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042720 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, April 27, 2020 President Kathi Hemken Commissioner John Elder Commissioner Cedrick Frazier Commissioner Andy Hoffe Commissioner Jonathan London 1. Call to order – EDA Meeting of April 27, 2020 2. Roll call 3. Approval of Minutes: x February 24, 2020 4. Resolution approving purchase and redevelopment agreement with Novak-Fleck Incorporated for the sale of 6027 West Broadway (improvement project no. 1038) 5. Adjournment EDA Meeting Page 1 February 24, 2020 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes February 24, 2020 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:30 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Staff Present: Tim Fournier, Police Chief Valerie Leone, City Clerk Jeff Sargent, Director of Community Development Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Elder, seconded by Commissioner Hoffe, to approve the minutes of February 10, 2020. Voting in favor: Hemken, Elder, Frazier, Hoffe; Abstained: London. Motion carried. 3924 UTAH AVE N (IMPROVEMENT PROJECT NO. 1020) Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving extension of completion date for remodeling contract with Day Construction, LLC for 3924 Utah Avenue North (Improvement Project No. 1020). Mr. Jeff Sargent, director of community development, explained the contractor’s request for the one-month extension of the completion date. Staff recommends approval of extending the deadline for the interior remodeling to March 20, 2020, and an extension of the exterior improvements to May 15, 2020. RESOLUTION 2020-03 Item 4 Commissioner Frazier introduced the following resolution and moved its adoption “RESOLUTION APPROVING EXTENSION OF COMPLETION DATE FOR REMODELING CONTRACT WITH DAY CONSTRUCTION, LLC FOR 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020).” 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, 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. 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, EDA Meeting Page 2 February 24, 2020 Valerie Leone, City Clerk I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q - 6027 West Broadway Lot Sale 04-27-20.docx Request for Action April 27, 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 and redevelopment agreement with Novak-Fleck Incorporated for the sale of 6027 West Broadway (improvement project no. 1038) Requested Action Staff requests that the Economic Development Authority conduct a public hearing and approve a resolution approving the sale of the scattered site lot located at 6027 West Broadway to Novak-Fleck Inc. Policy/Past Practice The Economic Development Authority reviews proposals for the redevelopment of scattered site housing properties prior to executing a contract with the preferred buyer/builder. Background The Economic Development Authority (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 was the lowest valued single-family house in the city. The home was demolished in March of 2020 and the lot has been prepared for construction of a new single-family home. A Request for Proposals (RFP) marketing the lot was sent to more than 20 builders on March 4, 2020. The non-negotiable minimum lot sale price was set at $60,000 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 house “must be an owner-occupied, single-family home.” The occupancy requirement applies to the first buyer for period of two years. Proposals were due on March 23, 2020. The EDA received four proposals from the following builders: x Great Buy Homes – 1 design x Novak-Fleck, Inc. (preferred) – 3 designs Staff reviewed the proposals with the city manager and selected the Wood Ridge design submitted by Novak- Fleck Inc. as the “preferred” proposal. The proposal includes the highest lot purchase price ($65,000), the highest projected sale price ($343,298), the most finished square footage (2,275), the most bedrooms (4) and bathrooms (3), and a three-stall garage. The proposed home features a split-level design with a high level of curb appeal, including cultured stone façade, board and batten siding, and front door sidelights. The base characteristics and attributes of each proposal are summarized as follows: Great Buy Homes Novak-Fleck – Ashley Novak-Fleck – Saxton Novak-Fleck – Wood Ridge (Preferred) Lot purchase price $61,000 $65,000 $65,000 $65,000 Projected sale price $315,000 $338,832 $329,242 $343,298 Design Split-level Split-entry (3 levels) Split-level Split-level Finished Space 1,784 SF 1,908 SF 1,886 SF 2,275 SF Bedrooms 4 (2 on upper level; 2 in lower level) 4 (3 on upper level; 1 in basement) 3 (2 on upper level; 1 in lower level) 4 (3 on upper level; 1 in lower level) Agenda Section EDA Item Number 4 Request for Action, Page 2 Great Buy Homes Novak-Fleck – Ashley Novak-Fleck – Saxton Novak-Fleck – Wood Ridge (Preferred) Bathrooms 2 (1 full; 1 ¾) 3 (1 full; 2 ¾) 2 (1 full; 1 ¾) 3 (1 full; 2 ¾) Garage 3-stall on left; door with glass inserts 3-stall center; door with glass inserts 3-stall on left; door with no glass inserts 3-stall center; door with glass inserts Façade x Garage door windows Cultured stone around lower half of garage & front of house x Board/batten siding x Front door with windows x 1 pillar & 1 sidelight x Cultured stone around lower half of garage x Board/batten siding x Front door with windows x 1 pillar with cultured stone x Cultured stone around lower half of garage x Board/batten siding x Front door with windows x 2 pillars with cultured stone x Cultured stone around lower half of garage & front of house x Board/batten siding x 1 pillar with cultured stone & 2 sidelights Other x Granite kitchen countertops x Engineered wood floor in kitchen & dining room x Fireplace with stone x Deck in rear x 2 walk-in closets, upper level x Allowance for wood floors x Laminated countertops x Fireplace with stone x Deck in rear x 2 walk-in closets, upper level x Allowance for wood floors x Laminated countertops x Fireplace with stone x Deck in rear x 1 walk-in closet, upper level x Allowance for wood floors x Laminated countertops Experience with Recommended Builder Novak-Fleck is a moderate-sized home builder based out of Brooklyn Park that has demonstrated a track record of selling homes at or above their anticipated sales price. The city has sold six lots to Novak-Fleck Inc. over the past six years. Addresses for those homes, sale price, and year of sale are as follows: x 5431 Virginia Avenue North: $245,000 (2015) x 6059 West Broadway: $226,150 (2016) x 9115 62nd Avenue North: $296,094 (2016) x 9121 62nd Avenue North: $270,900 (2016) x 4511 Boone Avenue North: $319,500 (2016) x 5201 Oregon Avenue North: $408,320 (2020) Cost & Tax Impact of Improvements It is anticipated that expenses associated with the project will be approximately $171,553.42. Revenue from the sale of the lot will be $65,000, resulting in an estimated loss of $106,553.42. The proposed improvements would result in a substantial increase in the taxable value of the property. If the lot were to be valued at $344,000 in 2021, approximately $229,000 in market value would be added to the property upon completion. Such a valuation would result in an estimated increase of $1,463.58, or 267.57%, in taxes payable to the city in 2022, as compared to taxes payable in 2020. Request for Action, Page 3 Old House New House Estimated Market Value 2019, Payable 2020 Projected Market Value 2021, Payable 2022 Change % Change $115,000 $344,000 $229,000 199.13% Taxable Market Value 2019, Payable 2020 Projected Taxable Market Value 2021, Payable 2022 Change % Change $88,110 $337,720 $249,610 283.29% Taxes Payable 2019, Payable 2020 Projected Taxes Payable 2021, Payable 2022 Change % Change $1,538.84 $5,656.30 $4,117.46 267.57% Taxes Allocated to City 2019, Payable 2020 (estimated) Taxes Allocated to City 2021, Payable 2022 (estimated) Change % Change $546.99 $2,010.57 $1,463.58 267.57% 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 (payable 2021) $0 ($106,553.42) -62.11% 1 (payable 2022) $1,463.58 ($105,089.84) -61.26% 2 (payable 2023) $2,927.16 ($103,626.26) -60.40% 3 (payable 2024) $4,390.74 ($102,162.68) -59.55% 4 (payable 2025) $5,854.32 ($100,699.10) -58.70% 5 (payable 2026) $7,317.90 ($99,235.52) -57.85% 10 (payable 2031) $14,635.80 ($91,917.62) -53.58% 15 (payable 2036) $21,953.70 ($84,599.72) -49.31% 20 (payable 2041) $29,271.60 ($77,281.82) -45.05% 25 (payable 2046) $36,589.50 ($69,963.92) -40.78% 30 (payable 2051) $43,907.40 ($62,646.02) -36.52% The estimated ROI for the project over 30 years is -36.52%. The city’s initial investment of $106,553.42 into the project would result in additional taxes being allocated to the city from the subject property. Estimated at $1,463.58 per year, newly collected property taxes would result in a 73-year payback period for the city’s original investment (assuming other substantial improvements are not made to the property). The Internal Rate of Return (IROR) for the project over 30 years is -4.97% (calculation attached). The city’s financial consultant AEM continues to work on a template that will modify ROI and IRR calculations for such projects to include assumptions. Once completed, staff will utilize the template for future calculations. Request for Action, Page 4 The following table shows the 30 year ROI and IROR for 6027 West Broadway as compared to other recent scattered site demolition and new construction projects at the time of purchase. Recent Projects Address Estimated ROI (30 years) Estimated IROR (30 years) 6027 West Broadway -36.52% -4.97% 5353 & 5355 Oregon Ave N (lot split) -8.39% -1.15% 5201 Oregon Ave N -35.39% -4.57% 4215 Louisiana Ave N -57.82% -10.36% 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 lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the purchase price of the lot at $65,000. 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. The RFP stipulates that closing must occur within 60 days of approval of the sale. The Purchase and Redevelopment Agreement stipulates that the home must 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 lot located at 6027 West Broadway to Novak-Fleck Inc. Attachments x Resolution x Purchase and Redevelopment Agreements with RFP and proposed plans x Other proposals x Budget x Estimated Tax Impact of Improvements x Estimated Return on Investment x Estimated Internal Rate of Return x Copy of staff presentation CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 20-___ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH NOVAK-FLECK INCORPORATED FOR THE SALE OF 6027 WEST BROADWAY (IMPROVEMENT PROJECT NO. 1038) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain real property located at 6027 West Broadway, New Hope, MN, and legally described as “Tract D, Registered Land Survey No. 21, Hennepin County, Minnesota” (the “Property”) as evidenced by the Warranty Deed recorded with the Hennepin County Registrar of Title’s Office on January 6, 2020, as Document No.T05675452; WHEREAS, the EDA purchased the Property with the intention of razing the existing house and all site improvements in preparation for the sale to a builder to construct a new single family home; and WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff to various builders, the EDA received an offer from Novak-Fleck Incorporated, a Minnesota corporation (“Novak-Fleck”) regarding the sale and redevelopment of the Property; and WHEREAS, the EDA arrived at an agreement with Novak-Fleck to sell the Property for the purchase price of $65,000.00 upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted Novak-Fleck’s offer and has presented a draft Purchase and Redevelopment Agreement for the Property to Novak-Fleck for its review, a copy of which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to Novak-Fleck for the sum of $65,000.00, in order for Novak-Fleck to redevelop and build a new single family home 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 Novak-Fleck, for the purchase price of $65,000, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Purchase and Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of a single-family home in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to Novak-Fleck for the construction of a single-family home, 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 27th day of April 2020. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director Exhibit A Purchase and Redevelopment Agreement See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11435 6027 West Broadway\Resolution Approving Sale of 6027 West Broadway.docxx 1 PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between Novak-Fleck Incorporated, 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 April ___, 2020. 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 6027 West Broadway, New Hope, Minnesota 55428, and legally described as “Tract D, Registered Land Survey No. 21, 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, there are no septic systems or wells on the Property. d. Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller’s Closing Documents signed by it. e. Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code. 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 B and C, 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 B. 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 June 30, 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 D and the proposal approved by Seller on April 27, 2020, attached as Exhibit E. 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: Novak-Fleck Incorporated Attn: Richard M. Novak 8857 Zealand Avenue North Brooklyn Park, MN 55445 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: ________________, 2020 By: _______________________________ Kirk McDonald Its: Executive Director Dated: ________________, 2020 BUYER: Novak-Fleck Incorporated By: ________________________________ Richard M. Novak Its: President Dated: _________________, 2020 STATE OF MINNESOTA ) ) s s . COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ___________, 2020, 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 ____________, 2020, by Richard M. Novak, the President of Novak-Fleck Incorporated, a Minnesota corporation, on behalf of said corporation. _______________________________ N o t a r y P u b l i c 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 Restrictive Covenants See attached. 1 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS (“Agreement”) dated effective the ____ day of _______________, 2020, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and Novak-Fleck Incorporated, a Minnesota corporation (“Novak-Fleck”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the City and Novak-Fleck dated effective April ___, 2020 (“Purchase Agreement”), Novak-Fleck purchased the real property located at 6027 West Broadway 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 “Tract D, Registered Land Survey No. 21, Hennepin County, Minnesota” (“Property”) which purchase closed on _____________, 2020; and WHEREAS, Novak-Fleck has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Novak-Fleck have agreed Novak-Fleck 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 Novak-Fleck have agreed the City may levy a $20,000.00 assessment against the Property prior to Novak-Fleck’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 Novak-Fleck. 2 NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Novak-Fleck agrees as follows: AGREEMENT 1. Restrictive Covenants Novak-Fleck 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 Novak-Fleck 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 Novak-Fleck 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 Novak-Fleck 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 ____________, 2021; and/or (b) if Novak-Fleck sells the Property with the completed home to a non-owner-occupant in violation of paragraph 1(a) above. Further, Novak-Fleck 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 Novak-Fleck Novak-Fleck 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 Novak-Fleck 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. Novak-Fleck’s Successors This Agreement shall not be terminated by: a) Voluntary dissolution of Novak-Fleck or any parent, subsidiary or successor of Novak-Fleck; b) Merger whereby Novak-Fleck (or such parent, subsidiary or successor of Novak- Fleck) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Novak-Fleck. 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 Novak-Fleck: Novak-Fleck Incorporated Attn: Richard M. Novak 8857 Zealand Avenue North Brooklyn Park, MN 55445 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 Novak-Fleck 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: _________________, 2020 Novak-Fleck Incorporated By: ________________________________ Richard M. Novak Its: President Dated: ________________, 2020 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of __________, 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 __________, 2020, by Richard M. Novak, the President of Novak-Fleck Incorporated, 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\99-11435 6027 West Broadway\Restrictive Covenant - 6027 West Broadway.docx 14 Exhibit C Assessment Agreement See attached. 1 ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT (“Agreement”) dated effective as of the ___ day of ___________, 2020, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and Novak-Fleck Incorporated, a Minnesota corporation (“Novak-Fleck”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between City and Novak-Fleck dated effective April ___, 2020 (“Purchase Agreement”) Novak-Fleck purchased the real property located at 6027 West Broadway 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 “Tract D, Registered Land Survey No. 21, Hennepin County, Minnesota” (“Property”) which purchase closed on ________________, 2020; and WHEREAS, Novak-Fleck has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Novak-Fleck have agreed Novak-Fleck 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 Novak-Fleck have further agreed the City may levy a $20,000.00 assessment against the Property prior to Novak-Fleck’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 Novak-Fleck hereby covenants and agrees with the City that the new home on the Property shall be fully completed on or before ___________, 2021. Fully completed shall mean the Property shall be improved with a new single-family house. 2 2. Agreement to Assessment Novak-Fleck 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 _____________, 2021; (b) if Novak-Fleck 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, Novak-Fleck 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 Novak-Fleck Novak-Fleck 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. Novak-Fleck’s Successors This Agreement shall not be terminated by: a) The voluntary dissolution of Novak-Fleck or any parent, subsidiary or successor of Novak-Fleck; b) Merger whereby Novak-Fleck (or such parent, subsidiary or successor of Novak- Fleck) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Novak-Fleck. 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 NOVAK-FLECK: Novak-Fleck Incorporated Attn: Richard M. Novak 8857 Zealand Avenue North Brooklyn Park, MN 55445 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 Novak-Fleck 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: _________________, 2020 Novak-Fleck Incorporated By: ________________________________ Richard M. Novak Its: President Dated: _______________, 2020 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of ___________, 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 _____________, 2020, by Richard M. Novak, the President of Novak-Fleck Incorporated, 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\99-11435 6027 West Broadway\Assessment Agreement - 6027 West Broadway.docxx 15 Exhibit D Request for Proposal (“RFP”) Guidelines See attached. City of New Hope, Minnesota Request For Proposals – 6027 West Broadway Date: March , 2020 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for proposals for construction of new single-family home 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 proposals from builders to purchase the vacant lot for the construction of a new single-family home. The lot is being offered as part of the city’s scattered site housing program, which focuses on the removal or rehabilitation of distressed properties. The site previously contained a vacant home that was razed by the EDA in March of 2020. Enclosed, please find the proposal form and specifications for submitting a proposal. Minimum Lot Price: This lot is being offered at a minimum base price of $60,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. 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 March 23, 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 make a selection at the April 13, 2020, meeting. Construction of the new home must be completed in full no later than one year after the closing on the purchase of the lot. City of New Hope, Minnesota Proposal 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 Minimum Lot Price: This lot is being offered at a minimum base price of $60,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to purchase this lot for $____________________ ($60,000 minimum), and build a new single-family house in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, the 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: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Name & Title: ____________________________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota General Notes 1. Only complete proposals will be considered. The city retains absolute discretion in deciding whether or not to accept any particular proposal. 2. State licensed builders who have built at least three (3) houses in Minnesota in the last five (5) years, or have equivalent experience acceptable to the city, are eligible to submit proposals. The home may be speculative or for specific buyers. 3. The city is interested in proposals that will generate the highest valued, owner occupied, single-family home. Owner occupancy restrictions will be documented in the development agreement and secured with a restrictive covenant recorded against the property. The occupancy requirement only applies to the first buyer and lasts for a period of two (2) years. A full legal description relating to this requirement is available upon request. 4. No preferred home style has been identified for this lot; 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. After proposals have been received, city staff will review and recommend a preferred builder/design at the next regularly scheduled EDA meeting. Within one week of approval by the EDA, the selected builder will enter into a purchase and development agreement that will address the sale of the lot and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement, the builder will be required to submit a $2,000 nonrefundable earnest money deposit. Closing on the purchase of the lot must take place within 60 days of final EDA approval. The buyer will be responsible for paying the following costs associated with the purchase: x Preparation and issuance of the title commitment. x 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, if any, utilized to close the transaction contemplated by this agreement (paid at closing). 6. Construction of the new home must be completed within one (1) year of closing on the purchase of the lot. City of New Hope, Minnesota Specifications 1. Utilities 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. West Broadway is a county road. b. The builder shall be responsible for any expenses associated with connecting the house to private utilities. c. Municipal water is available into the lot on the east side of the property and the location of the service will be marked onsite. The EDA will install a new curb stop and box in conjunction with the demolition of the home. d. Municipal sanitary sewer is available into the lot on the east side of the property and the location of the service will be marked onsite. The EDA will line the existing service from the termination point all the way to the main line in conjunction with the demolition of the home. 2. Building Standards and Design Guidelines a. All site improvements shall comply with the New Hope City Code. b. The house shall have at least three (3) finished bedrooms and two (2) finished bathrooms. c. The house shall have an attached garage that will accommodate a minimum of two (2) vehicles. Three (3) stall garages are preferred. d. The design should emphasize the front door as the focal point for the front of the house. A large and usable front porch is desired. Garage door dominance in design should be minimized as much as possible. Front door and garage door designs with windows are preferred. e. The driveway for the new home must be completely new and fully paved from the street to the garage. Curbing is not required on West Broadway. Driveways are not allowed within three (3) feet of any property line abutting another property. The maximum driveway/curb cut width at the property line is 22 feet. A cross-driveway culvert must be installed below the future driveway in accordance with Hennepin County specifications in order to maintain drainage in the ditch line. Builder is responsible for obtaining residential access permit through Hennepin County for new driveway access (contact Mike Olmstead, Permits Office Supervisor, 612-596-0336, michael.olmstead@hennepin.us). City of New Hope, Minnesota Specifications (continued) f. Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permitted. To the extent that southern exposures are present, house designs are expected to enhance wintertime natural light and passive solar heating. g. No equipment such as air-conditioning cooling structures or condensers that generate noise shall not be located within the front yard, side setback, or drainage and utility easement. h. Exterior materials (siding, soffit, doors, and windows) shall be low maintenance. 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 through the use of shakes, fish scales or other styles to break up the pattern. 3. Landscaping a. The lot shall be landscaped to be aesthetically pleasing in all seasons. Land forms and plant materials shall be used to define the site and blend neatly with adjoining property. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements shall be landscaped using ornamental grass, shrubs, trees or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed 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. b. A minimum of two (2) large-species deciduous shade trees shall be planted in the front yard. A minimum of one (1) large-species deciduous shade trees shall be planted in the side or rear yard. Trees should be a minimum of 2” in diameter. A list of prohibited trees is attached. 4. Setbacks Front Yard (east, abutting West Broadway) Rear Yard (west) Interior Side Yard Attached Garage (north or south) Interior Side Yard House (north or south) 30’ 25’ 5’ 10’ City of New Hope, Minnesota Specifications (continued) 5. Builder Selection Criteria a. Builder must licensed as a Residential Building Contractor in Minnesota. b. Builder shall provide the addresses of three houses they have built in Minnesota within the last five (5) years, or evidence of qualification acceptable to the EDA. c. Builder must be capable of completing the house within one (1) year of closing on the purchase of the lot. 6. Required Attachments by Builder x Site plan showing the layout of the home on the lot. Please include dimensions and setbacks. x Floor plans with dimensions. Clearly indicate square footages of each floor. x List overall square footage. x List total finished square feet. x Elevations specifying types of exterior materials (color elevations preferred). x Narrative description of the interior trim package. Include description of flooring. x Estimated sale price of the home. x Pictures of similar homes (if available). Attachments x Location map x Sample lot layout x Prohibited tree list WEST B R O A D W A Y 62 N D A V E N 60 2 7 60 2 7 W e s t B r o a d w a y ZͲ ϭ ͕ ^ ŝ Ŷ Ő ů Ğ Ͳ Ĩ Ă ŵ ŝ ů Ǉ ƌ Ğ Ɛ ŝ Ě Ğ Ŷ Ɵ Ă ů 62 N D A V E N 60 2 7 W e s t B r o a d w a y ZͲ ϭ ͕ ^ ŝ Ŷ Ő ů Ğ Ͳ Ĩ Ă ŵ ŝ ů Ǉ ƌ Ğ Ɛ ŝ Ě Ğ Ŷ Ɵ Ă ů Si d e s e t b a c k = 1 0 ’ / 5 ’ f o r g a r a g e 15 0 ’ WŽ ƚ Ğ Ŷ Ɵ Ă ů Ho m e Rear setb a c k = 2 5 ’ 11 0 . 8 ’ 88.68 106. 8 3 Fron t s e t b a c k = 3 0 ’ Si d e s e t b a c k = 1 0 ’ / 5 ’ f o r g a r a g e Trees provide value from an environmental and property value standpoint. They aid in reducing storm water runoff, soil erosion, and water pollution. Other environmental benefits include the improvement of air quality and conservation of energy. Trees have also been shown to increase property values and can help beautify neighborhoods. Tree Preservation Policy The city of New Hope has a Tree Preservation Policy in place, intended to protect and preserve trees when development takes place. The policy applies to commercial, industrial, multiple family, and institutional land use development projects. The city’s Tree Preservation Policy requires that significant, preferred trees be replaced at 1 inch to 0.5 inch ratio. The ratio refers to the diameter of the tree in inches (rounding up) and the total number of diameter inches required for replacement. A Significant Tree is considered a healthy tree measuring a minimum of six inches in diameter measured five (5) feet above the existing, natural grade surrounding the tree for deciduous trees for deciduous trees, or a minimum of twelve feet in height for coniferous trees. A Preferred Tree is considered any tree that does not appear on the city’s Prohibited Tree list, as shown below. Prohibited Trees The city’s Prohibited Tree list includes the following species: x Amur Maple x Black Locust x Boxelder x Ginko (female only) x Green, White, or Black Ash (fraxinus species) x Mulberry x Non-disease resistant elm species x Nonhybrid cottonwood species x Russian Olive Buckthorn x Siberian or Chinese Elm Boulevard Tree Replacement Policy The city of New Hope has also adopted a policy to help homeowners to replace boulevard trees that have been lost to storms, disease, or other causes. The city has a preferred tree list to address tree selection considerations including hardiness, mature size, salt tolerance, pest and disease resistance, rooting habits, maintenance requirements, and soil compatibility. For more information, call 763-592-6763. City of New Hope Forestry Department 5500 International Pkwy • New Hope MN 55428 • Phone: 763-592-6777 • Fax: 763-592-6776 • ci.new-hope.mn.us Prohibited Tree List G:\CommDev\Informational Forms for CD and Public\Originals\Prohibited Tree List.docx (07-15) 16 Exhibit E Buyer’s Proposed Plans See attached. 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" (5!2, F Budget for 6027 West Broadway EXPENSES AMOUNT Appraisal (350.00)$ Acquisition (including closing costs)(142,312.00)$ Legal costs for purchase (estimated)(1,500.00)$ Demolition survey (650.00)$ Demolition and site prep (22,697.00)$ Well sealing variance (estimated)(275.00)$ Real estate taxes (769.42)$ Lawn services (estimated)(200.00)$ Utility billing (estimated)(150.00)$ Public hearing notice (estimated)(150.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(1,000.00)$ TOTAL (171,553.42)$ REVENUE AMOUNT Lot sale proceeds 65,000.00$ TOTAL 65,000.00$ TOTAL COST/REVENUE (106,553.42)$ Estimated Market Value 2019, Payable 2020 Projected Estimated Market Value 2021, Payable 2022 Change Percent Change $115,000 $344,000 $229,000 199.13% Taxable Market Value 2019, Payable 2020 Projected Taxable Market Value 2021, Payable 2022 Change Percent Change $88,110 $337,720 $249,610 283.29% Net Taxes 2019, Payable 2020 Projected Net Taxes 2021, Payable 2022 Change Percent Change $1,538.84 $5,656.30 $4,117.46 267.57% Taxes Allocated to City 2019, Payable 2020 (estimated) Projected Taxes Allocated to City 2021, Payable 2022 Change Percent Change $546.99 $2,010.57 $1,463.58 267.57% Projected Project Expenses ($171,553.42) Lot Sale Revenue $65,000.00 Total Cost/Revenue ($106,553.42) # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (payable 2021) $0 ($106,553.42)-62.11% 1 (payable 2022) $1,463.58 ($105,089.84)-61.26% 2 (payable 2023) $2,927.16 ($103,626.26)-60.40% 3 (payable 2024) $4,390.74 ($102,162.68)-59.55% 4 (payable 2025) $5,854.32 ($100,699.10)-58.70% 5 (payable 2026) $7,317.90 ($99,235.52)-57.85% 10 (payable 2031) $14,635.80 ($91,917.62)-53.58% 15 (payable 2036) $21,953.70 ($84,599.72)-49.31% 20 (payable 2041) $29,271.60 ($77,281.82)-45.05% 25 (payable 2046) $36,589.50 ($69,963.92)-40.78% 30 (payable 2051) $43,907.40 ($62,646.02)-36.52% *Based on new home valued at $344,000 (2020 payable formula) Estimated Tax Impact of Improvements at 6027 West Broadway Description Amount Investment (171,553.42)$ Return, Year 1 1,463.58$ Return, Year 2 1,463.58$ Return, Year 3 1,463.58$ Return, Year 4 1,463.58$ Return, Year 5 1,463.58$ Return, Year 6 1,463.58$ Return, Year 7 1,463.58$ Return, Year 8 1,463.58$ Return, Year 9 1,463.58$ Return, Year 10 1,463.58$ Return, Year 11 1,463.58$ Return, Year 12 1,463.58$ Return, Year 13 1,463.58$ Return, Year 14 1,463.58$ Return, Year 15 1,463.58$ Return, Year 16 1,463.58$ Return, Year 17 1,463.58$ Return, Year 18 1,463.58$ Return, Year 19 1,463.58$ Return, Year 20 1,463.58$ Return, Year 21 1,463.58$ Return, Year 22 1,463.58$ Return, Year 23 1,463.58$ Return, Year 24 1,463.58$ Return, Year 25 1,463.58$ Return, Year 26 1,463.58$ Return, Year 27 1,463.58$ Return, Year 28 1,463.58$ Return, Year 29 1,463.58$ Return, Year 30 1,463.58$ Total Returns 43,907.40$ Investment Cost 171,553.42$ Selling Price 65,000.00$ Return on Investment -36.52% Estimated Return on Investment for 6027 West Broadway Description Amount Investment (106,553.42)$ Return, Year 1 1,463.58$ Return, Year 2 1,463.58$ Return, Year 3 1,463.58$ Return, Year 4 1,463.58$ Return, Year 5 1,463.58$ Return, Year 6 1,463.58$ Return, Year 7 1,463.58$ Return, Year 8 1,463.58$ Return, Year 9 1,463.58$ Return, Year 10 1,463.58$ Return, Year 11 1,463.58$ Return, Year 12 1,463.58$ Return, Year 13 1,463.58$ Return, Year 14 1,463.58$ Return, Year 15 1,463.58$ Return, Year 16 1,463.58$ Return, Year 17 1,463.58$ Return, Year 18 1,463.58$ Return, Year 19 1,463.58$ Return, Year 20 1,463.58$ Return, Year 21 1,463.58$ Return, Year 22 1,463.58$ Return, Year 23 1,463.58$ Return, Year 24 1,463.58$ Return, Year 25 1,463.58$ Return, Year 26 1,463.58$ Return, Year 27 1,463.58$ Return, Year 28 1,463.58$ Return, Year 29 1,463.58$ Return, Year 30 1,463.58$ Total Returns 43,907.40$ Internal Rate of Return -4.97% Estimated Internal Rate of Return for 6027 West Broadway Ci t y o f N e w H o p e Ec o n o m i c D e v e l o p m e n t A u t h o r i t y M e e t i n g Ap r i l 2 7 , 2 0 2 0 It e m 4 2 Re s o l u t i o n a p p r o v i n g p u r c h a s e a n d r e d e v e l o p m e n t a g r e e m e n t w i t h No v a k - F l e c k I n c o r p o r a t e d f o r t h e s a l e o f 6 0 2 7 W e s t B r o a d w a y (i m p r o v e m e n t p r o j e c t n o . 1 0 3 8 ) Ne w H o p e E D A Ap r i l 2 7 , 2 0 2 0 Ba c k g r o u n d 3 ED A p u r c h a s e d di s t r e s s e d & f u n c t i o n a l l y ob s o l e t e h o m e a t 60 2 7 W e s t B r o a d w a y i n Ja n u a r y 2 0 2 0 Lo w e s t v a l u e d h o u s e i n ci t y Lo c a t e d i n p r i o r i t y re d e v e l o p m e n t ne i g h b o r h o o d 1 Recent projects 1.6059 West Broadway 2.6065 Louisiana Ave 3.6067 Louisiana Ave 4.7303 62nd Ave 5.7311 62nd Ave 6.7215 62nd Ave 23 4 5 6 5 Re q u e s t f o r P r o p o s a l s 6 Se n t t o 2 0 + b u i l d e r s o n M a r c h 4 , 2 0 2 0 No n - n e g o t i a b l e s a l e p r i c e o f $ 6 0 , 0 0 0 w i t h o p t i o n t o s u b m i t hi g h e r o f f e r Mu s t b e o w n e r - o c c u p i e d f o r 2 y e a r s ( a p p l i e s t o f i r s t b u y e r ) Pr o p o s a l s 7 Re c e i v e d 4 p r o p o s a l s fr o m 2 b u i l d e r s : Gr e a t B u y H o m e s No v a k - F l e c k , I n c . As h l e y Sa x t o n Wo o d R i d g e (p r e f e r r e d ) Pr o p o s a l s 8 Re v i e w e d w i t h c i t y m a n a g e r & s e l e c t e d W o o d R i d g e s u b m i t t a l f r o m No v a k - F l e c k I n c . a s “ p r e f e r r e d ” p r o p o s a l Ba s e C h a r a c t e r i s t i c s & A t t r i b u t e s 9 Gr e a t B u y H o m e s No v a k -F l e c k – A s h l e y No v a k -F l e c k – S a x t o n Novak -Fleck – Wood Ridge (Preferred) Lo t p u r c h a s e p r i c e $6 1 , 0 0 0 $6 5 , 0 0 0 $6 5 , 0 0 0 $65,000 Pr o j e c t e d s a l e p r i c e $3 1 5 , 0 0 0 $3 3 8 , 8 3 2 $3 2 9 , 2 4 2 $343,298 De s i g n Sp l i t -l e v e l Sp l i t -e n t r y ( 3 l e v e l s ) Sp l i t -l e v e l Split -level Fi n i s h e d S p a c e 1, 7 8 4 S F 1, 9 0 8 S F 1, 8 8 6 S F 2,275 SF Be d r o o m s 4 (2 o n u p p e r l e v e l ; 2 i n l o w e r l e v e l ) 4 (3 o n u p p e r l e v e l ; 1 i n b a s e m e n t ) 3 (2 o n u p p e r l e v e l ; 1 i n l o w e r l e v e l ) 4 (3 on upper level;1 in lower level) Ba t h r o o m s 2 (1 f u l l ; 1 ¾ ) 3 (1 f u l l ; 2 ¾ ) 2 (1 f u l l ; 1 ¾ ) 3 (1 full; 2 ¾) Ga r a g e 3 -s t a l l on l e f t ; d o o r w i t h g l a s s in s e r t s 3 -s t a l l ce n t e r ; d o o r w i t h gl a s s i n s e r t s 3 -s t a l l on l e f t ; d o o r w i t h n o gl a s s i n s e r t s 3 -stall center; door with glass inserts Fa ç a d e x Ga r a g e d o o r w i n d o w s C u l t u r e d st o n e a r o u n d l o w e r h a l f o f ga r a g e & f r o n t o f h o u s e x Bo a r d / b a t t e n s i d i n g x Fr o n t d o o r w i t h w i n d o w s x 1 p i l l a r & 1 s i d e l i g h t x Cu l t u r e d s t o n e a r o u n d lo w e r h a l f o f g a r a g e x Bo a r d / b a t t e n s i d i n g x Fr o n t d o o r w i t h wi n d o w s x 1 p i l l a r w i t h c u l t u r e d st o n e x Cu l t u r e d s t o n e a r o u n d lo w e r h a l f o f g a r a g e x Bo a r d / b a t t e n s i d i n g x Fr o n t d o o r w i t h wi n d o w s x 2 p i l l a r s w i t h c u l t u r e d st o n e x Cultured stone around lower half of garage & front of house x Board/batten siding x 1 pillar with cultured stone & 2 sidelights 11 Re c o m m e n d e d B u i l d e r 12 Ci t y h a s s o l d 6 l o t s t o N o v a k - F l e c k o v e r t h e p a s t 5 y e a r s Ad d r e s s Sa l e s P r i c e Ye a r 54 3 1 V i r g i n i a A v e N $2 4 5 , 0 0 0 20 1 5 60 5 9 W e s t B r o a d w a y $2 2 6 , 1 5 0 20 1 6 91 1 5 6 2 n d A v e N $2 9 6 , 0 9 4 20 1 6 91 2 1 6 2 n d A v e N $2 7 0 , 9 0 0 20 1 6 45 1 1 B o o n e Av e N (p i c t u r e d ) $3 1 9 , 5 0 0 20 1 6 52 0 1 O r e g o n A v e N $4 0 1 , 6 0 0 20 2 0 Bu d g e t 13 Es t i m a t e d E x p e n s e s $ ( 1 7 1 , 5 5 3 . 4 2 ) Es t i m a t e d R e v e n u e $ 6 5 , 0 0 0 To t a l C o s t $ ( 1 0 6 , 5 5 3 . 4 2 ) 30 - Y e a r R e t u r n O n I n v e s t m e n t : - 3 6 . 5 2 % 30 - Y e a r I n t e r n a l R a t e o f R e t u r n : - 4 . 9 7 % *S e e s t a f f r e p o r t f o r i t e m i z e d e x p e n s e s Fu n d i n g f o r g a p w o u l d c o m e f r o m t h e E D A b u d g e t De v e l o p m e n t A g r e e m e n t & N e x t S t e p s 14 Dr a f t r e s o l u t i o n & P u r c h a s e & R e d e v e l o p m e n t A g r e e m e n t h a v e be e n p r e p a r e d Ag r e e m e n t e n s u r e s p r o v i s i o n s s e t f o r t h i n R F P w i l l b e m e t & s e t s lo t p u r c h a s e p r i c e a t $ 6 5 , 0 0 0 So m e m i n o r r e v i s i o n s m a y b e n e c e s s a r y o n c e f u l l y r e v i e w e d b y bu y e r An y s u b s t a n t i a l c h a n g e s w o u l d b e p r e s e n t e d t o E D A f o r a p p r o v a l If a p p r o v e d , c l o s i n g w o u l d t a k e p l a c e w i t h i n 6 0 - d a y s & h o m e m u s t be c o m p l e t e d w i t h i n 1 - y e a r o f c l o s i n g d a t e Re c o m m e n d a t i o n & Q u e s t i o n s 15 St a f f r e c o m m e n d s t h a t t h e E D A : Co n d u c t a p u b l i c h e a r i n g Ap p r o v e a r e s o l u t i o n a p p r o v i n g t h e s a l e o f t h e s c a t t e r e d s i t e l o t l o c a t e d a t 60 2 7 W e s t B r o a d w a y t o N o v a k - F l e c k , I n c . St a f f & r e a l t o r f o r N o v a k - F l e c k a r e a v a i l a b l e t o a n s w e r a n y q u e s t i o n s