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121420 EDA Meeting Packet    EDA MEETING  City Hall, 4401 Xylon Avenue North  Monday, December 14, 2020        President Kathi Hemken  Commissioner John Elder  Commissioner Cedrick Frazier  Commissioner Andy Hoffe  Commissioner Jonathan London      1. Call to order – EDA Meeting of December 14, 2020    2. Roll call    3. Approval of Minutes:   September 28, 2020    4. Resolution authorizing the final levy of a special benefit levy pursuant to Minnesota  Statutes, Section 469.033, subdivision 6 and approval of a final budget for fiscal year  2021    5. Resolution approving Purchase Agreement for the acquisition of 4637 Aquila Avenue  North (improvement project no. 1052)    6. Adjournment    EDA Meeting   Page 1 September 28, 2020  City of New Hope  4401 Xylon Avenue North  New Hope, Minnesota 55428    EDA Minutes September 28, 2020  Regular Meeting City Hall      CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to  order at 7:53 p.m.    ROLL CALL Present:          Absent:  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  Valerie Leone, City Clerk  Jeff Sargent, Director of Community Development  Bernie Weber, Director of Public Works  Stacy Woods, Assistant City Attorney    APPROVAL OF  MINUTES  Item 3    Motion was made by Commissioner Elder, seconded by Commissioner Frazier, to  approve the minutes of September 14, 2020. All present voted in favor. Motion  carried.    IMPROVEMENT  PROJECT NO. 1047  Item 4  President Hemken introduced for discussion EDA Item 4, Resolution approving  purchase and redevelopment agreement with Great Buy Homes, Inc. for the sale  of 4215 Louisiana Avenue North (improvement project no. 1047).     Mr. Jeff Alger, community development specialist, explained that the EDA  acquired the single‐family home for $125,000 in March of 2020, as part of the city’s  scattered site housing program. He stated the building was constructed in 1961 as  a single‐family home and was later converted into office space. The building was  demolished in July of 2020 and the lot has been prepared for construction of a new  single‐family home. The parcel was rezoned from CB, Community Business to R‐ 1, Single‐family Residential in July and a Request for Proposals (RFP) marketing  the lot was sent to more than 20 builders on July 28, 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. The RFP required the installation of a fence along  the south property line and coniferous trees at the southwest corner of the lot to  help with screening the adjacent commercial properties. Language was included  within the RFP encouraging bidders to provide additional landscaping along the  south property line to aid in screening. It was stated within the RFP that the  EDA Meeting   Page 2 September 28, 2020  evaluation process would involve a review of landscaping plans and submissions  that included such plans would be viewed favorably. The RFP also required that  curbing be restored along Louisiana Avenue North. The EDA received proposals  from Great Buy Homes and Novak‐Fleck, Inc.    Mr. Alger explained that staff reviewed the proposals with the city manager and  selected the submittal from Great Buy Homes as the “preferred” proposal. He  stated the city has sold six lots to Great Buy Homes over the past four years. The  proposal includes the highest lot purchase price ($69,000), the highest projected  sale price ($380,000), the most finished square footage (2,537), the most bedrooms  (5) 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  that incorporates address numbers into the design, board and batten siding, and  front door sidelights. The builder submitted a landscaping plan that shows a wood  fence along the south property line, seven feet tall behind the front‐of‐house and  42 inches tall in front of the house. It includes the three required coniferous trees  at the southwest corner of the lot and the two required deciduous trees within the  front and rear yard. In addition to what was required in the RFP, the landscaping  plan includes four additional coniferous trees along the south property line to aid  the fence in screening the adjacent property.    Mr. Alger reviewed the base characteristics and attributes of each proposal.     He reviewed the budget for the project as well as return on investment and  internal rate of return calculations. He stated funding for this project would come  from the EDA budget. The city has an annual budget of $250,000 for scattered site  projects and has expended approximately $207,304 on projects this year.    Mr. Alger stated staff worked with the assistant city attorney to draft a resolution  and Purchase and Redevelopment Agreement for the sale of the lot. 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.     Mr. Alger recommended the EDA to conduct the public hearing and approve a  resolution approving the sale of the scattered site lot located at 4215 Louisiana  Avenue North to Great Buy Homes. He noted Great Buy Homes intends to begin  construction this fall and complete the project in the spring.    President Hemken opened the floor for comments. There was no one present  desirous of addressing the EDA for the public hearing.    President Hemken pointed out the purpose of the scattered site housing program  is to improve the housing stock and revitalize neighborhoods.    CLOSE HEARING  Item 4  Motion was made by Commissioner Hoffe, seconded by Commissioner Frazier, to  close the public hearing. All present voted in favor. Motion carried.    RESOLUTION 2020‐09  Item 4  Commissioner Elder introduced the following resolution and moved its adoption  “RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT  AGREEMENT WITH GREAT BUY HOMES, INC. FOR THE SALE OF 4215  EDA Meeting   Page 3 September 28, 2020  LOUISIANA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1047).” The  motion for the adoption of the foregoing resolution was seconded by  Commissioner Frazier, and upon vote being taken thereon, the following voted in  favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted  against the same: None; Abstained: None; Absent: None; whereupon the  resolution was declared duly passed and adopted, signed by the president which  was attested to by the executive director.    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 8:05 p.m.    Respectfully submitted,    Valerie Leone, City Clerk    I:\RFA\City Manager\2020\Budget 2021\CM 121420\EDA4 Q ‐ EDA final levy 12.14.20.docx    Request for Action  December 14, 2020    Approved by: Kirk McDonald, City Manager  Originating Department: City Manager  By: Kirk McDonald, City Manager    Agenda Title  Resolution authorizing the final levy of a special benefit levy pursuant to Minnesota Statutes, Section 469.033,  subdivision 6 and approval of a final budget for fiscal year 2021  Requested Action  Staff requests the EDA adopt the attached resolution relating to the EDA levy for 2021.  Background  The resolution supports the $365,000 EDA levy. The EDA must adopt the EDA levy separate from the city’s  base levy. The EDA levy has been increased incrementally since 2013 to fund the scattered site housing  program. The EDA may levy up to .01813 percent of the estimated market value for taxes payable in 2021.  The total estimated market value is estimated by Hennepin County at $2,106,273,300 ($2,106,273,300 x  .01813% = $381,867). A levy increase of $17,000 is recommended for 2021 for a total EDA levy of $365,000.  Attachment   Resolution    Agenda Section EDA Item Number  4  City of New Hope    EDA RESOLUTION 2020 ‐    RESOLUTION AUTHORIZING THE FINAL LEVY OF A SPECIAL BENEFIT LEVY  PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND  APPROVAL OF A FINAL BUDGET FOR FISCAL YEAR 2021    WHEREAS, pursuant to Minnesota Statutes, Section 469.090 to 469.108 (the “EDA Act”), the  City Council of the City of New Hope created the New Hope Economic Development Authority (the  ʺAuthorityʺ); and    WHEREAS, pursuant to the EDA Act, the City Council granted to the Authority all of the  powers and duties of a housing and redevelopment authority under the provisions of the Minnesota  Statutes, sections 469.001 to 469.047 (the ʺHRA Actʺ); and    WHEREAS, Section 469.033, Subdivision 6, of the HRA Act permits the Authority to levy and  collect a special benefit levy of up to .01813 percent of estimated market value in the City upon all  taxable real property within the City; and    WHEREAS, the Authority desires to levy a special benefit levy in the amount of up to  .01813 percent of estimated market value in the City for taxes payable in 2021; and    WHEREAS, pursuant to Minnesota Statutes, Section 275.065, the Authority is required to adopt a  proposed budget and a proposed tax levy and submit the same to the County Auditor by Sept 30; and    WHEREAS, the Authority has before it for its consideration a copy of a proposed budget for its  operations for the fiscal year 2021 and the amount of the proposed levy for collection in 2021 shall be  based on this budget and the long range financial management plan, subject to any adjustments in the  budget as finally approved prior to certification of the final special benefit levy.    NOW THEREFORE, BE IT RESOLVED by the New Hope Economic Development Authority:  1. The proposed budget for the operations of the Authority in fiscal year 2021, as presented for  consideration by the City Council, is hereby in all respects approved, subject to final approval  by the Authority before certification of the tax levy under Minnesota Statutes, Section 275.07.    2. Staff of the Authority are hereby authorized and directed to file the proposed budget with the  City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6.    3. The proposed special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6,  is hereby approved in the amount of $365,000.  The maximum amount that can be levied is an  amount equal to .01813 percent of estimated market value in the City of New Hope.    4. Staff of the Authority are hereby authorized and directed to seek the approval by resolution of the  City Council of the levy of special benefit taxes payable in 2021 and to take such other actions as  are necessary to bring before the Board the final budget and levy to be sent to the county auditor  on or before five working days after December 20, 2020.  Adopted by the New Hope EDA on December 14, 2020.         _________________________________  President  Attest: ________________________________           Executive Director I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\EDA5 Q ‐ 4637 Aquila Ave N Acquisition 12‐14‐20.docx    Request for Action  December 14, 2020    Approved by: Kirk McDonald, City Manager  Originating Department: Community Development  By: Jeff Alger, Community Development Specialist;   Jeff Sargent, Director of Community Development  Agenda Title  Resolution approving Purchase Agreement for the acquisition of 4637 Aquila Avenue North (improvement  project no. 1052)  Requested Action  Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for the  acquisition of 4637 Aquila Avenue North for a purchase price of $73,000 with traditional closing costs to be  paid by each party.  Policy/Past Practice  The Economic Development Authority has acquired vacant and distressed properties in the past as part of the  city’s scattered site housing program. Goals of the scattered site housing program include removing distressed  and/or blighted properties, providing step‐up housing options in the city, improving the city’s overall housing  stock, investing and instilling confidence into neighborhoods, and increasing housing and land values.  Background  The Economic Development Authority (EDA) has directed community development staff to pursue the  acquisition of distressed and functionally obsolete single‐family homes as part of the city’s scattered site  housing program. The property at 4637 Aquila Avenue North was severely damaged in a tragic fire that  occurred in the spring of 2020. According to the building official and deputy fire marshal, the home is beyond  repair and should be demolished. The property presents a health and safety concern due to structural  damage from the fire and it may have an adverse effect on surrounding property values in the future without  the city’s involvement.    Shortly after the fire, family of the previous owners contacted city staff to discuss selling the property to the  EDA. An appraisal of the land was completed in July of 2020 and family agreed to sell the property to the city  for its appraised value, $73,000. The appraisal only considers the value of the land. The estate has been going  through probate and there have been delays with the court system due to the COVID‐19 pandemic. As a  result, the sale cannot take place until later this month. If approved by the EDA, a closing would be  scheduled for January of 2021, pending completion of the probate process.    The property is zoned R‐1, Single‐family Residential and borders ballfields for Cooper High School to the  east. The 0.25‐acre parcel is 82 feet wide and about 133 feet deep. The 2020 assessed value of the property was  $236,000, according to Hennepin County, prior to the fire.    Cost & Tax Impact of Improvements   It is anticipated that expenses associated with the project would be approximately $110,085.69. This is  significantly less than most of the previous demolition and rebuild projects due to the low acquisition price. In  this case, the acquisition price only considers the price of the land, as opposed to previous projects, which  included the value of the structure. Revenue from the sale of the lot is estimated at $67,000, resulting in a net  Agenda Section EDA Item Number  5    Request for Action, Page 2    loss of $43,085.69. The new home would result in an increase in the subject parcel’s taxable value. If the property  were to be valued at $400,000 in 2022, it is estimated that total taxes paid to the city in 2023 would increase by  $984, or 69.49%, as compared to those that will be allocated to the city in 2021.    Estimated Market Value 2020,  Payable 2021  Projected Market Value 2022,  Payable 2023  Change Percent Change  $236,000 $400,000 $164,000 69.49%            Taxes Allocated to City 2020,  Payable 2021  Taxes Allocated to City 2022,  Payable 2023  Change Percent Change  $1,416 $2,400 $984 69.49%    The following table illustrates the Return On Investment (ROI) and tax benefit associated with the estimated  increase in taxable property value over the next several years:    # of Years  (Year)  Additional Taxes   Collected By City  Total Cost/Revenue Return On  Investment  0 (present) $0 $(43,085.69) ‐100.00%  1 (2023) $984.00 $(42,101.69) ‐97.72%  5 (2027) $5,224.19 $(37,861.50) ‐87.87%  10 (2032) $11,280.46 $(31,805.23) ‐73.82%  15 (2037) $18,301.33 $(24,784.36) ‐57.52%  20 (2042) $26,440.45 $(16,645.24) ‐38.63%  25 (2047) $35,875.92 $(7,209.77) ‐16.73%  30 (2052) $46,814.21 $3,728.52  8.65%    The estimated ROI for the project over 30 years is 8.65% and the estimated Internal Rate of Return (IRR) for the  project over 30 years is 0.47% (calculations attached). The calculations utilize an estimated 3% tax value growth  rate, which is applied to both the original taxable market value for the old home and the increased taxable  market value for the new home, both over 30 years. The acquisition price of $73,000 is significantly lower than  what the city has paid on average for single‐family demolition and rebuild projects since 2018 ($138,250 for six  such projects, not including lot split purchases).    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.                Request for Action, Page 3    Funding  Funding for this project would come from the EDA budget. The city has an annual budget of $250,000 for  scattered site housing projects. If this project is approved, the city will have expended approximately $250,390  on scattered site housing projects this year.    Project Estimated Net Cost  6027 West Broadway $105,862.81  4215 Louisiana Ave N $101,441.53  4637 Aquila Ave N $43,085.69  Total $250,390.03     Annual Budget (2020) $250,000.00  Under/Over Budget $(390.03)    Recommendation  Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of  4637 Aquila Avenue North for a purchase price of $73,000 with traditional closing costs to be paid by each  party.  Attachments   Resolution   Purchase Agreement   Sample lot layout   Appraisal   Budget   Estimated Tax Impact of Improvements   Estimated Return on Investment   Estimated Internal Rate of Return   Tax Calculator    CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 20-___ RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 4637 AQUILA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1052) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City Council meeting authorizing City community development staff to actively pursue the acquisition of distressed properties that can be redeveloped as single family residential lots for potential purchase by the EDA, as part of the City’s scattered site housing program; WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to the City and EDA, and the execution of purchase agreements so as to secure purchase rights for distressed real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements; WHEREAS, City staff have identified the opportunity to purchase certain real property located at 4637 Aquila Avenue North, New Hope, MN, 55428, P.I.D. 07-118-21-43-0008, and legally described as “Lot 4, Block 1, Del Heights 2nd Addition, Hennepin County, Minnesota” (the “Property”) from Stephanie Millen Luckett, as Personal Representative for the Estate of Michael Moliter and Peggy Amoroso as Personal Representative for the Estate of Sandra Moliter (jointly, the “Seller”); WHEREAS, the home located on the Property was destroyed by a fire in 2020 and the Property is being sold as if it were a vacant lot; WHEREAS, the fire-damaged home on the Property will need to be demolished; WHEREAS, City staff believes that the best use of the Property is demolition in order to maximize the tax base by making the lot available for the development of a new residential housing unit; WHEREAS, the Property will be acquired with EDA funds; WHEREAS, the EDA has reviewed the proposed acquisition of Property and has determined that it has no effect or relationship with the New Hope Comprehensive Plan; WHEREAS, it is in the best interest of the EDA to purchase the Property from Seller, in order to redevelop the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. It is in the best interest of the EDA to purchase the Property for demolition and redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the purchase of the Property by EDA from Seller, for a sum of $73,000.00, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the purchase of the Property. 4. The proposed acquisition of Property is consistent with the New Hope Comprehensive Plan. 5. The City and EDA shall use due diligence for demolishing the structure located on the Property and conducting any necessary cleanup of the Property to pursue redevelopment and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 6. The President and Executive Director and the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the purchase of the Property in accordance with the Purchase Agreement. Dated the 14th day of December, 2020. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11441 - 4637 Aquila Ave. N\Resolution approving purchase of 4637 Aquila Ave N.docxx Exhibit A Purchase Agreement See attached. 1 PURCHASE AGREEMENT Date: November ____, 2020 BUYER(S): The Economic Development Authority in and for the City of New Hope , a public body corporate and politic created pursuant to the laws of the State of Minnesota SELLERS(S): Stephanie Millen Luckett, as Personal Representative for the Estate of Michael Moliter and Peggy Amoroso as Personal Representative for the Estate of Sandra Moliter Seller agrees to sell and Buyer agrees to purchase the real property located at: Street Address: 4637 Aquila Avenue North City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described as “Lot 4, Block 1, Del Heights 2nd Addition, Hennepin County, Minnesota” PID 07-118-21-43-0008. Said purchase shall include all improvements, fixtures, and appurtenances on the property, if any, including but not limited to, the following (collectively the "Property"): garden bulbs, plants, shrubs, trees, and lawn watering system; shed; storm sash, storm doors, screens and awnings; window shades, blinds; traverse, curtain, and drapery rods, valances, drapes, curtains, window coverings and treatments; towel rods; attached lighting and bulbs; fan fixtures; plumbing fixtures; garbage disposals; water softener; water treatment system; water heating systems, heating systems; air exchange system; radon mitigation system; sump pump; TV antenna/cable TV jacks and wiring/TV wall mounts; wall/ceiling-mounted speakers and mounts; carpeting; mirrors; garage door openers and all controls; smoke detectors; fireplace screens, door and heatilators; BUILT-INS: dishwashers; refrigerators; wine/beverage refrigerators; trash compactors; ovens; cook -top stoves; warming drawers; microwave ovens; hood fans; shelving; work benches; intercoms; speakers; air conditioning equipment; electronic air filter; humidifier/dehumidifier; liquid fuel tanks (and controls); pool/spa equipment; propane tank (and controls); security system equipment; TV satellite dish; AND the following personal property shall be transferred with no additional monetary value, and free and clear of all liens and encumbrances: ______________________________________________ Notwithstanding the foregoing, the following item(s) are excluded from the purchase: _________________________________________________________________________ Seller has agreed to sell the Property to Buyer for the sum of Seventy Three Thousand and 00/100 Dollars ($73,000.00), which Buyer agrees to pay in the following manner: 1. CASH of 100 percent (100%) of the sale price. The date of closing shall be on or before January 15, 2021, and shall occur at the offices of the City Attorney for City of New Hope: Jensen, Sondrall, Persellin & Woods, P.A., 8525 Edinbrook Crossing, Suite 201, Brooklyn Park, MN 55443. SALE OF BUYER'S PROPERTY CONTINGENCY : This Purchase Agreement IS NOT subject to an Addendum to Purchase Agreement: Sale of Buyer's Property Contingency . (If answer is IS, see attached Addendum.) (If answer is IS NOT, the closing of Buyer's property, if any, may still affect Buyer's ability to obtain financing, if financing is applicable.) This Purchase Agreement IS NOT subject to cancellation of a previously written purchase agreement dated _______________________, 20__. (If answer is IS, said cancellation shall be obtained no later than _____________, 20__. If said cancellation is not obtained by said date, this Purchase Agreement is canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation.) Buyer has been made aware of the availability of Property inspections. Buyer does not elect to have a Property inspection performed at Buyer's expense. 2 INSPECTION CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase Agreement: Inspection Contingency. (If answer is IS, see attached Addendum.) DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a (check one): Personal Representative’s Deeds joined in by spouse, if any, conveying marketable title, subject to (a) building and zoning laws, ordinances, and state and federal regulations; (b) restrictions relating to use or improvement of the Property without effective forfeiture provisions; (c) reservation of any mineral rights by the State of Minnesota; (d) utility and drainage easements which do not interfere with existing improvements; (e) rights of tenants as follows (unless specified, not subject to tenancies) _____________; and (f) others (must be specified in writing): ___________________________________________ REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all prior years including all penalties and interest. Buyer shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year 2021. Seller shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year 2021. If the closing date is changed, the real estate taxes paid shall, if prorated, be adjusted to the new closing date. If the Property tax status is a part- or non-homestead classification in the year of closing, Seller SHALL NOT pay the difference between the homestead and non-homestead. Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment of which is not otherwise herein provided. No representations are made concerning the amount of subsequent real estate taxes. DEFERRED TAXES/SPECIAL ASSESSMENTS: SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green Acres) or special assessments, payment of which is required as a result of the closing of this sale. SELLER SHALL PAY ON DATE OF CLOSING all installments of special assessments certified for payment, with the real estate taxes due and payable in the year of closing. SELLER SHALL PAY on date of closing all other special assessments levied as of the date of this Purchase Agreement. SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of the date of this Purchase Agreement for improvements that have been ordered by any assessing authorities. (Seller's provision for payment shall be by payment into escrow of two (2) times the estimated amount of the assessments or less, as required by Buyer's lender.) Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the payment of which is not otherwise herein provided. As of the date of this Purchase Agreement, Seller represents that Seller HAS NOT received a notice regarding any new improvement project from any assessing authorities, the costs of which project may be assessed against the Property. Any such notice received by Seller after the date of this Purchase Agreement and before closing shall be provided to Buyer immediately. If such notice is issued after the date of this Purchase Agreement and on or before the date of closing, then the parties may agree in writing, on or before the date of closing, to pay, provide for the payment of or assume the special assessments. In the absence of such agreement, either party may declare this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other party, in which case this Purchase 3 Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. POSSESSION: Seller shall deliver possession of the Property no later than date of closing. Seller agrees to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the Property by possession date. LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access or service to any device or system on or serving the property that is connected or controlled wirelessly, via internet protocol ("IP") to a router or gateway or directly to the cloud no later than delivery of possession as specified in this Purchase Agreement. PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer, electricity and natural gas shall be prorated between the parties as of date of closing. Buyer shall pay Seller for remaining gallons of fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by Seller. TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this Purchase Agreement: a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's pol icy of title insurance (the “Commitment”) issued by Midland Title (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Seller agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price for any endorsements requested by Buyer or Buyer’s lender. b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (ii) elect to have this Agreement remain in effect, in which event Buyer will be deemed to have approved the previously-cited exception and the same shall be considered part of the Permitted Encumbrances. Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay all costs and fees necessary to convey marketable title including obtaining and recording all required documents, subject to the following: In the event Seller has not provided marketable title by the date of closing, Seller shall have an additional 30 days to make title marketable, or in the alternative, Buyer may waive title defects by written notice to Seller. In addition to the 30-day extension, Buyer and Seller may, by mutual 4 agreement, further extend the closing date. Lacking such extension, either party may declare this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is canceled . If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. SUBDIVISION OF LAND, BOUNDARIES, AND ACCESS: If this sale constitutes or requires a subdivision of land owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental approvals. Seller warrants that the legal description of the real property to be conveyed has been or shall be approved for recording as of the date of closing. Seller warrants that the buildings are or shall be constructed entirely within the boundary lines of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure on, or improvement to, the Property. NOTICES: Seller warrants that Seller has not received any notice from any governmental authority as to condemnation proceedings, or violation of any law, ordinance or regulation. If the Property is subject to restrictive covenants, Seller warrants that Seller has not received any notice from any person or authority as to a breach of the covenants. Any such notices received by Seller shall be provided to Buyer immediately. DIMENSIONS: Buyer acknowledges any dimensions, square footage or acreage of land or improvements provided by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify the accuracy of information to Buyer's satisfaction, if material, at Buyer's sole cost and expense. ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any surveys or inspections agreed to herein. RISK OF LOSS: If there is any loss or damage to the Property between the date hereof and the date of closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on Seller. If the Property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. TIME OF ESSENCE: Time is of the essence in this Purchase Agreement. CALCULATION OF DAYS: Any calculation of days begins on the first day (calendar or Business Days as specified) following the occurrence of the event specified and includes subsequent days (calendar or Business Days as specified) ending at 11:59 P.M. on the last day. BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays or state or federal holidays unless stated elsewhere by the parties in writing. DEFAULT: If Buyer defaults in any of the agreements herein, Seller may cancel this Purchase Agreement, and Buyer and Seller shall affirm the same by a written cancellation agreement. If Buyer defaults in any of the agreements hereunder, Seller may terminate this Purchase Agreement under the provisions of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer or Seller defaults in any of the agreements hereunder or there exists an unfulfilled condition after the date specified for fulfillment, either party may cancel this Purchase Agreement under MN Statute 559.217, Subd. 3. Whenever it is provided herein that this Purchase Agreement is canceled, said language shall be deemed a provision authorizing a Declaratory Cancellation under MN Statute 559.217, Subd. 4. 5 If this Purchase Agreement is not canceled or terminated as provided hereunder, Buyer or Seller may seek actual damages for breach of this Purchase Agreement or specific performance of this Purchase Agreement; and, as to specific performance, such action must be commenc ed within six (6) months after such right of action arises. BUYER HAS RECEIVED A DISCLOSURE STATEMENT SELLER'S PROPERTY. DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property or Disclosure Statement: Seller's Disclosure Alternatives for description of disclosure responsibilities and limitations, if any. BUYER HAS RECEIVED THE INSPECTION REPORTS, IF REQUIRED BY MUNICIPALITY. BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OF THE PROPERTY AND ITS CONTENTS. SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED TO: CITY SEWER-YES / CITY WATER-YES SUBSURFACE SEWAGE TREATMENT SYSTEM SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure. Statement: Subsurface Sewage Treatment System.) PRIVATE WELL SELLER DOES NOT KNOW OF A WELL ON OR SERVING THE PROPERTY. (If answer is DOES and well is located on the Property, see Disclosure Statement: Well.) THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer is IS, see attached Addendum.) IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM. NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory offender registry and persons registered with the predatory offender registry under MN Statute 243.166 may be obtained by contacting the local law enforcement offices in the community where the Property is located or the Minnesota Department of Corrections at (651) 361-7200, or from the Department of Corrections web site at www.corr.state.mn.us. 6 No Home Protection/Warranty Plan is negotiated as part of this Purchase Agr eement. NOTICE is Seller’s Agent. (Licensee) (Real Estate Company Name) Buyer is not represented by an Agent in this transaction. (Licensee) (Real Estate Company Name) DUAL AGENCY REPRESENTATION Dual Agency representation DOES NOT apply in this transaction. CLOSING COSTS: Buyer or Seller may be required to pay certain closing costs, which may effectively increase the cash outlay at closing or reduce the proceeds from the sale. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section 1445 of the Internal Revenue Code. Seller shall represent and warrant, under the penalties of perjury, whether Seller is a "foreign person" (as the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to this issue shall survive the closing and delivery of the deed. Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their respective federal taxpayer identification numbers or Social Security numbers. Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax advice regarding FIRPTA compliance, as the respective licensee's representing or assisting either party will be unable to assure either party whether the transaction is exempt from FIRPTA withholding requirements. ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties shall constitute the entire agreement between Buyer and Seller. Any other written or oral communication between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed to be United States currency for purposes of this Purchase Agreement. 7 ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document related to this transaction constitute valid, binding signatures. FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties and a copy must be delivered. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract for deed. OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on the following: (1) Review and approval of the terms of the Purchase Agreement by the Economic Development Authority in and for the City of New Hope to the terms of the Purchase Agreement If the above contingenc y is not met, Buyer may declare this Purchase Agreement canceled by written notice to Seller, or licensee representing or assisting Seller, in which case this Purchase Agreement is canceled. If Buyer declares this Purchase Agreement canceled due to the failur e of one of the above contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation. Seller will not be required to complete the City of New Hope Point of Sale inspection. ADDENDA AND PAGE NUMBERING: Attached addenda are a part of this Purchase Agreement. Enter total number of pages of this Purchase Agreement, including addenda : __ pages. 8 NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement and should not be part of the page numbering. I, the owner of the Property, accept this Purchase Agreement and authorize the listing broker to withdraw said Property from the market, unless instructed otherwise in writing. I have reviewed all pages of this Purchase Agreement. If checked, this Agreement is subject to attached Addendum to Purchase Agreement: Counteroffer. FIRPTA: Seller represents and warrants, under penalty of perjury, that Seller IS NOT a foreign person (i.e., a non-resident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate for purposes of income taxation. This representation and warranty shall survive the closing of the transaction and the delivery of the deed. I agree to purchase the Property for the price and on the terms and conditions set forth above. I have reviewed all pages of this Purchase Agreement Sellers Buyer ______________________________________ Economic Development Authority in and for the Stephanie Millen Luckett, as Personal City of New Hope, a public body corporate and Representative for the Estate of Michael Moliter politic created pursuant to the laws of the State of Minnesota Date:_________________________ By: Kirk McDonald ______________________________________ Its: Executive Director Peggy Amoroso, as Personal Representative for the Estate of Sandra Moliter Date: ______________________ Date:__________________________ THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11441 - 4637 Aquila Ave. N\Purchase Agreement.docx 4637 Aquila Ave N R-1, Single-family residential 133.49’ 133.73’82’Potential Home & Garage Potential Driveway Buildable Area Appraisal Professionals of MN LLC Jayne Preusse Eden Prairie, MN 55344 (612)267-5269 07/02/2020 Jeff Alger City of New Hope Community Development 4401 Xylon Avenue N New Hope, MN 55428 Re:Property:4637 Aquila Ave N New Hope, MN 55428 Borrower:N/A File No.:AP20271 Opinion of Value: $73,000 Effective Date:06/29/2020 In accordance with your request, we have appraised the above referenced property. The report of that appraisal is attached. The purpose of the appraisal is to develop an opinion of market value for the property described in this appraisal report, as improved, in unencumbered fee simple title of ownership. This report is based on a physical analysis of the parcel site, a locational analysis of the neighborhood and city, and an economic analysis of the market for properties such as the subject. The appraisal was developed and the report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The opinion of value reported above is as of the stated effective date and is contingent upon the certification and limiting conditions attached. It has been a pleasure to assist you. Please do not hesitate to contact me if I can be of additional service to you. Sincerely, Jayne Preusse Certified Residential Appraiser License or Certification #: 20559939 State: MN Expires: 08/31/2021 jstrikos@msn.com APPRAISAL OF REAL PROPERTY Land 4637 Aquila Ave N New Hope, MN 55428 DEL HEIGHTS 2ND ADDITION City of New Hope 4401 Xylon Avenue N New Hope, MN 55428 73,000 06/29/2020 Jayne Preusse Appraisal Professionals of MN LLC Certified Residential Appraiser Eden Prairie, MN 55344 (612)267-5269 jstrikos@msn.com Form GA1V - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE LOCATED AT FOR OPINION OF VALUE AS OF BY AP20271N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Letter of Transmittal .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 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E & O Insurance .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 1 2 3 4 5 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Form TOCNP - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Borrower Lender/Client File No. Property Address City County State Zip Code TABLE OF CONTENTS Jayne Strikos City of New Hope AP20271 N/A 0215.03 33460 4637 Aquila Ave N New Hope Hennepin MN 55428 DEL HEIGHTS 2ND ADDITION N/A N/A N/A 4,064 N/A N/A City of New Hope 4401 Xylon Avenue N, New Hope, MN 55428 Vacant Jayne Preusse Market Value Land Parcel Only. 65 5 3 2 15 0 2 8 Other Vacant Land Improved Residential 2 183,000 409,000 277,174 0 67 54 Under the present land use, 8% indicates "other". The primary portion of this amount includes lakes, ponds, woods and some undeveloped land. This does not have any negative impact on the Subject's value & marketability at this time. Neighborhood statistics for one-unit ranges, were from a 1 mile radius from the subject property. Land Stats from within the city of New Hope was limited to none. Market Values based on single family housing. See attached addendum. 82x133.49 10,949 sf sf R1-Single Family Residential Future land with residential improvement - Detached Single Family Available Available Available Available Bituminous Level/Slants Upward Average Rectangular Gd/Res/Ball Field/Water Tower Average See attached addenda. 4637 Aquila Ave N New Hope, MN 55428 N/A per sq ft 6.67 RMLS/HenneCA N/A N;Res 10,949 sf Other Features None Views B;Res/BallField/WT Zoning R1-SingleFamily Notable Extras None N/A N/A 6501 31st Ave N Crystal, MN 55427 2.29 miles SE 78,000 4.46 RMLS#4918324/HenneCTAW s08/18;Unkn +5,000 B;Park -2,000 17,500 sf -2,000 None B;Res/Park/Trees -2,000 R1-Low Density Res 0 None N/A N/A -1,000 Net 1.3 % Gross 14.1 %77,000 6505 31st Ave N Crystal, MN 55427 2.27 miles SE 73,000 5.72 RMLS#4918020/HenneCTAW s01/19;Unkn +4,000 B;Park -2,000 12,758 sf 0 None B;Res/Park/Trees -2,000 R1-Low Density Res 0 None N/A N/A 0 Net 0.0 % Gross 11.0 %73,000 5728 Oregon Ct Crystal, MN 55428 1.48 miles NE 75,000 7.49 RMLS#4780925/HenneCtAW s02/17;Other +4,875 B;CDS/Newer -7,000 10,019 sf 0 None N;Res +2,000 R1-Low Density Res 0 None N/A N/A -125 Net 0.2 % Gross 18.5 %74,875 Similar comparable land sales to the subject were limited or none within the City of New Hope. Extending the search parameters into neighboring cities was necessary to locate the next best viable options of land sales. All above land sales are older sales with time adjustments utilized for the current market conditions. See Attached Addendum. See Attached Addendum. The Sales Comparison Approach to Value is applicable for vacant land. The adjusted values of the comparables sales with some consideration of active pending listings, range from $4.67 per sf-9.76 per sf. After observation all the sales with some consideration of current market values of the active/pending listings, a value consideration of $9.38 per sf is supported. See attached addendum. 06/29/2020 73,000 Jayne Preusse 07/02/2020 Certified Residential Appraiser 20559939 MN 08/31/2021 06/29/2020 Form LAND - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE LAND APPRAISAL REPORT File No.SUBJECTBorrower Census Tract Map Reference Property Address City County State Zip Code Legal Description Sale Price $Date of Sale Loan Term yrs.Property Rights Appraised Fee Leasehold De Minimis PUD Actual Real Estate Taxes $(yr)Loan charges to be paid by seller $Other sales concessions Lender/Client Address Occupant Appraiser Instructions to Appraiser NEIGHBORHOODLocation Urban Suburban Rural Built Up Over 75%25% to 75%Under 25% Growth Rate Fully Dev.Rapid Steady Slow Property Values Increasing Stable Declining Demand/Supply Shortage In Balance Oversupply Marketing Time Under 3 Mos.4-6 Mos.Over 6 Mos. Present Land Use % One-Unit % 2-4 Unit % Apts.% Condo % Commercial % Industrial % Vacant % Change in Present Land Use Not Likely Likely (*)Taking Place (*) (*) From To Predominant Occupancy Owner Tenant % Vacant One-Unit Price Range $to $Predominant Value $ One-Unit Age Range yrs. to yrs.Predominant Age yrs. Good Avg.Fair Poor Employment Stability Convenience to Employment Convenience to Shopping Convenience to Schools Adequacy of Public Transportation Recreational Facilities Adequacy of Utilities Property Compatibility Protection from Detrimental Conditions Police and Fire Protection General Appearance of Properties Appeal to Market Comments including those factors, favorable or unfavorable, affecting marketability (e.g. public parks, schools, view, noise)SITEDimensions =Corner Lot Zoning Classification Present Improvements Do Do Not Conform to Zoning Regulations Highest and Best Use Present Use Other (specify) Public Other (Describe) Elec. Gas Water San. Sewer Underground Elect. & Tel. OFF SITE IMPROVEMENTS Street Access Public Private Surface Maintenance Public Private Storm Sewer Curb/Gutter Sidewalk Street Lights Topo Size Shape View Drainage Is the property located in a FEMA Special Flood Hazard Area?Yes No Comments (favorable or unfavorable including any apparent adverse easements, encroachments, or other adverse conditions)MARKET DATA ANALYSISThe undersigned has recited the following recent sales of properties most similar and proximate to subject and has considered these in the market analysis.The description includes a dollar adjustment reflecting market reaction to those items of significant variation between the subject and comparable properties.If a significant item in the comparable property is superior to or more favorable than the subject property,a minus (–)adjustment is made,thus reducing the indicated value of subject;if a significant item in the comparable is inferior to or less favorable than the subject property,a plus (+)adjustment is made thus increasing the indicated value of the subject. ITEM SUBJECT PROPERTY COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3 Address Proximity to Subject Sales Price $$$$ Price $$$$ Data Source(s) ITEM DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.– Date of Sale/Time Adj. Location Site/View Sales or Financing Concessions Net Adj. (Total)+–$+–$+–$ Indicated Value of Subject $$$ Comments on Market Data RECONCILIATIONComments and Conditions of Appraisal Final Reconciliation I (WE)ESTIMATE THE MARKET VALUE,AS DEFINED,OF THE SUBJECT PROPERTY AS OF TO BE $ Appraiser Date of Signature and Report Title State Certification #ST Or State License #ST Expiration Date of State Certification or License Date of Inspection (if applicable) Supervisory Appraiser (if applicable) Date of Signature Title State Certification #ST Or State License #ST Expiration Date of State Certification or License Did Did Not Inspect Property Date of Inspection 08/11 City of New Hope AP20271 4637 Aquila Ave N New Hope, MN 55428 N/A per sq ft 6.67 RMLS/HenneCA N/A N;Res 10,949 sf Other Features None Views B;Res/BallField/WT Zoning R1-SingleFamily Notable Extras None N/A N/A 7901 23rd Ave N Golden Valley, MN 55427 2.52 miles S 84,900 5.94 RMLS#5349801/HenneCTAW Listing -4,245 A;BsRd +4,000 14,375 sf 0 None N;Res +2,000 R1-SingleFamily None N/A N/A 1,755 Net 2.1 % Gross 12.1 %86,655 Net % Gross % Net % Gross % See Attached Addendum. Form LAND.(AC) - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE 4 5 6 ADDITIONAL COMPARABLE SALES File No.MARKET DATA ANALYSISITEM SUBJECT PROPERTY COMPARABLE NO.COMPARABLE NO.COMPARABLE NO. Address Proximity to Subject Sales Price $$$$ Price $$$$ Data Source(s) ITEM DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.– Date of Sale/Time Adj. Location Site/View Sales or Financing Concessions Net Adj. (Total)+–$+–$+–$ Indicated Value of Subject $$$ Comments on Market Data 08/11 Appraisal of Land located in New Hope, MN PID #07-118-21-43-0008 - 4637 Aquila Ave N per Hennepin County Assessor Website Summary: Subject Property: 10,949 sf (This information is from Hennepin County Assessor Website/See Plat Map.) The subject parcel is located in a suburban area within the City of New Hope, MN. The subject is an interior site that is typical in parcel size (approximate .25 ac lot) and has average-good appeal of the subject neighborhood. The topography is level at the front, slants upward to the middle of the subject parcel rear and remains generally level to the parcel rear. The subject parcel is wide at the front with approximately 82 feet, which may allow a variety of detached single family home styles. The subject is long with approximately 133/134 feet. The overall parcel is rectangular in shape. The subject views include detached single family homes on both sides, to the rear and a ball field/water tower to the front. In short, the subject parcel is observed to be an average site. The view of the ball field to the front is observed to be an amenity for view, however also views from the front/north side a large water tower which may be observed as exterior obsolescence. (EXTRAORDINARY ASSUMPTION: The projected Market Value/comments assumes the subject lot is buildable without requiring extraordinary site correction costs. At the time of the appraisal appointment/inspection there was a detached single family home on the subject parcel, that appears to be destroyed by fire. It was vacant. This appraisal request is for the value of the "land as though vacant" value request. The appraiser did not walk the entire subject parcel on all corners. Information regarding the subject lot was from the appraisal inspection, aerial views of the subject per RMLS and Hennepin County Assessor Website. No external factors apparent in the subject location at the time of the appraisal inspection except for the views of the water tower which may or may not be observed to be external obsolescence for future marketing of the subject land. Effective Date of the Opinion of Value: June 29, 2020. Legal Description per Hennepin County Assessor Website: Acres: .25 (Approximate from Hennepin County Assessor Website) LOT 004 BLOCK 001 DEL HEIGHTS 2ND ADDITION Twelve Month Listing History of Subject Property An extensive search of the subject property was completed and there were no listings of the subject in the previous twelve months. Sources used were Hennepin County Records and Northstar Multiple Listing Service. The most recent sale of the subject is the previous sale of the subject property on 06/18/2004 with a sold price of $219,000. RMLS #2247995. Neighborhood Characteristics The subject parcel is located in the southwest section in the City of New Hope, Minnesota within the County of Hennepin. The subject's immediate neighborhood consists of detached single family homes ranging in age of 1966-2016. There is a lightly trafficked residential street to the subject front. There are city connected utilities available for any future construction on the subject parcel. The subject's immediate neighborhood is residential and with no development associations associated. The subject is within the boundaries of Bass Lake Road to the north, Winnetka Ave N to the east, 42nd Ave N to the south and State Highway 169 to the west. The subject market reflects an overall increase in property values from the statistics of single family homes within the previous two years of approximately 3-4%. The subject neighborhood is developed within little or no vacant land sites. Market conditions were based on the overall single family home properties from the previous two years RMLS data. No land sales available from the previous two year period of RMLS data. The most recent land sale within the City of New Hope was 3957 Winnetka Ave, which is a larger large and with split potential. Sold 07/24/2015 $92,500. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. potential. Sold 07/24/2015 $92,500. Market Conditions Overall market conditions for this report were based on the statistics from a one mile radius from the subject property and from detached residential single homes. Market statistics from the following: the median sold price of all single family homes within a half mile radius from the subject property from 06/29/2018-06/28/2019 was $264,250 (data of 124). Whereas, the median sold price of all single family homes from 06/29/2019-06/28/2020 was $274,450 (data of 130). An increase of approximately 3-4%. Statistics were taken under consideration, with the final observation of increasing overall market conditions. National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak On March 13, 2020, the United States Government declared a "National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak", which was in effect on the Effective Date of this Appraisal Report. In addition, on March 25, 2020 the State of Minnesota Government declared a "stay at home order", which was in effect on the Effective Date of this Appraisal Report. This appraisal report was performed pursuant to the Uniform Standards of Professional Appraisal Practice (USPAP) and was based on information and comparable sales available on that date. The effect of COVID-19 on the future value of the Subject Property or the value of the real estate market in the area of the Subject Property is unknown and not possible to predict. Reconciliation The effect COVID-19 will have on the real estate market in the region is currently unknown and will largely depend on both the scale and longevity of the pandemic. At this stage Tourism, F&B and Retail sectors are the first impacted, due to the increased response by local and global authorities including home quarantine, restriction of travel and international concerns. A prolonged pandemic could have a significant (and yet unknown or quantifiable) impact on other sectors of the property market. President Donald Trump on Friday 03/27/2020 signed a $2.2 trillion coronavirus economic stimulus bill, putting in motion desperately needed financial relief for millions of Americans set back by the pandemic. The more than $2 trillion bill is the largest economic relief package in modern U.S. history. This appraisal report was performed pursuant to the Uniform Standards of Professional Appraisal Practice (“USPAP”) and was based on information and comparable sales available as of the effective date. At this time, the effect of COVID-19 on the future value of the Subject Property or the value of the real estate market in the area of the Subject Property is unknown and not possible to predict. This valuation is based on the information available as of the effective date. Given the heightened uncertainty, a degree of caution should be exercised when relying upon this report. Values may change more rapidly and significantly than during standard market conditions. The analysis is being performed with as much current information and market feedback as possible. However, the appraiser can only work with what is available. The appraisal is being performed at a point in time and that of the market value opinion is - as of a certain date - the effective date. Changes after the date may affect the value. Analysis is being performed as quickly as possible to measure the impacts, if any, to the subject's market as a result of this event. Zoning ZONING: The subject is located in R1- Single Family per the City of New Hope Planning/Zoning department. Appraiser is not aware of any other new proposals that may change the zoning code. Highest and Best Use HIGHEST and BEST USE: The subject's current zoning would allow for a detached single family home to be built on the subject specified site according to the zoning codes rules and regulations and Planning and Zoning of the City of New Hope and Hennepin County. The appraiser is not aware of any current plan for a zoning change. The Highest and Best Use of the site is for the property to be vacant for a new construction residential home site. Highest and best use is defined in The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, at Page 93, as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. Alternatively, the probable use of land or improved property – specific with respect to the user and timing of the use – that is adequately supported and results in the highest present value. The subject as improved is a legally permissible use based on its current zoning. Also, the lot size, Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. The subject as improved is a legally permissible use based on its current zoning. Also, the lot size, shape, physical condition and land to building ratio allow the present structure and indicate a good utilization of the improvements. Based on current market conditions, the present use with a structure as a single family residence is its financially feasible and maximally productive use. The subject property currently has a detached single family home that has been destroyed by fire, and is being appraised as a vacant land site with no improvements for market value. Comparison Sales Approach Your appraiser has performed a detailed search for comparable sales. Every attempt was made to locate comparables close in proximity to the subject with similar characteristics as well as utility and appeal. Sales of recent similar parcel size, resulted with limited results. The sales utilized are considered the best available. The sales have been compared on a per square foot basis. The comparable photos utilized were obtained from RMLS and drive-by inspections. The appraiser has researched RMLS market data and Hennepin County data for land site sizes similar to the subject parcel and with similar amenities of the subject land. The search for parcel sites similar to the subject and located close in proximity resulted in limited or no data within a reasonable time within the City of New Hope. The search was eventually extended to include neighboring parcel sites from the subject property to gather more data/similar comparables. The RMLS data reflected the following: 1) 2 current active listings with an average list price of $99,900 to $120,000 and with an average price per sf of $4.09. 2) No land sales within the previous year. All sales comparisons used in this analysis bracket the subject's estimated market value. Comparable sales were extremely limited and required a search in neighboring cities. Recommended guidelines were exceeded and unavoidable considering distance from the subject property. All comparables in the Sales Comparison Grid are within the same school district #281-Robbinsdale. -Comps 1 and 2 are the next most viable/similar comparables to the subject in land amenities, view, and with both being located within the City of Crystal. Both are superior with being located to a park to the rear. Both comparables are similar in zoning codes as the subject. Comp 1's price per sf was $4.46 per sf. Comp 2's price per sf was 5.72 per sf, in comparison to the subject's 6.67 price per sf. -Comp 3 has a similar parcel size to the subject but lacks the overall view amenity. Comp 3 is located within a small area with newer construction and is located on a cul-de-sac. This comp has a similar zoning code to the subject. Price sold for this comp was $7.49 per sf. -Comp 4 represents an active/pending listing to the subject. This comp is slightly superior in parcel size and is located in the City of Golden Valley. This comp is located on a busier road. This comp has the zoning code of R1-Single Family. List price per sf for this comp is presently $5.94 per sf. Recommended guidelines have been exceeded and unavoidable considering location, view and distance from the subject property. The Sales Comparison Approach to Value is applicable for vacant land. The adjusted values of the comp sales with some consideration of active pending listings, range from $4.46-7.49 per sf within the SCG. After considering all the sales with some consideration of current market values of the active/pending listings, a value consideration of $6.67 per sf is supported. ADJUSTMENTS: TIME ADJUSTMENTS: Comparables #1, #2 and #3 all are adjusted to the current market conditions. Line item adjustments were necessary to all comparables due to no sold comparables within one year from the effective date of this appraisal report. LOCATION: The location adjustments, if any, considered accessibility, degree of conformity to adjoining properties, and the overall appeal and marketability of the respective neighborhoods in relation to the subject. Comparables #1 and #2 are located with parks to the rear. Comp #3 is located on a cul-de-sac and within a newer neighborhood. Comp #4 is located with a busier road to its front. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. within a newer neighborhood. Comp #4 is located with a busier road to its front. SITE/VIEW: Parcel adjustments were based on Anoka County Assessor Website values, land sales, parcel size, amenities of the parcels, view and overall utility. Each individual parcel was observed for all attributes, and therefore may not be completely defined by the specific square foot/acres per parcel. Comp 1 has a slightly larger parcel size to the subject. Comps #1 and #2 have slightly superior views with no external similar to the subject. Comps #3 and #4 both have slightly inferior views to the subject. The overall opinion of value is supported with the Sales Comparison Grid and the above land sales considered. Exposure Time: “The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal . An Exposure Time of 0-3 months has been projected for the subject property. With minimal data for analysis. Marketing Time: “An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value during the period immediately after the effective date of the appraisal.” A Marketing Time of 0-3 months has been projected for the subject property. With minimal data for analysis. Appraiser has not performed services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Income Approach Comments The Income Approach was not relevant to this assignment. The Income Approach would not aid in developing a credible result and is not required within this scope of work. Assessed Market Value for Tax Purposes According to Hennepin County Assessor Website records the subjects 2020 estimated assessed value is as follows: Land $72,000, Building $147,000 with a total of $219,000.00. There is a special assessment of $654.63 for delinquent utilities per Hennepin County Assessor. The subject property market value for this report has been "as if vacant" per the client. Intended Used Of Appraisal The Intended User of this appraisal report is the Lender/Client only. The Intended Use of this appraisal is to evaluate the property that is the subject of this appraisal for a land appraisal per the client request for a land market value, subject to the stated Scope of Work, purpose of the appraisal, reporting requirements of this appraisal report form, and Definition of Market Value. No additional Intended Users are identified by the appraiser. The appraisal is valuing the land only. There are no improvements on the land which need to be taken under consideration, etc. Scope Of The Appraisal The appraiser has viewed the subject property from the front street and into approximately half of the subject parcel but did not walk all four corners/entire parcel. The visual inspection is not intended to be the same depth or for the same purpose as a home inspection. The appraiser has viewed the property solely for valuation purposes and to observe property characteristics that a typical purchaser would consider in their decision making process, as well as those items outlined in the assumptions and limited conditions and certifications to this appraisal. Personal property or chattel was not included in the appraiser value. The report or statement and the information and conclusions included in the report or statement are the property of the client, and may not be used and must not be relied upon by any party other than the client's successors and assigns, except to the extent specifically permitted by written consent by the client. Market Value $73,000.00. Effective Date of the Opinion of value: June 29, 2020. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. DEFINITION OF MARKET VALUE*: Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised and acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. * This definition is from regulations published by federal regulatory agencies pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989 between July 5, 1990, and August 24, 1990, by the Federal Reserve System (FRS), National Credit Union Administration (NCUA), Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS), and the Office of Comptroller of the Currency (OCC). This definition is also referenced in regulations jointly published by the OCC, OTS, FRS, and FDIC on June 7, 1994, and in the Interagency Appraisal and Evaluation Guidelines, dated October 27, 1994. The Scope of Work is the type and extent of research and analyses performed in an appraisal assignment that is required to produce credible assignment results, given the nature of the appraisal problem, the specific requirements of the intended user(s) and the intended use of the appraisal report. Reliance upon this report, regardless of how acquired, by any party or for any use, other than those specified in this report by the Appraiser, is prohibited. The Opinion of Value that is the conclusion of this report is credible only within the context of the Scope of Work, Effective Date, the Date of Report, the Intended User(s), the Intended Use, the stated Assumptions and Limiting Conditions, any Hypothetical Conditions and/or Extraordinary Assumptions and the Type of Value, as defined herein. The appraiser, appraisal firm, and related parties assume no obligation, liability, or accountability, and will not be responsible for any unauthorized use of this report or its conclusions. No responsibility is assumed for changes in the market conditions or for the inability of the owner to locate a purchases at an appraised value. Additional Comments (Scope of Work, Extraordinary Assumptions, Hypothetical Conditions, etc.): There are no Hypothetical Conditions within this assignment condition. There are no known or unknown unexpected conditions known to the appraiser. Dangerous materials, substances, contamination, and gases was not part of the Scope of Work and should this type of contamination be found, appraiser is not responsible. The opinion of value does not include or knows of any correction costs due to soil tests or any other affirmations of any not known information to the appraiser for any development. Which includes any improvements on the subject property as of June 29, 2020. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. STATEMENT OF ASSUMPTIONS & LIMITING CONDITIONS - The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. - The appraiser may have provided a plat and/or parcel map in the appraisal report to assist the reader in visualizing the lot size, shape, and/or orientation. The appraiser has not made a survey of the subject property. - If so indicated, the appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. - The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. - The appraiser has noted in the appraisal report any adverse conditions (including, but not limited to, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property, or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property, or adverse environmental conditions (including, but not limited to, the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. - The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. - The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice, and any applicable federal, state or local laws. - An appraiser's client is the party (or parties) who engage an appraiser in a specific assignment. Any other party acquiring this report from the client does not become a party to the appraiser-client relationship. Any persons receiving this appraisal report because of disclosure requirements applicable to the appraiser's client do not become intended users of this report unless specifically identified by the client at the time of the assignment. - The appraiser's written consent and approval must be obtained before this appraisal report can be conveyed by anyone to the public, through advertising, public relations, news, sales, or by means of any other media, or by its inclusion in a private or public database. Possession of this report or any copy thereof does not carry with it the right of publication. - Forecasts of effective demand for the highest and best use or the best fitting and most appropriate use were based on the best available data concerning the market and are subject to conditions of economic uncertainty about the future. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20271 N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. Form GPDSSLND.SR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Land Photo Page N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Subject Front Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft 4637 Aquila Ave N N/A N/A N;Res None B;Res/BallField/WT R1-SingleFamily None Subject Rear Subject Street Borrower Lender/Client Property Address City County State Zip Code Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Views to the front Street View Opposite Direction Views to the north/front-Water Towner Street Sign Front of Parcel Side of Parcel Borrower Lender/Client Property Address City County State Zip Code Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Backyard/Views to the Rear Backyard Comp 1 - Street View Comp 2 - Street View Comp 3 - Street View Comp 4 - Street View Borrower Lender/Client Property Address City County State Zip Code Form GPDS%LND - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Land Photo Page N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Comparable 1 Prox. to Subj. Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft 6501 31st Ave N 2.29 miles SE 78,000 s08/18;Unkn B;Park None B;Res/Park/Trees R1-Low Density Res None Comparable 2 Prox. to Subj. Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft 6505 31st Ave N 2.27 miles SE 73,000 s01/19;Unkn B;Park None B;Res/Park/Trees R1-Low Density Res None Comparable 3 Prox. to Subj. Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft 5728 Oregon Ct 1.48 miles NE 75,000 s02/17;Other B;CDS/Newer None N;Res R1-Low Density Res None Borrower Lender/Client Property Address City County State Zip Code Form GPDS%LND - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Land Photo Page N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Comparable 4 Prox. to Subj. Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft 7901 23rd Ave N 2.52 miles S 84,900 Listing A;BsRd None N;Res R1-SingleFamily None Comparable 5 Prox. to Subj. Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft Comparable 6 Prox. to Subj. Sales Price Date of Sale Site Area Location Other Features Views Zoning Notable Extras per sq ft Borrower Lender/Client Property Address City County State Zip Code Plat Map Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Aerial N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Aerial N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Form MAP.FLOOD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Flood Map N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Zoning Map Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Location Map N/A 4637 Aquila Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Subject Property Info Hennepin County - Page 1 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Property Info Hennepin County - Page 2 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Most Recent RMLS Listing - Page 1 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Most Recent RMLS Listing - Page 2 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Realist - Page 1 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Realist - Page 2 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Realist - Page 3 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Appraisal License Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE E & O Insurance Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Budget for 4637 Aquila Avenue North EXPENSES AMOUNT Acquisition (73,000.00)$ Appraisal (425.00)$ Closing costs for purchase (estimated)(1,500.00)$ Legal costs for purchase (estimated)(1,500.00)$ Demolition and site prep (estimated)(28,000.00)$ Real estate taxes (estimated at 7 months)(2,370.69)$ Lawn services (estimated)(500.00)$ Utility billing (estimated)(140.00)$ Public hearing notice (estimated)(150.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(1,000.00)$ TOTAL (110,085.69)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)67,000.00$ TOTAL 67,000.00$ TOTAL COST/REVENUE (43,085.69)$ Taxable Market Value 2020, Payable 2021 Projected Taxable Value 2022, Payable 2023 Change Percent Change 236,000.00$ 400,000.00$ 164,000.00$ 69.49% Estimated Taxes Allocated to City 2020, Payable 2021 Projected Taxes Allocated to City 2022, Payable 2023 Change Percent Change 1,416.00$ 2,400.00$ 984.00$ 69.49% Projected Project Expenses (110,085.69)$ Lot Sale Revenue 67,000.00$ Total Cost/Revenue (43,085.69)$ # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)-$ (43,085.69)$ -100.00% 1 (payable 2023)984.00$ (42,101.69)$ -97.72% 2 (payable 2024)1,997.52$ (41,088.17)$ -95.36% 3 (payable 2025)3,041.45$ (40,044.24)$ -92.94% 4 (payable 2026)4,116.69$ (38,969.00)$ -90.45% 5 (payable 2027)5,224.19$ (37,861.50)$ -87.87% 10 (payable 2032)11,280.46$ (31,805.23)$ -73.82% 15 (payable 2037)18,301.33$ (24,784.36)$ -57.52% 20 (payable 2042)26,440.45$ (16,645.24)$ -38.63% 25 (payable 2047)35,875.92$ (7,209.77)$ -16.73% 30 (payable 2052)46,814.21$ 3,728.52$ 8.65% *Based on new home valued at $400,000 Estimated Tax Impact of Improvements at 4637 Aquila Avenue North Estimated Return on Investment for 4637 Aquila Avenue North Description Taxable Market Value Change Cash Flow Investment -$ (43,085.69)$ Return, Year 1 164,000.00$ 984.00$ Return, Year 2 168,920.00$ 1,013.52$ Return, Year 3 173,987.60$ 1,043.93$ Return, Year 4 179,207.23$ 1,075.24$ Return, Year 5 184,583.44$ 1,107.50$ Return, Year 6 190,120.95$ 1,140.73$ Return, Year 7 195,824.58$ 1,174.95$ Return, Year 8 201,699.31$ 1,210.20$ Return, Year 9 207,750.29$ 1,246.50$ Return, Year 10 213,982.80$ 1,283.90$ Return, Year 11 220,402.29$ 1,322.41$ Return, Year 12 227,014.35$ 1,362.09$ Return, Year 13 233,824.79$ 1,402.95$ Return, Year 14 240,839.53$ 1,445.04$ Return, Year 15 248,064.71$ 1,488.39$ Return, Year 16 255,506.66$ 1,533.04$ Return, Year 17 263,171.86$ 1,579.03$ Return, Year 18 271,067.01$ 1,626.40$ Return, Year 19 279,199.02$ 1,675.19$ Return, Year 20 287,574.99$ 1,725.45$ Return, Year 21 296,202.24$ 1,777.21$ Return, Year 22 305,088.31$ 1,830.53$ Return, Year 23 314,240.96$ 1,885.45$ Return, Year 24 323,668.19$ 1,942.01$ Return, Year 25 333,378.23$ 2,000.27$ Return, Year 26 343,379.58$ 2,060.28$ Return, Year 27 353,680.97$ 2,122.09$ Return, Year 28 364,291.40$ 2,185.75$ Return, Year 29 375,220.14$ 2,251.32$ Return, Year 30 386,476.74$ 2,318.86$ Total Returns 46,814.21$ Investment Cost 110,085.69$ Selling Price 67,000.00$ Return on Investment 8.65% Description Amount Investment (43,085.69)$ Return, Year 1 984.00$ Return, Year 2 1,013.52$ Return, Year 3 1,043.93$ Return, Year 4 1,075.24$ Return, Year 5 1,107.50$ Return, Year 6 1,140.73$ Return, Year 7 1,174.95$ Return, Year 8 1,210.20$ Return, Year 9 1,246.50$ Return, Year 10 1,283.90$ Return, Year 11 1,322.41$ Return, Year 12 1,362.09$ Return, Year 13 1,402.95$ Return, Year 14 1,445.04$ Return, Year 15 1,488.39$ Return, Year 16 1,533.04$ Return, Year 17 1,579.03$ Return, Year 18 1,626.40$ Return, Year 19 1,675.19$ Return, Year 20 1,725.45$ Return, Year 21 1,777.21$ Return, Year 22 1,830.53$ Return, Year 23 1,885.45$ Return, Year 24 1,942.01$ Return, Year 25 2,000.27$ Return, Year 26 2,060.28$ Return, Year 27 2,122.09$ Return, Year 28 2,185.75$ Return, Year 29 2,251.32$ Return, Year 30 2,318.86$ Total Returns 46,814.21$ Internal Rate of Return 0.47% Estimated Internal Rate of Return for 4637 Aquila Avenue North Year Original Taxable Market Value (assumes growth in value over time) Improved Taxable Market Value (assumes growth in value over time) New Taxable Value Projected City Taxes on New Taxable Market Value 1 236,000.00$ 400,000.00$ 164,000.00$ 984.00$ 2 243,080.00$ 412,000.00$ 168,920.00$ 1,013.52$ 3 250,372.40$ 424,360.00$ 173,987.60$ 1,043.93$ 4 257,883.57$ 437,090.80$ 179,207.23$ 1,075.24$ 5 265,620.08$ 450,203.52$ 184,583.44$ 1,107.50$ 6 273,588.68$ 463,709.63$ 190,120.95$ 1,140.73$ 7 281,796.34$ 477,620.92$ 195,824.58$ 1,174.95$ 8 290,250.23$ 491,949.55$ 201,699.31$ 1,210.20$ 9 298,957.74$ 506,708.03$ 207,750.29$ 1,246.50$ 10 307,926.47$ 521,909.27$ 213,982.80$ 1,283.90$ 11 317,164.27$ 537,566.55$ 220,402.29$ 1,322.41$ 12 326,679.19$ 553,693.55$ 227,014.35$ 1,362.09$ 13 336,479.57$ 570,304.35$ 233,824.79$ 1,402.95$ 14 346,573.96$ 587,413.49$ 240,839.53$ 1,445.04$ 15 356,971.18$ 605,035.89$ 248,064.71$ 1,488.39$ 16 367,680.31$ 623,186.97$ 255,506.66$ 1,533.04$ 17 378,710.72$ 641,882.58$ 263,171.86$ 1,579.03$ 18 390,072.04$ 661,139.05$ 271,067.01$ 1,626.40$ 19 401,774.20$ 680,973.22$ 279,199.02$ 1,675.19$ 20 413,827.43$ 701,402.42$ 287,574.99$ 1,725.45$ 21 426,242.25$ 722,444.49$ 296,202.24$ 1,777.21$ 22 439,029.52$ 744,117.83$ 305,088.31$ 1,830.53$ 23 452,200.40$ 766,441.36$ 314,240.96$ 1,885.45$ 24 465,766.42$ 789,434.60$ 323,668.19$ 1,942.01$ 25 479,739.41$ 813,117.64$ 333,378.23$ 2,000.27$ 26 494,131.59$ 837,511.17$ 343,379.58$ 2,060.28$ 27 508,955.54$ 862,636.51$ 353,680.97$ 2,122.09$ 28 524,224.21$ 888,515.60$ 364,291.40$ 2,185.75$ 29 539,950.93$ 915,171.07$ 375,220.14$ 2,251.32$ 30 556,149.46$ 942,626.20$ 386,476.74$ 2,318.86$ Tax Value Growth Rate 3% City Rate 60% The equation for calculating property taxes, in its most simplistic form, is Taxable Market Value X Property Tax Class Rate X City Tax Rate. The Taxable Market Value in this calculation is assumed based on the city's projections for growth in property value due to the improvements. The Property Tax Class Rates are set by the State of MN and stay fairly consistent from year to year (there have been changes in commercial industrial, however; residential is mostly constant). The city’s Tax Rate changes every year based on the levy certified and the overall tax value of the city. So, the Tax Rate used in this illustration is an assumption. The city’s rate has varied between 58-63% in recent years. Property taxes are calculated on taxable market value, not estimated market value. It is of important note, that this calculation does not take into consideration the market value exclusion which is applied to residential properties under $413,800 in value. Tax Calculator for 4637 Aquila Avenue North