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021020 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, February 10, 2020 President Kathi Hemken Commissioner John Elder Commissioner Cedrick Frazier Commissioner Andy Hoffe Commissioner Jonathan London 1. Call to order – EDA Meeting of February 10, 2020 2. Roll call 3. Approval of Minutes:  December 9, 2019 4. Resolution approving contract with Nitti Rolloff Services Inc. for hazardous material abatement, tree removal, demolition of site improvements, well sealing, sewer lining, and water service valve replacement at 6027 West Broadway (Improvement Project No. 1038) 5. Resolution approving Purchase Agreement for the acquisition of 4215 Louisiana Avenue North (improvement project no. 1047) 6. Adjournment EDA Meeting Page 1 December 9, 2019 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes December 9, 2019 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:33 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Staff Present: Kirk McDonald, City Manager Tim Fournier, Police Chief Rich Johnson, Director of HR/Admin. Services Valerie Leone, City Clerk Susan Rader, Director of Parks and Recreation Jeff Sargent, Director of Community Development Steve Sondrall, City Attorney Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Frazier, seconded by Commissioner Elder, to approve the minutes of November 12, 2019. All present voted in favor. Motion carried. 2020 LEVY AND BUDGET Item 4 President Hemken introduced for discussion EDA Item 4, Resolution authorizing the final levy of a special benefit levy pursuant to Minnesota Statutes, Section 469.033, subdivision 6 and approval of a final budget for fiscal year 2020. Mr. Kirk McDonald, city manager, stated the EDA is asked to approve a $348,000 levy for 2019. He noted the levy is $48,000 greater than last year to provide for increased funding for redevelopment and the scattered site housing program. RESOLUTION 2019-12 Item 4 Commissioner Elder introduced the following resolution and moved its adoption “RESOLUTION AUTHORIZING THE FINAL LEVY OF A SPECIAL BENEFIT LEVY PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVAL OF A FINAL BUDGET FOR FISCAL YEAR 2020”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Frazier, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. EDA Meeting Page 2 December 9, 2019 ADJOURNMENT Motion was made by Commissioner Frazier, seconded by Commissioner Elder, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 7:36 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q - 6027 West Broadway Demolition Contract 02-10-20.docx Request for Action February 10, 2020 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 contract with Nitti Rolloff Services Inc for hazardous material abatement, tree removal, demolition of site improvements, well sealing, sewer lining, and water service valve replacement at 6027 West Broadway (Improvement Project No. 1038) Requested Action Staff requests approval of a resolution awarding a contract for hazardous material abatement, tree removal, demolition of building and site improvements, well sealing, sewer lining, and water service valve replacement at 6027 West Broadway, to the low and responsible bidder, Nitti Rolloff Services Inc, in the amount of $22,697. Policy/Past Practice It is a past practice of staff to present contracts to the EDA for consideration when public bidding is required for scattered site housing projects. Background The EDA acquired the single-family home located at 6027 West Broadway for $141,000 in January of 2020, as part of the city’s scattered site housing program. According to Hennepin County tax records, it is the lowest valued single-family house in the city. The EDA directed staff to take the necessary steps in preparing the home for demolition in order to facilitate redevelopment of the property. This contract award includes hazardous material abatement, tree removal, demolition of building and site improvements, well sealing, sewer lining, and water service valve replacement at the property. The city forester recommended retaining the large tree on the southeast side of the lot. It will be correctively pruned to remove hazards or removed at a later date. The trees directly in front of the existing home will be removed. Staff met with a well sealing contractor on-site that was unable to locate a well. Due to the age of the house and the fact that the homes to the north and south of the property had wells, staff believes a well exists. Staff will request that the selected demolition contractor attempt to locate a well during the demolition process. If located, it will be sealed. If not, the city will request a variance for an unsealed well through the Minnesota Department of Health. Staff requested quotes from three contractors, who submitted the following bids:  Nitti Rolloff Services Inc $22,697  Jacon LLC $25,480  Leadens Excavating Inc $29,850 The EDA has worked with the low bidder, Nitti Rolloff Services, Inc, on five previous scattered site housing demolition projects. The contractor was selected for demolition work at 7311 62nd Avenue North, 9115 62nd Avenue North, 3751 Louisiana Avenue North, 4415 Nevada Avenue North, and 5400 Yukon Avenue North. Staff had a good experience working with the contractor and has no concerns with awarding them the contract. Agenda Section EDA Item Number 4 Request for Action, Page 2 Funding Funding is available in the EDA budget for the demolition contract. Recommendation Staff recommends approval of a resolution awarding a contract for hazardous material abatement, tree removal, demolition of building and site improvements, well sealing, sewer lining, and water service valve replacement for the property located at 6027 West Broadway, to Nitti Rolloff Services Inc in the amount of $22,697. Attachments  Resolution  Bids  Request For Quote/Project Specifications EDA RESOLUTION NO. 20-___ RESOLUTION APPROVING CONTRACT WITH NITTI ROLLOFF SERVICES INC FOR HAZARDOUS MATERIAL ABATEMENT, TREE REMOVAL, DEMOLITION OF SITE IMPROVEMENTS, WELL SEALING, SEWER LINING, AND WATER SERVICE VALVE REPLACEMENT AT 6027 WEST BROADWAY (IMPROVEMENT PROJECT NO. 1038) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Economic Development Authority in and for the City of New Hope (“EDA”) purchased that certain real property located at 6027 West Broadway, New Hope, MN (the “Property”) with the intentions of redeveloping the Property; and WHEREAS, City staff intends to redevelop the Property in accordance with the City’s scattered site housing program and policy and return the Property to the tax rolls for the benefit of all taxing jurisdictions; and WHEREAS, City staff is exercising due diligence to correct the Property’s blighted condition by performing hazardous material abatement at the Property to be followed by the tree removal, demolition of all buildings on the Property, well sealing, sewer lining, and water service valve replacement at the Property; and WHEREAS, Nitti Rolloff Services Inc submitted a proposal for hazardous material abatement, tree removal, demolition of site improvements, well sealing, sewer lining, and water service valve replacement (“Work”) that meets all of the Project Specifications and is the low bid; and WHEREAS, it is in the best interests of the EDA to enter into a contract with Nitti Rolloff Services Inc for the purpose of performing the Work; and WHEREAS, City staff is hereby seeking approval from the EDA of the selection of Nitti Rolloff Services Inc as the duly qualified contractor to perform the Work. 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 selection of Nitti Rolloff Services Inc as the Contractor to perform the hazardous material abatement, tree removal, demolition of all building and site improvements located at the Property, well sealing, sewer lining, and water service valve replacement at the Property pursuant to the Project Specifications is approved, it being in the best interest of the EDA and City to prepare the Property for redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the payment of $22,697.00 to Nitti Rolloff Services Inc to perform the Work is hereby approved. 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 hazardous material abatement, tree removal, demolition, well sealing, sewer lining, and water service valve replacement at the Property in accordance with the contract to be prepared by the City Attorney. Dated the 10th day of February, 2020. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11435 6027 West Broadway\Resolution approving Demolition contract for 6027 West Broadway.docx City of New Hope, Minnesota Request For Quote/Project Specifications Date: January 17, 2020 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for quotes for hazardous material abatement, tree removal, demolition, well sealing, sewer lining, and water service valve replacement at 6027 West Broadway. Overview: The city of New Hope EDA owns the property located at 6027 West Broadway, New Hope, MN 55428 (PID 05-118-21-21-0033). The EDA is requesting quotes for the removal of hazardous material, tree removal, and the demolition of all building and site improvements at this location followed by sealing of the well on-site, installation of utility improvements, and re-grading of the primary excavation area. If you are interested in submitting a quote for this project, please review the enclosed specifications and inspect the site. To gain entry into the home, use the lock box on the back door using the code 4401. Please call Jeff Alger in the Community Development Department with any questions at 763-531-5119. Submission: Interested bidders must submit enclosed Bid Form by U.S. Mail, e-mail, or in person. Bids shall be submitted to Jeff Alger, Community Development Specialist. City of New Hope Community Development Department Attention: Jeff Alger 4401 Xylon Avenue North New Hope, MN 55428 jalger@newhopemn.gov Deadline: Proposals must be submitted using the enclosed bid form and received no later than January 31, 2020 at 1:00 p.m. City staff will review the submitted proposals and make a recommendation to the EDA. It is anticipated that the EDA will award the bid at the February 10, 2020, meeting. The work shall be completed in full no later than two months after the contract has been awarded. City of New Hope, Minnesota Bid Form Property Owner: City of New Hope Economic Development Authority (EDA) Property Address: 6027 West Broadway, New Hope, MN 55428 Property Identification Number: 05-118-21-21-0033 For a price of $_______________________, the contractor named below proposes to fully complete the work in accordance with the attached specifications for hazardous material abatement, tree removal, demolition of all building and site improvements, well sealing, utility improvements, and re-grading of the primary excavation area. Contractor Name: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Contractor Name & Title: _______________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota Specifications For Demolition & Related Work 1. General a. Contractor shall furnish all labor, materials, and equipment, and shall perform all service and work required to remove the buildings, structures, and improvements from the site, and post demolition grading of the site, in strict accordance with these specifications and in accordance with all applicable ordinances and laws pertaining to removal of buildings, structures, grading, and erosion control. Following demolition, the contractor shall install silt fencing or erosion control logs around the entire perimeter of the disturbed area. b. Contractor shall thoroughly review these specifications and examine the site to evaluate existing and proposed conditions prior to submitting a quote. Failure to do so shall in no way relieve contractor from performing the work as required or be grounds for a claim for extra payment. 2. Demolition & Disposal of Buildings & Site Improvements a. All buildings and site improvements on the site shall be removed and properly disposed. Demolition to include, but not limited to stairs, ramps, floor slabs, equipment bases, driveways, aprons, foundation walls and footings, and other structure components, appurtenances, and contents associated with each structure, unless otherwise noted. Include removal of all out-buildings and miscellaneous items included in the attached pictures. b. All demolition materials, substrates, debris, waste, or other materials shall be collected, stored, handled, managed, and disposed in accordance with currently accepted practices at an approved, licensed, or permitted facility in accordance with applicable federal, state, and local ordinances, rules, and regulations. 3. Tree & Vegetation Removal a. City staff has marked all trees for removal with orange tape. All stumps shall be pulled from the ground and hauled away. Stump pits shall be back-filled. Contractor is to include removal of all marked trees and stumps in the demolition bid. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) 4. Backfill, Compaction & Grading a. No demolition material shall be left in, or placed in any excavation. All excavations, unless otherwise noted, shall be back filled with clean, imported sand. Imported material shall be placed in one-foot lifts and compacted to no less than 95% standard proctor density. Contactor shall provide the city with a third party sampling, analysis, and report to demonstrate that 95% compaction has been achieved. b. The finished grade shall be determined by matching the existing average grade of the excavation areas prior to demolition. The final grade shall maintain pre demolition drainage patterns. No imported topsoil is required. c. Upon completion of the finished grade, contractor shall immediately hydro- seed all disturbed areas of the site. 5. Utilities a. Contractor shall be responsible for calling Gopher State One to locate any underground utilities prior to beginning demolition and site grading work. b. The city has ordered the disconnection of electricity (Xcel Energy) and natural gas (CenterPoint Energy) services for the property. Contractor shall field verify disconnections prior to demolition. Other private communication utilities such as telephone and cable may still be connected; if so, contractor shall roll them back and secure them at the pole prior to demolition. c. Water service to the house has been terminated at the curb stop box. Contractor is to remove the water line all the way to the curb stop. Contractor is to install new curb stop and box as part of the water disconnection. The location of the service termination shall be documented and marked on-site. Inspection by the city will be required prior to backfilling of the trench. d. Contractor is to coordinate the termination of the private sewer line with Public Works. The sewer line shall be removed to within three (3) feet of the property line and the remaining service stub shall be lined with CIPP lining all the way to the main. Once lined, cap the end in preparation for connection to the new home. The location of the service termination shall be documented and marked onsite. Inspection by the city will be required prior to backfilling. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) 6. Well Abandonment a. City staff believes there is an unsealed well located at the property in the rear yard. The attached photos show where it may have previously entered the house. Contractor is to hire a state-licensed contractor to properly seal the well and record the sealing with the Minnesota Department of Health. Contractor shall provide records of the well sealing to the city upon completion. 7. Asbestos & Other Hazardous Materials a. Contractor shall submit “Notification of Intent to Perform a Demolition” form to the MPCA. The city has contracted with Angstrom Analytical for the completion of a demolition survey for the property. The survey is attached to this report. Demolition contractor is to provide for the removal, and appropriate disposal of all asbestos and other hazardous items listed in the report. 8. Permits & Inspections a. Contractor shall complete and submit the city of New Hope demolition permit application. Permit fees for the demolition permit will be waived, however the State surcharge will still be collected, as the city cannot waive that portion. Permit fees for sewer and water, utility work, and water meter installation will not be waived. Contractor shall have the work inspected prior to backfilling the primary excavation. The private water and sewer service terminations will also be inspected by the city’s Public Works staff. A separate water and sewer disconnection permit shall be secured from the city. Before payment may be issued to the selected contractor, all inspections must be completed, permits must be finalized, and the compaction analysis and well sealing reports must be provided to the city. b. If any permits from other governmental agencies are required, contractor shall, at contractor’s own expense, secure such permits, pay any fees, and complete any inspections required by same, and provide a copy of the permit to the city. c. Contractor shall submit “Notification of Intent to Perform a Demolition” form to the MPCA. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) 9. Miscellaneous Provisions & Notices a. Contractor shall erect and maintain all necessary barricades and warnings to adequately safeguard workers, adjacent property, and the public. b. The demolition and clearing of the site shall be carried out in such a manner to preclude damage to adjacent property or public right-of-way. c. Contractor is to provide dust control during demolition by watering the home. Water tank(s) can be filled at no cost at the New Hope Public Works building at 5500 International Parkway. Please notify Public Works staff one week in advance of request. d. Submission of a proposal will constitute an incontrovertible representation by contractor that contractor has complied with every requirement of these specifications and attachments thereto; that without exception the proposal is premised upon performing and furnishing the work including but not limited to the specific means, methods, techniques, sequences, procedures or precautions expressly required by these specifications and attachments thereto; that contractor has received from city satisfactory written resolution of any conflicts, errors, ambiguities, and discrepancies; and that these specifications and attachments thereto are generally sufficient to indicate and convey understanding of the terms and conditions for performing and furnishing the work. Attachments  Site photos  Aerial map  Hazardous material report City of New Hope, Minnesota City of New Hope, Minnesota On south side of lot, remove this section of fencing only. Section that runs parallel with south property line shall not be removed. On north side of lot, remove this section of fencing only. Section that runs parallel with north property line shall not be removed. City of New Hope, Minnesota Between garage and house, remove this section of fencing. Section that runs parallel with west property (green slats) line shall not be removed. City of New Hope, Minnesota On west side of house, believed location where well previously entered home. Henn e p in Co u nty Prop erty Map Da te : 1/1 4/2020 Com ments: 1 inc h = 1 00 feet PAR C EL ID: 05 11821210033 OWN ER N AME: Th omas R Mank e PAR C EL AD DR ESS: 6 027 W es t Bro ad way , New Hope MN 55428 PAR C EL AR EA: 0.2 5 ac re s , 11,038 sq ft A-T-B: Torrens SAL E PR ICE: $51,900 SAL E D ATA: 07/1993 SAL E C OD E: Wa rranty Deed ASSESSED 2 018 , PAYABLE 2019 PR OPERT Y TYPE: Res idential H OM ESTEAD : Homes tead M AR KET VAL UE: $93,000 TAX TO TAL: $1,200.96 ASSESSED 2 019 , PAYABLE 2020 PRO PER TY TYPE: Residential HO MESTEAD: Homestead MARKET VALU E: $115,000 This dat a (i) is fur nished 'AS IS' wit h no represent at ion as t o com plet enes s or acc ura cy ; (ii) is furnis hed with no war rant y of an y k ind; an d (i ii) is not s uit able for lega l, engi neering or s urv ey ing purpos es . Hen nepin C ounty s hall not be liable f or any damage, in jury o r los s r esu lt ing f rom t his data. CO PYRIG HT © HENNEPIN CO UN TY 20 20 I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q - 4215 Louisiana Ave N Acquisition 02-10-20.docx Request for Action February 10, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Alger, Community Development Specialist; Jeff Sargent, Director of Community Development Agenda Title Resolution approving Purchase Agreement for the acquisition of 4215 Louisiana Avenue North (improvement project no. 1047) Requested Action Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for the acquisition of 4215 Louisiana Avenue North for a purchase price of $125,000 with traditional closing costs to be paid by each party. Policy/Past Practice The Economic Development Authority has acquired vacant distressed properties in the past as part of the city’s scattered site housing program. Background The Economic Development Authority (EDA) has directed community development staff to pursue the acquisition of distressed and functionally obsolete single-family homes as part of the city’s scattered site housing program. The property at 4215 Louisiana Avenue North has been vacant and distressed for many years. It was constructed in 1961 as a single-family home and was later converted into office space, most recently for a business that sold and operated cash register systems. The property has been for sale for many years and the asking price has declined from $400,000 to $199,000 during that time. The property is zoned CB, Community Business, which prevents it from being used for residential purposes and requires that i t pay a commercial property tax rate. City inspectors toured the house in December of 2019 and did not believe it would be a good candidate for rehabilitation. The interior layout would present many challenges, the boiler system would need to be flushed, the second floor deck in the rear yard is failing, there is no garage and much of the space where a new garage could be placed is located above the basement. Staff determined that demolition of the home, rezoning of the parcel, and construction of a new single-family home would be the best option for the site. The site is not without challenges, as the rear yard topography is less than ideal and demolition expenses would be significant due to the size of the building and need to remove a large amount of asphalt. Much of the asphalt for the 4215 Louisiana Avenue North driveway is actually located on the property to the south (Cook Automotive) and was shared between parties without a formal agreement. Taking into account the challenges of the site and the possibility that it may not be redeveloped without the city’s involvement, a “standing offer” of $120,000 was made to the property owner in December of 2019. The offer was declined by the owner at that time. On Jan. 28, 2020, the listing agent contacted city staff stating that the owner would sell the property to the city for $130,000. Staff counter offered at $125,000 and the property owner agreed to the sale with traditional closing costs to be paid by each party. The 2018 and 2019 assessed value of the property was $245,000. It is located on an 80-foot wide lot and 0.24-acre parcel of land. Agenda Section EDA Item Number 5 Request for Action, Page 2 Cost & Tax Impact of Improvements It is anticipated that expenses associated with the project would be approximately $181,300. Revenue from the sale of the lot is estimated at $62,000, resulting in a net loss of $119,300. The proposed improvements would result in an increase in the taxable property value for the subject property. If the property were to be rezoned from commercial to residential, the tax rate for the property would decrease, as the parcel would no longer be paying Hennepin County’s commercial rate. If the property were to be valued at $350,000 in 2021, it is estimated that total taxes paid in 2022 would decrease by $1,969.48; however, taxes allocated to the city would increase by $482.17, or 26.63%, as compared to those that were allocated in 2020. Estimated Market Value 2019, Payable 2020 Projected Market Value 2021, Payable 2022 Change Percent Change $249,000 $350,000 $101,000 40.56% Taxable Market Value 2019, Payable 2020 Projected Taxable Value 2021, Payable 2022 Change Percent Change $249,000 $344,260 $95,260 38.26% Net Taxes 2019, Payable 2020 Projected Net Taxes 2021, Payable 2022 Change Percent Change $8,039.70 $6,070.22 ($1,969.48) -24.50% Taxes Allocated to City 2019, Payable 2020 Taxes Allocated to City 2021, Payable 2022 Change Percent Change $1,810.79 $2,292.96 $482.17 26.63% 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 ($119,300.00) -65.80% 1 (2021) $482.71 ($118,817.83) -65.54% 5 (2025) $2,410.85 ($116,889.15) -64.47% 10 (2030) $4,821.70 ($114,478.30) -63.14% 15 (2035) $7,232.55 ($112,067.45) -61.81% 20 (2040) $9,643.40 ($109,656.60) -60.48% 25 (2045) $12,054.25 ($107,245.75) -59.15% 30 (2050) $14,465.10 ($104,834.90) -57.82% The estimated ROI for the project over 30 years is -57.82% and the Internal Rate of Return (IRR) for the project over 30 years is -10.36% (calculations attached). The payback period for this project is much longer than most recent scattered site projects (248 years) due to the higher taxable market value of the existing structure and anticipated demolition costs (estimated at $37,000, including removal of pavement that extends onto Cook Automotive property). The acquisition price of $125,000 is significantly lower than what the city has been paying, on average, for single-family demolition projects over the last two years ($144,900 for five such projects, Request for Action, Page 3 one of which was split into two lots). Without the city’s involvement, staff does not believe the site will be redeveloped. The city has an opportunity to acquire the property for far less than what it is valued at, petition to rezone the property, and if rezoning is supported, add a new single -family home to the city’s residential housing stock. It is also possible that demolition costs will not be as high as anticipated and that a home valued higher than $350,000 will be constructed at the site, both of which would increase ROI and IRR. 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. Staff has been working with AEM to modify ROI and IRR calculations for such projects to include assumptions. This involves calculating projected market increases in property values and taxes for the existing structure that occupies the site and the future structure that will occupy the site, and estimating the difference in taxes paid. This will assist in setting a benchmark for evaluating scattered site housing opportunities in the future. For this project, staff has utilized the ROI and IRR formulas that were presented in November of 2019. Once finalized, the new template with assumptions will be presented. Funding Funding for this project would come from the EDA budget. Recommendation Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of 4215 Louisiana Avenue North at a purchase price of $125,000 with traditional closing costs to be paid by each party. If approved, staff will begin the process of requesting that the property be rezoned after the closing takes place. Attachments  Resolution  Purchase Agreement  Aerial/sample layout  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. 20-___ RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 4215 LOUISIANA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1047) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City Council meeting authorizing City community development staff to actively pursue the acquisition of distressed properties that can be redeveloped as single family residential lots for potential purchase by the EDA, as part of the City’s scattered site housing program; WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to the City and EDA, and the execution of purchase agreements so as to secure purchase rights for distressed real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements; WHEREAS, City staff have identified the opportunity to purchase certain real property located at 4215 Louisiana Avenue North, New Hope, MN, 55428, P.I.D. 17-118-21-21-0034, and legally described as “The North 80 feet of that part of the East 163 feet of Lot 34 lying South of a line drawn parallel to and 280 feet North of the South line of the Northeast Quarter of the Northwest Quarter of Section 17, Township 118, Range 21, “Auditor’s Subdivision Number 324, Hennepin County, Minnesota” according to the recorded plat thereof (the “Property”) from Gerald E. Anderson and Delores L. Anderson (jointly, the “Seller”); WHEREAS, the residential-type building located on the Property was built in 1961 and was most recently used for commercial purposes but is currently vacant; WHEREAS, the Property is in need of substantial rehabilitation and renovation due to deferred maintenance and general lack of upgrades; WHEREAS, City staff believes that the best use of the Property is demolition in order to maximize the tax base by making the lot available for the development of a new residential housing unit; WHEREAS, the Property will be acquired with EDA funds; WHEREAS, the EDA has reviewed the proposed acquisition of Property and has determined that it has no effect or relationship with the New Hope Comprehensive Plan; WHEREAS, it is in the best interest of the EDA to purchase the Property from Seller, in order to redevelop the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. It is in the best interest of the EDA to purchase the Property for demolition and redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the purchase of the Property by EDA from Seller, for a sum of $125,000.00, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the purchase of the Property. 4. The proposed acquisition of Property is consistent with the New Hope Comprehensive Plan. 5. The City and EDA shall use due diligence for demolishing the structure located on the Property and conducting any necessary cleanup of the Property to pursue redevelopment and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 6. The President and Executive Director and the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the purchase of the Property in accordance with the Purchase Agreement. Dated the 10th day of February, 2020. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11438 Purchase of 4215 Louisiana Ave N\Resolution approving purchase of 4215 Louisiana Ave N.docx Exhibit A Purchase Agreement See attached. 1 PURCHASE AGREEMENT Date: February____, 2020 BUYER(S): The Economic Development Authority in and for the City of New Hope , a public body corporate and politic created pursuant to the laws of the State of Minnesota Seller agrees to sell and Buyer agrees to purchase the real property located at: Street Address: 4215 Louisiana Avenue North City of New Hope, County of Hennepin, State of Minnesota, legally described on the attached Exhibit A. PID 17-118-21- 21-0034. Said purchase shall include all improvements, fixtures, and appurtenances on the property, if any, including but not limited to, the following (collectively the "Property"): garden bulbs, plants, shrubs, trees, and lawn watering system; s hed; storm sash, storm doors, screens and awnings; window shades, blinds; traverse, curtain, and drapery rods, valances, drapes, curtains, window coverings and treatments; towel rods; attached lighting and bulbs; fan fixtures; plumbing fixtures; garbage disposals; water softener; water treatment system; water heating systems, heating systems; air exchange system; radon mitigation system; sump pump; TV antenna/cable TV jacks and wiring/TV wall mounts; wall/ceiling -mounted speakers and mounts; carpeting; mirrors; garage door openers and all controls; smoke detectors; fireplace screens, door and heatilators; BUILT-INS: dishwashers; refrigerators; wine/beverage refrigerators; trash compactors; ovens; cook -top stoves; warming drawers; microwave ovens; hood fans; shelving; work ben ches; intercoms; speakers; air conditioning equipment; electronic air filter; humidifier/dehumidifier; liquid fuel tanks (and controls); pool/spa equipment; propane tank (and contr ols); security system equipment; TV satellite dish; AND the following person al property shall be transferred with no additional monetary value, and free and clear of all liens and encumbrances: ______________________________________________ Notwithstanding the foregoing, leased fixtures are not included. Notwithstanding the foregoing, the following item(s) are excluded from the purchase: _________________________________________________________________________ Seller has agreed to sell the Property to Buyer for the sum of One Hundred Twenty Five Thousand and 00/100 Dollars ($125,000.00), which Buyer agrees to pay in the following manner: 1. CASH of 100 percent (100%) of the sale price. The date of closing shall be on or before ___________, 2020, and shall occur at the offices of the City Attorney for City of New Hope: Jensen, Sondrall, Persellin & Woods, P.A., 8525 Edinbrook Crossing, Suite 201, Brooklyn Park, MN 55443. SALE OF BUYER'S PROPERTY CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase Agreement: Sale of Buyer's Property Contingency . (If answer is IS, see attached Addendum.) (If answer is IS NOT, the closing of Buyer's property, if any, may still affect Buyer's ability to obtain financing, if financing is applicable.) This Purchase Agreement IS NOT subject to cancellation of a previously written purchase agreement dated _______________________, 20__. (If answer is IS, said cancellation shall be obtained no later than _____________, 20__. If said cancellation is not obtained by said date, this Purc hase Agreement is canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation.) Buyer has been made aware of the availability of Property inspections. Buyer does not elect to have a Property inspection performed at Buyer's expense. INSPECTION CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase Agreement: Inspection Contingency. (If answer is IS, see attached Addendum.) DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a (check one): Warranty Deed joined in by spouse, if any, conveying marketable title, subject to (a) building and zoning laws, ordinances, and state and federal regulations; (b) restrictions relating to use or improvement of the Property without effective forfeiture provisions; 2 (c) reservation of any mineral rights by the State of Minnesota; (d) utility and drainage easements which do not interfere with existing improvements; (e) rights of tenants as follows (unless specified, not subject to tenancies) _____________; and (f) others (must be specified in writing): ___________________________________________ REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all prior years including all penalties and interest. Buyer shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year 2020. Seller shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year 2020. If the closing date is changed, the real estate taxes paid shall, if prorated, be adjusted to the new closing date. If the Property tax status is a part- or non-homestead classification in the year of closing, Seller SHALL NOT pay the difference between the homestead and non-homestead. Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment of which is not otherwise herein provided. No representations are made concerning the amount of subsequent real estate taxes. DEFERRED TAXES/SPECIAL ASSESSMENTS: SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green Acres) or special assessments, payment of which is required as a result of the closing of this sale. SELLER SHALL PAY ON DATE OF CLOSING all installments of special assessments certified for payment, with the real estate taxes due and payable in the year of closing. SELLER SHALL PAY on date of closing all other special assessments levied as of the date of this Purchase Agreement. SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of the date of this Purchase Agreement for improvements that have been ordered by any assessing authorities. (Seller's provision for payment shall be by payment into escrow of two (2) times the estimated amount of the assessments or less, as required by Buyer's lender.) Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the payment of which is not otherwise herein provided. As of the date of this Purchase Agreement, Seller represents that Seller HAS NOT received a notice regarding any new improvement project from any assessing authorities, the costs of which project may be assessed against the Property. Any such notice received by Seller after the date of this Purchase Agreement and before closing shall be provided to Buyer immediately. If such notice is issued after the date of this Purchase Agreement and on or before the date of closing, then the parties may agree in writing, on or before the date of closing, to pay, provide for the payment of or assume the special assessments. In the absence of such agreement, either party may declare this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. POSSESSION: Seller shall deliver possession of the Property no later than date of closing. Seller agrees to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the Property by possession date. LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access or service to any device or system on or serving the property that is connected or controlled wirelessly, via internet protocol ("IP") to a rou ter or gateway or directly to the cloud no later than delivery of posse ssion as specified in this Purchase Agreement. PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer, electricity and natural gas shall be prorated between the parties as of date of closing. Buyer shall pay Seller for remaining gallons of fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by Seller. TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this Purchase Agreement: 3 a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by Midland Title (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Seller 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 rem ove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued 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. Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay all costs and fees necessary to convey marketable title including obtaining and recording all required documents, subject to the following: In the event Seller has not provided marketable title by the date of closing, Seller shall have an additional 30 days to make title marketable, or in the alternative, Buyer may waive title defects by written notice to Seller. In addition to the 30-day extension, Buyer and Seller may, by mutual agreement, further extend the closing date. Lacking such extension, either party may declare this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. SUBDIVISION OF LAND, BOUNDARIES, AND ACCESS: If this sale constitutes or requires a subdivision of land owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental approvals. Seller warrants that the legal description of the real property to be conveyed has been or shall be approved for recording as of the date of closing. Seller warrants that the buildings are or shall be constructed entirely within the boundary lines of the Property. S eller warrants that there is a right of access to the Property from a public right-of-way. MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure on, or improvement to, the Property. NOTICES: Seller warrants that Seller has not received any notice from any governmental authority as to condemnation proceedings, or violation of any law, ordinance or regulation. If the Property is subject to restrictive covenants, Seller warrants that Seller has not received any notice from any person or authority as to a breach of the covenants. Any such notices received by Seller shall be provided to Buyer immediately. DIMENSIONS: Buyer acknowledges any dimensions, square footage or acreage of land or improvements provided by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify the accuracy of informati on to Buyer's satisfaction, if material, at Buyer's sole cost and expense. ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any surveys or inspections agreed to herein. 4 RISK OF LOSS: If there is any loss or dam age to the Property between the date hereof and the date of closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on Seller. If the Property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. TIME OF ESSENCE: Time is of the essence in this Purchase Agreement. CALCULATION OF DAYS: Any calculation of days begins on the first day (calendar or Business Days as specified) following the occurrence of the event specified and includes subsequent days (calendar or Business Days as specified) ending at 11:59 P.M. on the last day. BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays or state or federal holidays unless stated elsewhere by the parties in writing. DEFAULT: If Buyer defaults in any of the agreements herein, Seller may cancel this Purchase Agreement, and Buyer and Seller shall affirm the same by a written cancellation agreement. If Buyer defaults in any of the agreements hereunder, Seller may terminate this Purchase Agreement under the provisions of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer or Seller defaults in any of the agreements hereunder or there exists an unfulfilled condition after the date specified for fulfillment, either party may cancel this Purchase Agreement under MN Statute 559.217, Subd. 3. Whenever it is provided herein that this Purchase Agreement is canceled, said language shall be deemed a provision authorizing a Declaratory Canc ellation under MN Statute 559.217, Subd. 4. If this Purchase Agreement is not canceled or terminated as provided hereunder, Buyer or Seller may seek actual damages for breach of this Purchase Agreement or specific performance of this Purchase Agreement; a nd, as to specific performance, such action must be commenced within six (6) months after such right of action arises. BUYER HAS RECEIVED A DISCLOSURE STATEMENT SELLER'S PROPERTY. DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property or Disclosure Statement: Seller's Disclosure Alternatives for description of disclosure responsibilities and limitations, if any. BUYER HAS RECEIVED THE INSPECTION REPORTS, IF REQUIRED BY MUNICIPALITY. BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OF THE PROPERTY AND ITS CONTENTS. SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED TO: CITY SEWER-YES / CITY WATER-YES SUBSURFACE SEWAGE TREATMENT SYSTEM SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure. Statement: Subsurface Sewage Treatment System.) PRIVATE WELL SELLER DOES NOT KNOW OF A WELL ON OR SERVING THE PROPERTY. (If answer is DOES and well is located on the Property, see Disclosure Statement: Well.) THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer is IS, see attached Addendum.) 5 IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM. NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory offender registry and persons registered with the predatory offender registry under MN Statute 243.166 may be obtained by contacting the local law enforcement offices in the comm unity where the Property is located or the Minnesota Department of Corrections at (651) 361-7200, or from the Department of Corrections web site at www.corr.state.mn.us. HOME PROTECTION/WARRANTY PLAN: Buyer and Seller are advised to investigate the various home protection/ warranty plans available for purchase. Different home protection/warranty plans have different coverage options, exclusions, limitations and service fees. Most plans exclude pre-existing conditions. (Check one.) A Home Protection/Warranty Plan will be obtained by BUYER SELLER and paid for by BUYER SELLER to be issued by _____________________________________ at a cost not to exceed $________. No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement. However, Buyer may elect to purchase a Home Protection/Warranty Plan. NOTICE is Seller’s Agent Buyer’s Agent Dual Agent Facilitator (Licensee) (Real Estate Company Name) is Seller’s Agent Buyer’s Agent Dual Agent Facilitator (Licensee) (Real Estate Company Name) THIS NOTICE DOES NOT SATISFY MINNESOTA STATUTORY AGENCY DISCLOSURE REQUIREMENTS. DUAL AGENCY REPRESENTATION Dual Agency representation DOES NOT apply in this transaction. Broker represents both the Seller(s) and the Buyer(s) of the Property involved in this transaction, which creates a dual agency. This means that Broker and its salespersons owe fiduciary duties to both Seller(s) and Buyer(s). B ecause the parties may have conflicting interests, Broker and its salespersons are prohibited from advocating exclusively for either party. Broker cannot act as a dual agent in this transaction without the consent of both Seller(s) and Buyer(s). Seller(s) and Buyer(s) acknowledge that (1) confidential information communicated to Broker which regards price, terms, or motivation to buy or sell will remain confidential unless Seller(s) or Buyer(s) instructs Broker in writing to disclose this information. Oth er information will be shared; (2) Broker and its salespersons will not represent the interest of either party to the detriment of the other; and (3) within the limits of dual agency, Broker and its salespersons will work diligently to facilitate the mechanics of the sale. With the knowledge and understanding of the explanation above, Seller(s) and Buyer(s) authorize and instruct Broker and its salesperson to act as dual agents in this transaction. Seller Buyer Seller Buyer Date Date 6 CLOSING COSTS: Buyer or Seller may be required to pay certain closing costs, which may effectively increase the cash outlay at closing or reduce the proceeds from the sale. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section 1445 of the Internal Revenue Code. Seller shall represent and warrant, under the penalties of perjury, whether Sel ler is a "foreign person" (as the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to this issue shall survive the closing and delivery of the deed. Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their respective federal taxpayer identification numbers or Social Security numbers. Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax advice regarding FIRPTA compliance, as the respective licensee's representing o r assisting either party will be unable to assure either party whether the transaction is exempt from FIRPTA withholding requirements. ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties shall constitute the entire agreement between Buyer and Seller. Any other written or oral communication between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed to be United States currency for purposes of this Purchase Agreement. ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document related to this transaction constitute valid, binding signatures. FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties and a copy must be delivered. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract for deed. OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on the following: (1) Review and approval of the terms of the Purchase Agreement by the Economic Development Authority in and for the City of New Hope to the terms of the Purchase Agreement If the above contingenc y is not met, Buyer may declare this Purchase Agreement canceled by written notice to Seller, or licensee representing or assisting Seller, in which case this Purchase Agreement is canceled. If Buyer declares this Purchase Agreement canceled due to the failure of one of the above contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation . Seller will not be required to complete the City of New Hope Point of Sale inspection. ADDENDA AND PAGE NUMBERING: Attached addenda are a part of this Purchase Agreement. Enter total number of pages of this Purchase Agreement, including addenda : __ pages. 7 NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement and should not be part of the page numbering. I, the owner of the Property, accept this Purchase Agreement and authorize the listing broker to withdraw said Property from the market, unless instructed otherwise in writing. I have reviewed all pages of this Purchase Agreement. If checked, this Agreement is subject to attached Addendum to Purchase Agreement: Counteroffer. FIRPTA: Seller represents and warrants, under penalty of perjury, that Seller IS NOT a foreign person (i.e., a non-resident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate for purposes of income taxation. This representation and warranty shall survive the closing of the transaction and the delivery of the deed. I agree to purchase the Property for the price and on the terms and conditions set forth above. I have reviewed all pages of this Purchase Agreement Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ______________________________________ Gerald E. Anderson (Seller’s Signature) (Date) By: ______________ Delores L. Anderson (Seller’s Signature) (Date) (Buyer’s Signature) (Date) EDA in and for the City of New Hope (Buyer’s Printed Name) (Marital Status) Kirk McDonald Its: Executive Director THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11438 Purchase of 4215 Louisiana Ave N\Purchase Agreement.docx 8 Exhibit A Legal Description The North 80 feet of that part of the East 163 feet of Lot 34 lying South of a line drawn parallel to and 280 feet North of the South line of the Northeast Quarter of the Northwest Quarter of Section 17, Township 118, Range 21, “Auditor’s Subdivision Number 324, Hennepin County, Minnesota” according to the recorded plat thereof 4215 Louisiana Ave N R-1, Single-family residential 80 ’ Potential Home 133’ Budget for 4215 Louisiana Avenue North EXPENSES AMOUNT Acquisition (125,000.00)$ Closing costs for purchase (estimated)(1,500.00)$ Legal costs for purchase (estimated)(1,500.00)$ Demolition survey (650.00)$ Demolition and site prep (estimated)(37,000.00)$ Real estate taxes (estimated)(8,000.00)$ Lawn services (estimated)(1,000.00)$ Utility billing (estimated)(1,500.00)$ Public hearing notice (estimated)(150.00)$ Rezoning (estimated)(2,500.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(1,000.00)$ TOTAL (181,300.00)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)62,000.00$ TOTAL 62,000.00$ TOTAL COST/REVENUE (119,300.00)$ Estimated Market Value 2019, Payable 2020 Projected Estimated Market Value 2020, Payable 2021 Change Percent Change $249,000 $350,000 $101,000 40.56% Taxable Market Value 2019, Payable 2020 Projected Taxable Value 2020, Payable 2021 Change Percent Change $249,000 $344,260 $95,260 38.26% Net Taxes 2019, Payable 2020 Projected Net Taxes 2020, Payable 2021 Change Percent Change $8,039.70 $6,070.22 ($1,969.48)-24.50% Taxes Allocated to City 2019, Payable 2020 Projected Taxes Allocated to City 2020, Payable 2021 Change Percent Change $1,810.79 $2,292.96 $482.17 26.63% Project Expenses ($181,300.00) Lot Sale Revenue $62,000.00 Total Cost/Revenue ($119,300.00) # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)$0 ($119,300.00)-65.80% 1 (2021)$482.17 ($118,817.83)-65.54% 2 (2022)$964.34 ($118,335.66)-65.27% 3 (2023)$1,446.51 ($117,853.49)-65.00% 4 (2024)$1,928.68 ($117,371.32)-64.74% 5 (2025)$2,410.85 ($116,889.15)-64.47% 10 (2030)$4,821.70 ($114,478.30)-63.14% 15 (2035)$7,232.55 ($112,067.45)-61.81% 20 (2040)$9,643.40 ($109,656.60)-60.48% 25 (2045)$12,054.25 ($107,245.75)-59.15% 30 (2050)$14,465.10 ($104,834.90)-57.82% *Based on new home valued at $350,000 (2019 payable formula) Estimated Tax Impact of Improvements at 4215 Louisiana Avenue Estimated Return on Investment for 4215 Louisiana Avenue North Description Amount Investment (181,300.00)$ Return, Year 1 482.17$ Return, Year 2 482.17$ Return, Year 3 482.17$ Return, Year 4 482.17$ Return, Year 5 482.17$ Return, Year 6 482.17$ Return, Year 7 482.17$ Return, Year 8 482.17$ Return, Year 9 482.17$ Return, Year 10 482.17$ Return, Year 11 482.17$ Return, Year 12 482.17$ Return, Year 13 482.17$ Return, Year 14 482.17$ Return, Year 15 482.17$ Return, Year 16 482.17$ Return, Year 17 482.17$ Return, Year 18 482.17$ Return, Year 19 482.17$ Return, Year 20 482.17$ Return, Year 21 482.17$ Return, Year 22 482.17$ Return, Year 23 482.17$ Return, Year 24 482.17$ Return, Year 25 482.17$ Return, Year 26 482.17$ Return, Year 27 482.17$ Return, Year 28 482.17$ Return, Year 29 482.17$ Return, Year 30 482.17$ Total Returns 14,465.10$ Investment Cost 181,300.00$ Selling Price 62,000.00$ Return on Investment -57.82% Estimated Internal Rate of Return for 4215 Louisiana Avenue North Description Amount Investment (119,300.00)$ Return, Year 1 482.17$ Return, Year 2 482.17$ Return, Year 3 482.17$ Return, Year 4 482.17$ Return, Year 5 482.17$ Return, Year 6 482.17$ Return, Year 7 482.17$ Return, Year 8 482.17$ Return, Year 9 482.17$ Return, Year 10 482.17$ Return, Year 11 482.17$ Return, Year 12 482.17$ Return, Year 13 482.17$ Return, Year 14 482.17$ Return, Year 15 482.17$ Return, Year 16 482.17$ Return, Year 17 482.17$ Return, Year 18 482.17$ Return, Year 19 482.17$ Return, Year 20 482.17$ Return, Year 21 482.17$ Return, Year 22 482.17$ Return, Year 23 482.17$ Return, Year 24 482.17$ Return, Year 25 482.17$ Return, Year 26 482.17$ Return, Year 27 482.17$ Return, Year 28 482.17$ Return, Year 29 482.17$ Return, Year 30 482.17$ Total Returns 14,465.10$ Internal Rate of Return -10.36%