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022822 EDA Meeting Packet    EDA MEETING  City Hall, 4401 Xylon Avenue North  Monday, February 28, 2022        President Kathi Hemken  Commissioner John Elder  Commissioner Andy Hoffe  Commissioner Michael Isenberg  Commissioner Jonathan London      1. Call to order – EDA Meeting of February 28, 2022    2. Roll call    3. Approval of Minutes:   December 13, 2021    4. Resolution approving Purchase Agreement for the acquisition of 4201 Boone Avenue  North (Improvement Project No. 1081)    5. Resolution authorizing the acquisition of 5802 Boone Avenue North by the Economic  Development Authority through bidding at Sheriff’s Mortgage Foreclosure Sale  (improvement project no. 1088)    6. Resolution approving contract with Nitti Rolloff Services Inc. for hazardous material  abatement, tree removal, demolition of site improvements, well sealing, site grading,  and installation of utility improvements at 5306 Rhode Island Avenue North  (Improvement Project No. 1080)    7. Adjournment    EDA Meeting   Page 1 December 13, 2021  City of New Hope  4401 Xylon Avenue North  New Hope, Minnesota 55428    EDA Minutes December 13, 2021  Regular Meeting City Hall      CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to  order at 8:46 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  Dan Boyum, City Engineer  Tim Hoyt, Police Chief  Rich Johnson, Director of HR/Admin. Services  Valerie Leone, City Clerk  Susan Rader, Director of Parks and Recreation  Jeff Sargent, Director of Community Development  Mark Severson, Recreation Facilities Manager  Bernie Weber, Director of Public Works  Stacy Woods, Assistant City Attorney    APPROVAL OF  MINUTES  Item 3    Motion was made by Commissioner Hoffe, seconded by Commissioner Elder, to  approve the minutes of November 22, 2021. All present voted in favor. Motion  carried.    2022 HRA LEVY  Item 4  President Hemken introduced for discussion EDA Item 4, Resolution authorizing  the final HRA levy pursuant to Minnesota Statutes, Section 469.033, subdivision 6  and approval of a final budget for fiscal year 2022.     Mr. Kirk McDonald, executive director, stated the resolution approves the 2022  HRA levy of $417,000 to support the scattered site housing program and other  redevelopment efforts. This levy is adopted separate from the city’s tax levy.    Commissioner London commented that he is disappointed with the city’s overall  levy increase, but he understands the need to support the scattered site housing  program.    RESOLUTION 2021‐12  Item 4  Commissioner Hemken introduced the following resolution and moved its  adoption “RESOLUTION AUTHORIZING THE FINAL HRA LEVY  PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION  6 AND APPROVAL OF A FINAL BUDGET FOR FISCAL YEAR 2022.” The  motion for the adoption of the foregoing resolution was seconded by  EDA Meeting   Page 2 December 13, 2021  Commissioner Elder, and upon vote being taken thereon, the following voted in  favor thereof: Hemken, Elder, Hoffe, Isenberg, London; and the following voted  against the same: None; Abstained: None; Absent: None; whereupon the  resolution was declared duly passed and adopted, signed by the president which  was attested to by the executive director.    ADJOURNMENT Motion was made by Commissioner Isenberg, seconded by Commissioner Elder,  to adjourn the meeting. All present voted in favor. Motion carried. The New Hope  EDA adjourned at 8:48 p.m.    Respectfully submitted,    Valerie Leone, City Clerk    I:\RFA\COMM DEV\2022\EDA\4201 Boone Ave N\EDA4 Q ‐ 4201 Boone Ave N Acquisition 02‐28‐22.docx               Request for Action  February 28, 2022    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 4201 Boone Avenue North (improvement  project no. 1081)  Requested Action  Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for  the acquisition of 4201 Boone Avenue North for a purchase price of $245,000 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 4201 Boone Avenue North is owned by TreeHouse, a nonprofit  organization that serves teenagers. In November of 2021, TreeHouse merged its New Hope and Plymouth  locations and staff and began exploring the sale of the tax‐exempt property at 4201 Boone Avenue North. The  existing rambler style home was constructed in 1945. It has 1,200 square feet of finished above ground space,  with four bedrooms, one full bathroom and one half‐bathroom. The home has 1,742 square feet of finished  below ground space, including a kitchen. There is a single stall, detached garage on the property that is not  accessible by street, meaning there is nowhere to park a vehicle indoors on the property. The 0.6‐acre parcel is  zoned R‐1, Single‐family Residential and is large enough to split into two lots without a variance in order to  accommodate the construction of two new homes. The existing lot abuts 42nd Avenue North to the south and  Boone Avenue North to the east, locating it near one of the busier intersections in the city. Adjacent uses  include high density residential to the south, single‐family residential to the east and west, and a church  building to the north.    After learning that TreeHouse was interested in selling the property to the EDA, city staff ordered an  appraisal that was completed on December 3, 2021. The appraisal estimated the value of the property at  $250,000. The possible acquisition of the property was discussed at the December 20, 2021, work session,  where the City Council expressed support for the project. TreeHouse has agreed to sell the property to the  city for $245,000, contingent upon approval by the EDA. 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  4    Request for Action, Page 2    If the EDA were to acquire the parcel and split the lot, access to both of the new lots would come off Boone  Avenue North. The attached sample lot layout shows how the subdivided parcel might look with two new  lots. It is intended to provide a general idea of where the future property lines would be located. The final  plat may vary slightly from what is depicted. As a corner lot on an arterial street, the south lot would be  subject to greater setback requirements. Enlarging the size of the south lot would allow for the home and  driveway/curb cut to be set back further from 42nd Avenue North and the intersection of Boone and 42nd  avenues. The north lot would be approximately 80 feet wide, similar to most of the single‐family lots in the  area along Boone Avenue North.     If the EDA acquires the property, Hennepin County will be requesting that a 25‐foot by 25‐foot sight triangle  be preserved at the southeast corner of the lot. This would allow for county infrastructure (pedestrian ramps,  sidewalks, and signal system components) to be under public ownership and to be designed to provide ADA  compliant infrastructure with properly spaced accessible pedestrian signal buttons. Hennepin County will  also be requesting a 10‐foot sidewalk and trail easement along 42nd Avenue North to match the existing  drainage and utility easement along that road.    There would be significant costs associated with demolition, tree removal, grading, and the installation of  new utilities, however, the sale of two lots instead of one would help offset some of those expenses. Because  TreeHouse is a nonprofit, there are no property taxes being generated from the property. There is an  assessment that appears on the property tax statement for a previous infrastructure improvement project.  New Hope does not levy special assessments for street infrastructure improvement projects, except in the  case of tax‐exempt parcels. Such properties are assessed for their share of the cost. The outstanding  assessment would be paid by TreeHouse at the time of closing.    Cost & Tax Impact of Improvements   It is anticipated that expenses associated with the project would be approximately $343,975. Revenue from  the sale of the lot is estimated at $150,000, resulting in a net loss of $193,975. The two new homes would result  in a significant increase in the subject parcel’s taxable market value. If the new properties were to be valued at  $850,000 in 2023, it is estimated that total taxes paid to the city in 2024 would increase by $5,100 as compared  to those that were allocated to the city in 2022.    Taxable Market Value 2021,  Payable 2022  Projected Taxable Value 2023,  Payable 2024  Change  $0 $850,000 $850,000          Estimated Taxes Allocated to  City 2021, Payable 2022  Projected Taxes Allocated to  City 2023, Payable 2024  Change  $0 $5,100 $5,100    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:            Request for Action, Page 3      # of Years  (Year)  Additional Taxes   Collected by City  Total Cost/Revenue Return on  Investment  0 (present) $0 $(193,975.00) ‐100.00%  1 (2024) $5,100.00  $(188,875.00) ‐97.37%  5 (2028) $27,076.59  $(166,898.41) ‐86.04%  10 (2033) $58,465.78  $(135,509.22) ‐69.86%  15 (2038) $94,854.46  $(99,120.54) ‐51.10%  20 (2043) $137,038.91  $(56,936.09) ‐29.35%  25 (2048) $185,942.25  $(8,032.75) ‐4.14%  30 (2053) $242,634.62  $48,659.62  25.09%    The estimated ROI for the project over 30 years is 25.09% and the estimated Internal Rate of Return (IRR) for  the project over 30 years is 1.31% (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(s). The city’s scattered site housing policy prioritizes potential lot split projects as they  generally increase the market value of a parcel significantly more than a standard demolition and rebuild  project.  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  4201 Boone Ave N $193,975.00  Total $358,708.00     Annual Budget (2022) $500,000.00  Under/Over Budget +$141,292.00    Recommendation  Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of  4201 Boone Avenue North for a purchase price of $245,000 with traditional closing costs to be paid by each  party.        Request for Action, Page 4    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. 22-___ RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 4201 BOONE AVENUE NORTH (IMPROVEMENT PROJECT NO. ____) 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 4201 Boone Avenue North, New Hope, MN, 55428, P.I.D. 18-118-21-21-0107, and legally described as follows: Lot 3, Block 1, Mennonite Brethern Addition, Hennepin County, Minnesota. (the “Property”) from TreeHouse, Inc., a Minnesota nonprofit corporation (the “Seller”); WHEREAS, City staff believes that the best use of the Property is demolition and performing a minor subdivision to create two separate lots in order to maximize the tax base by making the lots available for the development of two new residential housing units; WHEREAS, a minor subdivision of the Property would be the most efficient method for subdividing the Property into two separate lots and is recommended to the EDA as opposed to a formal re- platting procedure; WHEREAS, a minor subdivision under City Code Section 13-1(g) will not cause the remaining portion of the lot or any structure to be in violation with the New Hope Zoning and Subdivision Code; 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 and apply with Hennepin County for an administrative lot split in order to redevelop the Property into two separate lots 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. It is in the best interest of the EDA to perform an administrative lot split to divide the Property into two separate lots for sale to maximize the redevelopment value to the City. 4. That the purchase of the Property by EDA from Seller, for a sum of $245,000.00, 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. 5. The proposed acquisition of Property and minor subdivision into two separate lots is consistent with the New Hope Comprehensive Plan. 6. The City and EDA shall use due diligence for demolishing the structure located on the Property and conducting any necessary cleanup of the Property and applying for a minor subdivision to pursue redevelopment and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 7. 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 and to perform a minor subdivision of the Property under Section 13- 1(g). Dated the 28th day of February, 2022. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11449 4201 Boone Ave N\Resolution approving purchase of 4201 Boone Ave. N. from TreeHouse, Inc..docx Exhibit A Purchase Agreement See attached. 1 PURCHASE AGREEMENT Date: February ____, 2022 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: TreeHouse, Inc., a Minnesota nonprofit corporation Seller agrees to sell and Buyer agrees to purchase the real property located at: Street Address: 4201 Boone Avenue North City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described on the attached Exhibit A, PID 18-118-21-21-0107. 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. Seller has agreed to sell the Property to Buyer for the sum of Two Hundred Forty Five Thousand and 00/100 Dollars ($245,000.00), 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 June 3, 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. This Purchase Agreement is NOT subject to cancellation of a previously written purchase agreement. 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 convey title by a limited warranty deed, 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 fo rfeiture provisions; (c) reservation of any mineral rights by the State of Minnesota; (d) utility and drainage easements which do not interfere with existing improvements; and (e) all other matters except those that Seller has agreed to remove in response to a title objection by Buyer. 2 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 and installments of special assessments due and payable in the year 2022. Seller shall pay PRORATED TO DAY OF CLOSING real estate taxes and installments of special assessments due and payable in the year 2022. 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 and installments of special assessments 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 or 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. 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. Buyer shall order 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 r eceipt 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 3 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. 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. 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 s hall 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 holida ys 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 ther e 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 d eemed 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 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: BUYER IS NOT RELYING ON ANY REPRESENTATIONS, EXPRESS OR IMPLIED, REGARDING THE CONDITION OF THE PROPERTY AND ITS CONTENTS. 4 Buyer waives all claims against Seller with respect to the condition of the Property and agrees to accept the Property As-Is, with all faults. SUBSURFACE SEWAGE TREATMENT SYSTEM SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING THE PROPERTY. PRIVATE WELL SELLER DOES NOT KNOW OF A WELL ON OR SERVING THE PROPERTY. THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. 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. No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement. 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. 5 ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document related to this transaction constitute valid, binding signatures. FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties and a copy must be delivered. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract for deed. OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on the following: (1) Review and approval of the terms of the Purchase Agreement by the Economic Development Authority in and for the City of New Hope to the terms of the Purchase Agreement If the above 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 Seller is not being displaced from the property as a result of the Purchase Agreement and that Seller 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. 6 Signature Page to Purchase Agreement Seller Buyer TreeHouse, Inc., Economic Development Authority in and for the a Minnesota Nonprofit corporation City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota By:____________________________________ By: Tim Clark Kirk McDonald Its: President and CEO Its: Executive Director Date: February ___, 2022 Date: February ____, 2022 THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. 7 Exhibit A Legal Description Lot 3, Block 1, Mennonite Brethern Addition , Hennepin County, Minnesota. 178.8’178.8’4201 Boone Ave N R-1, Single-family residential 182.3’182.3’100’100’82.3’82.3’100’100’78.8’78.8’Potential Potential HomeHome Potential Potential HomeHome DrivewayDriveway DrivewayDriveway 145.09’145.09’ 145.2145.2 Appraisal Professionals of MN LLC Jayne Preusse Eden Prairie, MN 55344 612-267-5269 12/09/2021 Jeff Alger City of New Hope Community Development 4401 Xylon Avenue N New Hope, MN 55428 Re:Property:4201 Boone Ave N New Hope, MN 55428 Borrower:N/A File No.:AP20645 Opinion of Value: $250,000 Effective Date:12/03/2021 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 4201 Boone Ave N New Hope, MN 55428 LOT 003 BLOCK 001 MENNONITE BRETHERN ADDITION City of New Hope 4401 Xylon Avenue N New Hope, MN 55428 250,000 12/03/2021 Jayne Preusse Appraisal Professionals of MN LLC 7164 Crowne Oak Road 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 City of New Hope AP20645 4201 Boone Ave N New Hope MN 55428 LOT 003 BLOCK 001 MENNONITE BRETHERN ADDITION Hennepin 18-118-21-21-0107 2021 0 2,005 N/A Treehouse Inc 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 7164 Crowne Oak Road, Eden Prairie, MN 55344 95 5 220 315 283 47 76 57 70 3 5 18 Other 4 CR 10 to the north, Winnetka Ave N to the east, 36th 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, City of New Hope only. Under present land use, 4% 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. 182x145x179x145 26,192 sf R1-Single Family Residential - See Attach Adden AMP CB Asphalt Concrete None Yes None Slants upward, levels 26192 sf Rectangular Average N;Res Average Asphalt/Avg Typical X 11/04/2016 27053C0192F Subject is located with a busy street to the front and side, along with a church parking lot to the rear. 1 1 Detached Rambler Existing 76 60 Concrete/Avg Brk/Stuc/Avg Asphalt/Avg Aluminum/Avg DBH/Hge/Avg Thermo/Avg N/A N/A N/A Full/WO None None None None 1,914 91% Finished/Open SR/Wd/Pl/P/Avg Vyl/Cpt/Avg Yes Unkn Unkn Unkn Unkn N/A N/A 1 2 1 1 1 3 1,914 1 1 1 4 1.1 1,200 6 4 1.1 1,200 Cpt/Vyl/Avg SR/Plstr/Pnl/Wd/Avg Wood/Avg Vyl/CT/Avg GB/Insert/Avg Wd/Avg Yes FWA Gas Avg Yes X Avg 1 Aggregate None None None None Shed 8 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 some functional obsolescence. The subject has a kitchenette on the main level and a full kitchen in the basement. The subject exhibits external obsolescence due to the busier streets to the front and to the side. 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 80,000 1,200 80,000 City of New Hope AP20645 Estimated economic life based on 100 total years. The most similar land sales per RMLS include the following: RMLS #4779014 $55,000 and #4780925 $75,000. 4201 Boone Ave N New Hope, MN 55428 N/A RMLS/HennCA Inspection A;BsRd/ChurchP Fee Simple 26,192 sf N;Res Rambler Q5 76 C4 6 4 1.1 1,200 1914sf1742sfwo 91% Average FWA C/Air None None Pt/Shed 1 None Notable Extras 2nd Kitchen 12/03/20221 RMLS/HennCA 8810 42nd Ave N New Hope, MN 55427 0.05 miles W 304,500 271.39 RMLS#6011319/102DOM RMLS/HenneCA ArmLth Conv;7500 0 s11/21;Unk 0 A;BsRd Fee Simple 22651 sf 0 N;Res; Rambler Q5 -30,000 70 C4 -2,000 6 3 1 +2,000 1,122 0 1122sf0sfwu +26,130 0 Average FWA C/Air None 3gd1tu6dw -24,000 None +2,000 None +2,000 None None +4,000 -19,870 Net 6.5 % Gross 30.3 % None 284,630 12/03/20221 RMLS/HennCA 8910 42nd Ave N New Hope, MN 55427 0.09 miles W 280,000 237.29 RMLS#6082510/2DOM RMLS/HenneCA ArmLth FHA;6704 0 s09/21;Unk 0 A;BsRd Fee Simple 19166 sf +4,000 N;Res; Rambler Q5 -25,000 74 0 C4 -2,000 4 2 1 +2,000 1,180 0 1180sf826sfwo +13,740 2rr1br1.0ba1o 0 Average FWA C/Air None 2ga4dw -12,000 Dk/Pt/EnPor -5,000 1 FP None 2nd Kitchen -24,260 Net 8.7 % Gross 22.8 % None 255,740 12/03/20221 RMLS/HennCA 8140 49th Ave N New Hope, MN 55428 0.81 miles NE 220,000 200.00 RMLS#5735920/1DOM RMLS/HenneCA ArmLth Cash;0 0 s04/21;Unk A;BsRd/Sch 0 Fee Simple 9148 sf +12,000 N;Res; Rambler Q5 -20,000 58 C4 5 3 1 +2,000 1,100 0 1100sf700sfwu +15,630 1rr1br1ba1o 0 Average FWA C/Air None 1ga3dw -6,000 None +2,000 None +2,000 None None +4,000 11,630 Net 5.3 % Gross 28.9 % None 231,630 12/03/20221 RMLS/HennCA See attached addendum. 250,000 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. 12/2021 12/03/2021 250,000 Jayne Preusse 12/09/2021 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 4201 Boone Ave N New Hope, MN 55428 N/A RMLS/HennCA Inspection A;BsRd/ChurchP Fee Simple 26,192 sf N;Res Rambler Q5 76 C4 6 4 1.1 1,200 1914sf1742sfwo 91% Average FWA C/Air None None Pt/Shed 1 None Notable Extras 2nd Kitchen 12/03/20221 RMLS/HennCA 4800 Virginia Ave N New Hope, MN 55428 0.71 miles NE 272,000 202.38 RMLS#6102709/13DOM RMLS/HenneCA ArmLth Conv;8160 0 s11/21;Unk 0 N;Res -12,000 Fee Simple 10454 sf +8,000 N;Res; Rambler Q5 -25,000 61 0 C3 -4,000 7 4 1.0 +2,000 1,344 -5,760 1344sf0sfwu +27,130 0 Average FWA C/Air None None EnPor 0 2 FP -2,000 None None +4,000 -7,630 Net 2.8 % Gross 33.0 % None 264,370 12/03/20221 RMLS/HennCA Net % Gross % Net % Gross % 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 City of New Hope AP20645 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 similar to the subject within a one mile radius within the City of New Hope, from the subject property from 12/03/2019-12/02/2020 was $270,000 (data of 47). Whereas, the median sold price of all single family homes similar to the subject from 12/03/2020-12/02/2021 was $292,250 (data of 31). An increase of approximately 7%. 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 southwest 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 State Highway 169 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 and appeal of the neighborhood. The subject is located with the busier street of Boone Ave N and 42nd Ave N to the front/side, with external from the traffic associated. The topography slants slightly upward at the front and side, and then is level to the parcel rear and Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20645 N/A 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. The topography slants slightly upward at the front and side, and then is level to the parcel rear and does allow for a walkout basement. There is an asphalt driveway that is entered from Bonne Ave N. The subject has an asphalt driveway but no garage. There is an aggregate/concrete walkway from the driveway that leads to the front entrance. The subject views detached single family homes on the south side, to the front, to the rear and a church parking lot to the north side. The subject's front door faces 42nd Ave N. The subject parcel is slightly larger in size. The overall location of the subject home is located on the northwest location of the parcel keeping the distance of the busier streets slightly further from the subject home. In short, the subject parcel is observed to be an average site with the external 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 an aggregate patio and shed. The subject home is currently being utilized as a non-profit organization called "Treehouse Inc." It was advised by a representative at the time of the appraisal inspection, that is operated as a religious place for young teens to spend time when there are no other places to go. The location in New Hope started approximately 2003. The subject home is observed to have functional obsolescence due to only having a kitchenette on the main level. The kitchenette consists of a refrigerator, cabinetry and a personal microwave. There is a full kitchen in the basement level. The request for this appraisal report was to appraiser as a single family residential home. The external is observed in the Sales Comparison Grid. The first level consists of a foyer, living room, kitchenette, three bedrooms, and a full bath with a half bath within the full bath. The basement is full, finished and is a walkout. The basement consists of a family room with a recreational room, full bath, two offices, two dens and a utility room. The appraiser manually measured the subject with 1200 GLA. There is no other previous RMLS listings for the subject indicating GLA. The subject's water, electricity and heat were on and working at the time of the appraisal inspection. The AC was not turned on due to outside temperatures. "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 non profit entity, 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: Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20645 N/A 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. 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. There is functional obsolescence due to the first floor only having a kitchenette on the main level. Four sold comparables were utilized for the overall opinion of value. Comparables #1-#4 are observed to be the next most 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, located on the same street and with similar external. All sold comparables are located within the same City of New Hope and 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 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 for main floor bathroom, line item adjustments for lack of the subject having a full kitchen on the main level and line item adjustments for finished basement square feet. All comparables were adjusted $20,000 for quality in the Sales Comparison Grid due to the subject lacking a main level full kitchen. The subject has 1.1 bathrooms on the main level. There were no other similar comparables with 1.1 bathrooms above grade to the subject. Line item adjustments for a half bath were utilized. The subject has superior finished below grade feet in the basement. This is due to the garage was completed into finished basement square feet (time frame unknown), and there were no other similar comparables with the similar finished basement sf to the subject. 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. DOM for the comparables exceed from the market trends indicated on page one of the URAR. The results of the market trends includes all detached single family homes and the indication may differ from the comparable sales market. 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 #4 has no external. SITE/VIEW: Adjustments for site/view were made on the basis of lot value and the availability of public utilities rather than size alone. Comparables #2, #3 and #4 all have slightly smaller parcel sizes 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. Line item adjustments were given for the lack of a full kitchen for the subject to all comparables of $20,000. Additional amounts adjusted were added to superior updates/upgrades of each individual comparable. Comparable #1 is observed to be superior in quality upgrades and condition to the subject per the RMLS description and photos in kitchen and miscellaneous interior remodeling. Comparable #2 is observed to be superior in quality upgrades/updates and condition to the subject per the RMLS description and photos in kitchen upgrades/updates. Comparable #4 is observed to be in quality upgrades/updates and condition to the subject per the RMLS description and photos in kitchen and miscellaneous interior updates. ROOM COUNT/PROPERTY FEATURES: Adjustment were made based on the price-point of the residence and on the appraiser's experience Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20645 N/A 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. 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 - 15.00 (smaller amount was due to the overall basement interior finishes and condition) 1,000 Walk-out 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 is not disclosed due to the subject being operated as a non-profit entity. 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 Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP20645 N/A 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. 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 AP20645 N/A 4201 Boone 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 4201 Boone 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 4201 Boone Ave N N/A 1,200 6 4 1.1 A;BsRd/ChurchP N;Res 26,192 sf Q5 76 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Living Kitchenette Foyer Bedroom 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Bedroom Shower in Full Bath Half Bath Bedroom Basement Den Basement Den 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Basement Family Basement Walk-out Basement Office Basement Recreation Basement Kitchen 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Basement Bath Basement Office Subject Rear Subject Side Subject Side Aggregate Patio 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Shed Church Parking Lot to the rear Boone Ave/42nd Ave Intersection at Front Boone Ave/42nd Ave Intersection at Front 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 4201 Boone 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 8810 42nd Ave N 0.05 miles W 304,500 1,122 6 3 1 A;BsRd N;Res; 22651 sf Q5 70 Comparable 2 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 8910 42nd Ave N 0.09 miles W 280,000 1,180 4 2 1 A;BsRd N;Res; 19166 sf Q5 74 Comparable 3 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 8140 49th Ave N 0.81 miles NE 220,000 1,100 5 3 1 A;BsRd/Sch N;Res; 9148 sf Q5 58 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 4201 Boone 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 4800 Virginia Ave N 0.71 miles NE 272,000 1,344 7 4 1.0 N;Res N;Res; 10454 sf Q5 61 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client 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 4201 Boone 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 4201 Boone 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 4201 Boone Ave N New Hope Hennepin MN 55428 City of New Hope Borrower Lender/Client Property Address City County State Zip Code City of New Hope AP20645 N/A 4201 Boone 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 12/09/2021 20559939 MN 08/31/2023 12/03/2021 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 4201 Boone Ave N EXPENSES AMOUNT Acquisition (245,000.00)$ 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)(75,000.00)$ Real estate taxes -$ Lawn services (estimated)(2,000.00)$ Utility billing (estimated)(300.00)$ Planning (lot split, estimated)(1,000.00)$ Engineering (lot split, utilities, estimated)(8,000.00)$ Park dedication fee (3,000.00)$ Public hearing notice (estimated)(150.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(2,000.00)$ TOTAL (343,975.00)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)150,000.00$ TOTAL 150,000.00$ TOTAL COST/REVENUE (193,975.00)$ Taxable Market Value 2021, Payable 2022 Projected Taxable Value 2023, Payable 2024 Change Percent Change -$ $850,000 850,000.00$ N/A Estimated Taxes Allocated to City 2021, Payable 2022 Projected Taxes Allocated to City 2023, Payable 2024 Change Percent Change -$ 5,100.00$ 5,100.00$ N/A Projected Project Expenses (343,975.00)$ Lot Sale Revenue 150,000.00$ Total Cost/Revenue (193,975.00)$ # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)-$ (193,975.00)$ -100.00% 1 (payable 2024)5,100.00$ (188,875.00)$ -97.37% 2 (payable 2025)10,353.00$ (183,622.00)$ -94.66% 3 (payable 2026)15,763.59$ (178,211.41)$ -91.87% 4 (payable 2027)21,336.50$ (172,638.50)$ -89.00% 5 (payable 2028)27,076.59$ (166,898.41)$ -86.04% 10 (payable 2033)58,465.78$ (135,509.22)$ -69.86% 15 (payable 2038)94,854.46$ (99,120.54)$ -51.10% 20 (payable 2043)137,038.91$ (56,936.09)$ -29.35% 25 (payable 2048)185,942.25$ (8,032.75)$ -4.14% 30 (payable 2053)242,634.62$ 48,659.62$ 25.09% *Based on two new homes valued at a combined $850,000 Estimated Tax Impact of Improvements at 4201 Boone Ave N Estimated Return on Investment for 4201 Boone Ave N Description Taxable Market Value Change Cash Flow Investment -$ (193,975.00)$ Return, Year 1 850,000.00$ 5,100.00$ Return, Year 2 875,500.00$ 5,253.00$ Return, Year 3 901,765.00$ 5,410.59$ Return, Year 4 928,817.95$ 5,572.91$ Return, Year 5 956,682.49$ 5,740.09$ Return, Year 6 985,382.96$ 5,912.30$ Return, Year 7 1,014,944.45$ 6,089.67$ Return, Year 8 1,045,392.79$ 6,272.36$ Return, Year 9 1,076,754.57$ 6,460.53$ Return, Year 10 1,109,057.21$ 6,654.34$ Return, Year 11 1,142,328.92$ 6,853.97$ Return, Year 12 1,176,598.79$ 7,059.59$ Return, Year 13 1,211,896.75$ 7,271.38$ Return, Year 14 1,248,253.66$ 7,489.52$ Return, Year 15 1,285,701.27$ 7,714.21$ Return, Year 16 1,324,272.30$ 7,945.63$ Return, Year 17 1,364,000.47$ 8,184.00$ Return, Year 18 1,404,920.49$ 8,429.52$ Return, Year 19 1,447,068.10$ 8,682.41$ Return, Year 20 1,490,480.15$ 8,942.88$ Return, Year 21 1,535,194.55$ 9,211.17$ Return, Year 22 1,581,250.39$ 9,487.50$ Return, Year 23 1,628,687.90$ 9,772.13$ Return, Year 24 1,677,548.53$ 10,065.29$ Return, Year 25 1,727,874.99$ 10,367.25$ Return, Year 26 1,779,711.24$ 10,678.27$ Return, Year 27 1,833,102.58$ 10,998.62$ Return, Year 28 1,888,095.65$ 11,328.57$ Return, Year 29 1,944,738.52$ 11,668.43$ Return, Year 30 2,003,080.68$ 12,018.48$ Total Returns 242,634.62$ Investment Cost 343,975.00$ Selling Price 150,000.00$ Return on Investment 25.09% Description Amount Investment (193,975.00)$ Return, Year 1 5,100.00$ Return, Year 2 5,253.00$ Return, Year 3 5,410.59$ Return, Year 4 5,572.91$ Return, Year 5 5,740.09$ Return, Year 6 5,912.30$ Return, Year 7 6,089.67$ Return, Year 8 6,272.36$ Return, Year 9 6,460.53$ Return, Year 10 6,654.34$ Return, Year 11 6,853.97$ Return, Year 12 7,059.59$ Return, Year 13 7,271.38$ Return, Year 14 7,489.52$ Return, Year 15 7,714.21$ Return, Year 16 7,945.63$ Return, Year 17 8,184.00$ Return, Year 18 8,429.52$ Return, Year 19 8,682.41$ Return, Year 20 8,942.88$ Return, Year 21 9,211.17$ Return, Year 22 9,487.50$ Return, Year 23 9,772.13$ Return, Year 24 10,065.29$ Return, Year 25 10,367.25$ Return, Year 26 10,678.27$ Return, Year 27 10,998.62$ Return, Year 28 11,328.57$ Return, Year 29 11,668.43$ Return, Year 30 12,018.48$ Total Returns 242,634.62$ Internal Rate of Return 1.31% Estimated Internal Rate of Return for 4201 Boone 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 -$ 850,000.00$ 850,000.00$ 5,100.00$ 2 -$ 875,500.00$ 875,500.00$ 5,253.00$ 3 -$ 901,765.00$ 901,765.00$ 5,410.59$ 4 -$ 928,817.95$ 928,817.95$ 5,572.91$ 5 -$ 956,682.49$ 956,682.49$ 5,740.09$ 6 -$ 985,382.96$ 985,382.96$ 5,912.30$ 7 -$ 1,014,944.45$ 1,014,944.45$ 6,089.67$ 8 -$ 1,045,392.79$ 1,045,392.79$ 6,272.36$ 9 -$ 1,076,754.57$ 1,076,754.57$ 6,460.53$ 10 -$ 1,109,057.21$ 1,109,057.21$ 6,654.34$ 11 -$ 1,142,328.92$ 1,142,328.92$ 6,853.97$ 12 -$ 1,176,598.79$ 1,176,598.79$ 7,059.59$ 13 -$ 1,211,896.75$ 1,211,896.75$ 7,271.38$ 14 -$ 1,248,253.66$ 1,248,253.66$ 7,489.52$ 15 -$ 1,285,701.27$ 1,285,701.27$ 7,714.21$ 16 -$ 1,324,272.30$ 1,324,272.30$ 7,945.63$ 17 -$ 1,364,000.47$ 1,364,000.47$ 8,184.00$ 18 -$ 1,404,920.49$ 1,404,920.49$ 8,429.52$ 19 -$ 1,447,068.10$ 1,447,068.10$ 8,682.41$ 20 -$ 1,490,480.15$ 1,490,480.15$ 8,942.88$ 21 -$ 1,535,194.55$ 1,535,194.55$ 9,211.17$ 22 -$ 1,581,250.39$ 1,581,250.39$ 9,487.50$ 23 -$ 1,628,687.90$ 1,628,687.90$ 9,772.13$ 24 -$ 1,677,548.53$ 1,677,548.53$ 10,065.29$ 25 -$ 1,727,874.99$ 1,727,874.99$ 10,367.25$ 26 -$ 1,779,711.24$ 1,779,711.24$ 10,678.27$ 27 -$ 1,833,102.58$ 1,833,102.58$ 10,998.62$ 28 -$ 1,888,095.65$ 1,888,095.65$ 11,328.57$ 29 -$ 1,944,738.52$ 1,944,738.52$ 11,668.43$ 30 -$ 2,003,080.68$ 2,003,080.68$ 12,018.48$ 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 4201 Boone Ave N Comparison of Costs & Tax Impact for Recent Projects Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020) 4201 Boone Avenue North 5306 Rhode Island Avenue North 4215 Nevada Avenue North 5213 Pennsylvania Avenue North 4637 Aquila Avenue North 4215 Louisiana Avenue North Number of Units 2 1 1 1 1 1 Project Description Demolition, lot split & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Year Acquired TBD 2022 TBD 2021 2021 2020 Projected or Actual Projected (at time of offer) Projected (at time of 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 ($343,975.00) ($244,733.00) ($237,301.00) ($205,172.18) ($127,292.01) ($170,441.53) Revenue $150,000.00 $80,000.00 $78,000.00 $72,000.00 $81,000.00 $69,000.00 Total Cost/Revenue ($193,975.00) ($164,733.00) ($159,301.00) ($133,172.18) ($46,292.01) ($101,441.53) Estimated Taxable Value of New Home(s) $850,000.00 $470,000.00 $430,000.00 $485,000.00 $445,000.00 $380,000.00 *Additional Taxes Collected by City - 1 year $5,100.00 $1,596.00 $1,656.00 $1,902.00 $1,254.00 $786.00 *Additional Taxes Collected by City - 30 years $242,634.62 $75,930.36 $78,784.89 $90,488.44 $59,659.57 $37,394.28 *Return On Investment - 30 years 25.09% -53.91% -50.54% -32.05% 28.88% -63.14% *Internal Rate of Return - 30 years 1.31% -3.98% -3.64% -2.08% 1.49% -5.01% *Assumed 3% tax value growth rate I:\RFA\COMM DEV\2022\EDA\5802 Boone Ave N\EDA5 Q ‐ 5802 Boone Ave N Acquisition 02‐28‐22.docx    Request for Action  February 28, 2022    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 authorizing the acquisition of 5802 Boone Avenue North by the Economic Development Authority  through bidding at Sheriff’s Mortgage Foreclosure Sale (improvement project no. 1088)  Requested Action  Staff requests that the Economic Development Authority authorize the city to bid up to $160,445.65 on the  property at 5802 Boone Avenue North at an upcoming Hennepin County Sheriff’s Sale.  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 distressed property at 5802 Boone Avenue North is being foreclosed on and will be  made available through an open bidding process at a sheriff’s sale on March 21, 2022. The two‐story  farmhouse is one of the oldest homes in New Hope and is in a state of disrepair, having been posted as  uninhabitable by the building official in March of 2021. No improvements have been made since that time. In  January of 2022 the city boarded up the property after getting consent from the owners. The building official  who inspected the house in 2021 stated that it is an ideal candidate for a demolition and rebuild project as the  scope of work required to make it habitable again is extensive. The 2021 assessed value of the property is  $213,000 according to Hennepin County. An appraisal of the property could not be completed as it is still  privately owned. The 0.33‐acre parcel is zoned R‐1, Single‐family Residential. The corner lot is approximately  94 feet wide along Boone Avenue North (west) and 138 feet wide along Boone Place (north). There is an  existing curb cut and two‐stall garage off Boone Avenue North. If the property were to be redeveloped by the  city, the curb cut off Boone Avenue North would be eliminated and the front of the house would face Boone  Place, which is a cul‐de‐sac. The property abuts single‐family properties in all directions.    The EDA has an opportunity to bid on the property through an upcoming sheriff’s sale. Per the city attorney,  the lender typically bids in its debt at the sheriff’s sale. If there are other bidders, they will bid and must  provide cash or certified funds at the sale. The highest bidder wins. Acquiring the title at the sheriff’s sale  allows the purchaser to take the foreclosed mortgage free and clear of any liens which are junior to the  foreclosed mortgage. The highest bidder at the sale acquires ownership of the mortgage property, subject to:  (i) existing reservations, restrictions, and easements of record, if any; (ii) any prior liens (including any  unpaid real estate taxes and assessments, which are always first priority liens); (iii) the owner’s redemption  rights; and (iv) the redemption rights of junior lienholders who timely file a notice of intention to redeem. It is  possible that junior liens might be recorded against the property, either before the sheriff’s sale or before the  Agenda Section EDA Item Number  5    Request for Action, Page 2    end of the redemption period. The purpose would be that an investor wants to redeem from a junior lien.  Staff believes this is unlikely to happen as there is little equity due to the condition of the property. The  lender, the holder of the Sheriff’s Certificate of Sale, or the municipality (i.e. city) can file a Summons and  Complaint to reduce the redemption period to five weeks because the property is abandoned. This requires a  court action (motion). If the owner does not redeem during the owner’s redemption period, then the  foreclosing creditor (or the holder of the Sheriff’s Certificate) becomes the fee owner of the foreclosed  property: (i) free and clear of the foreclosed mortgage; (ii) free and clear of any interest of the mortgagor; and  (iii) subject to any prior mortgages or liens.    If the EDA is supportive of submitting a bid for the property at the sheriff’s sale, staff is recommending that it  authorize submitting a bid up to $160,445.65, which is $1 more than the outstanding amount owed on the  mortgage. On the day of the sheriff’s sale, the lender will set an opening bid price. The EDA (or any other  entity) can submit a bid for at least $1 more than the opening bid price. It is unlikely that the lender will bid  on the property after setting the opening bid price. City staff could then bid $1 more than the opening bid  price and continue to bid up to the maximum bid of $160,445.65. Ideally, the opening bid will be significantly  less than the mortgage amount and the city will be the only other entity bidding on the property, in which  case the cost to acquire the property will decrease.    Cost & Tax Impact of Improvements   Because of the nature of the bidding process, the potential acquisition price is unknown. Staff has prepared a  budget and tax impact calculations based on acquiring the property for the maximum proposed bid price of  $160,445.65. At this price, it is anticipated that expenses associated with the project would be approximately  $209,008. Revenue from the sale of the lot is estimated at $80,000, resulting in a net loss of $129,008. The new  home would result in a significant increase in the subject parcel’s taxable market value. If the new property  were to be valued at $480,000 in 2023, it is estimated that total taxes paid to the city in 2024 would increase by  $1,602 as compared to those that were allocated to the city in 2022.    Taxable Market Value 2021,  Payable 2022  Projected Taxable Value 2023,  Payable 2024  Change  $213,000 $480,000 $267,000          Estimated Taxes Allocated to  City 2021, Payable 2022  Projected Taxes Allocated to  City 2023, Payable 2024  Change  $1,278 $2,880 $1,602    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 $(129,008.00) ‐100.00%  1 (2024) $1,602.00  $(127,406.00) ‐98.76%  5 (2028) $8,505.24  $(120,502.76) ‐93.41%  10 (2033) $18,365.13  $(110,642.87) ‐85.76%  15 (2038) $29,795.46  $(99,212.54) ‐76.90%    Request for Action, Page 3    # of Years  (Year)  Additional Taxes   Collected by City  Total Cost/Revenue Return on  Investment  20 (2043) $43,046.34  $(85,961.66) ‐66.63%  25 (2048) $58,407.74  $(70,600.26) ‐54.73%  30 (2053) $76,215.82  $(52,792.18) ‐40.92%    The estimated ROI for the project over 30 years is ‐40.92% and the estimated Internal Rate of Return (IRR) for  the project over 30 years is ‐2.78% (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(s).  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  4201 Boone Ave N $193,975.00  5802 Boone Ave N $129,008.00  Total $490,516.00     Annual Budget (2022) $500,000.00  Under/Over Budget +$9,484.00    Recommendation  Staff requests that the Economic Development Authority authorize the city to bid up to $160,445.65 on the  property at 5802 Boone Avenue North at an upcoming Hennepin County Sheriff’s Sale.  Attachments   Resolution   Sample Lot Layout   Photos   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. 22-___ RESOLUTION AUTHORIZING THE ACQUISITION OF 5802 BOONE AVENUE NORTH BY THE ECONOMIC DEVELOPMENT AUTHORITY THROUGH BIDDING AT SHERIFF’S MORTGAGE FORECLOSURE SALE (IMPROVEMENT PROJECT NO. 1088) 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, functionally obsolete single family homes for potential purchase by the EDA as part of the City’s scattered site housing program; WHEREAS, City staff have identified the opportunity to acquire certain real property located at 5802 Boone Avenue North, New Hope, MN and legally described as: That part of Lot 1, lying South of the following described line: Commencing at a point on the Westerly line of said Lot 1, distant 219.75 feet Northeasterly from the Southwest corner of said Lot 1, thence Easterly to a point on the East line of said Lot 1, distant 246.23 feet North of the Southeast corner of said Lot 1, and there terminating, except that part of said Lot lying South of a line drawn parallel to the Southerly line of said lot from a point on the Westerly line of said lot distant 125 feet Northerly of the Southwesterly corner of said lot and extending Easterly to the Easterly line of said Lot, Block 2, Meadow Lake Terrace, Hennepin County, Minnesota (the “Property”); WHEREAS, the owners of the Property, Richard R. Rosen and Laurelyn D. Rosen vacated the Property in 2021 as it had fallen into severe disrepair and deterioration and lacked heating and water services, and the City posted it as uninhabitable; WHEREAS, the adult son of the Owners thereafter vacated the Property in January, 2022, and the City boarded up and secured the Property on an emergency basis pursuant to Section 3 -34(c )(3) and re-posted it as uninhabitable to protect the health and safety of the community; WHEREAS, a Notice of Mortgage Foreclosure Sale has been recorded on the Property scheduling a Sheriff’s Sale for March 21, 2022 at 10:00 a.m. at Hennepin County Sheriff’s Office – Civil Unit (“Sheriff’s Sale”); WHEREAS, the current amount claimed to be due on the mortgage being foreclosed is $160,444.65; WHEREAS, City staff is seeking authority for the EDA to bid on the Property at the Sheriff’s Sale for an amount not to exceed $160,445.65 to enable the EDA to acquire the Property; WHEREAS, if the EDA is the high bidder at the Sheriff’s Sale and obtains the Sheriff’s Certificate of Sale, the City Attorney is recommending an action to reduce the redemption period to five (5) weeks under Minnesota Statutes in light of its unoccupied status; 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 initially acquired using EDA funds; WHEREAS, it is in the best interest of the City and EDA to acquire the Property through bidding at the Sheriff’s Sale, in order to redevelop the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval for the EDA to acquire the Property through bidding at the mortgage foreclosure sale, and the authority to commence an action to reduce the redemption period to 5 weeks. 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 and the City to acquire the Property for redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the acquisition of the Property by the EDA through being the high bidder at the Sheriff’s Sale, for a sum of up to $160,445.65 is approved. 4. The EDA may commence an action to reduce the redemption period to 5 weeks if it successfully obtains the Sheriff’s Certificate of Sale. 5. The City and EDA shall use due diligence for correcting the Property’s blighted condition and conducting any necessary environmental cleanup of the Property to pursue this redevelopment purpose and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 6. The Mayor and City Manager of the City and the President and Executive Director of the EDA through the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to obtain the Property at the Sheriff’s Sale. Dated the 28th day of February, 2022. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11446 5802 Boone Ave N\Resolution Approving Acquisition of 5802 Boone Ave N.docx 5802 Boone Ave N R-1, Single-family residential Potential Potential HomeHome 137.89’137.89’ DrivewayDriveway 94’94’132’132’~132’~132’ 5802 Boone Avenue North Budget for 5802 Boone Ave N EXPENSES AMOUNT Acquisition (160,446.00)$ Closing costs for purchase (estimated)(200.00)$ Legal costs for purchase (estimated)(4,000.00)$ Outstanding utility charges (estimated)(1,800.00)$ Demolition survey (650.00)$ Demolition and site prep (estimated)(35,000.00)$ Real estate taxes (estimated at 6 months)(1,562.00)$ Lawn services (estimated)(1,400.00)$ Utility billing (estimated)(300.00)$ Public hearing notice (estimated)(150.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(2,000.00)$ TOTAL (209,008.00)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)80,000.00$ TOTAL 80,000.00$ TOTAL COST/REVENUE (129,008.00)$ Taxable Market Value 2021, Payable 2022 Projected Taxable Value 2023, Payable 2024 Change Percent Change 213,000.00$ 480,000.00$ 267,000.00$ 125.35% Estimated Taxes Allocated to City 2021, Payable 2022 Projected Taxes Allocated to City 2023, Payable 2024 Change Percent Change 1,278.00$ 2,880.00$ 1,602.00$ 125.35% Projected Project Expenses (209,008.00)$ Lot Sale Revenue 80,000.00$ Total Cost/Revenue (129,008.00)$ # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (present)-$ (129,008.00)$ -100.00% 1 (payable 2024)1,602.00$ (127,406.00)$ -98.76% 2 (payable 2025)3,252.06$ (125,755.94)$ -97.48% 3 (payable 2026)4,951.62$ (124,056.38)$ -96.16% 4 (payable 2027)6,702.17$ (122,305.83)$ -94.80% 5 (payable 2028)8,505.24$ (120,502.76)$ -93.41% 10 (payable 2033)18,365.13$ (110,642.87)$ -85.76% 15 (payable 2038)29,795.46$ (99,212.54)$ -76.90% 20 (payable 2043)43,046.34$ (85,961.66)$ -66.63% 25 (payable 2048)58,407.74$ (70,600.26)$ -54.73% 30 (payable 2053)76,215.82$ (52,792.18)$ -40.92% *Based on new home valued at a combined $480,000 Estimated Tax Impact of Improvements at 5802 Boone Ave N Estimated Return on Investment for 5802 Boone Ave N Description Taxable Market Value Change Cash Flow Investment -$ (129,008.00)$ Return, Year 1 267,000.00$ 1,602.00$ Return, Year 2 275,010.00$ 1,650.06$ Return, Year 3 283,260.30$ 1,699.56$ Return, Year 4 291,758.11$ 1,750.55$ Return, Year 5 300,510.85$ 1,803.07$ Return, Year 6 309,526.18$ 1,857.16$ Return, Year 7 318,811.96$ 1,912.87$ Return, Year 8 328,376.32$ 1,970.26$ Return, Year 9 338,227.61$ 2,029.37$ Return, Year 10 348,374.44$ 2,090.25$ Return, Year 11 358,825.67$ 2,152.95$ Return, Year 12 369,590.44$ 2,217.54$ Return, Year 13 380,678.16$ 2,284.07$ Return, Year 14 392,098.50$ 2,352.59$ Return, Year 15 403,861.46$ 2,423.17$ Return, Year 16 415,977.30$ 2,495.86$ Return, Year 17 428,456.62$ 2,570.74$ Return, Year 18 441,310.32$ 2,647.86$ Return, Year 19 454,549.63$ 2,727.30$ Return, Year 20 468,186.12$ 2,809.12$ Return, Year 21 482,231.70$ 2,893.39$ Return, Year 22 496,698.65$ 2,980.19$ Return, Year 23 511,599.61$ 3,069.60$ Return, Year 24 526,947.60$ 3,161.69$ Return, Year 25 542,756.03$ 3,256.54$ Return, Year 26 559,038.71$ 3,354.23$ Return, Year 27 575,809.87$ 3,454.86$ Return, Year 28 593,084.16$ 3,558.50$ Return, Year 29 610,876.69$ 3,665.26$ Return, Year 30 629,202.99$ 3,775.22$ Total Returns 76,215.82$ Investment Cost 209,008.00$ Selling Price 80,000.00$ Return on Investment -40.92% Description Amount Investment (129,008.00)$ Return, Year 1 1,602.00$ Return, Year 2 1,650.06$ Return, Year 3 1,699.56$ Return, Year 4 1,750.55$ Return, Year 5 1,803.07$ Return, Year 6 1,857.16$ Return, Year 7 1,912.87$ Return, Year 8 1,970.26$ Return, Year 9 2,029.37$ Return, Year 10 2,090.25$ Return, Year 11 2,152.95$ Return, Year 12 2,217.54$ Return, Year 13 2,284.07$ Return, Year 14 2,352.59$ Return, Year 15 2,423.17$ Return, Year 16 2,495.86$ Return, Year 17 2,570.74$ Return, Year 18 2,647.86$ Return, Year 19 2,727.30$ Return, Year 20 2,809.12$ Return, Year 21 2,893.39$ Return, Year 22 2,980.19$ Return, Year 23 3,069.60$ Return, Year 24 3,161.69$ Return, Year 25 3,256.54$ Return, Year 26 3,354.23$ Return, Year 27 3,454.86$ Return, Year 28 3,558.50$ Return, Year 29 3,665.26$ Return, Year 30 3,775.22$ Total Returns 76,215.82$ Internal Rate of Return -2.78% Estimated Internal Rate of Return for 5802 Boone 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 1 213,000.00$ 480,000.00$ 267,000.00$ 1,602.00$ 2 219,390.00$ 494,400.00$ 275,010.00$ 1,650.06$ 3 225,971.70$ 509,232.00$ 283,260.30$ 1,699.56$ 4 232,750.85$ 524,508.96$ 291,758.11$ 1,750.55$ 5 239,733.38$ 540,244.23$ 300,510.85$ 1,803.07$ 6 246,925.38$ 556,451.56$ 309,526.18$ 1,857.16$ 7 254,333.14$ 573,145.10$ 318,811.96$ 1,912.87$ 8 261,963.13$ 590,339.46$ 328,376.32$ 1,970.26$ 9 269,822.03$ 608,049.64$ 338,227.61$ 2,029.37$ 10 277,916.69$ 626,291.13$ 348,374.44$ 2,090.25$ 11 286,254.19$ 645,079.86$ 358,825.67$ 2,152.95$ 12 294,841.81$ 664,432.26$ 369,590.44$ 2,217.54$ 13 303,687.07$ 684,365.23$ 380,678.16$ 2,284.07$ 14 312,797.68$ 704,896.18$ 392,098.50$ 2,352.59$ 15 322,181.61$ 726,043.07$ 403,861.46$ 2,423.17$ 16 331,847.06$ 747,824.36$ 415,977.30$ 2,495.86$ 17 341,802.47$ 770,259.09$ 428,456.62$ 2,570.74$ 18 352,056.55$ 793,366.86$ 441,310.32$ 2,647.86$ 19 362,618.24$ 817,167.87$ 454,549.63$ 2,727.30$ 20 373,496.79$ 841,682.91$ 468,186.12$ 2,809.12$ 21 384,701.69$ 866,933.39$ 482,231.70$ 2,893.39$ 22 396,242.74$ 892,941.39$ 496,698.65$ 2,980.19$ 23 408,130.03$ 919,729.64$ 511,599.61$ 3,069.60$ 24 420,373.93$ 947,321.53$ 526,947.60$ 3,161.69$ 25 432,985.14$ 975,741.17$ 542,756.03$ 3,256.54$ 26 445,974.70$ 1,005,013.41$ 559,038.71$ 3,354.23$ 27 459,353.94$ 1,035,163.81$ 575,809.87$ 3,454.86$ 28 473,134.56$ 1,066,218.72$ 593,084.16$ 3,558.50$ 29 487,328.59$ 1,098,205.28$ 610,876.69$ 3,665.26$ 30 501,948.45$ 1,131,151.44$ 629,202.99$ 3,775.22$ 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 5802 Boone Ave N Comparison of Costs & Tax Impact for Recent Projects Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020) 5802 Boone Avenue North 5306 Rhode Island Avenue North 4215 Nevada 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 2022 TBD 2021 2021 2020 Projected or Actual Projected (at time of offer) Projected (at time of 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 ($209,008.00)($244,733.00) ($237,301.00) ($205,172.18) ($127,292.01) ($170,441.53) Revenue $80,000.00 $80,000.00 $78,000.00 $72,000.00 $81,000.00 $69,000.00 Total Cost/Revenue ($129,008.00)($164,733.00) ($159,301.00) ($133,172.18) ($46,292.01) ($101,441.53) Estimated Taxable Value of New Home(s) $480,000.00 $470,000.00 $430,000.00 $485,000.00 $445,000.00 $380,000.00 *Additional Taxes Collected by City - 1 year $1,602.00 $1,596.00 $1,656.00 $1,902.00 $1,254.00 $786.00 *Additional Taxes Collected by City - 30 years $76,215.82 $75,930.36 $78,784.89 $90,488.44 $59,659.57 $37,394.28 *Return On Investment - 30 years -40.92%-53.91%-50.54%-32.05%28.88% -63.14% *Internal Rate of Return - 30 years -2.78%-3.98%-3.64%-2.08%1.49% -5.01% *Assumed 3% tax value growth rate I:\RFA\COMM DEV\2022\EDA\5306 Rhode Island Ave N\EDA6 Q ‐ 5306 Rhode Island Ave N Demolition Contract 02‐28‐22.docx    Request for Action  February 28, 2022    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 contract with Nitti Rolloff Services Inc for hazardous material abatement, tree removal,  demolition of site improvements, well sealing, site grading, and installation of utility improvements at 5306  Rhode Island Avenue North (Improvement Project No. 1080)  Requested Action  Staff requests approval of a resolution awarding a contract for hazardous material abatement, tree  removal, demolition of building and site improvements, well sealing, site grading, sewer lining, and  water service valve replacement at 5306 Rhode Island Avenue North, to the low and responsible bidder,  Nitti Rolloff Services Inc, in the amount of $29,700.  Policy/Past Practice  It is a past practice of staff to present contracts to the Economic Development Authority for consideration  when public bidding is required for scattered site housing projects.  Background  The Economic Development Authority (EDA) acquired the property located at 5306 Rhode Island Avenue  North for $213,000 in January of 2022, as part of the city’s scattered site housing program. The property is  located in a priority redevelopment neighborhood. The EDA directed staff to take the necessary steps in  preparing the building for demolition in order to facilitate redevelopment of the property. This contract  award includes hazardous material abatement, tree removal, demolition of building and site improvements,  well sealing, site grading, sewer lining, and water service valve replacement at the property. Staff requested  quotes from five contractors, who submitted the following bids:   Nitti Rolloff Services Inc  $29,700   Kevitt Excavating, LLC  $40,425   JACON LLC    $41,800   Leadens Excavating Inc  Did not submit   Lloydʹs Construction Services Inc Did not submit    The EDA has worked with the low bidder, Nitti Rolloff Services, Inc, on seven previous scattered site housing  demolition projects. The contractor most recently completed the demolition work at 5213 Pennsylvania  Avenue North in 2021. Staff had a good experience working with the contractor and has no concerns with  awarding them the contract.  Funding  Funding is available in the EDA budget for the demolition contract.        Agenda Section EDA Item Number  6    Request for Action, Page 2    Recommendation  Staff recommends approval of a resolution awarding a contract for hazardous material abatement, tree  removal, demolition of site improvements, well sealing, site grading, and installation of utility improvements  at 5306 Rhode Island Avenue North to Nitti Rolloff Services Inc in the amount of $29,700.  Attachments   Resolution   Bids   Request For Quote/Project Specifications    EDA RESOLUTION NO. 22-___ RESOLUTION APPROVING CONTRACT WITH NITTI ROLLOFF SERVICES INC FOR HAZARDOUS MATERIAL ABATEMENT, TREE REMOVAL, DEMOLITION OF SITE IMPROVEMENTS, WELL SEALING, SITE GRADING, AND INSTALLATION OF UTILITY IMPROVEMENTS AT 5306 RHODE ISLAND AVENUE NORTH (IMPROVEMENT PROJECT NO. _____) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Economic Development Authority in and for the City of New Hope (“EDA”) purchased that certain real property located at 5306 Rhode Island Avenue North, New Hope, MN (the “Property”) with the intention of redeveloping the Property; and WHEREAS, City staff intends to redevelop the Property in accordance with the City’s scattered site housing program and policy and return the Property to the tax rolls for the benefit of all taxing jurisdictions; and WHEREAS, City staff is exercising due diligence to correct the Property’s blighted condition by performing hazardous material abatement at the Property to be followed by the tree removal, demolition of all buildings on the Property, well sealing, site grading, and installation of utility improvements at the Property (“Work”); and WHEREAS, Nitti Rolloff Services Inc submitted a proposal for the Work that meets all of the Project Specifications and is the low bid; and WHEREAS, it is in the best interests of the EDA to enter into a contract with Nitti Rolloff Services Inc for the purpose of performing the Work; and WHEREAS, City staff is hereby seeking approval from the EDA of the selection of Nitti Rolloff Services Inc as the duly qualified contractor to perform the Work. 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 selection of Nitti Rolloff Services Inc as the Contractor to perform the hazardous material abatement at the Property to be followed by the tree removal, demolition of all buildings on the Property, well sealing, site grading, and installation of utility improvements at the Property pursuant to the Project Specifications is approved, it being in the best interest of the EDA and City to prepare the Property for redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the payment of $29,700.00 to Nitti Rolloff Services Inc to perform the Work is hereby approved. 4. The President, Executive Director, and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete demolition of all buildings on the Property, well sealing, site grading, and installation of utility improvements at the Property in accordance with the contract to be prepared by the City Attorney. Dated the 28th day of February, 2022. ____________________________________ 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 Demolition contract for 5306 Rhode Island Ave N.docx City of New Hope, Minnesota Request For Quote/Project Specifications Date: February 1, 2022 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for quotes for hazardous material abatement, tree removal, demolition, well sealing, sewer lining, and water service valve replacement at 5306 Rhode Island Avenue North. Overview: The city of New Hope EDA owns the property located at 5306 Rhode Island Avenue North, New Hope, MN 55428 (PID 08-118-21-22-0037). The EDA is requesting quotes for the removal of hazardous material, tree removal, and the demolition of all building and site improvements at this location followed by sealing of the well on-site, installation of utility improvements, and re-grading of the primary excavation area. If you are interested in submitting a quote for this project, please review the enclosed specifications and inspect the site. To gain entry into the home, use the lock box on the back entrance door using the code 4401. Please call Jeff Alger in the Community Development Department with any questions at 763-531-5119. Submission: Interested bidders must submit enclosed Bid Form by U.S. Mail, e-mail, or in person. Bids shall be submitted to Jeff Alger, Community Development Specialist. City of New Hope Community Development Department Attention: Jeff Alger 4401 Xylon Avenue North New Hope, MN 55428 jalger@newhopemn.gov Deadline: Proposals must be submitted using the enclosed bid form and received no later than February 18, 2022, at 1:00 p.m. City staff will review the submitted proposals and make a recommendation to the EDA. It is anticipated that the EDA will award the bid at the February 28, 2022, meeting. The work shall be completed in full no later than 90 days after the contract has been awarded. City of New Hope, Minnesota Bid Form Property Owner: City of New Hope Economic Development Authority (EDA) Property Address: 5306 Rhode Island Avenue North, New Hope, MN 55428 Property Identification Number: 08-118-21-22-0037 For a price of $_______________________, the contractor named below proposes to fully complete the work in accordance with the attached specifications for hazardous material abatement, disposal of items throughout yard and within buildings, tree removal, demolition of all building and site improvements, well sealing, utility improvements, and re-grading of the primary excavation area. Contractor Name: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Contractor Name & Title: _______________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota Specifications For Demolition & Related Work 1. General a. Contractor shall furnish all labor, materials, and equipment, and shall perform all service and work required to remove the buildings, structures, and improvements from the site, and post demolition grading of the site, in strict accordance with these specifications and in accordance with all applicable ordinances and laws pertaining to removal of buildings, structures, grading, and erosion control. Following demolition, the contractor shall install silt fencing or erosion control logs around the entire perimeter of the disturbed area. b. Contractor shall thoroughly review these specifications and examine the site to evaluate existing and proposed conditions prior to submitting a quote. Failure to do so shall in no way relieve contractor from performing the work as required or be grounds for a claim for extra payment. 2. Demolition & Disposal of Buildings & Site Improvements a. All buildings and site improvements on the site shall be removed and properly disposed. Demolition to include, but not limited to stairs, ramps, floor slabs, equipment bases, driveways, aprons, foundation walls and footings, and other structure components, appurtenances, and contents associated with each structure, unless otherwise noted. Include removal of all out-buildings and contents within out-buildings, items throughout the yard, and miscellaneous items depicted in the attached photos. Selected demolition contractor shall meet with city staff on-site prior to beginning work to review scope of work. Contractor must verify that all structures are empty prior to beginning work. b. All demolition materials, substrates, debris, waste, or other materials shall be collected, stored, handled, managed, and disposed in accordance with currently accepted practices at an approved, licensed, or permitted facility in accordance with applicable federal, state, and local ordinances, rules, and regulations. 3. Tree & Vegetation Removal a. All trees to be removed have been marked with yellow tape. All stumps shall be pulled from the ground and hauled away. Stump pits shall be back-filled. Contractor is to include tree and stump removal in the demolition bid. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) 4. Backfill, Compaction & Grading a. No demolition material shall be left in or placed in any excavation. All excavations, unless otherwise noted, shall be back filled with clean, imported sand. Imported material shall be placed in one-foot lifts and compacted to no less than 95% standard proctor density. Contactor shall provide the city with a third-party sampling, analysis, and report to demonstrate that at least 95% compaction has been achieved. b. The finished grade shall be determined by matching the existing average grade of the excavation areas prior to demolition. The final grade shall maintain pre demolition drainage patterns. No imported topsoil is required. c. Upon completion of the finished grade, contractor shall immediately hydro- seed all disturbed areas of the site. 5. Utilities a. Contractor shall be responsible for calling Gopher State One to locate any underground utilities prior to beginning demolition and site grading work. b. The city has ordered the disconnection of electricity (Xcel Energy) and natural gas (CenterPoint Energy) services for the property. Contractor shall verify disconnections in field prior to demolition. Other private communication utilities such as telephone and cable may still be connected; if so, contractor shall roll them back and secure them at the pole prior to demolition. c. Water service has been shut off at the curb stop box. Contractor is to remove the water line all the way to the curb stop. Contractor is to install new curb stop and box as part of the water disconnection. Contractor shall install lid shown on “Water Valve Top Sections” attachment. The location of the service termination shall be documented and marked on-site. An inspection by the city is required prior to backfilling. d. Contractor is to coordinate the termination of the private sewer line with Public Works. The sewer line shall be removed to within three (3) feet of the property line and the remaining service stub shall be lined with CIPP lining all the way to the main. Once lined, cap the end in preparation for connection to the new house. The location of the service termination shall be documented and marked onsite. An inspection by the city is required prior to backfilling. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) 6. Asbestos & Other Hazardous Materials a. Contractor shall submit “Notification of Intent to Perform a Demolition” form to the MPCA. The city has contracted with Angstrom Analytical for the completion of a demolition survey for the property. The survey is attached to this report. Demolition contractor is to provide for the removal, and appropriate disposal of all asbestos and other hazardous items listed in the report. 7. Well Abandonment a. There is an unsealed well located on the property. According to the previous property owner, it is located below the deck in the rear yard. Contractor shall hire a state-licensed contractor to properly seal the well and record the sealing with the Minnesota Department of Health. Contractor shall provide records of the well sealing to the city upon completion. If the well cannot be located, contractor shall be responsible for obtaining a well sealing variance through Minnesota Department of Health (including $275 cost for application). 8. Permits & Inspections a. Contractor shall submit building permit application prior to beginning demolition work. Demolition permit fees will be waived, however the state surcharge will still be collected, as the city cannot waive that portion. Permit fees for sewer, water, and utility work will not be waived. Contractor shall have the work inspected prior to backfilling the primary excavation. The private water and sewer service terminations must also be inspected by the city’s Public Works staff. A separate water and sewer disconnection permit shall be obtained from the city. Before payment may be issued to the selected contractor, all inspections must be completed, permits must be finalized, and the compaction analysis and well sealing documents (or well sealing variance) must be provided to the city. b. If any permits from other governmental agencies are required, contractor shall be responsible for securing such permits, paying any fees their own expense, and completing any required inspections. Copies of any such permits shall be provided to the city. c. Contractor shall submit “Notification of Intent to Perform a Demolition” form to the MPCA. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) 9. Miscellaneous Provisions & Notices a. Contractor shall erect and maintain all necessary barricades and warnings to adequately safeguard workers, adjacent property, and the public. b. The demolition and clearing of the site shall be carried out in such a manner to preclude damage to adjacent property or public right-of-way. Contractor shall be solely responsible for any such damage. c. Contractor is to provide dust control during demolition process by spraying water so as to suppress airborne dust. Water tank(s) can be filled at no cost at the New Hope Public Works building at 5500 International Parkway. Please notify Public Works staff one week in advance of the request. d. Submission of a proposal will constitute an incontrovertible representation by contractor that contractor has complied with every requirement of these specifications and attachments thereto; that without exception the proposal is premised upon performing and furnishing the work including but not limited to the specific means, methods, techniques, sequences, procedures, or precautions expressly required by these specifications and attachments thereto; that contractor has received from city satisfactory written resolution of any conflicts, errors, ambiguities, and discrepancies; and that these specifications and attachments thereto are generally sufficient to indicate and convey understanding of the terms and conditions for performing and furnishing the work. Attachments • Site photos • Aerial map • Hazardous material report • Water valve top sections City of New Hope, Minnesota X X X (Tree above is gone) Note cement driveway and sidewalks to be removed X City of New Hope, Minnesota City of New Hope, Minnesota City of New Hope, Minnesota X X X City of New Hope, Minnesota X X City of New Hope, Minnesota X X He nn e pin Cou n ty P ro perty Ma p Da te : 10 /20/2 021 Comm en ts: 1 inc h = 1 00 fee t PAR CEL ID: 08 118 21 220 03 7 OWN ER N AME: Be nny & Sh ery l A C otto n PAR CEL AD DRESS: 5 306 R ho de Is land Ave N , N ew Ho pe MN 55 428 PAR CEL AR EA: 0.3 a cr es , 1 3,01 2 sq ft A-T-B: Ab stra ct SAL E PR ICE: $92 ,5 00 SAL E D ATA: 0 7/20 00 SAL E C OD E: Exclu de d Fro m Ra tio Stud ies ASSESSED 20 20 , PAYABLE 202 1 PROPERT Y TYPE: R es iden t ial H OM ESTEAD : H ome ste ad M AR KET VAL UE: $20 4,00 0 TAX TO TAL: $3 ,0 15.6 2 ASSESSED 20 21 , PAYABLE 202 2 PRO PER TY TYPE: R eside ntial HO MESTEAD: Ho meste ad MARKET VALU E: $2 25 ,0 00 This data (i) is fur nish ed 'A S IS' wit h no represent at ion as t o com ple ten ess or acc urac y ; (ii) is furnis hed w it h n o war rant y of an y k ind; an d (ii i) is not sui tab le for lega l, engi neering or surv ey ing purposes . Hen nepin County s hall not be l iable fo r a ny damage, in jury or los s re sul ting f rom this dat a. COP YRIG HT © H EN N EPIN COU N TY 20 2 1 Page 1 of 1 Shop Drawing Review Review Notes: Submittal #3 – Core&Main – Utilities Materials – Resubmitted #2 – Offset Curb Box Lids Approved for construction. Thank you, Ann Project:City of New Hope – 2020 Infrastructure Improvements Reviewed Reviewed As Noted Revise And Resubmit Seal & Signature Required Review by Stantec is for the sole purpose of ascertaining general conformity with design. Contractor is responsible for dimensions, fabrication and construction methods, coordination of sub- trades, detail design of components, and errors or omissions on Shop Drawings. STANTEC CONSULTING SERVICES INC. To:Northwest Asphalt Inc.-Jeremy Gylland From:Stantec Client:City of New Hope File No.: 193804756 Specification Section No.and Name: 33 10 00 – Water Utilities 33 12 12 – Water Services 33 40 00 – Storm Drainage Utilities Signed by: Ann Dienhart Date: 5/4/2020 48 49 46 TREE GRATES NEENAH FOUNDRY TREE GRATES SURE-FIT FRAMES AND FRAMES 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS &XUE %R[ 5HSDLU /LGV 9350 County Road 19 Loretto, MN 55357 ‡ P: 763.478.2027 ‡ 7) 800-.478.2027 F: 763.478.8868 ‡ www.essbrothers.com 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868