IP #733March 1, 2007
Mr. Melvin Moore
Pinnacle Homes, Inc.
332 Minnesota Street, Suite 1070
St. Paul, MN 55101
Subject: $400,000 Limited Revenue Tax Increment Note and Certificate of Registration
Enclosed are two originals of the fore-mentioned documents which have been executed by New
Hope officials.
The note is issued in accordance with the contract for private redevelopment at 5620 Winnetka
Avenue North dated July 26, 2004 (improvement project nc( Z3
),,As indicated in the Note,
interest accrues from October 9, 2006 (the date of the final Certificates of Occupancy for the
townhomes) and the Note is payable from only 35% of available tax increment from Tax
Increment District No. 04-1 as per the contract.
Please contact Kirk McDonald, director of community development, if you have questions
regarding the documents.
Sincerely,
Valerie Leone, CMC
City Clerk
IWIM,
cc: Kirk McDonald, Director of Community Development (Imp #733)
Daryl Sulander, Director of Finance
Gay Cerney, Krass Monroe, P.A. (File No. 10048-13)
4401 Xylon Avenue North ® New Hope, Minnesota 55428-4898 + www. ci.new-hope.mn.us
City Hall: 763-531-5100 + Police (non-emergency): 763-531-5170 4- Public Works: 763-592-6777 ® TDD: 763-531-5109
City Hall Fax: 763-531-5136 * Police Fax: 763-531-5174 + Public Works Fax: 763-592-6776
'�11 lii 11
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF NEW HOPE
LIMITED REVENUE TAX INCREMENT NOTE
February,,) ,k, 2007
The Economic Development Authority in and for the City of New Hope (the
"Authority "), hereby acknowledges itself to be indebted and, for value received, promises to pay
to the order of Pinnacle Homes, Inc. (the "Owner "), solely from the source, to the extent and in
the manner hereinafter provided, the principal amount of this Note, being Four Hundred
Thousand Dollars ($400,000.00) (the "Principal Amount "), together with interest on the unpaid
principal balance from October 9, 2006 until paid at the rate of Six and Three/Fourths Percent
(6.75 %) per annum and payable on the dates described below (the "Payment Dates ") and in the
amounts as hereinafter defined (the "Payments ").
This Note is issued pursuant to that certain Contract for Private Redevelopment by and
between the Authority and the Owner dated as of July 26, 2004 (as amended, modified,
supplemented or restated from time to time, the "Agreement "). This Note is subject to the terms,
conditions and provisions of the Agreement. Capitalized terms in this Note not defined herein
shall have the definitions given those terms in the Agreement.
The Payment Dates shall commence on August 1 of the first year of receipt of Tax
hicrement from the construction of the Minimum Improvements and on each February 1 and
August 1 thereafter until and including December 31, 2031 unless earlier paid in accordance with
the terms of this Note.
All Payments made by the Authority on this Note shall be applied first to accrued interest
and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be
added on such Payment Date to the principal amount of this Note.
The Principal Amount is subject to prepayment at the option of the Authority in whole or
in part at any time without penalty.
Each Payment on this Note is payable in any coin or currency of the United States of
America which on the date of such Payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at its postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
which has been issued by the Authority pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota, including Mimnesota Statutes, Section 469.178,
subdivision 4, to aid in financing a project, as therein defined, of the Authority consisting
generally of defraying certain public redevelopment costs incurred and to be incurred by the
Authority within and for the benefit of its Redevelopment Project No. 1.
THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE
STATE OF MINNESOTA (THE "STATE "), AND NEITHER THE AUTHORITY, THE
STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE
NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN PLEDGED TAX INCREMENT, AS DEFINED BELOW.
The Payment of this Note due on any Payment Date is payable solely from and only to the
extent that the Authority shall have received as of such Payment Date Pledged Tax Increment, as
defined in the Agreement. In the event that Pledged Tax Increment is not sufficient to pay when
due the principal of and interest on this Note, the failure of the Authority to pay the principal of
and interest on this Note then due shall not constitute a default hereunder, but only to the extent
the Pledged Tax Increment received is less than the principal and interest due on such Payment
Date.
The Authority shall pay on each Payment Date to the Owner the Pledged Tax Increment.
On December 31, 2031, the maturity date of this Note, any unpaid portion shall be deemed to
have been paid in full.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to have
obligated itself to pay hereon from any funds, except the Pledged Tax Increment, and then only to
the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or of any other public body, and neither the Authority nor any
director, commissioner, council member, board member, officer, employee or agent of the
Authority, nor any person executing or registering this Note, shall be liable personally hereon by
reason of the issuance or registration hereof or otherwise.
The Authority makes no representation or covenant, express or implied, that the revenues
described herein will be sufficient to pay, in whole or in part, the amounts which are or may
otherwise become due and payable hereunder.
The Authority's payment obligations hereunder shall be further conditioned on the fact
that there shall not at the time have occurred and be continuing an Event of Default under the
Agreement, and, further, if pursuant to the occurrence of an Event of Default under the
Agreement the Authority elects to terminate the Agreement, the Authority shall have no further
debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the
Agreement for a fuller statement of the obligations of the Owner, and of the rights of the
Authority thereunder, and said provisions are hereby incorporated by reference into this Note to
the same extent as though set out in full herein. The execution and delivery of this Note by the
Authority, and the acceptance thereof by the Owner, as the initial Registered Owner hereof as
2
shown on the attached Certificate of Registration, shall conclusively establish this Note as the
"Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and
deliver the same to the Redeveloper) under the Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Authority outstanding on the
date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of
the Authority to exceed any constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Economic Development
Authority in and for the City of New Hope, by its Commission Members, has caused this Note to
be executed by the manual signatures of the President and the Executive Director of the
Authority and has caused this Note to be dated as of the date first indicated above.
ECONOMIC DEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF NEW HOPE
By _ lj
Its P e�id&e t
3
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Note, as originally issued on the - �- day of
February, 2007, was on said date registered in the name of the Economic Development Authority
in and for the City of New Hope, a public body corporate and politic and that, at the request of
said Registered Owner of this Note, the undersigned has this day registered this Note as to
principal and interest on the Note in the name of such Registered Owner, as indicated in the
registration blank below, on the books kept by the undersigned for such purposes.
Name of Date of Signature of
Registered Owner Registration Secretary
Pinnacle Homes, Inc., February&, 2007
a Minnesota corporation
332 Minnesota St, Suite 1070
St. Paul, MN 55101
C:\DOCUMENTS AND SETTINGS \VLEONE \LOCAL SETTINGS\TEMPORARY INTERNET FILES \OLK4F9 \REVENUE NOTE.DOC
11
a
Gay L. Cerney
gcerney@krassmonroe.com
Direct 952.885.4393
Also admitted in New York
February 19, 2007
Kirk McDonald
Community Development Director
City of New Hope
4401 Xylon Av N
New Hope, MN 55428
Re: New Hope /Former Frank's Nursery Site /Pinnacle Homes, Inc.
Our File No. 10048 -13
Dear Kirk:
Enclosed is a Limited Revenue Tax Increment Note in. the amount of $400,000 to be executed by the
New Hope EDA and delivered to Pinnacle Homes, Inc. as required by the Contract for Private
Development dated July 26, 2004. Please have the EDA do the following:
* The President and Executive Director should both sign the Note on page 3 where
indicated,
The Secretary of the EDA should sign the Certificate of Registration (attached to
the Note), and
* The date that the Note is executed should be inserted on the first page of the
Note and twice on the last page.
For purposes of the FDA's administration of the payments on the Note, please note the following:
* As stated in the first paragraph of the Note, interest accrues from October 9,
2006, the date of the final Certificates of Occupancy for the townhomes, and
* The Note is payable from only 35% of available tax increment from Tax
Increment District No. 04 -1 as per the Contract.
We would appreciate receiving a photocopy of the fully executed Note for our files.
Very truly yours,
KRASS MONROE, P.A.
Gay L. erney
GAWPDATAW\NEW HOPE\13 \COR\MCDONALD GLC01.1DOC
8000 Norman Center Drive, Suite 1000
Minneapolis, Minnesota 55437 -1178
TEL 952.885.5999 FAx 952.885.5969
www.krassmonroe.com
Leone Valerie
From:
McDonald Kirk
Sent:
Tuesday, February 20, 2007 2:11 PM
To:
Leone Valerie
Cc:
Donahue Dan; Sulander Daryl; Berggren Kim; Sylvester Pam
Subject:
FW: New Hope /Frank's site /Pinnacle Homes - Revenue Note
Attachments: 20070219_022210_7298963e001 c.pdf; Revenue Note.DOC
20070219_022210_Revenue Note.DOC
7298963e001c.p... (65 KB)
Val:
Please see attached letter from Krass Monroe with instructions for signatures on Revenue
Note and Certificate of Registration by EDA President and Executive Director. Can you
please print off copies, have Mayor and Dan execute and then send original to Pinnacle
Homes, Inc., send a copy to Krass Monroe and make a copy for the Improvement Project file
(maybe Daryl also wants an executed copy ?). Inasmuch as these agreements have already been
approved, I do not feel they need to be placed on an EDA agenda for approval again. Dan or
Daryl: if you feel differently, please let me know.
Kirk
- - - -- Original Message---- -
From: Gay Cerney [ mailto:gcerney @krassmonrce.com]
Sent: Monday, February 19, 2007 2:28 PM
To: McDonald Kirk
Cc: James Casserly; Greg Johnson; Berggren Kim; Sulander Daryl
Subject: New Hope /Frank's site /Pinnacle Homes - Revenue Note
Kirk,
The form of Revenue Note for Pinnacle Homes, and a transmittal letter, are attached.
Please let me know if you have any questions.
Gay
Gay Cerney I Krass Monroe, P.A. I 8000 Norman Center Dr, Suite 1000
Minneapolis, MN 55437
Direct: (952) 885 -4393 I Fax: (952) 885 -5969 Also admitted in New York
0
� n z
r �
Gay L. Carney
gcerney @krassmonroe.com
Direct 952.885.4393
Also admitted in New York F '
February 19, 2007
Kirk McDonald
Community Development Director
City of New Hope
4401 Xylon Av N
New Hope, MN 55428
Re: New Hope /Former Frank's Nursery Site /Pinnacle Homes, Inc.
Our File No. 10048 -13
Dear Kirk:
Enclosed is a Limited Revenue Tax Increment Note in. the amount of $400,000 to be executed by the
New Hope EDA and delivered to Pinnacle Homes, Inc. as required by the Contract for Private
Development dated July 26, 2004. Please have the EDA do the following:
The President and Executive Director should both sign the Note on page 3 where
indicated,
« The Secretary of the EDA should sign the Certificate of Registration (attached to
the Note), and
• The date that the Note is executed should be inserted on the first page of the
Note and twice on the last page.
For purposes of the FDA's administration of the payments on the Note, please note the following:
• As stated in the first paragraph of the Note, interest accrues from October 9,
2006, the date of the final Certificates of Occupancy for the townhomes, and
• The �Q# !. } .P'a -oba . frorta ly} vaifable, aa l pnt „fro. c
IQ R"r!tlt.,: x�t „q Cofi,rapt.
We would appreciate receiving a photocopy of the fully executed Note for our files.
Very truly yours,
KRASS MONROE, P.A.
Gay L. erney
GAWPDATA\N\NEW HOPM13\COR\MCDONALD GLC0I.D0C
8000 Norman Center Drive, Suite 1000
Minneapolis, Minnesota 55437 -1178
TEL 952.885.5999 FAX 952.885.5969
www.krassmonroe.com
'� 11 111 11
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF NEW HOPE
LIMITED REVENUE TAX INCREMENT NOTE
February_, 2007
The Economic Development Authority in and for the City of New Hope (the
"Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay
to the order of Pinnacle Homes, Inc. (the "Owner "), solely from the source, to the extent and in
the manner hereinafter provided, the principal amount of this Note, being Four Hundred
Thousand Dollars ($400,000.00) (the "Principal Amount "), together with interest on the unpaid
principal balance from October 9, 2006 until paid at the rate of Six and Three/Fourths Percent
(6.75 %) per annum and payable on the dates described below (the "Payment Dates ") and in the
amounts as hereinafter defined (the "Payments ").
This Note is issued pursuant to that certain Contract for Private Redevelopment by and
between the Authority and the Owner dated as of July 26, 2004 (as amended, modified,
supplemented or restated from time to time, the "Agreement "). This Note is subject to the terms,
conditions and provisions of the Agreement. Capitalized terms in this Note not defined herein
shall have the definitions given those terms in the Agreement.
The Payment Dates shall commence on August 1 of the first year of receipt of Tax
Increment from the construction of the Minimum Improvements and on each February 1 and
August 1 thereafter until and including December 31, 2031 unless earlier paid in accordance with
the terms of this Note.
All Payments made by the Authority on this Note shall be applied first to accrued interest
and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be
added on such Payment Date to the principal amount of this Note.
The Principal Amount is subject to prepayment at the option of the Authority in whole or
in part at any time without penalty.
Each Payment on this Note is payable in any coin or currency of the United States of
America which on the date of such Payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at its postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
which has been issued by the Authority pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178,
subdivision 4, to aid in financing a project, as therein defined, of the Authority consisting
generally of defraying certain public redevelopment costs incurred and to be incurred by the
Authority within and for the benefit of its Redevelopment Project No. 1.
THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE
STATE OF MINNESOTA (THE "STATE "), AND NEITHER THE AUTHORITY, THE
STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE
NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN PLEDGED TAX INCREMENT, AS DEFINED BELOW.
The Payment of this Note due on any Payment Date is payable solely from and only to the
extent that the Authority shall have received as of such Payment Date Pledged Tax Increment, as
defined in the Agreement. In the event that Pledged Tax Increment is not sufficient to pay when
due the principal of and interest on this Note, the failure of the Authority to pay the principal of
and interest on this Note then due shall not constitute a default hereunder, but only to the extent
the Pledged Tax Increment received is less than the principal and interest due on such Payment
Date.
The Authority shall pay on each Payment Date to the Owner the Pledged Tax Increment.
On December 31, 2031, the maturity date of this Note, any unpaid portion shall be deemed to
have been paid in full.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to have
obligated itself to pay hereon from any funds, except the Pledged Tax Increment, and then only to
the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or of any other public body, and neither the Authority nor any
director, commissioner, council member, board member, officer, employee or agent of the
Authority, nor any person executing or registering this Note, shall be liable personally hereon by
reason of the issuance or registration hereof or otherwise.
The Authority makes no representation or covenant, express or implied, that the revenues
described herein will be sufficient to pay, in whole or in part, the amounts which are or may
otherwise become due and payable hereunder.
The Authority's payment obligations hereunder shall be further conditioned on the fact
that there shall not at the time have occurred and be continuing an Event of Default under the
Agreement, and, further, if pursuant to the occurrence of an Event of Default under the
Agreement the Authority elects to terminate the Agreement, the Authority shall have no further
debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the
Agreement for a fuller statement of the obligations of the Owner, and of the rights of the
Authority thereunder, and said provisions are hereby incorporated by reference into this Note to
the same extent as though set out in full herein. The execution and delivery of this Note by the
Authority, and the acceptance thereof by the Owner, as the initial Registered Owner hereof as
2
shown on the attached Certificate of Registration, shall conclusively establish this Note as the
"Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and
deliver the same to the Redeveloper) under the Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Authority outstanding on the
date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of
the Authority to exceed any constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Economic Development
Authority in and for the City of New Hope, by its Commission Members, has caused this Note to
be executed by the manual signatures of the President and the Executive Director of the
Authority and has caused this Note to be dated as of the date first indicated above.
ECONOMIC DEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF NEW HOPE
By
Its President
By
Its Executive Director
3
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Note, as originally issued on the day of
February, 2007, was on said date registered in the name of the Economic Development Authority
in and for the City of New Hope, a public body corporate and politic and that, at the request of
said Registered Owner of this Note, the undersigned has this day registered this Note as to
principal and interest on the Note in the name of such Registered Owner, as indicated in the
registration blank below, on the books kept by the undersigned for such purposes.
Name of
Registered Owner
Pinnacle Homes, Inc.,
a Minnesota corporation
332 Minnesota St, Suite 1070
St. Paul, MN 55101
Date of Signature of
Registration Secretary
February , 2007
GAWPDATA\N \NEW HOPE \13 \DOC \REVENUE NOTE.DOC
E
R55CKREG LOG20010VO CITY OF NEW HOPE
AP Documentation
9/20/2006- 9/20/2006
Check # Date Amount V endor / Explanation PO # Doc No Inv No Account No Subledge Account Description
131437 9/20/2 006 110902 WINNETKA NEW HOPE TOWNHOMES LL
Business Unit
9/25/2006 11:11:21
Page - 80
56,000.00- Storm water pond fee 32976 9 -14 -06 LTR 9304.5390 1733 Storm Water Ponding Storm Water -BS /Inc
400,000.00 Redvlpmnt Contract Pmt #1 32976 9 -14 -06 LTR 41733.7090 1733 Othr Consultg Sery 5620 Wtka Ave- Townhome Devlpmt
344,000.00
Page 1 of 1
Sulander Daryl
From: kellyreamyers @comcast.net
Sent: Monday, September 18, 2006 11:00 AM
i
To: Sulander Daryl
Cc: mlmoore18 @aol.com
Subject: Disbursement for Redevelopment Costs
Mr. Sulander;
We received a letter from Kirk McDonald following our meeting on September 14, 2006, requesting us
to follow -up with you regarding whom the check should be made payable for the Redevelopment costs.
Please deduct $56,000.00 for the Storm water ponding fee from the $400,000.00, a ut a check
payable to Winnetka New Hope Town Homes, LLC. for the remaining balance of $344,000.0 .
If you have other questions or need to contact us you may contact me at
651- 398 -4498 or Melvin at 651- 336 -8767. Thanks.
9/18/2006
September 14, 2006
Mr. Melvin Moore
Winnetka Townhomes, LLC
332 Minnesota Street, Suite 1070
St. Paul, MN 55101
Subject: Disbursement for Redevelopment Costs
Dear Mr. Moore:
I am writing to follow up and confirm the discussion that took place on September 14, 2006, regarding
the city of New Hope reimbursing the redeveloper in cash for $400,000 of eligible costs for the Winnetka
Townhomes, LLC project upon the issuance of certificates of occupancy for the first 22 twnhomes. It
was agreed between both parties that there is an outstanding issue regarding a $56,000 storm water
ponding fee and it was agreed upon by both parties that said amount would be deducted from the
$400,000 payment. The city will proceed to prepare a disbursement to Winnetka Townhomes, LLC in the
amount of $344,000, which will be available on September 28. Please confirm how the check should be
made payable with Daryl Sulander, director of finance for the city of New Hope. Mr. Sulander can be
reached by phone (763- 531 -5131) or email at dsuander @ci.new- hope.mn.us.
The city's financial consultant from Krass Monroe will proceed to prepare the Tax Increment Revenue
Note to be executed by the New Hope Economic Development Authority and will complete that task by
approximately October 15. If you have any questions regarding that matter, please contact Greg Johnson
at Krass Monroe (952- 885 - 5994).
Lastly, the city engineer and building official will proceed to coordinate a meeting at the Winnetka
Townhomes site for a final inspection on pavement and landscaping issues. City staff will schedule the
release of the existing letter of credit to be placed on the October 9 Council agenda, with the
understanding that any remaining work or guarantees, such as landscaping, will be covered by an
escrow check or a similar financial guarantee.
4401 Xylon Avenue North + New Hope, Minnesota 55428 -4898 + www. ci.new- hope.mn.us
City Hall: 763- 531 -5100 + Police (non - emergency): 763 -531 -5170 + Public Works: 763- 592 -6777 + TDD: 763 - 531 -5109
City Hall Fax: 763- 531 -5136 + Police Fax: 763 - 531 -5174 + Public Works Fax: 763- 592 -6776
Mr. Melvin Moore
Page 2
September 14, 2006
Please contact me at 763 -531 -5119 if you have any questions. Thank you for your cooperation.
Sincerely,
Kirk McDonald
Community Development Director
Cc: Dan Donahue, City Manager
Vince Vander Top, City Engineer
Roger Axel, Building Official
Kent Johnson, Master Engineering
Greg Johnson, Krass Monroe
Daryl Sulander, Director of Finance
Guy Johnson, Director of Public Works
Steve Sondrall, City Attorney
Kim Berggren, Community Development Assistant
Valerie Leone, City Clerk (Improvement Project #733)
REQUISITION/PURCHASE ORDER
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MN 55428-4898
PHONE: 763-531-5100, FAX: 763-531-5136
FEDERAL ID #41-6008870, MUNICIPAL CORPORATION
VENDOR: lvi.w
Al 'i i Budget Year: 2006
P.O.#
DATE,
VENDOR NO: 1 7 0, _
_
DELIVER TO:
INVOICE # DATE I PROG 1, OBJ, I SUB 1, TYPE, AMOUNT.. DESCRIPTION
LTtC 07 A/ 0 L Y1733 ?o5o 1 c y ,
qll' 4- ?30 6390 033 c�
K T
I hereby certify that all goods have been received in good order, inspected and checked as to quality and quantity as specified in th
RECEIVED BY: CITY MANAGER:
APPROVED FOR PAYMENT: IV AUTHORIZED REPRESENTATIVE:
01
Whiter Vendor Green: Finance Yellow: Department
TERM SHEET
Redeveloper:
Authority:
City:
New Hope: Frank's Nursery
10048 -13
Armory Development II, LLC
New Hope Economic Development Authority
City of New Hope, Minnesota
1/23104
Redevelopment Property: The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue
North, New Hope, Minnesota, PIN# 05- 118 -21 -32 -0007. The
Redeveloper has the site under option and will purchase it.
Creation of TIF District: The Authority shall create a redevelopment tax increment
financing district for the Redevelopment Property (the "TIF
District ") assuming the statutory tests for establishment are met.
The Authority will properly consider and make all necessary
findings, including the "but for" finding on need for public
assistance.
City Assistance and Tax
Increment Financing: The Authority will provide the following forms of assistance to the
Redeveloper:
a. The Authority will reimburse the Redeveloper in cash for
$400,000 of eligible costs upon the issuance of certificates of
occupancy for the first 22 townhomes.
b. The Authority will issue a pay -as- you -go Tax Increment
Revenue Note to reimburse the Redeveloper for up to $400,000
of additional eligible costs, payable from tax increment
generated by the Redevelopment Project.
Tax Increment
Revenue Note: The following terms shall be applicable to the Tax Increment
Revenue Note:
a. Principal: shall not exceed $400,000
b. Term: 26 years
c. Interest rate: 6.75%
d. Pledge: 35% of available tax increment will be pledged for
payment of the Tax Increment Revenue Note.
e. Date of Issuance: Upon completion of the Minimum
Improvements and submission to the Authority of
documentation of unreimbursed eligible expenses for at least
the principal amount. For this purpose, "completion" shall
mean that certificates of occupancy have been issued for the
first 22 townhomes and the buildings for the remaining 22
townhomes may be locked and secured.
Developer's Fee: The developer's fee shall be limited to 5% of the total of land
acquisition and construction costs (not soft costs).
Profit Sharing: The amount of assistance provided by the Authority is intended to
yield a projected profit (sources less uses) of 15 %, with the
developer's fee not counted as profit for purposes of this
calculation. Upon completion of the project, if actual profit
exceeds 15 %, the principal amount of the Revenue Note shall be
decreased by 50% of the difference between actual profit and the
amount representing a 15% profit. The amount of any Met
Council grant shall be counted as a source for purposes of this
calculation.
The Redeveloper shall provide acceptable documentation to
establish projected project costs before execution of the
redevelopment agreement.
Grants: The City will apply for a Met Council grant upon receipt of the
proper documentation from the Redeveloper to reimburse the
Redeveloper for eligible expenses of approximately $21,000.
Development Costs: The Redeveloper shall pay for environmental remediation, site
preparation, public improvements, platting, plat amendment, PUD
and other development costs. If environmental remediation is
required, the Authority will diligently pursue any eligible programs
for reimbursement of such costs.
Platting: The Redeveloper shall re -plat the Redeveloper's Property and the
Authority Property into the lots shown on the Site Plan.
Permits/Fees: The Redeveloper shall comply with all applicable City building
codes and construction requirements. The Redeveloper will pay
normal permit, plan review, utility access and park dedication fees
and shall be responsible for obtaining all building, plumbing,
electrical and mechanical permits prior to construction.
2
Site Improvements: The Redeveloper shall construct all site improvements, including:
• Building demolition
• Site clearance
• Sanitary sewer
• Water mains and stubs
• Storm sewers and storm water system elements, including
ponding, both on and off site
• Private streets, including curb and gutter
• Landscaping and irrigation according to City - approved
landscape plans
• Pedestrian improvements pursuant to City - approved site plans
• Grading and import /export of soil in accordance with City -
approved grading plans
• Retaining walls and fences
Minimum Improvements: The Redeveloper shall construct the following Minimum
Improvements to the Redevelopment Property:
• 44 townhomes with an average sales price of approximately
$222,000 per unit.
Zoning and Land Use
Approvals/Easements: Normal and customary site and building plan review requirements
will be followed. The Redeveloper shall pay for rezoning,
subdivision, platting, plat amendment, PUD and preparation of
restrictive covenants, easements, reciprocal easements, and any
other documentation necessary for the construction and sale of the
Minimum Improvements. The Redeveloper shall be responsible
for obtaining all land use and zoning approvals.
Internal Drives: The Redeveloper will, in accordance with Authority specifications,
construct any internal drives on the Redevelopment Property. The
Redeveloper and subsequent owners of the Redevelopment
Property shall be responsible for maintaining all internal drives.
Timing: Begin on or about July 1, 2004
Complete on or about June 30, 2007
Business Subsidy Act: The Redeveloper shall set wage and job goals in connection with
the Business Subsidy Act, if applicable. If such goals are not
required by the Act, the Redeveloper agrees to comply with any of
the Act's reporting requirements that may nonetheless be
applicable to the redevelopment project.
3
Relocation of Tenants: The Redeveloper will pay for relocation services and benefits for
all tenants of the Redevelopment Property. The Redeveloper may,
in lieu of funding such services and benefits for a tenant, provide a
written waiver by that tenant. Such waiver must be in a form
acceptable to the Authority. The Redeveloper shall indemnify the
Authority for any relocation liabilities arising under applicable
law with respect to any portion of the Redevelopment Property.
Remedy Upon Redevel-
oper's Default: The conveyances transferring the Redevelopment Property to the
Redeveloper will contain a right of reverter which will be superior
to the rights of any liens. The right of reverter shall be released
upon issuance of the certificate of completion for each Phase.
Effect of Term Sheet: This Term Sheet outlines the terms under which the parties are
willing to enter into a contract for private redevelopment, but does
not constitute an offer or acceptance on either party's part. All
rights and obligations with respect to the Redevelopment Property
shall only be as provided for in a Contract for Private
Redevelopment approved by the Authority's Board of
Commissioners.
GAWPDATA\N\NEW HOPE \13\DOC'\TERM SHEET V 1.DOC
M
Page 1 of 1
Linnihan Julie
From:
Gay Cerney [gcerney @krassmonroe.com]
Sent:
Wednesday, May 09, 2007 3:36 PM
To:
Linnihan Julie
Cc:
James Casserly; McDonald Kirk
Subject: Pinnacle Homes revenue note
Attachments: Note amortization.xls
Julie,
As we discussed, attached is an amortization spreadsheet for the FDA's $400,000 revenue note to Pinnacle
Homes. It has "IF" formulas so that you don't have to redo them based on whether tax increment in any period is
more or less than accrued interest. I filled in sample tax increment amounts for the first 5 payment dates. For the
first two payment dates, you can see what happens when the 35% of district tax increment pledged is not enough
to cover accrued interest.
I used actual days elapsed in a 365 -day year.
I will respond to Melvin Moore's email.
Gay
Gay Cerney I Krass Monroe, P.A. 1 8000 Norman Center Dr, Suite 1000 1 Minneapolis, MN 55437
Direct: (952) 885 -4393 1 Fax: (952) 885 -5969
Also admitted in New York
THE INFORMATION CONTAINED IN THIS EMAIL MESSAGE AND IN ANY ACCOMPANYING ATTACHMENT IS CONFIDENTIAL AND PRIVILEGED.
IT IS INTENDED ONLY FOR THE USE OF EACH RECIPIENT. IF YOU ARE NOT AN INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT
RESPONSIBLE FOR DELIVERING THIS MESSAGE TO AN INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISCLOSURE,
COPYING, OR DISTRIBUTION OF THE CONTENTS OF THIS TRANSMISSION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS EMAIL
IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE.
ANY TAX ADVICE CONTAINED IN THIS ELECTRONIC OR WRITTEN COMMUNICATION (INCLUDING ANY ATTACHMENT) IS NOT INTENDED BY
OUR FIRM TO BE USED, AND CANNOT BE USED, BY ANY PERSON FOR THE PURPOSE OF AVOIDING ANY PENALTIES IMPOSED UNDER
THE INTERNAL REVENUE CODE OR APPLICABLE STATE OR LOCAL TAX LAW PROVISIONS. NO WRITTEN ADVICE FROM OUR FIRM MAY BE
USED IN PROMOTING, MARKETING OR RECOMMENDING ANY PARTNERSHIP, ENTITY, INVESTMENT PLAN OR ARRANGEMENT TO ANY
TAXPAYER WITHOUT OUR EXPRESS CONSENT. THIS NOTICE IS PROVIDED PURSUANT TO U.S. TREASURY DEPARTMENT CIRCULAR 230.
5/9/2007
CITY OF NEW HOPE
PINNACLE HOMES, INC._
$400,000 Limited Revenue Tax Increment Note
NOTE AMORTIZATION SCHEDULE
Interest Begins to Accrue:
10/9/2006
Principal Amount:
400,000
_Total
Interest Rate:
6,75%
First Payment Date:
8/1/2007
Accrued But
Unpaid Interest
Payment
D ate
TIF #04.1
Tax Increment*
35% of
Tax Increment
Principal
Pa ment
Accrued -+-
interest
Interest
Payment
Addedto
Principal
Total Debt
Payment
AnnualDebt
service
Principal
Balance
08/01/07
18,375.00
6,431.25
0.60
21,895.891
6,431.25
(15,464.64)
6,431.25
6,431.251
400,000
415,465
0 2/01/0 8
35,000.06
22MM
0.00
14,1371
0
12 51,
(1887.18)
12,250.00
417,352
------- 68101108
74,397.00
26,038.95
11,991.92
47 � 6 8
14,047.
04 7 03d
� 14:2
0.00
-
1 26,038.95
38,288.95
405,360
02/01/09
65,283.00
22,849.05
6,055771
13,793.341
13,793.341
0.00
22,849.05
396,304
08/01/09
44,528.00
15,584.80
2,3 1 9 .47
13,265.33
13265.33
0.00
15,584.80
38,433.85
393,985
02/01/10
0.00
0.00
13,406.27
0.60
0.00
om
0.001
0.00
0.00
0.00
0.00
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02/01/11
0.00
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_ 08/01/1 1
OC/01M - 1
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0.001
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02/01/13
OM
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68/01/13
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02/01/14
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02/01/15
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08/01/15
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02/01/18
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08/01/18
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02/01/19
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08/01/19
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- 62/01/20
08/01/20
02/01/21
08/01/21
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02/01/22
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02/01/26
08/01/26
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08/01/27
02/01/28
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08/01/30
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-------------------
- - ------------------------
---------------------------------------
TOTALS
-
23,367
90,545.04
83,154.05
1 _(max$400,000)
Tor 8pa-nents, TI received in 1 st half taxes of same year;
------ - -
----------------
for 2/1 payments, TI received in 2nd half taxes of prior year.
I f note principal is not paid in full by 8/1/35, the rest is forgiven
- - ------
- - ----- 4--
Note debt service stops before 8/1/35 if all principal has been repaid.
----------
I
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION NO. 2004 -06
A RESOLUTION AUTHORIZING APPROVAL OF A TERM SHEET
BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
AND ARMORY DEVELOPMENT 11, LLC FOR THE REDEVELOPMENT OF
THE FORMER FRANK'S NURSERY PROPERTY
BE IT RESOLVED by the New Hope Economic Development Authority (the "EDA ")
as follows:
Section 1. Recitals
1.01 Armory Development 11, LLC (the "Redeveloper") has presented a proposal to
the City to redevelop the Frank's Nursery site at 5620 W innetka Avenue North (the "Site ").
1.02 The Site is located within Redevelopment Project No. 1.
1.03 The EDA has presented a term sheet (the "Term Sheet ") to the Redeveloper,
attached as Schedule A , outlining the terms and conditions under which the EDA is willing
to enter into a Contract for Private Redevelopment with the Redeveloper. The
Redeveloper has indicated its willingness to undertake the project in accordance with the
Term Sheet.
1.04 It has been proposed that the EDA enter into a Contract for Private
Redevelopment (the "Contract ") with the Redeveloper if mutually agreeable terms can be
reached consistent with the Term Sheet.
Section 2. Findings
2.01 The EDA hereby finds that the redevelopment project promotes the
objectives as outlined in its Restated Redevelopment Plan for Redevelopment Project No.
1 established pursuant to Minnesota Statutes, Section 469.001 et seq.
2.02 The EDA hereby finds that the Site is located in an area which the EDA
intends to include in a new tax increment financing district pursuant to Minnesota Statutes,
Sections 469.174 through 469.1799, and, as applicable, Laws of Minnesota 2003, 1"
Special Session, Chapter 21, Article 10, Section 10, all as amended and supplemented
from time to time.
Section 3. Authorizations.
3.01 The President and the Executive Director (the "Officers"), along with
necessary staff, attorneys and consultants for the EDA, are hereby authorized to negotiate
a Contract for Private Redevelopment with the Redeveloper relating to the Site, which
Contract shall be presented to the EDA for its approval.
Adopted by the EDA this 26th day of January 2004.
W. Peter Enck, President
ATTEST:
aniel J. Donahue, Executive Director
G:kWPDATA\N\NEW HOPEN13\000EDA RESOL AUTHG TERM SHEET.DOC
2
Schedule A
TERM SHEET
TERM SHEET
New Hope: Frank's Nursery
10048 -13
Redeveloper: Armory Development H, LLC
Authority: New Hope Economic Development Authority
City: City of New Hope, Minnesota
1/23/04
Redevelopment Property: The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue
North, New Hope, Minnesota, PIN# 05- 118 -21 -32 -0007. The
Redeveloper has the site under option and will purchase it.
Creation of TIF District: The Authority shall create a redevelopment tax increment
financing district for the Redevelopment Property (the "TIF
District ") assuming the statutory tests for establishment are met.
The Authority will properly consider and make all necessary
findings, including the "but for" finding on need for public
assistance.
City Assistance and Tax
Increment Financing: The Authority will provide the following forms of assistance to the
Redeveloper:
a. The Authority will reimburse the Redeveloper in cash for
$400,000 of eligible costs upon the issuance of certificates of
occupancy for the first 22 townhomes.
b. The Authority will issue a pay -as- you -go Tax Increment
Revenue Note to reimburse the Redeveloper for up to $400,000
of additional eligible costs, payable from tax increment
generated by the Redevelopment Project.
Tax Increment
Revenue Note: The following terms shall be applicable to the Tax Increment
Revenue Note:
a. Principal: shall not exceed $400,000
b. Term: 26 years
c. Interest rate: 6.75%
d. Pledge: 35% of available tax increment will be pledged for
payment of the Tax Increment Revenue Note.