print Name and Title:_____________________________________________________________________ Proposals are due by Wednesday, October 9, 2019, at noon Submit this proposal form and required aĴachments to: Jeě Alger Community Development Specialist, City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 763.531.5119 jalger@newhopemn.gov Proposals may be submiĴed by hand delivery, U.S. Mail, or email _________________________________________________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 120,000 MyHomeSource 763-639-5386 nrreimler@alatusllc.com 800 Nicollet Mall Suite 2850 Mpls, MN 55402 Nick Reimler - Construction Manager 10/8/2019 BC696889 Sales Informational Sheet Northern Lot x 2946 overall sq ft x 2249 finished sq ft x Unfinished basement with apprx 700 additional sq ft x 3 bedrooms, 3 bathrooms (2 full and 1 half) x Bonus office/TV room on upper level x Sale price $399,900 Southern Lot x 2265 overall and finished sq ft x Finished basement x 4 bedrooms, 4 bathrooms (3 full and 1 half) x Sale price $399,900 Notes: - MyHomeSource will work with City to develop similar plans with 3-car garages if desired - Plans may be slightly altered to fit onto lots Informational Sheet Flooring: x Main level to be hard surface – Mohawk Rustic Legacy laminate or Triumph LVT x Bedrooms to be carpet – Dreamweaver 35 oz x All bathrooms to be ceramic tile. Ceramic tile walls in master bathroom shower x Laundry rooms to be vinyl architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com T o architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com - C e i l i n g h e i g h t o n m a i n t o b e 9 ' - 4 2 " u p p e r s - P r o v i d e o p t i o n f o r m u d r o o m b e n c h I L O o f c l o s e t - A d d o p t i o n f o r p a n t r y a t e n d o f c a b i n e t s b y d i n i n g architectural design & drafting birchhd@hotmail.com Ma s t e r B a t h r o o m : - 4 8 " x 3 6 " s h o w e r p a n w i t h t i l e d w a l l s I L O t u b - W i d e n v a n i t y t o 6 0 " a n d a d d a n o t h e r s i n k a n d f a u c e t architectural design & drafting birchhd@hotmail.com architectural design & drafting birchhd@hotmail.com Novak Fleck Budget for 5355 Oregon Avenue North EXPENSES AMOUNT Acquisition (including closing costs)(172,071.79)$ Demolition and site prep (11,424.20)$ Demolition survey (650.00)$ Engineering (purchase, lot split, moving utilities)(11,270.50)$ Lawn services (2,200.00)$ Legal (purchase, lot split, moving utilities)(6,395.15)$ Moving utilities (32,387.59)$ Park dedication fee (3,000.00)$ Planning (lot split)(1,385.25)$ Public hearing notice (154.70)$ Real estate taxes (3,813.56)$ Sewer and water connections (6,560.00)$ Utility billing (211.81)$ Closing costs for sale (estimated)(1,500.00)$ Engineering costs for moving utilities (estimated)(5,500.00)$ Future utility billing (estimated)(30.00)$ Legal costs for sale (estimated)(1,000.00)$ TOTAL (259,554.55)$ REVENUE AMOUNT Lot sale proceeds 130,000.00$ TOTAL 130,000.00$ TOTAL COST/REVENUE (129,554.55)$ Estimated Market Value 2018, Payable 2019 Projected Estimated Market Value 2020, Payable 2021 Change Percent Change $171,000 $700,000 $529,000 309.36% Taxable Market Value 2018, Payable 2019 Projected Taxable Value 2020, Payable 2021 Change Percent Change $149,150 $688,520 $539,370 361.63% Net Taxes 2018, Payable 2019 Projected Net Taxes 2020, Payable 2021 Change Percent Change $2,674.04 $12,140.44 $9,466 354.01% Taxes Allocated to City 2018, Payable 2019 Projected Taxes Allocated to City 2020, Payable 2021 Change Percent Change $993.63 $4,585.92 $3,592 361.53% Projected Project Expenses ($259,554.55) Lot Sale Revenue $130,000 Total Cost/Revenue ($129,554.55) # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)$0 ($129,554.55)-49.91% 1 (2021)$3,592.29 ($125,962.26)-48.53% 2 (2022)$7,184.58 ($122,369.97)-47.15% 3 (2023)$10,776.87 ($118,777.68)-45.76% 4 (2024)$14,369.16 ($115,185.39)-44.38% 5 (2025)$17,961.45 ($111,593.10)-42.99% 10 (2030)$35,922.90 ($93,631.65)-36.07% 15 (2035)$53,884.35 ($75,670.20)-29.15% 20 (2040)$71,845.80 ($57,708.75)-22.23% 25 (2045)$89,807.25 ($39,747.30)-15.31% 30 (2050)$107,768.70 ($21,785.85)-8.39% 37 (2062)$132,914.73 $3,360.18 1.29% *Based on 2 new homes valued at $350,000 each (2019 payable formula) Estimated Tax Impact of Improvements at 5355 Oregon Avenue North Description Amount Investment (259,554.55)$ Return, Year 1 3,592.29$ Return, Year 2 3,592.29$ Return, Year 3 3,592.29$ Return, Year 4 3,592.29$ Return, Year 5 3,592.29$ Return, Year 6 3,592.29$ Return, Year 7 3,592.29$ Return, Year 8 3,592.29$ Return, Year 9 3,592.29$ Return, Year 10 3,592.29$ Return, Year 11 3,592.29$ Return, Year 12 3,592.29$ Return, Year 13 3,592.29$ Return, Year 14 3,592.29$ Return, Year 15 3,592.29$ Return, Year 16 3,592.29$ Return, Year 17 3,592.29$ Return, Year 18 3,592.29$ Return, Year 19 3,592.29$ Return, Year 20 3,592.29$ Return, Year 21 3,592.29$ Return, Year 22 3,592.29$ Return, Year 23 3,592.29$ Return, Year 24 3,592.29$ Return, Year 25 3,592.29$ Return, Year 26 3,592.29$ Return, Year 27 3,592.29$ Return, Year 28 3,592.29$ Return, Year 29 3,592.29$ Return, Year 30 3,592.29$ Total Returns 107,768.70$ Investment Cost 259,554.55$ Selling Price 130,000.00$ Return on Investment -8.39% Estimated Return on Investment for 5355 Oregon Avenue North Description Amount Investment (129,554.55)$ Return, Year 1 3,592.29$ Return, Year 2 3,592.29$ Return, Year 3 3,592.29$ Return, Year 4 3,592.29$ Return, Year 5 3,592.29$ Return, Year 6 3,592.29$ Return, Year 7 3,592.29$ Return, Year 8 3,592.29$ Return, Year 9 3,592.29$ Return, Year 10 3,592.29$ Return, Year 11 3,592.29$ Return, Year 12 3,592.29$ Return, Year 13 3,592.29$ Return, Year 14 3,592.29$ Return, Year 15 3,592.29$ Return, Year 16 3,592.29$ Return, Year 17 3,592.29$ Return, Year 18 3,592.29$ Return, Year 19 3,592.29$ Return, Year 20 3,592.29$ Return, Year 21 3,592.29$ Return, Year 22 3,592.29$ Return, Year 23 3,592.29$ Return, Year 24 3,592.29$ Return, Year 25 3,592.29$ Return, Year 26 3,592.29$ Return, Year 27 3,592.29$ Return, Year 28 3,592.29$ Return, Year 29 3,592.29$ Return, Year 30 3,592.29$ Total Returns 107,768.70$ Internal Rate of Return -1.15% Estimated Internal Rate of Return for 5355 Oregon Avenue North