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062821 EDA Meeting Packet    EDA MEETING  City Hall, 4401 Xylon Avenue North  Monday, June 28, 2021        President Kathi Hemken  Commissioner John Elder  Commissioner Andy Hoffe  Commissioner Michael Isenberg  Commissioner Jonathan London      1. Call to order – EDA Meeting of June 28, 2021    2. Roll call    3. Approval of Minutes:   April 26, 2021    4. Resolution approving purchase and redevelopment agreement with Donnay Homes,  Inc. for the sale of 5213 Pennsylvania Avenue North (improvement project no. 1062)    5. Resolution approving purchase and redevelopment agreement with Great Buy  Homes, Inc. for the sale of 4637 Aquila Avenue North (improvement project no. 1052)    6. Adjournment    EDA Meeting   Page 1 April 26, 2021  City of New Hope  4401 Xylon Avenue North  New Hope, Minnesota 55428    EDA Minutes April 26, 2021  Regular Meeting City Hall      CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to  order at 8:33 p.m.    ROLL CALL Present:          Kathi Hemken, President  John Elder, Commissioner  Andy Hoffe, Commissioner  Michael Isenberg, 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 Hoffe, seconded by Commissioner London,  to approve the minutes of February 8, 2021. All present voted in favor. Motion  carried.    5213 PENNSYLVANIA  AVE N  (IMPROVEMENT  PROJECT NO. 1062)  Item 4  President Hemken introduced for discussion EDA Item 4, Resolution approving  contract with Nitti Rolloff Services Inc. for hazardous material abatement, tree  removal, demolition of site improvements, well sealing, site grading, sewer lining,  and water service valve replacement at 5213 Pennsylvania Avenue North  (improvement project no. 1062).    Mr. Jeff Alger, community development specialist, explained in February of 2021  the EDA acquired the single‐family home located at 5213 Pennsylvania Avenue  North as part of the city’s scattered site housing program. Bids were solicited to  prepare the lot for redevelopment. The low bid was submitted by Nitti Rolloff  Services, Inc. for $26,750. The work includes hazardous material abatement,  disposal of possessions, tree removal, demolition of the building and site  improvements, well sealing, sewer lining, and water service valve replacement.  The city has used the services of Nitti Rolloff in the past with good experiences.     RESOLUTION 2021‐04  Item 4  Commissioner London introduced the following resolution and moved its  adoption “RESOLUTION APPROVING CONTRACT WITH NITTI ROLLOFF  SERVICES INC. FOR HAZARDOUS MATERIAL ABATEMENT, TREE  REMOVAL, DEMOLITION OF SITE IMPROVEMENTS, WELL SEALING,  SITE GRADING, SEWER LINING, AND WATER SERVICE VALVE  REPLACEMENT AT 5213 PENNSYLVANIA AVENUE NORTH  (IMPROVEMENT PROJECT NO. 1062).” The motion for the adoption of the  EDA Meeting   Page 2 April 26, 2021  foregoing resolution was seconded by Commissioner Hoffe, and upon vote being  taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe,  Isenberg, 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.    4637 AQUILA AVE N  (IMPROVEMENT  PROJECT NO. 1052)  Item 5  President Hemken introduced for discussion EDA Item 5, Resolution approving  contract with Kevitt Excavating, LLC for hazardous material abatement,  demolition of site improvements, site grading, sewer lining, and water service  valve replacement at 4637 Aquila Avenue North (improvement project no. 1052)    Mr. Jeff Alger, community development specialist, stated in March of 2021 the  EDA acquired the property located at 4637 Aquila Avenue North as part of the  city’s scattered site housing program. The property was severely damaged in a  tragic fire that occurred in the spring of 2020. Bids were solicited to prepare the lot  for redevelopment. The low bid was submitted by Kevitt Excavating, LLC for  $32,200. The work includes hazardous material abatement, demolition of the  building and site improvements, site grading, sewer lining, and water service  valve replacement. Because the house sustained fire damage, the debris must be  taken to a landfill that is certified for potentially hazardous materials which is  more expensive but ensures proper disposal.    RESOLUTION 2021‐05  Item 5  Commissioner Elder introduced the following resolution and moved its adoption  “RESOLUTION APPROVING CONTRACT WITH KEVITT EXCAVATING,  LLC FOR HAZARDOUS MATERIAL ABATEMENT, DEMOLITION OF SITE  IMPROVEMENTS, SITE GRADING, SEWER LINING, AND WATER  SERVICE VALVE REPLACEMENT AT 4637 AQUILA AVENUE NORTH  (IMPROVEMENT PROJECT NO. 1052).” The motion for the adoption of the  foregoing resolution was seconded by Commissioner Isenberg, and upon vote  being taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe,  Isenberg, 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 Isenberg, seconded by Commissioner Elder,  to adjourn the meeting. All present voted in favor. Motion carried. The New Hope  EDA adjourned at 8:42 p.m.    Respectfully submitted,    Valerie Leone, City Clerk    I:\RFA\COMM DEV\2021\EDA\Pennsylvania\EDA4 Q ‐ 5213 Pennsylvania Ave N Lot Sale 06‐28‐21.docx    Request for Action  June 28, 2021    Approved by: Kirk McDonald, City Manager  Originating Department: Community Development  By: Jeff Alger, Community Development Specialist;   Jeff Sargent, Director of Community Development  Agenda Title  Resolution approving purchase and redevelopment agreement with Donnay Homes, Inc. for the sale of 5213  Pennsylvania Avenue North (improvement project no. 1062)  Requested Action  Staff requests that the Economic Development Authority conduct a public hearing and approve a resolution  approving the sale of the scattered site lot located at 5213 Pennsylvania Avenue North to Donnay Homes, Inc.  Policy/Past Practice  The Economic Development Authority reviews proposals for the redevelopment of scattered site housing  properties prior to executing a contract with the preferred buyer/builder.  Background  The Economic Development Authority (EDA) acquired the property located at 5213 Pennsylvania Avenue  North for $170,000 in February of 2021, as part of the city’s scattered site housing program. The property is  located in a priority redevelopment neighborhood and was one of the lowest valued single‐family homes in  the city. The home was demolished in May of 2021 and the lot has been prepared for construction of a new  single‐family home. A Request for Proposals (RFP) marketing the lot was sent to more than 30 builders on May  14, 2021. The non‐negotiable minimum lot sale price was set at $65,000 and builders were allowed the  opportunity to submit a higher offer in order to make their proposal more competitive. The RFP stipulated that  the proposed house “must be an owner‐occupied, single‐family home.” The occupancy requirement applies to  the first buyer for period of two years. Proposals were due on June 16, 2021. The EDA received proposals from  the following builders:   Donnay Homes (preferred)   Great Buy Homes   JB Hoffman Homes Inc.   Novak‐Fleck   SVK  Staff reviewed the proposals with the city manager and selected the submittal from Donnay Homes as the  preferred proposal. The RFP stated that a two‐story design was preferred for this lot, which Donnay Homes is  proposing. Donnay Homes’ proposal includes the second highest lot purchase price ($72,000), the highest  projected sale price ($485,000 or $535,000 with finished basement), the most finished square footage (2,747 or  3,102 with finished basement), tied for the most bathrooms (3), tied for the second most bedrooms (4 or 5 with  finished), and a three‐stall garage. The home features a two‐story design with a high level of curb appeal,  including cultured stone façade, board and batten siding, and a large front porch. The floorplan is identical to  the home that was constructed by Donnay Homes at 3856 Maryland Avenue in 2019 and includes a gas fireplace  in the family room. That home sold for $413,921. Upgrades have been made to the front façade of the home  proposed for 5213 Pennsylvania Avenue North, with additional cultured stone spanning the wall behind the  front porch.  Agenda Section EDA Item Number  4    Request for Action, Page 2    Great Buy Homes’ proposal includes a lot purchase price of $81,000, which is $9,000 more than Donnay Homes’  proposal. It features a split‐level design, which is viewed less favorably than the two‐story design submitted  by Donnay Homes. Donnay Homes’ proposal is projected to sell for $40,000 to $90,000 more than Great Buy  Homes’ proposal. Donnay Homes’ proposal includes a large front porch, utilizes more cultured stone, and in  staff’s opinion, has greater overall curb appeal. For these reasons, it is being recommended as the preferred  proposal. SVK committed to building a split‐level design, which is most prevalent within the Windsor Ridge  subdivision. The base characteristics and attributes of each proposal are summarized as follows:     Donnay Homes  (Preferred)  Great Buy Homes JB Hoffman  Homes  Novak‐Fleck SVK  Lot purchase price $72,000 $81,000 $65,000 $68,000 $65,000  Projected sale  price  $485,000; $535,000 if  basement finished  $445,000 $480,000 $480,717  $419,900  Design 2‐story Split‐level Split‐level 2‐story Split‐level  Finished Space 2,747 SF; 3,102 SF if  basement finished  2,701 SF 2,166 SF 2,037 SF; ~2,866  SF if basement  finished  2,306 SF  Bedrooms 4 (4 on upper level; 1  more in basement if  finished)  5 (3 on upper  level; 2 in lower  level)  3 (2 on upper; 1  in in lower)  4 (4 on upper  level; 1 more in  basement if  finished)  3 (1 on upper  level; 2 in lower  level)  Bathrooms 3 (2 full; 1 ½; 1 more  ¾ in basement if  finished)  3 (2 full; 1 ¾)  2 (1 full; 1 ¾) 3 (2 full; 1 ½; 1  more ¾ in  basement if  finished)  3 (1 full; 1 ¾; 1 ½)  Garage 3‐stall on left; door  with glass inserts  3‐stall on left;  door with glass  inserts  2‐stall on right;  door with glass  inserts  3‐stall on left;  door with glass  inserts  2‐stall on left  Façade  Garage door  windows   Cultured stone on  lower 1/3 of garage  & front 1/2 of  house   Board/batten siding   Front door with 1  sidelight   3 pillars with  cultured stone base   Garage door  windows   Cultured stone  on lower 1/3 of  front house &  garage   Board/batten  siding   Front door with  2 sidelights   Garage door  windows   Cultured  stone on lower  1/3 of front  house &  garage   Board/batten  siding    Front door  with 1  sidelight   Garage door  windows   Cultured stone  around lower  1/3 of garage   Board/batten  siding   Front door  with 2  sidelights   3 pillars; 1/2  cultured stone   Cultured stone  on lower 1/3 of  front house   Board/batten  siding   Front door with  1 sidelight   2 wood pillars   One side  without  windows  Other  1 walk‐in closet,  upper level   Gas fireplace   Office on main level   Walk‐in pantry   Kitchen island;  quartz countertops   Laundry room on  upper level   Quartz bathroom  vanities   1 walk‐in closet,  upper level   Kitchen island  with granite  countertop   Engineered  wood floor in  kitchen & dining  room     1 walk‐in  closet, upper  level   Kitchen island  with granite  countertop   Hardwood  floor  allowance   1 walk‐in  closet, upper  level   Gas fireplace   Walk‐in pantry   Kitchen island;  granite or  quartz  countertops     1 walk‐in closet,  upper level   Optional gas  fireplace   Kitchen island;  granite or quartz  countertops   Granite or  quartz bathroom  vanities    Request for Action, Page 3    Experience with Recommended Builder  Donnay Homes is a custom home builder based out of Maple Grove. The city worked with Donnay Homes  on the previously referenced project at 3856 Maryland Avenue North. That home sold for $413,921 in 2019.  Some members of the City Council toured the home upon completion. Staff was impressed with the quality  of home constructed by Donnay Homes, which sold for $19,000 more than the projected sale price.    Cost & Tax Impact of Improvements  It is anticipated that expenses associated with the project would be approximately $205,172. The lot would be  sold for $72,000, resulting in a net loss of $133,172. The new home would result in a significant increase in the  subject parcel’s taxable market value. If the property were to be valued at $485,000 in 2022, it is estimated that  total taxes paid to the city in 2023 would increase by $1,902, or 189%, as compared to those that will be allocated  to the city in 2021.    Old House New House  Estimated Market Value 2020,  Payable 2021  Projected Market Value 2022,  Payable 2023  Change Percent  Change  $168,000 $485,000 $317,000 188.69%        Taxes Allocated to City 2020,  Payable 2021  Taxes Allocated to City 2022,  Payable 2023  Change Percent  Change  $1,008 $2,910 $1,902 188.69%    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 $(133,172.18) ‐100.00%  1 (2023) $1,902.00  $(131,270.18) ‐98.57%  5 (2027) $10,097.98  $(123,074.20) ‐92.42%  10 (2032) $21,804.30  $(111,367.88) ‐83.63%  15 (2037) $35,375.13  $(97,797.05) ‐73.44%  20 (2042) $51,107.45  $(82,064.73) ‐61.62%  25 (2047) $69,345.52  $(63,826.66) ‐47.93%  30 (2052) $90,488.44  $(42,683.74) ‐32.05%    The estimated ROI for the project over 30 years is ‐32.05% and the estimated Internal Rate of Return (IRR) for  the project over 30 years is ‐2.08% (calculations attached). The calculations utilize an estimated 3% tax value  growth rate, which is applied to the original taxable market value for the old home and the increased taxable  market value for the new home, both over 30 years. The ROI over 30 years for Great Buy Homes’ proposal  (higher lot purchase price and lower projected sale price) is ‐36.32% and the estimated IRR is ‐2.4%. A cost and  tax impact comparison of this project and the three other projects that have been approved since  implementation of an analysis template that utilizes tax growth rate assumptions is attached.      Request for Action, Page 4    The primary focus of the scattered site program is to target distressed single‐family properties throughout the  city, with the goal of improving residential neighborhoods. It is understood that potential losses are incurred  on each project, as the cost to acquire and redevelop distressed properties often exceeds the value of the new  or rehabilitated home.    Development Agreement and Next Steps  Staff worked with the assistant city attorney to draft a resolution and Purchase and Redevelopment Agreement  for the sale of the lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the  purchase price of the lot at $72,000. The agreement included in the attachments is considered complete by staff  and the city attorney; however, some minor revisions may be necessary once fully reviewed by the buyer. Any  substantial changes to the agreement would be presented to the EDA for approval. The RFP stipulates that  closing must occur within 60 days of approval of the sale. The Purchase and Redevelopment Agreement  stipulates that the home must be completed within a year of the closing date.  Funding  Funding for this project would come from the EDA budget. The city has an annual budget of $250,000 for  scattered site projects and has committed approximately $251,933 to projects this year. The project at 4637  Aquila Avenue North was approved with funds from the 2020 budget and is not included with the 2021 budget.    Project (2021 Budget) Estimated Net Cost  5213 Pennsylvania Ave N $133,172.18  3611 Louisiana Ave N $118,761.03  Total $251,933.21    Annual Budget (2021) $250,000.00  Under/Over Budget $(1,933.21)    Recommendation  Staff recommends that the EDA conduct a public hearing and approve a resolution approving the sale of the  scattered site lot located at 5213 Pennsylvania Avenue North to Donnay Homes, Inc.  Attachments   Resolution   Purchase and Redevelopment Agreements with RFP and proposed plans   Other proposals   Front elevation comparison   Budget   Estimated Tax Impact of Improvements   Estimated Return on Investment   Estimated Internal Rate of Return   Tax Calculator   Comparison of Costs & Tax Impact of Recent Projects    CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 21-___ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH DONNAY HOMES, INC. FOR THE SALE OF 5213 PENNSYLVANIA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1062) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain real property located at 5213 Pennsylvania Avenue North, New Hope, MN, P.I.D. 08-118-21-21-0043, and legally described as “Lot 7, Block 4, Sunset Heights, Hennepin County, Minnesota” (the “Property”) as evidenced by the warranty deed recorded with the Hennepin County Recorder’s Office on February 12, 2021, as Document No. 10915902, respectively; and WHEREAS, the EDA purchased the Property with the intention of razing the existing house and all site improvements in preparation for the sale to a builder to construct a new single family home; and WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff to various builders, the EDA received an offer from Donnay Homes, Inc., a Minnesota corporation (“Donnay Homes”) regarding the sale and redevelopment of the Property; and WHEREAS, the EDA arrived at an agreement with Donnay Homes to sell the Property for the purchase price of $72,000.00 upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted Donnay Homes’ offer and has presented a draft Purchase and Redevelopment Agreement for the Property to Donnay Homes for its review, a copy of which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to Donnay Homes for the sum of $72,000.00, in order for Donnay Homes to redevelop and build a new single family home in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to Donnay Homes, Inc., for the purchase price of $72,000, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Purchase and Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of a single-family home in accordance with the City’s scattered site housing program and polic y. 3. The EDA shall use due diligence for selling the Property to Donnay Homes, Inc. for the construction of a single-family home, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 28th day of June, 2021. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director Exhibit A Purchase and Redevelopment Agreement See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11444 5213 Pennsylvania Ave N\Resolution Approving Sale of 5213 Pennsylvania Ave N.docx 1 PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between Donnay Homes, Inc. a Minnesota corporation (“Buyer") and the Economic Development Authority in and for the City of New Hope, Minnesota, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("Seller") effective June 28, 2021. In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase the vacant parcel of real property located in the City of New Hope at the property address of 5213 Pennsylvania Avenue North, New Hope, Minnesota 55428, PID 08-118-21-21-0043 and legally described on the attached Exhibit A (the “Property”). 1. Purchase Price. The purchase price for the Property is Seventy Two Thousand and No/100 Dollars ($72,000.00) (the “Purchase Price”), which Buyer shall pay as follows: an initial payment of Two Thousand and No/100 Dollars ($2,000.00) (the “Earnest Money”), which sum shall be paid to Seller upon Buyer and Seller’s execution of this Agreement and Seventy Thousand and No/100 Dollars ($70,000.00) payable by wire, cashier’s check or cash on the “Date of Closing”, as that term is defined in paragraph 6 below. There are no items of personal property or fixtures included in this sale. 2. Title Conveyed. On the Date of Closing, Seller shall deliver a Quit Claim Deed (the "Deed") to Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments, and restrictions, except for the “Permitted Encumbrances” set forth on Exhibit B and the restrictive covenants referenced below in paragraph 4.b. 3. Representations of Seller. Seller represents and agrees as follows: a. Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, there are no parties other than Seller in possession of any portion of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property. b. Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. c. To the best of Seller’s knowledge, there are no septic systems or wells on the Property. d. Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller’s Closing Documents signed by it. e. Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code. 2 f. To the best of Seller’s knowledge without inquiry, no above ground or underground tanks are located in or about the Property. g. Seller makes no other warranties as to the condition of the Property. Seller agrees that any breach of Seller’s foregoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. Wherever herein a representation is made “to the best of Seller’s knowledge,” such representation is limited to the actual knowledge of the President and/or Executive Director of Seller. 4. Representations of Buyer. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and sell the Property, Buyer hereby represents to Seller: a. SUBJECT TO THE FOREGOING REPRESENTATIONS BY SELLER, BUYER HEREBY ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN “AS IS” CONDITION AS TO THE USE OF THE PROPERTY. Buyer understands and agrees that the Purchase Price is the fair market value of the Property in its “AS IS” condition. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the homes described in paragraph 10 below. If the soil is determined to be unacceptable Buyer may rescind this Agreement by written notice to Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be refunded to Buyer. b. Buyer agrees the first sale of the separate homes on the Property will be sold to owner-occupants. An “owner-occupant” shall be defined as an individual(s) that purchases the home from Buyer by warranty deed or a contract for deed and intending to reside in the home as a primary residence. To insure the intent of the parties that the home constructed on the Property is purchased by an owner- occupant, Buyer will record restrictive covenants and assessment agreement against the Property prohibiting the leasing of the home for a period of two (2) years after the sale of such home by Buyer to an owner-occupant of the home. The restrictive covenants and assessment agreement shall be substantially in the form of the documents attached hereto as Exhibits C and D, respectively. Further, the restrictive covenants and assessment agreement shall provide that the EDA may levy a $20,000.00 assessment on the Property prior to the sale if the lot is not being sold to an owner-occupant. The EDA shall release the Property from these restrictive covenants and assessment agreement upon the issuance of a certificate of occupancy for the construction of the home on the Property and upon the receipt by the EDA of an affidavit signed by Buyer and the owner- occupants verifying owner-occupants’ intent to reside in the homes as their primary residence in compliance with the restrictive covenants described herein in the form attached as Exhibit C. 3 c. Within one (1) year of Closing, Buyer shall complete the construction of the single family home on the Property (the Improvements). The Improvements must be consistent with all building and zoning requirements and the restrictive covenants applicable to the Property. The representations set forth in this paragraph shall be incorporated into appropriate documents to be recorded against the Property (whether by declaration, restrictive covenants, or development agreement as hereinafter defined) subject to approval by Seller and Buyer as a condition of Closing. 5. Title Commitment and Policy. a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by a title insurance company of Buyer’s choice (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Buyer agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price for any endorsements requested by Buyer or Buyer’s lender. b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon all of the Earnest Money shall be returned to Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (ii) elect to have this Agreement remain in effect, in which event Buyer will be deemed to have approved the previously-cited exception and the same shall be considered part of the Permitted Encumbrances. 4 6. Closing. a. Closing shall occur on or before August 27, 2021 (the “Date of Closing” or “Closing”), unless both parties agree, in writing, to an earlier or later time. b. Closing shall occur at the office of the Title Company. c. Seller shall deliver at closing the following executed and acknowledged documents: (i) the Deed; (ii) affidavit(s) in industry-standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; Seller is not a foreign person or entity; and addressing such other matters as Buyer may reasonably require. 7. Payments/Prorations. At Closing, Seller shall pay the cost of recording any instrument (other than the Deed) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. Buyer shall pay at Closing the cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the Closing, the fees required for recording the Deed, the Purchase and Redevelopment Agreement, the assessment agreement and restrictive covenants and all customary closing fees charged by the Title Company or other closing agent to both Seller and Buyer, if any, utilized to close the transaction contemplated by this Agreement. General real estate taxes payable in the year of closing shall be prorated by Seller and Buyer as of the closing date based upon a calendar year. Each party shall pay its own attorney’s fees. 8. Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and Seller shall be entitled to any and all condemnation proceeds. 9. Construction of Home. Buyer agrees that it will construct a new single family home on the Property. This covenant shall survive the delivery of the Deed. 5 a. The single family home described in this paragraph is referred to as the "Minimum Improvements.” b. The Minimum Improvements shall consist of one new single family home, and shall be constructed substantially in accordance with the RFP Guidelines attached as Exhibit E and the proposal approved by Seller on June 28, 2021, attached as Exhibit F. c. Construction of the Minimum Improvements must be substantially completed within one (1) year following Closing. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of New Hope building inspector. d. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Buyer to construct such Minimum Improvements (including the date for completion thereof), Seller will furnish Buyer with a Certificate of Completion for such improvements. Such certification by Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the Deed with respect to the obligations of Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this paragraph of this Agreement shall be in such form as will enable it to be recorded in the Hennepin County Recorder’s Office and other instruments pertaining to the Property. If Seller shall refuse or fail to provide any certification in accordance with the provisions of this paragraph, Seller shall, within thirty (30) days after written request by Buyer, provide Buyer with a written statement, indicating in adequate detail in what respects Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of Seller for Buyer to take or perform in order to obtain such certification. e. Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (i) Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a “Transfer”), without the prior written approval of Seller. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or 6 permanent financing necessary to enable Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (ii) If Buyer seeks to effect a Transfer prior to issuance of the Certificate of Completion, Seller shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by Buyer as to the portion of the Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of Seller, have expressly assumed all of the obligations of Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by Seller) deprive Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by Seller to the contrary, no such transfer or approval by Seller thereof shall be deemed to relieve Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the 7 Property governed by this subparagraph shall be in a form reasonably satisfactory to Seller. (iii) If the conditions described above are satisfied then the Transfer will be approved and Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (iii) apply to all subsequent transferors. (iv) Upon issuance of the Certificate of Completion, Buyer may transfer or assign the Minimum Improvements and/or Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of Seller. f. Buyer agrees that (a) it will use the Minimum Improvements as only a single family, owner-occupied homes, (b) it will not seek exemption from real estate taxes on the Property under State law, and (c) it will not transfer or permit transfer of the Property to any entity whose ownership or operation of the property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of New Hope or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for at least 30 years after the Date of Closing. g. Buyer shall comply with all recommendations of the City Engineer. h. Buyer’s construction plans shall be approved by the City Building Official. 10. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to Buyer and prior to receipt by Buyer of the Certificate of Completion of the Minimum Improvements, Buyer fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from Seller to Buyer to do so, then Seller shall have the right to re-enter and take possession of the Property and to terminate (and revert in Seller) the estate conveyed by the Deed to Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of Buyer and failure on the part of Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, Seller at its option may declare a termination in favor of Seller of the title, and of all the rights and interests in and to the Property conveyed to Buyer, and that such title and all rights and interests of Buyer, and any assigns or successors in interest to and in the Property, shall revert to Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. 8 Notwithstanding anything to the contrary contained in this paragraph, Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a Certificate of Completion has been issued. 11. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in Seller of title to and/or possession of the Property or any part thereof as provided in paragraph 10, Seller shall apply the Purchase Price paid by Buyer under paragraph 1 of this Agreement as follows: a. First, to reimburse Seller for all costs and expenses incurred by Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing Seller by the Buyer and its successor or transferee; and b. Second, to reimburse Buyer for the balance of the Purchase Price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to Buyer upon delivery of executed, recordable warranty deed to the Property by Buyer to Seller. 12. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; or (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery. Any party shall have the right to designate any other address for notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: SELLER: Economic Development Authority in and for the City of New Hope Kirk McDonald, Executive Director 4401 Xylon Avenue North New Hope, MN 55428-4898 9 with copy to: Stacy A. Woods, New Hope City Attorney Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 BUYER: Donnay Homes, Inc. Attn: Paul Donnay 9655 63rd Avenue North Maple Grove, MN 55369 13. No Broker Involved. Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Seller. 14. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer as provided by law. If Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If Seller defaults under this Agreement, Buyer’s only remedy shall be to terminate the Agreement and recover the Earnest Money paid to Seller. Buyer shall not have any right to the remedy of specific performance 15. Assignment/Prohibition Against Transfer of Property. Buyer may not assign its rights and obligations hereunder without the prior written consent of Seller, which consent may be granted or withheld by Seller in its sole discretion. 16. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both Seller and Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. Seller and Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. 17. Survival. The Parties representations contained herein shall survive the delivery of the Deed. 10 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the above date (“Effective Date”). SELLER: Economic Development Authority in and for the City of New Hope By: _______________________________ Kathi Hemken Its: President Dated: June____, 2021 By: _______________________________ Kirk McDonald Its: Executive Director Dated: June____, 2021 BUYER: Donnay Homes, Inc. By: ________________________________ Paul Donnay Its: President Dated: June____, 2021 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of June, 2021, by Kathi Hemken and Kirk McDonald, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. _______________________________ Notary Public 11 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of June, 2021, by Paul Donnay, the President of Donnay Homes, Inc., a Minnesota corporation, on behalf of said corporation. _______________________________ Notary Public DRAFTED BY: Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424-8811 12 Exhibit A Legal Description Lot 7, Block 4, Sunset Heights, Hennepin County, Minnesota. 13 Exhibit B Permitted Encumbrances 1. Restrictions, reservations, covenants and easements relating to use or improvement of the Property without effective forfeiture provisions of record on the Effective Date; 2. Building and zoning laws, ordinances, city, state and federal regulations; 3. Governmental regulations, if any, affecting the use and occupancy of the Property; 4. All rights in public highways upon the land; 5. Easements for public rights-of-way and public and private utilities, which do not interfere with present improvements; 6. Reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. 7. The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due; 8. The lien of unpaid real estate taxes, if any, not presently payable but to be paid as part of the annual taxes to become due. 14 Exhibit C Restrictive Covenants See attached. 1 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS (“Agreement”) dated effective the ____ day of _____________, 2021, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and Donnay Homes, Inc., a Minnesota corporation (“Donnay Homes”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the City and Donnay Homes dated effective June 28, 2021 (“Purchase Agreement”), Donnay Homes purchased the real property located at 5213 Pennsylvania Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described on the attached Exhibit A (“Property”) which purchase closed on __________ 2021; and WHEREAS, Donnay Homes has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Donnay Homes have agreed Donnay Homes shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and Donnay Homes have agreed the City may levy a $20,000.00 assessment against the Property prior to Donnay Homes’ sale of the Property with the completed home if it is not being sold to an owner-occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and WHEREAS, compliance with the restrictions imposed by this Agreement is an additional consideration for the sale of the Property to Donnay Homes. 2 NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Donnay Homes agrees as follows: AGREEMENT 1. Restrictive Covenants Donnay Homes hereby covenants and agrees with the City that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling (“Dwelling”) constructed upon the Property will be only to “Owner-occupant(s)”. “Owner-occupant” is defined as an individual that purchases the Property from Donnay Homes with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner- occupant, and/or by the “Immediate Family Member(s)” of the Owner-occupant for a period of two (2) consecutive years commencing on the date of initial conveyance to an Owner-occupant. “Immediate Family Member” shall only mean a parent, step-parent, child, step-child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the City of an Affidavit signed by Donnay Homes and the Owner-occupant verifying the Owner-occupant’s intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the two (2) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by City Notwithstanding the restrictions stated above, the City may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Agreement to Assessment Donnay Homes acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before _______________, 2022; and/or (b) if Donnay Homes sells the Property with the completed home to a non-owner-occupant in violation of paragraph 1(a) above. Further, Donnay Homes agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 5. Waiver by Donnay Homes Donnay Homes expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement 3 or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies It is further understood that if Donnay Homes or an Owner- occupant should breach their respective obligations under this Agreement, the City will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the City shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating this Agreement. It is further agreed that the City’s rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the City may have. 7. Donnay Homes’ Successors This Agreement shall not be terminated by: a) Voluntary dissolution of Donnay Homes or any parent, subsidiary or successor of Donnay Homes; b) Merger whereby Donnay Homes (or such parent, subsidiary or successor of Donnay Homes) is not the surviving or resulting entity; or c) Any transfer of all or substantiall y all of the assets of Donnay Homes. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 kmcdonald@ci.new-hope.mn.us 4 If to Donnay Homes: Donnay Homes, Inc. Attn: Paul Donnay 9655 63rd Avenue North Maple Grove, MN 55369 10. Governing Law All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment This Agreement may be modified or amended only by a written instrument executed by Donnay Homes and the City. 13. Counterpart Signatures This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above-written. 5 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: _________________, 2021 Donnay Homes, Inc. By: ________________________________ Paul Donnay Its: President Dated: __________________, 2021 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of ____________, 2021, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of ___________, 2021, by Paul Donnay, the President of Donnay Homes, Inc., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 6 Exhibit A Legal Description Lot 7, Block 4, Sunset Heights, Hennepin County, Minnesota. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11444 5213 Pennsylvania Ave N\Restrictive Covenant - 5213 Pennsylvania Ave N.docx 15 Exhibit D Assessment Agreement See attached. 1 ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT (“Agreement”) dated effective as of the ___ day of ____________, 2021, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and Donnay Homes, Inc., a Minnesota corporation (“Donnay Homes”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between City and Donnay Homes dated effective June 28, 2021 (“Purchase Agreement”) Donnay Homes purchased the real property located at 5213 Pennsylvania Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described on the attached Exhibit A (“Property”) which purchase closed on ____________, 2021; and WHEREAS, Donnay Homes has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Donnay Homes have agreed Donnay Homes shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and Donnay Homes have further agreed the City may levy a $20,000.00 assessment against the Property prior to Donnay Homes sale of the Property with the completed home if it is not being sold to an owner-occupant to be owned and occupied by the owner-occupant for at least two (2) years. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project Donnay Homes hereby covenants and agrees with the City that the new home on the Property shall be fully completed on or before ______________, 2022. Fully completed shall mean the Property shall be improved with a new single- family house. 2 2. Agreement to Assessment Donnay Homes acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single-family house on or before _____________, 2022; (b) if Donnay Homes sells the Property with the completed home to a non-owner-occupant; and/or (c) if the Property is leased to a non-owner-occupant in the first two (2) years after initial conveyance. Further, Donnay Homes agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by Donnay Homes Donnay Homes expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. Donnay Homes’ Successors This Agreement shall not be terminated by: a) The voluntary dissolution of Donnay Homes or any parent, subsidiary or successor of Donnay Homes; b) Merger whereby Donnay Homes (or such parent, subsidiary or successor of Donnay Homes) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Donnay Homes. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Running of Benefits and Burdens All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 6. Notices Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428-4898 kmcdonald@ci.new-hope.mn.us 3 If to DONNAY HOMES: Donnay Homes, Inc. Attn: Paul Donnay 9655 63rd Avenue North Maple Grove, MN 55369 7. Governing Law All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 8. Cumulative Rights Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 9. Amendment This Agreement may be modified or amended only by a written instrument executed by Donnay Homes and the City. 10. Counterpart Signatures This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed this Assessment Agreement effective the day and year first above-written. EXECUTION AND NOTARY PAGE FOLLOWS 4 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: _________________, 2021 Donnay Homes, Inc. By: ________________________________ Paul Donnay Its: President Dated: _______________, 2021 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of ____________, 2021, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of ___________, 2021, by Paul Donnay, the President of Donnay Homes, Inc., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11444 5213 Pennsylvania Ave N\Assessment Agreement - 5213 Pennsylvania Ave N.docx 5 Exhibit A Legal Description Lot 7, Block 4, Sunset Heights, Hennepin County, Minnesota. 16 Exhibit E Request for Proposal (“RFP”) Guidelines See attached. City of New Hope, Minnesota Request For Proposals – 5213 Pennsylvania Avenue North Date: May 14, 2021 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for proposals for construction of new single-family home at 5213 Pennsylvania Avenue North Overview: The city of New Hope EDA owns the property located at 5213 Pennsylvania Avenue North, New Hope, MN 55428 (PID 08-118-21-21-0043). The EDA is requesting proposals from builders to purchase the vacant lot for the construction of a new single-family home. The lot is being offered as part of the city’s scattered site housing program, which focuses on the removal or rehabilitation of distressed properties. The site was previously occupied by a home that was (or will be) razed by the EDA. Enclosed, please find the proposal form and specifications for submitting a proposal. Minimum Lot Price: This lot is being offered at a minimum base price of $65,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. Submission: Interested bidders must submit enclosed Bid Form by U.S. Mail, e-mail, or in person. Bids shall be submitted to Jeff Alger, Community Development Specialist. City of New Hope Community Development Department Attention: Jeff Alger 4401 Xylon Avenue North New Hope, MN 55428 jalger@newhopemn.gov Deadline: Proposals must be submitted using the enclosed bid form and received no later than June 16, 2021 at 1:00 p.m. City staff will review the submitted proposals and make a recommendation to the EDA. It is anticipated that the EDA will make a selection at the June 28, 2021, meeting. Construction of the new home must be completed in full no later than one (1) year after the closing on the purchase of the lot. City of New Hope, Minnesota Proposal Form Property Owner: City of New Hope Economic Development Authority (EDA) Property Address: 5213 Pennsylvania Avenue North, New Hope, MN 55428 Property Identification Number: 08-118-21-21-0043 Minimum Lot Price: This lot is being offered at a minimum base price of $65,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to purchase this lot for $____________________ ($65,000 minimum), and build a new single-family house in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, the builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lot. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Company Name: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Name & Title: ____________________________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota General Notes 1. Only complete proposals will be considered. The city retains absolute discretion in deciding whether or not to accept any particular proposal. 2. State licensed builders who have built at least three (3) houses in Minnesota in the last five (5) years, or have equivalent experience acceptable to the city, are eligible to submit proposals. The home may be speculative or for specific buyers. 3. The city is interested in proposals that will generate the highest valued, owner occupied, single-family home. Owner occupancy restrictions will be documented in the development agreement and secured with a restrictive covenant recorded against the property. The occupancy requirement only applies to the first buyer and lasts for a period of two (2) years. A full legal description relating to this requirement is available upon request. 4. The city would prefer to see a two-story home placed on the site, as the two-story homes built in the program have commanded the highest prices when compared to other home styles such as split-entry. Preference will be given to proposals with the most finished square footage that include high quality exterior materials and upgraded interior amenities. Previously approved plans are available upon request. 5. After proposals have been received, city staff will review and recommend a preferred builder/design at the next regularly scheduled EDA meeting. Within one (1) week of approval by the EDA, the selected builder will enter into a purchase and development agreement that will address the sale of the lot and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement, the builder will be required to submit a $2,000 nonrefundable earnest money deposit. Closing on the purchase of the lot must take place within 60 days of final EDA approval. The buyer will be responsible for paying the following costs associated with the purchase:  Preparation and issuance of the title commitment.  The cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the closing, the fees required for recording the deed, the purchase and redevelopment agreement, the assessment agreement and restrictive covenants, and all customary closing fees charged by the title company or other closing agent, if any, utilized to close the transaction contemplated by this agreement (paid at closing). 6. Construction of the new home must be completed within one (1) year of closing on the purchase of the lot. City of New Hope, Minnesota Specifications 1. Utilities a. All utility service lines shall be underground. Utilities may locate necessary facilities such as pedestals or boxes in the street right-of-way or utility and drainage easements. b. The builder shall be responsible for any expenses associated with connecting the house to private utilities. c. Municipal water is available into the lot on the east side of the property and the location of the service is marked onsite. The EDA coordinated installation of a new curb stop box in conjunction with demolition of the home. d. Municipal sanitary sewer is available into the lot on the east side of the property and the location of the service is marked onsite. The EDA coordinated lining of the existing service from the termination point all the way to the main line in conjunction with demolition of the home. 2. Building Standards and Design Guidelines a. All site improvements shall comply with the New Hope City Code. b. The house shall have at least three (3) finished bedrooms and two (2) finished bathrooms. c. The house shall have an attached garage that will accommodate a minimum of two (2) vehicles. Three (3) stall garages are preferred. d. The design should emphasize the front door as the focal point for the front of the house. A large and usable front porch is desired. Garage door dominance in design should be minimized as much as possible. Front door and garage door designs with windows are preferred. e. The driveway for the new home must be completely new and fully paved from the street to the garage. Driveways are not allowed within three (3) feet of any property line abutting another property and may not be placed above sewer lines or curb stop boxes. The maximum driveway/curb cut width at the property line is 24 feet for a two-car garage and 28 feet for a three-car garage. Installation of a curb and curb cut must meet requirements of the City Code and must be approved by the Public Works Department. See attached specifications for the replacement of curbing and driveway installation (STR-10A and STR-30). If the driveway is moved, the previous curb cut must be replaced with new curbing. Contact the Public Work’s Department for an inspection before pouring the curb. City of New Hope, Minnesota Specifications (continued) f. Equipment such as air-conditioning cooling structures or condensers that generate noise shall not be located within the front yard, side yard setback, or drainage and utility easement. g. Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permitted. To the extent that southern exposures are present, house designs are expected to enhance wintertime natural light and passive solar heating. h. Exterior materials (siding, soffit, doors, and windows) shall be low maintenance. The use of brick or stone accents and incorporation of address numbers into the brick or stone is preferred. Vinyl or other low maintenance siding materials are generally acceptable and can be made more desirable through the use of shakes, fish scales, or other styles to break up the pattern. 3. Landscaping a. The lot shall be landscaped to be aesthetically pleasing in all seasons. Land forms and plant materials shall be used to define the site and blend neatly with adjoining properties. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements shall be landscaped using ornamental grass, shrubs, trees, or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed or hydro-seed is not acceptable for restoration of disturbed areas. All grass that is planted must be sod. Additionally, all lawn areas must be irrigated with underground irrigation systems. b. A minimum of one (1) large-species deciduous shade tree shall be planted in the front yard. A minimum of one (1) large-species deciduous shade tree shall be planted in the side or rear yard. Trees should be a minimum of two (2) inches in diameter. A list of prohibited trees is attached. 4. Setbacks Front Yard (east) Rear Yard (west) Interior Side Yard Attached Garage (north or south) Interior Side Yard House (north or south) 25’ 25’ 5’ 10’ City of New Hope, Minnesota Specifications (continued) 5.Builder Selection Criteria a.Builder must be licensed as a Residential Building Contractor in Minnesota. b.Builder shall provide the addresses of three (3) houses they have built in Minnesota within the last five (5) years, or evidence of qualification acceptable to the EDA. c.Builder must be capable of completing the house within one (1) year of closing on the purchase of the lot. 6.Required Attachments by Builder Site plan showing the layout of the home on the lot. Include dimensions and setbacks. Floor plans with dimensions. Clearly indicate square footages of each floor. List overall square footage. List total finished square footage. Elevations specifying types of exterior materials (color elevations preferred). Narrative description of the interior trim package. Include description of flooring. Estimated sale price of the home. Pictures of similar homes (if available). Attachments Location map Sample lot layout Driveway and curbing specifications (STR-10A and STR-30) Prohibited tree list 5213 5213 Pennsylvania Ave N R-1, Single-family residential 5213 Pennsylvania Ave N R-1, Single-family residential 135’75’Potential Home & Garage Potential Driveway Buildable Area PLATE NO. LAST REVISION: STR-10A AUG. 2019RESIDENTIAL DRIVEWAY WITH APRON CITY OF NEW HOPE, MN 18"MIN18"MINREMOVE EXISTING CURB DAMAGE (MINIMUM ONE PANEL)REMOVE EXISTING CONCRETE DRIVEWAY SURFACE EXISTING DRIVEWAY BACK OF CURBEXISTING CONCRETE CURB & GUTTER ℄EXISTING ROADWAY REMOVE EXISTING BITUMINOUS D428 CONCRETE CURB & GUTTER SAWCUT FELT EXPANSION JOINT SAWCUT EXISTING DRIVEWAY 6" CONCRETE DRIVEWAYBITUMINOUS PATCH SECTIONEXISTING BITUMINOUS LC ONE PANEL MIMIMUM 2'2' PLATE NO. LAST REVISION: STR-30 DEC 2017 CONCRETE CURB REPLACEMENT DRIVE LOCATION (CONCRETE D/W APRON) CITY OF NEW HOPE, MN 6" CLASS 5 AGGREGATE BASE. PLAN 18'' MIN. t Trees provide value from an environmental and property value standpoint. They aid in reducing storm water runoff, soil erosion, and water pollution. Other environmental benefits include the improvement of air quality and conservation of energy. Trees have also been shown to increase property values and can help beautify neighborhoods. Tree Preservation Policy The city of New Hope has a Tree Preservation Policy in place, intended to protect and preserve trees when development takes place. The policy applies to commercial, industrial, multiple family, and institutional land use development projects. The city’s Tree Preservation Policy requires that significant, preferred trees be replaced at 1 inch to 0.5 inch ratio. The ratio refers to the diameter of the tree in inches (rounding up) and the total number of diameter inches required for replacement. A Significant Tree is considered a healthy tree measuring a minimum of six inches in diameter measured five (5) feet above the existing, natural grade surrounding the tree for deciduous trees for deciduous trees, or a minimum of twelve feet in height for coniferous trees. A Preferred Tree is considered any tree that does not appear on the city’s Prohibited Tree list, as shown below. Prohibited Trees The city’s Prohibited Tree list includes the following species:  Amur Maple  Black Locust  Boxelder  Ginko (female only)  Green, White, or Black Ash (fraxinus species)  Mulberry  Non-disease resistant elm species  Nonhybrid cottonwood species  Russian Olive Buckthorn  Siberian or Chinese Elm Boulevard Tree Replacement Policy The city of New Hope has also adopted a policy to help homeowners to replace boulevard trees that have been lost to storms, disease, or other causes. The city has a preferred tree list to address tree selection considerations including hardiness, mature size, salt tolerance, pest and disease resistance, rooting habits, maintenance requirements, and soil compatibility. For more information, call 763‐592‐6763. City of New Hope Forestry Department 5500 International Pkwy • New Hope MN 55428 • Phone: 763-592-6777 • Fax: 763-592-6776 • ci.new-hope.mn.us Prohibited Tree List G:\CommDev\Informational Forms for CD and Public\Originals\Prohibited Tree List.docx (07-15) 17 Exhibit F Buyer’s Proposed Plans See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11444 5213 Pennsylvania Ave N\Purchase and Redevelopment Agreement 5213 Pennsylvania Ave N.docx   D o n n a y H o m e s, I n c. –UG$YHQXH1RUWK0DSOH*URYH0LQQHVRWD Builder #594838, #722939  0D\   5H3HQQV\OYDQLD$YH1RUWK1HZ+RSH01   (QFORVHGSOHDVHILQGRXUVXEPLWWDOIRUWKH,QILOO3URMHFWDWWKHDERYHDGGUHVV  x6LWH3ODQ x/DQGVFDSH3ODQ x%XLOGLQJ3ODQV x6WDQGDUG)HDWXUH6KHHW x)ORRULQJ6SHFLILFDWLRQV x(QHUJ\(IILFLHQF\'RFXPHQWDWLRQ   +RXVH'HWDLOV xEDVHSULFHZLWKRSWLRQDOEDVHPHQWILQLVKa GHSHQGLQJRQILQLVKHV  x/LYLQJ$UHD$ERYH*URXQG VIW xEHGURRPVDQGEDWKURRPV x6HH6WDQGDUG)HDWXUHV6KHHWIRU)LQLVK'HWDLOV x6HHDWWDFKHG)ORRULQJ6SHFV   3') FUHDWHG ZLWK SGI)DFWRU\3URWULDO YHUVLRQZZZSGIIDFWRU\FRP 3') FUHDWHG ZLWK SGI)DFWRU\3URWULDO YHUVLRQZZZSGIIDFWRU\FRP PDF created with pdfFactory Pro trial versionwww.pdffactory.com PDF created with pdfFactory Pro trial versionwww.pdffactory.com PDF created with pdfFactory Pro trial versionwww.pdffactory.com PDF created with pdfFactory Pro trial versionwww.pdffactory.com  D o n n a y H o m e s, I n c. –UG$YHQXH1RUWK0DSOH*URYH0LQQHVRWD Builder #594838, #594839  ZZZGRQQD\KRPHVFRPZZZWUDGWLRQVE\GRQQD\FRP $ERXW8V  )URP2XU)DPLO\WR<RXUV 'RQQD\+RPHVLVDORFDOO\RZQHGSUHPLHUVLQJOHIDPLO\KRPHDQGWRZQKRPHEXLOGHUWKDWKDV GHOLJKWHGQHZKRPHRZQHUVZLWKRXUTXDOLW\DQGFUDIWVPDQVKLSIRUGHFDGHV,QIDFWPDQ\ IDPLOLHVZKRKDGEXLOWWKHLUILUVWKRPHZLWh us come back for their second and third. It’s a great WHVWDPHQWWRRXUVWDQGDUGVIRUVHUYLFH2XUEXVLQHVVSKLORVRSK\LVRQHWKDWEHJDQZLWKRXU family many years ago, we give you ‘More home for your money’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quality and professionalism. 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WE WANT TO MAKE YOUR SHOPPING EXPERIENCE AS EASY AS POSSIBLE. SO HERE IS ALL THE INFO YOU NEED ABOUT THIS PRODUCT. JUST TAKE THE FOLLOWING INFORMATION TO A STORE TO SEE AND FEEL OUR CARPET IN PERSON. WE KNOW YOU WILL BE IMPRESSED. HTTPS://WWW.DWCARPET.COM/PRODUCT/1220/775/) CONTACT US Get in touch if you have any questions or need help placing your order. 866-706-9745 info@engineeredèoors.com 3510 Corporate Drive Dalton, GA 30721 (HTTPS://WWW.ENGINEEREDFLOORS.COM/EMPLOYMENT/) My Account (https://www.engineeredèoors.com/account/) Terms of Use (https://www.dwcarpet.com/terms/) Privacy Policy (https://www.dwcarpet.com/privacy-policy/) Engineered Floors LLC (https://www.engineeredèoors.com/) © 2019 All Rights Reserved. Name * Email * Phone Message SEND ­¬Õšãŧ M A t (htt ///i dè /t/)T fU (htt ///d t /t /) ­¬Õ š ã ŧ Page | 1 Luxury Vinyl Flooring Warranty Style Name Thickness (mm) Wear Layer Residential Warranty Waterproof Warranty Pet Warranty Commercial Warranty The New Standard II - Triumph 5.0 12 mil Lifetime Lifetime Lifetime 7 Year Italian Impressions - Triumph 5.0 22 mil Lifetime Lifetime Lifetime 10 Year Adventure II - Triumph 5.5 22 mil Lifetime Lifetime Lifetime 10 Year Bella Sera - Triumph 5.5 22 mil Lifetime Lifetime Lifetime 10 Year Lux Haus II - Triumph 6.5 22 mil Lifetime Lifetime Lifetime 10 Year Revotec - ALL 8 20 mil Lifetime Lifetime Lifetime 10 Year This limited warranty, from Engineered Floors, extends only to the original end-user and to flooring in its original installation. The Engineered Floors warranties are non-transferable. No installer, distributor or agent, or employee of Engineered Floors may alter the obligations or limitations of any Engineered Floors Warranty. The original receipt, as proof of purchase, is required. If a problem appears which is covered by these warranties, the original purchaser should contact the dealer where the product was purchased immediately and describe the problem. INSTALLATION Engineered Floors recommends that its floor coverings be professionally installed. If not, no labor costs will be considered should there be a valid claim. This warranty covers materials and reasonable labor costs (as determined by Engineered Floors, at its sole discretion) provided a professional installer was used and paid when the Luxury Vinyl Flooring (LVF) was originally installed, and provided further that such LVF was installed in accordance with the installation instructions. Workmanship errors should be addressed to the contractor who installed the floor. Your Engineered Floors LVF should be professionally installed by contractors who have demonstrated expertise in installing the floor covering. Engineered Floors does not warrant installers’ workmanship. The LVF must be installed correctly over a properly prepared sub-floor and regularly and properly maintained. The consumer and installer are responsible for final inspection of the product before permanent installation. Engineered Floors is not responsible for labor costs to replace visibly defective product after installation. REPLACEMENT/REPAIRS Engineered Floors reserves the right to repair any LVF or use its own installer for replacement LVF product. If Engineered Floors repairs or replaces a LVF product as a result of a warranty claim, the consumer is required to remove, store and re-install all fixtures, furnishings and any items placed over the affected areas subsequent to the original installation. Engineered Floors will, at its discretion, repair or replace the defective product according to the proration chart listed in this document. The replacement product is warranted for the remainder of the original warranty period. These costs are the consumer's responsibility. Engineered Floors recommends that appropriate replacement stock of the LVF product be kept if needed for future product repair or replacement. COVERAGE This limited warranty covers manufacturing defects and loss of original pattern and color due to stain, fade or wear, provided that the LVF covered by this limited warranty is (i) installed and maintained according to the LVF Installation Instructions and (ii) subject only to normal residential, light commercial use or commercial, as further detailed for any individual warranties for a specific LVF product. Residential warranties apply to products installed in non-commercial, owner-occupied, residential premises (single-family homes, condominiums, town houses, etc.). Residential rental units fall under the commercial or light commercial warranty only. Light commercial implies light traffic and residential cleaning practices. Commercial implies high foot traffic and well as routine and scheduled maintenance protocols. MANUFACTURING DEFECTS WARRANTY Engineered Floors warrants to the original purchaser of its products that, if properly installed, the products shall remain free of manufacturing defects for the indicated period of time, starting from the date of original purchase, as long as the original pu rchaser owns the property. The product will be manufactured according to the floor covering industry’s standards and tolerances in quality variation. Engineered Floors will replace or repair defective materials including reasonable labor costs during the first five (5) years from the date of the original purchase. If the owner hires a third party to install the product, the owner is responsible for that party’s Page | 2 judgment. Material installed with obvious defects will be deemed acceptable by the owner or installer and will not be considered for warranty. This warranty is subject to restrictions and limitations outlined in the Conditions/Exclusions and Limitations sectio ns. WEAR, STAIN AND FADE WARRANTY Engineered Floors warrants to the original purchaser that its LVF products will not wear, stain or fade from normal use for the indicated period of time specified on the authorized retailer’s sample, starting from the date of original purchase. Engineered Floors requires that the LVF was installed and maintained in accordance to the installation instructions and subject to normal residential, light commercial use, or commercial, as further detailed for any individual warrantied for a specific product. This warranty is subject to restrictions and limitations as outlined in the Conditions/Exclusions and Limitations sections of this document. Definitions: xWear must be through the wear layer to the degree that the printed pattern is altered. xFade must be to the degree that the floor is permanently discolored. xStain is defined as a permanent change in color of the surface of the product caused by common household food, beverages, and recommended cleaning products as indicated in our Care and Maintenance Guide. PET-PROOF WARRANTY Engineered Floors warrants to the original purchaser that its LVF products will resist staining from pets (domestic dog or cat) including feces, urine and vomit for the indicated period of time specified on the authorized retailer’s sample, starting from the date of original purchase when properly installed and maintained. This pet-proof warranty is defined as a permanent change in color of the surface of the product after proper spot cleaning as outlined in the care and maintenance guide. This warranty is subject to restrictions and limitations as outlined in the Conditions/Exclusions and Limitations sections of this document. WATERPROOF WARRANTY Engineered Floors warrants its LVF products for the indicated period of time specified on the authorized retailer’s sample from the date of original purchase to the original purchaser to be waterproof and that the structural integrity of the flooring plank will not be significantly diminished by topical exposure to water for the life of the product. The flooring planks integrity will not be affected by moisture, it is probable that when excessive moisture that flows over the edge of the flooring surface onto the subfloor or into other surrounding structures/building materials or where there is standing water, mold or mildew growth can occur. LVF is not a moisture barrier. This limited warranty excludes damage from mold and mildew growth due to prolonged exposure to moisture, damage to surrounding structures such as, but not limited to, subfloors, walls, fixtures, furniture, underlayment, moldings, trims or subfloor heating systems. This limited warranty does not apply to damage caused by water or moisture in the subfloor or underneath the flooring including, but not limited to, damage from subfloor hydrostatic pressure or other conditions that result in water or moisture under the floor. This warranty is subject to restrictions and limitations as outlined in the Conditions/Exclusions and Limitations sections of this document. CONDITIONS/EXCLUSIONS The residential limited warranty is not transferable and applies only to the original purchaser of the LVF product, not to any subsequent owner or user of such product, regardless of how such ownership or use arises. The light commercial limited warranty is not transferable and applies only to the original purchaser of the LVF product, not to any subsequent owners or users of such product, regardless of how such ownership or use arises. Copies of the original sales receipt must be maintained. This warranty applies only where the affected area of the LVF is visible and covers an area greater than 10% of the room. The following are not covered by this limited warranty: xClaims arising out of scratches and dirt. Some products tend to show more scratches and dirt due to color and may require more maintenance. xShading claims for an overall white product that touches another white plank or tile floor covering. xDamage caused by improper installation (including but not limited to improper adhesives and improper subfloor preparation as outlined in the Installation Instructions). xDamage caused by exposure to extreme heat, freight, accidents, intentional abuse, misuse, improper care and maintenance, vacuum cleaner beater bar, indentations, improper rolling loads, use of chairs or other furniture without proper floor protectors or caster wheels, cuts, surface scratches, impact, changes in color or sheen appearance when exposed to a natural light source, subfloor conditions, fire or smoke damage, flooding caused by natural disaster, water or liquid intrusion, exterior application or modification, alterations, repair or service by a non-authorized third party, or construction-related damage. Page | 3 xMinor shading, color or texture differences between samples and delivered product, all of which will be determined at Engineered Floor’s sole discretion. Engineered Floors cannot guarantee a perfect match between productions. Production runs are dye lot sensitive. There may be minor differences in color and texture between the dealer’s sample and the finished material and from one lot to another. xThe following items must be cleaned promptly as they can discolor the grout lines and will not be covered under this warranty: ink, iodine, Mercurochrome, Betadine, dyes, asphalt, tar, grease, baking grease, cooking oils, and nail polish xDamage arising out of the use of the LVF products to seal an existing subfloor from moisture, as LVF products will not inhibit the growth of mold or mildew associated with or caused by flooding, excessive moisture, hydrostatic pressure or alkalis found within a subfloor. xDamage from any urine, feces, or vomit stains other than pets (domestic cat or dog). xLVF products used for athletic playing surfaces, any recreational activity, or inappropriate end user activities. xLVF that has been cut or altered; any installation of the wrong style, color or product with visible defects. Visible defects include but are not limited to shading, surface sheen, squareness, and product color. Labor is excluded on products installed with visible defects. xDamage to surrounding structures such as, but not limited to walls, subfloor, fixtures, furniture, underlayment, moldings, trims, subfloor heating systems, or anything that is not the floor plank. xDamage from neglect, pets, pebbles, other abrasives, insects, spike-heeled shoes, or improper maintenance. xFlooring used outdoors. xDamage caused by chemically reactive material, carpet crocking, dye, mold, stains, spillage, burns, gouges, scratches, indentations, floods, accidents, abuse, or any harsh scouring pads while buffing. xDiscoloration or expansion from heat or sunlight. Avoid exposure to long periods of sunlight. Engineered Floors requires the use of UV protective film, blinds, curtains or shades to assure that LVF products are protected from sun and are not overheated due to this exposure. This type of exposure can induce expansion which may cause buckling. Direct sunlight voids all warranties, express or implied; furthermore, the end user shall assume full responsibility for any failure of the flooring, and Engineered Floors shall be released from any claims, damages, or liabilities whatsoever arising out of or related to the failure to install the flooring with approved adhesive when the flooring is exposed to direct sunlight. xNormal wearing of the finish in high traffic areas, pivot points, and seating areas. xMoldings and accessories. LIMITATIONS: The following limitations and conditions also apply: xAll maintenance instructions must be followed. The consumer must contact the authorized retailer for details. xChange in surface gloss in traffic areas is normal and not covered by this warranty. xIndustry standards allow a maximum 5% irregularity in production. Such defects may be manufacturing related or natural. Should there be any indication that a piece of flooring may be defective due to manufacturing or factory finish, it should not be installed. Installation of flooring that contains any visible manufacturing defect is not covered by this warranty. Engineered Floors must be informed in writing of such defects within a reasonable time. What constitutes a “reasonable time” will be determined at Engineered Floors sole discretion. xThese warranties do not apply to any product designated as off-goods including, but not limited to, second quality, specials or non-standard items. Products so designated are sold “AS IS”. xEngineered Floors reserves the right at any time to modify or discontinue any of its products and will not be liable for changes. If the original product or color is no longer available, Engineered Floors may substitute with reasonably comparable products. xA suitable mat or sufficiently large transition area at the entrance door(s) must be used to prevent sand or dust from damaging the flooring. ENGINEERED FLOORS DOES NOT GRANT TO ANY PERSON OR ENTITY THE AUTHORITY TO CREATE FOR IT ANY OBLIGATION OR LIABILITY IN CONNECTION WITH THIS PRODUCT. THIS LIMITED WARRANTY IS IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. ENGINEERED FLOORS SHALL NOT BE LIABLE TO THE CONSUMER OR ANY OTHER PERSON OR ENTITY FOR ANY INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFITS OR USE OF THE ROOM OR SPACE WHERE THE LVF PRODUCT IS INSTALLED) ARISING OUT OF BREACH OF THIS LIMITED WARRANTY. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF IMPLIED WARRANTIES OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE EXCLUSIONS OR LIMITATIONS MAY NOT APPLY. THIS LIMITED WARRANTY GIVES Page | 4 SPECIFIC LEGAL RIGHTS TO THE CONSUMER, WHO MAY HAVE OTHER LEGAL RIGHTS WHICH VARY FROM STATE TO STATE. THE CONSUMER MUST KEEP THE ORIGINAL RECEIPT AS ENGINEERED FLOORS REQUIRES IT IN ORDER TO VERIFY DATE OF PURCHASE. CLAIMS If a claim arises, it must be submitted to Engineered Floors in writing by the authorized retailer, within a reasonable time after the alleged defect or issue that is the subject of the claim is discovered by the original purchaser. What constitutes a “reasonable time” will be determined at Engineered Floors sole discretion. A claim form must be used and must identify: invoice number, lot number, invoice date, the LVF product collection, and a description of the installation sundries, a detailed description of the alleged defect, and the exact address and location within the address of the installed LVF product. Engineered Floors reserves the right to inspect or test the product at its sole discretion, in the event of a claim. If Engineered Floors determines replacement LVF product is necessary, and the identical LVF product is not available, Engineered Floors will, at its sole discretion, provide a LVF product of comparable quality, color and value. In the event that Engineered Floors repairs a LVF product, this limited warranty shall remain in effect with respect to such repaired LVF product. The above described remedies are the consumer's sole and exclusive remedies for claims under this limited warranty. If Engineered Floors reimburses the consumer for the flooring under the terms of these warranties, Engineered Floors will credit a percentage of the original floor purchase price according to the proration chart below. Warranty for each flooring product is indicated on the retailer's sample. RESIDENTIAL PRORATION SCALE Claim Reported Lifetime Limited 30 Year Limited 25 Year Limited 15 Year Limited 10 Year Limited 7 Year Limited 5 Year Limited 1st to 5th Year 100% 100% 100% 100% 100% 100% 100% 6th to 10th Year 75 % 75% 75% 50% 25% 10% N/A 11th to 15th Year 50% 50% 50% 10% N/A N/A N/A 16th to 20th Year 35% 35% 35% N/A N/A N/A N/A 21st to 25th Year 25% 10% 10% N/A N/A N/A N/A 26th to 30th Year 10% 5% N/A N/A N/A N/A N/A 31st and beyond 5% N/A N/A N/A N/A N/A N/A COMMERCIAL PRORATION SCALE Claim Reported Material Allowed Labor Allowed* 1st Year Material to Repair or replace defective material Reasonable Consideration 1st to 5th Year Material to Repair or replace defective material 50% Labor 5th to 10th Year Material to Repair or replace defective material No labor *reasonable labor costs shall be determined by Engineered Floors. NOTE: SOME JURISDICTIONS DO NOT ALLOW EXCLUSION OR LIMITATIONS OF INCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATIONS OR EXCLUSIONS MAY NOT APPLY TO YOU. THERE ARE NO OTHER WARRANTIES BEYOND THIS EXPRESS WARRANTY. ALL OTHER WARRANTIES, INCLUDING WARRANTIES OR MERCHANTABILITYOR FITNESS FOR A PARTICULAR PURPOSE, ARE EXCLUDED. NO IMPLIED WARRANTIES OF ANY KIND ARE PROVIDED. EXCEPT AS HEREIN EXPRESSLY STATED, THERE ARE NO WARRANTIESOR CONDITION. EXPRESS OR IMPLIED, BY OPERATION OR OTHERWISE, FOR ANY BREACH OF CONTRACT, PRODUCTS LIABILITY, STRICT LIABILITY, NEGLIGENCE OR PART THEREOF FURNISHED HEREUNDER. THE PARTIES AGREE THAT THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL OTHER WARRANTIES AND/OR GUARANTEES, EXPRESS OR IMPLIED, ARE EXCLUDED FROM THIS TRANSACTION AND SHALL NOT PAY FOR THE CONTRACT PRODUCTS. For additional information, please contact Engineered Floors Technical Services at 866-706-9745 Ext 7105 or hstechservice@engineeredfloors.com  Luxury Vinyl Sheet xFlooring Thickness: 58 xFloorScore® Certified: Yes xMade In: USA xGuardian Protection: Yes xNever Yellow: Yes xPattern Scale: Medium xRepeat Length: 36 xRepeat Width: 72 xInstallation Type: Full spread, Loose lay (no glue) or Perimeter (glue only perimeter) xWarranty: 6 Year Residential  The Energy Network Worldwide (TENww) | 612-913-4250 | Final Inspection | Final Inspection Donnay Homes 1309 Meadow Crt, Shakopee Page of .12 Address: 1309 Meadow Crt, Shakopee Plan Name: Meadowood Inspection Date: 11/21/2018 Gas Utility: Centerpoint Energy Electric Utility: Shakopee Energy Association Project Details 51 This Home Test Details Volume (cubic ft): 30,115 CFA (sq ft): 3,166 Blower Door: 943 CFM ACH: 1.88 Projected Savings Above Baseline Home Gas:18.1 % Electric:10.7 % Total Energy:16.5 %* *Total energy converts projected gas & electric usage to the same units before calculating the percent, as a result it is not the sum of gas & electric percent savings HERS Index Less Energy More Energy Zero Energy Home Existing Homes 0 1206010 20 30 40 50 70 80 90 100 110 The Energy Network Worldwide (TENww) | 612-913-4250 | Final Inspection | Final Inspection Donnay Homes 1309 Meadow Crt, Shakopee Page of .22 Framing leakage in basement walls Good Building Practices (Left Picture) No leakage around electrical ceiling penetrations (Right Picture) No leakage around attic hatch Possible Issues (Left Picture) Leakage across basement bottom plates (Right Picture) Framing leakage at garage door Great Buy Homes JB Hoffman Homes Novak-Fleck 5213 Pennsylvania Ave N Donnay Homes SVK 5213 Pennsylvania Ave N Budget for 5213 Pennsylvania Ave N EXPENSES AMOUNT Acquisition (including closing and legal costs)(172,141.71)$ Appraisal (350.00)$ Demolition survey (650.00)$ Demolition and site prep (26,750.00)$ Real estate taxes (estimated at 6 months)(1,580.47)$ Lawn services (estimated)(400.00)$ Utility billing (estimated)(200.00)$ Public hearing notice (estimated)(100.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(1,500.00)$ TOTAL (205,172.18)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)72,000.00$ TOTAL 72,000.00$ TOTAL COST/REVENUE (133,172.18)$ Taxable Market Value 2020, Payable 2021 Projected Taxable Value 2022, Payable 2023 Change Percent Change 168,000.00$ 485,000.00$ 317,000.00$ 188.69% Estimated Taxes Allocated to City 2020, Payable 2021 Projected Taxes Allocated to City 2022, Payable 2023 Change Percent Change 1,008.00$ 2,910.00$ 1,902.00$ 188.69% Projected Project Expenses (205,172.18)$ Lot Sale Revenue 72,000.00$ Total Cost/Revenue (133,172.18)$ # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)-$ (133,172.18)$ -100.00% 1 (payable 2023)1,902.00$ (131,270.18)$ -98.57% 2 (payable 2024)3,861.06$ (129,311.12)$ -97.10% 3 (payable 2025)5,878.89$ (127,293.29)$ -95.59% 4 (payable 2026)7,957.26$ (125,214.92)$ -94.02% 5 (payable 2027)10,097.98$ (123,074.20)$ -92.42% 10 (payable 2032)21,804.30$ (111,367.88)$ -83.63% 15 (payable 2037)35,375.13$ (97,797.05)$ -73.44% 20 (payable 2042)51,107.45$ (82,064.73)$ -61.62% 25 (payable 2047)69,345.52$ (63,826.66)$ -47.93% 30 (payable 2052)90,488.44$ (42,683.74)$ -32.05% *Based on new home valued at $485,000 Estimated Tax Impact of Improvements at 5213 Pennsylvania Ave N Estimated Return on Investment for 5213 Pennsylvania Ave N Description Taxable Market Value Change Cash Flow Investment -$ (133,172.18)$ Return, Year 1 317,000.00$ 1,902.00$ Return, Year 2 326,510.00$ 1,959.06$ Return, Year 3 336,305.30$ 2,017.83$ Return, Year 4 346,394.46$ 2,078.37$ Return, Year 5 356,786.29$ 2,140.72$ Return, Year 6 367,489.88$ 2,204.94$ Return, Year 7 378,514.58$ 2,271.09$ Return, Year 8 389,870.02$ 2,339.22$ Return, Year 9 401,566.12$ 2,409.40$ Return, Year 10 413,613.10$ 2,481.68$ Return, Year 11 426,021.49$ 2,556.13$ Return, Year 12 438,802.14$ 2,632.81$ Return, Year 13 451,966.20$ 2,711.80$ Return, Year 14 465,525.19$ 2,793.15$ Return, Year 15 479,490.94$ 2,876.95$ Return, Year 16 493,875.67$ 2,963.25$ Return, Year 17 508,691.94$ 3,052.15$ Return, Year 18 523,952.70$ 3,143.72$ Return, Year 19 539,671.28$ 3,238.03$ Return, Year 20 555,861.42$ 3,335.17$ Return, Year 21 572,537.26$ 3,435.22$ Return, Year 22 589,713.38$ 3,538.28$ Return, Year 23 607,404.78$ 3,644.43$ Return, Year 24 625,626.92$ 3,753.76$ Return, Year 25 644,395.73$ 3,866.37$ Return, Year 26 663,727.60$ 3,982.37$ Return, Year 27 683,639.43$ 4,101.84$ Return, Year 28 704,148.61$ 4,224.89$ Return, Year 29 725,273.07$ 4,351.64$ Return, Year 30 747,031.27$ 4,482.19$ Total Returns 90,488.44$ Investment Cost 205,172.18$ Selling Price 72,000.00$ Return on Investment -32.05% Description Amount Investment (133,172.18)$ Return, Year 1 1,902.00$ Return, Year 2 1,959.06$ Return, Year 3 2,017.83$ Return, Year 4 2,078.37$ Return, Year 5 2,140.72$ Return, Year 6 2,204.94$ Return, Year 7 2,271.09$ Return, Year 8 2,339.22$ Return, Year 9 2,409.40$ Return, Year 10 2,481.68$ Return, Year 11 2,556.13$ Return, Year 12 2,632.81$ Return, Year 13 2,711.80$ Return, Year 14 2,793.15$ Return, Year 15 2,876.95$ Return, Year 16 2,963.25$ Return, Year 17 3,052.15$ Return, Year 18 3,143.72$ Return, Year 19 3,238.03$ Return, Year 20 3,335.17$ Return, Year 21 3,435.22$ Return, Year 22 3,538.28$ Return, Year 23 3,644.43$ Return, Year 24 3,753.76$ Return, Year 25 3,866.37$ Return, Year 26 3,982.37$ Return, Year 27 4,101.84$ Return, Year 28 4,224.89$ Return, Year 29 4,351.64$ Return, Year 30 4,482.19$ Total Returns 90,488.44$ Internal Rate of Return -2.08% Estimated Internal Rate of Return for 5213 Pennsylvania Ave N 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 1 168,000.00$ 485,000.00$ 317,000.00$ 1,902.00$ 2 173,040.00$ 499,550.00$ 326,510.00$ 1,959.06$ 3 178,231.20$ 514,536.50$ 336,305.30$ 2,017.83$ 4 183,578.14$ 529,972.60$ 346,394.46$ 2,078.37$ 5 189,085.48$ 545,871.77$ 356,786.29$ 2,140.72$ 6 194,758.04$ 562,247.93$ 367,489.88$ 2,204.94$ 7 200,600.79$ 579,115.36$ 378,514.58$ 2,271.09$ 8 206,618.81$ 596,488.82$ 389,870.02$ 2,339.22$ 9 212,817.37$ 614,383.49$ 401,566.12$ 2,409.40$ 10 219,201.89$ 632,814.99$ 413,613.10$ 2,481.68$ 11 225,777.95$ 651,799.44$ 426,021.49$ 2,556.13$ 12 232,551.29$ 671,353.43$ 438,802.14$ 2,632.81$ 13 239,527.83$ 691,494.03$ 451,966.20$ 2,711.80$ 14 246,713.66$ 712,238.85$ 465,525.19$ 2,793.15$ 15 254,115.07$ 733,606.02$ 479,490.94$ 2,876.95$ 16 261,738.53$ 755,614.20$ 493,875.67$ 2,963.25$ 17 269,590.68$ 778,282.62$ 508,691.94$ 3,052.15$ 18 277,678.40$ 801,631.10$ 523,952.70$ 3,143.72$ 19 286,008.75$ 825,680.03$ 539,671.28$ 3,238.03$ 20 294,589.02$ 850,450.44$ 555,861.42$ 3,335.17$ 21 303,426.69$ 875,963.95$ 572,537.26$ 3,435.22$ 22 312,529.49$ 902,242.87$ 589,713.38$ 3,538.28$ 23 321,905.37$ 929,310.15$ 607,404.78$ 3,644.43$ 24 331,562.53$ 957,189.46$ 625,626.92$ 3,753.76$ 25 341,509.41$ 985,905.14$ 644,395.73$ 3,866.37$ 26 351,754.69$ 1,015,482.30$ 663,727.60$ 3,982.37$ 27 362,307.33$ 1,045,946.76$ 683,639.43$ 4,101.84$ 28 373,176.55$ 1,077,325.17$ 704,148.61$ 4,224.89$ 29 384,371.85$ 1,109,644.92$ 725,273.07$ 4,351.64$ 30 395,903.01$ 1,142,934.27$ 747,031.27$ 4,482.19$ 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 5213 Pennsylvania Ave N Comparison of Costs & Tax Impact for Recent Projects Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020) 3611 Louisiana Avenue North 5213 Pennsylvania Avenue North 4215 Louisiana Avenue North 4637 Aquila Avenue North Number of Units 1 1 1 1 Project Description Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Year Acquired TBD 2021 2020 2021 Projected or Actual Projected (at time of offer) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Expenses $(200,761.03) $(205,172.18) $(170,441.53) $(127,292.01) Revenue $67,000.00 $72,000.00 $69,000.00 $81,000.00 Total Cost/Revenue $(133,761.03) $(133,172.18) $(101,441.53) $(46,292.01) *Additional Taxes Collected by City - 1 year $1,296.00 $1,902.00 $786.00 $1,254.00 *Additional Taxes Collected by City - 30 years $61,657.74 $90,488.44 $37,394.28 $59,659.57 *Return On Investment - 30 years -53.90% -32.05% -63.14% 28.88% *Internal Rate of Return - 30 years -3.98% -2.08% -5.01% 1.49% *Assumed 3% tax value growth rate I:\RFA\COMM DEV\2021\EDA\Aquila\EDA5 Q ‐ 4637 Aquila Ave N Lot Sale 06‐28‐21.docx    Request for Action  June 28, 2021    Approved by: Kirk McDonald, City Manager  Originating Department: Community Development  By: Jeff Alger, Community Development Specialist;   Jeff Sargent, Director of Community Development  Agenda Title  Resolution approving purchase and redevelopment agreement with Great Buy Homes, Inc. for the sale of 4637  Aquila Avenue North (improvement project no. 1052)  Requested Action  Staff requests that the Economic Development Authority conduct a public hearing and approve a resolution  approving the sale of the scattered site lot located at 4637 Aquila Avenue North to Great Buy Homes, Inc.  Policy/Past Practice  The Economic Development Authority reviews proposals for the redevelopment of scattered site housing  properties prior to executing a contract with the preferred buyer/builder.  Background  The Economic Development Authority (EDA) acquired the property located at 4637 Aquila Avenue North for  $73,000 in March of 2021, as part of the city’s scattered site housing program. The property was severely  damaged in a tragic fire that occurred in the spring of 2020. The home was beyond repair and was demolished  earlier this month. The lot has been prepared for construction of a new single‐family home. A Request for  Proposals (RFP) marketing the lot was sent to more than 30 builders on May 14, 2021. The non‐negotiable  minimum lot sale price was set at $70,000 and builders were allowed the opportunity to submit a higher offer  in order to make their proposal more competitive. The RFP stipulated that the proposed house “must be an  owner‐occupied, single‐family home.” The occupancy requirement applies to the first buyer for period of two  years. Proposals were due on June 16, 2021. The EDA received proposals from the following builders:   Great Buy Homes (preferred)   JB Hoffman Homes   SVK  Staff reviewed the proposals with the city manager and selected the submittal from Great Buy Homes as the  preferred proposal. The proposal includes the highest lot purchase price ($81,000), the second highest projected  sale price ($445,000), 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. It is the same design that is currently under construction at 4215 Louisiana Avenue North,  which was listed for $415,000 and is currently pending (final sale price may vary). While the proposal from JB  Hoffman Homes has a higher projected sale price ($480,000), it does not include a three‐stall garage, it is 371  square feet smaller, it has two fewer bedrooms, and it has one fewer bathroom as compared to the proposal  from Great Buy Homes. SVK committed to building a split‐level design, which is most prevalent within the  Windsor Ridge subdivision.    The base characteristics and attributes of each proposal are summarized as follows:    Agenda Section EDA Item Number  5    Request for Action, Page 2     Great Buy Homes (Preferred) JB Hoffman Homes SVK  Lot purchase price $81,000 $70,000 $70,000  Projected sale price $445,000 $480,000 $419,900  Design Split‐level Split‐level Split‐level  Finished Space 2,537 SF 2,166 SF 2,306 SF  Bedrooms 5 (3 on upper level; 2 in lower  level)  3 (2 on upper; 1 in in lower) 3 (1 on upper level; 2 in lower  level)  Bathrooms 3 (2 full; 1 ¾)  2 (1 full; 1 ¾) 3 (1 full; 1 ¾; 1 ½)  Garage 3‐stall on left; door with glass  inserts  2‐stall on right; door with glass  inserts  2‐stall on left  Façade  Garage door windows   Cultured stone on lower 1/3  of front house & garage   Board/batten siding    Front door with windows & 2  sidelights   Garage door windows   Cultured stone on lower 1/3  of front house & garage   Board/batten siding    Front door with 1 sidelight   Cultured stone on lower 1/3  of front house   Board/batten siding   Front door with 1 sidelight   2 wood pillars   One side without windows  Other  1 walk‐in closet, upper level   Kitchen island with granite  countertop   Engineered wood floor in  kitchen & dining room     1 walk‐in closet, upper level   Kitchen island with granite  countertop   Hardwood floor allowance   1 walk‐in closet, upper level   Optional gas fireplace   Kitchen island; granite or  quartz countertops   Granite or quartz bathroom  vanities    Experience with Recommended Builder  Great Buy Homes is a mid‐sized custom home builder based out of Anoka. The city has sold seven lots to  Great Buy Homes over the past five years. Each of the homes has sold for higher than the projected sale price.  Addresses for those homes, sale price, and year of sale are as follows:   5400 Yukon Ave N: $297,000 (2017)   6065 Louisiana Ave N: $325,000 (2018)   6067 Louisiana Ave N: $323,900 (2018)   7215 62nd Ave N: $350,821 (2019)   5355 Oregon Ave N: $389,921 (2020)   5353 Oregon Ave N: $385,750 (2021)   4215 Louisiana Ave N: Under construction (original projected sale price of $380,000, listed for $415,000  and pending on MLS)    Cost & Tax Impact of Improvements  It is anticipated that expenses associated with the project would be approximately $127,292. The lot would be  sold for $81,000, resulting in a net loss of $46,292. The new home would result in a significant increase in the  subject parcel’s taxable market value. If the property were to be valued at $445,000 in 2022, it is estimated that  total taxes paid to the city in 2023 would increase by $1,254, or 89%, as compared to those that will be allocated  to the city in 2021.              Request for Action, Page 3    Old House New House  Estimated Market Value 2020,  Payable 2021  Projected Market Value 2022,  Payable 2023  Change Percent  Change  $236,000 $445,000 $209,000 88.56%        Taxes Allocated to City 2020,  Payable 2021  Taxes Allocated to City 2022,  Payable 2023  Change Percent  Change  $1,416 $2,670 $1,254 88.56%    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 $(46,292.01) ‐100.00%  1 (2023) $1,254.00 $(45,038.01) ‐97.29%  5 (2027) $6,657.66 $(39,634.35) ‐85.62%  10 (2032) $14,375.70 $(31,916.31) ‐68.95%  15 (2037) $23,323.04 $(22,968.97) ‐49.62%  20 (2042) $33,695.45 $(12,596.56) ‐27.21%  25 (2047) $45,719.92 $(572.09) ‐1.24%  30 (2052) $59,659.57 $13,367.56 28.88%    The estimated ROI for the project over 30 years is 28.88% and the estimated Internal Rate of Return (IRR) for  the project over 30 years is 1.49% (calculations attached). The calculations utilize an estimated 3% tax value  growth rate, which is applied to the original taxable market value for the old home and the increased taxable  market value for the new home, both over 30 years. A cost and tax impact comparison of this project and the  three other projects that have been approved since implementation of an analysis template that utilizes tax  growth rate assumptions is attached.    The primary focus of the scattered site program is to target distressed single‐family properties throughout the  city, with the goal of improving residential neighborhoods. It is understood that potential losses are incurred  on each project, as the cost to acquire and redevelop distressed properties often exceeds the value of the new  or rehabilitated home.    Development Agreement and Next Steps  Staff worked with the assistant city attorney to draft a resolution and Purchase and Redevelopment Agreement  for the sale of the lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the  purchase price of the lot at $81,000. The agreement included in the attachments is considered complete by staff  and the city attorney; however, some minor revisions may be necessary once fully reviewed by the buyer. Any  substantial changes to the agreement would be presented to the EDA for approval. The RFP stipulates that  closing must occur within 60 days of approval of the sale. The Purchase and Redevelopment Agreement  stipulates that the home must be completed within a year of the closing date.      Request for Action, Page 4    Funding  Funding for this project would come from the EDA budget. The city has an annual budget of $250,000 for  scattered site projects. The project at 4637 Aquila Avenue North was approved with funds from the 2020  budget, which is estimated below. The project at 5213 Pennsylvania Avenue North is included in the 2021  budget.    Project (2020 Budget) Estimated Net Cost  6027 West Broadway $106,516.81  4215 Louisiana Ave N $102,891.51  4637 Aquila Ave N $46,292.01  Total $255,700.33    Annual Budget (2020) $250,000.00  Under/Over Budget $(5,700.33)    Recommendation  Staff recommends that the EDA conduct a public hearing and approve a resolution approving the sale of the  scattered site lot located at 4637 Aquila Avenue North to Great Buy Homes, Inc.  Attachments   Resolution   Purchase and Redevelopment Agreements with RFP and proposed plans   Other proposals   Front elevation comparison   Budget   Estimated Tax Impact of Improvements   Estimated Return on Investment   Estimated Internal Rate of Return   Tax Calculator   Comparison of Costs & Tax Impact of Recent Projects    CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 21-___ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT WITH GREAT BUY HOMES, INC. FOR THE SALE 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, the EDA purchased that certain real property located at 4637 Aquila Avenue North, New Hope, MN, 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”) as evidenced by the two Deeds of Sale recorded with the Hennepin County Registrar of Title’s Office on April 1, 2021, as Document No. 5821043 and Document No. 5821045, respectively; and WHEREAS, the EDA purchased the Property with the intention of razing the existing house and all site improvements in preparation for the sale to a builder to construct a new single family home; and WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff to various builders, the EDA received an offer from GREAT BUY HOMES, INC., a Minnesota corporation (“Great Buy”) regarding the sale and redevelopment of the Property; and WHEREAS, the EDA arrived at an agreement with Great Buy to sell the Property for the purchase price of $81,000.00 upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted Great Buy’s offer and has presented a draft Purchase and Redevelopment Agreement for the Property to Great Buy for its review, a copy of which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to Great Buy for the sum of $81,000.00, in order for Great Buy to redevelop and build a new single family home in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to GREAT BUY HOMES, INC., for the purchase price of $81,000, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Purchase and Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of a single-family home in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to GREAT BUY HOMES, INC. for the construction of a single-family home, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 28th day of June, 2021. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director Exhibit A Purchase and Redevelopment Agreement See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11441 - 4637 Aquila Ave. N\Resolution Approving Sale of 4637 Aquila Ave N.docx 1 PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between GREAT BUY HOMES, INC. a Minnesota corporation (“Buyer") and the Economic Development Authority in and for the City of New Hope, Minnesota, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("Seller") effective June 28, 2021. In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase the vacant parcel of real property located in the City of New Hope at the property address of 4637 Aquila Avenue North, New Hope, Minnesota 55428, PID 07-118-21-43-0008 and legally described on the attached Exhibit A (the “Property”). 1. Purchase Price. The purchase price for the Property is Eighty One Thousand and No/100 Dollars ($81,000.00) (the “Purchase Price”), which Buyer shall pay as follows: an initial payment of Two Thousand and No/100 Dollars ($2,000.00) (the “Earnest Money”), which sum shall be paid to Seller upon Buyer and Seller’s execution of this Agreement and Seventy Nine Thousand and No/100 Dollars ($79,000.00) payable by wire, cashier’s check or cash on the “Date of Closing”, as that term is defined in paragraph 6 below. There are no items of personal property or fixtures included in this sale. 2. Title Conveyed. On the Date of Closing, Seller shall deliver a Quit Claim Deed (the "Deed") to Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments, and restrictions, except for the “Permitted Encumbrances” set forth on Exhibit B and the restrictive covenants referenced below in paragraph 4.b. 3. Representations of Seller. Seller represents and agrees as follows: a. Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, there are no parties other than Seller in possession of any portion of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property. b. Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. c. To the best of Seller’s knowledge, there are no septic systems or wells on the Property. d. Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller’s Closing Documents signed by it. e. Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code. 2 f. To the best of Seller’s knowledge without inquiry, no above ground or underground tanks are located in or about the Property. g. Seller makes no other warranties as to the condition of the Property. Seller agrees that any breach of Seller’s foregoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. Wherever herein a representation is made “to the best of Seller’s knowledge,” such representation is limited to the actual knowledge of the President and/or Executive Director of Seller. 4. Representations of Buyer. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and sell the Property, Buyer hereby represents to Seller: a. SUBJECT TO THE FOREGOING REPRESENTATIONS BY SELLER, BUYER HEREBY ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN “AS IS” CONDITION AS TO THE USE OF THE PROPERTY. Buyer understands and agrees that the Purchase Price is the fair market value of the Property in its “AS IS” condition. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the homes described in paragraph 10 below. If the soil is determined to be unacceptable Buyer may rescind this Agreement by written notice to Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be refunded to Buyer. b. Buyer agrees the first sale of the separate homes on the Property will be sold to owner-occupants. An “owner-occupant” shall be defined as an individual(s) that purchases the home from Buyer by warranty deed or a contract for deed and intending to reside in the home as a primary residence. To insure the intent of the parties that the home constructed on the Property is purchased by an owner- occupant, Buyer will record restrictive covenants and assessment agreement against the Property prohibiting the leasing of the home for a period of two (2) years after the sale of such home by Buyer to an owner-occupant of the home. The restrictive covenants and assessment agreement shall be substantially in the form of the documents attached hereto as Exhibits C and D, respectively. Further, the restrictive covenants and assessment agreement shall provide that the EDA may levy a $20,000.00 assessment on the Property prior to the sale if the lot is not being sold to an owner-occupant. The EDA shall release the Property from these restrictive covenants and assessment agreement upon the issuance of a certificate of occupancy for the construction of the home on the Property and upon the receipt by the EDA of an affidavit signed by Buyer and the owner- occupants verifying owner-occupants’ intent to reside in the homes as their primary residence in compliance with the restrictive covenants described herein in the form attached as Exhibit C. 3 c. Within one (1) year of Closing, Buyer shall complete the construction of the single family home on the Property (the Improvements). The Improvements must be consistent with all building and zoning requirements and the restrictive covenants applicable to the Property. The representations set forth in this paragraph shall be incorporated into appropriate documents to be recorded against the Property (whether by declaration, restrictive covenants, or development agreement as hereinafter defined) subject to approval by Seller and Buyer as a condition of Closing. 5. Title Commitment and Policy. a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by a title insurance company of Buyer’s choice (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Buyer agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price for any endorsements requested by Buyer or Buyer’s lender. b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i) terminate this Agreement, whereupon all of the Earnest Money shall be returned to Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (ii) elect to have this Agreement remain in effect, in which event Buyer will be deemed to have approved the previously-cited exception and the same shall be considered part of the Permitted Encumbrances. 4 6. Closing. a. Closing shall occur on or before August 27, 2021 (the “Date of Closing” or “Closing”), unless both parties agree, in writing, to an earlier or later time. b. Closing shall occur at the office of the Title Company. c. Seller shall deliver at closing the following executed and acknowledged documents: (i) the Deed; (ii) affidavit(s) in industry-standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; Seller is not a foreign person or entity; and addressing such other matters as Buyer may reasonably require. 7. Payments/Prorations. At Closing, Seller shall pay the cost of recording any instrument (other than the Deed) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. Buyer shall pay at Closing the cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the Closing, the fees required for recording the Deed, the Purchase and Redevelopment Agreement, the assessment agreement and restrictive covenants and all customary closing fees charged by the Title Company or other closing agent to both Seller and Buyer, if any, utilized to close the transaction contemplated by this Agreement. General real estate taxes payable in the year of closing shall be prorated by Seller and Buyer as of the closing date based upon a calendar year. Each party shall pay its own attorney’s fees. 8. Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and Seller shall be entitled to any and all condemnation proceeds. 9. Construction of Home. Buyer agrees that it will construct a new single family home on the Property. This covenant shall survive the delivery of the Deed. 5 a. The single family home described in this paragraph is referred to as the "Minimum Improvements.” b. The Minimum Improvements shall consist of one new single family home, and shall be constructed substantially in accordance with the RFP Guidelines attached as Exhibit E and the proposal approved by Seller on June 28, 2021, attached as Exhibit F. c. Construction of the Minimum Improvements must be substantially completed within one (1) year following Closing. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of New Hope building inspector. d. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Buyer to construct such Minimum Improvements (including the date for completion thereof), Seller will furnish Buyer with a Certificate of Completion for such improvements. Such certification by Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the Deed with respect to the obligations of Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this paragraph of this Agreement shall be in such form as will enable it to be recorded in the Hennepin County Registrar of Title’s Office and other instruments pertaining to the Property. If Seller shall refuse or fail to provide any certification in accordance with the provisions of this paragraph, Seller shall, within thirty (30) days after written request by Buyer, provide Buyer with a written statement, indicating in adequate detail in what respects Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of Seller for Buyer to take or perform in order to obtain such certification. e. Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (i) Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a “Transfer”), without the prior written approval of Seller. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or 6 permanent financing necessary to enable Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (ii) If Buyer seeks to effect a Transfer prior to issuance of the Certificate of Completion, Seller shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by Buyer as to the portion of the Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of Seller, have expressly assumed all of the obligations of Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by Seller) deprive Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by Seller to the contrary, no such transfer or approval by Seller thereof shall be deemed to relieve Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the 7 Property governed by this subparagraph shall be in a form reasonably satisfactory to Seller. (iii) If the conditions described above are satisfied then the Transfer will be approved and Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (iii) apply to all subsequent transferors. (iv) Upon issuance of the Certificate of Completion, Buyer may transfer or assign the Minimum Improvements and/or Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of Seller. f. Buyer agrees that (a) it will use the Minimum Improvements as only a single family, owner-occupied homes, (b) it will not seek exemption from real estate taxes on the Property under State law, and (c) it will not transfer or permit transfer of the Property to any entity whose ownership or operation of the property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of New Hope or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for at least 30 years after the Date of Closing. g. Buyer shall comply with all recommendations of the City Engineer. h. Buyer’s construction plans shall be approved by the City Building Official. 10. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to Buyer and prior to receipt by Buyer of the Certificate of Completion of the Minimum Improvements, Buyer fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from Seller to Buyer to do so, then Seller shall have the right to re-enter and take possession of the Property and to terminate (and revert in Seller) the estate conveyed by the Deed to Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of Buyer and failure on the part of Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, Seller at its option may declare a termination in favor of Seller of the title, and of all the rights and interests in and to the Property conveyed to Buyer, and that such title and all rights and interests of Buyer, and any assigns or successors in interest to and in the Property, shall revert to Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. 8 Notwithstanding anything to the contrary contained in this paragraph, Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a Certificate of Completion has been issued. 11. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in Seller of title to and/or possession of the Property or any part thereof as provided in paragraph 10, Seller shall apply the Purchase Price paid by Buyer under paragraph 1 of this Agreement as follows: a. First, to reimburse Seller for all costs and expenses incurred by Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing Seller by the Buyer and its successor or transferee; and b. Second, to reimburse Buyer for the balance of the Purchase Price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to Buyer upon delivery of executed, recordable warranty deed to the Property by Buyer to Seller. 12. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; or (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery. Any party shall have the right to designate any other address for notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: SELLER: Economic Development Authority in and for the City of New Hope Kirk McDonald, Executive Director 4401 Xylon Avenue North New Hope, MN 55428-4898 9 with copy to: Stacy A. Woods, New Hope City Attorney Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 BUYER: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 13. No Broker Involved. Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Seller. 14. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer as provided by law. If Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If Seller defaults under this Agreement, Buyer’s only remedy shall be to terminate the Agreement and recover the Earnest Money paid to Seller. Buyer shall not have any right to the remedy of specific performance 15. Assignment/Prohibition Against Transfer of Property. Buyer may not assign its rights and obligations hereunder without the prior written consent of Seller, which consent may be granted or withheld by Seller in its sole discretion. 16. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both Seller and Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. Seller and Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. 17. Survival. The Parties representations contained herein shall survive the delivery of the Deed. 10 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the above date (“Effective Date”). SELLER: Economic Development Authority in and for the City of New Hope By: _______________________________ Kathi Hemken Its: President Dated: June____, 2021 By: _______________________________ Kirk McDonald Its: Executive Director Dated: June____, 2021 BUYER: GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: June____, 2021 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of June, 2021, by Kathi Hemken and Kirk McDonald, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. _______________________________ Notary Public 11 STATE OF MINNESOTA ) ) ss. COUNTY OF _________________ ) The foregoing instrument was acknowledged before me this ___ day of June, 2021, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation,, on behalf of said corporation. _______________________________ Notary Public DRAFTED BY: Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424-8811 12 Exhibit A Legal Description Lot 4, Block 1, Del Heights 2nd Addition, Hennepin County, Minnesota. Registered Torrens Property Certificate of Title No. 1520127 13 Exhibit B Permitted Encumbrances 1. Restrictions, reservations, covenants and easements relating to use or improvement of the Property without effective forfeiture provisions of record on the Effective Date; 2. Building and zoning laws, ordinances, city, state and federal regulations; 3. Governmental regulations, if any, affecting the use and occupancy of the Property; 4. All rights in public highways upon the land; 5. Easements for public rights-of-way and public and private utilities, which do not interfere with present improvements; 6. Reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. 7. The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due; 8. The lien of unpaid real estate taxes, if any, not presently payable but to be paid as part of the annual taxes to become due. 14 Exhibit C Restrictive Covenants See attached. 1 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS (“Agreement”) dated effective the ____ day of _____________, 2021, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“Great Buy”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the City and Great Buy dated effective June 28, 2021 (“Purchase Agreement”), Great Buy purchased the real property located at 4637 Aquila Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described on the attached Exhibit A (“Property”) which purchase closed on __________ 2021; and WHEREAS, Great Buy has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Great Buy have agreed Great Buy shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and Great Buy have agreed the City may levy a $20,000.00 assessment against the Property prior to Great Buy’s sale of the Property with the completed home if it is not being sold to an owner-occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and WHEREAS, compliance with the restrictions imposed by this Agreement is an additional consideration for the sale of the Property to Great Buy. 2 NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Great Buy agrees as follows: AGREEMENT 1. Restrictive Covenants Great Buy hereby covenants and agrees with the City that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling (“Dwelling”) constructed upon the Property will be only to “Owner-occupant(s)”. “Owner-occupant” is defined as an individual that purchases the Property from Great Buy with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner- occupant, and/or by the “Immediate Family Member(s)” of the Owner-occupant for a period of two (2) consecutive years commencing on the date of initial conveyance to an Owner-occupant. “Immediate Family Member” shall only mean a parent, step-parent, child, step-child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the City of an Affidavit signed by Great Buy and the Owner-occupant verifying the Owner-occupant’s intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the two (2) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by City Notwithstanding the restrictions stated above, the City may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Agreement to Assessment Great Buy acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before _______________, 2022; and/or (b) if Great Buy sells the Property with the completed home to a non-owner-occupant in violation of paragraph 1(a) above. Further, Great Buy agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 5. Waiver by Great Buy Great Buy expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that 3 the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies It is further understood that if Great Buy or an Owner-occupant should breach their respective obligations under this Agreement, the City will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the City shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating this Agreement. It is further agreed that the City’s rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the City may have. 7. Great Buy’s Successors This Agreement shall not be terminated by: a) Voluntary dissolution of Great Buy or any parent, subsidiary or successor of Great Buy; b) Merger whereby Great Buy (or such parent, subsidiary or successor of Great Buy) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Great Buy. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 kmcdonald@ci.new-hope.mn.us 4 If to Great Buy: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 10. Governing Law All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment This Agreement may be modified or amended only by a written instrument executed by Great Buy and the City. 13. Counterpart Signatures This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above-written. 5 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: _________________, 2021 GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: __________________, 2021 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of ____________, 2021, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF ______________ The foregoing instrument was acknowledged before me this ____ day of ___________, 2021, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 6 Exhibit A Legal Description Lot 4, Block 1, Del Heights 2nd Addition, Hennepin County, Minnesota. Registered Torrens Property Certificate of Title No. 1520127 15 Exhibit D Assessment Agreement See attached. 1 ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT (“Agreement”) dated effective as of the ___ day of ____________, 2021, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“Great Buy”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between City and Great Buy dated effective June 28, 2021 (“Purchase Agreement”) Great Buy purchased the real property located at 4637 Aquila Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described on the attached Exhibit A (“Property”) which purchase closed on ____________, 2021; and WHEREAS, Great Buy has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Great Buy have agreed Great Buy shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and Great Buy have further agreed the City may levy a $20,000.00 assessment against the Property prior to Great Buy’s sale of the Property with the completed home if it is not being sold to an owner-occupant to be owned and occupied by the owner- occupant for at least two (2) years. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project Great Buy hereby covenants and agrees with the City that the new home on the Property shall be fully completed on or before ______________, 2022. Fully completed shall mean the Property shall be improved with a new single-family house. 2 2. Agreement to Assessment Great Buy acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single-family house on or before _____________, 2022; (b) if Great Buy sells the Property with the completed home to a non-owner-occupant; and/or (c) if the Property is leased to a non-owner-occupant in the first two (2) years after initial conveyance. Further, Great Buy agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by Great Buy Great Buy expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. Great Buy’s Successors This Agreement shall not be terminated by: a) The voluntary dissolution of Great Buy or any parent, subsidiary or successor of Great Buy; b) Merger whereby Great Buy (or such parent, subsidiary or successor of Great Buy) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Great Buy. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Running of Benefits and Burdens All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 6. Notices Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428-4898 kmcdonald@ci.new-hope.mn.us 3 If to GREAT BUY: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 7. Governing Law All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 8. Cumulative Rights Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 9. Amendment This Agreement may be modified or amended only by a written instrument executed by Great Buy and the City. 10. Counterpart Signatures This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed this Assessment Agreement effective the day and year first above-written. EXECUTION AND NOTARY PAGE FOLLOWS 4 City of New Hope By: ________________________________ Kirk McDonald Its: City Manager Dated: _________________, 2021 GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: _______________, 2021 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ____ day of ____________, 2021, by Kirk McDonald, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF ____________ The foregoing instrument was acknowledged before me this ____ day of ___________, 2021, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11441 - 4637 Aquila Ave. N\Assessment Agreement - 4637 Aquila Ave N.docx 5 Exhibit A Legal Description Lot 4, Block 1, Del Heights 2nd Addition, Hennepin County, Minnesota. Registered Torrens Property Certificate of Title No. 1520127 16 Exhibit E Request for Proposal (“RFP”) Guidelines See attached. City of New Hope, Minnesota Request For Proposals – 4637 Aquila Avenue North Date: May 14, 2021 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for proposals for construction of new single-family home at 4637 Aquila Avenue North Overview: The city of New Hope EDA owns the property located at 4637 Aquila Avenue North, New Hope, MN 55428 (PID 07-118-21-43-0008). The EDA is requesting proposals from builders to purchase the vacant lot for the construction of a new single-family home. The lot is being offered as part of the city’s scattered site housing program, which focuses on the removal or rehabilitation of distressed properties. The site was previously occupied by a home that was (or will be) razed by the EDA. Enclosed, please find the proposal form and specifications for submitting a proposal. Minimum Lot Price: This lot is being offered at a minimum base price of $70,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. Submission: Interested bidders must submit enclosed Bid Form by U.S. Mail, e-mail, or in person. Bids shall be submitted to Jeff Alger, Community Development Specialist. City of New Hope Community Development Department Attention: Jeff Alger 4401 Xylon Avenue North New Hope, MN 55428 jalger@newhopemn.gov Deadline: Proposals must be submitted using the enclosed bid form and received no later than June 16, 2021 at 1:00 p.m. City staff will review the submitted proposals and make a recommendation to the EDA. It is anticipated that the EDA will make a selection at the June 28, 2021, meeting. Construction of the new home must be completed in full no later than one (1) year after the closing on the purchase of the lot. City of New Hope, Minnesota Proposal Form Property Owner: City of New Hope Economic Development Authority (EDA) Property Address: 4637 Aquila Avenue North, New Hope, MN 55428 Property Identification Number: 07-118-21-43-0008 Minimum Lot Price: This lot is being offered at a minimum base price of $70,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to purchase this lot for $____________________ ($70,000 minimum), and build a new single-family house in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, the builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lot. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Company Name: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Name & Title: ____________________________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota General Notes 1.Only complete proposals will be considered. The city retains absolute discretion in deciding whether or not to accept any particular proposal. 2.State licensed builders who have built at least three (3) houses in Minnesota in the last five (5) years, or have equivalent experience acceptable to the city, are eligible to submit proposals. The home may be speculative or for specific buyers. 3.The city is interested in proposals that will generate the highest valued, owner occupied, single-family home. Owner occupancy restrictions will be documented in the development agreement and secured with a restrictive covenant recorded against the property. The occupancy requirement only applies to the first buyer and lasts for a period of two (2) years. A full legal description relating to this requirement is available upon request. 4.No preferred home style has been determined for the lot. Preference will be given to proposals with the most finished square footage that include high quality exterior materials and upgraded interior amenities. Previously approved plans are available upon request. 5.After proposals have been received, city staff will review and recommend a preferred builder/design at the next regularly scheduled EDA meeting. Within one (1) week of approval by the EDA, the selected builder will enter into a purchase and development agreement that will address the sale of the lot and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement, the builder will be required to submit a $2,000 nonrefundable earnest money deposit. Closing on the purchase of the lot must take place within 60 days of final EDA approval. The buyer will be responsible for paying the following costs associated with the purchase: Preparation and issuance of the title commitment. The cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the closing, the fees required for recording the deed, the purchase and redevelopment agreement, the assessment agreement and restrictive covenants, and all customary closing fees charged by the title company or other closing agent, if any, utilized to close the transaction contemplated by this agreement (paid at closing). 6.Construction of the new home must be completed within one (1) year of closing on the purchase of the lot. City of New Hope, Minnesota Specifications 1. Utilities a. All utility service lines shall be underground. Utilities may locate necessary facilities such as pedestals or boxes in the street right-of-way or utility and drainage easements. b. The builder shall be responsible for any expenses associated with connecting the house to private utilities. c. Municipal water is available into the lot on the east side of the property and the location of the service is marked onsite. The EDA coordinated installation of a new curb stop box in conjunction with demolition of the home. d. Municipal sanitary sewer is available into the lot on the east side of the property and the location of the service is marked onsite. The EDA coordinated lining of the existing service from the termination point all the way to the main line in conjunction with demolition of the home. 2. Building Standards and Design Guidelines a. All site improvements shall comply with the New Hope City Code. b. The house shall have at least three (3) finished bedrooms and two (2) finished bathrooms. c. The house shall have an attached garage that will accommodate a minimum of two (2) vehicles. Three (3) stall garages are preferred. d. The design should emphasize the front door as the focal point for the front of the house. A large and usable front porch is desired. Garage door dominance in design should be minimized as much as possible. Front door and garage door designs with windows are preferred. e. The driveway for the new home must be completely new and fully paved from the street to the garage. Driveways are not allowed within three (3) feet of any property line abutting another property and may not be placed above sewer lines or curb stop boxes. The maximum driveway/curb cut width at the property line is 24 feet for a two-car garage and 28 feet for a three-car garage. Installation of curbing and/or a curb cut should not be necessary, as the existing curbing on Aquila Avenue North is surmountable. See attached specifications for installation of the driveway (STR-10A). City of New Hope, Minnesota Specifications (continued) f. Equipment such as air-conditioning cooling structures or condensers that generate noise shall not be located within the front yard, side yard setback, or drainage and utility easement. g. Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permitted. To the extent that southern exposures are present, house designs are expected to enhance wintertime natural light and passive solar heating. h. Exterior materials (siding, soffit, doors, and windows) shall be low maintenance. The use of brick or stone accents and incorporation of address numbers into the brick or stone is preferred. Vinyl or other low maintenance siding materials are generally acceptable and can be made more desirable through the use of shakes, fish scales, or other styles to break up the pattern. 3. Landscaping a. The lot shall be landscaped to be aesthetically pleasing in all seasons. Land forms and plant materials shall be used to define the site and blend neatly with adjoining properties. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements shall be landscaped using ornamental grass, shrubs, trees, or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed or hydro-seed is not acceptable for restoration of disturbed areas. All grass that is planted must be sod. Additionally, all lawn areas must be irrigated with underground irrigation systems. b. A minimum of one (1) large-species deciduous shade tree shall be planted in the front yard. A minimum of one (1) large-species deciduous shade tree shall be planted in the side or rear yard. Trees should be a minimum of two (2) inches in diameter. A list of prohibited trees is attached. 4. Setbacks Front Yard (east) Rear Yard (west) Interior Side Yard Attached Garage (north or south) Interior Side Yard House (north or south) 25’ 25’ 5’ 10’ City of New Hope, Minnesota Specifications (continued) 5.Builder Selection Criteria a.Builder must be licensed as a Residential Building Contractor in Minnesota. b.Builder shall provide the addresses of three (3) houses they have built in Minnesota within the last five (5) years, or evidence of qualification acceptable to the EDA. c.Builder must be capable of completing the house within one (1) year of closing on the purchase of the lot. 6.Required Attachments by Builder Site plan showing the layout of the home on the lot. Include dimensions and setbacks. Floor plans with dimensions. Clearly indicate square footages of each floor. List overall square footage. List total finished square footage. Elevations specifying types of exterior materials (color elevations preferred). Narrative description of the interior trim package. Include description of flooring. Estimated sale price of the home. Pictures of similar homes (if available). Attachments Location map Sample lot layout Driveway and curbing specifications (STR-10A) Prohibited tree list 4637 4637 Aquila Ave N R-1, Single-family residential 4637 Aquila Ave N R-1, Single-family residential 133.49’ 133.73’82’Potential Home & Garage Potential Driveway Buildable Area PLATE NO. LAST REVISION: STR-10A AUG. 2019RESIDENTIAL DRIVEWAY WITH APRON CITY OF NEW HOPE, MN t Trees provide value from an environmental and property value standpoint. They aid in reducing storm water runoff, soil erosion, and water pollution. Other environmental benefits include the improvement of air quality and conservation of energy. Trees have also been shown to increase property values and can help beautify neighborhoods. Tree Preservation Policy The city of New Hope has a Tree Preservation Policy in place, intended to protect and preserve trees when development takes place. The policy applies to commercial, industrial, multiple family, and institutional land use development projects. The city’s Tree Preservation Policy requires that significant, preferred trees be replaced at 1 inch to 0.5 inch ratio. The ratio refers to the diameter of the tree in inches (rounding up) and the total number of diameter inches required for replacement. A Significant Tree is considered a healthy tree measuring a minimum of six inches in diameter measured five (5) feet above the existing, natural grade surrounding the tree for deciduous trees for deciduous trees, or a minimum of twelve feet in height for coniferous trees. A Preferred Tree is considered any tree that does not appear on the city’s Prohibited Tree list, as shown below. Prohibited Trees The city’s Prohibited Tree list includes the following species:  Amur Maple  Black Locust  Boxelder  Ginko (female only)  Green, White, or Black Ash (fraxinus species)  Mulberry  Non-disease resistant elm species  Nonhybrid cottonwood species  Russian Olive Buckthorn  Siberian or Chinese Elm Boulevard Tree Replacement Policy The city of New Hope has also adopted a policy to help homeowners to replace boulevard trees that have been lost to storms, disease, or other causes. The city has a preferred tree list to address tree selection considerations including hardiness, mature size, salt tolerance, pest and disease resistance, rooting habits, maintenance requirements, and soil compatibility. For more information, call 763‐592‐6763. City of New Hope Forestry Department 5500 International Pkwy • New Hope MN 55428 • Phone: 763-592-6777 • Fax: 763-592-6776 • ci.new-hope.mn.us Prohibited Tree List G:\CommDev\Informational Forms for CD and Public\Originals\Prohibited Tree List.docx (07-15) 17 Exhibit F Buyer’s Proposed Plans See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11441 - 4637 Aquila Ave. N\Purchase and Redevelopment Agreement 4637 Aquila Ave N.docx JB Hoffman Homes SVK 4637 Aquila Ave N Great Buy Homes Budget for 4637 Aquila Avenue North EXPENSES AMOUNT Acquisition (including closing and legal costs)(78,888.31)$ Appraisal (425.00)$ Demolition, tree removal and site prep (42,197.00)$ Real estate taxes (estimated at 7 months)(2,081.70)$ Lawn services (estimated)(400.00)$ Utility billing (estimated)(200.00)$ Public hearing notice (estimated)(100.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(1,500.00)$ TOTAL (127,292.01)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)81,000.00$ TOTAL 81,000.00$ TOTAL COST/REVENUE (46,292.01)$ Taxable Market Value 2020, Payable 2021 Projected Taxable Value 2022, Payable 2023 Change Percent Change 236,000.00$ 445,000.00$ 209,000.00$ 88.56% Estimated Taxes Allocated to City 2020, Payable 2021 Projected Taxes Allocated to City 2022, Payable 2023 Change Percent Change 1,416.00$ 2,670.00$ 1,254.00$ 88.56% Projected Project Expenses (127,292.01)$ Lot Sale Revenue 81,000.00$ Total Cost/Revenue (46,292.01)$ # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)-$ (46,292.01)$ -100.00% 1 (payable 2023)1,254.00$ (45,038.01)$ -97.29% 2 (payable 2024)2,545.62$ (43,746.39)$ -94.50% 3 (payable 2025)3,875.99$ (42,416.02)$ -91.63% 4 (payable 2026)5,246.27$ (41,045.74)$ -88.67% 5 (payable 2027)6,657.66$ (39,634.35)$ -85.62% 10 (payable 2032)14,375.70$ (31,916.31)$ -68.95% 15 (payable 2037)23,323.04$ (22,968.97)$ -49.62% 20 (payable 2042)33,695.45$ (12,596.56)$ -27.21% 25 (payable 2047)45,719.92$ (572.09)$ -1.24% 30 (payable 2052)59,659.57$ 13,367.56$ 28.88% *Based on new home valued at $445,000 Estimated Tax Impact of Improvements at 4637 Aquila Avenue North Estimated Return on Investment for 4637 Aquila Avenue North Description Taxable Market Value Change Cash Flow Investment -$ (46,292.01)$ Return, Year 1 209,000.00$ 1,254.00$ Return, Year 2 215,270.00$ 1,291.62$ Return, Year 3 221,728.10$ 1,330.37$ Return, Year 4 228,379.94$ 1,370.28$ Return, Year 5 235,231.34$ 1,411.39$ Return, Year 6 242,288.28$ 1,453.73$ Return, Year 7 249,556.93$ 1,497.34$ Return, Year 8 257,043.64$ 1,542.26$ Return, Year 9 264,754.95$ 1,588.53$ Return, Year 10 272,697.60$ 1,636.19$ Return, Year 11 280,878.52$ 1,685.27$ Return, Year 12 289,304.88$ 1,735.83$ Return, Year 13 297,984.03$ 1,787.90$ Return, Year 14 306,923.55$ 1,841.54$ Return, Year 15 316,131.25$ 1,896.79$ Return, Year 16 325,615.19$ 1,953.69$ Return, Year 17 335,383.65$ 2,012.30$ Return, Year 18 345,445.16$ 2,072.67$ Return, Year 19 355,808.51$ 2,134.85$ Return, Year 20 366,482.77$ 2,198.90$ Return, Year 21 377,477.25$ 2,264.86$ Return, Year 22 388,801.57$ 2,332.81$ Return, Year 23 400,465.61$ 2,402.79$ Return, Year 24 412,479.58$ 2,474.88$ Return, Year 25 424,853.97$ 2,549.12$ Return, Year 26 437,599.59$ 2,625.60$ Return, Year 27 450,727.57$ 2,704.37$ Return, Year 28 464,249.40$ 2,785.50$ Return, Year 29 478,176.88$ 2,869.06$ Return, Year 30 492,522.19$ 2,955.13$ Total Returns 59,659.57$ Investment Cost 127,292.01$ Selling Price 81,000.00$ Return on Investment 28.88% Description Amount Investment (46,292.01)$ Return, Year 1 1,254.00$ Return, Year 2 1,291.62$ Return, Year 3 1,330.37$ Return, Year 4 1,370.28$ Return, Year 5 1,411.39$ Return, Year 6 1,453.73$ Return, Year 7 1,497.34$ Return, Year 8 1,542.26$ Return, Year 9 1,588.53$ Return, Year 10 1,636.19$ Return, Year 11 1,685.27$ Return, Year 12 1,735.83$ Return, Year 13 1,787.90$ Return, Year 14 1,841.54$ Return, Year 15 1,896.79$ Return, Year 16 1,953.69$ Return, Year 17 2,012.30$ Return, Year 18 2,072.67$ Return, Year 19 2,134.85$ Return, Year 20 2,198.90$ Return, Year 21 2,264.86$ Return, Year 22 2,332.81$ Return, Year 23 2,402.79$ Return, Year 24 2,474.88$ Return, Year 25 2,549.12$ Return, Year 26 2,625.60$ Return, Year 27 2,704.37$ Return, Year 28 2,785.50$ Return, Year 29 2,869.06$ Return, Year 30 2,955.13$ Total Returns 59,659.57$ Internal Rate of Return 1.49% 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$ 445,000.00$ 209,000.00$ 1,254.00$ 2 243,080.00$ 458,350.00$ 215,270.00$ 1,291.62$ 3 250,372.40$ 472,100.50$ 221,728.10$ 1,330.37$ 4 257,883.57$ 486,263.52$ 228,379.94$ 1,370.28$ 5 265,620.08$ 500,851.42$ 235,231.34$ 1,411.39$ 6 273,588.68$ 515,876.96$ 242,288.28$ 1,453.73$ 7 281,796.34$ 531,353.27$ 249,556.93$ 1,497.34$ 8 290,250.23$ 547,293.87$ 257,043.64$ 1,542.26$ 9 298,957.74$ 563,712.69$ 264,754.95$ 1,588.53$ 10 307,926.47$ 580,624.07$ 272,697.60$ 1,636.19$ 11 317,164.27$ 598,042.79$ 280,878.52$ 1,685.27$ 12 326,679.19$ 615,984.07$ 289,304.88$ 1,735.83$ 13 336,479.57$ 634,463.59$ 297,984.03$ 1,787.90$ 14 346,573.96$ 653,497.50$ 306,923.55$ 1,841.54$ 15 356,971.18$ 673,102.43$ 316,131.25$ 1,896.79$ 16 367,680.31$ 693,295.50$ 325,615.19$ 1,953.69$ 17 378,710.72$ 714,094.37$ 335,383.65$ 2,012.30$ 18 390,072.04$ 735,517.20$ 345,445.16$ 2,072.67$ 19 401,774.20$ 757,582.71$ 355,808.51$ 2,134.85$ 20 413,827.43$ 780,310.19$ 366,482.77$ 2,198.90$ 21 426,242.25$ 803,719.50$ 377,477.25$ 2,264.86$ 22 439,029.52$ 827,831.08$ 388,801.57$ 2,332.81$ 23 452,200.40$ 852,666.02$ 400,465.61$ 2,402.79$ 24 465,766.42$ 878,246.00$ 412,479.58$ 2,474.88$ 25 479,739.41$ 904,593.38$ 424,853.97$ 2,549.12$ 26 494,131.59$ 931,731.18$ 437,599.59$ 2,625.60$ 27 508,955.54$ 959,683.11$ 450,727.57$ 2,704.37$ 28 524,224.21$ 988,473.61$ 464,249.40$ 2,785.50$ 29 539,950.93$ 1,018,127.82$ 478,176.88$ 2,869.06$ 30 556,149.46$ 1,048,671.65$ 492,522.19$ 2,955.13$ 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 Comparison of Costs & Tax Impact for Recent Projects Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020) 3611 Louisiana Avenue North 5213 Pennsylvania Avenue North 4215 Louisiana Avenue North 4637 Aquila Avenue North Number of Units 1 1 1 1 Project Description Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Year Acquired TBD 2021 2020 2021 Projected or Actual Projected (at time of offer) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Expenses $(200,761.03) $(205,172.18) $(170,441.53) $(127,292.01) Revenue $67,000.00 $72,000.00 $69,000.00 $81,000.00 Total Cost/Revenue $(133,761.03) $(133,172.18) $(101,441.53) $(46,292.01) *Additional Taxes Collected by City - 1 year $1,296.00 $1,902.00 $786.00 $1,254.00 *Additional Taxes Collected by City - 30 years $61,657.74 $90,488.44 $37,394.28 $59,659.57 *Return On Investment - 30 years -53.90% -32.05% -63.14% 28.88% *Internal Rate of Return - 30 years -3.98% -2.08% -5.01% 1.49% *Assumed 3% tax value growth rate