112221 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, November 22, 2021
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Michael Isenberg
Commissioner Jonathan London
1. Call to order – EDA Meeting of November 22, 2021
2. Roll call
3. Approval of Minutes:
September 13, 2021
4. Resolution approving Amendment 2 to Loan Origination Agreement between Center
for Energy and Environment and EDA
5. Resolution approving Purchase Agreement for the acquisition of 4215 Nevada
Avenue North (improvement project no. 1077)
6. Resolution approving Purchase Agreement for the acquisition of 5306 Rhode Island
Avenue North (improvement project no. 1080)
7. Adjournment
EDA Meeting
Page 1 September 13, 2021
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes September 13, 2021
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 7:58 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
Vicki Holthaus, AEM
Valerie Leone, City Clerk
Susan Rader, Director of Parks and Recreation
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Elder, seconded by Commissioner London,
to approve the minutes of June 28, 2021. All present voted in favor. Motion
carried.
EDA 2022 LEVY
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution authorizing
the proposed HRA levy pursuant to Minnesota Statutes, Section 469.033,
subdivision 6 and approval of a preliminary budget for fiscal year 2022.
Mr. Kirk McDonald, executive director, stated the EDA is asked to approve the
HRA levy of $417,000 levy for 2022 to help support redevelopment efforts.
RESOLUTION 2021‐08
Item 4
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION AUTHORIZING THE PROPOSED HRA LEVY PURSUANT
TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND
APPROVAL OF A PRELIMINARY BUDGET FOR FISCAL YEAR 2022.” 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; and the following voted against
the same: London; 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 8:00 p.m.
Respectfully submitted,
EDA Meeting
Page 2 September 13, 2021
Valerie Leone, City Clerk
I:\RFA\COMM DEV\2021\EDA\CEE\EDA4 Q ‐ Center for Energy & Environment 11‐22‐21.docx
Request for Action
November 22, 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 Amendment 2 to Loan Origination Agreement between Center for Energy and
Environment and EDA
Requested Action
Staff requests that the Economic Development Authority (EDA) approve a resolution approving a contract
extension with the Center for Energy and Environment (CEE) to offer housing loan/grant programs to New
Hope residents through December 31, 2024. The current agreement expires on December 31, 2021.
Policy/Past Practice
It is a practice of the EDA to review and approve housing loan/grant programs that will be offered within the
city.
Background
New Hope has partnered with the CEE to administer housing loan/grant programs to residents since 2012.
In 2018, the EDA approved an extension of the contract, which expires on December 31, 2021. If approved,
the resolution would extend the contract for another three years, through December 31, 2024. The following
financing and rehabilitation programs are offered to residents of New Hope:
Emergency Deferred Loan: Deferred loan designed specifically for homeowners that have
emergency improvement needs but do not qualify for other home improvement loan or grant
programs.
Low Interest Home Improvement Loan Program: Revolving loans to help New Hope homeowners
make improvements to their properties.
Between 2016 and 2018, the city issued four loans through the Low Interest Home Improvement Loan
Program. Since 2019, three loans have been issued through the Low Interest Home Improvement Loan
Program and one Emergency Deferred Loan has been issued. In March of 2021, the city reduced the interest
rate for the Low Interest Home Improvement Loan Program from 4% to 2%. Loans offered through the
Minnesota Housing Finance Agency (MHFA) had been around 2% and most projects were being financed
through that program. Reducing the interest rate helped make city loans more competitive with loans
offered through the MHFA. In addition to the Emergency Deferred Load and Low Interest Home
Improvement Loan Program, the CEE offers several other statewide financing options to residents of New
Hope. Since 2019, funds have been leveraged for ten loans through MHFA and two loans through the CEE,
bringing the total number of loans issued in New Hope during that time to 16.
Up until 2018, when the city received monthly payments from residents repaying loans, the funds were
deposited into the general EDA fund. Because the program is a “revolving loan program,” beginning in
2019, the city started transferring all payments and interest back into the CEE loan fund to be made available
for additional loans. As of October 2021, there was approximately $65,000 available for loans. Note that
Item Number
4
Agenda Section
EDA
Request for Action, Page 2
program income from monthly payments and loans that have been repaid is not included on the attached
New Hope Loan Program Activity Report from CEE. Staff is proposing that approximately $15,000 in EDA
funds be allocated to the account, bringing the balance to $80,000. This is the same amount that was
budgeted for 2019‐2021. As previously stated, monthly payments and interest are now being transferred
back into the CEE loan fund, helping offset the amount of funds needed to get the account back to $80,000
every three years.
Significant proposed changes from the 2019‐2021 contract include the following:
Decrease of interest rate for Low Interest Home Improvement Loan Program from 4% to 2%. This
change took effect in March of 2021. Reducing the city’s interest rate helped make city loans more
competitive with MHFA loans.
Elimination of Interest Subsidy Grant Program. Rates through MHFA were lower than those
offered through the Interest Subsidy Grant Program; therefore, the program was not being utilized.
The cost to write down the loan to 2% was significant.
Increase of annual administration fee from $500 to $2,500. The CEE has been increasing this fee for
all programs over the last few years as contracts expire. According to CEE staff, with the increase in
operating costs, the organization needs to try to reach a break‐even point in order to continue to offer
various programs. This includes city programs, MHFA loans, and other resources that are
administered for residents throughout the state. The administrative fee covers monthly reporting,
meetings, contract amendments, updating and maintaining the CEE website, marketing, compliance,
and offering online applications.
The attached “program overview” matrix lists details and proposed changes to the 2022‐2024 contract.
Funding
Funding for the program would be provided through the EDA budget.
Recommendation
Staff recommends that the EDA approve a resolution approving a contract extension with the CEE to offer
housing loan/grant programs to New Hope residents through December 31, 2024.
Attachments
Resolution
Contract
Matrix depicting program details and changes proposed by CEE
Loans issued since January 1, 2019
Loan summary report
Loan program activity report
Home improvement programs flyer
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 21-___
RESOLUTION APPROVING AMENDMENT 2 TO LOAN ORIGINATION
AGREEMENT BETWEEN CENTER FOR ENERGY AND ENVIRONMENT AND EDA
BE IT RESOLVED by the Economic Development Authority in and for the City of New
Hope (“EDA”) as follows:
WHEREAS, the EDA desires to continue to promote, encourage and facilitate proper
maintenance and repairs of houses within the City; and
WHEREAS, the EDA desires to renew its most recent contract with the Center for
Energy and Environment (“CEE”) which was dated effective January 1, 2019, so as to ensure
that the CEE continues to effectively administer the following loan programs offered by the EDA
to homeowners of the City: (1) Low Interest Home Improvement Loan Program; and (2)
Emergency Deferred Loan Program; and
WHEREAS, the City Attorney and City Staff have reviewed the attached Amendment 2
to the Loan Origination Agreement including Program Guidelines for the above-referenced
programs which are acceptable; and
WHEREAS, it is in the best interests of the EDA and the City to enter into a contract
with CEE and continuing the loan origination administration services provided by the CEE.
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 EDA shall continue to work with the Center for Energy and Environment
regarding loan origination administration pursuant to the terms of the Amendment
2 to Loan Origination Agreement attached hereto as Exhibit A, which is hereby
approved.
3. The President and Executive Director and the New Hope City staff are authorized
and directed to take whatever additional actions are necessary to enter into the
Amendment 2 to Loan Origination Agreement attached hereto as Exhibit A.
Dated the 22nd day of November, 2021.
____________________________________
Kathi Hemken, President
Attest: __________________________
Kirk McDonald, Executive Director
EXHIBIT A
Amendment 2 to Loan Origination Agreement and Program Guidelines
See attached.
G:\CommDev\zJeff Alger\Center for Energy & Environment (CEE)\2022 Renewal\2022 (DRAFT) Amendment 2.docT:\Admin\Contracts\NewHopeEDA\2019 Amendment 21
#27973628 .doc 9/28/20216/23/20216/22/2021
AMENDMENT 1 2 to the LOAN ORIGINATION AGREEMENT
Between
ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE
And
CENTER FOR ENERGY AND ENVIRONMENT
City of New Hope Home Improvement Loan Program
The Agreement made the day of , 2018 2021by and between the Economic
Development Authority in and for the City of New Hope, with offices at 4401 Xylon Avenue N,
New Hope, MN 55428, (the “Authority”), and CENTER FOR ENERGY AND
ENVIRONMENT, with its offices at 212 3rd Avenue North, Suite 560, Minneapolis, Minnesota
55401 (“CEE”) is hereby amended.
1. Services/Scope of Work of the agreement shall read:
1.1 CEE shall in conjunction with the Authority develop and deliver the City of New
Hope Home Improvement Loan Program (hereinafter the “Program”) and more fully
described in Exhibit A1 A2 attached hereto. All activities delivered under the Program
shall be coordinated with the Authority’s designated Program Manager.
2. Compensation of the agreement shall read:
2.1 The Authority shall compensate CEE for services provided under this agreement
according to the following schedule and more fully described in Exhibit B1 B2 attached
hereto:
Loan Origination Fee $550
Interest Subsidy Fee $125
Post Inspection Fee $100
Property Inspection Fee $100
Annual Administration Fee $500
The Annual Administration Fee shall be payable on January 1st of each year the contract
is active.
5. Term and Termination of the agreement shall read:
5.1 Unless earlier terminated as provided in the following paragraphs, this Agreement
shall become effective on January 1, 2019 2022 and continue through December 31,
20212024.
All other sections of the contract shall remain as written in the original and amended agreements.
G:\CommDev\zJeff Alger\Center for Energy & Environment (CEE)\2022 Renewal\2022 (DRAFT) Amendment 2.docT:\Admin\Contracts\NewHopeEDA\2019 Amendment 21
#27973628 .doc 9/28/20216/23/20216/22/2021
IN WITNESS WHEREOF, the parties hereunder set their hands as of the date written below:
ECONOMIC DEVELOPMENT
AUTHORITY in and for the CITY OF
NEW HOPE
CENTER FOR ENERGY AND
ENVIRONMENT
By ___________________________ By __________________________
President
Date __________________________
Date _________________________
#27973628
By ___________________________ TAX ID 41-1647799
Date __________________________
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 1
CEE Doc #2797 3628 20182021
EXHIBIT A1A2
PROGRAM GUIDELINES
This document includes guidelines for the: REVOLVING HOME
IMPROVEMENT LOAN PROGRAM, INTEREST SUBSIDY GRANT
PROGRAM, and the EMERGENCY DEFERRED LOAN PROGRAM.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 2
CEE Doc #2797 3628 20182021
CITY OF NEW HOPE PROGRAM GUIDELINES
The ECONOMIC DEVELOPMENT AUTHORITY in and for the City of New Hope is making funds available
for New Hope homeowners to make improvements to their properties. This program consists of 3 2
distinct loan offerings, the Revolving Loan, the Interest Subsidy Grant Home Improvement Loan
Program and the Emergency Deferred Loan Program. The New Hope Program is designed to
supplement existing loan programs available from MHFA, CEE, private lenders and other housing
resources. This program is not intended to be the sole source of improvement funds available to the
City. Center for Energy and Environment shall serve as the administrator for the City of New Hope
programs and will secure the most beneficial financing based on the borrower’s needs independent of
the funding source.
Revolving Home Improvement Loan Program
Interest Rate: 42% fixed
Amortization Type: Amortizing. Closed-end (Monthly Payments Required)
Loan Amount: Minimum loan size of $2,000 and maximum of $15,000.
Total Project Cost: The borrower must have sufficient funds necessary to cover the cost of the entire
project (as outlined in the bid(s). Additional funds may come from the borrower’s personal savings,
bona fide gifts, or other NON-New Hope EDA loans.
Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the
size of the loan and the borrower’s ability to repay the loan. The minimum term is 1 year; the maximum
term will be 10 years.
Eligible Properties: 1-4 unit properties located within the geographical boundaries of the City of New
Hope. Townhomes and Condominiums are eligible.
Ineligible Properties: Dwellings with more than four units (as these would be considered “apartments”
and hence commercial properties, co-ops, manufactured homes, time shares, properties held in the
name of a trust, contract for deeds, and properties used for commercial purposes.
Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social
security number, Including: U.S. Citizens, Permanent Resident Aliens, Non-Permanent Resident Aliens.
TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 3
CEE Doc #2797 3628 20182021
Ineligible Borrowers: Including but not limited to: - Foreign Nationals, Non-Occupant Co-Borrowers,
and properties held in the name of a trust and properties held in the name of a business.
Ownership/Occupancy: Owner- occupied and absentee owned are eligible. Contracts for Deed are not
eligible.
Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should
not exceed 110% of the property value.
Income Limit: No maximum income limit. All income must be derived in the United States.
Debt - to - Income Ratio: Applicant must have the ability to repay the loan. An applicant who has a debt
to income ratio in excess of 50% will be denied loan financing.
Credit Requirements: 1) All mortgage payments must be current and reflect 0 x30 payment history in
the past 12 month period. 2) All real estate taxes must be current. 3) A reasonable explanation for any
judgments and collections is required and may not have been placed within 12 months prior to the
application date. 4) Bankruptcy must have been discharged for at least 12 18 months. Borrowers with
late payments after bankruptcy may be declined based on an evaluation of the borrowers situation and
ability to repay. 5) The redemption period on prior foreclosures must have occurred at least 12 18
months prior to the loan application date.
Multiple Loans per Borrower/Property: Multiple loans per borrower are eligible as long as the total
outstanding balance of any existing and new loan doesn’t exceed the maximum eligible loan amount
and must be current on all payments.
Eligible Use of Funds: Loans may be used to finance most interior and exterior improvements that
improve the basic livability of the property, including the garage.
Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed.
Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools,
etc.), furniture, non-permanent appliances (unless part of a kitchen remodel), and funds for working
capital, debt service or refinancing existing debts are NOT allowed.
Bids: Only 1 bid is required. All contractors must be properly licensed. Permits must be obtained
where required.
Sweat Equity / Homeowner Labor: Work may be performed by property owners on a “sweat equity”
basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to rent
purchase tools or equipment or compensate for labor. The property owner will provide evidence to CEE
that they have the ability to complete the work.
Property Inspection: Not required.
Post Installation Inspection: Not required
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 4
CEE Doc #2797 3628 20182021
Loan Security: All loans will be secured with a mortgage in favor of The ECONOMIC DEVELOPMENT
AUTHORITY in and for the City of New Hope
Underwriting Decision: Applicants must have acceptable credit history: Generally, borrowers may not
have more than three 90 day late payments in the past 12 months (without reasonable explanation), or
have had a bankruptcy in the previous 18 months. Applicants must also be current on all mortgage
payments and real estate property taxes. CEE will approve or deny loans based on a credit report,
income verification and other criteria as outlined in the program guidelines..
Loan Costs: Administrative fees will be paid from the E.D.A.’s Administrative Budget for this program..
Borrowers will pay all applicable closing fees, which includes a 1% Origination Fee and Document
Preparation Fee. All closing fees may be financed as part of the loan.
Work Completion: All work must be completed within 120 days of the loan closing. However, when
warranted, CEE may authorize exceptions on a case by case basis.
Interest Subsidy Grant Program
CEE will utilize City funds to write down the interest rate on the Minnesota Housing Finance Agency’s
(MHFA) Community Fix-Up Loan Program. The intent of the program is to make the interest rates on
MHFA funded loans and City funded loans more consistent and leverage additional dollars for the E.D.A.
Underwriting Decision: Underwriting of these loans will follow the MHFA procedural manuals and
normal and prudent underwriting criteria.
Interest Rate: The ECONOMIC DEVELOPMENT AUTHORITY in and for the City of New Hope will
subsidize or buy down the current MHFA Community Fix Up Fund interest rate to 4%.
Amortization Type: Not applicable. These funds are used to permanently write down the interest rate
on the MHFA Community Fix Up Loan, therefore these funds are a grant and are not recollected by the
City.
Loan Amount: Minimum loan amount $2,000 maximum loan amount $15,000.
Income Limit: Per MHFA guidelines, an eligible borrower must have an annual household income of less
than the current MHFA Community Fix-Up Loan Program income limit.
Loan Term: Generally, one year per $1,000 borrowed. The maximum term will be 10 years.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 5
CEE Doc #2797 3628 20182021
Eligible Properties: 1-4 unit properties, including Condominiums and Townhomes, located in the City of
New Hope.
Ineligible Properties: Dwellings with more than four units (as these would be considered “apartments”
and hence commercial properties), co-ops, manufactured homes, time shares, properties held in the
name of a trust, and properties used for commercial purposes.
Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social
security number, Including: U.S. Citizens, Permanent Resident Aliens, Non-Permanent Resident Aliens.
TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE.
Ineligible Borrowers: Including but not limited to: - Foreign Nationals, Non-Occupant Co-Borrowers,
and Properties held in the name of a trust.
Ownership/Occupancy: Owner- occupied only per MHFA. Contracts for Deed are not eligible.
Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, must not
exceed 110% of the property value per MHFA guidelines.
Debt - to Income Ratio: Per current MHFA guidelines at the time of closing, an applicant must prove the
ability to repay the loan and have a debt to income ratio less than 48%.
Credit Requirements: Follow MHFA guidelines.
Multiple Loans per Property: The Interest Subsidy Loan Program is limited to one-loan per borrower;
therefore a loan for multiple properties would not be permitted.
Multiple Loans per Borrower: One loan per borrower.
Eligible Improvements: Per current MHFA guidelines at the time of closing, loans may be used to
finance most interior or exterior improvements, including the garage.
Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed.
Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools,
etc.), furniture, non-permanent appliances, and funds for working capital, debt service or refinancing
existing debts are NOT allowed.
Bids: 1 bid is required. All contractors must be properly licensed.
Sweat Equity / Homeowner Labor: Work may be performed by property owners on a “sweat equity”
basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to rent
tools or equipment or compensate for labor.
Property Inspection: Not Required.
Post Installation Inspection: Random as chosen by MHFA.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 6
CEE Doc #2797 3628 20182021
Loan Servicing: MHFA will be responsible for servicing the loans.
Loan Security: As required by the MHFA, all loans will be will be secured with a mortgage.
Loan Costs: Administrative fees will be paid from the E.D.A.’s Administrative Budget for this program.
Servicing costs will be paid by MHFA. Borrowers will pay all applicable closing fees, which includes a 1%
Origination Fee.
Underwriting Decision: Follows MHFA guidelines.
Work Completion: All work must be completed within 270 days of the loan closing. However, when
warranted, CEE may authorize exceptions on a case by case basis.
Emergency Deferred Loan Program
The Emergency Deferred Loan Program is designed specifically for homeowners in the City of New Hope
that have emergency home improvement needs but do not qualify for other home improvement loan or
grant programs. Applicants will be considered for this program only after it is determined that they are
not eligible for all other traditional home improvement program options that CEE administersany other
program administered by CEE.
Interest Rate: 0% deferred loan
Amortization Type: Deferred. No payment is due as long as the borrower retains ownership for a
period greater than 10 years. If the property is sold or ownership changes within 10 years of the closing
date, 100% of the amount borrowed is due.
Loan Amount: Minimum loan amount $1,000; Maximum loan amount of $5,000.
Total Project Cost: The borrower must have sufficient funds necessary to cover the cost of the entire
project (as outlined in the bid(s). Additional funds may come from the borrower’s personal savings, bona
fide gifts, or other NON New Hope EDA loans. Because this is a “last resort” program, other ECONOMIC
DEVELOPMENT AUTHORITY in and for the City of New Hope loan programs are not an eligible source.
Loan Term: The loan is 100% forgiven if the borrower retains ownership and occupancy of the property
for a period greater than 10 years. The loan will be 100% due upon sale or transfer of ownership within
10 years of the loan closing.
Eligible Properties: Funding will be available in the form of a deferred payment loan
up to $5,000 for 1-4 unit, owner-occupied properties.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 7
CEE Doc #2797 3628 20182021
Ineligible Properties: Dwellings with more than four units (as these would be considered “apartments”
and hence commercial properties), condominiums that are “Condo-hotels”, co-ops, manufactured
homes, time shares, properties held in the name of a trust, and properties used for commercial
purposes.
Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social
security number, Including: U.S. Citizens, Permanent Resident Aliens, Non-Permanent Resident Aliens.
TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE.
Ineligible Borrowers: Including but not limited to: - Foreign Nationals, Non-Occupant Co-Borrowers,
and Properties held in the name of a trust.
Ownership/Occupancy: Properties must be owner- occupied. Contracts for Deed are not eligible.
Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan must not
exceed 110% of the property value.
Income Limit: Annual household income will be calculated based on current gross income projected
forward 12 months. The household limit is 80% of the current AMI.
Debt-to-Income: N/A.
Credit Requirements: This is a “last resort” program: the borrower must not be eligible for any other
financing program CEE administers in order to obtain an Emergency Deferred Loan.
Multiple Loans per Borrower/Property: One loan per borrower. If the property transfers ownership
the new owner(s) are eligible to participate one time.
Loan Security: All deferred loans will be secured with a mortgage or lien in favor of the ECONOMIC
DEVELOPMENT AUTHORITY in and for the City of New Hope. Borrower will pay all filing fees.
Eligible Improvements: An emergency is defined as an imminent condition that makes the house
dangerous or uninhabitable. CEE will determine whether the proposed improvement is an emergency
based on a site visit to the property. CEE’s decision on project eligibility shall be final.
Ineligible Use of Funds: Projects that do not meet the definition of “Emergency” as previously outlined.
Payment for work initiated prior to the loan being approved and closed. Recreation or luxury projects
(pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-
permanent appliances, and funds for working capital, debt service or refinancing existing debts are NOT
allowed.
Bids: 2 bids are required when the work from any one contractor exceeds $5,000. All contractors must
be properly licensed. Permits must be obtained where required; when not required, a post installation
inspection will be performed by CEE to ensure the work has been completed.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 8
CEE Doc #2797 3628 20182021
Sweat Equity / Homeowner Labor: Work may NOT be performed by property owners on a “sweat
equity” basis.
Property Inspection: Required prior to loan approval to determine the situation is an emergency.
Post Installation Inspection: Permits must be obtained and signed off by a City inspector where
required; when not required, a post installation inspection will be performed by CEE to ensure the work
has been completed before any funds will be released.
Loan Security: All loans will be secured with a mortgage in favor of the ECONOMIC DEVELOPMENT
AUTHORITY in and for the City of New Hope. Borrower will pay all applicable closing fees, which
includes a 1% Origination Fee. All closing fees may be financed in the loan amount..
Work Completion: All work must be completed within 30 days of the loan closing. However, when
warranted, CEE may authorize exceptions on a case by case basis.
General Program Conditions
Application Processing: Loans will be distributed on a first come first serve basis as borrowers qualify.
Applicants must provide a completed application package including the following in order to be
considered for funding.
Completed and signed application form
Proof of income
Bids or estimates for proposed projects
Other miscellaneous documents loan officers may require.
Contractors/Permits: Contractors must be properly licensed. Permits must be obtained when required
by city ordinance.
Program Costs: Loan origination, post installation inspection and property inspection fees will be paid
out of the E.D.A. in and for the City of New Hope Program Administrative Fund. Loan program marketing
efforts will be billed directly to E.D.A. in and for the New Hope and is a separate expense should the
E.D.A. in and for the City of New Hope choose to commission CEE for marketing support. Borrowers will
pay all mortgage filing fees and related closing costs.
Total Project Cost: It is the borrower’s responsibility to obtain the amount of funds necessary to finance
the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower
must obtain the additional funds and show verification of the additional funds in order to be approved
for the loan.
Disbursement Process: The Interest Subsidy Grant and the Revolving Loan funds will be disbursed to
the borrower after the loan closing and rescission period.
EXHIBIT A1A2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit A21 Page 9
CEE Doc #2797 3628 20182021
The Emergency Deferred Loan payment to the contractor will be made upon completion of work. An
inspection will be performed by a City Inspector and/or CEE to verify the completion of the Emergency
Program work. The following items must be received prior to final disbursement of funds:
Final invoice or proposal from contractor (or materials list from supplier);
Final inspection verification by a City Inspector (or CEE);
Completion certificate(s) signed by borrower and contractor;
Lien waiver for entire cost of work;
Evidence of required city permit.
EXHIBIT B2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit B2 Page 1
CEE Doc #3628 2021
EXHIBIT B2
TOTAL PROGRAM BUDGET
$80,000 + Program Income
EXHIBIT B2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit B2 Page 2
CEE Doc #3628 2021
EDA IN AND FOR THE CITY OF NEW HOPE HOME IMPROVEMENT PROGRAM BUDGET
A. Total E.D.A. in and for the City of New Hope Program Fund Allocation: __ $80,000 +
Program Income___
B. Use of Funds
Program Fund Allocation and Administration Fees _ __ $80,000 + Program
Income___
Revolving Loan
Emergency Deferred Loan
Administration Fees
Budget Notes:
1. Funds may be transferred between Budget Categories in this Exhibit that do not
change the Total Contract Amount. Program Income (payments made back to the
Program) will be added to the Program Fund Allocation. The City of New Hope will
provide quarterly updates to the CEE specifying the amount of funds available.
2. Administrative services performed by CEE will initially be funded from the Total
budget as stated above and paid in accordance with the following Administration
Fee schedule:
(1) Origination Fee: $750.00 per loan closed
(2) Post Installation Inspections: $100.00 per Inspection
(3) Property Inspection: $250.00 per Inspection
(4) Annual Administration Fee: $2,500
The Annual Administration Fee shall be payable on January 1st of each year the contract is active
3. Servicing
The E.D.A. in and for the City of New Hope will directly contract with a servicing
company for the E.D.A. in and for the City of New Hope Loans.
4. Marketing
Marketing efforts will be supported by CEE and marketing costs are not included in
the administrative budget. Hourly rates are inclusive of all overhead expenses and
will be charged only for hours directly related to the labor of all program marketing.
EXHIBIT B2
CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF NEW HOPE and CENTER FOR ENERGY AND
ENVIRONMENT Exhibit B2 Page 3
CEE Doc #3628 2021
CEE will also be reimbursed by The E.D.A. in and for the City New Hope for any non-
labor, out of pocket expenses relating to these services on a dollar -for-dollar-basis.
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Program Overview
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan
Interest Rate 0% Deferred
Amortization Type Deferred
Loan Amount Minimum: $1,000
Maximum: $5,000
The ECONOMIC DEVELOPMENT AUTHORITY in and for the City of New Hope is making funds available for New Hope homeowners to
make improvements to their properties. This program consists of 2 loan offerings; Home Improvement Loan and the Emergency Loan.
The New Hope Program is designed to supplement existing loan programs available from MHFA, CEE, private lenders and other
housing resources. This program is not intended to be the sole source of improvement funds available to the City. Center for Energy
and Environment shall serve as the administrator for the New Hope programs and will secure the most beneficial financing based on
the borrower’s needs independent of the funding source.
Home Improvement Loan Program
Minimum: $2,000
Maximum: $15,000
2%
Amortizing, Closed-end (monthly payments required)
Page 1 of 7
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan Home Improvement Loan Program
Total Project Cost
The borrower must have sufficient funds to cover the cost of the entire
project. Additional funds may come from the borrower's savings, gifts or
other NON New Hope Loans. Because this is a 'last resort' program, other
New Hope loan programs are not an eligible source. In the event the final
cost exceeds the original loan amount, the borrower must obtain the
additional funds and show verification of the additional funds in order to
be approved for the loan.
Term
No payment is due as long as the borrower retains ownership and
occupies the property for a period greater than 10 years. If the property
is sold, tiel is transferred or is no longer owner-occupied within 10 years
of the closing date, 100% of the amount borrowed is due.
Eligible Properties
1-4 Unit owner-occupied properties located within the geographical
boundaries of the City of New Hope. Townhomes and Condominiums ARE
eligible.
Minimum term is 1 year. Maximum term is 10 years.
Generally 1-year per $1,000 borrowed. This will be
somewhat flexible depending on the size of the loan and
the borrowers ability to repay the loan.
1-4 Unit owner-occupied and absentee owned properties
located within the geographical boundaries of the City of
New Hope. Townhomes and Condominiums ARE eligible.
It is the borrower’s responsibility to obtain the amount of
funds necessary to finance the entire cost of the work. In
the event the final cost exceeds the original loan amount,
the borrower must obtain the additional funds and show
verification of the additional funds in order to be approved
for the loan.
Page 2 of 7
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan Home Improvement Loan Program
Ineligible Properties
Eligible Borrowers
Ineligible Borrowers
Ownership/Occupancy Must be owner-occupied
Loan-to-Value
Income Limit
Annual household income will be calculated based on current gross
income projected forward 12 months. The household limit is 80% of the
AMI. These numbers will change yearly in accordance with HUD
guidelines.
Debt-to-Income Ratio N/A50%
None
Including but not limited to: - Ineligible Borrowers:
*Foreign Nationals
*Non-Occupant Co-Borrowers
*Properties held in the name of a Trust
Dwellings with more than 4 units, Co-operatives, manufactured homes, time shares, properties held in the name of a trust, and
properties used for commercial purposes.
The ratio of all loans secured by the property, including the new loan, must not exceed 110% of the property value.
Owner Occupied and Absentee Owned properties are
eligible
All borrowers must be a legal resident of the United States, as evidenced by a social security number, including:
*U.S. Citizens
*Permanent Resident Aliens
*Non-Permanent Resident Aliens
Tax identification numbers (ITIN) are not acceptable
Page 3 of 7
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan Home Improvement Loan Program
Credit Requirements
This is a last resort program: the borrower must not be eligible for any
other financing program CEE administers in order to obtain an Emergency
loan. All mortgage payments and taxes must be current.
Multiple Loans per
Property/Borrower
Program is limited to one-loan per borrower, therefore a loan for multiple
properties would not be permitted.
Eligible Use of Funds
An emergency is defined as an imminent condition that makes the house
dangerous or uninhabitable. CEE will determine whether the proposed
improvement is an emergency based on a site visit to the property. CEE's
decision on project eligibility shall be final.
Applicants must have acceptable credit history. Generally,
may not have more than three 90 day lates in the past 12
months (w/o reasonable explanation), or have had a
bankruptcy with the past 18 months. Borrwers mus be
current on housing payments and taxes. CEE will approve
or deny loans based on credit report, income verification
and other criteria as outlined in the program guidelines.
Multiple loans per borrower are eligible as long as the total
outstanding balance of any existing and the new loan
doesn't exceed the maximum eligible loan amount and
must be current on all payments.
Loans may be used to finance most interior or exterior
improvements that improve the basic livability of the
property including the garage.
Page 4 of 7
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan Home Improvement Loan Program
Ineligible Improvements
Projects that don't meet the definition of an "emergency" as previously
outlined.
Payment for work initiated prior to the loan being approved and closed.
Bids
2 bids are required when the work from any one contractor exceeds
$5,000. All contractors must be properly licensed. Permits must be
obtained where required; when not required, a post installation
inspection will be performed by CEE to ensure the work has been
completed.
Sweat Equity/Homeowner
Labor
Work may NOT be performed by property owners on a "Sweat Equity"
basis.
Property Inspection Required prior to loan approval to evidence the situation is an emergency.
Payment for work initiated prior to the loan being
approved and closed.
Recreation or Luxury projects (pools, lawn sprinkler
systems, playground equipment, Saunas, Whirlpools, Etc.)
Furniture, non-permanent appliances (unless part of a
kitchen remodel), and funds for working capital, debt
service or refinancing existing debts are NOT allowed.
Not required
Work may be performed by property owners on a "sweat
equity" basis. Loan funds may be used only for the
purchase of materials. Loan funds cannot be used to rent
tools or equipment or compensate for labor. Property
owner will provide evidence to CEE that they have the
ability to complete the work.
Only 1 bid is required
Page 5 of 7
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan Home Improvement Loan Program
Post-Install Inspection
Permits must be obtained and signed off by a City inspector where
required; when not required, a post installation inspection will be
performed by CEE to ensure the work has been completed before any
funds will be released.
Loan Servicing
Loan Security
Program Costs
Work Completion Work must be completed within 30 days of the loan closing. However,
when warranted, CEE may authorize exceptions on a case by case basis.
by City of New Hope E.D.A.
Loan origination, post installation inspection and property inspection fees will be paid out of the E.D.A. in and for the City of New Hope
Program Administrative Fund. Loan program marketing efforts will be billed directly to E.D.A. in and for the New Hope and is a
separate expense should the E.D.A. in and for the City of New Hope choose to commission CEE for marketing support. Borrowers will
pay all mortgage filing fees and related closing costs, including a 1% Origination Fee for the Revolving Loan Program. All closing fees
may be financed in the loan amount. Their will be a $500 Annual Administration Fee for staffing the annual "City Day", contract
amendments, attending meetings, marketing and other CEE overhead costs associated with the New Hope Loan Programs.
Work must be completed within 120 days of the loan
closing. However, when warranted, CEE may authorize
exceptions on a case by case basis.
All Loans will be secured with a mortgage in favor of the Economic Development Authority in and for the City of New Hope.
Properties are subject to an inspection by a CEE
representative when a permit is not required. When a
permit is required, the city inspector will be required to
inspect the project.
Page 6 of 7
New Hope EDA Program Guidelines
Effective January 1, 2022 - Dec 31, 2024
Jan 1, 2022 - Dec 31, 2024 Emergency Deferred Loan Home Improvement Loan Program
Custody of funds /
Disbursement Process
The Emergency Deferred Loan payment to the contractor will be made
upon completion of work. An inspection will be performed by a City
Inspector and/or CEE to verify the completion of the Emergency Program
work. The following items must be received prior to final disbursement of
funds:
• Final invoice or proposal from contractor (or materials list from
supplier);
• Final inspection verification by a City Inspector (or CEE);
• Completion certificate(s) signed by borrower and contractor;
• Lien waiver for entire cost of work;
• Evidence of required city permit.
Residential Advisor Visit Not applicable in this agreement
The Revolving Loan funds will be disbursed to the
borrower after the loan closing and rescission period.
Page 7 of 7
Printed Tuesday, September 28, 2021 Page 1
CEE Loans Closed
For the Period 1/1/2019 - 9/30/2021
City of New Hope
Program
Closed End 2%
Loan #Name Address Amt Fin. Orig Fee Entered Closed Improvements
Pool
Int Sub CRFDoc
21-021977 4,200.00Lynsey Moore 2840 Winnetka Ave N Driveways3/30/2021 4/14/2021New Hope, MN 55427 4/9/2021
21-022552 15,000.00Sherry Pfeiffer 3501 Aquila Ave N Windows, Doors, Storm Windows, Storm Doors5/3/2021 5/26/2021New Hope, MN 55427 5/25/2021
2 19,200.00Total Loans:Total Amt Financed:Total Interest Subsidy:Total Orig Fee:
Closed End 4%
Loan #Name Address Amt Fin. Orig Fee Entered Closed Improvements
Pool
Int Sub CRFDoc
19-014931 15,000.00FELICIA JOHNSON 3657 MARYLAND AVENUE N Kitchens1/23/2019 4/19/2019NEW HOPE, MN 55427 4/19/2019
1 15,000.00Total Loans:Total Amt Financed:Total Interest Subsidy:Total Orig Fee:
Emergency Deferred 0%
Loan #Name Address Amt Fin. Orig Fee Entered Closed Improvements
Pool
Int Sub CRFDoc
21-022603 4,943.00Jean Lewis 5901 Cavell Ave N Windows, Doors, Storm Windows, Storm Doors5/7/2021 8/17/2021New Hope, MN 55428 8/16/2021
1 4,943.00Total Loans:Total Amt Financed:Total Interest Subsidy:Total Orig Fee:
4 39,143.00Total Closed Loans:Total Amt Financed:
New Hope Loan Summary Report
Activity for Period 1/1/2019 - 9/30/2021
Application packets requested/mailed:Year-to-Date: This period:6 6
Residential Advisor Visits:This period:Year-to-Date: 0 0
Loans currently in process for residents in your City/Neighborhood:13
Closed Loans This period:Year-to-Date:
City of New Hope UnitsUnits
0 0
Closed End 0.00 0 00.00
Closed End 2%19,200.00 2 219,200.00
Closed End 4%15,000.00 1 115,000.00
Emergency Deferred 0 0
Emergency Deferred 0%4,943.00 1 14,943.00
39,143.00 4Total 39,143.00 4
MHFA CFUF UnitsUnits
Interest Subsidy 0.00 0 00.00
0.00 0Total 0.00 0
Units UnitsYear-to-Date:This period:Leveraged Funds
CEE 240,000.0040,000.00 2
MHFA FUF 10161,667.00161,667.00 10
Total 201,667.00 12201,667.00 12
% of Total#Types of Properties Financed YTD
Commercial -Non-residential 11.112
Single Family Residence 88.8916
Types of Improvements Financed YTD # of Projects % of Total
Abatement 4.001
Additions/Finishing off unused space 4.001
Driveways 4.001
Electrical 4.001
Flooring/Carpet/Tile 4.001
Foundations/Basement 4.001
Heating System 4.001
Insulation 12.003
Kitchens 12.003
Landscaping 4.001
Lighting 8.002
Other Exterior Improvements 4.001
Other Interior Improvements 4.001
Roof 4.001
Solar-PV 8.002
Ventilation/Bath Fans 4.001
Windows, Doors, Storm Windows, Storm Doors 12.003
Inv #20081 Inv #20176
Program Budget Activity to Date Funds Remaining Jul-21 Aug-21
Revolving Loan $34,200.00
Interest Subsidy Grant $0.00
Emergency Deferred Loan $4,943.00 $4,943.00
PROGRAM SUBTOTAL $70,000.00 $39,143.00 $30,857.00 $0.00 $4,943.00
Admin $/Unit Budget Activity to Date Funds Remaining
Origination: Revolving & Emergency Loans 550$ $2,200.00 $0.00 $550.00
Origination: Interest Subsidy Grants 125$ $0.00 $0.00 $0.00
Post Installation Inspection 100$ $0.00 $0.00 $0.00
Emergency Property Inspection 100$ $100.00 $100.00 $0.00
Annual Admin Fee 500$ $1,500.00 $0.00 $0.00
ADMIN SUBTOTAL $10,000.00 $3,800.00 $6,200.00 $100.00 $550.00
TOTAL $80,000.00 $42,943.00 $37,057.00 $100.00 $5,493.00
Origination: Revolving & Emergency Loans 4 1
Origination: Interest Subsidy Grants 0
Post Installation Inspection 0
Emergency Property Inspection 1 1
Marketing (no set budget)$0.00
Please contact the Lending Center at the Center for Energy and Environment 612-335-5885 if you have any questions about this report.
Note: Program income is not reflected in this report.
New Hope Loan Program Activity Report (1/1/19 to 9/30/21)
FIXED INTEREST
RATE
To qualify for the emergency deferred loan you
must first be ineligible for the fixed interest loan.
2% 0%
$2,000 to
$15,000
$5,000
FIXED INTEREST EMERGENCY DEFERRED LOAN
LOAN AMOUNTS
FROM
MAXIMUM LOAN
AMOUNT
LOAN TERMS UP TO
10 YEARS
INCOME LIMITS APPLY
INCOME LIMITS
AND ADDITIONAL RESTRICTIONS APPLY
ELIGIBLE IMPROVEMENTS
BASED ON A SITE VISIT
LOAN IS 100%
FORGIVEN IF
BORROWER
REMAINS IN
THEIR HOME
FOR 10 YEARS
(0.341% APR)*
(2.325% APR*)
*APR is based on $5,000 for 10 years
*APR is based on $15,000 for 10 years
1–4 UNIT OWNER
OCCUPIED AND
NON-OWNER
OCCUPIED
MOST IMPROVEMENTS ELIGIBLE
PROPERTY TAXES AND MORTGAGE
PAYMENTS MUST BE CURRENT
The city of New Hope has partnered with the Center for Energy
and Environment, a local nonprofit, to offer low interest home
improvement financing to homeowners. Additionally, the city buys
down Home Energy Squad Enhanced visits to $50 (normally $100)
for New Hope residents.
CITY OF NEW HOPE
HOME IMPROVEMENT PROGRAMS
I:\RFA\COMM DEV\2021\EDA\Scattered Site Housing\11‐22‐21\4215 Nevada Ave N\EDA5 Q ‐ 4215 Nevada Ave N Acquisition 11‐22‐21.docx
Request for Action
November 22, 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 Agreement for the acquisition of 4215 Nevada Avenue North (improvement
project no. 1077)
Requested Action
Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for
the acquisition of 4215 Nevada Avenue North for a purchase price of $206,000 with traditional closing costs to
be paid by each party.
Policy/Past Practice
The Economic Development Authority has acquired vacant and distressed properties in the past as part of
the city’s scattered site housing program. Goals of the scattered site housing program include removing
distressed and/or blighted properties, providing step‐up housing options in the city, improving the city’s
overall housing stock, investing and instilling confidence into neighborhoods, and increasing home and land
values.
Background
The Economic Development Authority (EDA) has directed community development staff to pursue the
acquisition of distressed and functionally obsolete single‐family homes as part of the city’s scattered site
housing program. The property at 4215 Nevada Avenue North is one of the lowest valued single‐family
homes in the city. The 2020 assessed value of the property was $154,000 and the 2021 assessed value is
$184,000, according to Hennepin County. This is lower than approximately 99% of single‐family homes in the
city. The existing “Cape Cod” style home was constructed in 1940. It has 1,053 square feet of finished above
ground space, three bedrooms, one bathroom, and an unfinished basement. There is a two‐stall detached
garage. The 0.24‐acre parcel is zoned R‐1, Single‐family Residential. The lot is 79.5 feet wide and 130 feet long.
The lot abuts multifamily uses to the west and single‐family homes to the north and east. There is a cul‐de‐sac
to the south that provides access to the apartments to the west and funeral chapel to the south. There are
three twin homes located half a block north of the subject property that were constructed through the
scattered site housing program in 2006. A demolition and lot split project was completed at 4415/4417
Nevada Avenue North in 2017. Staff believes the property at 4215 Nevada Avenue North is a good candidate
for a demolition and rebuild project.
The property at 4215 Nevada Avenue North was identified by staff as a potential candidate for the scattered
site housing in October of 2021 when letters were mailed to several property owners in the city. The property
owner expressed interest in selling to the EDA and an appraisal was completed on October 8, 2021. The
appraisal estimated the value of the property at $206,000. The property owner has agreed to sell the home for
$206,000, with traditional closing costs to be paid by each party, contingent upon approval by the EDA. The
appraised value and offer price reflect the continued increase in home prices and values within the city. Since
2016, the median household value in New Hope has increased from $196,000 to $275,000, an increase of 40%
over five years.
Agenda Section
EDA
Item Number
5
Request for Action, Page 2
Cost & Tax Impact of Improvements
It is anticipated that expenses associated with the project would be approximately $237,301. Revenue from
the sale of the lot is estimated at $78,000, resulting in a net loss of $159,301. 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 $430,000
in 2022, it is estimated that total taxes paid to the city in 2023 would increase by $1,656, or 179%, as compared
to those that will be allocated to the city in 2021.
Taxable Market Value 2020,
Payable 2021
Projected Taxable Value 2022,
Payable 2023
Change Percent Change
$154,000 $430,000 $276,000 179%
Estimated Taxes Allocated to
City 2020, Payable 2021
Projected Taxes Allocated to
City 2022, Payable 2023
Change Percent Change
$924 $2,580 $1,656 179%
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 ($159,301.00) ‐100.00%
1 (2023) $1,656.00 ($157,645.00) ‐98.96%
5 (2027) $8,791.93 ($150,509.07) ‐94.48%
10 (2032) $18,984.18 ($140,316.82) ‐88.08%
15 (2037) $30,799.80 ($128,501.20) ‐80.67%
20 (2042) $44,497.34 ($114,803.66) ‐72.07%
25 (2047) $60,376.54 ($98,924.46) ‐62.10%
30 (2052) $78,784.89 ($80,516.11) ‐50.54%
The estimated ROI for the project over 30 years is ‐50.54% and the estimated Internal Rate of Return (IRR) for
the project over 30 years is ‐3.64% (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
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.
Funding
Funding for this project would come from the EDA budget. If the acquisition is approved, funds from the
2021 budget will be utilized. The city has budgeted $250,000 for scattered site projects in 2021.
Request for Action, Page 3
The project that was approved earlier this year at 3611 Louisiana Avenue North fell through after redemption
took place on the foreclosed property. The city was repaid its winning bid ($155,000) from the sheriff’s sale
plus a percentage of legal fees and related expenses as dictated by state statute. In addition, the city was
compensated with 7.69% interest for the six months funds were held. After subtracting legal fees and all other
expenses associated with the project, there was a surplus of $4,118.06. This has been noted in the table below.
The acquisition of 4215 Nevada Avenue North would put the EDA 15.1% over budget for 2021, however, a
new HRA levy is included in the 2022 budget to help provide additional funding for scattered site housing
projects in the future and these funds can be used to offset the cost.
Project Estimated Net Cost
5213 Pennsylvania Ave N $133,172.18
4215 Nevada Ave N $159,301.00
Total $292,473.18
Annual Budget (2021) $250,000.00
3611 Louisiana Ave N surplus $4,118.06
Total $254,118.06
Under/Over Budget ($38,355.12)
Recommendation
Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of
4215 Nevada Avenue North for a purchase price of $206,000 with traditional closing costs to be paid by each
party.
Attachments
Resolution
Purchase Agreement
Sample Lot Layout
Appraisal
Budget
Estimated Tax Impact of Improvements
Estimated Return on Investment
Estimated Internal Rate of Return
Tax Calculator
Comparison of Costs & Tax Impact of Recent Projects
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 21-___
RESOLUTION APPROVING PURCHASE AGREEMENT
FOR THE ACQUISITION OF 4215 NEVADA AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1077)
BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope
(“EDA”) as follows:
WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City
Council meeting authorizing City community development staff to actively pursue the acquisition of
distressed properties that can be redeveloped as single family residential lots for potential purchase by the
EDA, as part of the City’s scattered site housing program;
WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to
the City and EDA, and the execution of purchase agreements so as to secure purchase rights for distressed
real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements;
WHEREAS, City staff have identified the opportunity to purchase certain real property located at
4215 Nevada Avenue North, New Hope, MN, 55428, P.I.D. 17-118-21-21-0011, and legally described as
follows:
The East 130 feet of Lot 19, Auditor’s Subdivision No. 324, Hennepin County, Minnesota.
(the “Property”) from Andrew L. Caruthers, Jr., an unmarried person (the “Seller”);
WHEREAS, City staff believes that the best use of the Property is demolition in order to maximize
the tax base by making the lot available for the development of a new residential housing unit;
WHEREAS, the Property will be acquired with EDA funds;
WHEREAS, the EDA has reviewed the proposed acquisition of Property and has determined that
it has no effect or relationship with the New Hope Comprehensive Plan;
WHEREAS, it is in the best interest of the EDA to purchase the Property from Seller, in order to
redevelop the Property in accordance with the City’s scattered site housing program and policy; and
WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement,
subject to the review and approval by the City Attorney of proper title evidence and other terms relating to
the closing on the sale of the Property.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for
the City of New Hope as follows:
1. That the above recitals are incorporated herein by reference.
2. It is in the best interest of the EDA to purchase the Property for demolition and
redevelopment in accordance with the City’s scattered site housing program and policy.
3. That the purchase of the Property by EDA from Seller, for a sum of $206,000.00, with
other terms and conditions as set forth in the Purchase Agreement attached hereto as
Exhibit A, is approved subject to the review and approval by the City Attorney of proper
title evidence and other terms relating to the closing on the purchase of the Property.
4. The proposed acquisition of Property is consistent with the New Hope Comprehensive
Plan.
5. The City and EDA shall use due diligence for demolishing the structure located on the
Property and conducting any necessary cleanup of the Property to pursue redevelopment
and return the Property to the tax rolls for the benefit of all taxing jurisdictions.
6. The President and Executive Director and the New Hope City staff are authorized and
directed to sign all appropriate documents, and to take whatever additional actions are
necessary or desirable, to complete the purchase of the Property in accordance with the
Purchase Agreement.
Dated the 22nd day of November, 2021.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Kirk McDonald, Executive Director
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11448 4215 Nevada Ave. N\Resolution approving purchase of 4215 Nevada Ave N.docx
Exhibit A
Purchase Agreement
See attached.
1
PURCHASE AGREEMENT
Date: November ____, 2021
BUYER: 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
SELLER: Andrew L. Caruthers, Jr., unmarried
Seller agrees to sell and Buyer agrees to purchase the real property located at:
Street Address: 4215 Nevada Avenue North
City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described on the attached
Exhibit A, PID 17-118-21-21-0011. Said purchase shall include all improvements, fixtures, and
appurtenances on the property, if any, including but not limited to, the following (collectively the "Property"):
garden bulbs, plants, shrubs, trees, and lawn watering system; shed; storm sash, storm doors, screens and
awnings; window shades, blinds; traverse, curtain, and drapery rods, valances, drapes, curtains, window
coverings and treatments; towel rods; attached lighting and bulbs; fan fixtures; plumbing fixtures; garbage
disposals; water softener; water treatment system; water heating systems, heating systems; air exchange
system; radon mitigation system; sump pump; TV antenna/cable TV jacks and wiring/TV wall mounts;
wall/ceiling-mounted speakers and mounts; carpeting; mirrors; garage door openers and all controls; smoke
detectors; fireplace screens, door and heatilators; BUILT-INS: dishwashers; refrigerators; wine/beverage
refrigerators; trash compactors; ovens; cook-top stoves; warming drawers; microwave ovens; hood fans;
shelving; work benches; intercoms; speakers; air conditioning equipment; electronic air filter;
humidifier/dehumidifier; liquid fuel tanks (and controls); pool/spa equipment; propane tank (and controls);
security system equipment; TV satellite dish; AND the following personal property shall be transferred with
no additional monetary value, and free and clear of all liens and encumbrances:
______________________________________________
Notwithstanding the foregoing, the following item(s) are excluded from the purchase:
_________________________________________________________________________
Seller has agreed to sell the Property to Buyer for the sum of Two Hundred Six Thousand and 00/100
Dollars ($206,000.00), which Buyer agrees to pay in the following manner:
1. CASH of 100 percent (100%) of the sale price.
The date of closing shall be on or before May 22, 2022, and shall occur at the offices of the City Attorney
for City of New Hope: Jensen, Sondrall, Persellin & Woods, P.A., 8525 Edinbrook Crossing, Suite 201,
Brooklyn Park, MN 55443.
SALE OF BUYER'S PROPERTY CONTINGENCY: This Purchase Agreement IS NOT subject to an
Addendum to Purchase Agreement: Sale of Buyer's Property Contingency . (If answer is IS, see attached
Addendum.) (If answer is IS NOT, the closing of Buyer's property, if any, may still affect Buyer's ability to
obtain financing, if financing is applicable.)
This Purchase Agreement IS NOT subject to cancellation of a previously written purchase agreement dated
_______________________, 20__. (If answer is IS, said cancellation shall be obtained no later than
_____________, 20__. If said cancellation is not obtained by said date, this Purchase Agreement is
canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said
cancellation.)
Buyer has been made aware of the availability of Property inspections. Buyer does not elect to have a
Property inspection performed at Buyer's expense.
2
INSPECTION CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase
Agreement: Inspection Contingency. (If answer is IS, see attached Addendum.)
DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a (check one):
Warranty Deed joined in by spouse, if any, conveying marketable title, subject to
(a) building and zoning laws, ordinances, and state and federal regulations;
(b) restrictions relating to use or improvement of the Property without effective forfeiture provisions;
(c) reservation of any mineral rights by the State of Minnesota;
(d) utility and drainage easements which do not interfere with existing improvements;
(e) rights of tenants as follows (unless specified, not subject to tenancies) _____________; and
(f) others (must be specified in writing): ___________________________________________
REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all
prior years including all penalties and interest.
Buyer shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year
2021.
Seller shall pay PRORATED TO DAY OF CLOSING real estate taxes due and payable in the year 2021.
If the closing date is changed, the real estate taxes paid shall, if prorated, be adjusted to the new closing
date. If the Property tax status is a part- or non-homestead classification in the year of closing, Seller SHALL
NOT pay the difference between the homestead and non-homestead.
Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment
of which is not otherwise herein provided. No representations are made concerning the amount of
subsequent real estate taxes.
DEFERRED TAXES/SPECIAL ASSESSMENTS:
SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green Acres) or special
assessments, payment of which is required as a result of the closing of this sale.
SELLER SHALL PAY ON DATE OF CLOSING all installments of special assessments certified for
payment, with the real estate taxes due and payable in the year of closing.
SELLER SHALL PAY on date of closing all other special assessments levied as of the date of this Purchase
Agreement.
SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of the date of this
Purchase Agreement for improvements that have been ordered by any assessing authorities.
Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the
payment of which is not otherwise herein provided.
As of the date of this Purchase Agreement, Seller represents that Seller HAS NOT received a notice
regarding any new improvement project from any assessing authorities, the costs of which project may be
assessed against the Property. Any such notice received by Seller after the date of this Purchase
Agreement and before closing shall be provided to Buyer immediately. If such notice is issued after the
date of this Purchase Agreement and on or before the date of closing, then the parties may agree in writing,
on or before the date of closing, to pay, provide for the payment of or assume the special assessments. In
the absence of such agreement, either party may declare this Purchase Agreement canceled by written
notice to the other party, or licensee representing or assisting the other party, in which case this Purchase
Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall
immediately sign a Cancellation of Purchase Agreement confirming said cancellation.
3
POSSESSION: Seller shall deliver possession of the Property no later than date of closing. Seller agrees
to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the Property
by possession date.
LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access
or service to any device or system on or serving the property that is connected or controlled wirelessly, via
internet protocol ("IP") to a router or gateway or directly to the cloud no later than delivery of possession as
specified in this Purchase Agreement.
PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer,
electricity and natural gas shall be prorated between the parties as of date of closing. Buyer shall pay Seller
for remaining gallons of fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by
Seller.
TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this
Purchase Agreement:
a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title
insurance (the “Commitment”) issued by Midland Title (“Title Company”) and covering title
to the Property, in the amount of the Purchase Price. Seller agrees to pay the costs
associated with the preparation and issuance of the Commitment; Buyer shall pay the
premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price
for any endorsements requested by Buyer or Buyer’s lender.
b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve
the title to the Property and to object to any exception to title that is disclosed in the
Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not
within such fifteen (15) day period give notice to Seller objecting to any such exceptions,
then all such exceptions shall be deemed approved and shall be considered a part of the
Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before
the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception
or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5)
days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer
may elect by notice to Seller to either:
(i) terminate this Agreement, whereupon the parties shall be released from all further
obligations hereunder except obligations under this Agreement which provide for
continued exercise following the cancellation or other termination of this
Agreement; or
(ii) elect to have this Agreement remain in effect, in which event Buyer will be deemed
to have approved the previously-cited exception and the same shall be considered
part of the Permitted Encumbrances.
Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay
all costs and fees necessary to convey marketable title including obtaining and recording all required
documents, subject to the following:
In the event Seller has not provided marketable title by the date of closing, Seller shall have an
additional 30 days to make title marketable, or in the alternative, Buyer may waive title defects by
written notice to Seller. In addition to the 30-day extension, Buyer and Seller may, by mutual
agreement, further extend the closing date. Lacking such extension, either party may declare this
Purchase Agreement canceled by written notice to the other party, or licensee representin g or
4
assisting the other party, in which case this Purchase Agreement is canceled. If either party
declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a
Cancellation of Purchase Agreement confirming said cancellation.
SUBDIVISION OF LAND, BOUNDARIES, AND ACCESS: If this sale constitutes or requires a subdivision
of land owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental
approvals. Seller warrants that the legal description of the real property to be conveyed has been or shall
be approved for recording as of the date of closing. Seller warrants that the buildings are or shall be
constructed entirely within the boundary lines of the Property. Seller warrants that there is a righ t of access
to the Property from a public right-of-way.
MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all
labor, materials, machinery, fixtures or tools furnished within the 120 days immediately prece ding the
closing in connection with construction, alteration or repair of any structure on, or improvement to, the
Property.
NOTICES: Seller warrants that Seller has not received any notice from any governmental authority as to
condemnation proceedings, or violation of any law, ordinance or regulation. If the Property is subject to
restrictive covenants, Seller warrants that Seller has not received any notice from any person or authority
as to a breach of the covenants. Any such notices received by Seller shall be provided to Buyer immediately.
DIMENSIONS: Buyer acknowledges any dimensions, square footage or acreage of land or improvements
provided by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify
the accuracy of information to Buyer's satisfaction, if material, at Buyer's sole cost and expense.
ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any
surveys or inspections agreed to herein.
RISK OF LOSS: If there is any loss or damage to the Property between the date hereof and the date of
closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be
on Seller. If the Property is destroyed or substantially damaged b efore the closing date, this Purchase
Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting
Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation
of Purchase Agreement confirming said cancellation.
TIME OF ESSENCE: Time is of the essence in this Purchase Agreement.
CALCULATION OF DAYS: Any calculation of days begins on the first day (calendar or Business Days as
specified) following the occurrence of the event specified and includes subsequent days (calendar or
Business Days as specified) ending at 11:59 P.M. on the last day.
BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays or state or federal holidays
unless stated elsewhere by the parties in writing.
DEFAULT: If Buyer defaults in any of the agreements herein, Seller may cancel this Purchase Agreement,
and Buyer and Seller shall affirm the same by a written cancellation agreement.
If Buyer defaults in any of the agreements hereunder, Seller may terminate this Purchase Agreement under
the provisions of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer
or Seller defaults in any of the agreements hereunder or there exists an un fulfilled condition after the date
specified for fulfillment, either party may cancel this Purchase Agreement under MN Statute 559.217, Subd.
3. Whenever it is provided herein that this Purchase Agreement is canceled, said language shall be deemed
a provision authorizing a Declaratory Cancellation under MN Statute 559.217, Subd. 4.
If this Purchase Agreement is not canceled or terminated as provided hereunder, Buyer or Seller may seek
actual damages for breach of this Purchase Agreement or specific performance of this Purchase
5
Agreement; and, as to specific performance, such action must be commenced within six (6) months after
such right of action arises.
BUYER HAS NOT RECEIVED A DISCLOSURE STATEMENT RE: SELLER'S PROPERTY.
DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property or Disclosure
Statement: Seller's Disclosure Alternatives for description of disclosure responsibilities and limitations, if
any.
BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OF THE
PROPERTY AND ITS CONTENTS.
SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED
TO:
CITY SEWER-YES / CITY WATER-YES
SUBSURFACE SEWAGE TREATMENT SYSTEM
SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING
THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure.
Statement: Subsurface Sewage Treatment System.)
PRIVATE WELL
SELLER DOES KNOW OF A WELL ON OR SERVING THE PROPERTY. (If answer is DOES and well is
located on the Property, see Disclosure Statement: Well.) See attached Well Disclosure with well sealing
certificate
THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT:
SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer
is IS, see attached Addendum.)
IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER
HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT:
SUBSURFACE SEWAGE TREATMENT SYSTEM.
NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory
offender registry and persons registered with the predatory offender registry under MN Statute 243.166
may be obtained by contacting the local law enforcement offices in the community where the Property is
located or the Minnesota Department of Corrections at (651) 361 -7200, or from the Department of
Corrections web site at www.corr.state.mn.us.
6
No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement.
NOTICE
Seller is not represented by a listing Agent in this
transaction.
(Licensee)
(Real Estate Company Name)
Buyer is not represented by an Agent in this
transaction.
(Licensee)
(Real Estate Company Name)
DUAL AGENCY REPRESENTATION
Dual Agency representation DOES NOT apply in this transaction.
CLOSING COSTS: Buyer and Seller agree to respectively pay traditional closing costs.
FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal
Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified
in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from
FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section
1445 of the Internal Revenue Code.
Seller shall represent and warrant, under the penalties of perjury, whether Seller is a "foreign person" (as
the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to
this issue shall survive the closing and delivery of the deed.
Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or
statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their
respective federal taxpayer identification numbers or Social Security numbers.
Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's
responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax
advice regarding FIRPTA compliance, as the respective licensee's representing or assisting either
party will be unable to assure either party whether the transaction is exempt from FIRPTA
withholding requirements.
ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties
shall constitute the entire agreement between Buyer and Seller. Any other written or oral communication
between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic
communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or
canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed
to be United States currency for purposes of this Purchase Agreement.
ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document
related to this transaction constitute valid, binding signatures.
7
FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties
and a copy must be delivered.
SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or
contract for deed.
OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on
the following:
(1) Review and approval of the terms of the Purchase Agreement by the Economic Development
Authority in and for the City of New Hope to the terms of the Purchase Agreement
If the above contingency is not met, Buyer may declare this Purchase Agreement canceled by written
notice to Seller, or licensee representing or assisting Seller, in which case this Purchase Agreement is
canceled. If Buyer declares this Purchase Agreement canceled due to the failure of one of the above
contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming
said cancellation and all earnest money paid shall be immediately returned to Buyer.
Seller will not be required to complete the City of New Hope Point of Sale inspection.
Seller warrants that there are no tenants on the property with a lawful leasehold interest. In the event any
tenant comes forward and claims an interest in the property at the time of or following the purchase,
Seller agrees to fully indemnify Buyer for any and all costs associated with terminating such tenancy and
for any and all relocation assistance and benefits that may be due to such tenant together with attorney’s
fees that Buyer would have to incur in connection with legal action required to resolve any relocation
assistance or benefits dispute with such tenant.
Seller acknowledges that she is not being displaced from the property as a result of the Purchase
Agreement and that she is not eligible for relocation assistance and benefits, that the purchase price
includes compensation for any and all relocation assistance and benefits for which Seller may be eligible.
The provisions of this paragraph shall survive the closing of the transaction contemplated by this
Purchase Agreement.
For purposes of this Purchase Agreement, “relocation assistance and benefits” shall have the meanings
ascribed to them by the Minnesota Uniform Relocation Act, Minn. Stat.§117.50 to 117.56, the Uniform
Relocation Assistance and Real Property Acquisition Policies Act, 42 U.S.C. §§4601 -4655 (the federal
URA) and the regulations implementing the federal URA, 49 C.D.R. Part 24.
ADDENDA AND PAGE NUMBERING: Attached addenda are a part of this Purchase Agreement.
Enter total number of pages of this Purchase Agreement, including addenda : __ pages.
8
NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement
and should not be part of the page numbering.
I, the owner of the Property, accept this Purchase
Agreement and authorize the listing broker to withdraw
said Property from the market, unless instructed
otherwise in writing.
I have reviewed all pages of this Purchase
Agreement.
If checked, this Agreement is subject to attached
Addendum to Purchase Agreement: Counteroffer.
FIRPTA: Seller represents and warrants, under penalty
of perjury, that Seller IS NOT a foreign person (i.e., a
non-resident alien individual, foreign corporation, foreign
partnership, foreign trust, or foreign estate for purposes
of income taxation. This representation and warranty
shall survive the closing of the transaction and the
delivery of the deed.
I agree to purchase the Property for the price and on
the terms and conditions set forth above.
I have reviewed all pages of this Purchase
Agreement
Seller Buyer
______________________________________ Economic Development Authority in and for the
Andrew L. Caruthers, Jr., unmarried City of New Hope, a public body corporate and
politic created pursuant to the laws of the State
of Minnesota
Date: November ____, 2021
By:
Kirk McDonald
Its: Executive Director
Date: November ____, 2021
THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S).
IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL.
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11448 4215 Nevada Ave. N\Purchase Agreement.docx
9
Exhibit A
Legal Description
The East 130 feet of Lot 19, Auditor’s Subdivision No. 324, Hennepin County, Minnesota.
4215 Nevada Ave N
R-1, Single-family residential
130’79.5’Potential Home & Garage Potential Driveway
Buildable Area
Appraisal Professionals of MN LLC
Jayne Preusse
Eden Prairie, MN 55344
612-267-5269
10/15/2021
Jeff Alger
City of New Hope
Community Development
4401 Xylon Avenue N
New Hope, MN 55428
Re:Property:4215 Nevada Ave N
New Hope, MN 55428
Borrower:N/A
File No.:AP20606
Opinion of Value: $206,000
Effective Date:10/08/2021
In accordance with your request, we have appraised the above referenced property. The report of that appraisal is
attached.
The purpose of the appraisal is to develop an opinion of market value for the property described in this appraisal
report, as improved, in unencumbered fee simple title of ownership.
This report is based on a physical analysis of the site and improvements, a locational analysis of the neighborhood and
city, and an economic analysis of the market for properties such as the subject. The appraisal was developed and the
report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice.
The opinion of value reported above is as of the stated effective date and is contingent upon the certification and
limiting conditions attached.
It has been a pleasure to assist you. Please do not hesitate to contact me if I can be of additional service to you.
Sincerely,
Jayne Preusse
License or Certification #: 20559939
State: MN Expires: 08/31/2023
jstrikos@msn.com
APPRAISAL OF REAL PROPERTY
4215 Nevada Ave N
New Hope, MN 55428
LOT 019 AUDITOR'S SUBDIVISION NO. 324 HENNEPIN COUNTY, MINN
City of New Hope
4401 Xylon Avenue N
New Hope, MN 55428
206,000
10/08/2021
Jayne Preusse
Appraisal Professionals of MN LLC
Certified Residential Appraiser
Eden Prairie, MN 55344
612-267-5269
jstrikos@msn.com
Form GA1V - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
LOCATED AT
FOR
OPINION OF VALUE
AS OF
BY
Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Andrew Caruthers JR
AP20606
4215 Nevada Ave N New Hope MN 55428
LOT 019 AUDITOR'S SUBDIVISION NO. 324 HENNEPIN COUNTY, MINN Hennepin
17-118-21-21-0011 2021 3,058 906
N/A Andrew Caruthers Jr
0
New Hope 33460 0215.03
N/A N/A N/A
City of New Hope 4401 Xylon Avenue N, New Hope, MN 55428
Jayne Preusse Eden Prairie, MN 55344
85
15
205
300
260
60
90
71
67
3
4
20
Other 6
49th Ave N to the north, Douglas Dr to the east, CR 9 to the south, and Winnetka Ave N to the west.
Market trends analysis was from a 1 mile radius from the subject property.
Under present land use, 6% indicates "Other". The primary portion of this amount includes parks, miscellaneous, water and undeveloped
land. This does not indicate any negative impact on the Subject's value & marketability at this time.
Market data indicates overall property values have been increasing for the previous 12 month period prior to the effective date of this
appraisal. Market times are deemed to be in the "0-3 months" range at this time.
79.5x130x79.5x130
10,329 sf
R1-Single Family Residential
AMP CB Asphalt
Concrete
None
Yes
None
Level
Average-10329 sf
Rectangular
Average
N;Res
Average
Asphalt/Avg
None Noted
X 11/04/2016
27053C0211F
Subject is located
with a commercial building/parking lot to the south side across the Oregon Ave, apartment buildings to the rear and a gas station across the
front southeast. External is observed from any traffic and miscellaneous. This is observed to be accepting within this location and price-point.
1
2
Detached
Cape Cod
Existing
81
60
Concrete/Avg
Vyl/Cp/Avg
Asphalt/Avg
Aluminum/Avg
DbH/Gldr/Hg/Av
Full/Avg
N/A
N/A
N/A
Full/wu
None
None Noted
None Noted
None Noted
720
0
N/A
N/A
N/A
No
Unkn
Unkn
Unkn
Unkn
1 720
1 1 1 2 1 723
1 330
5 3 1 1,053
Cpt/WL/A-G
SR/Avg
Wood/Avg
CT/A-G
CTA-G
Wd/Avg
Yes
FWA
Gas
Avg
None
None
None
Deck
None
None
None
Yes
2
8
See Attached Addendum.
C4;The
subject is a "Cape Cod" 1.5 detached single family home reflecting overall average condition as compared to competing properties of a
similar age and design. The subject property exhibits no apparent effects of functional obsolescence. See attached addendum and photo
addendum.
None known.
Jayne Strikos
Property Description File No.UNIFORM RESIDENTIAL APPRAISAL REPORT
SUBJECTProperty Address
Legal Description
Assessor's Parcel No.
Borrower
Property rights appraised
Neighborhood or Project Name
Sale Price $
Lender/Client
Appraiser
Location
Built up
Growth rate
Property values
Demand/supply
Marketing time
City State Zip Code
County
Tax Year R.E. Taxes $Special Assessments $
Current Owner Occupant:Owner Tenant Vacant
Fee Simple Leasehold Project Type PUD Condominium (HUD/VA only)HOA $/Mo.
Map Reference Census Tract
Date of Sale Description and $ amount of loan charges/concessions to be paid by seller
Address
Address
NEIGHBORHOODPredominant
occupancy
Single family housing Present land use %Land use change
Note: Race and the racial composition of the neighborhood are not appraisal factors.
Predominant
Urban
Over 75%
Rapid
Increasing
Shortage
Under 3 mos.
Suburban
25-75%
Stable
Stable
In balance
3-6 mos.
Rural
Under 25%
Slow
Declining
Over supply
Over 6 mos.
Owner
Tenant
Vacant (0-5%)
Vac.(over 5%)
PRICE AGE
$(000)(yrs)
Low
High
One family
2-4 family
Multi-family
Commercial
Not likely
In process
Likely
To:
Neighborhood boundaries and characteristics:
Factors that affect the marketability of the properties in the neighborhood (proximity to employment and amenities, employment stability, appeal to market, etc.):
Market conditions in the subject neighborhood (including support for the above conclusions related to the trend of property values, demand/supply, and marketing time
-- such as data on competitive properties for sale in the neighborhood, description of the prevalence of sales and financing concessions, etc.):PUDProject Information for PUDs (If applicable) - - Is the developer/builder in control of the Home Owners' Association (HOA)?Yes No
Approximate total number of units in the subject project Approximate total number of units for sale in the subject project
Describe common elements and recreational facilities:SITEDimensions
Site area
Specific zoning classification and description
Zoning compliance
Highest & best use as improved:
Corner Lot Yes No
Legal Legal nonconforming (Grandfathered use)Illegal No zoning
Present use Other use (explain)
Utilities Off-site Improvements
Electricity
Gas
Water
Sanitary sewer
Storm sewer
Public Other Type Public Private
Street
Curb/gutter
Sidewalk
Street lights
Alley
Topography
Size
Shape
Drainage
View
Landscaping
Driveway Surface
Apparent easements
FEMA Special Flood Hazard Area
FEMA Zone
FEMA Map No.
Map Date
Yes No
Comments (apparent adverse easements, encroachments, special assessments, slide areas, illegal or legal nonconforming zoning use, etc.):DESCRIPTION OF IMPROVEMENTSGENERAL DESCRIPTION
No. of Units
No. of Stories
Type (Det./Att.)
Design (Style)
Existing/Proposed
Age (Yrs.)
Effective Age (Yrs.)
EXTERIOR DESCRIPTION
Foundation
Exterior Walls
Roof Surface
Gutters & Dwnspts.
Window Type
Storm/Screens
Manufactured House
FOUNDATION
Slab
Crawl Space
Basement
Sump Pump
Dampness
Settlement
Infestation
BASEMENT
Area Sq. Ft.
% Finished
Ceiling
Walls
Floor
Outside Entry
INSULATION
Roof
Ceiling
Walls
Floor
None
Unknown
ROOMS
Basement
Level 1
Level 2
Finished area above grade contains:Rooms;Bedroom(s);Bath(s);Square Feet of Gross Living Area
Foyer Living Dining Kitchen Den Family Rm.Rec. Rm.Bedrooms # Baths Laundry Other Area Sq. Ft.
INTERIOR Materials/Condition
Floors
Walls
Trim/Finish
Bath Floor
Bath Wainscot
Doors
HEATING
Type
Fuel
Condition
COOLING
Central
Other
Condition
KITCHEN EQUIP.
Refrigerator
Range/Oven
Disposal
Dishwasher
Fan/Hood
Microwave
Washer/Dryer
ATTIC
None
Stairs
Drop Stair
Scuttle
Floor
Heated
Finished
AMENITIES
Fireplace(s) #
Patio
Deck
Porch
Fence
Pool
CAR STORAGE:
None
Garage
Attached
Detached
Built-In
Carport
Driveway
# of cars
COMMENTSAdditional features (special energy efficient items, etc.):
Condition of the improvements, depreciation (physical, functional, and external), repairs needed, quality of construction, remodeling/additions, etc.:
Adverse environmental conditions (such as, but not limited to, hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the
immediate vicinity of the subject property.:
Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6/93PAGE 1 OF 2
Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
59,000
1,053
576
59,000
Andrew Caruthers JR
AP20606
Estimated economic life based on 100
total years. The most recent and similar land comparables per
RMLS are of the following:
RMLS #4800557 $107,000 and #5011198 $49,000.
4215 Nevada Ave N
New Hope, MN 55428
N/A
RMLS/HennCA
Inspection
A;Com/Apt
Fee Simple
10,329 sf
N;Res
Cape Cod
Q5
81
C4
5 3 1
1,053
720sf0sfwu
0
Average
FWA
None
2gd7dw
Deck
None
None
10/08/2021
RMLS/HennCA
4055 Oregon Ave N
New Hope, MN 55427
0.18 miles SW
224,900
227.17
RMLS#5664140/20DOM
RMLS/HennAssessWeb
ArmLth
FHA;4000 0
s01/21;Unk +4,216
A;RR 0
Fee Simple
8712 sf 0
N;Res;
Cape Cod
Q5 +4,000
65 0
C4 -2,000
6 3 1
990 0
800sf400sfwu -8,000
1rr0br.0ba3o 0
Average
FWA C/Air -4,000
None
2gd4dw 0
ScPor/Pt -2,000
None
None
-7,784
None
217,116
10/08/2021
RMLS/HennCA
7019 47th Ave N
Crystal, MN 55428
0.45 miles NE
224,660
211.35
RMLS#6090479/8DOM
RMLS/HennAssessWeb
ArmLth
Cash;0 0
s09/21;Unk 0
N;Res;-4,000
Fee Simple
8276 sf 0
N;Res;
Cape Cod
Q5 +4,000
67 0
C4 -2,000
5 3 1 0
1,063 0
783sf448sfwu -8,960
1rr0br0.0ba1o 0
Average
FWA C/Air -4,000
None
2gd6dw 0
Patio 0
None
None
-14,960
None
209,700
10/08/2021
RMLS/HennCA
3611 Louisiana Ave N
New Hope, MN 55427
0.79 miles S
205,000
132.00
RMLS#6072899/0DOM
RMLS/HennAssessWeb
REO
Cash;0 0
s08/21;Unk 0
A;BsRd/Apt 0
Fee Simple
12632 sf 0
N;Res;
Cape Cod
Q5 +6,000
60 0
C4
7 3 1 0
1,553 -12,500
665sf565sfwu -8,475
1rr0br0.0ba1o 0
Average
FWA C/Air -4,000
None
1gb5dw +8,000
2Dk -2,000
1 FP -2,000
REO +15,000
25
None
205,025
03/11/2021
155,000
RMLS/HennCA
See attached addendum.
The subject property has not been a sale / re-sale during the past 36 months. All comparable sales have not been sales / resales during the
past 12 months, except for Comparable #3, listed in grid above and one prior on 03/01/2021 both indicating a sheriff sale.
206,000
N/A N/A
See Attached Addendum.
Most emphasis was placed on the Sales Comparison Approach to Value. The Income (GRM) Approach and Cost Approach
were both considered with the Sales Comparison Approach weighing in as the most viable approach to value/opinion of value.
10/2021
10/08/2021
206,000
Jayne Preusse
10/15/2021
20559939 MN
Valuation Section File No.UNIFORM RESIDENTIAL APPRAISAL REPORT
COST APPROACHESTIMATED SITE VALUE
ESTIMATED REPRODUCTION COST-NEW-OF IMPROVEMENTS:
Dwelling
Garage/Carport
Total Estimated Cost New
Less
Depreciation
Depreciated Value of Improvements
"As-is" Value of Site Improvements
INDICATED VALUE BY COST APPROACH
Sq. Ft.
Sq. Ft.
Sq. Ft.
@
@
@
$
$
$
Physical Functional External
=
=
=
=
=
$
$
=
=
=
=
=
$
$
$
$
$
Comments on Cost Approach (such as, source of cost estimate, site value,
square foot calculation and for HUD, VA and FmHA, the estimated remaining
economic life of the property):SALES COMPARISON ANALYSIS////
ITEM SUBJECT COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3
ITEM SUBJECT COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3
DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–
Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths
Sq. Ft.Sq. Ft.Sq. Ft.Sq. Ft.
+–+–+–
$
$$
$
$
$
$
$
$
$
$
$
$
$
$
$$
Address
Proximity to Subject
Sales Price
Price/Gross Living Area
Data and/or
Verification Source
VALUE ADJUSTMENTS
Sales or Financing
Concessions
Date of Sale/Time
Location
Leasehold/Fee Simple
Site
View
Design and Appeal
Quality of Construction
Age
Condition
Above Grade
Room Count
Gross Living Area
Basement & Finished
Rooms Below Grade
Functional Utility
Heating/Cooling
Energy Efficient Items
Garage/Carport
Porch, Patio, Deck,
Fireplace(s), etc.
Fence, Pool, etc.
Net Adj. (total)
Adjusted Sales Price
of Comparable
Comments on Sales Comparison (including the subject property's compatibility to the neighborhood, etc.):
Date, Price and Data
Source, for prior sales
within year of appraisal
Analysis of any current agreement of sale, option, or listing of subject property and analysis of any prior sales of subject and comparables within one year of the date of appraisal:
INDICATED VALUE BY SALES COMPARISON APPROACH
INDICATED VALUE BY INCOME APPROACH (if Applicable) Estimated Market Rent /Mo.x Gross Rent Multiplier =RECONCILIATIONThis appraisal is made "as is"subject to the repairs, alterations, inspections or conditions listed below subject to completion per plans & specifications.
Conditions of Appraisal:
Final Reconciliation:
The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report, based on the above conditions and the certification, contingent
and limiting conditions, and market value definition that are stated in the attached Freddie Mac Form 439/FNMA form 1004B (Revised ).
Signature
Name
Date Report Signed
State Certification #State
Or State License #State
Signature
Name
Date Report Signed
State Certification #State
Or State License #State
Inspect Property
Did Did Not
I (WE) ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT, AS OF
(WHICH IS THE DATE OF INSPECTION AND THE EFFECTIVE DATE OF THIS REPORT) TO BE $
APPRAISER:SUPERVISORY APPRAISER (ONLY IF REQUIRED):
Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6-93PAGE 2 OF 2
Form UA2.(AC) - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
4215 Nevada Ave N
New Hope, MN 55428
N/A
RMLS/HennCA
Inspection
A;Com/Apt
Fee Simple
10,329 sf
N;Res
Cape Cod
Q5
81
C4
5 3 1
1,053
720sf0sfwu
0
Average
FWA
None
2gd7dw
Deck
None
None
10/08/2021
RMLS/HennCA
4517 Brunswick Ave N
Crystal, MN 55422
0.76 miles E
176,000
117.33
RMLS#5507493/21/DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Conv;4000 0
s05/20;Unk +29,333
N;Res;-4,000
Fee Simple
22216 sf -10,000
N;Res;
Cape Cod
Q5 +12,000
90 0
C4
8 4 1.0 0
1,500 -11,175
1200sf0sfwu 0
0
Average
FWA
None
2dg2dw
None +2,000
None
None
18,158
None
194,158
01/21/2021
05/14/2020-$140,800
RMLS/HenneCA
4 5 6
SALES COMPARISON ANALYSISUNIFORM RESIDENTIAL APPRAISAL REPORT
MARKET DATA ANALYSIS
These recent sales of properties are most similar and proximate to subject and have been considered in the market analysis. The description includes a dollar adjustment, reflecting
market reaction to those items of significant variation between the subject and comparable properties. If a significant item in the comparable property is superior to, or more
favorable than, the subject property, a minus (-) adjustment is made, thus reducing the indicated value of the subject. If a significant item in the comparable is inferior to, or less
favorable than, the subject property, a plus (+) adjustment is made, thus increasing the indicated value of the subject.
////
ITEM SUBJECT COMPARABLE NO. COMPARABLE NO. COMPARABLE NO.
DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–
Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths
Sq. Ft.Sq. Ft.Sq. Ft.Sq. Ft.
+–+–+–
$
$$
$
$
$
$
$
$
$
$
$
$
$
Address
Proximity to Subject
Sales Price
Price/Gross Living Area
Data and/or
Verification Sources
VALUE ADJUSTMENTS
Sales or Financing
Concessions
Date of Sale/Time
Location
Leasehold/Fee Simple
Site
View
Design and Appeal
Quality of Construction
Age
Condition
Above Grade
Room Count
Gross Living Area
Basement & Finished
Rooms Below Grade
Functional Utility
Heating/Cooling
Energy Efficient Items
Garage/Carport
Porch, Patio, Deck,
Fireplace(s), etc.
Fence, Pool, etc.
Net Adj. (total)
Adjusted Sales Price
of Comparable
Date, Price and Data
Source for prior sales
within year of appraisal
COMMENTSComments:
Market Data Analysis 6-93
Andrew Caruthers JR
AP20606
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
File No.
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Condition Ratings and Definitions
C1
The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new
and the dwelling features no physical depreciation.
Note: Newly constructed improvements that feature recycled or previously used materials and/or components can be considered new dwellings
provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been
rehabilitated/remanufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they
have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without
adequate maintenance or upkeep).
C2
The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components
are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced
with components that meet current standards. Dwellings in this category are either almost new or have been recently completely renovated and
are similar in condition to new construction.
Note: The improvements represent a relatively new property that is well maintained with no deferred maintenance and little or no physical
depreciation, or an older property that has been recently completely renovated.
C3
The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every
major building component, may be updated or recently rehabilitated. The structure has been well maintained.
Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is
being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of
short-lived building components have been replaced but not to the level of a complete renovation.
C4
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been
adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building
components have been adequately maintained and are functionally adequate.
Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building
components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however,
they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property.
C5
The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs,
rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains
useable and functional as a residence.
Note: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many
of its short-lived building components are at the end of or have exceeded their physical life expectancy but remain functional.
C6
The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety,
soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many
or most major components.
Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property
with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements.
Quality Ratings and Definitions
Q1
Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such
residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship
and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality
exterior refinements and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes
throughout the dwelling are of exceptionally high quality.
Q2
Dwellings with this quality rating are often custom designed for construction on an individual property owner’s site. However, dwellings in
this quality grade are also found in high-quality tract developments featuring residence constructed from individual plans or from highly
modified or upgraded plans. The design features detailed, high quality exterior ornamentation, high-quality interior refinements, and detail. The
workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality.
UAD Version 9/2011 (Updated 4/2012)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Quality Ratings and Definitions (continued)
Q3
Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard
residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors
that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been
upgraded from “stock” standards.
Q4
Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans
are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship,
finish, and equipment are of stock or builder grade and may feature some upgrades.
Q5
Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a
plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation
and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials
with limited refinements and upgrades.
Q6
Dwellings with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings
are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or
expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical
systems and equipment may be minimal or non-existent. Older dwellings may feature one or more substandard or non-conforming additions
to the original structure
Definitions of Not Updated, Updated, and Remodeled
Not Updated
Little or no updating or modernization. This description includes, but is not limited to, new homes.
Residential properties of fifteen years of age or less often reflect an original condition with no updating, if no major
components have been replaced or updated. Those over fifteen years of age are also considered not updated if the
appliances, fixtures, and finishes are predominantly dated. An area that is ‘Not Updated’ may still be well maintained
and fully functional, and this rating does not necessarily imply deferred maintenance or physical/functional deterioration.
Updated
The area of the home has been modified to meet current market expectations. These modifications
are limited in terms of both scope and cost.
An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute
updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not
include significant alterations to the existing structure.
Remodeled
Significant finish and/or structural changes have been made that increase utility and appeal through
complete replacement and/or expansion.
A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include
some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation
of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of)
square footage). This would include a complete gutting and rebuild.
Explanation of Bathroom Count
Three-quarter baths are counted as a full bath in all cases. Quarter baths (baths that feature only a toilet) are not
included in the bathroom count. The number of full and half baths is reported by separating the two values using a
period, where the full bath count is represented to the left of the period and the half bath count is represented to the
right of the period.
Example:
3.2 indicates three full baths and two half baths.
UAD Version 9/2011 (Updated 4/2012)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Abbreviations Used in Data Standardization Text
Abbreviation Full Name Fields Where This Abbreviation May Appear
ac Acres Area, Site
AdjPrk Adjacent to Park Location
AdjPwr Adjacent to Power Lines Location
A Adverse Location & View
ArmLth Arms Length Sale Sale or Financing Concessions
ba Bathroom(s)Basement & Finished Rooms Below Grade
br Bedroom Basement & Finished Rooms Below Grade
B Beneficial Location & View
Cash Cash Sale or Financing Concessions
CtySky City View Skyline View View
CtyStr City Street View View
Comm Commercial Influence Location
c Contracted Date Date of Sale/Time
Conv Conventional Sale or Financing Concessions
CrtOrd Court Ordered Sale Sale or Financing Concessions
DOM Days On Market Data Sources
e Expiration Date Date of Sale/Time
Estate Estate Sale Sale or Financing Concessions
FHA Federal Housing Authority Sale or Financing Concessions
GlfCse Golf Course Location
Glfvw Golf Course View View
Ind Industrial Location & View
in Interior Only Stairs Basement & Finished Rooms Below Grade
Lndfl Landfill Location
LtdSght Limited Sight View
Listing Listing Sale or Financing Concessions
Mtn Mountain View View
N Neutral Location & View
NonArm Non-Arms Length Sale Sale or Financing Concessions
BsyRd Busy Road Location
o Other Basement & Finished Rooms Below Grade
Prk Park View View
Pstrl Pastoral View View
PwrLn Power Lines View
PubTrn Public Transportation Location
rr Recreational (Rec) Room Basement & Finished Rooms Below Grade
Relo Relocation Sale Sale or Financing Concessions
REO REO Sale Sale or Financing Concessions
Res Residential Location & View
RH USDA - Rural Housing Sale or Financing Concessions
s Settlement Date Date of Sale/Time
Short Short Sale Sale or Financing Concessions
sf Square Feet Area, Site, Basement
sqm Square Meters Area, Site
Unk Unknown Date of Sale/Time
VA Veterans Administration Sale or Financing Concessions
w Withdrawn Date Date of Sale/Time
wo Walk Out Basement Basement & Finished Rooms Below Grade
wu Walk Up Basement Basement & Finished Rooms Below Grade
WtrFr Water Frontage Location
Wtr Water View View
Woods Woods View View
Other Appraiser-Defined Abbreviations
Abbreviation Full Name Fields Where This Abbreviation May Appear
UAD Version 9/2011 (Updated 4/2012)
Twelve Month Listing History of Subject Property
An extensive search of the subject property was completed and there were no listings of the subject
in the previous twelve months.
Sources used were Hennepin County Records and Northstar Multiple Listing Service.
Market Conditions
Overall market conditions for this report were based on the statistics for page one of the URAR - Old Form.
Market statistics for page one of the URAR/Old Form concluded the following: the median sold price of all single
family homes within a one mile radius from the subject property from 10/08/2019-10/07/2020 was
$252,500 (data of 14). Whereas, the median sold price of all single family homes from 10/08/2020-10/07/2021
was $260,000 (data of 15). An increase of approximately 2-3%. The average priced homes of the same RMLS
statistics indicates an increase in market conditions as well.
Both statistics were taken under consideration, with the final observation of an increase in overall
market conditions.
National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak
On March 13, 2020, the United States Government declared a "National Emergency Concerning the Novel
Coronavirus Disease (COVID-19) Outbreak", which was in effect on the Effective Date of this Appraisal Report.
In addition, on March 25, 2020 the State of Minnesota Government declared a "stay at home order", which was in
effect on the Effective Date of this Appraisal Report. This appraisal report was performed pursuant to the Uniform
Standards of Professional Appraisal Practice (USPAP) and was based on information and comparable sales
available on that date. The effect of COVID-19 on the future value of the Subject Property or the value of the real
estate market in the area of the Subject Property is unknown and not possible to predict.
Reconciliation
The effect COVID-19 will have on the real estate market in the region is currently unknown and will largely depend
on both the scale and longevity of the pandemic. At this stage Tourism, F&B and Retail sectors are the first
impacted, due to the increased response by local and global authorities including home quarantine, restriction of
travel and international concerns. A prolonged pandemic could have a significant (and yet unknown or quantifiable)
impact on other sectors of the property market.
President Donald Trump on Friday 03/27/2020 signed a $2.2 trillion coronavirus economic stimulus bill, putting in
motion desperately needed financial relief for millions of Americans set back by the pandemic. The more than $2
trillion bill is the largest economic relief package in modern U.S. history.
This appraisal report was performed pursuant to the Uniform Standards of Professional Appraisal Practice
(“USPAP”) and was based on information and comparable sales available as of the effective date. At this time, the
effect of COVID-19 on the future value of the Subject Property or the value of the real estate market in the area of
the Subject Property is unknown and not possible to predict.
This valuation is based on the information available as of the effective date. Given the heightened uncertainty, a
degree of caution should be exercised when relying upon this report. Values may change more rapidly and
significantly than during standard market conditions.
The analysis is being performed with as much current information and market feedback as possible. However, the
appraiser can only work with what is available.
The appraisal is being performed at a point in time and that the market value opinion is - as of a certain date - the
effective date. changes after the date may affect the value. Analysis is being performed as quickly as possible to
measure the impacts, if any, to the subject's market as a result of this event.
Neighborhood Description
The subject property is located in the eastern section of the City of New Hope MN within the County of Hennepin.
The immediate neighborhood consists primarily of detached single family homes all that generally
conform with one another in style, size and price range.
All neighborhood conveniences including shopping public schools, parks and highway access are
within reasonable distances. There has traditionally been an average demand for housing in this
neighborhood. The subject's immediate neighborhood is a mix of single family detached homes.
Subjects neighborhood is mainly a residential neighborhood with easy access to other suburban
areas via Highways 169/100 and connecting to other main arteries.
No adverse conditions were observed.
Subject Site
The subject is a corner site that is typical in parcel size. The subject is located close in proximity of commercial to
the south side and with apartments to the rear. Both are observed to have external obsolescence associated with
the subject The topography is generally level from the front to the rear and does not allow for a walkout basement.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20606
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
the subject The topography is generally level from the front to the rear and does not allow for a walkout basement.
There is an asphalt driveway that is entered from a lightly trafficked residential street to the attached garage. There
is a concrete walkway from the driveway that leads to the front entrance. The subject views detached single family
homes on the north side, to the front, an apartment complex to the rear (however there is a taller wood fence
blocking some of the views at the rear) and commercial to the south side. In short, the subject parcel is observed to
be an average site with the external associated observed, and is considered to be a suitable place for the home
improvements.
There are no apparent easements or encroachments, other than typical utility easements.
In making this appraisal report, we are not aware of any testing for the existence of presence of
radon, asbestos, toxic substances, or other environmental pollutants in the building, land, or other
surrounding areas, and that the value assigned herein to the land and buildings assume that no
such contaminants exist. We further recommend that if you have knowledge of or reason to subject
the existence of such pollutants, that you obtain an environmental assessment of the property.
To the best of our knowledge, there are no environmental risk factors which may affect the real
estate being appraised.
Additional Features
Exterior features of the subject include a wood deck at the front.
Main level features include some updates to the kitchen to include newer tiled back splash, counter tops, newer
cabinetry, paint and appliances, newer wood laminate flooring on much of the main level and an updated bathroom
with ceramic tiling.
The first level consists of a foyer, living room, kitchen, full bath, and two bedrooms. The second level
consists of one bedroom.
The basement is full, unfinished and is not a walkout.
The appraiser manually measured the subject with 1053 GLA. RMLS Realist for the subject indicates GLA of 900.
Per the home owner, Andrew Caruthers Jr, the well on the subject property has been capped. Appraiser was not
able to determine.
"This assignment was completed in full compliance with the appraisal independence
regulations".
Highest and Best Use
Highest and best use is defined in The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, at Page
93, as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically
possible, appropriately supported, financially feasible, and that results in the highest value.
The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility,
and maximum profitability. Alternatively, the probable use of land or improved property – specific with respect to the
user and timing of the use – that is adequately supported and results in the highest present value.
The subject as improved is a legally permissible use based on its current zoning. Also, the lot size, shape, physical
condition and land to building ratio allow the present structure and indicate a good utilization of the improvements.
Based on current market conditions, the present use and structure as a single family residence is its financially
feasible and maximally productive use.
The subject property is currently being utilized as a residential single family home and is being
appraised as a residential single family home.
Comments on Sale Comparison
Your appraiser has performed a detailed search for comparables to the subject in location, design,
utility and appeal. After extensive research, the comparable sales chosen were deemed the best
available. The appraiser has researched, reviewed, analyzed and documented the sales. The
appraiser has made peer acceptable, unbiased, and impartial adjustments for items of significant variation.
Search parameters included the following:
- location of being in the City of New Hope and within one mile from the subject property
- similar design style, age, condition and amenities
- similar parcel size and view.
The subject is a Cape Cod 1.5 story designed detached single family home. The subject is considered to be overall
average condition. Four sold comparables were utilized for the overall opinion of value. The additional fourth sold
comparable is an older comparable however was added to support the opinion of value and with being an inferior
comparable to the subject.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20606
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
Comparables #1, #2 and #3 are observed to be good viable comparables to the subject, many of the search
parameters, and being close in proximity to the subject. Comparables #1 and #2 were given most
weight in the determination of the opinion of value due to being close in proximity to the subject
while being similar in most of the original search parameters. Comparable #3 best represented an external location
as the subject.
Due to limited comparables within one mile of the subject and with the subject being close in proximity of the City of
Crystal, comparables were located within the cities of New Hope and Crystal. All comparables are within the same
school district as the subject - #281-Robbinsdale.
Effective ages were taken under consideration for the sales comparison grid. GLA along with the other parameters
were the next most viable attributes in locating similar comparables to the subject.
Parcel adjustments if any, were based on Hennepin County Assessor Website values, land sales, parcel size,
amenities of the parcels, view and overall utility. Each individual parcel was observed for all
attributes, and therefore may not be completely defined by the specific square foot/acres per parcel.
Due to extending the search parameters, recommended guidelines were exceeded in gross adjustments, line item
adjustments in quality updates/upgrades, and GLA to the subject property.
GLA for the comparables utilized within this report have been researched per the individual listings, RMLS Realist,
previous appraisal files for Comp #3, and Hennepin County Assessor Website and each analyzed to the best
judgment of the most accurate GLA of each comparable.
Subject falls in between the low to medium predominant value range. This does not have a
negative impact on future marketing or is the subject considered to be an under improvement
to the neighborhood.
Adjustments
TIME ADJUSTMENTS:
Comparables #1 and #4 have been adjusted to the current market conditions.
LOCATION:
The location adjustments, if any, considered accessibility, degree of conformity to adjoining
properties, and the overall appeal and marketability of the respective neighborhoods in relation
to the subject. Comparables #2 and #4 both have no external as the subject.
SITE/VIEW:
Adjustments for site/view were made on the basis of lot value and the availability of public utilities
rather than size alone. Comparable #4 has a larger parcel size to the subject.
DESIGN/STYLE:
Adjustments are made on the basis of interior and exterior appeal characteristics.
QUALITY/CONDITION:
Adjustments are made on the basis of MLS photos, an inspection from the street and the appraiser's
experience and judgment.
Comparables #1, #2, #3 and #4 are observed to be inferior in overall quality updates/upgrades however vary in
overall condition to the subject.
Comparables #1 and #2 are observed to be slightly superior in overall condition to the subject per the RMLS
description.
ROOM COUNT/PROPERTY FEATURES:
Adjustment were made based on the price-point of the residence and on the appraiser's experience
and judgment.
GLA- 25.00 Finished Basement sf - 20.00 - Comparable #3 has finished basement square feet however the
condition of the basement is observed from the appraiser having been within the interior basement and observing
that a less price per sf may be more representative of its finishes, calculating at 15.00 per sf.
The subject and comparables have different size amenities, and the size of each was taken under consideration and
therefore may not be completely defined by the specific adjustments as described for each above.
- No adjustments were utilized for GLA or Finished Basement sf within 100 sf due to the margin of
error of the RMLS comparables utilized in the report.
Assessed Market Value for Tax Purposes
According to Hennepin County Assessor Website records the subjects 2021 estimated assessed value is
as follows: Land $59,000, Building $95,000 with a total of $154,000. There is a special assessment of $905.94 for
delinquent utilities per Hennepin County Assessor Records.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20606
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
Cost Approach
The cost approach has not been developed by the appraiser as an analysis to support the opinion
of the property's market value. The cost approach may not be a reliable indication of
replacement or reproduction cost due to changing costs of labor and materials, due to
changing building codes, governmental regulations and requirements, age of the subject
and speculative depreciation.
Intended Used of Appraisal
The Intended User of this appraisal report is the Lender/Client. The Intended Use is to evaluate
the property that is the subject of this appraisal for a full appraisal per the client request for market
value, subject to the stated Scope of Work, purpose of the appraisal, reporting
requirements of this appraisal report form, and Definition of Market Value. No additional
intended Users are identified by the appraiser.
Scope of the Appraisal
The appraiser has viewed all readily accessible areas of the dwelling (and any other building
structure located on the property). This complete visual inspection is not intended to be the
same depth or for the same purpose as a home inspection. The appraiser has viewed the
property solely for the valuation purposes and to observe property characteristics that a typical
purchaser would consider in their decision making process, as well as those items outlined in
the assumptions and limited conditions and certifications to this appraisal. Personal property or
chattel was not included in the appraised value.
Zoning
Comments about the zoning compliance of the subject property are intended by the appraiser to
be in general terms. A detailed analysis about every aspect of the subject property's improvements
and the site characteristic with respect to current zoning and building codes are beyond the scope
of this assignment and was not performed. The subject is considered to be in compliance with
current zoning requirements in a general sense. It is a Single family residential improvement in
an area zoned for single family residential use.
Site Conditions
No obvious adverse site conditions or external factors were observed. Unless otherwise stated,
typical drainage, utility and right of way easements do not adversely impact value. However, the
discovery of many site related issues often require special expertise or data sources not customary
or available in the performance of an appraisal. A fundamental site analysis such as this is beyond
the scope of this assignment. A detailed site or location survey, which may reveal adverse easements,
encroachments, zoning violations, environmental issues or other matters that could impact the
analysis or opinions, was not available to the appraiser.
Sketch
The subject's sketch is used for representational purposes only. The subject's sketch is to comply
with The American National Standard Institute process for calculating gross living area; however,
due to the complexity of the subject property and the limitations of the appraisal software it is not
possible to develop a blue print of the subject property. The subject's sketch is not intended to be
used for any other purpose. The subject's sketch and actual dimensions will very. The appraiser
is not a structural engineer. If the lender requires a precise blue print of the subject property it is
the lenders responsibility to have the building surveyed by a structural engineer. See Statement
Of Assumptions And Limiting Conditions.
At the time of inspection, the appraiser physically measured the exterior/interior of the improvement.
The appraiser's measurements may differ from that of the assessor's and/or builder's documentation
for the subject's gross living area. The appraiser has no knowledge as to if the assessor physically
measured the subject property or used blueprint documentation for the gross living area. Since the
appraiser physically measured the subject property on the effective date of this report, the appraiser
deems their calculations to be accurate and reliable. The subject's sketch is used for representational
purposes only. The subject's sketch is to comply with The American National Standard Institute
process for calculating gross living area; however, due to the complexity of the subject property,
and the limitations of the appraisal software, it is not possible to develop a blue print of the subject
property. The subject's sketch is not intended to be used for any other purpose. The subject's sketch
and actual dimensions will vary. The appraiser is not a structural engineer. If the lender requires a
precise blue print of the subject property it is the lenders responsibility to have the building surveyed
by a structural engineer. See Statement Of Assumptions And Limiting Conditions.
Land Value
Development of a land value has been attempted by the appraiser . The use of this data, in whole
or in part, for other purposes is not intended by the appraiser. Nothing set forth in the appraisal
should be relied upon for the purpose of determining the amount or type of insurance coverage to
be placed on the subject property. The appraiser assumes no liability for and does not guarantee
that any insurable value estimate inferred from this report will result in the subject property being
fully insured for any loss that may be sustained. Further, the land value may not be reliable
indication of replacement or reproduction cost for any date other than the effective date of this
appraisal due to changing costs of labor and materials and due to changing building codes and
governmental regulations and requirements.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20606
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
Form PICPIX.SR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Subject Photo Page
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Subject Front
Sales Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
4215 Nevada Ave N
N/A
1,053
5
3
1
A;Com/Apt
N;Res
10,329 sf
Q5
81
Subject Rear
Subject Street
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Living Kitchen
Foyer Interior of Garage
Main Floor Bath Bedroom
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Bedroom Second Floor Bedroom
Exposed Ceiling Insulation on Second Floor Basement Laundry
Basement HVAC
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Subject Driveway Street View Opposite Direction
Views to the south Views across the street to the south side-
Gas Station
Views to the south - Mortuary to the south
along with parking lot
Views to the rear - Apartment Building and
Garages
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Oregon Ave At Rear Kitchen Ceiling Stained
Garage Backyard - small green space in between
subject parcel and street
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Comparable Photo Page
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Comparable 1
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
4055 Oregon Ave N
0.18 miles SW
224,900
990
6
3
1
A;RR
N;Res;
8712 sf
Q5
65
Comparable 2
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
7019 47th Ave N
0.45 miles NE
224,660
1,063
5
3
1
N;Res;
N;Res;
8276 sf
Q5
67
Comparable 3
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
3611 Louisiana Ave N
0.79 miles S
205,000
1,553
7
3
1
A;BsRd/Apt
N;Res;
12632 sf
Q5
60
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Comparable Photo Page
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Comparable 4
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
4517 Brunswick Ave N
0.76 miles E
176,000
1,500
8
4
1.0
N;Res;
N;Res;
22216 sf
Q5
90
Comparable 5
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
Comparable 6
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
Borrower
Lender/Client
Property Address
City County State Zip Code
Form SKT.BLDSKI - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Building Sketch
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
24'24'24'24'24'24'12'0.5'5.5'0.5'12.5'
30'
1.5'8'20'8'0.5'0.5'5.5'0.5'12.5'11'30'11'30'24'30'24'30'
First Floor
Deck
FoyerLiving Kitchen
BedroomBathBedroom
Basement
Laundry Utility
Second Floor Bedroom
Garage
Shed
TOTAL Sketch by a la mode, inc.Area Calculations Summary
Living Area Calculation Details
First Floor 722.75 Sq ft 5.5 × 0.5 = 2.75
30 × 24 = 720
Second Floor 330 Sq ft 30 × 11 = 330
Total Living Area (Rounded):1053 Sq ft
Non-living Area
2 Car Detached 576 Sq ft 24 × 24 = 576
Wood Deck 157.25 Sq ft 20 × 7.5 = 150
0.5 × 0.5 = 0.25
0.5 × 14 = 7
Basement 720 Sq ft 30 × 24 = 720
Property Address
City County State Zip Code
Plat
Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Aerial
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Aerial
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Location Map
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
Andrew Caruthers JR
AP20606
N/A
4215 Nevada Ave N
New Hope Hennepin MN 55428
City of New Hope
None.
None. Sources for data were from RMLS and Hennepin County
Assessor Website.
0-90
0-90
Jayne Preusse
10/15/2021
20559939
MN
08/31/2023
10/08/2021
Form ID14EC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Borrower
Lender/Client
USPAP Compliance Addendum
Loan #
File #
Property Address
City County State Zip Code
APPRAISAL AND REPORT IDENTIFICATION
This Appraisal Report is one of the following types:
Appraisal Report This report was prepared in accordance with the requirements of the Appraisal Report option of USPAP Standards Rule 2-2(a).
Restricted Appraisal Report This report was prepared in accordance with the requirements of the Restricted Appraisal Report option of USPAP Standards Rule 2-2(b). The
intended user of this report is limited to the identified client. This is a Restricted Appraisal Report and the rationale for how the appraiser arrived
at the opinions and conclusions set forth in the report may not be understood properly without the additional information in the appraiser's workfile.
ADDITIONAL CERTIFICATIONS
I certify that, to the best of my knowledge and belief:
The statements of fact contained in this report are true and correct.
The report analyses, opinions, and conclusions are limited only by the reported assumptions and are my personal, impartial, and unbiased professional analyses,
opinions, and conclusions.
I have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or specified) personal interest with respect to the
parties involved.
I have no bias with respect to the property that is the subject of this report or the parties involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting predetermined results.
My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause
of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of
this appraisal.
My analyses, opinions, and conclusions were developed and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
This appraisal report was prepared in accordance with the requirements of Title XI of FIRREA and any implementing regulations.
PRIOR SERVICES
I have NOT performed services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period
immediately preceding acceptance of this assignment.
I HAVE performed services, as an appraiser or in another capacity, regarding the property that is the subject of this report within the three-year period immediately
preceding acceptance of this assignment. Those services are described in the comments below.
PROPERTY INSPECTION
I have NOT made a personal inspection of the property that is the subject of this report.
I HAVE made a personal inspection of the property that is the subject of this report.
APPRAISAL ASSISTANCE
Unless otherwise noted, no one provided significant real property appraisal assistance to the person signing this certification. If anyone did provide significant assistance, they
are hereby identified along with a summary of the extent of the assistance provided in the report.
ADDITIONAL COMMENTS
Additional USPAP related issues requiring disclosure and/or any state mandated requirements:
MARKETING TIME AND EXPOSURE TIME FOR THE SUBJECT PROPERTY
A reasonable marketing time for the subject property is day(s)utilizing market conditions pertinent to the appraisal assignment.
A reasonable exposure time for the subject property is day(s).
APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED)
Signature
Name
Date of Signature
State Certification #
or State License #
State
Expiration Date of Certification or License
Effective Date of Appraisal
Signature
Name
Date of Signature
State Certification #
or State License #
State
Expiration Date of Certification or License
Supervisory Appraiser Inspection of Subject Property
Did Not Exterior-only from Street Interior and Exterior
USPAP Compliance Addendum 2014 Page 1 of 1
Appraisal License
Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
E & O Insurance
Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Budget for 4215 Nevada Ave N
EXPENSES AMOUNT
Acquisition (206,000.00)$
Closing costs for purchase (estimated)(3,000.00)$
Legal costs for purchase (estimated)(2,000.00)$
Appraisal (375.00)$
Demolition survey (650.00)$
Demolition and site prep (estimated)(20,000.00)$
Real estate taxes (estimated at 6 months)(1,076.00)$
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)(2,000.00)$
TOTAL (237,301.00)$
REVENUE AMOUNT
EDA (estimated lot sale proceeds)78,000.00$
TOTAL 78,000.00$
TOTAL COST/REVENUE (159,301.00)$
Taxable Market Value 2020,
Payable 2021
Projected Taxable Value 2022,
Payable 2023 Change Percent Change
154,000.00$ 430,000.00$ 276,000.00$ 179.22%
Estimated Taxes Allocated to
City 2020, Payable 2021
Projected Taxes Allocated
to City 2022, Payable 2023 Change Percent Change
924.00$ 2,580.00$ 1,656.00$ 179.22%
Projected Project Expenses (237,301.00)$
Lot Sale Revenue 78,000.00$
Total Cost/Revenue (159,301.00)$
# of Years
(Year)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (present)-$ (159,301.00)$ -100.00%
1 (payable 2023)1,656.00$ (157,645.00)$ -98.96%
2 (payable 2024)3,361.68$ (155,939.32)$ -97.89%
3 (payable 2025)5,118.53$ (154,182.47)$ -96.79%
4 (payable 2026)6,928.09$ (152,372.91)$ -95.65%
5 (payable 2027)8,791.93$ (150,509.07)$ -94.48%
10 (payable 2032)18,984.18$ (140,316.82)$ -88.08%
15 (payable 2037)30,799.80$ (128,501.20)$ -80.67%
20 (payable 2042)44,497.34$ (114,803.66)$ -72.07%
25 (payable 2047)60,376.54$ (98,924.46)$ -62.10%
30 (payable 2052)78,784.89$ (80,516.11)$ -50.54%
*Based on new home valued at $430,000
Estimated Tax Impact of Improvements at 4215 Nevada Ave N
Estimated Return on Investment for 4215 Nevada Ave N
Description Taxable Market Value
Change Cash Flow
Investment -$ (159,301.00)$
Return, Year 1 276,000.00$ 1,656.00$
Return, Year 2 284,280.00$ 1,705.68$
Return, Year 3 292,808.40$ 1,756.85$
Return, Year 4 301,592.65$ 1,809.56$
Return, Year 5 310,640.43$ 1,863.84$
Return, Year 6 319,959.64$ 1,919.76$
Return, Year 7 329,558.43$ 1,977.35$
Return, Year 8 339,445.19$ 2,036.67$
Return, Year 9 349,628.54$ 2,097.77$
Return, Year 10 360,117.40$ 2,160.70$
Return, Year 11 370,920.92$ 2,225.53$
Return, Year 12 382,048.55$ 2,292.29$
Return, Year 13 393,510.00$ 2,361.06$
Return, Year 14 405,315.30$ 2,431.89$
Return, Year 15 417,474.76$ 2,504.85$
Return, Year 16 429,999.01$ 2,579.99$
Return, Year 17 442,898.98$ 2,657.39$
Return, Year 18 456,185.95$ 2,737.12$
Return, Year 19 469,871.52$ 2,819.23$
Return, Year 20 483,967.67$ 2,903.81$
Return, Year 21 498,486.70$ 2,990.92$
Return, Year 22 513,441.30$ 3,080.65$
Return, Year 23 528,844.54$ 3,173.07$
Return, Year 24 544,709.88$ 3,268.26$
Return, Year 25 561,051.17$ 3,366.31$
Return, Year 26 577,882.71$ 3,467.30$
Return, Year 27 595,219.19$ 3,571.32$
Return, Year 28 613,075.77$ 3,678.45$
Return, Year 29 631,468.04$ 3,788.81$
Return, Year 30 650,412.08$ 3,902.47$
Total Returns 78,784.89$
Investment Cost 237,301.00$
Selling Price 78,000.00$
Return on Investment -50.54%
Description Amount
Investment (159,301.00)$
Return, Year 1 1,656.00$
Return, Year 2 1,705.68$
Return, Year 3 1,756.85$
Return, Year 4 1,809.56$
Return, Year 5 1,863.84$
Return, Year 6 1,919.76$
Return, Year 7 1,977.35$
Return, Year 8 2,036.67$
Return, Year 9 2,097.77$
Return, Year 10 2,160.70$
Return, Year 11 2,225.53$
Return, Year 12 2,292.29$
Return, Year 13 2,361.06$
Return, Year 14 2,431.89$
Return, Year 15 2,504.85$
Return, Year 16 2,579.99$
Return, Year 17 2,657.39$
Return, Year 18 2,737.12$
Return, Year 19 2,819.23$
Return, Year 20 2,903.81$
Return, Year 21 2,990.92$
Return, Year 22 3,080.65$
Return, Year 23 3,173.07$
Return, Year 24 3,268.26$
Return, Year 25 3,366.31$
Return, Year 26 3,467.30$
Return, Year 27 3,571.32$
Return, Year 28 3,678.45$
Return, Year 29 3,788.81$
Return, Year 30 3,902.47$
Total Returns 78,784.89$
Internal Rate of Return -3.64%
Estimated Internal Rate of Return for 4215 Nevada 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
1 154,000.00$ 430,000.00$ 276,000.00$ 1,656.00$
2 158,620.00$ 442,900.00$ 284,280.00$ 1,705.68$
3 163,378.60$ 456,187.00$ 292,808.40$ 1,756.85$
4 168,279.96$ 469,872.61$ 301,592.65$ 1,809.56$
5 173,328.36$ 483,968.79$ 310,640.43$ 1,863.84$
6 178,528.21$ 498,487.85$ 319,959.64$ 1,919.76$
7 183,884.05$ 513,442.49$ 329,558.43$ 1,977.35$
8 189,400.58$ 528,845.76$ 339,445.19$ 2,036.67$
9 195,082.59$ 544,711.13$ 349,628.54$ 2,097.77$
10 200,935.07$ 561,052.47$ 360,117.40$ 2,160.70$
11 206,963.12$ 577,884.04$ 370,920.92$ 2,225.53$
12 213,172.02$ 595,220.56$ 382,048.55$ 2,292.29$
13 219,567.18$ 613,077.18$ 393,510.00$ 2,361.06$
14 226,154.19$ 631,469.50$ 405,315.30$ 2,431.89$
15 232,938.82$ 650,413.58$ 417,474.76$ 2,504.85$
16 239,926.98$ 669,925.99$ 429,999.01$ 2,579.99$
17 247,124.79$ 690,023.77$ 442,898.98$ 2,657.39$
18 254,538.54$ 710,724.48$ 456,185.95$ 2,737.12$
19 262,174.69$ 732,046.22$ 469,871.52$ 2,819.23$
20 270,039.93$ 754,007.60$ 483,967.67$ 2,903.81$
21 278,141.13$ 776,627.83$ 498,486.70$ 2,990.92$
22 286,485.36$ 799,926.67$ 513,441.30$ 3,080.65$
23 295,079.92$ 823,924.47$ 528,844.54$ 3,173.07$
24 303,932.32$ 848,642.20$ 544,709.88$ 3,268.26$
25 313,050.29$ 874,101.47$ 561,051.17$ 3,366.31$
26 322,441.80$ 900,324.51$ 577,882.71$ 3,467.30$
27 332,115.06$ 927,334.25$ 595,219.19$ 3,571.32$
28 342,078.51$ 955,154.27$ 613,075.77$ 3,678.45$
29 352,340.86$ 983,808.90$ 631,468.04$ 3,788.81$
30 362,911.09$ 1,013,323.17$ 650,412.08$ 3,902.47$
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 4215 Nevada Ave N
Comparison of Costs & Tax Impact for Recent Projects
Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020)
5306 Rhode Island
Avenue North
4215 Nevada
Avenue North
3611 Louisiana
Avenue North
5213 Pennsylvania
Avenue North
4637 Aquila
Avenue North
4215 Louisiana
Avenue North
Number of Units 1 1 1 1 1 1
Project Description Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Year Acquired TBD TBD Not acquired 2021 2021 2020
Projected or Actual Projected
(prior to offer)
Projected
(prior to offer)
Projected
(at time of offer)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Expenses ($244,733.00) ($237,301.00) ($200,761.03) ($205,172.18) ($127,292.01) ($170,441.53)
Revenue $80,000.00 $78,000.00 $67,000.00 $72,000.00 $81,000.00 $69,000.00
Total Cost/Revenue ($164,733.00) ($159,301.00) ($133,761.03) ($133,172.18) ($46,292.01) ($101,441.53)
Estimated Taxable Value of
New Home
$470,000.00 $430,000.00 $390,000.00 $485,000.00 $445,000.00 $380,000.00
*Additional Taxes
Collected by City - 1 year
$1,596.00 $1,656.00 $1,296.00 $1,902.00 $1,254.00 $786.00
*Additional Taxes
Collected by City - 30 years
$75,930.36 $78,784.89 $61,657.74 $90,488.44 $59,659.57 $37,394.28
*Return On Investment -
30 years
-53.91% -50.54% -53.90% -32.05% 28.88% -63.14%
*Internal Rate of Return -
30 years
-3.98% -3.64% -3.98% -2.08% 1.49% -5.01%
*Assumed 3% tax value growth rate
I:\RFA\COMM DEV\2021\EDA\Scattered Site Housing\11‐22‐21\5306 Rhode Island Ave N\EDA6 Q ‐ 5306 Rhode Island Ave N Acquisition 11‐22‐21.docx
Request for Action
November 22, 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 Agreement for the acquisition of 5306 Rhode Island Avenue North
(improvement project no. 1080)
Requested Action
Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for
the acquisition of 5306 Rhode Island Avenue North for a purchase price of $213,000 with traditional closing
costs to be paid by each party.
Policy/Past Practice
The Economic Development Authority has acquired vacant and distressed properties in the past as part of
the city’s scattered site housing program. Goals of the scattered site housing program include removing
distressed and/or blighted properties, providing step‐up housing options in the city, improving the city’s
overall housing stock, investing and instilling confidence into neighborhoods, and increasing home and land
values.
Background
The Economic Development Authority (EDA) has directed community development staff to pursue the
acquisition of distressed and functionally obsolete single‐family homes as part of the city’s scattered site
housing program. According to Hennepin County, the property at 5306 Rhode Island Avenue North had an
assessed value of $204,000 in 2020 and $225,000 as of 2021. This is lower than approximately 93% of single‐
family homes in the city. The existing rambler style home was constructed in 1959. It has 1,072 square feet of
finished above ground space, with three bedrooms and one bathroom. It has 438 square feet of finished below
ground space, with a half bathroom. The single stall detached garage is approximately 35 feet deep. The 0.3‐
acre parcel is zoned R‐1, Single‐family Residential. The lot is 75 feet wide and approximately 163 feet long.
The lot abuts single‐family uses in all directions. Several other scattered site projects have been completed
over the last few years within 3‐4 blocks of the property. This includes the demolition, lot split, and rebuild
project at 5353/5355 Oregon Avenue North and the demolition and rebuild projects at 5201 Oregon Avenue
North and 5213 Pennsylvania Avenue North. Staff believes the property at 5306 Rhode Island Avenue North
is a good candidate for a demolition and rebuild project.
The property at 5306 Rhode Island Avenue North was identified by inspectors as a potential candidate for the
scattered site housing program in October of 2021, when a point of sale inspection was completed. It was
estimated that $8,000 in repairs would be needed to bring the home up to minimum standards. The property
owner expressed interest in selling to the EDA and an appraisal was completed on October 26, 2021. The
appraisal estimated the value of the property at $227,000. The property owner has agreed to sell the home for
$213,000, with traditional closing costs to be paid by each party, contingent upon approval by the EDA.
Because neither party would be utilizing a real estate agent as part of the transaction, the property owner can
expect to save up to 6% in commission expenses ($13,620 for appraised value of $227,000 or $12,780 for offer
price of $213,000). By selling directly to the city, no repairs would need to be completed by the seller or buyer.
Agenda Section
EDA
Item Number
6
Request for Action, Page 2
The appraised value and offer price reflect the continued increase in home prices and values within the city.
Since 2016, the median household value in New Hope has increased from $196,000 to $275,000, an increase of
40% over five years. At 0.3‐acres, the property is larger than most other single lots acquired by the city in
recent years. There is no slope to the grade and there are several mature trees that will remain after
demolition, making the lot highly desirable. Staff believes the minimum price for this lot can be set at or near
$80,000.
Cost & Tax Impact of Improvements
It is anticipated that expenses associated with the project would be approximately $244,733. Revenue from
the sale of the lot is estimated at $80,000, resulting in a net loss of $164,733. 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 $470,000
in 2022, it is estimated that total taxes paid to the city in 2023 would increase by $1,596, or 130%, as compared
to those that were allocated to the city in 2021.
Taxable Market Value 2020,
Payable 2021
Projected Taxable Value 2022,
Payable 2023
Change Percent Change
$204,000 $470,000 $266,000 130%
Estimated Taxes Allocated to
City 2020, Payable 2021
Projected Taxes Allocated to
City 2022, Payable 2023
Change Percent Change
$1,224 $2,820 $1,596 130%
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 ($164,733.00) ‐100.00%
1 (2023) $1,596.00 ($163,137.00) ‐99.03%
5 (2027) $8,473.38 ($156,259.62) ‐94.86%
10 (2032) $18,296.35 ($146,436.65) ‐88.89%
15 (2037) $29,683.87 ($135,049.13) ‐81.98%
20 (2042) $42,885.12 ($121,847.88) ‐73.97%
25 (2047) $58,188.99 ($106,544.01) ‐64.68%
30 (2052) $75,930.36 ($88,802.64) ‐53.91%
The estimated ROI for the project over 30 years is ‐53.91% and the estimated Internal Rate of Return (IRR) for
the project over 30 years is ‐3.98% (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
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.
Request for Action, Page 3
Funding
Funding for this project would come from the EDA budget. If the acquisition is approved, funds from the
2022 budget will be utilized. As a result of the implementation of a new HRA levy, the city has budgeted
$500,000 for scattered site projects in 2022.
Project Estimated Net Cost
5306 Rhode Island Ave N $164,733.00
Total $164,733.00
Annual Budget (2022) $500,000.00
Under/Over Budget +$335,267.00
Recommendation
Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of
5306 Rhode Island Avenue North for a purchase price of $213,000 with traditional closing costs to be paid by
each party.
Attachments
Resolution
Purchase Agreement
Sample Lot Layout
Appraisal
Budget
Estimated Tax Impact of Improvements
Estimated Return on Investment
Estimated Internal Rate of Return
Tax Calculator
Comparison of Costs & Tax Impact of Recent Projects
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 21-___
RESOLUTION APPROVING PURCHASE AGREEMENT
FOR THE ACQUISITION OF 5306 RHODE ISLAND AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1080)
BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope
(“EDA”) as follows:
WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City
Council meeting authorizing City community development staff to actively pursue the acquisition of
distressed properties that can be redeveloped as single family residential lots for potential purchase by the
EDA, as part of the City’s scattered site housing program;
WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to
the City and EDA, and the execution of purchase agreements so as to secure purchase rights for distressed
real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements;
WHEREAS, City staff have identified the opportunity to purchase certain real property located at
5306 Rhode Island Avenue North, New Hope, MN, 55428, P.I.D. 08-118-21-22-0037, and legally
described as follows:
Lot 11, Block 3, J.P. Riedel & Company’s St. Raphael Addition, except that part lying
Northerly of a line drawn from a point on the Westerly line of Lot 12, said Block 3, Distant 8
feet Northerly from the Southwesterly corner of said Lot 12 to a point on the Easterly line
of said Lot 11, distant 14 feet Southerly from the Northeasterly corner of said Lot 11,
according to the recorded plat thereof, and situated in Hennepin Cunty, Minnesota.
Parcel Plat 2
That part of Lot 12, Block 3, J.P. Riedel & Company’s St. Raphael Addition, lying Southerly
of a line drawn from a point on the Westerly line of said Lot 12, distant 8 feet Northerly
from the Southwesterly corner of said Lot 12 to a point on the Easterly line of Lot 11, said
Block 3, according to the recorded plat thereof, and situated in Hennepin County,
Minnesota.
(the “Property”) from Benny Cotton and Sheryl A. Cotton, husband and wife (the “Seller”);
WHEREAS, City staff believes that the best use of the Property is demolition in order to maximize
the tax base by making the lot available for the development of a new residential housing unit;
WHEREAS, the Property will be acquired with EDA funds;
WHEREAS, the EDA has reviewed the proposed acquisition of Property and has determined that
it has no effect or relationship with the New Hope Comprehensive Plan;
WHEREAS, it is in the best interest of the EDA to purchase the Property from Seller, in order to
redevelop the Property in accordance with the City’s scattered site housing program and policy; and
WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement,
subject to the review and approval by the City Attorney of proper title evidence and other terms relating to
the closing on the sale of the Property.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for
the City of New Hope as follows:
1. That the above recitals are incorporated herein by reference.
2. It is in the best interest of the EDA to purchase the Property for demolition and
redevelopment in accordance with the City’s scattered site housing program and policy.
3. That the purchase of the Property by EDA from Seller, for a sum of $213,000.00, with
other terms and conditions as set forth in the Purchase Agreement attached hereto as
Exhibit A, is approved subject to the review and approval by the City Attorney of proper
title evidence and other terms relating to the closing on the purchase of the Property.
4. The proposed acquisition of Property is consistent with the New Hope Comprehensive
Plan.
5. The City and EDA shall use due diligence for demolishing the structure located on the
Property and conducting any necessary cleanup of the Property to pursue redevelopment
and return the Property to the tax rolls for the benefit of all taxing jurisdictions.
6. The President and Executive Director and the New Hope City staff are authorized and
directed to sign all appropriate documents, and to take whatever additional actions are
necessary or desirable, to complete the purchase of the Property in accordance with the
Purchase Agreement.
Dated the 22nd day of November, 2021.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Kirk McDonald, Executive Director
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11447 5306 Rhode Island Ave. N\Resolution approving purchase of 5306 Rhode Island
Ave N.docx
Exhibit A
Purchase Agreement
See attached.
1
PURCHASE AGREEMENT
Date: November ____, 2021
BUYER: 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
SELLER: Benny Cotton and Sheryl A. Cotton, husband and wife
Seller agrees to sell and Buyer agrees to purchase the real property located at:
Street Address: 5306 Rhode Island Avenue North
City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described on the attached
Exhibit A, PID 08-118-21-22-0037. Said purchase shall include all improvements, fixtures, and
appurtenances on the property, if any, including but not limited to, the following (collectively the "Property"):
garden bulbs, plants, shrubs, trees, and lawn watering system; shed; storm sash, storm doors, screens and
awnings; window shades, blinds; traverse, curtain, and drapery rods, valances, drapes, curtains, window
coverings and treatments; towel rods; attached lighting and bulbs; fan fixtures; plumbing fixtures; garbage
disposals; water softener; water treatment system; water heating systems, heating systems; air exchange
system; radon mitigation system; sump pump; TV antenna/cable TV jacks and wiring/TV wall mounts;
wall/ceiling-mounted speakers and mounts; carpeting; mirrors; garage door openers and all controls; smoke
detectors; fireplace screens, door and heatilators; BUILT-INS: dishwashers; refrigerators; wine/beverage
refrigerators; trash compactors; ovens; cook-top stoves; warming drawers; microwave ovens; hood fans;
shelving; work benches; intercoms; speakers; air conditioning equipment; electronic air filter;
humidifier/dehumidifier; liquid fuel tanks (and controls); pool/spa equipment; propane tank (and controls);
security system equipment; TV satellite dish; AND the following personal property shall be transferred with
no additional monetary value, and free and clear of all liens and encumbrances:
______________________________________________
Notwithstanding the foregoing, the following item(s) are excluded from the purchase:
Washer and dryer.
Seller has agreed to sell the Property to Buyer for the sum of Two Hundred Thirteen Thousand and
00/100 Dollars ($213,000.00), which Buyer agrees to pay in the following manner:
1. CASH of 100 percent (100%) of the sale price.
The date of closing shall be on or before March 22, 2022, and shall occur at the offices of the City
Attorney for City of New Hope: Jensen, Sondrall, Persellin & Woods, P.A., 8525 Edinbrook Crossing,
Suite 201, Brooklyn Park, MN 55443.
SALE OF BUYER'S PROPERTY CONTINGENCY: This Purchase Agreement IS NOT subject to an
Addendum to Purchase Agreement: Sale of Buyer's Property Contingency . (If answer is IS, see attached
Addendum.) (If answer is IS NOT, the closing of Buyer's property, if any, may still affect Buyer's ability to
obtain financing, if financing is applicable.)
This Purchase Agreement IS NOT subject to cancellation of a previously written purchase agreement dated
_______________________, 20__. (If answer is IS, said cancellation shall be obtained no later than
_____________, 20__. If said cancellation is not obtained by said date, this Purchase Agreement is
canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said
cancellation.)
2
Buyer has been made aware of the availability of Property inspections. Buyer does not elect to have a
Property inspection performed at Buyer's expense.
INSPECTION CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase
Agreement: Inspection Contingency. (If answer is IS, see attached Addendum.)
DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a (check one):
Warranty Deed joined in by spouse, if any, conveying marketable title, subject to
(a) building and zoning laws, ordinances, and state and federal regulations;
(b) restrictions relating to use or improvement of the Property without effective forfeiture provisions;
(c) reservation of any mineral rights by the State of Minnesota;
(d) utility and drainage easements which do not interfere with existing improvements;
(e) rights of tenants as follows (unless specified, not subject to tenancies) _____________; and
(f) others (must be specified in writing): ___________________________________________
REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all
prior years including all penalties and interest.
Buyer shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year
2021.
Seller shall pay PRORATED TO DAY OF CLOSING real estate taxes due and payable in the year 2021.
If the closing date is changed, the real estate taxes paid shall, if prorated, be adjusted to the new closing
date. If the Property tax status is a part- or non-homestead classification in the year of closing, Seller SHALL
NOT pay the difference between the homestead and non-homestead.
Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment
of which is not otherwise herein provided. No representations are made concerning the amount of
subsequent real estate taxes.
DEFERRED TAXES/SPECIAL ASSESSMENTS:
SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green Acres) or special
assessments, payment of which is required as a result of the closing of this sale.
SELLER SHALL PAY ON DATE OF CLOSING all installments of special assessments certified for
payment, with the real estate taxes due and payable in the year of closing.
SELLER SHALL PAY on date of closing all other special assessments levied as of the date of this Purchase
Agreement.
SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of the date of this
Purchase Agreement for improvements that have been ordered by any assessing authorities.
Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the
payment of which is not otherwise herein provided.
As of the date of this Purchase Agreement, Seller represents that Seller HAS NOT received a notice
regarding any new improvement project from any assessing authorities, the costs of which project may be
assessed against the Property. Any such notice received by Seller after the date of this Purchase
Agreement and before closing shall be provided to Buyer immediately. If such notice is issued after the
date of this Purchase Agreement and on or before the date of closing, then the parties may agree in writing,
on or before the date of closing, to pay, provide for the payment of or assume the special assessments. In
the absence of such agreement, either party may declare this Purchase Agreement canceled by written
notice to the other party, or licensee representing or assisting the other party, in which case this Purchase
3
Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall
immediately sign a Cancellation of Purchase Agreement confirming said cancellation.
POSSESSION: Seller shall deliver possession of the Property no later than date of closing. Seller agrees
to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the Property
by possession date.
LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access
or service to any device or system on or serving the property that is connected or controlled wirelessly, via
internet protocol ("IP") to a router or gateway or directly to the cloud no later than delivery of possession as
specified in this Purchase Agreement.
PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer,
electricity and natural gas shall be prorated between the parties as of date of closing. Buyer shall pay Seller
for remaining gallons of fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by
Seller.
TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this
Purchase Agreement:
a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title
insurance (the “Commitment”) issued by Midland Title (“Title Company”) and covering title
to the Property, in the amount of the Purchase Price. Seller agrees to pay the costs
associated with the preparation and issuance of the Commitment; Buyer shall pay the
premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price
for any endorsements requested by Buyer or Buyer’s lender.
b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve
the title to the Property and to object to any exception to title that is disclosed in the
Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not
within such fifteen (15) day period give notice to Seller objecting to any such exceptions,
then all such exceptions shall be deemed approved and shall be considered a part of the
Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before
the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception
or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5)
days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer
may elect by notice to Seller to either:
(i) terminate this Agreement, whereupon the parties shall be released from all further
obligations hereunder except obligations under this Agreement which provide for
continued exercise following the cancellation or other termination of this
Agreement; or
(ii) elect to have this Agreement remain in effect, in which event Buyer will be deemed
to have approved the previously-cited exception and the same shall be considered
part of the Permitted Encumbrances.
Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay
all costs and fees necessary to convey marketable title including obtaining and recording all required
documents, subject to the following:
In the event Seller has not provided marketable title by the date of closing, Seller shall have an
additional 30 days to make title marketable, or in the alternative, Buyer may waive title defects by
written notice to Seller. In addition to the 30-day extension, Buyer and Seller may, by mutual
4
agreement, further extend the closing date. Lacking such extension, either party may declare this
Purchase Agreement canceled by written notice to the other p arty, or licensee representing or
assisting the other party, in which case this Purchase Agreement is canceled. If either party
declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a
Cancellation of Purchase Agreement confirming said cancellation.
SUBDIVISION OF LAND, BOUNDARIES, AND ACCESS: If this sale constitutes or requires a subdivision
of land owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental
approvals. Seller warrants that the legal description of the real property to be conveyed has been or shall
be approved for recording as of the date of closing. Seller warrants that the buildings are or shall be
constructed entirely within the boundary lines of the Property. Seller warrants that there is a right of access
to the Property from a public right-of-way.
MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all
labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the
closing in connection with construction, alteration or repair of any structure on, or improvement to, the
Property.
NOTICES: Seller warrants that Seller has not received any notice from any governmental autho rity as to
condemnation proceedings, or violation of any law, ordinance or regulation. If the Property is subject to
restrictive covenants, Seller warrants that Seller has not received any notice from any person or authority
as to a breach of the covenants. Any such notices received by Seller shall be provided to Buyer immediately.
DIMENSIONS: Buyer acknowledges any dimensions, square footage or acreage of land or improvements
provided by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify
the accuracy of information to Buyer's satisfaction, if material, at Buyer's sole cost and expense.
ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any
surveys or inspections agreed to herein.
RISK OF LOSS: If there is any loss or damage to the Property between the date hereof and the date of
closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be
on Seller. If the Property is destroyed or substantially damaged before the closing date, this Purchase
Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting
Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation
of Purchase Agreement confirming said cancellation.
TIME OF ESSENCE: Time is of the essence in this Purchase Agreement.
CALCULATION OF DAYS: Any calculation of days begins on the first day (calendar or Business Days as
specified) following the occurrence of the event specified and includes subsequent days (calendar or
Business Days as specified) ending at 11:59 P.M. on the last day.
BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays or state or federal holidays
unless stated elsewhere by the parties in writing.
DEFAULT: If Buyer defaults in any of the agreements herein, Seller may cancel this Purchase Agreement,
and Buyer and Seller shall affirm the same by a written cancellation agreement.
If Buyer defaults in any of the agreements hereunder, Seller may terminate this Purchase Agreement under
the provisions of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer
or Seller defaults in any of the agreements hereunder or there exists an unfulfilled condition after the date
specified for fulfillment, either party may cancel this Purchase Agreement under MN Statute 559.217, Subd.
3. Whenever it is provided herein that this Purchase Agreement is canceled, said language shall be deemed
a provision authorizing a Declaratory Cancellation under MN Statute 559.217, Subd. 4.
5
If this Purchase Agreement is not canceled or terminated as provided hereunder, Buyer or Seller may seek
actual damages for breach of this Purchase Agreement or specific performance of this Purchase
Agreement; and, as to specific performance, such action must be commenced within six (6) months after
such right of action arises.
BUYER HAS NOT RECEIVED A DISCLOSURE STATEMENT RE: SELLER'S PROPERTY.
DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property or Disclosure
Statement: Seller's Disclosure Alternatives for description of disclosure responsibilities and limitations, if
any.
BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OF THE
PROPERTY AND ITS CONTENTS.
SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED
TO:
CITY SEWER-YES / CITY WATER-YES
SUBSURFACE SEWAGE TREATMENT SYSTEM
SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING
THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure.
Statement: Subsurface Sewage Treatment System.)
PRIVATE WELL
SELLER DOES KNOW OF A WELL ON OR SERVING THE PROPERTY. (If answer is DOES and well is
located on the Property, see Disclosure Statement: Well.)
THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT:
SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer
is IS, see attached Addendum.)
IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER
HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT:
SUBSURFACE SEWAGE TREATMENT SYSTEM.
NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory
offender registry and persons registered with the predatory offender registry under MN Statute 243.166
may be obtained by contacting the local law enforcement offices in the comm unity where the Property is
located or the Minnesota Department of Corrections at (651) 361 -7200, or from the Department of
Corrections web site at www.corr.state.mn.us.
6
No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement.
NOTICE
Seller is not represented by a listing Agent in this
transaction.
(Licensee)
(Real Estate Company Name)
Buyer is not represented by an Agent in this
transaction.
(Licensee)
(Real Estate Company Name)
DUAL AGENCY REPRESENTATION
Dual Agency representation DOES NOT apply in this transaction.
CLOSING COSTS: Buyer and Seller agree to respectively pay traditional closing costs.
FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal
Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified
in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from
FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section
1445 of the Internal Revenue Code.
Seller shall represent and warrant, under the penalties of perjury, whether Sel ler is a "foreign person" (as
the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to
this issue shall survive the closing and delivery of the deed.
Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or
statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their
respective federal taxpayer identification numbers or Social Security numbers.
Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's
responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax
advice regarding FIRPTA compliance, as the respective licensee's representing or assisting either
party will be unable to assure either party whether the transaction is exempt from FIRPTA
withholding requirements.
ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties
shall constitute the entire agreement between Buyer and Seller. Any other written or oral communication
between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic
communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or
canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed
to be United States currency for purposes of this Purchase Agreement.
ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document
related to this transaction constitute valid, binding signatures.
7
FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties
and a copy must be delivered.
SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or
contract for deed.
OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on
the following:
(1) Review and approval of the terms of the Purchase Agreement by the Economic Development
Authority in and for the City of New Hope to the terms of the Purchase Agreement
If the above contingency is not met, Buyer may declare this Purchase Agreement canceled by written
notice to Seller, or licensee representing or assisting Seller, in which case this Purchase Agreement is
canceled. If Buyer declares this Purchase Agreement canceled due to the failure of one of the above
contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming
said cancellation and all earnest money paid shall be immediately returned to Buyer.
Seller will not be required to complete the City of New Hope Point of Sale inspection.
Seller warrants that there are no tenants on the property with a lawful leasehold interest. In the event any
tenant comes forward and claims an interest in the property at the time of or following the purchase,
Seller agrees to fully indemnify Buyer for any and all costs associated with terminating such tenancy and
for any and all relocation assistance and benefits that may be due to such tenant together with attorney’s
fees that Buyer would have to incur in connection with legal action required to resolve any relocation
assistance or benefits dispute with such tenant.
Seller acknowledges that she is not being displaced from the property as a result of the Purchase
Agreement and that she is not eligible for relocation assistance and benefits, that the purchase price
includes compensation for any and all relocation assistance and benefits for which Seller may be eligible.
The provisions of this paragraph shall survive the closing of the transaction contemplat ed by this
Purchase Agreement.
For purposes of this Purchase Agreement, “relocation assistance and benefits” shall have the meanings
ascribed to them by the Minnesota Uniform Relocation Act, Minn. Stat.§117.50 to 117.56, the Uniform
Relocation Assistance and Real Property Acquisition Policies Act, 42 U.S.C. §§4601-4655 (the federal
URA) and the regulations implementing the federal URA, 49 C.D.R. Part 24.
ADDENDA AND PAGE NUMBERING: Attached addenda are a part of this Purchase Agreement.
Enter total number of pages of this Purchase Agreement, including addenda: __ pages.
8
NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement
and should not be part of the page numbering.
I, the owner of the Property, accept this Purchase
Agreement and authorize the listing broker to withdraw
said Property from the market, unless instructed
otherwise in writing.
I have reviewed all pages of this Purchase
Agreement.
If checked, this Agreement is subject to attached
Addendum to Purchase Agreement: Counteroffer.
FIRPTA: Seller represents and warrants, under penalty
of perjury, that Seller IS NOT a foreign person (i.e., a
non-resident alien individual, foreign corporation, foreign
partnership, foreign trust, or foreign estate for purposes
of income taxation. This representation and warranty
shall survive the closing of the transaction and the
delivery of the deed.
I agree to purchase the Property for the price and on
the terms and conditions set forth above.
I have reviewed all pages of this Purchase
Agreement
Seller Buyer
______________________________________ Economic Development Authority in and for the
Benny Cotton n City of New Hope, a public body corporate and
politic created pursuant to the laws of the State
of Minnesota
______________________________________
Sheryl A. Cotton
Date: November ____, 2021
By:
Kirk McDonald
Its: Executive Director
Date: November ____, 2021
THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S).
IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL.
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11447 5306 Rhode Island Ave. N\Purchase Agreement.docx
9
Exhibit A
Legal Description
Lot 11, Block 3, J.P. Riedel & Company’s St. Raphael Addition, except that part lying Northerly of a
line drawn from a point on the Westerly line of Lot 12, said Block 3, Distant 8 feet Northerly from
the Southwesterly corner of said Lot 12 to a point on the Eas terly line of said Lot 11, distant 14
feet Southerly from the Northeasterly corner of said Lot 11, according to the recorded plat thereof,
and situated in Hennepin Cunty, Minnesota.
Parcel Plat 2
That part of Lot 12, Block 3, J.P. Riedel & Company’s St. Raphael Addition, lying Southerly of a
line drawn from a point on the Westerly line of said Lot 12, distant 8 feet Nort herly from the
Southwesterly corner of said Lot 12 to a point on the Easterly line of Lot 11, said Block 3,
according to the recorded plat thereof, and situated in Hennepin County, Minnesota.
5306 Rhode Island Ave N
R-1, Single-family residential
163.44’75’Potential Home & Garage
Potential Driveway
Buildable Area
Appraisal Professionals of MN LLC
Jayne Preusse
Eden Prairie, MN 55344
612-267-5269
10/29/2021
Jeff Alger
City of New Hope
Community Development
4401 Xylon Avenue N
New Hope, MN 55428
Re:Property:5306 Rhode Island Ave N
New Hope, MN 55428
Borrower:N/A
File No.:AP20618
Opinion of Value: $227,000
Effective Date:10/26/2021
In accordance with your request, we have appraised the above referenced property. The report of that appraisal is
attached.
The purpose of the appraisal is to develop an opinion of market value for the property described in this appraisal
report, as improved, in unencumbered fee simple title of ownership.
This report is based on a physical analysis of the site and improvements, a locational analysis of the neighborhood and
city, and an economic analysis of the market for properties such as the subject. The appraisal was developed and the
report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice.
The opinion of value reported above is as of the stated effective date and is contingent upon the certification and
limiting conditions attached.
It has been a pleasure to assist you. Please do not hesitate to contact me if I can be of additional service to you.
Sincerely,
Jayne Preusse
License or Certification #: 20559939
State: MN Expires: 08/31/2023
jstrikos@msn.com
APPRAISAL OF REAL PROPERTY
5306 Rhode Island Ave N
New Hope, MN 55428
BLOCK 003 J. P. RIEDEL & COMPANY'S ST. RAPHAEL ADDITION
City of New Hope
4401 Xylon Avenue N
New Hope, MN 55428
227,000
10/26/2021
Jayne Preusse
Appraisal Professionals of MN LLC
Certified Residential Appraiser
Eden Prairie, MN 55344
612-267-5269
jstrikos@msn.com
Form GA1V - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
LOCATED AT
FOR
OPINION OF VALUE
AS OF
BY
Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Sheryl Cotton
AP20618
5306 Rhode Island Ave N New Hope MN 55428
BLOCK 003 J. P. RIEDEL & COMPANY'S ST. RAPHAEL ADDITION Hennepin
08-118-21-22-0037 2021 3,016 0
N/A Benny & Sheryl Cotton
0
Hennepin 33460 0215.02
N/A N/A N/A
City of New Hope 4401 Xylon Avenue N, New Hope, MN 55428
Jayne Preusse 7164 Crowne Oak Road, Eden Prairie, MN 55344
85
15
181
375
276
11
73
69
60
2
5
30
Other 3
Bass Lake Rd to the north, W Broadway Ave to the east, 49th Ave N to the south, and State
Highway 169 to the west. Market trends analysis was from a 1 mile radius from the subject property.
Under present land use, 3% indicates "Other". The primary portion of this amount includes parks, miscellaneous, water and undeveloped
land. This does not indicate any negative impact on the Subject's value & marketability at this time.
Market data indicates overall property values have been increasing for the previous 12 month period prior to the effective date of this
appraisal. Market times are deemed to be in the "0-3 months" range at this time.
N/A
83X163X76X163
13,012 sf
R1-Single Family
AMP CB Asphalt
Concrete
None
Yes
None
Slants Upward, Levels
Average
Rectangular
Average
N;Res
Average
Concrete/Avg
None Noted.
X 11/04/2016
27053C0192F
No apparent
easements, etc. at time of the appraisal appointment.
1
1
Detached
Rambler
Existing
62
45
Concrete/Avg
Vyl/Wd/Avg
Asphalt/Avg
Aluminum/Avg
Case/Gldr/Avg
Full/Avg
N/A
N/A
N/A
Full/WU
None
None Noted
None Noted
None Noted
931
Finished/Open
SR/Avg
Carpet/Conc
No
Unkn
Unkn
Unkn
Unkn
N/A
N/A
1 .1 1 1 931
1 1 1 1 3 1.0 1,072
7 3 1 1,072
Wd/WL/Cpt/Avg
SR/Avg
Wood/Avg
CT/MT/Avg
Insert/Avg
Wood/Avg
Yes
FWA
Gas
Avg
Yes
X
Avg
None
Patio
Deck
None
CL
None
Shed
Yes
N/A
Detached
N/A
N/A
3
See Attached Addendum.
C4;The
subject is a "Rambler" detached single family home reflecting overall average condition as compared to competing properties of a similar age
and design. The subject property exhibits no apparent effects of functional or external obsolescence. See attached addendum and photo
addendum.
None Noted.
Jayne Strikos
Property Description File No.UNIFORM RESIDENTIAL APPRAISAL REPORT
SUBJECTProperty Address
Legal Description
Assessor's Parcel No.
Borrower
Property rights appraised
Neighborhood or Project Name
Sale Price $
Lender/Client
Appraiser
Location
Built up
Growth rate
Property values
Demand/supply
Marketing time
City State Zip Code
County
Tax Year R.E. Taxes $Special Assessments $
Current Owner Occupant:Owner Tenant Vacant
Fee Simple Leasehold Project Type PUD Condominium (HUD/VA only)HOA $/Mo.
Map Reference Census Tract
Date of Sale Description and $ amount of loan charges/concessions to be paid by seller
Address
Address
NEIGHBORHOODPredominant
occupancy
Single family housing Present land use %Land use change
Note: Race and the racial composition of the neighborhood are not appraisal factors.
Predominant
Urban
Over 75%
Rapid
Increasing
Shortage
Under 3 mos.
Suburban
25-75%
Stable
Stable
In balance
3-6 mos.
Rural
Under 25%
Slow
Declining
Over supply
Over 6 mos.
Owner
Tenant
Vacant (0-5%)
Vac.(over 5%)
PRICE AGE
$(000)(yrs)
Low
High
One family
2-4 family
Multi-family
Commercial
Not likely
In process
Likely
To:
Neighborhood boundaries and characteristics:
Factors that affect the marketability of the properties in the neighborhood (proximity to employment and amenities, employment stability, appeal to market, etc.):
Market conditions in the subject neighborhood (including support for the above conclusions related to the trend of property values, demand/supply, and marketing time
-- such as data on competitive properties for sale in the neighborhood, description of the prevalence of sales and financing concessions, etc.):PUDProject Information for PUDs (If applicable) - - Is the developer/builder in control of the Home Owners' Association (HOA)?Yes No
Approximate total number of units in the subject project Approximate total number of units for sale in the subject project
Describe common elements and recreational facilities:SITEDimensions
Site area
Specific zoning classification and description
Zoning compliance
Highest & best use as improved:
Corner Lot Yes No
Legal Legal nonconforming (Grandfathered use)Illegal No zoning
Present use Other use (explain)
Utilities Off-site Improvements
Electricity
Gas
Water
Sanitary sewer
Storm sewer
Public Other Type Public Private
Street
Curb/gutter
Sidewalk
Street lights
Alley
Topography
Size
Shape
Drainage
View
Landscaping
Driveway Surface
Apparent easements
FEMA Special Flood Hazard Area
FEMA Zone
FEMA Map No.
Map Date
Yes No
Comments (apparent adverse easements, encroachments, special assessments, slide areas, illegal or legal nonconforming zoning use, etc.):DESCRIPTION OF IMPROVEMENTSGENERAL DESCRIPTION
No. of Units
No. of Stories
Type (Det./Att.)
Design (Style)
Existing/Proposed
Age (Yrs.)
Effective Age (Yrs.)
EXTERIOR DESCRIPTION
Foundation
Exterior Walls
Roof Surface
Gutters & Dwnspts.
Window Type
Storm/Screens
Manufactured House
FOUNDATION
Slab
Crawl Space
Basement
Sump Pump
Dampness
Settlement
Infestation
BASEMENT
Area Sq. Ft.
% Finished
Ceiling
Walls
Floor
Outside Entry
INSULATION
Roof
Ceiling
Walls
Floor
None
Unknown
ROOMS
Basement
Level 1
Level 2
Finished area above grade contains:Rooms;Bedroom(s);Bath(s);Square Feet of Gross Living Area
Foyer Living Dining Kitchen Den Family Rm.Rec. Rm.Bedrooms # Baths Laundry Other Area Sq. Ft.
INTERIOR Materials/Condition
Floors
Walls
Trim/Finish
Bath Floor
Bath Wainscot
Doors
HEATING
Type
Fuel
Condition
COOLING
Central
Other
Condition
KITCHEN EQUIP.
Refrigerator
Range/Oven
Disposal
Dishwasher
Fan/Hood
Microwave
Washer/Dryer
ATTIC
None
Stairs
Drop Stair
Scuttle
Floor
Heated
Finished
AMENITIES
Fireplace(s) #
Patio
Deck
Porch
Fence
Pool
CAR STORAGE:
None
Garage
Attached
Detached
Built-In
Carport
Driveway
# of cars
COMMENTSAdditional features (special energy efficient items, etc.):
Condition of the improvements, depreciation (physical, functional, and external), repairs needed, quality of construction, remodeling/additions, etc.:
Adverse environmental conditions (such as, but not limited to, hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the
immediate vicinity of the subject property.:
Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6/93PAGE 1 OF 2
Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
61,000
1,072
61,000
Sheryl Cotton
AP20618
Estimated economic life based on 100
total years. The most similar land sales per RMLS to the
subject include the following: RMLS #4779014 $55,000 and
#4780925 $75,000.
5306 Rhode Island Ave N
New Hope, MN 55428
N/A
RMLS/HennCA
Inspection
N;Res;
Fee Simple
13,012 sf
N;Res
Rambler
Q4
62
C4
7 3 1
1,072
931sf438sfwu
1rr0br0.1ba2o
Average
FWA C/Air
None
1gd3dw
Pt/Dk
None
CL
10/25/2021
RMLS/HennCA
5301 Quebec Ave N
New Hope, MN 55428
0.03 miles E
255,000
210.40
RMLS#6028810/57DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Cash;0 0
s09/21;Unk 0
N;Res;
Fee Simple
12197 sf 0
N;Res;
Rambler
Q4
63 0
C4
7 3 1
1,212 -5,600
960sf850sfwu -10,300
1rr0br1.0ba1o -2,000
Average
FWA C/Air
None
2ga6dw -8,000
Pt/Dk
1 FP -2,000
CL
-27,900
None
227,100
10/25/2021
RMLS/HennCA
5342 Pennsylvania Ave N
New Hope, MN 55428
0.17 miles NE
250,000
205.76
RMLS#5733028/7DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Conv;0 0
s05/21;Unk 0
N;Res;
Fee Simple
11326 sf 0
N;Res;
Rambler
Q4 +5,000
69
C4 +2,000
6 3 1 0
1,215 -5,720
1200sf280SFwu +3,950
1rr0br1.0ba1o -2,000
Average
FWA C/Air
None
2gd6dw -8,000
None +2,000
1 FP -2,000
CL
-4,770
None
245,230
10/25/2021
RMLS/HennCA
5342 Louisiana Ave N
Crystal, MN 55428
0.36 miles E
205,000
242.32
RMLS#5756286/3DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Cash;0 0
s09/21;Unk 0
A;BsRd +4,000
Fee Simple
8712 sf +4,000
N;Res;
Rambler
Q4
68 0
C4
+4,000
4 2 1 0
846 +9,040
720sf408sfwu 0
1rr1br1.0ba1o -2,000
Average
FWA C/Air
None
1ga4dw 0
Pt +2,000
None
CL
21,040
None
226,040
10/25/2021
RMLS/HennCA
See attached addendum.
The subject property has not been a sale / re-sale during the past 36 months. All comparable sales have not been sales / resales during the
past 12 months.
227,000
See Attached Addendum.
Most emphasis was placed on the Sales Comparison Approach to Value. The Income (GRM) Approach and Cost Approach
were both considered with the Sales Comparison Approach weighing in as the most viable approach to value/opinion of value.
10/2021
10/26/2021
227,000
Jayne Preusse
10/29/2021
20559939 MN
Valuation Section File No.UNIFORM RESIDENTIAL APPRAISAL REPORT
COST APPROACHESTIMATED SITE VALUE
ESTIMATED REPRODUCTION COST-NEW-OF IMPROVEMENTS:
Dwelling
Garage/Carport
Total Estimated Cost New
Less
Depreciation
Depreciated Value of Improvements
"As-is" Value of Site Improvements
INDICATED VALUE BY COST APPROACH
Sq. Ft.
Sq. Ft.
Sq. Ft.
@
@
@
$
$
$
Physical Functional External
=
=
=
=
=
$
$
=
=
=
=
=
$
$
$
$
$
Comments on Cost Approach (such as, source of cost estimate, site value,
square foot calculation and for HUD, VA and FmHA, the estimated remaining
economic life of the property):SALES COMPARISON ANALYSIS////
ITEM SUBJECT COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3
ITEM SUBJECT COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3
DESCRIPTION DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–DESCRIPTION +( )$ Adjust.–
Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths
Sq. Ft.Sq. Ft.Sq. Ft.Sq. Ft.
+–+–+–
$
$$
$
$
$
$
$
$
$
$
$
$
$
$
$$
Address
Proximity to Subject
Sales Price
Price/Gross Living Area
Data and/or
Verification Source
VALUE ADJUSTMENTS
Sales or Financing
Concessions
Date of Sale/Time
Location
Leasehold/Fee Simple
Site
View
Design and Appeal
Quality of Construction
Age
Condition
Above Grade
Room Count
Gross Living Area
Basement & Finished
Rooms Below Grade
Functional Utility
Heating/Cooling
Energy Efficient Items
Garage/Carport
Porch, Patio, Deck,
Fireplace(s), etc.
Fence, Pool, etc.
Net Adj. (total)
Adjusted Sales Price
of Comparable
Comments on Sales Comparison (including the subject property's compatibility to the neighborhood, etc.):
Date, Price and Data
Source, for prior sales
within year of appraisal
Analysis of any current agreement of sale, option, or listing of subject property and analysis of any prior sales of subject and comparables within one year of the date of appraisal:
INDICATED VALUE BY SALES COMPARISON APPROACH
INDICATED VALUE BY INCOME APPROACH (if Applicable) Estimated Market Rent /Mo.x Gross Rent Multiplier =RECONCILIATIONThis appraisal is made "as is"subject to the repairs, alterations, inspections or conditions listed below subject to completion per plans & specifications.
Conditions of Appraisal:
Final Reconciliation:
The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report, based on the above conditions and the certification, contingent
and limiting conditions, and market value definition that are stated in the attached Freddie Mac Form 439/FNMA form 1004B (Revised ).
Signature
Name
Date Report Signed
State Certification #State
Or State License #State
Signature
Name
Date Report Signed
State Certification #State
Or State License #State
Inspect Property
Did Did Not
I (WE) ESTIMATE THE MARKET VALUE, AS DEFINED, OF THE REAL PROPERTY THAT IS THE SUBJECT OF THIS REPORT, AS OF
(WHICH IS THE DATE OF INSPECTION AND THE EFFECTIVE DATE OF THIS REPORT) TO BE $
APPRAISER:SUPERVISORY APPRAISER (ONLY IF REQUIRED):
Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6-93PAGE 2 OF 2
Sheryl Cotton
AP20618
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
File No.
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Condition Ratings and Definitions
C1
The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new
and the dwelling features no physical depreciation.
Note: Newly constructed improvements that feature recycled or previously used materials and/or components can be considered new dwellings
provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been
rehabilitated/remanufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they
have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without
adequate maintenance or upkeep).
C2
The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components
are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced
with components that meet current standards. Dwellings in this category are either almost new or have been recently completely renovated and
are similar in condition to new construction.
Note: The improvements represent a relatively new property that is well maintained with no deferred maintenance and little or no physical
depreciation, or an older property that has been recently completely renovated.
C3
The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every
major building component, may be updated or recently rehabilitated. The structure has been well maintained.
Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is
being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of
short-lived building components have been replaced but not to the level of a complete renovation.
C4
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been
adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building
components have been adequately maintained and are functionally adequate.
Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building
components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however,
they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property.
C5
The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs,
rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains
useable and functional as a residence.
Note: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many
of its short-lived building components are at the end of or have exceeded their physical life expectancy but remain functional.
C6
The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety,
soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many
or most major components.
Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property
with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements.
Quality Ratings and Definitions
Q1
Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such
residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship
and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality
exterior refinements and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes
throughout the dwelling are of exceptionally high quality.
Q2
Dwellings with this quality rating are often custom designed for construction on an individual property owner’s site. However, dwellings in
this quality grade are also found in high-quality tract developments featuring residence constructed from individual plans or from highly
modified or upgraded plans. The design features detailed, high quality exterior ornamentation, high-quality interior refinements, and detail. The
workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality.
UAD Version 9/2011 (Updated 4/2012)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Quality Ratings and Definitions (continued)
Q3
Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard
residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors
that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been
upgraded from “stock” standards.
Q4
Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans
are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship,
finish, and equipment are of stock or builder grade and may feature some upgrades.
Q5
Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a
plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation
and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials
with limited refinements and upgrades.
Q6
Dwellings with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings
are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or
expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical
systems and equipment may be minimal or non-existent. Older dwellings may feature one or more substandard or non-conforming additions
to the original structure
Definitions of Not Updated, Updated, and Remodeled
Not Updated
Little or no updating or modernization. This description includes, but is not limited to, new homes.
Residential properties of fifteen years of age or less often reflect an original condition with no updating, if no major
components have been replaced or updated. Those over fifteen years of age are also considered not updated if the
appliances, fixtures, and finishes are predominantly dated. An area that is ‘Not Updated’ may still be well maintained
and fully functional, and this rating does not necessarily imply deferred maintenance or physical/functional deterioration.
Updated
The area of the home has been modified to meet current market expectations. These modifications
are limited in terms of both scope and cost.
An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute
updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not
include significant alterations to the existing structure.
Remodeled
Significant finish and/or structural changes have been made that increase utility and appeal through
complete replacement and/or expansion.
A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include
some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation
of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of)
square footage). This would include a complete gutting and rebuild.
Explanation of Bathroom Count
Three-quarter baths are counted as a full bath in all cases. Quarter baths (baths that feature only a toilet) are not
included in the bathroom count. The number of full and half baths is reported by separating the two values using a
period, where the full bath count is represented to the left of the period and the half bath count is represented to the
right of the period.
Example:
3.2 indicates three full baths and two half baths.
UAD Version 9/2011 (Updated 4/2012)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Abbreviations Used in Data Standardization Text
Abbreviation Full Name Fields Where This Abbreviation May Appear
ac Acres Area, Site
AdjPrk Adjacent to Park Location
AdjPwr Adjacent to Power Lines Location
A Adverse Location & View
ArmLth Arms Length Sale Sale or Financing Concessions
ba Bathroom(s)Basement & Finished Rooms Below Grade
br Bedroom Basement & Finished Rooms Below Grade
B Beneficial Location & View
Cash Cash Sale or Financing Concessions
CtySky City View Skyline View View
CtyStr City Street View View
Comm Commercial Influence Location
c Contracted Date Date of Sale/Time
Conv Conventional Sale or Financing Concessions
CrtOrd Court Ordered Sale Sale or Financing Concessions
DOM Days On Market Data Sources
e Expiration Date Date of Sale/Time
Estate Estate Sale Sale or Financing Concessions
FHA Federal Housing Authority Sale or Financing Concessions
GlfCse Golf Course Location
Glfvw Golf Course View View
Ind Industrial Location & View
in Interior Only Stairs Basement & Finished Rooms Below Grade
Lndfl Landfill Location
LtdSght Limited Sight View
Listing Listing Sale or Financing Concessions
Mtn Mountain View View
N Neutral Location & View
NonArm Non-Arms Length Sale Sale or Financing Concessions
BsyRd Busy Road Location
o Other Basement & Finished Rooms Below Grade
Prk Park View View
Pstrl Pastoral View View
PwrLn Power Lines View
PubTrn Public Transportation Location
rr Recreational (Rec) Room Basement & Finished Rooms Below Grade
Relo Relocation Sale Sale or Financing Concessions
REO REO Sale Sale or Financing Concessions
Res Residential Location & View
RH USDA - Rural Housing Sale or Financing Concessions
s Settlement Date Date of Sale/Time
Short Short Sale Sale or Financing Concessions
sf Square Feet Area, Site, Basement
sqm Square Meters Area, Site
Unk Unknown Date of Sale/Time
VA Veterans Administration Sale or Financing Concessions
w Withdrawn Date Date of Sale/Time
wo Walk Out Basement Basement & Finished Rooms Below Grade
wu Walk Up Basement Basement & Finished Rooms Below Grade
WtrFr Water Frontage Location
Wtr Water View View
Woods Woods View View
Other Appraiser-Defined Abbreviations
Abbreviation Full Name Fields Where This Abbreviation May Appear
UAD Version 9/2011 (Updated 4/2012)
Twelve Month Listing History of Subject Property
An extensive search of the subject property was completed and there were no listings of the subject
in the previous twelve months.
Sources used were Hennepin County Records and Northstar Multiple Listing Service.
Market Conditions
Overall market conditions for this report were based on the statistics for page one of the Form 1004 O.
Market statistics for page one of the Form 1004 O concluded the following: the median sold price of all single
family homes within a one mile radius from the subject property from 10/25/2019-10/24/2020 was
$250,000 (data of 94). Whereas, the median sold price of all single family homes from 10/25/2020-10/24/2021 was
$284,000 (data of 111). An increase of approximately 12%. The average priced homes of the same RMLS statistics
indicates an increase of market conditions of approximately 9%.
Both statistics were taken under consideration, with the final observation of an increase in overall
market conditions.
National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak
On March 13, 2020, the United States Government declared a "National Emergency Concerning the Novel
Coronavirus Disease (COVID-19) Outbreak", which was in effect on the Effective Date of this Appraisal Report.
In addition, on March 25, 2020 the State of Minnesota Government declared a "stay at home order", which was in
effect on the Effective Date of this Appraisal Report. This appraisal report was performed pursuant to the Uniform
Standards of Professional Appraisal Practice (USPAP) and was based on information and comparable sales
available on that date. The effect of COVID-19 on the future value of the Subject Property or the value of the real
estate market in the area of the Subject Property is unknown and not possible to predict.
Reconciliation
The effect COVID-19 will have on the real estate market in the region is currently unknown and will largely depend
on both the scale and longevity of the pandemic. At this stage Tourism, F&B and Retail sectors are the first
impacted, due to the increased response by local and global authorities including home quarantine, restriction of
travel and international concerns. A prolonged pandemic could have a significant (and yet unknown or quantifiable)
impact on other sectors of the property market.
President Donald Trump on Friday 03/27/2020 signed a $2.2 trillion coronavirus economic stimulus bill, putting in
motion desperately needed financial relief for millions of Americans set back by the pandemic. The more than $2
trillion bill is the largest economic relief package in modern U.S. history.
This appraisal report was performed pursuant to the Uniform Standards of Professional Appraisal Practice
(“USPAP”) and was based on information and comparable sales available as of the effective date. At this time, the
effect of COVID-19 on the future value of the Subject Property or the value of the real estate market in the area of
the Subject Property is unknown and not possible to predict.
This valuation is based on the information available as of the effective date. Given the heightened uncertainty, a
degree of caution should be exercised when relying upon this report. Values may change more rapidly and
significantly than during standard market conditions.
The analysis is being performed with as much current information and market feedback as possible. However, the
appraiser can only work with what is available.
The appraisal is being performed at a point in time and that the market value opinion is - as of a certain date - the
effective date. changes after the date may affect the value. Analysis is being performed as quickly as possible to
measure the impacts, if any, to the subject's market as a result of this event.
Neighborhood Description
The subject property is located in the western section of the City of New Hope MN within the County of Hennepin.
The immediate neighborhood consists primarily of detached single family homes all that generally
conform with one another in style, size and price range.
All neighborhood conveniences including shopping public schools, parks and highway access are
within reasonable distances. There has traditionally been an average demand for housing in this
neighborhood. The subject's immediate neighborhood is a mix of single family detached homes.
Subjects neighborhood is mainly a residential neighborhood with easy access to other suburban
areas via Highways 169/100/Interstate 694 and connecting to other main arteries.
No adverse conditions were observed.
Subject Site
The subject is an interior site that is typical in parcel size and appeal of the neighborhood. The
topography slants slightly upward at the front, and is level to the parcel rear and does not allow for a walkout
basement. There is a concrete driveway that is entered from a lightly trafficked residential street to the detached
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20618
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
basement. There is a concrete driveway that is entered from a lightly trafficked residential street to the detached
garage. There is a concrete walkway from the driveway that leads to the front entrance. The subject views
detached single family homes on all sides. In short, the subject parcel is observed to be an average site
and is considered to be a suitable place for the home improvements.
There are no apparent easements or encroachments, other than typical utility easements.
In making this appraisal report, we are not aware of any testing for the existence of presence of
radon, asbestos, toxic substances, or other environmental pollutants in the building, land, or other
surrounding areas, and that the value assigned herein to the land and buildings assume that no
such contaminants exist. We further recommend that if you have knowledge of or reason to subject
the existence of such pollutants, that you obtain an environmental assessment of the property.
To the best of our knowledge, there are no environmental risk factors which may affect the real
estate being appraised.
Additional Features
Exterior features of the subject include a concrete patio, deck and shed.
The first level consists of a foyer, living room, dining area, kitchen, full bath, and three bedrooms.
The basement is full, finished and is not a walkout. The basement consists of a family room, half bath, an
unfinished storage room, laundry room, and a utility room.
The appraiser manually measured the subject with 1072 GLA. The most recent RMLS listing for the
subject indicates GLA of 960. RMLS Realist indicates 1039 GLA.
"This assignment was completed in full compliance with the appraisal independence
regulations".
Highest and Best Use
Highest and best use is defined in The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, at Page
93, as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically
possible, appropriately supported, financially feasible, and that results in the highest value.
The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility,
and maximum profitability. Alternatively, the probable use of land or improved property – specific with respect to the
user and timing of the use – that is adequately supported and results in the highest present value.
The subject as improved is a legally permissible use based on its current zoning. Also, the lot size, shape, physical
condition and land to building ratio allow the present structure and indicate a good utilization of the improvements.
Based on current market conditions, the present use and structure as a single family residence is its financially
feasible and maximally productive use.
The subject property is currently being utilized as a residential single family home and is being
appraised as a residential single family home.
Comments on Sale Comparison
Your appraiser has performed a detailed search for comparables to the subject in location, design,
utility and appeal. After extensive research, the comparable sales chosen were deemed the best
available. The appraiser has researched, reviewed, analyzed and documented the sales. The
appraiser has made peer acceptable, unbiased, and impartial adjustments for items of significant variation.
Search parameters included the following:
- location of being in the City of New Hope and within one mile from the subject property
- similar design style, age, condition and amenities
- similar parcel size and view.
The subject is a rambler designed detached single family home. The subject is considered to be overall average
condition. Three sold comparables were utilized for the overall opinion of value.
Comparables #1, #2 and #3 are observed to be good viable comparables to the subject, many of the search
parameters, and being close in proximity to the subject. Comparables #1 and #2 were given most
weight in the determination of the opinion of value due to being close in proximity to the subject
while being similar in most of the original search parameters.
Comparables #1 and #2 best represent the current market conditions of being sold within 90 DOM.
All sold comparables are located within the same school district as the subject - #281-Robbinsdale.
All sold comparables are within a 5% range to the subject's opinion of value.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20618
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
All sold comparables are within a 5% range to the subject's opinion of value.
Effective ages were taken under consideration for the sales comparison grid. GLA along with the other parameters
were the next most viable attributes in locating similar comparables to the subject.
Parcel adjustments were based on Hennepin County Assessor Website values, land sales, parcel size,
amenities of the parcels, view and overall utility. Each individual parcel was observed for all
attributes, and therefore may not be completely defined by the specific square foot/acres per parcel.
GLA for the comparables utilized within this report have been researched per the individual listings, RMLS Realist
and Hennepin County Assessor Website and each analyzed to the best judgment of the most accurate GLA of each
comparable.
Subject falls in between the low to medium predominant value range. This does not have a
negative impact on future marketing or is the subject considered to be an under improvement
to the neighborhood.
Adjustments
LOCATION:
The location adjustments, if any, considered accessibility, degree of conformity to adjoining
properties, and the overall appeal and marketability of the respective neighborhoods in relation
to the subject. Comparable #3 is located with a busier road to its side with external associated.
SITE/VIEW:
Adjustments for site/view were made on the basis of lot value and the availability of public utilities
rather than size alone. Comparable #3 has a slightly smaller parcel size to the subject.
DESIGN/STYLE:
Adjustments are made on the basis of interior and exterior appeal characteristics.
QUALITY/CONDITION:
Adjustments are made on the basis of MLS photos, an inspection from the street and the appraiser's
experience and judgment.
Comparable #2 is observed to be inferior in quality upgrades/updates and condition to the subject per the RMLS
description and photos in kitchen updates.
ROOM COUNT/PROPERTY FEATURES:
Adjustment were made based on the price-point of the residence and on the appraiser's experience
and judgment.
GLA- 40.00 Finished Basement sf - 25.00
The subject and comparables have different size amenities, and the size of each was taken under consideration and
therefore may not be completely defined by the specific adjustments as described for each above.
- No adjustments were utilized for GLA or Finished Basement sf within 100 sf due to the margin of
error of the RMLS comparables utilized in the report.
Assessed Market Value for Tax Purposes
According to Hennepin County Assessor Website records the subjects 2021 estimated assessed value is
as follows: Land $61,000, Building $143,000 with a total of $204,000.
Cost Approach
The cost approach has not been developed by the appraiser as an analysis to support the opinion
of the property's market value. The cost approach may not be a reliable indication of
replacement or reproduction cost due to changing costs of labor and materials, due to
changing building codes, governmental regulations and requirements, age of the subject
and speculative depreciation.
Intended Used of Appraisal
The Intended User of this appraisal report is the Lender/Client. The Intended Use is to evaluate
the property that is the subject of this appraisal for a full appraisal per the client request for market value,
subject to the stated Scope of Work, purpose of the appraisal, reporting requirements of this appraisal report form,
and Definition of Market Value. No additional intended Users are identified by the appraiser.
Scope of the Appraisal
The appraiser has viewed all readily accessible areas of the dwelling (and any other building
structure located on the property). This complete visual inspection is not intended to be the
same depth or for the same purpose as a home inspection. The appraiser has viewed the
property solely for the valuation purposes and to observe property characteristics that a typical
purchaser would consider in their decision making process, as well as those items outlined in
the assumptions and limited conditions and certifications to this appraisal. Personal property or
chattel was not included in the appraised value.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20618
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
chattel was not included in the appraised value.
Zoning
Comments about the zoning compliance of the subject property are intended by the appraiser to
be in general terms. A detailed analysis about every aspect of the subject property's improvements
and the site characteristic with respect to current zoning and building codes are beyond the scope
of this assignment and was not performed. The subject is considered to be in compliance with
current zoning requirements in a general sense. It is a Single family residential improvement in
an area zoned for single family residential use.
Site Conditions
No obvious adverse site conditions or external factors were observed. Unless otherwise stated,
typical drainage, utility and right of way easements do not adversely impact value. However, the
discovery of many site related issues often require special expertise or data sources not customary
or available in the performance of an appraisal. A fundamental site analysis such as this is beyond
the scope of this assignment. A detailed site or location survey, which may reveal adverse easements,
encroachments, zoning violations, environmental issues or other matters that could impact the
analysis or opinions, was not available to the appraiser.
Sketch
The subject's sketch is used for representational purposes only. The subject's sketch is to comply
with The American National Standard Institute process for calculating gross living area; however,
due to the complexity of the subject property and the limitations of the appraisal software it is not
possible to develop a blue print of the subject property. The subject's sketch is not intended to be
used for any other purpose. The subject's sketch and actual dimensions will very. The appraiser
is not a structural engineer. If the lender requires a precise blue print of the subject property it is
the lenders responsibility to have the building surveyed by a structural engineer. See Statement
Of Assumptions And Limiting Conditions.
At the time of inspection, the appraiser physically measured the exterior/interior of the improvement.
The appraiser's measurements may differ from that of the assessor's and/or builder's documentation
for the subject's gross living area. The appraiser has no knowledge as to if the assessor physically
measured the subject property or used blueprint documentation for the gross living area. Since the
appraiser physically measured the subject property on the effective date of this report, the appraiser
deems their calculations to be accurate and reliable. The subject's sketch is used for representational
purposes only. The subject's sketch is to comply with The American National Standard Institute
process for calculating gross living area; however, due to the complexity of the subject property,
and the limitations of the appraisal software, it is not possible to develop a blue print of the subject
property. The subject's sketch is not intended to be used for any other purpose. The subject's sketch
and actual dimensions will vary. The appraiser is not a structural engineer. If the lender requires a
precise blue print of the subject property it is the lenders responsibility to have the building surveyed
by a structural engineer. See Statement Of Assumptions And Limiting Conditions.
Land Value
Development of a land value has been attempted by the appraiser . The use of this data, in whole
or in part, for other purposes is not intended by the appraiser. Nothing set forth in the appraisal
should be relied upon for the purpose of determining the amount or type of insurance coverage to
be placed on the subject property. The appraiser assumes no liability for and does not guarantee
that any insurable value estimate inferred from this report will result in the subject property being
fully insured for any loss that may be sustained. Further, the land value may not be reliable
indication of replacement or reproduction cost for any date other than the effective date of this
appraisal due to changing costs of labor and materials and due to changing building codes and
governmental regulations and requirements.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20618
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
Form PICPIX.SR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Subject Photo Page
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Subject Front
Sales Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
5306 Rhode Island Ave N
N/A
1,072
7
3
1
N;Res;
N;Res
13,012 sf
Q4
62
Subject Rear
Subject Street
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Living Kitchen
Foyer Dining
Main Floor Bath Kitchen
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Bedroom Bedroom
Bedroom Basement Family
Basement Half Bath Laundry
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
HVAC Unable to see if Well is Capped
Garage Patio
Backyard Shed
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Subject Front/Side
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Comparable Photo Page
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Comparable 1
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
5301 Quebec Ave N
0.03 miles E
255,000
1,212
7
3
1
N;Res;
N;Res;
12197 sf
Q4
63
Comparable 2
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
5342 Pennsylvania Ave N
0.17 miles NE
250,000
1,215
6
3
1
N;Res;
N;Res;
11326 sf
Q4
69
Comparable 3
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
5342 Louisiana Ave N
0.36 miles E
205,000
846
4
2
1
A;BsRd
N;Res;
8712 sf
Q4
68
Borrower
Lender/Client
Property Address
City County State Zip Code
Form SKT.BLDSKI - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Building Sketch
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
8.5'2 .2 4 '2 .2 4 '2'
2.24'
2.24'2'1.5'19.5'25.5'40'14'14.5'14'14.5'1.5'4
.
6
1
'6'38'9'6'16'2'4.5'2'6.5'12'34'12'1'33'22.5'19.5'1.5'20.5'24'40'
Basement
Family
Unfinished
Storage
LaundryHalf Bath
Utility
Garage
Patio
Deck
First Floor
Foyer
Living
Dining
Kitchen
Bedroom
Bedroom
Bedroom
Bath
Shed
TOTAL Sketch by a la mode, inc.Area Calculations Summary
Living Area Calculation Details
First Floor 1071.75 Sq ft 0.5 × 4 × 2 = 4
0.5 × 2 × 4 = 4
2 × 2 = 4
4.5 × 2 = 9
25.5 × 19.5 = 497.25
27 × 20.5 = 553.5
Total Living Area (Rounded):1072 Sq ft
Non-living Area
Wood Deck 203 Sq ft 14.5 × 14 = 203
1 Car Detached 408 Sq ft 34 × 12 = 408
Concrete Patio 327.75 Sq ft 9 × 22 = 198
7 × 4.5 = 31.5
9 × 8 = 72
3.5 × 6 = 21
0.5 × 3.5 × 3 = 5.25
Basement 930.75 Sq ft 22.5 × 19.5 = 438.75
20.5 × 24 = 492
Property Address
City County State Zip Code
Plat
Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Aerial
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Aerial
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Location Map
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
Sheryl Cotton
AP20618
N/A
5306 Rhode Island Ave N
New Hope Hennepin MN 55428
City of New Hope
None.
None. Sources for data were from RMLS and Hennepin County
Assessor Website.
0-90
0-90
Jayne Preusse
10/29/2021
20559939
MN
08/31/2023
10/26/2021
Form ID14EC - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Borrower
Lender/Client
USPAP Compliance Addendum
Loan #
File #
Property Address
City County State Zip Code
APPRAISAL AND REPORT IDENTIFICATION
This Appraisal Report is one of the following types:
Appraisal Report This report was prepared in accordance with the requirements of the Appraisal Report option of USPAP Standards Rule 2-2(a).
Restricted Appraisal Report This report was prepared in accordance with the requirements of the Restricted Appraisal Report option of USPAP Standards Rule 2-2(b). The
intended user of this report is limited to the identified client. This is a Restricted Appraisal Report and the rationale for how the appraiser arrived
at the opinions and conclusions set forth in the report may not be understood properly without the additional information in the appraiser's workfile.
ADDITIONAL CERTIFICATIONS
I certify that, to the best of my knowledge and belief:
The statements of fact contained in this report are true and correct.
The report analyses, opinions, and conclusions are limited only by the reported assumptions and are my personal, impartial, and unbiased professional analyses,
opinions, and conclusions.
I have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or specified) personal interest with respect to the
parties involved.
I have no bias with respect to the property that is the subject of this report or the parties involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting predetermined results.
My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause
of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of
this appraisal.
My analyses, opinions, and conclusions were developed and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
This appraisal report was prepared in accordance with the requirements of Title XI of FIRREA and any implementing regulations.
PRIOR SERVICES
I have NOT performed services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period
immediately preceding acceptance of this assignment.
I HAVE performed services, as an appraiser or in another capacity, regarding the property that is the subject of this report within the three-year period immediately
preceding acceptance of this assignment. Those services are described in the comments below.
PROPERTY INSPECTION
I have NOT made a personal inspection of the property that is the subject of this report.
I HAVE made a personal inspection of the property that is the subject of this report.
APPRAISAL ASSISTANCE
Unless otherwise noted, no one provided significant real property appraisal assistance to the person signing this certification. If anyone did provide significant assistance, they
are hereby identified along with a summary of the extent of the assistance provided in the report.
ADDITIONAL COMMENTS
Additional USPAP related issues requiring disclosure and/or any state mandated requirements:
MARKETING TIME AND EXPOSURE TIME FOR THE SUBJECT PROPERTY
A reasonable marketing time for the subject property is day(s)utilizing market conditions pertinent to the appraisal assignment.
A reasonable exposure time for the subject property is day(s).
APPRAISER SUPERVISORY APPRAISER (ONLY IF REQUIRED)
Signature
Name
Date of Signature
State Certification #
or State License #
State
Expiration Date of Certification or License
Effective Date of Appraisal
Signature
Name
Date of Signature
State Certification #
or State License #
State
Expiration Date of Certification or License
Supervisory Appraiser Inspection of Subject Property
Did Not Exterior-only from Street Interior and Exterior
USPAP Compliance Addendum 2014 Page 1 of 1
Appraisal License
Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
E & O Insurance
Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Budget for 5306 Rhode Island Ave N
EXPENSES AMOUNT
Acquisition (213,000.00)$
Closing costs for purchase (estimated)(3,000.00)$
Legal costs for purchase (estimated)(2,000.00)$
Appraisal (375.00)$
Demolition survey (650.00)$
Demolition and site prep (estimated)(20,000.00)$
Real estate taxes (estimated at 6 months)(1,508.00)$
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)(2,000.00)$
TOTAL (244,733.00)$
REVENUE AMOUNT
EDA (estimated lot sale proceeds)80,000.00$
TOTAL 80,000.00$
TOTAL COST/REVENUE (164,733.00)$
Taxable Market Value 2020,
Payable 2021
Projected Taxable Value 2022,
Payable 2023 Change Percent Change
204,000.00$ 470,000.00$ 266,000.00$ 130.39%
Estimated Taxes Allocated to
City 2020, Payable 2021
Projected Taxes Allocated
to City 2022, Payable 2023 Change Percent Change
1,224.00$ 2,820.00$ 1,596.00$ 130.39%
Projected Project Expenses (244,733.00)$
Lot Sale Revenue 80,000.00$
Total Cost/Revenue (164,733.00)$
# of Years
(Year)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (present)-$ (164,733.00)$ -100.00%
1 (payable 2023)1,596.00$ (163,137.00)$ -99.03%
2 (payable 2024)3,239.88$ (161,493.12)$ -98.03%
3 (payable 2025)4,933.08$ (159,799.92)$ -97.01%
4 (payable 2026)6,677.07$ (158,055.93)$ -95.95%
5 (payable 2027)8,473.38$ (156,259.62)$ -94.86%
10 (payable 2032)18,296.35$ (146,436.65)$ -88.89%
15 (payable 2037)29,683.87$ (135,049.13)$ -81.98%
20 (payable 2042)42,885.12$ (121,847.88)$ -73.97%
25 (payable 2047)58,188.99$ (106,544.01)$ -64.68%
30 (payable 2052)75,930.36$ (88,802.64)$ -53.91%
*Based on new home valued at $470,000
Estimated Tax Impact of Improvements at 5306 Rhode Island Ave N
Estimated Return on Investment for 5306 Rhode Island Ave N
Description Taxable Market Value
Change Cash Flow
Investment -$ (164,733.00)$
Return, Year 1 266,000.00$ 1,596.00$
Return, Year 2 273,980.00$ 1,643.88$
Return, Year 3 282,199.40$ 1,693.20$
Return, Year 4 290,665.38$ 1,743.99$
Return, Year 5 299,385.34$ 1,796.31$
Return, Year 6 308,366.90$ 1,850.20$
Return, Year 7 317,617.91$ 1,905.71$
Return, Year 8 327,146.45$ 1,962.88$
Return, Year 9 336,960.84$ 2,021.77$
Return, Year 10 347,069.67$ 2,082.42$
Return, Year 11 357,481.76$ 2,144.89$
Return, Year 12 368,206.21$ 2,209.24$
Return, Year 13 379,252.40$ 2,275.51$
Return, Year 14 390,629.97$ 2,343.78$
Return, Year 15 402,348.87$ 2,414.09$
Return, Year 16 414,419.33$ 2,486.52$
Return, Year 17 426,851.91$ 2,561.11$
Return, Year 18 439,657.47$ 2,637.94$
Return, Year 19 452,847.19$ 2,717.08$
Return, Year 20 466,432.61$ 2,798.60$
Return, Year 21 480,425.59$ 2,882.55$
Return, Year 22 494,838.36$ 2,969.03$
Return, Year 23 509,683.51$ 3,058.10$
Return, Year 24 524,974.01$ 3,149.84$
Return, Year 25 540,723.23$ 3,244.34$
Return, Year 26 556,944.93$ 3,341.67$
Return, Year 27 573,653.28$ 3,441.92$
Return, Year 28 590,862.88$ 3,545.18$
Return, Year 29 608,588.76$ 3,651.53$
Return, Year 30 626,846.42$ 3,761.08$
Total Returns 75,930.36$
Investment Cost 244,733.00$
Selling Price 80,000.00$
Return on Investment -53.91%
Description Amount
Investment (164,733.00)$
Return, Year 1 1,596.00$
Return, Year 2 1,643.88$
Return, Year 3 1,693.20$
Return, Year 4 1,743.99$
Return, Year 5 1,796.31$
Return, Year 6 1,850.20$
Return, Year 7 1,905.71$
Return, Year 8 1,962.88$
Return, Year 9 2,021.77$
Return, Year 10 2,082.42$
Return, Year 11 2,144.89$
Return, Year 12 2,209.24$
Return, Year 13 2,275.51$
Return, Year 14 2,343.78$
Return, Year 15 2,414.09$
Return, Year 16 2,486.52$
Return, Year 17 2,561.11$
Return, Year 18 2,637.94$
Return, Year 19 2,717.08$
Return, Year 20 2,798.60$
Return, Year 21 2,882.55$
Return, Year 22 2,969.03$
Return, Year 23 3,058.10$
Return, Year 24 3,149.84$
Return, Year 25 3,244.34$
Return, Year 26 3,341.67$
Return, Year 27 3,441.92$
Return, Year 28 3,545.18$
Return, Year 29 3,651.53$
Return, Year 30 3,761.08$
Total Returns 75,930.36$
Internal Rate of Return -3.98%
Estimated Internal Rate of Return for 5306 Rhode Island 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
1 204,000.00$ 470,000.00$ 266,000.00$ 1,596.00$
2 210,120.00$ 484,100.00$ 273,980.00$ 1,643.88$
3 216,423.60$ 498,623.00$ 282,199.40$ 1,693.20$
4 222,916.31$ 513,581.69$ 290,665.38$ 1,743.99$
5 229,603.80$ 528,989.14$ 299,385.34$ 1,796.31$
6 236,491.91$ 544,858.81$ 308,366.90$ 1,850.20$
7 243,586.67$ 561,204.58$ 317,617.91$ 1,905.71$
8 250,894.27$ 578,040.72$ 327,146.45$ 1,962.88$
9 258,421.10$ 595,381.94$ 336,960.84$ 2,021.77$
10 266,173.73$ 613,243.40$ 347,069.67$ 2,082.42$
11 274,158.94$ 631,640.70$ 357,481.76$ 2,144.89$
12 282,383.71$ 650,589.92$ 368,206.21$ 2,209.24$
13 290,855.22$ 670,107.62$ 379,252.40$ 2,275.51$
14 299,580.88$ 690,210.85$ 390,629.97$ 2,343.78$
15 308,568.30$ 710,917.17$ 402,348.87$ 2,414.09$
16 317,825.35$ 732,244.69$ 414,419.33$ 2,486.52$
17 327,360.11$ 754,212.03$ 426,851.91$ 2,561.11$
18 337,180.92$ 776,838.39$ 439,657.47$ 2,637.94$
19 347,296.34$ 800,143.54$ 452,847.19$ 2,717.08$
20 357,715.23$ 824,147.84$ 466,432.61$ 2,798.60$
21 368,446.69$ 848,872.28$ 480,425.59$ 2,882.55$
22 379,500.09$ 874,338.45$ 494,838.36$ 2,969.03$
23 390,885.10$ 900,568.60$ 509,683.51$ 3,058.10$
24 402,611.65$ 927,585.66$ 524,974.01$ 3,149.84$
25 414,690.00$ 955,413.23$ 540,723.23$ 3,244.34$
26 427,130.70$ 984,075.63$ 556,944.93$ 3,341.67$
27 439,944.62$ 1,013,597.90$ 573,653.28$ 3,441.92$
28 453,142.96$ 1,044,005.83$ 590,862.88$ 3,545.18$
29 466,737.25$ 1,075,326.01$ 608,588.76$ 3,651.53$
30 480,739.36$ 1,107,585.79$ 626,846.42$ 3,761.08$
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 5306 Rhode Island Ave N
Comparison of Costs & Tax Impact for Recent Projects
Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020)
5306 Rhode Island
Avenue North
4215 Nevada
Avenue North
3611 Louisiana
Avenue North
5213 Pennsylvania
Avenue North
4637 Aquila
Avenue North
4215 Louisiana
Avenue North
Number of Units 1 1 1 1 1 1
Project Description Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Year Acquired TBD TBD Not acquired 2021 2021 2020
Projected or Actual Projected
(prior to offer)
Projected
(prior to offer)
Projected
(at time of offer)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Expenses ($244,733.00) ($237,301.00) ($200,761.03) ($205,172.18) ($127,292.01) ($170,441.53)
Revenue $80,000.00 $78,000.00 $67,000.00 $72,000.00 $81,000.00 $69,000.00
Total Cost/Revenue ($164,733.00) ($159,301.00) ($133,761.03) ($133,172.18) ($46,292.01) ($101,441.53)
Estimated Taxable Value of
New Home
$470,000.00 $430,000.00 $390,000.00 $485,000.00 $445,000.00 $380,000.00
*Additional Taxes
Collected by City - 1 year
$1,596.00 $1,656.00 $1,296.00 $1,902.00 $1,254.00 $786.00
*Additional Taxes
Collected by City - 30 years
$75,930.36 $78,784.89 $61,657.74 $90,488.44 $59,659.57 $37,394.28
*Return On Investment -
30 years
-53.91% -50.54% -53.90% -32.05% 28.88% -63.14%
*Internal Rate of Return -
30 years
-3.98% -3.64% -3.98% -2.08% 1.49% -5.01%
*Assumed 3% tax value growth rate