031323 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, March 13, 2023
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Michael Isenberg
Commissioner Jonathan London
1. Call to order – EDA Meeting of March 13, 2023
2. Roll call
3. Approval of Minutes:
• February 27, 2023
4. Resolution authorizing the purchase of 5802 Boone Avenue North by the Economic
Development Authority (improvement project no. 1088)
5. Resolution approving Purchase Agreement for the acquisition of 4965 Winnetka
Avenue North by the Economic Development Authority (improvement project no.
1060)
6. Adjournment
EDA Meeting
Page 1 February 27, 2023
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes February 27, 2023
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 7:46 p.m.
ROLL CALL Present:
Absent:
Kathi Hemken, President
Andy Hoffe, Commissioner
Michael Isenberg, Commissioner
Jonathan London, Commissioner
John Elder, Commissioner
Staff Present:
Jeff Sargent, Director of Community Development
Jeff Alger, Community Development Specialist
Valerie Leone, City Clerk
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Hoffe, seconded by Commissioner Isenberg,
to approve the minutes of December 12, 2022. All present voted in favor. Motion
carried.
4201 AND 4205
BOONE AVE N
(IMPROVEMENT
PROJECT NO. 1081)
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution approving
purchase and redevelopment agreements with Great Buy Homes, Inc. for the sale
of 4201 and 4205 Boone Avenue North (improvement project no. 1081).
Mr. Jeff Alger, community development specialist, stated this is a public hearing
to consider approving purchase and redevelopment agreements with Great Buy
Homes, Inc. for the sale of 4201 and 4205 Boone Avenue North. He explained the
EDA acquired 4201 Boone Avenue North (the TreeHouse property) in June of 2022
for $245,000. Demolition work and utility improvements and a lot split were
completed in the fall of 2022. He stated a berm was added along the south property
line.
Mr. Alger stated in December, staff mailed RFPs marketing the lots to more than
40 builders. He stated builders were asked to provide additional screening along
the north and south property lines. Also, builders were asked to incorporate
soundproofing construction materials. Mr. Alger reported that Great Buy Homes
was the only builder that submitted a proposal. He noted some builders expressed
concern regarding the location and current market conditions. He illustrated the
proposal that includes two split level entry homes and three‐car garages with
projected sale prices of $475,000 to $480,000 for each home. Great Buy Homes is
offering $161,000 total for both lots (a minimum price of $75,000 per lot was
included in the RFP). He stated the homes must be completed within one year of
the closing date.
EDA Meeting
Page 2 February 27, 2023
Mr. Alger reviewed previous projects completed by Great Buy Homes, the project
budget, and tax impact. He recommended approval of the purchase and
redevelopment agreements with Great Buy Homes, Inc.
Mr. Alger stated Shawn Rogers, the realtor representing Great Buy Homes, is
present if the EDA has questions.
Council Member London commented on the visibility of the site and
recommended marketing signage during construction to sell the homes as soon as
possible. He also suggested the builder use a more substantial support beam
compared to the one at the 4215 Louisiana property.
Mr. Rogers indicated he would relay the message. He stated Great Buy Homes is
appreciative of the city’s support.
There was no one present to address the EDA for the public hearing.
CLOSE HEARING
Item 4
Motion was made by Commissioner Isenberg, seconded by Commissioner Hoffe,
to close the public hearing. All present voted in favor. Motion carried.
RESOLUTION 2023‐01
Item 4
Commissioner Isenberg introduced the following resolution and moved its
adoption “RESOLUTION APPROVING PURCHASE AND
REDEVELOPMENT AGREEMENTS WITH GREAT BUY HOMES, INC. FOR
THE SALE OF 4201 AND 4205 BOONE AVENUE NORTH (IMPROVEMENT
PROJECT NO. 1081).” The motion for the adoption of the foregoing resolution
was seconded by Commissioner London, and upon vote being taken thereon, the
following voted in favor thereof: Hemken, Hoffe, Isenberg, London; and the
following voted against the same: None; Abstained: None; Absent: Elder;
whereupon the resolution was declared duly passed and adopted, signed by the
president which was attested to by the executive director.
3611 LOUISIANA
AVE N
(IMPROVEMENT
PROJECT NO. 1065)
Item 5
President Hemken introduced for discussion EDA Item 5, Resolution approving
contract with Nitti Rolloff Services Inc. for hazardous material abatement,
disposal of items throughout yard and within buildings, tree removal, demolition
of site improvements, well sealing, site grading, and installation of utility
improvements at 3611 Louisiana Avenue North (improvement project no. 1065).
Mr. Jeff Alger, community development specialist, reported in December of 2022
the EDA acquired the single‐family home located at 3611 Louisiana Avenue North
as part of the city’s scattered site housing program. Bids were solicited to prepare
the lot for redevelopment. He explained the work includes hazardous material
abatement, disposal of items in yard and buildings, tree removal, demolition of
site improvements, well sealing, site grading, and installation of utility
improvements. He indicated two bids were received, and the low bid was
submitted by Nitti Rolloff Services, Inc. for $39,250. The city has used the services
of Nitti Rolloff in the past with good experiences.
Mr. Alger stated the EDA budget would fund the contract. The work must be
completed within three months.
EDA Meeting
Page 3 February 27, 2023
He stated an RFP for new home construction will be sent to home builders near
the end of the demolition process.
RESOLUTION 2023‐02
Item 5
Commissioner Isenberg introduced the following resolution and moved its
adoption “RESOLUTION APPROVING CONTRACT WITH NITTI ROLLOFF
SERVICES INC. FOR HAZARDOUS MATERIAL ABATEMENT, DISPOSAL
OF ITEMS THROUGHOUT YARD AND WITHIN BUILDINGS, TREE
REMOVAL, DEMOLITION OF SITE IMPROVEMENTS, WELL SEALING,
SITE GRADING, AND INSTALLATION OF UTILITY IMPROVEMENTS AT
3611 LOUISIANA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1065).”
The motion for the adoption of the foregoing resolution was seconded by
Commissioner Hoffe, and upon vote being taken thereon, the following voted in
favor thereof: Hemken, Hoffe, Isenberg, London; and the following voted against
the same: None; Abstained: None; Absent: Elder; 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 Hoffe,
to adjourn the meeting. All present voted in favor. Motion carried. The New Hope
EDA adjourned at 8:10 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
I:\RFA\COMM DEV\2023\EDA\5802 Boone Ave N\Q ‐ 5802 Boone Ave N Acquisition 03‐13‐23.docx
Request for Action
March 13, 2023
Approved by: Tim Hoyt, Acting City Manager
Originating Department: Community Development
By: Jeff Alger, Community Development Specialist;
Jeff Sargent, Director of Community Development
Agenda Title
Resolution authorizing the purchase of 5802 Boone Avenue North by the Economic Development Authority
(improvement project no. 1088)
Requested Action
Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for the
acquisition of the bank‐owned property at 5802 Boone Avenue North. It is recommended that the EDA submit
an initial offer for the list price of $119,600, with the ability to increase its offer up to $160,000 if multiple offers
are submitted, at the discretion of city staff.
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 home at 5802 Boone Avenue North is a foreclosed property that is owned by
Deutsche Bank. 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. A recent point of sale inspection identified approximately $158,550 in repairs needed to
bring the home up to minimum standards. The home is an ideal candidate for a demolition and rebuild project.
The 2022 assessed value of the property is $234,000 according to Hennepin County. The realtor representing
Deutsche Bank completed a market analysis and the bank listed the property for sale for $119,600 on March 7,
2023. All offers will be reviewed on March 20, 2023. If no other offers are submitted and an offer from the EDA
is accepted, the bank would send the city an addendum with a purchase agreement from the bank. The
addendum would be reviewed by the city attorney to confirm it is consistent with the Minnesota Realtor
purchase agreement (attached) that is being presented with this request. It would need to be signed by the city
within 24 hours. If multiple offers are submitted, the bank would ask for highest and best offers, allowing those
who have submitted offers the opportunity to increase their offer. It is recommended that the EDA submit an
initial offer of $119,600, with the ability to increase its offer up to $160,000 if multiple offers are submitted, at
the discretion of city staff. The offer would include a 3% earnest money deposit. The realtor representing the
bank would receive 2% commission from the seller and a $599 facilitator fee from the buyer.
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 home would face Boone Place, which is a cul‐de‐sac.
Agenda Section
EDA
Item Number
4
Request for Action, Page 2
The property abuts single‐family residential properties to the north, east, and west, and a two‐family residential
property to the south.
Cost & Tax Impact of Improvements
Because of the nature of the bidding process, the potential acquisition price would be between $119,600 and
$160,000. Staff has prepared a budget and tax impact calculations based on acquiring the property for its list
price of $119,600. At this price, it is anticipated that expenses associated with the project would be
approximately $188,464. Revenue from the sale of the lot is estimated at $80,000, resulting in a net loss of
$108,464. The new home would result in a significant increase in the subject parcel’s taxable market value. If
the new home were to be valued at $500,000 in 2024, it is estimated that total taxes payable to the city in 2025
would increase by $1,596 as compared to those that were payable to the city in 2023. Property values and
classifications are established on January 2 of each year for assessment purposes. This value is used to
determine property taxes that will be paid the following year. For example, the taxable market value for a
property on January 2, 2022, is used for taxes that are payable in 2023.
Old Home New Home
Taxable Market Value 2022,
Payable 2023
Projected Taxable Market
Value 2024, Payable 2025
Change % Change
$234,000 $500,000 $266,000 113.68%
Estimated Taxes Allocated to
City 2022, Payable 2023
Projected Taxes Allocated to
City 2024, Payable 2025
Change % Change
$1,404 $3,000 $1,596 113.68%
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 payable)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (present) $0 $(108,464.00) ‐100.00%
1 (payable 2025) $1,596.00 $(106,868.00) ‐98.53%
5 (payable 2029) $8,473.38 $(99,990.62) ‐92.19%
10 (payable 2034) $18,296.35 $(90,167.65) ‐83.13%
15 (payable 2039) $29,683.87 $(78,780.13) ‐72.63%
20 (payable 2044) $42,885.12 $(65,578.88) ‐60.46%
25 (payable 2049) $58,188.99 $(50,275.01) ‐46.35%
30 (payable 2054) $75,930.36 $(32,533.64) ‐29.99%
The estimated ROI for the project over 30 years is ‐29.99% and the estimated Internal Rate of Return (IRR) for
the project over 30 years is ‐1.92% (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
Request for Action, Page 3
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. The city has budgeted $500,000 for scattered site
projects in 2023.
Project Estimated Net Cost
5802 Boone Ave N $108,464.00
4965 Winnetka Ave N $158,972.00
Total $267,436.00
Annual Budget (2023) $500,000.00
Under/Over Budget +$232,564.00
Recommendation
Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of
5802 Boone Avenue North. It is recommended that the EDA submit an initial offer of $119,600, with the ability
to increase its offer up to $160,000 if multiple offers are submitted, at the discretion of city staff. The offer would
include a 3% earnest money deposit.
Attachments
Resolution
Purchase Agreement
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. 23-___
RESOLUTION AUTHORIZING THE PURCHASE OF 5802 BOONE AVENUE NORTH
BY THE ECONOMIC DEVELOPMENT AUTHORITY
(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, 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 these 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 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 previous 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, the Mortgage recorded against the Property was foreclosed with the lender
Deutsche Bank National Trust Company, as Trustee for the holders of the Morgan Stanley ABS
Capital I Inc. Trust 2007-HE6, Mortgage Pass-Through Certificates, Series 2007-HE6
(“Lender”) being the successful bidder at the Sheriff’s Sale on March 21, 2022;
WHEREAS, City staff has diligently been pursuing the potential purchase of this
Property and is in touch with the real estate agent who represents the Lender;
WHEREAS, the Property was listed on the MLS on March 7, 2023, and a Purchase
Agreement was submitted to ensure that the EDA has a competitive chance of being the high
bidder;
WHEREAS, City staff is seeking authority from the EDA to approve the offer of the
Purchase Agreement attached hereto as Exhibit A, which was submitted as contingent on EDA
approval, listing an initial offer of $119,600 but subject to potential increase of an amount not to
exceed $160,000 to enable the EDA to be in a competitive position to successfully purchase the
Property from the Lender;
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 purchase the Property 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 of the Purchase Agreement
attached as Exhibit A for the EDA to purchase the Property from the Lender.
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 purchase of the Property by EDA from Seller, for an initial offer of
$119,600 but subject to increase to a sum not to exceed $160,000, with other
terms and conditions as set forth in the Purchase Agreement attached hereto as
Exhibit A, is approved subject to the review and approval by the City Attorney
of: (a) proper title evidence; (b) the Lender’s addendum form that is required to
be signed; and (c) other terms relating to the closing on the purchase of the
Property.
4.The proposed purchase of Property is consistent with the New Hope
Comprehensive Plan.
5. The City and EDA shall use due diligence for correcting the Property’s blighted
condition and conducting any necessary environmental cleanup of the Property to
pursue this redevelopment purpose and return the Property to the tax rolls for the
benefit of all taxing jurisdictions.
6. The Mayor and Acting City Manager of the City and the President and Acting
Executive Director of the EDA through the New Hope City staff are authorized
and directed to sign all appropriate documents, and to take whatever additional
actions are necessary or desirable, to purchase the Property.
Dated the 13th day of March, 2023. ____________________________________
Kathi Hemken, President
Attest: _____________________________
Tim Hoyt, Acting Executive Director
\\jspserver\data\Attorney\SAS\1 Client Files\2 City of New Hope\99-11446 5802 Boone Ave N\Resolution Approving Acquisition of 5802
Boone Ave N from lender.docx
5802 Boone Ave N
R-1, Single-family residential
94’94’132’132’~123’~123’Potential Potential HomeHome
DrivewayDriveway
137.89’137.89’
5802 Boone Avenue North
Budget for 5802 Boone Ave N
EXPENSES AMOUNT
Acquisition (119,600.00)$
Legal/closing costs for purchase (estimated)(5,000.00)$
Demolition survey (650.00)$
Demolition and site prep (estimated)(55,400.00)$
Real estate taxes (estimated at 6 months)(1,864.00)$
Lawn services (estimated)(2,000.00)$
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 (188,464.00)$
REVENUE AMOUNT
EDA (estimated lot sale proceeds)80,000.00$
TOTAL 80,000.00$
TOTAL COST/REVENUE (108,464.00)$
Taxable Market Value 2022,
Payable 2023
Projected Taxable Value 2024,
Payable 2025 Change Percent Change
234,000.00$ 500,000.00$ 266,000.00$ 113.68%
Estimated Taxes Allocated to
City 2022, Payable 2023
Projected Taxes Allocated
to City 2024, Payable 2025 Change Percent Change
1,404.00$ 3,000.00$ 1,596.00$ 113.68%
Projected Project Expenses (188,464.00)$
Lot Sale Revenue 80,000.00$
Total Cost/Revenue (108,464.00)$
# of Years
(Year)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (present)-$ (108,464.00)$ -100.00%
1 (payable 2025)1,596.00$ (106,868.00)$ -98.53%
2 (payable 2026)3,239.88$ (105,224.12)$ -97.01%
3 (payable 2027)4,933.08$ (103,530.92)$ -95.45%
4 (payable 2028)6,677.07$ (101,786.93)$ -93.84%
5 (payable 2029)8,473.38$ (99,990.62)$ -92.19%
10 (payable 2034)18,296.35$ (90,167.65)$ -83.13%
15 (payable 2039)29,683.87$ (78,780.13)$ -72.63%
20 (payable 2044)42,885.12$ (65,578.88)$ -60.46%
25 (payable 2049)58,188.99$ (50,275.01)$ -46.35%
30 (payable 2054)75,930.36$ (32,533.64)$ -29.99%
*Based on new home valued at $500,000
Estimated Tax Impact of Improvements at 5802 Boone Ave N
Estimated Return on Investment for 5802 Boone Ave N
Description Taxable Market Value
Change Cash Flow
Investment -$ (108,464.00)$
Return, Year 1 266,000.00$ 1,596.00$
Return, Year 2 273,980.00$ 1,643.88$
Return, Year 3 282,199.40$ 1,693.20$
Return, Year 4 290,665.38$ 1,743.99$
Return, Year 5 299,385.34$ 1,796.31$
Return, Year 6 308,366.90$ 1,850.20$
Return, Year 7 317,617.91$ 1,905.71$
Return, Year 8 327,146.45$ 1,962.88$
Return, Year 9 336,960.84$ 2,021.77$
Return, Year 10 347,069.67$ 2,082.42$
Return, Year 11 357,481.76$ 2,144.89$
Return, Year 12 368,206.21$ 2,209.24$
Return, Year 13 379,252.40$ 2,275.51$
Return, Year 14 390,629.97$ 2,343.78$
Return, Year 15 402,348.87$ 2,414.09$
Return, Year 16 414,419.33$ 2,486.52$
Return, Year 17 426,851.91$ 2,561.11$
Return, Year 18 439,657.47$ 2,637.94$
Return, Year 19 452,847.19$ 2,717.08$
Return, Year 20 466,432.61$ 2,798.60$
Return, Year 21 480,425.59$ 2,882.55$
Return, Year 22 494,838.36$ 2,969.03$
Return, Year 23 509,683.51$ 3,058.10$
Return, Year 24 524,974.01$ 3,149.84$
Return, Year 25 540,723.23$ 3,244.34$
Return, Year 26 556,944.93$ 3,341.67$
Return, Year 27 573,653.28$ 3,441.92$
Return, Year 28 590,862.88$ 3,545.18$
Return, Year 29 608,588.76$ 3,651.53$
Return, Year 30 626,846.42$ 3,761.08$
Total Returns 75,930.36$
Investment Cost 188,464.00$
Selling Price 80,000.00$
Return on Investment -29.99%
s
Description Amount
Investment (108,464.00)$
Return, Year 1 1,596.00$
Return, Year 2 1,643.88$
Return, Year 3 1,693.20$
Return, Year 4 1,743.99$
Return, Year 5 1,796.31$
Return, Year 6 1,850.20$
Return, Year 7 1,905.71$
Return, Year 8 1,962.88$
Return, Year 9 2,021.77$
Return, Year 10 2,082.42$
Return, Year 11 2,144.89$
Return, Year 12 2,209.24$
Return, Year 13 2,275.51$
Return, Year 14 2,343.78$
Return, Year 15 2,414.09$
Return, Year 16 2,486.52$
Return, Year 17 2,561.11$
Return, Year 18 2,637.94$
Return, Year 19 2,717.08$
Return, Year 20 2,798.60$
Return, Year 21 2,882.55$
Return, Year 22 2,969.03$
Return, Year 23 3,058.10$
Return, Year 24 3,149.84$
Return, Year 25 3,244.34$
Return, Year 26 3,341.67$
Return, Year 27 3,441.92$
Return, Year 28 3,545.18$
Return, Year 29 3,651.53$
Return, Year 30 3,761.08$
Total Returns 75,930.36$
Internal Rate of Return -1.92%
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
1 234,000.00$ 500,000.00$ 266,000.00$ 1,596.00$
2 241,020.00$ 515,000.00$ 273,980.00$ 1,643.88$
3 248,250.60$ 530,450.00$ 282,199.40$ 1,693.20$
4 255,698.12$ 546,363.50$ 290,665.38$ 1,743.99$
5 263,369.06$ 562,754.41$ 299,385.34$ 1,796.31$
6 271,270.13$ 579,637.04$ 308,366.90$ 1,850.20$
7 279,408.24$ 597,026.15$ 317,617.91$ 1,905.71$
8 287,790.48$ 614,936.93$ 327,146.45$ 1,962.88$
9 296,424.20$ 633,385.04$ 336,960.84$ 2,021.77$
10 305,316.93$ 652,386.59$ 347,069.67$ 2,082.42$
11 314,476.43$ 671,958.19$ 357,481.76$ 2,144.89$
12 323,910.73$ 692,116.94$ 368,206.21$ 2,209.24$
13 333,628.05$ 712,880.44$ 379,252.40$ 2,275.51$
14 343,636.89$ 734,266.86$ 390,629.97$ 2,343.78$
15 353,946.00$ 756,294.86$ 402,348.87$ 2,414.09$
16 364,564.38$ 778,983.71$ 414,419.33$ 2,486.52$
17 375,501.31$ 802,353.22$ 426,851.91$ 2,561.11$
18 386,766.35$ 826,423.82$ 439,657.47$ 2,637.94$
19 398,369.34$ 851,216.53$ 452,847.19$ 2,717.08$
20 410,320.42$ 876,753.03$ 466,432.61$ 2,798.60$
21 422,630.03$ 903,055.62$ 480,425.59$ 2,882.55$
22 435,308.93$ 930,147.29$ 494,838.36$ 2,969.03$
23 448,368.20$ 958,051.70$ 509,683.51$ 3,058.10$
24 461,819.24$ 986,793.26$ 524,974.01$ 3,149.84$
25 475,673.82$ 1,016,397.05$ 540,723.23$ 3,244.34$
26 489,944.04$ 1,046,888.96$ 556,944.93$ 3,341.67$
27 504,642.36$ 1,078,295.63$ 573,653.28$ 3,441.92$
28 519,781.63$ 1,110,644.50$ 590,862.88$ 3,545.18$
29 535,375.08$ 1,143,963.84$ 608,588.76$ 3,651.53$
30 551,436.33$ 1,178,282.75$ 626,846.42$ 3,761.08$
Tax Value Growth Rate 3%
City Rate 60%
The equation for calculating property taxes, in its most simplistic form, is Taxable Market Value X Property Tax Class Rate X City Tax
Rate. The Taxable Market Value in this calculation is assumed based on the city's projections for growth in property value due to the
improvements. The Property Tax Class Rates are set by the State of MN and stay fairly consistent from year to year (there have been
changes in commercial industrial, however; residential is mostly constant). The city’s Tax Rate changes every year based on the levy
certified and the overall tax value of the city. So, the Tax Rate used in this illustration is an assumption. The city’s rate has varied
between 58-63% in recent years. Property taxes are calculated on taxable market value, not estimated market value. It is of
important note, that this calculation does not take into consideration the market value exclusion which is applied to residential
properties under $413,800 in value.
Tax Calculator for 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
4201 Boone
Avenue North
3611 Louisiana
Avenue North
5306 Rhode Island
Avenue North
5213 Pennsylvania
Avenue North
4637 Aquila
Avenue North
4215 Louisiana
Avenue North
Number of Units 1 2 1 1 1 1 1
Project Description Demolition &
rebuild
Demolition, lot
split & rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Year Acquired TBD 2022 2022 2022 2021 2021 2020
Projected or Actual Projected
(at time of offer)
Projected
(at time of lot sale)
Projected
(at time of offer)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Expenses ($188,464.00) ($344,888.00) ($244,819.00) ($253,072.00) ($205,172.18) ($127,292.01) ($170,441.53)
Revenue $80,000.00 $161,000.00 $75,000.00 $87,000.00 $72,000.00 $81,000.00 $69,000.00
Total Cost/Revenue ($108,464.00) ($183,888.00) ($169,819.00) ($166,072.00) ($133,172.18) ($46,292.01) ($101,441.53)
Estimated Taxable Value of
New Home(s)
$500,000 $475,000 per home
$950,000 total
$450,000 $575,000 $485,000 $445,000 $380,000
*Additional Taxes
Collected by City - 1 year
$1,596.00 $5,700.00 $1,194.00 $2,100.00 $1,902.00 $1,254.00 $786.00
*Additional Taxes
Collected by City - 30 years
$75,930.36 $271,179.87 $56,805.05 $99,908.37 $90,488.44 $59,659.57 $37,394.28
*Return On Investment -
30 years
-29.99% 47.47% -66.55% -39.84% -32.05% 28.88% -63.14%
*Internal Rate of Return -
30 years
-1.92% 2.33% -5.44% -2.69% -2.08% 1.49% -5.01%
*Assumed 3% tax value growth rate
I:\RFA\COMM DEV\2023\EDA\4965 Winnetka Ave N\Q ‐ 4965 Winnetka Ave N Acquisition 03‐13‐23.docx
Request for Action
March 13, 2023
Approved by: Tim Hoyt, Acting 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 4965 Winnetka Avenue North (improvement
project no. 1060)
Requested Action
Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for the
acquisition of 4965 Winnetka Avenue North for a purchase price of $230,000 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, with an emphasis on lots that are large
enough to split into two parcels, as part of the city’s scattered site housing program. The property at 4965
Winnetka Avenue North is a rambler that was constructed in 1953 and features 1,551 square feet of finished
space. It has four bedrooms, one full bathroom, one unfinished bathroom, and a two‐stall attached garage. The
0.5‐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 corner lot is approximately 125 feet
wide along Winnetka Avenue North and approximately 175 feet long along 50th Avenue North. Adjacent uses
include single‐family residential to the south, west, and northwest, a small dental office to the northeast, and
industrial to the east.
After receiving a letter of interest from city staff in the fall of 2020, the owners of 4965 Winnetka Avenue North
expressed interest in selling to the EDA. An appraisal was completed on October 28, 2020, estimating the value
of the property at $215,000. The property owners agreed to sell the home for that price with assurances that the
city was in no rush to acquire the property, which would allow them time to locate a new home. The owners
did not move and recently expressed interest again in selling the property to the EDA. As a result of the increase
in home prices over the last 28 months, the offer price has been increased by $15,000, to $230,000, contingent
upon approval by the EDA. Traditional closing costs would be paid by each party.
If the EDA were to acquire the property and split the lot, access to both new parcels would come off 50th
Avenue North and the curb cut along Winnetka Avenue North would be eliminated. 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 location of property lines may differ slightly from
what is depicted. The west lot would be approximately 80 feet wide along 50th Avenue North and the east lot
Agenda Section
EDA
Item Number
5
Request for Action, Page 2
would be approximately 95 feet wide along 50th Avenue North. As a corner lot on an arterial street, the east
lot would be subject to greater setback requirements. During the subdivision process, Hennepin County may
request an easement along Winnetka Avenue North for future infrastructure improvements. There would be
significant costs associated with demolition, tree removal, and the installation of new utility connections,
however, the sale of two lots instead of one would help offset some of those expenses. Additionally, upon
completion of the project there would be two taxable properties with new homes as compared to one taxable
property with an older home.
Cost & Tax Impact of Improvements
It is anticipated that expenses associated with the project would be approximately $318,972. Revenue from the
sale of the lots is estimated at $160,000, resulting in a net loss of $158,972. The two new homes would result in
a significant increase in the subject parcel’s taxable market value. If the combined value of the two new
properties was $950,000 in 2024, it is estimated that total taxes payable to the city in 2025 would increase by
$3,984 as compared to those that were payable to the city in 2023. Property values and classifications are
established on January 2 of each year for assessment purposes. This value is used to determine property taxes
that will be paid the following year. For example, the taxable market value for a property on January 2, 2022,
is used for taxes that are payable in 2023.
Old Home New Homes
Taxable Market Value 2022,
Payable 2023
Projected Taxable Market
Value 2024, Payable 2025
Change % Change
$286,000 $950,000 $664,000 232.17%
Estimated Taxes Allocated to
City 2022, Payable 2023
Projected Taxes Allocated to
City 2024, Payable 2025
Change % Change
$1,716 $5,700 $3,984 232.17%
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 payable)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (present) $0 $(158,972.00) ‐100.00%
1 (payable 2025) $3,984.00 $(154,988.00) ‐97.49%
5 (payable 2029) $21,151.60 $(137,820.40) ‐86.69%
10 (payable 2034) $45,672.10 $(113,299.90) ‐71.27%
15 (payable 2039) $74,098.07 $(84,873.93) ‐53.39%
20 (payable 2044) $107,051.57 $(51,920.43) ‐32.66%
25 (payable 2049) $145,253.71 $(13,718.29) ‐8.63%
30 (payable 2054) $189,540.46 $30,568.46 19.23%
The estimated ROI for the project over 30 years is 19.23% and the estimated Internal Rate of Return (IRR) for
the project over 30 years is 1.02% (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 homes, both over 30 years. A cost and tax impact comparison of this project and other
Request for Action, Page 3
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. The city has budgeted $500,000 for scattered site
projects in 2023.
Project Estimated Net Cost
4965 Winnetka Ave N $158,972.00
5802 Boone Ave N $108,464.00
Total $267,436.00
Annual Budget (2023) $500,000.00
Under/Over Budget +$232,564.00
Recommendation
Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of
4965 Winnetka Avenue North for a purchase price of $230,000 with traditional closing costs to be paid by each
party.
Attachments
Resolution
Purchase Agreement
Sample Lot Layout
Appraisal
Budget
Estimated Tax Impact of Improvements
Estimated Return on Investment
Estimated Internal Rate of Return
Tax Calculator
Comparison of Costs & Tax Impact of Recent Projects
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 23-___
RESOLUTION APPROVING PURCHASE AGREEMENT
FOR THE ACQUISITION OF 4965 WINNETKA AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1060)
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
4965 Winnetka Avenue North, New Hope, MN, 55428, P.I.D. 07-118-21-14-0131, and legally described
as follows:
Lot 24, Block 1, except the Easterly 7 feet thereof, Mork-Campion Manor, according to the
recorded plat thereof, Hennepin County, Minnesota.
Abstract property
And
That part of Lot 25, Block 1, Mork-Campion Manor lying West of the East 7 feet thereof,
according to the recorded plat thereof, Hennepin County, Minnesota.
Torrens Property
Certificate of Title No. 1001134
(the “Property”) from Michael and Yvonne Hestick (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 $230,000.00, 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 13th day of March, 2023.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Tim Hoyt, Acting Executive Director
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11452 4965 Winnetka Ave N\Resolution approving purchase of 4965 Winnetka Ave
N.docx
Exhibit A
Purchase Agreement
See attached.
1
PURCHASE AGREEMENT
Date: March ____, 2023
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: Michael L. Hestick and Yvonne E. Hestick, husband and wife
Seller agrees to sell and Buyer agrees to purchase the real property located at:
Street Address: 4965 Winnetka Avenue North
City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described on the attached
Exhibit A, PID 07-118-21-14-0131. Said purchase shall include all improvements, fixtures, and
appurtenances on the property, if any, including but not limited to, the following (collectively the "Property"):
garden bulbs, plants, shrubs, trees, and lawn watering system; shed; storm sash, storm doors, screens and
awnings; window shades, blinds; traverse, curtain, and drapery rods, valances, drapes, curtains, window
coverings and treatments; towel rods; attached lighting and bulbs; fan fixtures; plumbing fixtures; garbage
disposals; water softener; water treatment system; water heating systems, heating systems; air exchange
system; radon mitigation system; sump pump; TV antenna/cable TV jacks and wiring/TV wall mounts;
wall/ceiling-mounted speakers and mounts; carpeting; mirrors; garage door openers and all controls; smoke
detectors; fireplace screens, door and heatilators; BUILT-INS: dishwashers; refrigerators; wine/beverage
refrigerators; trash compactors; ovens; cook-top stoves; warming drawers; microwave ovens; hood fans;
shelving; work benches; intercoms; speakers; air conditioning equipment; electronic air filter;
humidifier/dehumidifier; liquid fuel tanks (and controls); pool/spa equipment; propane tank (and controls);
security system equipment; TV satellite dish; AND the following personal property shall be transferred with
no additional monetary value, and free and clear of all liens and encumbrances:
______________________________________________
Notwithstanding the foregoing, the following item(s) are excluded from the purchase:
_________________________________________________________________________
Seller has agreed to sell the Property to Buyer for the sum of Two Hundred Thirty Thousand and 00/100
Dollars ($230,000.00), 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 December 31, 2023, and shall occur at the offices of the City
Attorney for City of New Hope: Jensen, Sondrall, Persellin & Woods, P.A., 8525 Edinbrook Crossing,
Suite 201, Brooklyn Park, MN 55443.
SALE OF BUYER'S PROPERTY CONTINGENCY: This Purchase Agreement IS NOT subject to an
Addendum to Purchase Agreement: Sale of Buyer's Property Contingency . (If answer is IS, see attached
Addendum.) (If answer is IS NOT, the closing of Buyer's property, if any, may still affect Buyer's ability to
obtain financing, if financing is applicable.)
This Purchase Agreement IS NOT subject to cancellation of a previously written purchase agreement dated
_______________________, 20__. (If answer is IS, said cancellation shall be obtained no later than
_____________, 20__. If said cancellation is not obtained by said date, this Purchase Agreement is
canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said
cancellation.)
Buyer has been made aware of the availability of Property inspections. Buyer does not elect to have a
Property inspection performed at Buyer's expense.
2
INSPECTION CONTINGENCY: This Purchase Agreement IS NOT subject to an Addendum to Purchase
Agreement: Inspection Contingency. (If answer is IS, see attached Addendum.)
DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a (check one):
Warranty Deed joined in by spouse, if any, conveying marketable title, subject to
(a) building and zoning laws, ordinances, and state and federal regulations;
(b) restrictions relating to use or improvement of the Property without effective forfeiture provisions;
(c) reservation of any mineral rights by the State of Minnesota;
(d) utility and drainage easements which do not interfere with existing improvements;
(e) rights of tenants as follows (unless specified, not subject to tenancies) _____________; and
(f) others (must be specified in writing): ___________________________________________
REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all
prior years including all penalties and interest.
Buyer shall pay PRORATED FROM DAY OF CLOSING real estate taxes due and payable in the year
2023.
Seller shall pay PRORATED TO DAY OF CLOSING real estate taxes due and payable in the year 2023.
If the closing date is changed, the real estate taxes paid shall, if prorated, be adjusted to the new closing
date. If the Property tax status is a part- or non-homestead classification in the year of closing, Seller SHALL
NOT pay the difference between the homestead and non-homestead.
Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment
of which is not otherwise herein provided. No representations are made concerning the amount of
subsequent real estate taxes.
DEFERRED TAXES/SPECIAL ASSESSMENTS:
SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green Acres) or special
assessments, payment of which is required as a result of the closing of this sale.
SELLER SHALL PAY ON DATE OF CLOSING all installments of special assessments certified for
payment, with the real estate taxes due and payable in the year of closing.
SELLER SHALL PAY on date of closing all other special assessments levied as of the date of this Purchase
Agreement.
SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of the date of this
Purchase Agreement for improvements that have been ordered by any assessing authorities.
Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the
payment of which is not otherwise herein provided.
As of the date of this Purchase Agreement, Seller represents that Seller HAS NOT received a notice
regarding any new improvement project from any assessing authorities, the costs of which project may be
assessed against the Property. Any such notice received by Seller after the date of this Purchase
Agreement and before closing shall be provided to Buyer immediately. If such notice is issued after the
date of this Purchase Agreement and on or before the date of closing, then the parties may agree in writing,
on or before the date of closing, to pay, provide for the payment of or assume the special assessments. In
the absence of such agreement, either party may declare this Purchase Agreement canceled by written
notice to the other party, or licensee representing or assisting the other party, in which case this Purchase
Agreement is canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall
immediately sign a Cancellation of Purchase Agreement confirming said cancellation.
3
POSSESSION: Seller shall deliver possession of the Property no later than date of closing. Seller agrees
to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the Property
by possession date.
LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access
or service to any device or system on or serving the property that is connected or controlled wirelessly, via
internet protocol ("IP") to a router or gateway or directly to the cloud no later than delivery of possession as
specified in this Purchase Agreement.
PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer,
electricity and natural gas shall be prorated between the parties as of date of closing. Buyer shall pay Seller
for remaining gallons of fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by
Seller.
TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this
Purchase Agreement:
a. Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title
insurance (the “Commitment”) issued by Midland Title (“Title Company”) and covering title
to the Property, in the amount of the Purchase Price. Seller agrees to pay the costs
associated with the preparation and issuance of the Commitment; Buyer shall pay the
premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price
for any endorsements requested by Buyer or Buyer’s lender.
b. Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve
the title to the Property and to object to any exception to title that is disclosed in the
Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not
within such fifteen (15) day period give notice to Seller objecting to any such exceptions,
then all such exceptions shall be deemed approved and shall be considered a part of the
Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before
the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception
or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5)
days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer
may elect by notice to Seller to either:
(i) terminate this Agreement, whereupon the parties shall be released from all further
obligations hereunder except obligations under this Agreement which provide for
continued exercise following the cancellation or other termination of this
Agreement; or
(ii) elect to have this Agreement remain in effect, in which event Buyer will be deemed
to have approved the previously-cited exception and the same shall be considered
part of the Permitted Encumbrances.
Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay
all costs and fees necessary to convey marketable title including obtaining and recording all required
documents, subject to the following:
In the event Seller has not provided marketable title by the date of closing, Seller shall have an
additional 30 days to make title marketable, or in the alternative, Buyer may waive title defects by
written notice to Seller. In addition to the 30-day extension, Buyer and Seller may, by mutual
agreement, further extend the closing date. Lacking such extension, either party may declare this
Purchase Agreement canceled by written notice to the other p arty, or licensee representing or
4
assisting the other party, in which case this Purchase Agreement is canceled. If either party
declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a
Cancellation of Purchase Agreement confirming said cancellation.
SUBDIVISION OF LAND, BOUNDARIES, AND ACCESS: If this sale constitutes or requires a subdivision
of land owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental
approvals. Seller warrants that the legal description of the real property to be conveyed has been or shall
be approved for recording as of the date of closing. Seller warrants that the buildings are or shall be
constructed entirely within the boundary lines of the Property. Seller warrants that there is a right of access
to the Property from a public right-of-way.
MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all
labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the
closing in connection with construction, alteration or repair of any structure on, or improvement to, the
Property.
NOTICES: Seller warrants that Seller has not received any notice from any governmental autho rity as to
condemnation proceedings, or violation of any law, ordinance or regulation. If the Property is subject to
restrictive covenants, Seller warrants that Seller has not received any notice from any person or authority
as to a breach of the covenants. Any such notices received by Seller shall be provided to Buyer immediately.
DIMENSIONS: Buyer acknowledges any dimensions, square footage or acreage of land or improvements
provided by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify
the accuracy of information to Buyer's satisfaction, if material, at Buyer's sole cost and expense.
ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any
surveys or inspections agreed to herein.
RISK OF LOSS: If there is any loss or damage to the Property between the date hereof and the date of
closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be
on Seller. If the Property is destroyed or substantially damaged before the closing date, this Purchase
Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting
Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation
of Purchase Agreement confirming said cancellation.
TIME OF ESSENCE: Time is of the essence in this Purchase Agreement.
CALCULATION OF DAYS: Any calculation of days begins on the first day (calendar or Business Days as
specified) following the occurrence of the event specified and includes subsequent days (calendar or
Business Days as specified) ending at 11:59 P.M. on the last day.
BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays or state or federal holidays
unless stated elsewhere by the parties in writing.
DEFAULT: If Buyer defaults in any of the agreements herein, Seller may cancel this Purchase Agreement,
and Buyer and Seller shall affirm the same by a written cancellation agreement.
If Buyer defaults in any of the agreements hereunder, Seller may terminate this Purchase Agreement under
the provisions of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer
or Seller defaults in any of the agreements hereunder or there exists an unfulfilled condition after the date
specified for fulfillment, either party may cancel this Purchase Agreement under MN Statute 559.217, Subd.
3. Whenever it is provided herein that this Purchase Agreement is canceled, said language shall be deemed
a provision authorizing a Declaratory Cancellation under MN Statute 559.217, Subd. 4.
If this Purchase Agreement is not canceled or terminated as provided hereunder, Buyer or Seller may seek
actual damages for breach of this Purchase Agreement or specific performance of this Purchase
5
Agreement; and, as to specific performance, such action must be commenced within six (6) months after
such right of action arises.
BUYER HAS NOT RECEIVED A DISCLOSURE STATEMENT RE: SELLER'S PROPERTY.
DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property or Disclosure
Statement: Seller's Disclosure Alternatives for description of disclosure responsibilities and limitations, if
any.
BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OF THE
PROPERTY AND ITS CONTENTS.
SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED
TO:
CITY SEWER-YES / CITY WATER-YES
SUBSURFACE SEWAGE TREATMENT SYSTEM
SELLER DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR SERVING
THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure.
Statement: Subsurface Sewage Treatment System.)
PRIVATE WELL
SELLER DOES KNOW OF A WELL ON OR SERVING THE PROPERTY which has not been sealed. (If
answer is DOES and well is located on the Property, see Disclosure Statement: Well.) See attached Well
Disclosure.
THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT:
SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer
is IS, see attached Addendum.)
IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER
HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISC LOSURE STATEMENT:
SUBSURFACE SEWAGE TREATMENT SYSTEM.
NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory
offender registry and persons registered with the predatory offender registry under MN Statute 243.166
may be obtained by contacting the local law enforcement offices in the community where the Property is
located or the Minnesota Department of Corrections at (651) 361-7200, or from the Department of
Corrections web site at www.corr.state.mn.us.
6
No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement.
NOTICE
Seller is not represented by a listing Agent in this
transaction.
(Licensee)
(Real Estate Company Name)
Buyer is not represented by an Agent in this
transaction.
(Licensee)
(Real Estate Company Name)
DUAL AGENCY REPRESENTATION
Dual Agency representation DOES NOT apply in this transaction.
CLOSING COSTS: Buyer and Seller agree to respectively pay traditional closing costs.
FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal
Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified
in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from
FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section
1445 of the Internal Revenue Code.
Seller shall represent and warrant, under the penalties of perjury, whether Sel ler is a "foreign person" (as
the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to
this issue shall survive the closing and delivery of the deed.
Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or
statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their
respective federal taxpayer identification numbers or Social Security numbers.
Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's
responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax
advice regarding FIRPTA compliance, as the respective licensee's representing or assisting either
party will be unable to assure either party whether the transaction is exempt from FIRPTA
withholding requirements.
ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties
shall constitute the entire agreement between Buyer and Seller. Any other written or oral communication
between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic
communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or
canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed
to be United States currency for purposes of this Purchase Agreement.
ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document
related to this transaction constitute valid, binding signatures.
7
FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties
and a copy must be delivered.
SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or
contract for deed.
OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on
the following:
(1) Review and approval of the terms of the Purchase Agreement by the Economic Development
Authority in and for the City of New Hope to the terms of the Purchase Agreement
If the above contingency is not met, Buyer may declare this Purchase Agreement canceled by written
notice to Seller, or licensee representing or assisting Seller, in which case this Purchase Agreement is
canceled. If Buyer declares this Purchase Agreement canceled due to the failure of one of the above
contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming
said cancellation and all earnest money paid shall be immediately returned to Buyer.
Seller will not be required to complete the City of New Hope Point of Sale inspection.
Seller warrants that there are no tenants on the property with a lawful leasehold interest. In the event any
tenant comes forward and claims an interest in the property at the time of or following the purchase,
Seller agrees to fully indemnify Buyer for any and all costs associated with terminating such tenancy and
for any and all relocation assistance and benefits that may be due to such tenant together with attorney’s
fees that Buyer would have to incur in connection with legal action required to resolve any relocation
assistance or benefits dispute with such tenant.
Seller acknowledges that they are not being displaced from the property as a result of the Purchase
Agreement and that they are not eligible for relocation assistance and benefits, that the purchase price
includes compensation for any and all relocation assistance and benefits for which Seller may be eligible.
The provisions of this paragraph shall survive the closing of the transaction contemplated by this
Purchase Agreement.
For purposes of this Purchase Agreement, “relocation assistance and benefits” shall have the meanings
ascribed to them by the Minnesota Uniform Relocation Act, Minn. Stat.§117.50 to 117.56, the Uniform
Relocation Assistance and Real Property Acquisition Policies Act, 42 U.S.C. §§4601 -4655 (the federal
URA) and the regulations implementing the federal URA, 49 C.D.R. Part 24.
ADDENDA AND PAGE NUMBERING: Attached addenda are a part of this Purchase Agreement.
Enter total number of pages of this Purchase Agreement, including addenda : __ pages.
8
NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement
and should not be part of the page numbering.
I, the owner of the Property, accept this Purchase
Agreement and authorize the listing broker to withdraw
said Property from the market, unless instructed
otherwise in writing.
I have reviewed all pages of this Purchase
Agreement.
If checked, this Agreement is subject to attached
Addendum to Purchase Agreement: Counteroffer.
FIRPTA: Seller represents and warrants, under penalty
of perjury, that Seller IS NOT a foreign person (i.e., a
non-resident alien individual, foreign corporation, foreign
partnership, foreign trust, or foreign estate for purposes
of income taxation. This representation and warranty
shall survive the closing of the transaction and the
delivery of the deed.
I agree to purchase the Property for the price and on
the terms and conditions set forth above.
I have reviewed all pages of this Purchase
Agreement
Seller Buyer
_____________________________
Michael L. Hestick, a married person 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
Yvonne E. Hestick, a married person
By:
Tim Hoyt
Its: Acting Executive Director
Date: March ___, 2023 Date: March ____, 2023
THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S).
IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL.
9
Exhibit A
Legal Description
Lot 24, Block 1, except the Easterly 7 feet thereof, Mork-Campion Manor, according to the
recorded plat thereof, Hennepin County, Minnesota.
Abstract property
And
That part of Lot 25, Block 1, Mork-Campion Manor lying West of the East 7 feet thereof,
according to the recorded plat thereof, Hennepin County, Minnesota.
Torrens Property
Certificate of Title No. 1001134
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11452 4965 Winnetka Ave N\Purchase Agreement.docx
4965 Winnetka Ave N
R-1, Single-family residential
175’175’124.84’124.84’Potential Potential HomeHomePotential Potential HomeHome
95’95’80’80’DrivewayDrivewayDrivewayDriveway
Appraisal Professionals of MN LLC
Jayne Preusse
Eden Prairie, MN 55344
612-267-5269
11/04/2020
Jeff Alger
City of New Hope
4401 Xylon Ave N
New Hope, MN 55428
Re:Property:4965 Winnetka Ave N
New Hope, MN 55428
Borrower:N/A
File No.:AP20375
Opinion of Value: $215,000
Effective Date:10/28/2020
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: 08/31/2021
jstrikos@msn.com
APPRAISAL OF REAL PROPERTY
4965 Winnetka Ave N
New Hope, MN 55428
BLOCK 001 MORK-CAMPION MANOR
City of New Hope
4401 Xylon Ave N
New Hope, MN 55428
215,000
10/28/2020
Jayne Preusse
Appraisal Professionals of MN LLC
Certified Residential Appraiser
Eden Prairie, MN 55344
612-267-5269
jstrikos@msn.com
Form GA1V - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
LOCATED AT
FOR
OPINION OF VALUE
AS OF
BY
Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
4965 Winnetka Ave N
AP20375
4965 Winnetka Ave N New Hope MN 55428
BLOCK 001 MORK-CAMPION MANOR Hennepin
07-118-21-14-0131 2020 3,535 0
N/A M L & P Hestick
0
New Hope 33460 0215.03
N/A N/A N/A
City of New Hope 4401 Xylon Ave N, New Hope, MN 55428
Jayne Preusse 7164 Crowne Oak Road, Eden Prairie, MN 55344
95
5
183
454
298
0
71
47
35
1
1
60
Other 3
Int 694 to the north, CR 81 to the east, CR 9 to the south, and St Hwy 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, 3% indicates "Other". The primary portion of this amount includes parks, miscellaneous, water and undeveloped
land. This does not indicate any negative impact on the Subject's value & marketability at this time.
Market data indicates overall property values have been increasing for the previous 12 month period prior to the effective date of this
appraisal. Market times are deemed to be in the "0-3 months" range at this time.
125x174
21,893 sf
R1-Single Family Residential
AMP CB Asphalt
Concrete
Concrete
Yes
None
Level, Slants Upward Slightly
Average-21,893 sf
Rectangular
Average
A;Res/Com
Average
Asphalt
Typical Easements
X 11/04/2016
27053C0192F
Subject is located
with a busy street of Winnetka Ave to its front with external from the noise of the traffic and commercial buildings across the street at the
front.
1
1
Detached
Rambler
Existing
67
45
Concrete/Avg
Wd/Avg
Asphalt/Avg
Aluminum/Avg
DgH/Hge/Avg
Full/Avg
N/A
N/A
N/A
Full/WO
None
See Att Adden
See Att Adden
None
1,551
50%
Finished/Open
SR/Pnl/F-A
Vyl/Con/F-A
Yes/Walk-out
Unkn
Unkn
Unkn
Unkn
N/A
N/A
1 1 .1 1 1 1,551
1 1 1 1 1 4 1 1,551
7 4 1 1,551
Cpt/Vy/Wd/Avg
SR/Pnl/Wd/Avg
Wood/Avg
CT/Vyl/Avg
Tile/Avg
Wd/Avg
Yes
FWA
Gas
Avg
Yes
No
Window
Avg
1
None
1
OPorch
None
None
Yes
2
6
See Attached Addendum.
C4;The
subject is a "Rambler" detached single family home reflecting overall average condition as compared to competing properties of a similar age
and design. The subject property exhibits no apparent effects of functional obsolescence. See attached addendum and photo addendum.
None noted.
Jayne Strikos
Property Description File No.UNIFORM RESIDENTIAL APPRAISAL REPORT
SUBJECTProperty Address
Legal Description
Assessor's Parcel No.
Borrower
Property rights appraised
Neighborhood or Project Name
Sale Price $
Lender/Client
Appraiser
Location
Built up
Growth rate
Property values
Demand/supply
Marketing time
City State Zip Code
County
Tax Year R.E. Taxes $Special Assessments $
Current Owner Occupant:Owner Tenant Vacant
Fee Simple Leasehold Project Type PUD Condominium (HUD/VA only)HOA $/Mo.
Map Reference Census Tract
Date of Sale Description and $ amount of loan charges/concessions to be paid by seller
Address
Address
NEIGHBORHOODPredominant
occupancy
Single family housing Present land use %Land use change
Note: Race and the racial composition of the neighborhood are not appraisal factors.
Predominant
Urban
Over 75%
Rapid
Increasing
Shortage
Under 3 mos.
Suburban
25-75%
Stable
Stable
In balance
3-6 mos.
Rural
Under 25%
Slow
Declining
Over supply
Over 6 mos.
Owner
Tenant
Vacant (0-5%)
Vac.(over 5%)
PRICE AGE
$(000)(yrs)
Low
High
One family
2-4 family
Multi-family
Commercial
Not likely
In process
Likely
To:
Neighborhood boundaries and characteristics:
Factors that affect the marketability of the properties in the neighborhood (proximity to employment and amenities, employment stability, appeal to market, etc.):
Market conditions in the subject neighborhood (including support for the above conclusions related to the trend of property values, demand/supply, and marketing time
-- such as data on competitive properties for sale in the neighborhood, description of the prevalence of sales and financing concessions, etc.):PUDProject Information for PUDs (If applicable) - - Is the developer/builder in control of the Home Owners' Association (HOA)?Yes No
Approximate total number of units in the subject project Approximate total number of units for sale in the subject project
Describe common elements and recreational facilities:SITEDimensions
Site area
Specific zoning classification and description
Zoning compliance
Highest & best use as improved:
Corner Lot Yes No
Legal Legal nonconforming (Grandfathered use)Illegal No zoning
Present use Other use (explain)
Utilities Off-site Improvements
Electricity
Gas
Water
Sanitary sewer
Storm sewer
Public Other Type Public Private
Street
Curb/gutter
Sidewalk
Street lights
Alley
Topography
Size
Shape
Drainage
View
Landscaping
Driveway Surface
Apparent easements
FEMA Special Flood Hazard Area
FEMA Zone
FEMA Map No.
Map Date
Yes No
Comments (apparent adverse easements, encroachments, special assessments, slide areas, illegal or legal nonconforming zoning use, etc.):DESCRIPTION OF IMPROVEMENTSGENERAL DESCRIPTION
No. of Units
No. of Stories
Type (Det./Att.)
Design (Style)
Existing/Proposed
Age (Yrs.)
Effective Age (Yrs.)
EXTERIOR DESCRIPTION
Foundation
Exterior Walls
Roof Surface
Gutters & Dwnspts.
Window Type
Storm/Screens
Manufactured House
FOUNDATION
Slab
Crawl Space
Basement
Sump Pump
Dampness
Settlement
Infestation
BASEMENT
Area Sq. Ft.
% Finished
Ceiling
Walls
Floor
Outside Entry
INSULATION
Roof
Ceiling
Walls
Floor
None
Unknown
ROOMS
Basement
Level 1
Level 2
Finished area above grade contains:Rooms;Bedroom(s);Bath(s);Square Feet of Gross Living Area
Foyer Living Dining Kitchen Den Family Rm.Rec. Rm.Bedrooms # Baths Laundry Other Area Sq. Ft.
INTERIOR Materials/Condition
Floors
Walls
Trim/Finish
Bath Floor
Bath Wainscot
Doors
HEATING
Type
Fuel
Condition
COOLING
Central
Other
Condition
KITCHEN EQUIP.
Refrigerator
Range/Oven
Disposal
Dishwasher
Fan/Hood
Microwave
Washer/Dryer
ATTIC
None
Stairs
Drop Stair
Scuttle
Floor
Heated
Finished
AMENITIES
Fireplace(s) #
Patio
Deck
Porch
Fence
Pool
CAR STORAGE:
None
Garage
Attached
Detached
Built-In
Carport
Driveway
# of cars
COMMENTSAdditional features (special energy efficient items, etc.):
Condition of the improvements, depreciation (physical, functional, and external), repairs needed, quality of construction, remodeling/additions, etc.:
Adverse environmental conditions (such as, but not limited to, hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the
immediate vicinity of the subject property.:
Freddie Mac Form 70 6/93 Fannie Mae Form 1004 6/93PAGE 1 OF 2
Form UA2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
76,000
1,551
1,551
480
76,000
4965 Winnetka Ave N
AP20375
Estimated economic life based on 100
total years. Remaining Economic Life: 55
The most recent and similar land sales per RMLS - #4779014
$55,000 and #4780925 $75,000, both from the neighboring city
of Crystal. No other land sales from 1/1/2016 to present within
a one mile radius and within the city of New Hope per RMLS
statistics.
4965 Winnetka Ave N
New Hope, MN 55428
N/A
RMLS/HennCA
Inspection
A;BsRd/Com
Fee Simple
21,893 sf
A;Res/Com
Rambler
Q5
67
Q4
7 4 1
1,551
1551sf775sfwo
2rr0br0.1ba2o
Average
FWA
None
2ga6dw
Dk/OPor
1 FP
None
10/28/2020
RMLS/HennCA
4649 Oregon Ave N
New Hope, MN 55428
0.52 miles SE
200,350
122.54
RMLS#5237100/71DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Cash;0 0
s11/19;Unk +8,347
A;Railroad/Com 0
Fee Simple
14810 sf +4,000
A;Res/Com
Traditional 0
Q5 -4,000
59 0
Q4
7 4 1.1 -3,000
1,635 -2,520
736sf330sfwu +9,900
2rr0br0ba1o 0
Average
FWA C/Air -6,000
None 0
2gd4dw 0
Dk/ScPor 0
None +1,000
None
7,727
208,077
10/28/2020
RMLS/HennCA
7819 48th Ave N
New Hope, MN 55428
0.26 miles SE
183,000
156.54
RMLS#5488885/2DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Conv;3250 0
s04/20;Unk +3,050
N;Res;-8,000
Fee Simple
9583 sf +5,000
N;Res;-4,000
DT1;Rambler
Q5
56 0
Q4
6 3 1.1 -3,000
1,169 +11,460
1169sf234sfwu +11,420
1rr0br1.0ba1o 0
Average
FWA C/Air
None 0
2gb4dw 0
None +2,000
None +1,000
None
18,930
None
201,930
10/28/2020
RMLS/HennCA
5615 Wisconsin Ave N
New Hope, MN 55428
0.69 miles NW
239,900
184.54
RMLS#5285175/46DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
FHA/7600 0
s11/19;Unk +9,995
A;Apartments -5,000
Fee Simple
27007 sf -6,000
N;Res;-4,000
DT1;Rambler
Q5
71 0
Q4 -4,000
6 3 2.1 -9,000
1,300 +7,530
1285sf896wu -1,420
1rr0br1.0ba1o 0
Average
FWA C/Air
None
2gd4dw 0
None +2,000
None +1,000
None
-8,895
None
231,005
10/28/2020
RMLS/HennCA
The subject property has not been a sale / re-sale
during the past 36 months. All comparable sales have not been sales / resales during the past 12 months.
Remaining Economic Life: 55
215,000
See Attached Addendum.
Most emphasis was placed on the Sales Comparison Approach to Value. The Income (GRM) Approach and Cost Approach
were both considered with the Sales Comparison Approach weighing in as the most viable approach to value/opinion of value.
10/2020
10/28/2020
215,000
Jayne Preusse
11/04/2020
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
4965 Winnetka Ave N
New Hope, MN 55428
N/A
RMLS/HennCA
Inspection
A;BsRd/Com
Fee Simple
21,893 sf
A;Res/Com
Rambler
Q5
67
Q4
7 4 1
1,551
1551sf775sfwo
2rr0br0.1ba2o
Average
FWA
None
2ga6dw
Dk/OPor
1 FP
None
10/28/2020
RMLS/HennCA
4609 Flag Ave N
New Hope, MN 55428
0.87 miles SW
201,000
179.46
RMLS#5292750/1DOM
RMLS/HennAssessWeb/Dr-BIns
ArmLth
Cash;0 0
s10/19;Unk +10,050
N;Res;-8,000
Fee Simple
9583 sf +5,000
N;Res;-4,000
DT1;Split Entry 0
Q5 -5,000
51 0
Q4
5 2 1 0
1,120 +12,930
1080sf651wu +3,480
1rr1br1.0ba1o 0
Average
FWA C/Air
None 0
2ga6dw 0
EnPor/Dk -1,000
1 FP
None
13,460
214,460
10/28/2020
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
4965 Winnetka Ave N
AP20375
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
File No.
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Condition Ratings and Definitions
C1
The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new
and the dwelling features no physical depreciation.
Note: Newly constructed improvements that feature recycled or previously used materials and/or components can be considered new dwellings
provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been
rehabilitated/remanufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they
have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without
adequate maintenance or upkeep).
C2
The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components
are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced
with components that meet current standards. Dwellings in this category are either almost new or have been recently completely renovated and
are similar in condition to new construction.
Note: The improvements represent a relatively new property that is well maintained with no deferred maintenance and little or no physical
depreciation, or an older property that has been recently completely renovated.
C3
The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every
major building component, may be updated or recently rehabilitated. The structure has been well maintained.
Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is
being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of
short-lived building components have been replaced but not to the level of a complete renovation.
C4
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been
adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building
components have been adequately maintained and are functionally adequate.
Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building
components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however,
they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property.
C5
The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs,
rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains
useable and functional as a residence.
Note: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many
of its short-lived building components are at the end of or have exceeded their physical life expectancy but remain functional.
C6
The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety,
soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many
or most major components.
Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property
with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements.
Quality Ratings and Definitions
Q1
Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such
residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship
and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality
exterior refinements and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes
throughout the dwelling are of exceptionally high quality.
Q2
Dwellings with this quality rating are often custom designed for construction on an individual property owner’s site. However, dwellings in
this quality grade are also found in high-quality tract developments featuring residence constructed from individual plans or from highly
modified or upgraded plans. The design features detailed, high quality exterior ornamentation, high-quality interior refinements, and detail. The
workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality.
UAD Version 9/2011 (Updated 4/2012)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Quality Ratings and Definitions (continued)
Q3
Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard
residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors
that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been
upgraded from “stock” standards.
Q4
Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans
are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship,
finish, and equipment are of stock or builder grade and may feature some upgrades.
Q5
Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a
plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation
and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials
with limited refinements and upgrades.
Q6
Dwellings with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings
are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or
expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical
systems and equipment may be minimal or non-existent. Older dwellings may feature one or more substandard or non-conforming additions
to the original structure
Definitions of Not Updated, Updated, and Remodeled
Not Updated
Little or no updating or modernization. This description includes, but is not limited to, new homes.
Residential properties of fifteen years of age or less often reflect an original condition with no updating, if no major
components have been replaced or updated. Those over fifteen years of age are also considered not updated if the
appliances, fixtures, and finishes are predominantly dated. An area that is ‘Not Updated’ may still be well maintained
and fully functional, and this rating does not necessarily imply deferred maintenance or physical/functional deterioration.
Updated
The area of the home has been modified to meet current market expectations. These modifications
are limited in terms of both scope and cost.
An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute
updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not
include significant alterations to the existing structure.
Remodeled
Significant finish and/or structural changes have been made that increase utility and appeal through
complete replacement and/or expansion.
A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include
some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation
of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of)
square footage). This would include a complete gutting and rebuild.
Explanation of Bathroom Count
Three-quarter baths are counted as a full bath in all cases. Quarter baths (baths that feature only a toilet) are not
included in the bathroom count. The number of full and half baths is reported by separating the two values using a
period, where the full bath count is represented to the left of the period and the half bath count is represented to the
right of the period.
Example:
3.2 indicates three full baths and two half baths.
UAD Version 9/2011 (Updated 4/2012)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements)
Abbreviations Used in Data Standardization Text
Abbreviation Full Name Fields Where This Abbreviation May Appear
ac Acres Area, Site
AdjPrk Adjacent to Park Location
AdjPwr Adjacent to Power Lines Location
A Adverse Location & View
ArmLth Arms Length Sale Sale or Financing Concessions
ba Bathroom(s)Basement & Finished Rooms Below Grade
br Bedroom Basement & Finished Rooms Below Grade
B Beneficial Location & View
Cash Cash Sale or Financing Concessions
CtySky City View Skyline View View
CtyStr City Street View View
Comm Commercial Influence Location
c Contracted Date Date of Sale/Time
Conv Conventional Sale or Financing Concessions
CrtOrd Court Ordered Sale Sale or Financing Concessions
DOM Days On Market Data Sources
e Expiration Date Date of Sale/Time
Estate Estate Sale Sale or Financing Concessions
FHA Federal Housing Authority Sale or Financing Concessions
GlfCse Golf Course Location
Glfvw Golf Course View View
Ind Industrial Location & View
in Interior Only Stairs Basement & Finished Rooms Below Grade
Lndfl Landfill Location
LtdSght Limited Sight View
Listing Listing Sale or Financing Concessions
Mtn Mountain View View
N Neutral Location & View
NonArm Non-Arms Length Sale Sale or Financing Concessions
BsyRd Busy Road Location
o Other Basement & Finished Rooms Below Grade
Prk Park View View
Pstrl Pastoral View View
PwrLn Power Lines View
PubTrn Public Transportation Location
rr Recreational (Rec) Room Basement & Finished Rooms Below Grade
Relo Relocation Sale Sale or Financing Concessions
REO REO Sale Sale or Financing Concessions
Res Residential Location & View
RH USDA - Rural Housing Sale or Financing Concessions
s Settlement Date Date of Sale/Time
Short Short Sale Sale or Financing Concessions
sf Square Feet Area, Site, Basement
sqm Square Meters Area, Site
Unk Unknown Date of Sale/Time
VA Veterans Administration Sale or Financing Concessions
w Withdrawn Date Date of Sale/Time
wo Walk Out Basement Basement & Finished Rooms Below Grade
wu Walk Up Basement Basement & Finished Rooms Below Grade
WtrFr Water Frontage Location
Wtr Water View View
Woods Woods View View
Other Appraiser-Defined Abbreviations
Abbreviation Full Name Fields Where This Abbreviation May Appear
UAD Version 9/2011 (Updated 4/2012)
Twelve Month Listing History of Subject Property
An extensive search of the subject property was completed and there were no listings of the subject
in the previous twelve months.
Sources used were Hennepin County Records and Northstar Multiple Listing Service.
Market Conditions
Overall market conditions for this report were based on the statistics for page one of the URAR.
Market statistics for page one of the URAR concluded the following: the median sold price of all single
family homes within a one mile radius from the subject property within the City of New Hope only, from
10/28/2018-10/27/2019 was $258,950 (data of 80). Whereas, the median sold price of all single family
homes from 10/28/2019-10/27/2020 was $290,000 (data of 101). An increase of approximately 10%.
The average priced homes indicates an increase with the same statistics 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 north central 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/Interstate 694 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
topography slants slightly upward at the front, and then levels and does not allow for a walkout basement. There is
an asphalt driveway that is entered from a busier street of Winnetka Ave N at the front to the attached garage.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20375
N/A
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
an asphalt driveway that is entered from a busier street of Winnetka Ave N at the front to the attached garage.
There is a concrete walkway/steps from the driveway that leads to the front entrance. The subject views detached
single family homes on both sides, to the rear and commercial to the front. In short, the subject parcel is observed
to be an average site with the external associated observed, and is considered to be a suitable place for the home
improvements.
There are no apparent easements or encroachments, other than typical utility easements.
In making this appraisal report, we are not aware of any testing for the existence of presence of
radon, asbestos, toxic substances, or other environmental pollutants in the building, land, or other
surrounding areas, and that the value assigned herein to the land and buildings assume that no
such contaminants exist. We further recommend that if you have knowledge of or reason to subject
the existence of such pollutants, that you obtain an environmental assessment of the property.
To the best of our knowledge, there are no environmental risk factors which may affect the real
estate being appraised.
Additional Features
Exterior features of the subject include an open porch and deck.
Main level features include a fireplace in the main level family room.
The first level consists of a foyer, living room, family room, kitchen, kitchen dining, full bath, and four bedrooms.
The basement is full, finished and is a walkout. The basement consists of a family room, den, half bath and
laundry/utility rooms.
The appraiser manually measured the subject with 1551 GLA. RMLS tax information for the subject indicates GLA
of 1553.
At the time of the appraisal appointment/inspection, while in the basement, appraiser noticed that there was possible
moisture around the parameter of the family room walls and flooring. Appraiser asked Ms Owner if there was any
water issues in previous years and owner advised that there has been water that has come into the basement from
weather conditions.
EXTRAORDINARY ASSUMPTION: The projected Market Value assumes the subject's previous wet
basement is repairable without requiring extraordinary correction costs.
"This assignment was completed in full compliance with the appraisal independence
regulations".
Highest and Best Use
Highest and best use is defined in The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, at Page
93, as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically
possible, appropriately supported, financially feasible, and that results in the highest value.
The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility,
and maximum profitability. Alternatively, the probable use of land or improved property – specific with respect to the
user and timing of the use – that is adequately supported and results in the highest present value.
The subject as improved is a legally permissible use based on its current zoning. Also, the lot size, shape, physical
condition and land to building ratio allow the present structure and indicate a good utilization of the improvements.
Based on current market conditions, the present use and structure as a single family residence is its financially
feasible and maximally productive use.
The subject property is currently being utilized as a residential single family home and is being
appraised as a residential single family home.
Comments on Sale Comparison
Your appraiser has performed a detailed search for comparables to the subject in location, design,
utility and appeal. After extensive research, the comparable sales chosen were deemed the best
available. The appraiser has researched, reviewed, analyzed and documented the sales. The
appraiser has made peer acceptable, unbiased, and impartial adjustments for items of significant variation.
Search parameters included the following:
- location of being in the City of New Hope and within one mile from the subject property
- similar design style, age, condition and amenities
- similar parcel size and view.
The subject is a rambler designed detached single family home. The subject is considered to be overall fair-average
condition. Four sold comparables were utilized for the overall opinion of value.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20375
N/A
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
condition. 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.
Comparable #1 best represents being most similar in external obsolescence with railroad tracks and commercial
directly to the rear of its parcel.
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 and line item adjustments for parcel size.
GLA for the comparables utilized within this report have been researched per the individual listings, RMLS Realist
and Hennepin County Assessor Website and each analyzed to the best judgment of the most accurate GLA of each
comparable.
Subject falls in between the low to medium predominant value range. This does not have a
negative impact on future marketing or is the subject considered to be an under improvement
to the neighborhood.
Adjustments
TIME ADJUSTMENTS:
Comparables #1-#4 have been adjusted to the current market conditions.
LOCATION:
The location adjustments, if any, considered accessibility, degree of conformity to adjoining
properties, and the overall appeal and marketability of the respective neighborhoods in relation
to the subject. Comparables #2 and #4 have no external. Comparable #3 has apartment buildings to
the front and to the rear and is observed to be slightly superior to the subject in location.
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 #1, #2 and #4 have slightly smaller parcel sizes to the subject and are
adjusted accordingly. Comparable #3 has a slightly larger parcel size to the subject. Comparable #2, #3 and #4 all
have slightly superior residential views to the subject.
DESIGN/STYLE:
Adjustments are made on the basis of interior and exterior appeal characteristics.
QUALITY/CONDITION:
Adjustments are made on the basis of MLS photos, an inspection from the street and the appraiser's
experience and judgment.
Comparable #1 is observed to be slightly superior in quality upgrades to the subject per the RMLS description and
photos with a newer roof and siding.
Comparable #3 is observed to be slightly superior in condition to the subject per the RMLS description and photos.
Comparable #4 is observed to be superior in quality upgrades/updates to the subject per the RMLS description and
photos with some new windows, furnace and AC.
ROOM COUNT/PROPERTY FEATURES:
Adjustment were made based on the price-point of the residence and on the appraiser's experience
and judgment.
GLA- 30.00 Finished Basement sf - 20.00
The subject and comparables have different size amenities, and the size of each was taken under consideration and
therefore may not be completely defined by the specific adjustments as described for each above.
Assessed Market Value for Tax Purposes
According to Hennepin County Assessor Website records the subjects 2020 estimated assessed value is
as follows: Land $76,000, Building $150,000 with a total of $226,000.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20375
N/A
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
Cost Approach
The cost approach has not been developed by the appraiser as an analysis to support the opinion
of the property's market value. The cost approach may not be a reliable indication of
replacement or reproduction cost due to changing costs of labor and materials, due to
changing building codes, governmental regulations and requirements, age of the subject
and speculative depreciation.
Intended Used of Appraisal
The Intended User of this appraisal report is the Lender/Client. The Intended Use is to evaluate
the property that is the subject of this appraisal for a full appraisal per the client request for a market
value, subject to the stated Scope of Work, purpose of the appraisal, reporting requirements of this
appraisal report form, and Definition of Market Value. No additional intended Users are identified by
the appraiser.
Scope of the Appraisal
The appraiser has viewed all readily accessible areas of the dwelling (and any other building
structure located on the property). This complete visual inspection is not intended to be the
same depth or for the same purpose as a home inspection. The appraiser has viewed the
property solely for the valuation purposes and to observe property characteristics that a typical
purchaser would consider in their decision making process, as well as those items outlined in
the assumptions and limited conditions and certifications to this appraisal. Personal property or
chattel was not included in the appraised value.
Zoning
Comments about the zoning compliance of the subject property are intended by the appraiser to
be in general terms. A detailed analysis about every aspect of the subject property's improvements
and the site characteristic with respect to current zoning and building codes are beyond the scope
of this assignment and was not performed. The subject is considered to be in compliance with
current zoning requirements in a general sense. It is a Single family residential improvement in
an area zoned for single family residential use.
Site Conditions
No obvious adverse site conditions or external factors were observed. Unless otherwise stated,
typical drainage, utility and right of way easements do not adversely impact value. However, the
discovery of many site related issues often require special expertise or data sources not customary
or available in the performance of an appraisal. A fundamental site analysis such as this is beyond
the scope of this assignment. A detailed site or location survey, which may reveal adverse easements,
encroachments, zoning violations, environmental issues or other matters that could impact the
analysis or opinions, was not available to the appraiser.
Sketch
The subject's sketch is used for representational purposes only. The subject's sketch is to comply
with The American National Standard Institute process for calculating gross living area; however,
due to the complexity of the subject property and the limitations of the appraisal software it is not
possible to develop a blue print of the subject property. The subject's sketch is not intended to be
used for any other purpose. The subject's sketch and actual dimensions will very. The appraiser
is not a structural engineer. If the lender requires a precise blue print of the subject property it is
the lenders responsibility to have the building surveyed by a structural engineer. See Statement
Of Assumptions And Limiting Conditions.
At the time of inspection, the appraiser physically measured the exterior/interior of the improvement.
The appraiser's measurements may differ from that of the assessor's and/or builder's documentation
for the subject's gross living area. The appraiser has no knowledge as to if the assessor physically
measured the subject property or used blueprint documentation for the gross living area. Since the
appraiser physically measured the subject property on the effective date of this report, the appraiser
deems their calculations to be accurate and reliable. The subject's sketch is used for representational
purposes only. The subject's sketch is to comply with The American National Standard Institute
process for calculating gross living area; however, due to the complexity of the subject property,
and the limitations of the appraisal software, it is not possible to develop a blue print of the subject
property. The subject's sketch is not intended to be used for any other purpose. The subject's sketch
and actual dimensions will vary. The appraiser is not a structural engineer. If the lender requires a
precise blue print of the subject property it is the lenders responsibility to have the building surveyed
by a structural engineer. See Statement Of Assumptions And Limiting Conditions.
Land Value
Development of a land value has been attempted by the appraiser . The use of this data, in whole
or in part, for other purposes is not intended by the appraiser. Nothing set forth in the appraisal
should be relied upon for the purpose of determining the amount or type of insurance coverage to
be placed on the subject property. The appraiser assumes no liability for and does not guarantee
that any insurable value estimate inferred from this report will result in the subject property being
fully insured for any loss that may be sustained. Further, the land value may not be reliable
indication of replacement or reproduction cost for any date other than the effective date of this
appraisal due to changing costs of labor and materials and due to changing building codes and
governmental regulations and requirements.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
AP20375
N/A
4965 Winnetka 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
4965 Winnetka 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
4965 Winnetka Ave N
N/A
1,551
7
4
1
A;BsRd/Com
A;Res/Com
21,893 sf
Q5
67
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
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Living Kitchen
Foyer Family
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
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Bedroom Bedroom
Bedroom Basement Half Bath
Basement Den Basement Laundry
Borrower
Lender/Client
Property Address
City County State Zip Code
Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
Photograph Addendum
N/A
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
HVAC Basement Walk-out
Basement Family - Signs of Moisture
See Attached Addendum
Basement
Street Views Opposite Direction Deck Above Garage
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
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Views to the Front Open Porch at Side
Backyard Garage
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
4965 Winnetka 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
4649 Oregon Ave N
0.52 miles SE
200,350
1,635
7
4
1.1
A;Railroad/Com
A;Res/Com
14810 sf
Q5
59
Comparable 2
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
7819 48th Ave N
0.26 miles SE
183,000
1,169
6
3
1.1
N;Res;
N;Res;
9583 sf
Q5
56
Comparable 3
Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
5615 Wisconsin Ave N
0.69 miles NW
239,900
1,300
6
3
2.1
A;Apartments
N;Res;
27007 sf
Q5
71
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
4965 Winnetka 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
4609 Flag Ave N
0.87 miles SW
201,000
1,120
5
2
1
N;Res;
N;Res;
9583 sf
Q5
51
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
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
20'24'20'24'24'20'24'20'5'14'32'36.5'4.5'22'22.5'44.5'
14'32'36.5'4.5'22'22.5'44.5'5'First Floor
Foyer
Kitchen
Dining
Living Family
BedroomBedroom
BedroomBedroom
Bath
Basement Walk-out
Deck
Garage
Basement
Family
Den
Half Bath Laundry
Utility
11.5'9'11.5'9'Open Porch
TOTAL Sketch by a la mode, inc.Area Calculations Summary
Living Area Calculation Details
First Floor 1550.5 Sq ft 22.5 × 22 = 495
27 × 22.5 = 607.5
14 × 32 = 448
Total Living Area (Rounded):1551 Sq ft
Non-living Area
2 Car Attached 480 Sq ft 24 × 20 = 480
Open Porch 103.5 Sq ft 9 × 11.5 = 103.5
Composite Deck 480 Sq ft 20 × 24 = 480
Basement 1550.5 Sq ft 22.5 × 22 = 495
27 × 22.5 = 607.5
32 × 14 = 448
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
4965 Winnetka 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
4965 Winnetka 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
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
Borrower
Lender/Client
Property Address
City County State Zip Code
4965 Winnetka Ave N
AP20375
N/A
4965 Winnetka Ave N
New Hope Hennepin MN 55428
City of New Hope
None.
None. Sources for data were from RMLS and Hennepin County
Assessor Website. All Photos are from the appraisal appointment/inspection on 07/25/2020. Appraisal has performed services as an appraiser
for the subject property for an appraisal report for market value on 07/25/2020.
Appraiser does know the owners of the subject property.
0-90
0-90
Jayne Preusse
11/04/2020
20559939
MN
08/31/2021
10/28/2020
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 4965 Winnetka Avenue North
EXPENSES AMOUNT
Acquisition (230,000.00)$
Closing costs for purchase (estimated)(3,000.00)$
Legal costs for purchase (estimated)(2,000.00)$
Appraisal (350.00)$
Demolition survey (650.00)$
Demolition and site prep (estimated)(70,000.00)$
Real estate taxes (estimated at 9 months)(3,022.00)$
Lawn services (estimated)(2,000.00)$
Utility billing (estimated)(300.00)$
Consultant fees for platting (estimated)(4,000.00)$
Public hearing notices (estimated)(150.00)$
Closing costs for sale (estimated)(1,500.00)$
Legal costs for sale (estimated)(2,000.00)$
TOTAL (318,972.00)$
REVENUE AMOUNT
EDA (estimated lot sale proceeds)160,000.00$
TOTAL 160,000.00$
TOTAL COST/REVENUE (158,972.00)$
Taxable Market Value 2022,
Payable 2023
Projected Taxable Value 2024,
Payable 2025 Change Percent Change
286,000.00$ 950,000.00$ 664,000.00$ 232.17%
Estimated Taxes Allocated to
City 2022, Payable 2023
Projected Taxes Allocated
to City 2024, Payable 2025 Change Percent Change
1,716.00$ 5,700.00$ 3,984.00$ 232.17%
Projected Project Expenses (318,972.00)$
Lot Sale Revenue 160,000.00$
Total Cost/Revenue (158,972.00)$
# of Years
(Year)
Additional Taxes
Collected By City
Total Cost/
Revenue
Return On
Investment
0 (present)-$ (158,972.00)$ -100.00%
1 (payable 2025)3,984.00$ (154,988.00)$ -97.49%
2 (payable 2026)8,087.52$ (150,884.48)$ -94.91%
3 (payable 2027)12,314.15$ (146,657.85)$ -92.25%
4 (payable 2028)16,667.57$ (142,304.43)$ -89.52%
5 (payable 2029)21,151.60$ (137,820.40)$ -86.69%
10 (payable 2034)45,672.10$ (113,299.90)$ -71.27%
15 (payable 2039)74,098.07$ (84,873.93)$ -53.39%
20 (payable 2044)107,051.57$ (51,920.43)$ -32.66%
25 (payable 2049)145,253.71$ (13,718.29)$ -8.63%
30 (payable 2054)189,540.46$ 30,568.46$ 19.23%
*Based on two new homes valued at $475,000 each
Estimated Tax Impact of Improvements at 4965 Winnetka Avenue North
Estimated Return on Investment for 4965 Winnetka Avenue North
Description Taxable Market Value
Change Cash Flow
Investment -$ (158,972.00)$
Return, Year 1 664,000.00$ 3,984.00$
Return, Year 2 683,920.00$ 4,103.52$
Return, Year 3 704,437.60$ 4,226.63$
Return, Year 4 725,570.73$ 4,353.42$
Return, Year 5 747,337.85$ 4,484.03$
Return, Year 6 769,757.99$ 4,618.55$
Return, Year 7 792,850.72$ 4,757.10$
Return, Year 8 816,636.25$ 4,899.82$
Return, Year 9 841,135.33$ 5,046.81$
Return, Year 10 866,369.39$ 5,198.22$
Return, Year 11 892,360.48$ 5,354.16$
Return, Year 12 919,131.29$ 5,514.79$
Return, Year 13 946,705.23$ 5,680.23$
Return, Year 14 975,106.39$ 5,850.64$
Return, Year 15 1,004,359.58$ 6,026.16$
Return, Year 16 1,034,490.36$ 6,206.94$
Return, Year 17 1,065,525.08$ 6,393.15$
Return, Year 18 1,097,490.83$ 6,584.94$
Return, Year 19 1,130,415.55$ 6,782.49$
Return, Year 20 1,164,328.02$ 6,985.97$
Return, Year 21 1,199,257.86$ 7,195.55$
Return, Year 22 1,235,235.60$ 7,411.41$
Return, Year 23 1,272,292.66$ 7,633.76$
Return, Year 24 1,310,461.44$ 7,862.77$
Return, Year 25 1,349,775.29$ 8,098.65$
Return, Year 26 1,390,268.55$ 8,341.61$
Return, Year 27 1,431,976.60$ 8,591.86$
Return, Year 28 1,474,935.90$ 8,849.62$
Return, Year 29 1,519,183.98$ 9,115.10$
Return, Year 30 1,564,759.50$ 9,388.56$
Total Returns 189,540.46$
Investment Cost 318,972.00$
Selling Price 160,000.00$
Return on Investment 19.23%
Description Amount
Investment (158,972.00)$
Return, Year 1 3,984.00$
Return, Year 2 4,103.52$
Return, Year 3 4,226.63$
Return, Year 4 4,353.42$
Return, Year 5 4,484.03$
Return, Year 6 4,618.55$
Return, Year 7 4,757.10$
Return, Year 8 4,899.82$
Return, Year 9 5,046.81$
Return, Year 10 5,198.22$
Return, Year 11 5,354.16$
Return, Year 12 5,514.79$
Return, Year 13 5,680.23$
Return, Year 14 5,850.64$
Return, Year 15 6,026.16$
Return, Year 16 6,206.94$
Return, Year 17 6,393.15$
Return, Year 18 6,584.94$
Return, Year 19 6,782.49$
Return, Year 20 6,985.97$
Return, Year 21 7,195.55$
Return, Year 22 7,411.41$
Return, Year 23 7,633.76$
Return, Year 24 7,862.77$
Return, Year 25 8,098.65$
Return, Year 26 8,341.61$
Return, Year 27 8,591.86$
Return, Year 28 8,849.62$
Return, Year 29 9,115.10$
Return, Year 30 9,388.56$
Total Returns 189,540.46$
Internal Rate of Return 1.02%
Estimated Internal Rate of Return for 4965 Winnetka Avenue North
Year
Original Taxable
Market Value (assumes
growth in value over
time)
Improved Taxable
Market Value
(assumes growth in
value over time)
New Taxable Value
Projected City Taxes on
New Taxable Market
Value
1 286,000.00$ 950,000.00$ 664,000.00$ 3,984.00$
2 294,580.00$ 978,500.00$ 683,920.00$ 4,103.52$
3 303,417.40$ 1,007,855.00$ 704,437.60$ 4,226.63$
4 312,519.92$ 1,038,090.65$ 725,570.73$ 4,353.42$
5 321,895.52$ 1,069,233.37$ 747,337.85$ 4,484.03$
6 331,552.39$ 1,101,310.37$ 769,757.99$ 4,618.55$
7 341,498.96$ 1,134,349.68$ 792,850.72$ 4,757.10$
8 351,743.93$ 1,168,380.17$ 816,636.25$ 4,899.82$
9 362,296.24$ 1,203,431.58$ 841,135.33$ 5,046.81$
10 373,165.13$ 1,239,534.52$ 866,369.39$ 5,198.22$
11 384,360.08$ 1,276,720.56$ 892,360.48$ 5,354.16$
12 395,890.89$ 1,315,022.18$ 919,131.29$ 5,514.79$
13 407,767.61$ 1,354,472.84$ 946,705.23$ 5,680.23$
14 420,000.64$ 1,395,107.03$ 975,106.39$ 5,850.64$
15 432,600.66$ 1,436,960.24$ 1,004,359.58$ 6,026.16$
16 445,578.68$ 1,480,069.05$ 1,034,490.36$ 6,206.94$
17 458,946.04$ 1,524,471.12$ 1,065,525.08$ 6,393.15$
18 472,714.42$ 1,570,205.25$ 1,097,490.83$ 6,584.94$
19 486,895.86$ 1,617,311.41$ 1,130,415.55$ 6,782.49$
20 501,502.73$ 1,665,830.75$ 1,164,328.02$ 6,985.97$
21 516,547.81$ 1,715,805.67$ 1,199,257.86$ 7,195.55$
22 532,044.25$ 1,767,279.84$ 1,235,235.60$ 7,411.41$
23 548,005.57$ 1,820,298.24$ 1,272,292.66$ 7,633.76$
24 564,445.74$ 1,874,907.19$ 1,310,461.44$ 7,862.77$
25 581,379.11$ 1,931,154.40$ 1,349,775.29$ 8,098.65$
26 598,820.49$ 1,989,089.03$ 1,390,268.55$ 8,341.61$
27 616,785.10$ 2,048,761.70$ 1,431,976.60$ 8,591.86$
28 635,288.66$ 2,110,224.56$ 1,474,935.90$ 8,849.62$
29 654,347.32$ 2,173,531.29$ 1,519,183.98$ 9,115.10$
30 673,977.73$ 2,238,737.23$ 1,564,759.50$ 9,388.56$
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 4965 Winnetka Avenue North
Comparison of Costs & Tax Impact for Recent Projects
Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020)
4965 Winnetka
Avenue North
4201 Boone
Avenue North
3611 Louisiana
Avenue North
5306 Rhode Island
Avenue North
5213 Pennsylvania
Avenue North
4637 Aquila
Avenue North
4215 Louisiana
Avenue North
Number of Units 2 2 1 1 1 1 1
Project Description Demolition, lot
split & rebuild
Demolition, lot
split & rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Demolition &
rebuild
Year Acquired TBD 2022 2022 2022 2021 2021 2020
Projected or Actual Projected
(at time of offer)
Projected
(at time of lot sale)
Projected
(at time of offer)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Projected
(at time of lot sale)
Expenses ($318,972.00) ($344,888.00) ($244,819.00) ($253,072.00) ($205,172.18) ($127,292.01) ($170,441.53)
Revenue $160,000.00 $161,000.00 $75,000.00 $87,000.00 $72,000.00 $81,000.00 $69,000.00
Total Cost/Revenue ($158,972.00) ($183,888.00) ($169,819.00) ($166,072.00) ($133,172.18) ($46,292.01) ($101,441.53)
Estimated Taxable Value of
New Home(s)
$475,000 per home
$950,000 total
$475,000 per home
$950,000 total
$450,000 $575,000 $485,000 $445,000 $380,000
*Additional Taxes
Collected by City - 1 year
$3,984.00 $5,700.00 $1,194.00 $2,100.00 $1,902.00 $1,254.00 $786.00
*Additional Taxes
Collected by City - 30 years
$189,540.46 $271,179.87 $56,805.05 $99,908.37 $90,488.44 $59,659.57 $37,394.28
*Return On Investment -
30 years
19.23% 47.47% -66.55% -39.84% -32.05% 28.88% -63.14%
*Internal Rate of Return -
30 years
1.02% 2.33% -5.44% -2.69% -2.08% 1.49% -5.01%
*Assumed 3% tax value growth rate