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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 0. 02/01/11 0.00 0 0.00 1 0.00 _ 08/01/1 1 OC/01M - 1 62/01 M2 ---.-0.00 0.00 OM 0.001 0001 0.00 0.00 ---- ------ - 0.00 . 0.001 0.00 0.09 0,00 0.00 � 0.00 0.00 OM 0.000.001 0.001 0.00 02/01/13 OM 0.00 OM 0.001 0.001 68/01/13 0.00 0.001 0.00 0.00 0.00 0.00 02/01/14 0.00 0.00 0.00 0.00 0.00 0.00 08/01114 0.00 6 0.00 0.00 0.00 0.00 02/01/15 0.00 0.00 0.00 100 Omoot 08/01/15 0.00 - ------- 0.00 - 0.001 0.00 0.00 Om 1 0.00 02/01/16 0.00 0.00 - 0-001 - 0.00 Om 0001 0.00 0.00 0.00 i OMI Om 0.001 ---- 0.00 - ----08/01/16_ 02/01/17 0.00 0,00 0.00 0 0.00 0.001 08/01/17 0.00 0.00 0.00 00 OM 0.0010.00 02/01/18 6 0.00 0.00 --- 0M - 0.00 0.001 08/01/18 OM 0.00 0.00 OM ---- 0.00 0.00 0.001 OM 02/01/19 0.00 0.00 0.00 6.6 0.00 0.00 08/01/19 0.00 0.001 0.001 0.00 0.00 0.00 OMI - 62/01/20 08/01/20 02/01/21 08/01/21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 0.001 0.001 0.00' 0.00 0.00 0.00 0 0=0 6.60 0.00 6,66 0.00 0.00 0.001 0.00 0'00 i 1 02/01/22 08/01/22 02/01/23 08/01/23 02/01/24 08/01/24 / 9 1/2 08 / 0 1/25 02/01/26 08/01/26 0 �1/27 - UA0 08/01/27 02/01/28 000 0.00 - q:O:OT - 0.00 0.00 0.00 0.00 I- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1 0.00 1 0.00 1 OM OM OM 1 0.00 -- OMOO 0.00 o.00 1 0.00 F 0.001 0.00 0.00 0.00 - 000 0.00 0.00 - 0.00 1 0.00 0.00 0,00 0.00 OM 0.00 - - - 0.00 0.00 -------- 0.00 0 . 00 1---- 0,001 0.001 0.001 0.001 a001 0001 0.00 0.00 0,00 --- 0.00 0 0.00 0,00 6.00 0.00 0.00 0 OM 0.00 0.001 -. 0.00 6.0 0.00 0.00 0.00 0.00 0.00 - 0 - 00 0.00 0.00 0.00 -- OM:; 0,00[ 0.00 0.00 ---- 0.001 - 08/01/28 0 0.00--- 0.001 OM 0,00 0.00 02/01/29 0.00 0.00 1 0.00 0.60 1 0-00 0.00 - ------- 08/01/29 0.00 0.001 O mj 0.00 1 0.00 1 0.00 0 2/0I/30 0.00 -0001 0.00 0.001 0.00 0,00 -- 0.00 -- I---- ...... 08/01/30 0.00 0.001 0.00 0.001 0.00 0.00 0.001 02/01/31 0.00 0.6 0.00 0.001 OM 0.00 08/01/31 - 60 - 0 0.001 0 Om 1 0. - 000 - 0 02/01/32 0.00 0.001 OJO - o - .00 0.00 OM 08/01/ 02/01/33 0.00 0.00 0.00 0.00 0.00 0.60 0.00 0100 0.00 0.00 0.00 -- 0.00 08/61/33 0.00 0.00, 0.00 0.001 0.00 1 OM 0 - 00 02/01/34 3.00 0,00 0,00E 0.00 ] 0.00 --- 08/01/34 1 0.000.00 0.001 1 0.0 0.00 02/01/35 08/01/35 - ----- 0.001 - 6 - 0 - 0 0.00 1 , 0.00 0.00 - 0 - 0 - OF - 0.00 0.00 -0M 0.00 OM 0. 00 -- 0.001 0 . 00 ---- ---- - ------------------- - - ------------------------ --------------------------------------- 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.