060820 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, June 8, 2020
President Kathi Hemken
Commissioner John Elder
Commissioner Cedrick Frazier
Commissioner Andy Hoffe
Commissioner Jonathan London
1. Call to order – EDA Meeting of June 8, 2020
2. Roll call
3. Approval of Minutes:
April 27, 2020
4. Resolution approving contract with JACON LLC for hazardous material abatement,
tree removal, demolition of site improvements, site grading, sewer lining, and water
service valve replacement at 4215 Louisiana Avenue North (Improvement Project
No. 1047)
5. Resolution approving sale of 3924 Utah Avenue North (Improvement Project No.
1020)
6. Adjournment
EDA Meeting
Page 1 April 27, 2020
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes April 27, 2020
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 7:50 p.m.
ROLL CALL Present:
Kathi Hemken, President
John Elder, Commissioner
Cedrick Frazier, Commissioner
Andy Hoffe, Commissioner
Jonathan London, Commissioner
Staff Present:
Kirk McDonald, City Manager
Jeff Alger, Community Development Specialist
Dan Boyum, City Engineer
Rich Johnson, Director of HR/Admin. Services
Beth Kramer, Communications Coordinator
Valerie Leone, City Clerk
Susan Rader, Director of Parks & Recreation
Jeff Sargent, Director of Community Development
Bernie Weber, Director of Public Works
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Elder, seconded by Commissioner Hoffe, to
approve the minutes of February 24, 2020. All present voted in favor. Motion
carried.
6027 WEST
BROADWAY
(IMPROVEMENT
PROJECT NO. 1038)
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution approving
purchase and redevelopment agreement with Novak-Fleck Incorporated for the
sale of 6027 West Broadway (Improvement Project No. 1038).
Mr. Jeff Alger, community development specialist, explained 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 a total of four proposals (one design from
Great Buy Homes and three designs from Novak-Fleck, Inc.).
EDA Meeting
Page 2 April 27, 2020
Mr. Alger stated 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.
Mr. Alger illustrated the home design proposals. He stated the city has sold six
lots to Novak-Fleck over the past five years. He stated 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. He also reviewed the 30-year return on investment and 30-year internal rate
of return for the project.
Mr. Alger stated Dale Anderson, the realtor for the property, is available for any
questions. The EDA did not have any questions for staff or the realtor.
CLOSE HEARING
Item 4
Motion was made by Council Member Elder, seconded by Council Member Hoffe,
to close the public hearing. All present voted in favor. Motion carried.
RESOLUTION 2020-04
Item 4
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT
AGREEMENT WITH NOVAK-FLECK INCORPORATED FOR THE SALE OF
6027 WEST BROADWAY (IMPROVEMENT PROJECT NO. 1038).” 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 8:01 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q - 4215 Louisiana Ave N Demolition Contract 06-08-20.docx
Request for Action
June 8, 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 JACON LLC for hazardous material abatement, tree removal, demolition
of site improvements, site grading, sewer lining, and water service valve replacement at 4215 Louisiana
Avenue North (Improvement Project No. 1047)
Requested Action
Staff requests approval of a resolution awarding a contract for hazardous material abatement, tree
removal, demolition of building and site improvements, sewer lining, and water service valve
replacement at 4215 Louisiana Avenue North, to the low and responsible bidder, JACON LLC, in the
amount of $32,278.
Policy/Past Practice
It is a past practice of staff to present contracts to the Economic Development Authority for consideration
when public bidding is required for scattered site housing projects.
Background
The Economic Development Authority (EDA) acquired the property located at 4215 Louisiana Avenue North
for $125,000 in February of 2020, as part of the city’s scattered site housing program. The building was
constructed in 1961 as a single-family home and was later converted into office space. It is zoned CB,
Community Business, which currently prevents it from being used for residential purposes. The EDA
directed staff to take the necessary steps in preparing the building 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, sewer lining, and water service valve replacement at the
property. The city forester recommended removing all trees from the site, as they are not considered
preferred or significant. A well sealing contractor was unable to locate a well on the property. If one is located
during the demolition or construction process, it will be sealed. Staff requested quotes from three contractors,
who submitted the following bids:
• JACON LLC $32,278
• Nitti Rolloff Services Inc $50,742
• Leadens Excavating Inc Did not submit
The EDA has worked with the low bidder, JACON LLC, on three previous scattered site housing demolition
projects. The contractor was selected for demolition work at 7215 62nd Avenue North, 7303 62nd Avenue
North, and 5201 Oregon Avenue North. Staff has had a good experience working with the contractor and has
no concerns with awarding them the contract. If demolition work is approved, staff will begin the process of
requesting that the property be rezoned to allow for the construction of a new single-family home.
Funding
Funding is available in the EDA budget for the demolition contract.
Agenda Section EDA
Item Number
4
Request for Action, Page 2
Recommendation
Staff recommends approval of a resolution awarding a contract for hazardous material abatement, tree
removal, demolition of building and site improvements, sewer lining, and water service valve replacement
for the property located at 4215 Louisiana Avenue North, to JACON LLC in the amount of $32,278.
Attachments
• Resolution
• Bids
• Request For Quote/Project Specifications
EDA RESOLUTION NO. 20-___
RESOLUTION APPROVING CONTRACT WITH JACON LLC FOR HAZARDOUS
MATERIAL ABATEMENT, TREE REMOVAL, DEMOLITION OF SITE
IMPROVEMENTS, SITE GRADING, SEWER LINING, AND WATER SERVICE
VALVE REPLACEMENT AT 4215 LOUISIANA AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1047)
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 certa in real property located at 4215 Louisiana Avenue North, 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, site grading, sewer lining, and water service
valve replacement at the Property; and
WHEREAS, JACON LLC submitted a proposal for hazardous material abatement, tree
removal, demolition of site improvements, site grading, 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 JACON
LLC for the purpose of performing the Work; and
WHEREAS, City staff is hereby seeking a pproval from the EDA of the selection of
JACON LLC 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 JACON LLC as the Contractor to perform the hazardous material
abatement, tree removal, demolition of all building and site improvements located
at the Property, site grading, 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 $32,278 to JACON LLC 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 , site grading, sewer lining, and water service valve
replacement at the Property in accordance with the contract to be prepared by the
City Attorney.
Dated the 8th day of June , 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 Demolition contract for
4215 Louisiana Ave N.docx
City of New Hope, Minnesota
Request For Quote/Project Specifications
Date: May 1, 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, sewer lining, and water service valve replacement at 4215 Louisiana
Avenue North.
Overview: The city of New Hope EDA owns the property located at 4215 Louisiana
Avenue North, New Hope, MN 55428 (PID 17-118-21-21-0034). 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 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 south entrance
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 May 20, 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 June 8, 2020, meeting. The work shall be completed in full no later than one month
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: 4215 Louisiana Avenue North, New Hope, MN 55428
Property Identification Number: 17-118-21-21-0034
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,
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 (not including
disturbed area on Cook Automotive’s property).
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 (including concrete parking lot bumpers stops) depicted in the
attached photos.
b. The asphalt driveway on the south side of the property extends across the
neighboring property line (Cook Automotive’s property). The portion of the
driveway that extends onto their property shall be removed. The attached
Right of Entry Agreement depicts the area of the driveway located on Cook
Automotive’s property that should be removed and replaced with hydro-seed
(Exhibit B). All of the asphalt located on the city’s property shall be removed as well,
up to the curb. Selected demolition contractor shall meet with city staff on-site
prior to beginning driveway removal to review scope of work.
c. 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.
City of New Hope, Minnesota
Specifications For Demolition & Related Work (continued)
3. Tree & Vegetation Removal
a. Property lines have been staked out at the site. All trees located within the property
boundaries are to be removed. All stumps shall be pulled from the ground and
hauled away. Stump pits shall be back-filled. A tree inventory completed by the city
forester is attached and depicts larger trees located on the property. Smaller trees,
shrubs, and bushes shall also be removed. Trees outside of the property
boundaries shall not be removed or trimmed. Contractor is to include tree and
stump removal in the demolition bid.
b. All piles of brush, sticks, branches, and yard waste shall be removed from the site.
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, including the area affected on Koch Automotive’s
property.
5. 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.
6. Well Abandonment
a. There is no known well at the property.
City of New Hope, Minnesota
Specifications For Demolition & Related Work (continued)
7. 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 has been turned off at the water meter inside of the house, but not
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. There are many tree roots around where the curb stop box is
located. 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.
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, water, and utility work 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
report 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
Tree inventory
Right of Entry Agreement with Cook Automotive
City of New Hope, Minnesota
City of New Hope, Minnesota
City of New Hope, Minnesota
Asphalt to be removed
(inside dashed area)
All asphalt behind house to be removed (not all visible in previous photo)
City of New Hope, Minnesota
City of New Hope, Minnesota
Property lines marked. All trees,
brush, sticks, branches, yard
waste, and debris within
property lines to be removed.
Stumps to be pulled from the
ground and hauled away. Stump
pits to be back-filled
City of New Hope, Minnesota
City of New Hope, Minnesota
4215 Louisiana Ave N
CB, Community Business
80
’
80
’
42154215
133133’’
1
RIGHT OF ENTRY AGREEMENT
This Right of Entry Agreement ("Right of Entry ”) is entered into effective the ____
day of April, 2020, by and among City of New Hope, a Minnesota municipal corporation
(“City”), 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, and Cook
Automotive Enterprises Inc., a Minnesota corporation ("Cook Automotive"). The City, EDA
and Cook Automotive are sometimes individually referred to as "Party" and collectively as
"Parties."
RECITALS
WHEREAS, the EDA is the fee owner of that parcel of real property located at 4215
Louisiana Avenue North, New Hope, Minnesota, PID No. 17-118-21-21-0034 and legally
described on the attached Exhibit A (“EDA Property”);
WHEREAS, Cook Automotive is the fee owner of that parcel of real property located
at 7100 42nd Avenue North, New Hope, Minnesota, PID No. 17-118-21-21-0032 and legally
described on the attached Exhibit A (“Cook Automotive Property”);
WHEREAS, the EDA and City intend to demolish the existing house located on the
EDA Property and redevelop with a new residential house, and reconfigured lot;
WHEREAS, in preparation for the redevelopment of the EDA Property for the limited
purposes described herein (the “Permitted Activity”), the EDA and the City have proposed to
remove the asphalt surface located on the Cook Automotive Property adjacent to the South
property line of the EDA Property and graphically depicted on the attached Exhibit B and plant
grass seed or sod;
WHEREAS, Cook Automotive agrees to the proposed removal of asphalt as depicted
on Exhibit B and planting with grass seed or sod following the construction of the new house
on the EDA Property, and will permit the City to enter the Cook Automotive Property for the
Permitted Activity subject to the terms of this Right of Entry.
NOW, THEREFORE, the Parties do hereby agree as follows:
AGREEMENT
1. Right of Entry. In consideration of One Dollar ($1.00) and other good valuable
consideration, Cook Automotive hereby grants to the City and its agents, employees, and
contractors the temporary right to enter onto the Cook Automotive Property for the
purpose of removing the asphalt and later replacing it with grass seed or sod following
the construction of the new house on the EDA Property (“Permitted Activity”), and for
no other purpose.
2. Costs. The EDA will be solely responsible for the costs of removing the asphalt and
planting of grass seed or sod on the portion of the Cook Automotive Property graphically
depicted on Exhibit B. Cook Automotive will be solely responsible for the costs of
maintenance of the grass after it is planted and established.
2
3. Term. This Right of Entry shall terminate on December 31, 2021.
4. Indemnification . Except as provided below, the City hereby agrees to indemnify,
defend, and hold harmless Cook Automotive and its respective officers, employees,
trustees, members, managers, agents and representatives (the "Indemnitees") from all
actions, claims, obligations, liabilities, damages to property, injuries o r death to
persons and attorneys' fees and costs ("Claims"), to the extent such Claim or Claims
arise from or are caused by the entry onto the Cook Automotive Property or activities
of the City or its agents or employees on the Cook Automotive Property pursuant to
this Right of Entry. The foregoing indemnity and hold harmless obligation shall not
apply (i) to the extent a Claim or Claims arise from the negligence or willful
misconduct of Cook Automotive or its officers, employees, members, or agents; (ii) to
any defects in the Cook Automotive Property discovered by the City or its agents,
employees, or contractors during their work on the Cook Automotive Property; or (iii)
the existence of any hazardous substances which are discovered (but not deposited or
exacerbated) on or under the Cook Automotive Property by the City or its agents,
employees, or contractors.
5. Liens. The City and its agents shall not permit any mechanic’s liens to stand against
the Cook Automotive Property as the result of the entry and/or activities conducted
pursuant to this Right of Entry.
6. Insurance. Prior to initially entering upon the Cook Automotive Property, and
continuing thereafter, during any periods of entry upon the Cook Automotive
Property by the City or any of its contractors , agents or employees ("City’s
Consultants") pursuant to this Right of Entry, the City and City’s Consultants shall,
maintain: (i) workers' compensation insurance at statutory limits for all persons
employed in carrying out the Permitted Activities and (ii) commercial general
liability insurance covering the entry and activities of the City and City’s
Consultants upon the Cook Automotive Property .
7. Compliance with Laws . The City and its consultants shall, in all activities undertaken
pursuant to this Right of Entry, comply and cause its contractors, agents and
employees to comply with all federal, state and local laws, statutes, orders,
ordinances, rules, regulations, plans, policies and decrees.
8. Restoration of the Property. Upon the termination of this Right of Entry, the City shall,
if required by Cook Automotive, at its own cost and expense, restore any portion of the
Cook Automotive Property that was disturbed by the entry to a condition as close as
possible to the same condition in which it was prior to the City’s entry, with the exception
of the asphalt that was removed and replaced with grass seed or sod.
9. No Conveyance. Nothing in this Right of Entry shall be deemed to constitute a gift,
grant or conveyance of any interest in the Cook Automotive Property and is intended to
benefit only the City for for the limited time, and limited purpose stated herein.
3
10. No Interest In Cook Automotive Property Created. The City acknowledges that they do
not have, and shall not claim at any time, any interest or estate of any kind or extent
whatsoever in the Cook Automotive Property by virtue of this Right of Entry.
11. Counterparts. This Right of Entry may be executed in any number of counterparts, each
of which when executed shall be deemed an original but all of which together shall
constitute one and the same instrument. E-mail (PDF format) signatures shall be deemed
and treated as originals.
12. Entire Agreement. This Right of Entry contains the entire agreement of the Parties with
respect to the subject matter hereof, and supersedes all prior negotiations, understandings
or agreements. This Right of Entry may only be modified by a writing signed by both
Parties.
IN WITNESS WHEREOF, the Parties hereto have executed this Right of Entry on the date first
above written.
EXECUTION AND NOTARY PAGE FOLLOWS
4
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
By: ______________________________
Kirk McDonald
Its: Executive Director
STATE OF MINNESOTA
COUNTY OF HENNEPIN
}ss.
The foregoing instrument was acknowledged before me this ___ day of April,
2020, by Kirk McDonald , the Executive Director of The Economic Development
Authority in and for the City of New Hope, a public body corporate and politic created
pursuant to the laws of the State of Minnesota on behalf of said authority.
(Notary Public Seal)
______________________________________
Notary Public
City of New Hope, a Minnesota municipal corporation
By: ________________________________
Kirk McDonald
Its: City Manager
STATE OF MINNESOTA
COUNTY OF HENNEPIN
}ss.
The foregoing instrument was acknowledged before me this ___ day of April, 20 20,
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
5
Cook Automotive Enterprises Inc., a Minnesota corporation
By: ________________________________
Gordon Cook
Its: President
STATE OF MINNESOTA
COUNTY OF HENNEPIN
}ss.
The foregoing instrument was acknowledged before me this ___ day of April, 2020,
by Gordon Cook, the President of the Cook Automotive Enterprises Inc., a Minnesota
corporation, on behalf of said corporation.
(Notary Public Seal)
_____________________________________
Notary Public
Drafted By:
JENSEN SONDRALL PERSELLIN & WOODS, P.A.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
(763) 424-8811
6
EXHIBIT A
Legal Description of Property
EDA Property
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
Cook Automotive Property
The East 150 feet of that part of Lot 34 lying South of a line running parallel to and 200 feet North
of the South line of Northeast Quarter of Northwest Quarter of Section 17, Township 118, Range
21, “Auditor’s Subdivision Number 324, Hennepin County, Minnesota.”
7
EXHIBIT B
Graphic Depiction of Portion of Cook Automotive Property
Where Asphalt Will Be Removed
See attached.
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11438 Purchase of 4215 Louisiana Ave N\Right of Entry Agreement.docx
I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q - 3924 Utah Ave N Sale 06-08-20.docx
Request for Action
June 8, 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 sale of 3924 Utah Avenue North (Improvement Project No. 1020)
Requested Action
Staff requests that the Economic Development Authority approve a resolution approving the sale of the
property at 3924 Utah Avenue North to Ethan Lederer at the sale price of $387,000.
Policy/Past Practice
The Economic Development Authority must approve the sale of scattered site housing properties owned by
the city.
Background
In December of 2018, the Economic Development Authority (EDA) purchased the vacant and distressed
property located at 3924 Utah Avenue North for $190,100 as part of the city’s scattered site housing program.
The intent of the purchase was to rehabilitate the home for resale and maximize the value of the finished
product. The house was in disrepair and substantial exterior and interior work was needed in order to make
it habitable and desirable. On August 12, 2019, the EDA approved a $173,671 contract with Day Construction
for rehabilitation of the home. This included an alternate to remodel the two bedrooms on the north side of
the second floor to create a master-suite, including a large bedroom, a bathroom, and a walk-in closet. The
scope of work for the project included improvements to nearly all interior and exterior areas of the house.
During the construction process, it was determined that additional repairs to the home were needed and
change orders were processed for the replacement of the roof ($7,814) and air conditioning unit ($4,250).
Including the change orders, the city has invested $185,735 into making improvements to the property. Before
and after photos from the project are attached.
The goal of the project was to rehabilitate the house and create the highest valued product possible. When the
contract was approved in 2019, staff presented the EDA with a “worst case scenario” and “best case scenario”
relating to costs associated with the project. The “best case scenario” resulted in a loss of approximately
$12,080. The “worst case scenario” resulted in a loss of approximately $64,080. Factors included the state of
the housing market, the final sale price, unexpected costs for other improvements, and whether or not the
buyer and/or city would be paying brokerage fees to real estate agents.
When the rehabilitation contract was approved in 2019, staff committed to attempting to sell the home
without utilizing a real estate agent in order to reduce costs and limit potential losses for the EDA. Once the
house was completed, staff began marketing the property. An appraisal was completed and the list price was
set at $371,900. Professional photos were taken, a virtual 3D tour was produced, and a website was created
for the listing. A for sale sign was placed in the front yard of the property. The project was advertised in city
publications and on websites with real estate listings. Staff emailed the listing to more than 250 real estate
agents in the area as well as members of the city’s Business Networking Group. Staff received a fair amount
Agenda Section
EDA
Item Number
5
Request for Action, Page 2
of interest on the property and two offers were submitted. The offer being recommended for approval by the
EDA sets the purchase price at $387,000 with a 2.5% ($9,675) brokerage fee to the buyer’s real estate agent.
Under these terms, it is estimated that the city would incur a loss of $14,152, slightly more than the “best case
scenario” presented in 2019. The potential buyer has provided the city with a check for $5,000 in earnest
money and is pre-approved for a loan with a sale price up to $387,000. By selling the home without a listing
agent, it is anticipated that the city will save between $10,000 and $12,000 in brokerage fees. The attached
Purchase Agreement has been signed by the prospective buyer and city manager and is contingent upon
approval by the EDA.
Rehabilitation of the home was intended to be a demonstration project for the city. Many other homes in the
neighborhood and surrounding areas were constructed with similar floorplans. The intent was to highlight
improvements and floorplan changes that could be implemented by other property owners with similar
homes. Due to the COVID-19 pandemic, the city elected not to host an open house for neighbors this
summer. Those interested in seeing the inside of the house are able to view a 3D tour and photos at
newhopemn.gov/forsale. Neighbors within 500 feet of the property were mailed a flyer with a link to the
virtual tour.
Cost & Tax Impact of Improvements
It is anticipated that expenses associated with the project will be approximately $391,477.06. Revenue from the
sale of the lot would be $377,325, resulting in an estimated loss of $14,152.06. The proposed improvements
would result in a substantial increase in the taxable value of the property. If the property were to be valued at
$370,000 in 2020, its market value will have increased by $168,000 since it was acquired in 2019. Such a valuation
would result in an estimated increase of $1,065.08, or 87.44%, in taxes payable to the city in 2021, as compared
to taxes payable in 2019.
Before Rehabilitation After Rehabilitation
Estimated Market Value 2018,
Payable 2019
Projected Market Value 2021,
Payable 2022
Change % Change
$202,000 $370,000 $168,000 83.17%
Taxable Market Value 2018,
Payable 2019
Projected Taxable Market
Value 2021, Payable 2022
Change % Change
$182,940 $366,060 $183,120 100.10%
Taxes Payable 2018,
Payable 2019
Projected Taxes Payable
2021, Payable 2022
Change % Change
$3,267.52 $6,124.64 $2,857.12 87.44%
Taxes Allocated to City 2018,
Payable 2019
Taxes Allocated to City 2021,
Payable 2022 (estimated)
Change % Change
$1,218.07 $2,283.15 $1,065.08 87.44%
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:
Request for Action, Page 3
# of Years (Year) Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (payable 2021) $0 ($14,152.06) -3.62%
1 (payable 2022) $1,065.08 ($13,086.98) -3.34%
2 (payable 2023) $2,130.16 ($12,021.90) -3.07%
3 (payable 2024) $3,195.24 ($10,956.82) -2.80%
4 (payable 2025) $4,260.32 ($9,891.74) -2.53%
5 (payable 2026) $5,325.40 ($8,826.66) -2.25%
10 (payable 2031) $10,650.80 ($3,501.26) -0.89%
15 (payable 2036) $15,976.20 $1,824.14 0.47%
20 (payable 2041) $21,301.60 $7,149.54 1.83%
25 (payable 2046) $26,627.00 $12,474.94 3.19%
30 (payable 2051) $31,952.40 $17,800.34 4.55%
*Based on new home valued at $370,000 (2020 payable formula)
The estimated ROI for the project over 30 years is 4.55%. The city’s initial investment of $14,152.06 into the
project would result in additional taxes being allocated to the city from the subject property. Estimated at
$1,065.08 per year, newly collected property taxes would result in a 14-year payback period for the city’s
original investment (assuming other substantial improvements are not made to the property). The estimated
Internal Rate of Return (IROR) for the project over 30 years is 6.33% (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.
Funding
Funding for this project came from the EDA budget. Funds collected from the sale will be reallocated to the
EDA budget and losses incurred on the project will diminish the EDA fund balance.
Recommendation
Staff recommends that the EDA conduct a public hearing and approve a resolution approving the sale of the
property at 3924 Utah Avenue North to Ethan Lederer at the sale price of $387,000. If the sale is approved, the
Purchase Agreement sets July 16, 2020, as the date of closing.
Attachments
Resolution
Purchase Agreement
Before and after photos
Virtual tour flyer
Budget
Estimated Tax Impact of Improvements
Estimated Return on Investment
Estimated Internal Rate of Return
Public Hearing Notice
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 20-___
RESOLUTION APPROVING SALE OF 3924 UTAH AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1020)
BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope
(“EDA”) as follows:
WHEREAS, the EDA purchased the single family home located at 3924 Utah Avenue
North, New Hope, MN, P.I.D. 18-118-21-41-0077, and legally described as Lot 23, Block 6,
Hopewood Hills, Hennepin County, Minnesota (the “Property”) on December 21, 2018 for
$190,100;
WHEREAS, the EDA acquired the Property with the intention of substantially remodeling
and rehabilitating the existing house to bring it into compliance with the City Building Code;
WHEREAS, the Property was in fact substantially remodeled and rehabilitated;
WHEREAS, New Hope City staff received an offer from Ethan Lederer (“Buyer”)
regarding the purchase of the renovated Property;
WHEREAS, the EDA arrived at an agreement with Buyer to sell the Property for the
purchase price of $387,000.00, subject to the review and approval of the EDA with a closing date
of July 16, 2020;
WHEREAS, the EDA has accepted Buyer’s offer and has presented a draft of the Purchase
Agreement to Buyer, for his review, a copy of which is attached hereto as Exhibit A (“Purchase
Agreement”) and incorporated herein by reference;
WHEREAS, it is in the best interest of the EDA to sell the Property to Buyer for the sum
of $387,000.00, in accordance with the City’s scattered site housing program and policy; and
WHEREAS, the City staff is hereby seekin g approval from the EDA of the Purchase
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 Buyer, for the purchase price of
$387,000.00, with other terms and conditions as set forth in the Purchase
Agreement attached hereto as Exhibit A, is approved, it being in the best interest
of the EDA to sell the rehabilitated Property for use as a single-family home in
accordance with the City’s scattered site housing program and policy.
3. The sale of the rehabilitated Property by the EDA will return the Property to the tax
rolls and maximize the tax base 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 Agreement.
Dated the 8th day of June, 2020.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Kirk McDonald, Executive Director
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\Resolution Approving Sale of 3924 Utah Ave N.docx
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
Before & After - 3924 Utah Avenue North
3924 UTAH AVENUE NORTH
CITY OF NEW HOPE DEMONSTRATION PROJECT
Demonstration project for city’s scattered site housing program with improve-
ments to nearly all interior and exterior areas of the house. Open kitchen and
dining room floor plan with new 5’ center island. New quartz countertops,
cabinets, and appliances. New/refinished wood flooring throughout main
level and new carpeting upstairs and downstairs. Master suite with walk-in
closet and master bath. Updated bathrooms with new vanities, fixtures, and
tile. Half of basement finished. Great curb appeal with all new windows, sid-
ing, roof, gutters, garage door, entry doors, driveway, and landscaping.
VIRTUAL TOUR & PHOTOS | NEWHOPEMN.GOV/FORSALE
Due to the COVID-19 pandemic, the city of New Hope is unable to host an
open house for the public this summer. Those who are interested in viewing
the interior of the home are encouraged to tour the property virtually (3D)
and view photos at newhopemn.gov/forsale. Potential buyers or realtors
interested in touring or the home in person should contact Jeff Alger,
Community Development Specialist, for more information.
3 BEDROOMS
3 BATHROOMS
1,973 SQ FEET
0.24 ACRES
CONTACT
Jeff Alger, CD Specialist
763.531.5119
jalger@newhopemn.gov
PRICE: $371,900
Budget for 3924 Utah Avenue North
EXPENSES AMOUNT
Acquisition (including closing costs)(191,968.70)$
Legal (purchase, contract extension)(2,736.00)$
1st half real estate taxes (3,267.52)$
Lawn services (945.00)$
Utility billing (511.24)$
CenterPoint - gas (1,849.02)$
Xcel Energy - electric (estimated)(545.58)$
Base improvements (158,794.00)$
Alternate #1 (14,877.00)$
Change order #1 - Roof (7,814.00)$
Change order #2 - A/C (4,250.00)$
Appraisal (375.00)$
Photos and 3D tour (265.00)$
Tree branch removal (575.00)$
Closing costs for sale (estimated)(1,500.00)$
Legal costs for sale (estimated)(1,000.00)$
Future utility billing (estimated)(64.00)$
Future CenterPoint - gas (estimated)(40.00)$
Future Xcel Energy - electric (estimated)(100.00)$
TOTAL (391,477.06)$
REVENUE AMOUNT
EDA (home sale proceeds) 387,000.00$
Buyer's realtor fees (2.5%)(9,675.00)$
TOTAL 377,325.00$
TOTAL COST/REVENUE (14,152.06)$
Estimated Market Value 2018,
Payable 2019
Projected Estimated Market
Value 2020, Payable 2021
Change Percent Change
$202,000 $370,000 $168,000 83.17%
Taxable Market Value 2018,
Payable 2019
Projected Taxable Market Value
2020, Payable 2021
Change Percent Change
$182,940 $366,060 $183,120 100.10%
Net Taxes 2018,
Payable 2019
Projected Net Taxes 2020,
Payable 2021
Change Percent Change
$3,267.52 $6,124.64 $2,857.12 87.44%
Taxes Allocated to City 2018,
Payable 2019
Projected Taxes Allocated to
City 2020, Payable 2021
Change Percent Change
$1,218.07 $2,283.15 $1,065.08 87.44%
Project Expenses ($391,477.06)
Lot Sale Revenue $377,325.00
Total Cost/Revenue ($14,152.06)
# of Years
(Year)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (payable 2021)$0 ($14,152.06)-3.62%
1 (payable 2022)$1,065.08 ($13,086.98)-3.34%
2 (payable 2023)$2,130.16 ($12,021.90)-3.07%
3 (payable 2024)$3,195.24 ($10,956.82)-2.80%
4 (payable 2025)$4,260.32 ($9,891.74)-2.53%
5 (payable 2026)$5,325.40 ($8,826.66)-2.25%
10 (payable 2031)$10,650.80 ($3,501.26)-0.89%
15 (payable 2036)$15,976.20 $1,824.14 0.47%
20 (payable 2041)$21,301.60 $7,149.54 1.83%
25 (payable 2046)$26,627.00 $12,474.94 3.19%
30 (payable 2051)$31,952.40 $17,800.34 4.55%
*Based on new home valued at $370,000 (2020 payable formula)
Estimated Tax Impact of Improvements at 3924 Utah Avenue North
Estimated Return on Investment for 3924 Utah Avenue North
Description Amount
Investment (391,477.06)$
Return, Year 1 1,065.08$
Return, Year 2 1,065.08$
Return, Year 3 1,065.08$
Return, Year 4 1,065.08$
Return, Year 5 1,065.08$
Return, Year 6 1,065.08$
Return, Year 7 1,065.08$
Return, Year 8 1,065.08$
Return, Year 9 1,065.08$
Return, Year 10 1,065.08$
Return, Year 11 1,065.08$
Return, Year 12 1,065.08$
Return, Year 13 1,065.08$
Return, Year 14 1,065.08$
Return, Year 15 1,065.08$
Return, Year 16 1,065.08$
Return, Year 17 1,065.08$
Return, Year 18 1,065.08$
Return, Year 19 1,065.08$
Return, Year 20 1,065.08$
Return, Year 21 1,065.08$
Return, Year 22 1,065.08$
Return, Year 23 1,065.08$
Return, Year 24 1,065.08$
Return, Year 25 1,065.08$
Return, Year 26 1,065.08$
Return, Year 27 1,065.08$
Return, Year 28 1,065.08$
Return, Year 29 1,065.08$
Return, Year 30 1,065.08$
Total Returns 31,952.40$
Investment Cost 391,477.06$
Selling Price 377,325.00$
Return on Investment 4.55%
Estimated Internal Rate of Return for 3924 Utah Avenue North
Description Amount
Investment (14,152.06)$
Return, Year 1 1,065.08$
Return, Year 2 1,065.08$
Return, Year 3 1,065.08$
Return, Year 4 1,065.08$
Return, Year 5 1,065.08$
Return, Year 6 1,065.08$
Return, Year 7 1,065.08$
Return, Year 8 1,065.08$
Return, Year 9 1,065.08$
Return, Year 10 1,065.08$
Return, Year 11 1,065.08$
Return, Year 12 1,065.08$
Return, Year 13 1,065.08$
Return, Year 14 1,065.08$
Return, Year 15 1,065.08$
Return, Year 16 1,065.08$
Return, Year 17 1,065.08$
Return, Year 18 1,065.08$
Return, Year 19 1,065.08$
Return, Year 20 1,065.08$
Return, Year 21 1,065.08$
Return, Year 22 1,065.08$
Return, Year 23 1,065.08$
Return, Year 24 1,065.08$
Return, Year 25 1,065.08$
Return, Year 26 1,065.08$
Return, Year 27 1,065.08$
Return, Year 28 1,065.08$
Return, Year 29 1,065.08$
Return, Year 30 1,065.08$
Total Returns 31,952.40$
Internal Rate of Return 6.33%
NOTICE OF PUBLIC HEARING
SALE OF EDA OWNED PROPERTY
3924 UTAH AVE NORTH
CITY OF NEW HOPE, MINNESOTA
Notice is hereby given that the Economic Development Authority in and for the City of New Hope will
meet at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota on Monday, June 8, 2020, at 7 p.m.
to hold a public hearing for the sale of EDA owned property located at 3924 Utah Avenue North, legally
described as follows:
Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota
PID # 18-118-21-41-0077
Such persons as desire to be heard with reference to the proposal will be heard at this meeting. Options
for providing feedback are as follows:
1. Submit written comments prior to the meeting to Valerie Leone, City Clerk, by email
(vleone@newhopemn.gov) or by US mail (4401 Xylon Ave N, New Hope MN, 55428, attention
Valerie Leone).
2. Provide comments during the meeting by telephone (call Valerie Leone, City Clerk, at 763-531-
5117 in advance of the meeting to obtain the call in number and details).
3. Attend the meeting at city hall (social distancing will be in place).
Accommodations such as a sign language interpreter or large printed materials are available upon request
at least five working days in advance. Please contact the city clerk to make arrangements (telephone 763-
531-5117).
Dated: May 21, 2020
Valerie Leone
City Clerk
(Published in the New Hope -Golden Valley Sun-Post on May 28, 2020)