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062623 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, June 26, 2023 President Kathi Hemken Commissioner John Elder Commissioner Andy Hoffe Commissioner Michael Isenberg Commissioner Jonathan London 1. Call to order – EDA Meeting of June 26, 2023 2. Roll call 3. Approval of Minutes: • March 13, 2023 4. Resolution approving purchase and redevelopment agreement with Great Buy Homes, Inc. for the sale of 3611 Louisiana Avenue North (improvement project no. 1065) 5. Resolution approving Purchase Agreement for the acquisition of 5243 Oregon Avenue North (improvement project no. 1104) 6. 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 5802 Boone Avenue North (improvement project no. 1088) 7. Adjournment EDA Meeting   Page 1 March 13, 2023  City of New Hope  4401 Xylon Avenue North  New Hope, Minnesota 55428    EDA Minutes March 13, 2023  Regular Meeting City Hall      CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to  order at 8:53 p.m.    ROLL CALL Present:          Kathi Hemken, President  John Elder, Commissioner  Andy Hoffe, Commissioner  Michael Isenberg, Commissioner  Jonathan London, Commissioner     Staff Present:      Jeff Sargent, Director of Community Development  Jeff Alger, Community Development Specialist  Dan Boyum, City Engineer  Valerie Leone, City Clerk  Susan Rader, Director of Parks and Recreation  Stacy Woods, Assistant City Attorney    APPROVAL OF  MINUTES  Item 3    Motion was made by Commissioner Elder, seconded by Commissioner London,  to approve the minutes of February 27, 2023. Voting in favor: Hemken, Elder,  Hoffe, Isenberg, London; Abstained: Elder. Motion carried.    5802 BOONE AVE N  (IMPROVEMENT  PROJECT NO. 1088)  Item 4  President Hemken introduced for discussion EDA Item 4, Resolution authorizing  the purchase of 5802 Boone Avenue North by the Economic Development  Authority (improvement project no. 1088).    Mr. Jeff Alger, community development specialist, illustrated the property and  reviewed the history. The two‐story farmhouse is one of the oldest homes in New  Hope and is in a state of disrepair. He stated the EDA is asked to approve the  purchase agreement for acquisition of the bank‐owned property at 5802 Boone  Avenue North. An initial offer for the list price of $119,600 will be made and staff  would like authorization to increase the offer as high as $160,000 if multiple offers  are submitted. Earnest money of 3% would be required.     Mr. Alger reported the home is an ideal candidate for a demolition and rebuild  project. The 2022 assessed value of the property is $234,000. The EDA has funds  for the acquisition.    President Hemken noted the large lot size of one‐third acre may generate a price  above $80,000.     Commissioner London inquired of the condemnation process. Community  Development Director Jeff Sargent stated in order for the city to condemn the  EDA Meeting   Page 2 March 13, 2023  home, the building official would have to make a determination that it is  structurally unsafe which was not proven during the last inspection.      RESOLUTION 2023‐03  Item 4  Commissioner London introduced the following resolution and moved its  adoption “RESOLUTION AUTHORIZING THE PURCHASE OF 5802 BOONE  AVENUE NORTH BY THE ECONOMIC DEVELOPMENT AUTHORITY  (IMPROVEMENT PROJECT NO. 1088).” 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, Elder, Hoffe,  Isenberg, London; and the following voted against the same: None; Abstained:  None; Absent: None; whereupon the resolution was declared duly passed and  adopted, signed by the president which was attested to by the executive director.    4965 WINNETKA AVE  N (IMPROVEMENT  PROJECT NO. 1060)  Item 5    President Hemken introduced for discussion EDA Item 5, Resolution approving  Purchase Agreement for the acquisition of 4965 Winnetka Avenue North by the  Economic Development Authority (improvement project no. 1060).    Mr. Jeff Alger, community development specialist, illustrated the rambler that was  constructed in 1953. He stated the home is being sold by the owner to the EDA for  $230,000 plus closing costs.     Mr. Alger reported the .5 acre parcel is sufficient size to subdivide to accommodate  the construction of two homes. He stated the current curbcut is onto Winnetka  Avenue, and it would be changed to 50th Avenue.  He reported on the project  budget, tax impact, and return on investment. Mr. Alger stated the EDA has funds  for the acquisition.    RESOLUTION 2023‐04  Item 5  Commissioner London introduced the following resolution and moved its  adoption “RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE  ACQUISITION OF 4965 WINNETKA AVENUE NORTH BY THE ECONOMIC  DEVELOPMENT AUTHORITY (IMPROVEMENT PROJECT NO. 1060).” The  motion for the adoption of the foregoing resolution was seconded by  Commissioner Elder, and upon vote being taken thereon, the following voted in  favor thereof: Hemken, Elder, Hoffe, Isenberg, London; and the following voted  against the same: None; Abstained: None; Absent: None; whereupon the  resolution was declared duly passed and adopted, signed by the president which  was attested to by the executive director.    ADJOURNMENT Motion was made by Commissioner Isenberg, seconded by Commissioner Elder,  to adjourn the meeting. All present voted in favor. Motion carried. The New Hope  EDA adjourned at 9:14 p.m.    Respectfully submitted,    Valerie Leone, City Clerk    I:\RFA\COMM DEV\2023\EDA\3611 Louisiana Ave N\Q ‐ 3611 Louisiana Ave N Lot Sale 06‐26‐23.docx    Request for Action  June 26, 2023    Approved by: Reece Bertholf, City Manager  Originating Department: Community Development  By: Jeff Alger, Community Development Specialist;   Jeff Sargent, Director of Community Development  Agenda Title  Resolution approving purchase and redevelopment agreement with Great Buy Homes, Inc. for the sale of 3611  Louisiana Avenue North (improvement project no. 1065)  Requested Action  Staff requests that the Economic Development Authority conduct a public hearing and approve a resolution  approving the sale of the scattered site lot located at 3611 Louisiana Avenue North to Great Buy Homes.  Policy/Past Practice  The Economic Development Authority reviews proposals for the redevelopment of scattered site housing  properties prior to executing a contract with the preferred buyer/builder.   Background  The Economic Development Authority (EDA) acquired the property located at 3611 Louisiana Avenue North  for $205,000 in December of 2022, as part of the city’s scattered site housing program. Demolition work was  completed in May of 2023 and the lot has been prepared for construction of a new single‐family home. A  Request for Proposals (RFP) marketing the lots was sent to more than 50 builders on May 24, 2023. This includes  several new builders contacted by city staff in an attempt to continue increasing the number and quality of  proposals that are submitted. The non‐negotiable minimum lot sale price was set at $75,000 and builders were  allowed the opportunity to submit a higher offer in order to make their proposal more competitive. The lot  presents some challenges as it is 94 feet wide in the front yard, along Louisiana Avenue North, and decreases  to 30 feet wide along the rear property line. The sewer main for the property runs along the rear yard, which  means the selected builder will need to run sewer through the rear yard as opposed to from the street. The  property also abuts apartment buildings to the south and west. The RFP stipulated that the proposed house  “must be an owner‐occupied, single‐family home.” The occupancy requirement applies to the first buyer for  period of two years. It did not identify a preferred home style for the lot but stated “two‐story and rambler  designs have commanded the highest prices when compared to other home styles such as split entry.” The RFP  included an attachment listing homes in the city that have sold for $450,000 or more since June 1, 2021, and an  attachment listing the highest valued previous scattered site projects.    Proposals were due on June 15, 2023. The EDA received proposals from the following builders:   Great Buy Homes   Noberg Homes    Staff reviewed the proposals with the city manager and selected the submittal from Great Buy Homes as the  preferred proposal. Great Buy Homes’ proposal features a higher projected sale price ($11,000 to $25,000 more),  more finished square footage (262 square feet), and a higher level of curb appeal, including a front door with a  window and two sidelights and cultured stone on the entire two‐stall garage and the bottom third of the single‐ stall garage and home. Both homes feature the same number of bedrooms (5) and bathrooms (3). The proposal  Agenda Section EDA Item Number  4    Request for Action, Page 2    from Noberg Homes includes a lot purchase price of $80,000 as compared to $75,000 for Great Buy Homes.  Although the proposal from Noberg Homes includes a higher lot purchase price, staff felt the higher projected  sale price, additional square footage, and exterior finishes outweighed this factor. The proposal from Great Buy  Homes also features more upgrades such as a walk‐in closet and double sink bathroom vanity.    The base characteristics and attributes of the proposal are summarized as follows:     Great Buy Homes Noberg Homes  Lot purchase  price  $75,000 $80,000  Projected sale  price  $475,000 to $480,000 $450,000 to $469,000  Design Split‐level Split‐level   Finished Space 2,537 SF 2,275 SF  Bedrooms 5 5  Bathrooms 3 (2 full; 1 ¾) 3 (1 full; 2 ¾)  Garage 3‐stall with glass inserts 3‐stall with glass inserts  Façade  Cultured stone on entire 2‐stall garage  and lower 1/3 of 1‐stall garage and lower  1/3 of home   Address numbers built into façade   Shakes and board and batten siding   Front door with windows & 2 sidelights   Cultured stone on lower 1/3 of garage  and lower 1/3 of portion of house   Address numbers built into façade   Board and batten siding   Front door with 1 sidelight  Other  Granite/quartz countertops in kitchen   Vaulted ceilings   Engineered wood flooring   Walk‐in closet   Double sink bathroom vanity   Granite/quartz countertops in kitchen   Vaulted ceilings   Luxury vinyl plank flooring  Upgrade  Checklist  22 of 44 checked 17 of 44 checked    Experience with Recommended Builder  Great Buy Homes is a mid‐sized custom home builder based out of Anoka. The city has sold 10 lots to the  builder in recent years. Each of the homes has sold for higher than the builder’s projected sale price. Projected  sale prices, actual sale prices, and county assessed values as of January 2, 2023, are as follows:    Address Builder’s Projected  Sale Price  Actual Sale Price  & Year  2023 Hennepin County  Assessed Value  5400 Yukon Ave N $285,000 $297,000 (2017) $381,800  6065 Louisiana Ave N $320,000 $325,000 (2018) $377,400  6067 Louisiana Ave N $320,000 $323,900 (2018) $427,800  7215 62nd Ave N $325,000 $350,821 (2019)  $435,000 (2022)  $404,500  5353 Oregon Ave N $350,000 $385,750 (2021) $407,900    Request for Action, Page 3    Address Builder’s Projected  Sale Price  Actual Sale Price  & Year  2023 Hennepin County  Assessed Value  5355 Oregon Ave N $350,000 $389,921 (2020)  $430,000 (2022)  $402,900  4215 Louisiana Ave N $380,000 $435,000 (2021) $440,000  4637 Aquila Ave N $445,000 $460,000 (2022) $443,800  4201 Boone Ave N $475,000‐$480,000 N/A N/A  4205 Boone Ave N $475,000‐$480,000 N/A N/A    Cost & Tax Impact of Improvements  It is anticipated that expenses associated with the project would be approximately $258,423. Revenue from the  sale of the lot would be $75,000, resulting in an estimated net loss of $183,423. 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 $475,000  in 2024, it is estimated that total taxes payable to the city in 2025 would increase by $1,344 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. It should be noted that the city’s analysis template utilizes the year the old house was acquired as its  base price. The subject property was acquired in December of 2022, when its assessed value was $251,000. Its  assessed value decreased significantly to $139,700 as of January 2, 2023.    Old House New Houses   Taxable Market Value 2022,  Payable 2023  Projected Taxable Market  Value 2024, Payable 2025  Change Percent  Change  $251,000 $475,000 $224,000 89%         Taxes Allocated to City 2022,  Payable 2023  Projected Taxes Allocated to  City 2024, Payable 2025  Change Percent  Change  $1,506 $2,850 $1,344 89%    The following table illustrates the Return on Investment (ROI) and tax benefit associated with the estimated  increase in taxable property value in one year and in 30 years.    # of Years  (Year payable)  Additional Taxes Collected  By City – Cumulative Total  Total Cost/  Revenue  Return On  Investment  1 (payable 2025) $1,344.00  $(182,079.00) ‐99.27%  30 (payable 2054) $63,941.36  $(119,481.64) ‐65.14%  *Please refer to the attached documents for details on the estimated tax impact of improvements and ROI calculations     The estimated ROI for the project over 30 years is ‐65.14% and the estimated Internal Rate of Return (IRR) for  the project over 30 years is ‐5.26% (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  recent projects that have been approved since implementation of an analysis template that utilizes tax growth  rate assumptions is attached.    Request for Action, Page 4    The primary focus of the scattered site housing 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).    Development Agreement and Next Steps  Staff worked with the assistant city attorney to draft a resolution and Purchase and Redevelopment Agreement  for the sale of the lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the  purchase price of the lot at $75,000. The agreement included in the attachments is considered complete by staff  and the city attorney; however, some minor revisions may be necessary once fully reviewed by the buyer. Any  substantial changes to the agreement would be presented to the EDA for approval. The RFP stipulates that  closing must occur within 60 days of approval of the sale. The Purchase and Redevelopment Agreement  stipulates that the home must be completed within a year of the closing date.  Funding  Funding for this project came from the 2022 EDA budget. The city budgeted $500,000 for scattered site projects  in 2022.    Project (2022 Budget) Estimated Net Cost  4201 Boone Ave N $183,888.00  3611 Louisiana Ave N $183,423.00  5306 Rhode Island Ave N $166,072.00  Total $533,383.00     Annual Budget (2022) $500,000.00  Under/Over Budget $(33,383.00)    As discussed when the acquisition of 3611 Louisiana Avenue North was approved, the three projects that were  approved in 2022 put the EDA slightly over budget for the year, however, the city did not spend the $159,301  it had committed to a scattered site project at 4215 Nevada Avenue North in 2021. That project did not come to  fruition, allowing for those funds to be used on other projects. Additionally, the city received about $4,118 in  interest (after subtracting legal fees) when refunded its winning bid from the 3611 Louisiana Avenue North  sheriff’s sale.  Recommendation  Staff recommends that the EDA conduct a public hearing and approve a resolution approving the sale of the  scattered site lot located at 3611 Louisiana Avenue North to Great Buy Homes.  Attachments   Resolution   Purchase and Redevelopment Agreement with RFP and proposed plans   Other proposals   Front elevation comparison   Budget   Estimated Tax Impact of Improvements    Request for Action, Page 5     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 AND REDEVELOPMENT AGREEMENT WITH GREAT BUY HOMES, INC. FOR THE SALE OF 3611 LOUISIANA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1065) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain real property located at 3611 Louisiana Avenue North, New Hope, MN, 55427, P.I.D. 17-118-21-34-0060, and legally described as “Lot 14, Block 3, Wonderland 1st Addition, according to the recorded plat thereof, and situate in Hennepin County, Minnesota” (the “Property”) as evidenced by the warranty deed recorded with the Hennepin County Registrar of Title’s Office on December 16, 2022, as Document No. 5991077; and WHEREAS, the EDA purchased the Property with the intention of razing the existing house and all site improvements in preparation for the sale to a builder to construct a new single family home; and WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff to various builders, the EDA received an offer from GREAT BUY HOMES, INC., a Minnesota corporation (“Great Buy”) regarding the sale and redevelopment of the Property; and WHEREAS, the EDA arrived at an agreement with Great Buy to sell the Property for the purchase price of $75,000.00 upon all of the terms set forth in the RFP; and WHEREAS, the EDA has accepted Great Buy’s offer and has presented a draft Purchase and Redevelopment Agreement for the Property to Great Buy for its review, a copy of which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and incorporated herein by reference; and WHEREAS, it is in the best interest of the EDA to sell the Property to Great Buy for the sum of $75,000.00, in order for Great Buy to redevelop and build a new single family home in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and Redevelopment Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to GREAT BUY HOMES, INC., for the purchase price of $75,000, with other terms and conditions as set forth in the Purchase and Redevelopment Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the Purchase and Redevelopment Agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of a single-family home in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to GREAT BUY HOMES, INC. for the construction of a single-family home, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 26th day of June, 2023. ____________________________________ Kathi Hemken, President Attest: _____________________________ Reece Bertholf, Executive Director Exhibit A Purchase and Redevelopment Agreement See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11445 3611 Louisiana Ave N\Resolution Approving Sale of 3611 Louisiana Ave N.docx 1 PURCHASE AND REDEVELOPMENT AGREEMENT This Purchase and Redevelopment Agreement ("Agreement") is made by and between GREAT BUY HOMES, INC., a Minnesota corporation (“Buyer") and the Economic Development Authority in and for the City of New Hope, Minnesota, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("Seller") effective June ___, 2023. In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase the vacant parcel of real property located in the City of New Hope at the property address of 3611 Louisiana Avenue North, New Hope, MN 55427, PID 17-118-21-34-0060 legally described on the attached Exhibit A (the “Property”). 1.Purchase Price. The purchase price for the Property is Seventy Five Thousand and No/100 Dollars ($75,000.00) (the “Purchase Price”), which Buyer shall pay as follows: an initial payment of Two Thousand and No/100 Dollars ($2,000.00) (the “Earnest Money”), which sum shall be paid to Seller upon Buyer and Seller’s execution of this Agreement and Seventy Three Thousand and No/100 Dollars ($73,000.00) payable by wire, cashier’s check or cash on the “Date of Closing”, as that term is defined in paragraph 6 below. There are no items of personal property or fixtures included in this sale. 2.Title Conveyed. On the Date of Closing, Seller shall deliver a Quit Claim Deed (the "Deed") to Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments, and restrictions, except for the “Permitted Encumbrances” set forth on Exhibit B and the restrictive covenants referenced below in paragraph 4.b. 3.Representations of Seller. Seller represents and agrees as follows: a.Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, there are no parties other than Seller in possession of any portion of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property. b.Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. c.To the best of Seller’s knowledge, there are no septic systems or wells on the Property other than the sealed well as described on the well sealing certificate and provided to Buyer. d.Seller represents that it has the requisite power and authority to enter into and perform this Agreement and any Seller’s Closing Documents signed by it. e.Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code. 2 f.To the best of Seller’s knowledge without inquiry, no above ground or underground tanks are located in or about the Property. g.Seller makes no other warranties as to the condition of the Property. Seller agrees that any breach of Seller’s foregoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. Wherever herein a representation is made “to the best of Seller’s knowledge,” such representation is limited to the actual knowledge of the President and/or Executive Director of Seller. 4.Representations of Buyer. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and sell the Property, Buyer hereby represents to Seller: a.SUBJECT TO THE FOREGOING REPRESENTATIONS BY SELLER, BUYER HEREBY ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN “AS IS” CONDITION AS TO THE USE OF THE PROPERTY. Buyer understands and agrees that the Purchase Price is the fair market value of the Property in its “AS IS” condition. Buyer acknowledges that they have inspected or have had the opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the home described in paragraph 10 below. If the soil is determined to be unacceptable Buyer may rescind this Agreement by written notice to Seller, in which case the Agreement shall be null and void and all earnest money paid hereunder shall be refunded to Buyer. b.Buyer agrees the first sale of the home constructed on the Property will be sold to owner-occupants. An “owner-occupant” shall be defined as an individual(s) that purchases the home from Buyer by warranty deed or a contract for deed and intending to reside in the home as primary residence. To insure the intent of the parties that the home constructed on the Property is purchased by owner- occupants, Buyer will record restrictive covenants and an assessment agreement against the Property prohibiting the leasing of the home for a period of two (2) years after the sale of such home by Buyer to an owner-occupant. The restrictive covenants and assessment agreement shall be substantially in the form of the documents attached hereto as Exhibits C and D, respectively. Further, the restrictive covenants and assessment agreement shall provide that the EDA may levy a $20,000.00 assessment on the Property prior to the sale if the lot is not being sold to an owner-occupant. The EDA shall release the Property from these restrictive covenants and assessment agreements upon the issuance of a certificate of occupancy for the construction of the home on the Property and upon the receipt by the EDA of an affidavit signed by Buyer and the owner-occupants verifying owner-occupants’ intent to reside in the home as their primary residence in compliance with the restrictive covenants described herein in the form attached as Exhibit C. 3 c.Buyer will be constructing a single family home on the Property. Within one (1) year of Closing, Buyer shall complete the construction of the single family home on the Property (the Improvements). The Improvements must be consistent with all building and zoning requirements and the restrictive covenants applicable to the Property. The representations set forth in this paragraph shall be incorporated into appropriate documents to be recorded against the Property (whether by declaration, restrictive covenants, or development agreement as hereinafter defined) subject to approval by Seller and Buyer as a condition of Closing. 5.Title Commitment and Policy. a.Seller shall deliver to Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the “Commitment”) issued by a title insurance company of Buyer’s choice (“Title Company”) and covering title to the Property, in the amount of the Purchase Price. Buyer agrees to pay the costs associated with the preparation and issuance of the Commitment; Buyer shall pay the premium for the owner’s policy, if any, and the lender’s policy, if any, along with the price for any endorsements requested by Buyer or Buyer’s lender. b.Buyer shall have fifteen (15) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment or which is otherwise discovered by Buyer. In the event that Buyer does not within such fifteen (15) day period give notice to Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Encumbrances. If Buyer timely objects to an exception to title, then on or before the tenth (10) day following Buyer’s notice of exception, Seller shall remove the exception or notify Buyer that Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by Seller that Seller it is unable to remove an exception to title, Buyer may elect by notice to Seller to either: (i)terminate this Agreement, whereupon all of the Earnest Money shall be returned to Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (ii)elect to have this Agreement remain in effect, in which event Buyer will be deemed to have approved the previously-cited exception and the same shall be considered part of the Permitted Encumbrances. 4 6.Closing. a.Closing shall occur on or before August 28, 2023 (the “Date of Closing” or “Closing”), unless both parties agree, in writing, to an earlier or later time. b.Closing shall occur at the office of the Title Company. c.Seller shall deliver at closing the following executed and acknowledged documents: (i)the Deed; (ii)affidavit(s) in industry-standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; Seller is not a foreign person or entity; and addressing such other matters as Buyer may reasonably require. 7.Payments/Prorations. At Closing, Seller shall pay the cost of recording any instrument (other than the Deed) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. Buyer shall pay at Closing the cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the Closing, the fees required for recording the Deed, the Purchase and Redevelopment Agreement, the assessment agreement and restrictive covenants and all customary closing fees charged by the Title Company or other closing agent to both Seller and Buyer, if any, utilized to close the transaction contemplated by this Agreement. General real estate taxes payable in the year of closing shall be prorated by Seller and Buyer as of the closing date based upon a calendar year. Each party shall pay its own attorney’s fees. 8.Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and Seller shall be entitled to any and all condemnation proceeds. 9.Construction of Home. Buyer agrees that it will construct a new single family home on the Property. This covenant shall survive the delivery of the Deed. a.The single family home described in this paragraph is referred to as the "Minimum Improvements.” 5 b.The Minimum Improvements shall consist of a new single family home, and shall be constructed substantially in accordance with the RFP Guidelines attached as Exhibit E and the proposal approved by Seller on June 26, 2023, attached as Exhibit F. c.Construction of the Minimum Improvements must be substantially completed within one (1) year following Closing. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of New Hope building inspector. d.Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Buyer to construct such Minimum Improvements (including the date for completion thereof), Seller will furnish Buyer with a Certificate of Completion for such improvements. Such certification by Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the Deed with respect to the obligations of Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this paragraph of this Agreement shall be in such form as will enable it to be recorded in the Hennepin County Registrar of Titles Office and other instruments pertaining to the Property. If Seller shall refuse or fail to provide any certification in accordance with the provisions of this paragraph, Seller shall, within thirty (30) days after written request by Buyer, provide Buyer with a written statement, indicating in adequate detail in what respects Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of Seller for Buyer to take or perform in order to obtain such certification. e.Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (i)Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a “Transfer”), without the prior written approval of Seller. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable Buyer or any successor in interest 6 to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (ii) If Buyer seeks to effect a Transfer prior to issuance of the Certificate of Completion, Seller shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by Buyer as to the portion of the Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of Seller, have expressly assumed all of the obligations of Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by Seller) deprive Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by Seller to the contrary, no such transfer or approval by Seller thereof shall be deemed to relieve Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the 7 Property governed by this subparagraph shall be in a form reasonably satisfactory to Seller. (iii) If the conditions described above are satisfied then the Transfer will be approved and Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (iii) apply to all subsequent transferors. (iv) Upon issuance of the Certificate of Completion, Buyer may transfer or assign the Minimum Improvements and/or Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of Seller. f. Buyer agrees that (a) it will use the Minimum Improvements as only a single family, owner-occupied home, (b) it will not seek exemption from real estate taxes on the Property under State law, and (c) it will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of New Hope or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for at least 30 years after the Date of Closing. g. Buyer shall comply with all recommendations of the City Engineer. h. Buyer’s construction plans shall be approved by the City Building Official. 10. Revesting Title in Seller upon Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to Buyer and prior to receipt by Buyer of the Certificate of Completion of the Minimum Improvements, Buyer fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within thirty (30) days after written demand from Seller to Buyer to do so, then Seller shall have the right to re-enter and take possession of the Property and to terminate (and revert in Seller) the estate conveyed by the Deed to Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of Buyer and failure on the part of Buyer to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, Seller at its option may declare a termination in favor of Seller of the title, and of all the rights and interests in and to the Property conveyed to Buyer, and that such title and all rights and interests of Buyer, and any assigns or successors in interest to and in the Property, shall revert to Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. 8 Notwithstanding anything to the contrary contained in this paragraph, Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a Certificate of Completion has been issued. 11. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in Seller of title to and/or possession of the Property or any part thereof as provided in paragraph 10, Seller shall apply the Purchase Price paid by Buyer under paragraph 1 of this Agreement as follows: a. First, to reimburse Seller for all costs and expenses incurred by Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing Seller by the Buyer and its successor or transferee; and b. Second, to reimburse Buyer for the balance of the Purchase Price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to Buyer upon delivery of executed, recordable warranty deed to the Property by Buyer to Seller. 12. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; or (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery. Any party shall have the right to designate any other address for notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: SELLER: Economic Development Authority in and for the City of New Hope Reece Bertholf, Executive Director 4401 Xylon Avenue North New Hope, MN 55428-4898 9 with copy to: Stacy A. Woods, New Hope City Attorney Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 BUYER: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 13. No Broker Involved. Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Buyer, and Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or finders' fees in connection with negotiations for purchase of the Property arising out of any alleged agreement or commitment or negotiation by Seller. 14. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer as provided by law. If Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If Seller defaults under this Agreement, Buyer’s only remedy shall be to terminate the Agreement and recover the Earnest Money paid to Seller. Buyer shall not have any right to the remedy of specific performance 15. Assignment/Prohibition Against Transfer of Property. Buyer may not assign its rights and obligations hereunder without the prior written consent of Seller, which consent may be granted or withheld by Seller in its sole discretion. 16. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both Seller and Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. Seller and Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. 17. Survival. The Parties representations contained herein shall survive the delivery of the Deed. 10 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the above date (“Effective Date”). SELLER: Economic Development Authority in and for the City of New Hope By: _______________________________ Kathi Hemken Its: President Dated: June____, 2023 By: _______________________________ Reece Bertholf Its: Executive Director Dated: June____, 2023 BUYER: GREAT BUY HOMES, INC. By: ________________________________ Glenn Hammer Its: President Dated: June ____, 2023 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of June, 2023, by Kathi Hemken and Reece Bertholf, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota. _______________________________ Notary Public 11 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of June, 2023, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. _______________________________ Notary Public DRAFTED BY: Jensen Sondrall Persellin & Woods, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424-8811 12 Exhibit A Legal Description Lot 14, Block 3, Wonderland 1st Addition, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. (“Property”) Registered Torrens Property: Certificate of Title No. 1555119 13 Exhibit B Permitted Encumbrances 1. Restrictions, reservations, covenants and easements relating to use or improvement of the Property without effective forfeiture provisions of record on the Effective Date; 2. Building and zoning laws, ordinances, city, state and federal regulations; 3. Governmental regulations, if any, affecting the use and occupancy of the Property; 4. All rights in public highways upon the land; 5. Easements for public rights-of-way and public and private utilities, which do not interfere with present improvements; 6. Reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Property the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. 7. The lien of unpaid special assessments, if any, not presently payable but to be paid as a part of the annual taxes to become due; 8. The lien of unpaid real estate taxes, if any, not presently payable but to be paid as part of the annual taxes to become due. 14 Exhibit C Restrictive Covenants 1 RESTRICTIVE COVENANTS THESE RESTRICTIVE COVENANTS (“Agreement”) dated effective the ___ day of August, 2023, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“Great Buy”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between the City and Great Buy dated effective June ___, 2023 (“Purchase Agreement”), Great Buy purchased the real property located at 3611 Louisiana Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described on the attached Exhibit A (“Property”) which purchase closed on August ___, 2023; and WHEREAS, Great Buy has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Great Buy have agreed Great Buy shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and Great Buy have agreed the City may levy a $20,000.00 assessment against the Property prior to Great Buy’s sale of the Property with the completed home if it is not being sold to an owner-occupant. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment; and WHEREAS, compliance with the restrictions imposed by this Agreement is an additional consideration for the sale of the Property to Great Buy. 2 NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Great Buy agrees as follows: AGREEMENT 1. Restrictive Covenants Great Buy hereby covenants and agrees with the City that the Property is restricted by the following covenants: a) The initial conveyance of the residential dwelling (“Dwelling”) constructed upon the Property will be only to “Owner-occupant(s)”. “Owner-occupant” is defined as an individual that purchases the Property from Great Buy with a bona fide intent to reside in the Dwelling as a primary residence; and b) The Dwelling constructed on the Property shall be occupied only by the Owner- occupant, and/or by the “Immediate Family Member(s)” of the Owner-occupant for a period of two (2) consecutive years commencing on the date of initial conveyance to an Owner-occupant. “Immediate Family Member” shall only mean a parent, step-parent, child, step-child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece. Relationship may be by blood or marriage. 2. Release of Restrictions The Property will be released from the restrictions imposed by this Agreement as follows: a) Upon the issuance of a Certificate of Occupancy for a Dwelling constructed upon the Property and receipt by the City of an Affidavit signed by Great Buy and the Owner-occupant verifying the Owner-occupant’s intent to occupy the Dwelling as a primary residence the Property shall be released from the restriction stated in paragraph 1(a) above. b) The Property shall be released from the restriction of paragraph 1(b) above on the two (2) year anniversary of the date the Property was conveyed in compliance with paragraph 1(a). 3. Waiver by City Notwithstanding the restrictions stated above, the City may waive the restrictions stated above upon a finding of hardship or other extenuating circumstances sufficient to justify the waiver in its sole discretion. 4. Agreement to Assessment Great Buy acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single family house on or before August ___, 2024; and/or (b) if Great Buy sells the Property with the completed home to a non-owner-occupant in violation of paragraph 1(a) above. Further, Great Buy agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 5. Waiver by Great Buy Great Buy expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that 3 the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 6. Additional Remedies It is further understood that if Great Buy or an Owner-occupant should breach their respective obligations under this Agreement, the City will suffer irrevocable harm from which a recovery of money damages would be an inadequate remedy. It is therefore agreed that the City shall be entitled, as a matter of right, in any Court of competent jurisdiction to a mandatory injunction restraining and enjoining pending litigation, as well as upon final determination thereof, from attempting to violate or violating this Agreement. It is further agreed that the City’s rights to such injunctive relief shall be cumulative with and in addition to any other rights, remedies or actions which the City may have. 7. Great Buy’s Successors This Agreement shall not be terminated by: a) Voluntary dissolution of Great Buy or any parent, subsidiary or successor of Great Buy; b) Merger whereby Great Buy (or such parent, subsidiary or successor of Great Buy) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Great Buy. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall inure to the benefit of and shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 8. Running of Benefits and Burdens All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 9. Notices Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Reece Bertholf 4401 Xylon Avenue North New Hope, MN 55428 rbertholf@newhopemn.gov 4 If to Great Buy: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Avenue NW Anoka, MN 55303 10. Governing Law All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 11. Cumulative Rights Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 12. Amendment This Agreement may be modified or amended only by a written instrument executed by Great Buy and the City. 13. Counterpart Signatures This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed these Restrictive Covenants effective the day and year first above-written. 5 City of New Hope By: _______________________________ Reece Bertholf Its: City Manager Dated: August ___, 2023 GREAT BUY HOMES, INC. By: _______________________________ Glenn Hammer Its: President Dated: August ___, 2023 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ___ day of August, 2023, by Reece Bertholf, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ___ day of August, 2023, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 6 Exhibit A Legal Description Lot 14, Block 3, Wonderland 1st Addition, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. (“Property”) Registered Torrens Property: Certificate of Title No. 1555119 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11445 3611 Louisiana Ave N\Restrictive Covenant.docx 15 Exhibit D Assessment Agreement 1 ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT (“Agreement”) dated effective as of the ____ day of August, 2023, by and between the City of New Hope, a Minnesota municipal corporation (“City”) and GREAT BUY HOMES, INC., a Minnesota corporation (“Great Buy”). RECITALS WHEREAS, pursuant to that certain Purchase and Redevelopment Agreement between City and Great Buy dated effective June __, 2023 (“Purchase Agreement”) Great Buy purchased the real property located at 3611 Louisiana Avenue North in the City of New Hope from the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota (“EDA”), which property is legally described on the attached Exhibit A (“Property”) which purchase closed on August ___, 2023; and WHEREAS, Great Buy has committed to constructing a new residential home on the Property pursuant to the terms of the Purchase Agreement; and WHEREAS, the City and Great Buy have agreed Great Buy shall complete the construction of the home as described in the Purchase Agreement within one (1) year of the date of closing on the purchase of the Property; and WHEREAS, the City and Great Buy have further agreed the City may levy a $20,000.00 assessment against the Property prior to Great Buy’s sale of the Property with the completed home if it is not being sold to an owner-occupant to be owned and occupied by the owner-occupant for at least two (2) years. Further, said assessment may be certified to Hennepin County for collection with real estate taxes payable in a single installment. AGREEMENT 1. Completion of Project Great Buy hereby covenants and agrees with the City that the new home on the Property shall be fully completed on or before August ___, 2024. Fully completed shall mean the Property shall be improved with a new single-family house. 2 2. Agreement to Assessment Great Buy acknowledges and agrees the City may levy a $20,000.00 assessment against the Property if: (a) the Property is not improved with a single-family house on or before August ___, 2024; (b) if Great Buy sells the Property with the completed home to a non-owner-occupant; and/or (c) if the Property is leased to a non- owner-occupant in the first two (2) years after initial conveyance. Further, Great Buy agrees the assessment provided by this paragraph may be certified to Hennepin County as a special assessment and collected with the real estate taxes against the Property in a single installment. 3. Waiver by Great Buy Great Buy expressly waives objection to any irregularity with regard to any assessment levied against the Property per this Agreement or any claim that the amount thereof levied against the Property is excessive, together with all rights to appeal the assessment in the courts. 4. Great Buy’s Successors This Agreement shall not be terminated by: a) The voluntary dissolution of Great Buy or any parent, subsidiary or successor of Great Buy; b) Merger whereby Great Buy (or such parent, subsidiary or successor of Great Buy) is not the surviving or resulting entity; or c) Any transfer of all or substantially all of the assets of Great Buy. In the event of any such merger or consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting entity to which such assets shall be transferred. 5. Running of Benefits and Burdens All provisions of this Agreement, including the benefits and burdens run with the land and are binding upon and shall inure to the benefit of the assigns and successors of the parties to this Agreement, such that the provisions of this Agreement shall restrict the Property, and subdivision thereof, notwithstanding any sale or transfer of the Property or any subdivision thereof to a third party. 6. Notices Any notice to be given by a party to this Agreement shall be personally delivered, sent by registered or certified mail, sent by confirmed electronic transmission, or sent by a nationally recognized overnight courier that issues a receipt to the address set forth for the other party in this section (or to such other address as may be designated by notice to the other parties), and shall be deemed given upon the earlier of personal delivery, the date postmarked, confirmation of electronic transmission, delivery to such courier or the refusal to accept such service. If to the City: City of New Hope Attn: Reece Bertholf 4401 Xylon Avenue North New Hope, MN 55428 rbertholf@newhopemn.gov 3 If to Great Buy: GREAT BUY HOMES, INC. Attn: Glenn Hammer 5790 195th Ave. NW Anoka, MN 55303 7. Governing Law All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the internal laws of the State of Minnesota. 8. Cumulative Rights Each and all of the various rights, power and remedies of the City in this Agreement shall be considered as cumulative with and in addition to any other rights, powers, or remedies of the City, and no one of them is exclusive to the others, or is exclusive to any other rights, powers and remedies allowed by law. The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof, nor the waiver of any other power or remedy. 9. Amendment This Agreement may be modified or amended only by a written instrument executed by Great Buy and the City. 10. Counterpart Signatures This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. IN AGREEMENT, the parties have executed this Assessment Agreement effective the day and year first above-written. EXECUTION AND NOTARY PAGE FOLLOWS 4 City of New Hope By: _______________________________ Reece Bertholf Its: City Manager Dated: August ___, 2023 GREAT BUY HOMES, INC. By: _______________________________ Glenn Hammer Its: President Dated: August ___, 2023 STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this ___ day of August, 2023, by Reece Bertholf, the City Manager of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notary Public Seal) _______________________________________ Notary Public STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ____ day of August, 2023, by Glenn Hammer, the President of GREAT BUY HOMES, INC., a Minnesota corporation, on behalf of said corporation. (Notary Public Seal) ______________________________________ Notary Public Drafted By: JENSEN SONDRALL PERSELLIN & WOODS, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11445 3611 Louisiana Ave N\Assessment Agreement.docx 5 Exhibit A Legal Description Lot 14, Block 3, Wonderland 1st Addition, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. (“Property”) Registered Torrens Property: Certificate of Title No. 1555119 16 Exhibit E Request for Proposal (“RFP”) Guidelines See attached. City of New Hope, Minnesota Request For Proposals – 3611 Louisiana Avenue North Date: May 24, 2023 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for proposals for construction of new single-family home at 3611 Louisiana Avenue North. Overview: The city of New Hope EDA owns the property located at 3611 Louisiana Avenue North, New Hope, MN 55427 (PID 17-118-21-34-0060). The EDA is requesting proposals from builders to purchase the vacant lot for the construction of a new single-family home. The lot is being offered as part of the city’s scattered site housing program, which focuses on the removal or rehabilitation of distressed properties. The site was previously occupied by a home that was razed by the EDA. Enclosed, please find the proposal form and specifications for submitting a proposal. Minimum Lot Price: This lot is being offered at a minimum base price of $75,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. Submission: Interested bidders must submit enclosed Bid Form by U.S. Mail, e-mail, or in person. All documents submitted will be made available to the public and presented at an EDA meeting. Bids shall be submitted to Jeff Alger, Community Development Specialist. City of New Hope Community Development Department Attention: Jeff Alger 4401 Xylon Avenue North New Hope, MN 55428 jalger@newhopemn.gov Deadline: Proposals must be submitted using the enclosed bid form and received no later than June 15, 2023, at 1:00 p.m. City staff will review the submitted proposals and make a recommendation to the EDA. It is anticipated that the EDA will make a selection at the June 26, 2023, meeting. Construction of the new home must be completed in full no later than one (1) year after the closing on the purchase of the lot. City of New Hope, Minnesota Proposal Form Property Owner: City of New Hope Economic Development Authority (EDA) Property Address: 3611 Louisiana Avenue North, New Hope, MN 55427 Property Identification Number: 17-118-21-34-0060 Minimum Lot Price: This lot is being offered at a minimum base price of $75,000. The EDA will consider higher offers for the lot; however, submitting a higher offer does not guarantee selection of a proposal. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to purchase this lot for $____________________ ($75,000 minimum) and build a new single-family home in accordance with the RFP guidelines. If a builder’s proposal is accepted by the EDA, the builder will be asked to enter into a purchase and development agreement and provide $2,000 earnest money for the lot. Only after such an agreement is signed would a binding contract exist between the EDA and the builder. Company Name: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Name & Title: ____________________________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota General Notes 1. Only complete proposals will be considered. The city retains absolute discretion in deciding whether or not to accept any particular proposal. 2. State licensed builders who have built at least three (3) homes in Minnesota in the last five (5) years, or have equivalent experience acceptable to the city, are eligible to submit proposals. The home may be speculative or for specific buyers. 3. The city is interested in proposals that will generate the highest valued, owner occupied, single-family home. Owner occupancy restrictions will be documented in the development agreement and secured with a restrictive covenant recorded against the property. The occupancy requirement only applies to the first buyer and lasts for a period of two (2) years. A full legal description relating to this requirement is available upon request. 4. No preferred home style has been determined for the lot, though two-story and rambler designs have commanded the highest prices when compared to other home styles such as split entry. Preference will be given to proposals with the most finished square footage that include high quality exterior materials and upgraded interior amenities. Previously approved plans are available upon request. 5. After proposals have been received, city staff will review and recommend a preferred builder/design at the next regularly scheduled EDA meeting. Within one (1) week of approval by the EDA, the selected builder will enter into a purchase and development agreement that will address the sale of the lot and secure all applicable development and performance standards outlined in the proposal guidelines. At the time of this agreement, the builder will be required to submit a $2,000 nonrefundable earnest money deposit. Closing on the purchase of the lot must take place within 60 days of final EDA approval. The buyer will be responsible for paying the following costs associated with the purchase: • Preparation and issuance of the title commitment. • The cost of the owner’s policy or lender’s policy of title insurance (if any), sales tax (if any) resulting from the closing, the fees required for recording the deed, the purchase and redevelopment agreement, the assessment agreement and restrictive covenants, and all customary closing fees charged by the title company or other closing agent, if any, utilized to close the transaction contemplated by this agreement (paid at closing). 6. Construction of the new home must be completed within one (1) year of closing on the purchase of the lot. City of New Hope, Minnesota Specifications 1. Utilities a. All utility service lines shall be underground. Utilities may install necessary facilities such as pedestals or boxes in the street right-of-way or utility and drainage easements. b. The builder shall be responsible for any expenses associated with connecting the home to private utilities. c. Municipal water is available into the lot on the east side of the property and the location of the service is marked onsite. The EDA coordinated installation of a new curb stop box in conjunction with demolition of the home. d. Municipal sanitary sewer is available into the lot on the west side of the property (does not come from street) and the location of the service is marked onsite. The sewer main is located along the rear property line. The line to the new home will run through the backyard. The previous line was removed at the main in conjunction with demolition of the home. e. There is a four (4) inch black perforated flex drain tile pipe directly behind (west of) the curb along Louisiana Avenue North. It is buried approximately two (2) feet deep and connects to a catch basin that is just south of the driveway for the apartment building at 7104 36th Avenue North. The sump pump for the home shall tie into existing drain tile. The city’s detail plate for sump connections to a drain tile is included as an attachment. Caution should be exercised digging and working in the area. Builder shall be solely responsible for any damage that occurs to the drain tile pipe and system. City of New Hope, Minnesota Specifications (continued) 2. Building Standards and Design Guidelines a. All site improvements shall comply with the New Hope City Code. b. The home shall have at least three (3) finished bedrooms, two (2) finished bathrooms, and an attached garage that will accommodate a minimum of two (2) vehicles. Three (3) stall garages are preferred. c. The design should emphasize the front door as the focal point for the front of the home. A large and usable front porch is desired. Garage door dominance in the design should be minimized as much as possible. Front door and garage door designs with windows are preferred. d. If an above-grade patio door is included, the inclusion of a deck is preferred. e. Equipment such as air-conditioning cooling structures or condensers that generate noise shall not be located within the front yard, side yard setback, or drainage and utility easement. f. Plans should present a balanced and pleasing distribution of wall and window areas from all views. Blank walls are not permitted. To the extent that southern exposures are present, home designs are expected to enhance wintertime natural light and passive solar heating. g. Exterior materials (siding, soffit, doors, and windows) shall be low maintenance. The use of brick or stone accents and incorporation of address numbers into the brick or stone is preferred. Vinyl or other low maintenance siding materials are generally acceptable and can be made more desirable through the use of shakes, fish scales, or other styles to break up the pattern. h. The driveway for the new home must be completely new and fully paved from the street to the garage. Driveways are not allowed within three (3) feet of any property line abutting another property and may not be placed above sewer lines or curb stop boxes. The maximum driveway/curb cut width at the property line is 24 feet for a two-car garage and 28 feet for a three-car garage. If the existing curb cut will not be utilized for accessing the new driveway it must be replaced with new curbing. New curb cuts and curbing must meet City Code requirements and must be approved by the Public Works Department. See the attached specifications for the replacement of curbing and driveway installation (STR-10A and STR-30). Contact the Public Works Department to inspect curbing forms before pouring the curb. City of New Hope, Minnesota Specifications (continued) 3. Landscaping a. The lot shall be landscaped to be aesthetically pleasing in all seasons. Landforms and plant materials shall be used to define the site and blend neatly with adjoining properties. The lot area remaining after providing for off-street parking, sidewalks, driveways, buildings, and other requirements shall be landscaped using ornamental grass, shrubs, trees, or other acceptable vegetation or treatment generally used in landscaping. The use of grass seed or hydro-seed is not acceptable for restoration of disturbed areas. All grass that is planted must be sod. Additionally, all lawn areas must be irrigated with underground irrigation systems. b. A minimum of two (2) large-species deciduous shade tree shall be planted on the lot. Trees must be a minimum of two (2) inches in diameter. A list of prohibited trees is attached. c. Additional screening/landscaping (arborvitae, evergreen trees, decorative fencing, etc.) is encouraged along the south and west property lines to aid in screening the home from the parking lots for the adjacent apartment buildings. All such screening measures or landscaping should be noted within the proposal. d. Foundation plantings with landscaping rock or wood chips and edging around the foundation of the home are preferred. e. Missing sections of fencing along the north and south property lines will be rebuilt by a fence contractor hired and paid for by the EDA. Timing of the installations will be coordinated with the selected builder. 4. Setbacks Front Yard (east) Rear Yard (west) Interior Side Yard Attached Garage (north or south) Interior Side Yard Home (north or south) 25’ 25’ 5’ 10’ City of New Hope, Minnesota Specifications (continued) 5. Builder Selection Criteria a. Builder must be licensed as a Residential Building Contractor in Minnesota. b. Builder shall provide the addresses of three (3) homes they have built in Minnesota within the last five (5) years, or evidence of qualification acceptable to the EDA. c. Builder must be capable of completing the home within one (1) year of closing on the purchase of the lot. 6. Required Attachments by Builder • Upgrade checklist (attached). • Site plan showing the layout of the home on the lot. Include dimensions and setbacks. • Floor plans with dimensions. Clearly indicate square footages of each floor. • List overall square footage. • List total finished square footage. • Elevations specifying types of exterior materials (color elevations preferred). • Description of the interior trim package, including flooring. • Estimated sale price of the home. • Pictures of similar homes (if available). Attachments • Recent home sales • Previous scattered site projects • Upgrade checklist • Location map • Sample lot layout • Sump connection to drain tile specifications • Driveway and curbing specifications (STR-10A and STR-30) • Prohibited tree list City of New Hope, Minnesota Recent Home Sales The following homes in New Hope sold for $450,000 or more since June 1, 2021. Address Price Date Finished SF Beds Baths Year Built 8809 35th Ave N $655,000 9/2021 3,065 4 4 2006 8800 35th Ave N $640,000 4/2022 3,047 4 4 2016 5213 Pennsylvania Ave N $575,000 8/2022 3,102 5 4 2022 8057 55th Ln N $555,000 9/2021 3,307 5 4 2016 8045 55th Ln N $550,000 10/2021 3,787 5 4 2016 5507 Wisconsin Ave N $540,000 8/2021 3,501 4 4 2016 7328 51st Ave N $531,217 1/2022 2,434 3 3 2021 8028 55th Ln N $530,000 9/2021 2,695 4 3 2016 3400 Ensign Ave N $515,000 10/2022 2,471 5 3 2013 8111 60th Ave N $500,000 5/2022 3,442 6 4 1966 7202 51st Ave N $490,000 6/2022 2,306 3 3 2021 7319 51st Ave N $479,900 12/2021 2,339 3 3 2021 5431 Virginia Ave N $476,000 6/2022 2,432 4 3 2015 5510 Virginia Ave N $465,000 8/2022 2,778 4 4 2017 9101 36th Ave N $460,000 10/2021 3,564 3 4 2004 4637 Aquila Ave N $460,000 7/2022 2,537 5 3 2022 3517 Decatur Ct N $456,000 10/2021 2,269 4 4 1995 4301 Flag Ave N $465,000 3/2022 2,832 5 3 1978 7116 51st Ave N $451,557 12/2021 2,354 3 3 2021 8401 Meadow Lake Rd N $450,000 5/2022 1,948 3 2 1966 City of New Hope, Minnesota Previous Scattered Site Projects The following are the homes built through the city’s scattered site housing program with the highest sale prices. Address Price Date Finished SF Bed/Bath Builder 5213 Pennsylvania Avenue North $575,000 8/2022 3,102 5/4 Donnay Homes 5431 Virginia Avenue North $476,000 $245,000 6/2022 11/2015 2,432 4/3 Novak-Fleck 4637 Aquila Avenue North $460,000 7/2022 2,537 5/3 Great Buy Homes 7215 62nd Avenue North $435,000 $350,821 10/2022 6/2019 2,284 4/3 Great Buy Homes 4215 Louisiana Avenue North $430,650 7/2021 2,537 5/3 Great Buy Homes 5355 Oregon Avenue North $430,000 $389,921 11/2022 11/2020 2,327 5/3 Great Buy Homes 3856 Maryland Avenue North $413,921 10/2019 3,102 5/4 Donnay Homes 4417 Nevada Avenue North $410,000 $363,869 11/2020 5/2017 2,329 4/3 Regal Homes 5201 Oregon Avenue North $408,320 4/2020 2,805 4/4 Novak-Fleck 5353 Oregon Avenue North $385,750 3/2021 2,648 5/3 Great Buy Homes 5306 Rhode Island Avenue North List price $598,870 Pending 2,259 4/3 Fieldstone Family Homes City of New Hope, Minnesota Upgrade Checklist Please indicate which of the following upgrades are included as part of your proposal. Bathrooms  Double sink  Granite/quartz countertops  Soaking tub  Tiled baths/showers  Tiled floor Bedrooms  Ceiling fans  Master bathroom  Tray/inverted ceiling  Walk-in closet Exterior  Address numbers built into façade  Brick or stone façade/accents  Concrete driveway  Deck  Decorative shutters  Finished garage  Front porch  Front door with sidelights  Front door with windows  Garage door made of wood/wood composite  Garage door with windows  Gutters  Landscaping/plantings other than required trees  Landscaping rock or wood chips and edging around foundation  Patio  Recessed lighting  Stone pillars  Underground irrigation system (required) General  Finished basement  Finished laundry room  Fireplace  Heated floors  Home office (room not classified as bedroom)  Recessed lighting (interior)  Smooth or knock-down ceilings  Solid core interior doors  Solid wood interior molding/trim  Three-stall garage  Vaulted ceilings  Wood flooring Kitchen  Backsplash/tile on walls  Center island  Custom cabinets  Granite/quartz countertops  Stainless steel appliances Other  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________  ___________________________________________________________________________________ 3611 Louisiana Ave N R-1, Single-family residential 195.94’195.94’30’30’Buildable Buildable AreaArea 94’94’Poten t ial Poten t ial Home & Garage Home & Garage Poten t ial Poten t ial DrivewayDriveway 214.76’214.76’ 3611 Louisiana Ave N R-1, Single-family residential 36113611 PLATE NO. LAST REVISION:SUGGESTED SUMP PUMP TO DRAIN TILE CONNECTION STO-18A JUNE 2018 CITY OF NEW HOPE, MN 6" PERFORATED PVC DRAIN TILE AT BASE OF CONCRETE CURB & GUTTER CONCRETE CURB & GUTTER 10' HOUSE 4" NON-PERFORATED PVC DRAIN TILE (INSTALLED BY CITY) RIGHT OF WAY (APPROX. LOCATION) *PROPERTY OWNER TO REMOVE 4" PVC RISER AND CAP AND CONNECT TO EXISTING 4" PVC DRAIN TILE SUMP DRAIN TILE CONNECTION WITH TRACER WIRE (INSTALLED BY PROPERTY OWNER) SUMP DRAIN TILE CONNECTION TO HOUSE (INSTALLED BY PROPERTY OWNER) SEE CONNECTION DETAIL ABOVE PLAN VIEW - SUMP PUMP DRAIN TILE HOUSE SUMP PUMP DISCHARGE FROM HOUSE ABOVE-GROUND AIR GAP IN DISCHARGE PIPE (COORDINATE HOME CONNECTION AND AIR GAP WITH LICENSED PLUMBER)CONCRETE CURB & GUTTER 6" PERFORATED PVC DRAIN TILE AT BASE OF CONCRETE CURB & GUTTER (LOCATED APPROX. 2.5' BELOW GRADE) 4" NON-PERFORATED PVC DRAIN TILE GRADE TO DRAIN (MIN. 1.0%) PROFILE VIEW - SUMP PUMP DRAIN TILE RIGHT OF WAY (APPROX. LOCATION) *REMOVE RISER AND CAP AND CONNECT TO 4" NON-PERFORATED PVC DRAIN TILE *PRIOR TO CONNECTION TO EXISTING CITY DRAIN TILE, NOTIFY PROJECT INSPECTOR OR NEW HOPE PUBLIC WORKS AT 763-592-6777. (PERMIT REQUIRED, $1 FEE FOR PROCESSING) NOTE: THIS DETAIL IS PROVIDED ONLY AS GENERAL GUIDANCE FOR THE PROPERTY OWNER TO CONNECT TO THE CITY'S DRAIN TILE SYSTEM. IT IS RECOMMENDED TO INSTALL THE PRIVATE SUMP PUMP DRAIN TILE UTILIZING A LICENSED PLUMBER. THE CITY IS NOT RESPONSIBLE FOR IMPROPER INSTALLATION OR DAMAGE CAUSED BY THE PRIVATE SUMP PUMP DRAIN TILE CONNECTION TO THE CITY SYSTEM. NOT TO SCALE NOT TO SCALE *PRIOR TO CONNECTION TO EXISTING CITY DRAIN TILE, NOTIFY PROJECT INSPECTOR OR NEW HOPE PUBLIC WORKS AT 763-592-6777. (PERMIT REQUIRED, $1 FEE FOR PROCESSING) ATTACH LOOPED TRACER WIRE TO DRAIN TILE PIPE SUGGESTED TRACER WIRE LOOP PLATE NO. LAST REVISION: STR-10A AUG. 2019RESIDENTIAL DRIVEWAY WITH APRON CITY OF NEW HOPE, MN 18"MIN18"MINREMOVE EXISTING CURB DAMAGE (MINIMUM ONE PANEL)REMOVE EXISTING CONCRETE DRIVEWAY SURFACE EXISTING DRIVEWAY BACK OF CURBEXISTING CONCRETE CURB & GUTTER ℄EXISTING ROADWAY REMOVE EXISTING BITUMINOUS D428 CONCRETE CURB & GUTTER SAWCUT FELT EXPANSION JOINT SAWCUT EXISTING DRIVEWAY 6" CONCRETE DRIVEWAYBITUMINOUS PATCH SECTIONEXISTING BITUMINOUS LC ONE PANEL MIMIMUM 2'2' PLATE NO. LAST REVISION: STR-30 DEC 2017 CONCRETE CURB REPLACEMENT DRIVE LOCATION (CONCRETE D/W APRON) CITY OF NEW HOPE, MN 6" CLASS 5 AGGREGATE BASE. PLAN 18'' MIN. t Trees provide value from an environmental and property value standpoint. They aid in reducing storm water runoff, soil erosion, and water pollution. Other environmental benefits include the improvement of air quality and conservation of energy. Trees have also been shown to increase property values and can help beautify neighborhoods. Tree Preservation Policy The city of New Hope has a Tree Preservation Policy in place, intended to protect and preserve trees when development takes place. The policy applies to commercial, industrial, multiple family, and institutional land use development projects. The city’s Tree Preservation Policy requires that significant, preferred trees be replaced at 1 inch to 0.5 inch ratio. The ratio refers to the diameter of the tree in inches (rounding up) and the total number of diameter inches required for replacement. A Significant Tree is considered a healthy tree measuring a minimum of six inches in diameter measured five (5) feet above the existing, natural grade surrounding the tree for deciduous trees for deciduous trees, or a minimum of twelve feet in height for coniferous trees. A Preferred Tree is considered any tree that does not appear on the city’s Prohibited Tree list, as shown below. Prohibited Trees The city’s Prohibited Tree list includes the following species:  Amur Maple  Black Locust  Boxelder  Ginko (female only)  Green, White, or Black Ash (fraxinus species)  Mulberry  Non-disease resistant elm species  Nonhybrid cottonwood species  Russian Olive Buckthorn  Siberian or Chinese Elm Boulevard Tree Replacement Policy The city of New Hope has also adopted a policy to help homeowners to replace boulevard trees that have been lost to storms, disease, or other causes. The city has a preferred tree list to address tree selection considerations including hardiness, mature size, salt tolerance, pest and disease resistance, rooting habits, maintenance requirements, and soil compatibility. For more information, call 763‐592‐6763. City of New Hope Forestry Department 5500 International Pkwy • New Hope MN 55428 • Phone: 763-592-6777 • Fax: 763-592-6776 • ci.new-hope.mn.us Prohibited Tree List G:\CommDev\Informational Forms for CD and Public\Originals\Prohibited Tree List.docx (07-15) 17 Exhibit F Buyer’s Proposed Plans See attached. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11445 3611 Louisiana Ave N\Purchase and Redevelopment Agreement.docx Noberg HomesGreat Buy Homes 3611 Louisiana Ave N Budget for 3611 Louisiana Ave N EXPENSES AMOUNT Acquisition (205,000.00)$ Legal/closing costs for purchase (estimated)(3,000.00)$ Appraisal (350.00)$ Demolition survey (650.00)$ Demolition and site prep (42,425.00)$ Real estate taxes (estimated at 8 months)(2,748.00)$ Lawn services (estimated)(400.00)$ Utility billing (estimated)(200.00)$ Public hearing notice (estimated)(150.00)$ Closing costs for sale (estimated)(1,500.00)$ Legal costs for sale (estimated)(2,000.00)$ TOTAL (258,423.00)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)75,000.00$ TOTAL 75,000.00$ TOTAL COST/REVENUE (183,423.00)$ Taxable Market Value 2022, Payable 2023 Projected Taxable Value 2024, Payable 2025 Change Percent Change 251,000.00$ 475,000.00$ 224,000.00$ 89.24% Estimated Taxes Allocated to City 2022, Payable 2023 Projected Taxes Allocated to City 2024, Payable 2025 Change Percent Change 1,506.00$ 2,850.00$ 1,344.00$ 89.24% Projected Project Expenses (258,423.00)$ Lot Sale Revenue 75,000.00$ Total Cost/Revenue (183,423.00)$ # of Years (Year) Additional Taxes Collected By City – Cumulative Total Total Cost/ Revenue Return On Investment 0 (present)-$ (183,423.00)$ -100.00% 1 (payable 2025)1,344.00$ (182,079.00)$ -99.27% 2 (payable 2026)2,728.32$ (180,694.68)$ -98.51% 3 (payable 2027)4,154.17$ (179,268.83)$ -97.74% 4 (payable 2028)5,622.79$ (177,800.21)$ -96.93% 5 (payable 2029)7,135.48$ (176,287.52)$ -96.11% 10 (payable 2034)15,407.45$ (168,015.55)$ -91.60% 15 (payable 2039)24,996.94$ (158,426.06)$ -86.37% 20 (payable 2044)36,113.78$ (147,309.22)$ -80.31% 25 (payable 2049)49,001.25$ (134,421.75)$ -73.29% 30 (payable 2054)63,941.36$ (119,481.64)$ -65.14% *Based on new home valued at $475,000 Estimated Tax Impact of Improvements at 3611 Louisiana Ave N Estimated Return on Investment for 3611 Louisiana Ave N Description Taxable Market Value Change Cash Flow Investment -$ (183,423.00)$ Return, Year 1 224,000.00$ 1,344.00$ Return, Year 2 230,720.00$ 1,384.32$ Return, Year 3 237,641.60$ 1,425.85$ Return, Year 4 244,770.85$ 1,468.63$ Return, Year 5 252,113.97$ 1,512.68$ Return, Year 6 259,677.39$ 1,558.06$ Return, Year 7 267,467.71$ 1,604.81$ Return, Year 8 275,491.75$ 1,652.95$ Return, Year 9 283,756.50$ 1,702.54$ Return, Year 10 292,269.19$ 1,753.62$ Return, Year 11 301,037.27$ 1,806.22$ Return, Year 12 310,068.39$ 1,860.41$ Return, Year 13 319,370.44$ 1,916.22$ Return, Year 14 328,951.55$ 1,973.71$ Return, Year 15 338,820.10$ 2,032.92$ Return, Year 16 348,984.70$ 2,093.91$ Return, Year 17 359,454.24$ 2,156.73$ Return, Year 18 370,237.87$ 2,221.43$ Return, Year 19 381,345.01$ 2,288.07$ Return, Year 20 392,785.36$ 2,356.71$ Return, Year 21 404,568.92$ 2,427.41$ Return, Year 22 416,705.98$ 2,500.24$ Return, Year 23 429,207.16$ 2,575.24$ Return, Year 24 442,083.38$ 2,652.50$ Return, Year 25 455,345.88$ 2,732.08$ Return, Year 26 469,006.26$ 2,814.04$ Return, Year 27 483,076.44$ 2,898.46$ Return, Year 28 497,568.74$ 2,985.41$ Return, Year 29 512,495.80$ 3,074.97$ Return, Year 30 527,870.67$ 3,167.22$ Total Returns 63,941.36$ Investment Cost 258,423.00$ Selling Price 75,000.00$ Return on Investment -65.14% Description Amount Investment (183,423.00)$ Return, Year 1 1,344.00$ Return, Year 2 1,384.32$ Return, Year 3 1,425.85$ Return, Year 4 1,468.63$ Return, Year 5 1,512.68$ Return, Year 6 1,558.06$ Return, Year 7 1,604.81$ Return, Year 8 1,652.95$ Return, Year 9 1,702.54$ Return, Year 10 1,753.62$ Return, Year 11 1,806.22$ Return, Year 12 1,860.41$ Return, Year 13 1,916.22$ Return, Year 14 1,973.71$ Return, Year 15 2,032.92$ Return, Year 16 2,093.91$ Return, Year 17 2,156.73$ Return, Year 18 2,221.43$ Return, Year 19 2,288.07$ Return, Year 20 2,356.71$ Return, Year 21 2,427.41$ Return, Year 22 2,500.24$ Return, Year 23 2,575.24$ Return, Year 24 2,652.50$ Return, Year 25 2,732.08$ Return, Year 26 2,814.04$ Return, Year 27 2,898.46$ Return, Year 28 2,985.41$ Return, Year 29 3,074.97$ Return, Year 30 3,167.22$ Total Returns 63,941.36$ Internal Rate of Return -5.26% Estimated Internal Rate of Return for 3611 Louisiana 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 1 251,000.00$ 475,000.00$ 224,000.00$ 1,344.00$ 2 258,530.00$ 489,250.00$ 230,720.00$ 1,384.32$ 3 266,285.90$ 503,927.50$ 237,641.60$ 1,425.85$ 4 274,274.48$ 519,045.33$ 244,770.85$ 1,468.63$ 5 282,502.71$ 534,616.68$ 252,113.97$ 1,512.68$ 6 290,977.79$ 550,655.19$ 259,677.39$ 1,558.06$ 7 299,707.13$ 567,174.84$ 267,467.71$ 1,604.81$ 8 308,698.34$ 584,190.09$ 275,491.75$ 1,652.95$ 9 317,959.29$ 601,715.79$ 283,756.50$ 1,702.54$ 10 327,498.07$ 619,767.26$ 292,269.19$ 1,753.62$ 11 337,323.01$ 638,360.28$ 301,037.27$ 1,806.22$ 12 347,442.70$ 657,511.09$ 310,068.39$ 1,860.41$ 13 357,865.98$ 677,236.42$ 319,370.44$ 1,916.22$ 14 368,601.96$ 697,553.51$ 328,951.55$ 1,973.71$ 15 379,660.02$ 718,480.12$ 338,820.10$ 2,032.92$ 16 391,049.82$ 740,034.52$ 348,984.70$ 2,093.91$ 17 402,781.32$ 762,235.56$ 359,454.24$ 2,156.73$ 18 414,864.76$ 785,102.63$ 370,237.87$ 2,221.43$ 19 427,310.70$ 808,655.70$ 381,345.01$ 2,288.07$ 20 440,130.02$ 832,915.38$ 392,785.36$ 2,356.71$ 21 453,333.92$ 857,902.84$ 404,568.92$ 2,427.41$ 22 466,933.94$ 883,639.92$ 416,705.98$ 2,500.24$ 23 480,941.96$ 910,149.12$ 429,207.16$ 2,575.24$ 24 495,370.21$ 937,453.59$ 442,083.38$ 2,652.50$ 25 510,231.32$ 965,577.20$ 455,345.88$ 2,732.08$ 26 525,538.26$ 994,544.52$ 469,006.26$ 2,814.04$ 27 541,304.41$ 1,024,380.85$ 483,076.44$ 2,898.46$ 28 557,543.54$ 1,055,112.28$ 497,568.74$ 2,985.41$ 29 574,269.85$ 1,086,765.65$ 512,495.80$ 3,074.97$ 30 591,497.94$ 1,119,368.62$ 527,870.67$ 3,167.22$ Tax Value Growth Rate 3% City Rate 60% The equation for calculating property taxes, in its most simplistic form, is Taxable Market Value X Property Tax Class Rate X City Tax Rate. The Taxable Market Value in this calculation is assumed based on the city's projections for growth in property value due to the improvements. The Property Tax Class Rates are set by the State of MN and stay fairly consistent from year to year (there have been changes in commercial industrial, however; residential is mostly constant). The city’s Tax Rate changes every year based on the levy certified and the overall tax value of the city. So, the Tax Rate used in this illustration is an assumption. The city’s rate has varied between 58-63% in recent years. Property taxes are calculated on taxable market value, not estimated market value. It is of important note, that this calculation does not take into consideration the market value exclusion which is applied to residential properties under $413,800 in value. Tax Calculator for 3611 Louisiana Ave N Comparison of Costs & Tax Impact for Recent Projects Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020) 3611 Louisiana Avenue North 5243 Oregon Avenue North 5802 Boone Avenue North 4201 Boone Avenue North 5306 Rhode Island Avenue North 5213 Pennsylvania Avenue North 4637 Aquila Avenue North 4215 Louisiana Avenue North Number of Units 1 1 1 2 1 1 1 1 Project Description Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition, lot split & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Year Acquired 2022 TBD 2023 2022 2022 2021 2021 2020 Projected or Actual Projected (at time of lot sale) Projected (at time of offer) Projected (at time of offer) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Expenses ($258,423.00) ($243,620.00) ($188,464.00) ($344,888.00) ($253,072.00) ($205,172.18) ($127,292.01) ($170,441.53) Revenue $75,000.00 $80,000.00 $80,000.00 $161,000.00 $87,000.00 $72,000.00 $81,000.00 $69,000.00 Total Cost/Revenue ($183,423.00) ($163,620.00) ($108,464.00) ($183,888.00) ($166,072.00) ($133,172.18) ($46,292.01) ($101,441.53) Estimated Taxable Value of New Home(s) $475,000 $475,000 $500,000 $475,000 per home $950,000 total $575,000 $485,000 $445,000 $380,000 *Additional Taxes Collected by City - 1 year $1,344.00 $1,626.60 $1,596.00 $5,700.00 $2,100.00 $1,902.00 $1,254.00 $786.00 *Additional Taxes Collected by City - 30 years $63,941.36 $77,386.17 $75,930.36 $271,179.87 $99,908.37 $90,488.44 $59,659.57 $37,394.28 *Return On Investment - 30 years -65.14%-52.70%-29.99%47.47% -39.84%-32.05%28.88% -63.14% *Internal Rate of Return - 30 years -5.26%-3.86%-1.92%2.33% -2.69%-2.08%1.49% -5.01% *Assumed 3% tax value growth rate I:\RFA\COMM DEV\2023\EDA\5243 Oregon Ave N\Q ‐ 5243 Oregon Ave N Acquisition 06‐26‐23.docx    Request for Action  June 26, 2023    Approved by: Reece Bertholf, 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 5243 Oregon Avenue North (improvement  project no. 1104)  Requested Action  Staff requests that the Economic Development Authority authorize entering into a Purchase Agreement for the  acquisition of the property at 5243 Oregon Avenue North for a purchase price of $200,000 with traditional  closing costs to be paid by each party.  Policy/Past Practice  The Economic Development Authority has acquired vacant and distressed properties in the past as part of the  city’s scattered site housing program. Goals of the scattered site housing program include removing distressed  and/or blighted properties, providing step‐up housing options in the city, improving the city’s overall housing  stock, investing and instilling confidence into neighborhoods, and increasing home and land values.  Background  The Economic Development Authority (EDA) has directed community development staff to pursue the  acquisition of distressed and functionally obsolete single‐family homes as part of the city’s scattered site  housing program. According to Hennepin County, the property at 5243 Oregon Avenue North has an assessed  value of $203,900 as of 2023, lower than 99% of single‐family homes in the city. The rambler style home was  constructed in 1952 and does not have a basement. It has 841 square feet of finished space, two bedrooms, and  one bathroom. There is a one‐stall detached garage on the property. The 0.24‐acre parcel is zoned R‐1, Single‐ family Residential. The corner lot is 95 feet wide along 53rd Avenue North and 110 feet wide along Oregon  Avenue North. The lot abuts single‐family uses in all directions. Several other scattered site projects have been  completed over the last few years within 3‐4 blocks of the property. This includes the demolition, lot split, and  rebuild project at 5353/5355 Oregon Avenue North and the demolition and rebuild projects at 5201 Oregon  Avenue North, 5213 Pennsylvania Avenue North, and 5306 Rhode Island Avenue North. Staff believes the  property at 5243 Oregon Avenue North is a good candidate for a demolition and rebuild project.    The property at 5243 Oregon Avenue North is going through “pre‐foreclosure,” and the owner responded to a  letter of interest from the city. After the property owner expressed interest in selling to the EDA, an appraisal  was completed on April 17, 2023. The appraisal estimated the value of the property at $220,000. The property  owner has agreed to sell the home for $200,000, with traditional closing costs to be paid by each party,  contingent upon approval by the EDA. Because neither party would be utilizing a real estate agent as part of  the transaction, the property owner can expect to save up to 6% in commission expenses ($13,200 for appraised  value of $220,000 or $12,000 for offer price of $200,000). By selling directly to the city, no home repairs would  need to be completed by the seller or buyer. If the transaction cannot be completed prior to a Sheriff’s Sale, the  EDA may still have an opportunity to purchase the home from the current owner. The seller would be  responsible for paying all fees associated with repurchasing the property during the redemption period.      Agenda Section EDA Item Number  5    Request for Action, Page 2    Cost & Tax Impact of Improvements   It is anticipated that expenses associated with the project would be approximately $243,620. Revenue from the  sale of the lot is estimated at $80,000, resulting in a net loss of $163,620. 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 $475,000  in 2025, it is estimated that total taxes payable to the city in 2026 would increase by $1,626.60 as compared to  those that were payable to the city in 2024. 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, 2023, is used for taxes that  are payable in 2024.    Old Home New Home  Taxable Market Value 2023,  Payable 2024  Projected Taxable Market  Value 2025, Payable 2026  Change % Change  $203,900 $475,000 $271,100 133%    Estimated Taxes Allocated to  City 2023, Payable 2024  Projected Taxes Allocated to  City 2025, Payable 2026  Change % Change  $1,223.40 $2,850 $1,626.60 133%    The following table illustrates the Return on Investment (ROI) and tax benefit associated with the estimated  increase in taxable property value in one year and in 30 years.    # of Years  (Year payable)  Additional Taxes Collected  By City – Cumulative Total  Total Cost/  Revenue  Return On  Investment  1 (payable 2026) $1,626.60 $(161,993.4 ‐99.01%  30 (payable 2055) $77,386.17 $(86,233.83 ‐52.70%  *Please refer to the attached documents for details on the estimated tax impact of improvements and ROI calculations     The estimated ROI for the project over 30 years is ‐52.70% and the estimated Internal Rate of Return (IRR) for  the project over 30 years is ‐3.86% (calculations attached). The calculations utilize an estimated 3% tax value  growth rate, which is applied to the original taxable market value for the old home and the increased taxable  market value for the new home, both over 30 years. A cost and tax impact comparison of this project and other  projects that have been approved since implementation of an analysis template that utilizes tax growth rate  assumptions is attached.    The primary focus of the scattered site program is to target distressed single‐family properties throughout the  city, with the goal of improving residential neighborhoods. It is understood that potential losses are incurred  on each project, as the cost to acquire and redevelop distressed properties often exceeds the value of the new  or rehabilitated home(s).              Request for Action, Page 3    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  5243 Oregon Ave N $163,620.00  4965 Winnetka Ave N $158,972.00  5802 Boone Ave N $108,464.00  Total $431,056.00     Annual Budget (2023) $500,000.00  Under/Over Budget +$68,944.00    Recommendation  Staff recommends that the EDA approve a resolution approving a Purchase Agreement for the acquisition of  5243 Oregon Avenue North for a purchase price of $200,000 with traditional closing costs to be paid by each  party.  Attachments   Resolution   Purchase Agreement   Map   Sample Lot Layout   Photos   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 5243 OREGON AVENUE NORTH (IMPROVEMENT PROJECT NO. 1104) 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 5243 Oregon Avenue North, New Hope, MN, 55428, P.I.D. 08-118-21-21-0046, and legally described as follows: Lot 1, Block 5, Sunset Heights, Hennepin County, Minnesota. (the “Property”) from Daniel Willkom (the “Seller”); WHEREAS, City staff believes that the best use of the Property is demolition and making the lot available for the development of a new residential housing unit in order to maximize the tax base; 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 redevelop the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. It is in the best interest of the EDA to purchase the Property for demolition and redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the purchase of the Property by EDA from Seller, for a sum of $200,000.00, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the purchase of the Property. 4. The proposed acquisition of Property and redevelopment is consistent with the New Hope Comprehensive Plan. 5. The City and EDA shall use due diligence for demolishing the structure located on the Property and conducting any necessary cleanup of the Property to pursue redevelopment and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 6. The President and Executive Director and the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the purchase of the Property in accordance with the Purchase Agreement. Dated the 26th day of June, 2023. ____________________________________ Kathi Hemken, President Attest: _____________________________ Reece Bertholf, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11453 5243 Oregon Ave N\Resolution approving purchase of 5243 Oregon Ave N.docx Exhibit A Purchase Agreement See attached. 1 PURCHASE AGREEMENT Date: June ____, 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: Daniel Willkom, a single person Seller agrees to sell and Buyer agrees to purchase the real property located at: Street Address: 5243 Oregon Avenue North City of New Hope, County of Hennepin, State of Minnesota, 55428 legally described on the attached Exhibit A, PID 08-118-21-21-0046. 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 Thousand and 00/100 Dollars ($200,000.00), 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 January 14, 2024, 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 SEALED WELL ON OR SERVING THE PROPERTY. (If answer is DOES and well is located on the Property, see Disclosure Statement: Well.) See Well Disclosure Statement. THIS PURCHASE AGREEMENT IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. (If answer is IS, see attached Addendum.) IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER HAS RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT: SUBSURFACE SEWAGE TREATMENT SYSTEM. NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory offender registry and persons registered with the predatory offender registry under MN Statute 243.166 may be obtained by contacting the local law enforcement offices in the community where the Property is located or the Minnesota Department of Corrections at (651) 361 -7200, or from the Department of Corrections web site at www.corr.state.mn.us. 6 No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement. NOTICE Seller is not represented by a listing Agent in this transaction. (Licensee) (Real Estate Company Name) Buyer is not represented by an Agent in this transaction. (Licensee) (Real Estate Company Name) DUAL AGENCY REPRESENTATION Dual Agency representation DOES NOT apply in this transaction. CLOSING COSTS: Buyer and Seller agree to respectively pay traditional closing costs. Any increased costs associated with the closing of the sale of the Property, that are a result of redemption following the sheriff’s sale for the mortgage foreclosure will be the sole responsibility of Seller. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal Revenue Code provides that a transferee ("Buyer") of a United States real property interest must be notified in writing and must withhold tax if the transferor ("Seller") is a foreign person and no exceptions from FIRPTA withholding apply. Buyer and Seller agree to comply with FIRPTA requirements under Section 1445 of the Internal Revenue Code. Seller shall represent and warrant, under the penalties of perjury, whether Seller is a "foreign person" (as the same is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to this issue shall survive the closing and delivery of the deed. Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or statement reasonably necessary to comply with the FIRPTA requirements, including delivery of their respective federal taxpayer identification numbers or Social Security numbers. Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's responsibility for withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax advice regarding FIRPTA compliance, as the respective licensee's representing or assisting either party will be unable to assure either party whether the transaction is exempt from FIRPTA withholding requirements. ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties shall constitute the entire agreement between Buyer and Seller. Any other written or oral communication between Buyer and Seller, including, but not limited to, e-mails, text messages, or other electronic communications are not part of this Purchase Agreement. This Purchase Agreement can be modified or canceled only in writing signed by Seller and Buyer or by operation of law. All monetary sums are deemed to be United States currency for purposes of this Purchase Agreement. 7 ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document related to this transaction constitute valid, binding signatures. FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties and a copy must be delivered. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract for deed. OTHER: Buyer’s obligation to purchase the Property under this Purchase Agreement is contingent on the following: (1) Review and approval of the terms of the Purchase Agreement by the Economic Development Authority in and for the City of New Hope to the terms of the Purchase Agreement If the above contingency is not met, Buyer may declare this Purchase Agreement canceled by written notice to Seller, or licensee representing or assisting Seller, in which case this Purchase Agreement is canceled. If Buyer declares this Purchase Agreement canceled due to the failure of one of the above contingencies, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and all earnest money paid shall be immediately returned to Buyer. Seller will not be required to complete the City of New Hope Point of Sale inspection. Seller warrants that there are no tenants on the property with a lawful leasehold interest. In the event any tenant comes forward and claims an interest in the property at the time of or following the purchase, Seller agrees to fully indemnify Buyer for any and all costs associated with terminating such tenancy and for any and all relocation assistance and benefits that may be due to such tenant together with attorney’s fees that Buyer would have to incur in connection with legal action required to resolve any relocation assistance or benefits dispute with such tenant. Seller acknowledges that 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 _____________________________ Daniel Willkom, a single 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 By: Reece Bertholf Its: Executive Director Date: June ___, 2023 Date: June ____, 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 1, Block 5, Sunset Heights, Hennepin County, Minnesota. P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11453 5243 Oregon Ave N\Purchase Agreement.docx 5243 Oregon Ave N R-1, Single-family residential 52435243 5243 Oregon Ave N R-1, Single-family residential 110’110’Buildable Buildable AreaArea Potential Potential Home & GarageHome & Garage Potential Potential DrivewayDriveway 95’95’ Scattered Site Housing Project - 5243 Oregon Avenue North Appraisal Professionals of MN LLC Jayne Preusse Eden Prairie, MN 55344 612-267-5269 04/19/2023 Jeff Alger City of New Hope Community Development 4401 Xylon Avenue N New Hope, MN 55428 Re:Property:5243 Oregon Ave N New Hope, MN 55428-4207 Borrower:N/A File No.:AP202327 Opinion of Value: $220,000 Effective Date:04/17/2023 In accordance with your request, we have appraised the above referenced property. The report of that appraisal is attached. The purpose of the appraisal is to develop an opinion of market value for the property described in this appraisal report, as improved, in unencumbered fee simple title of ownership. This report is based on a physical analysis of the site and improvements, a locational analysis of the neighborhood and city, and an economic analysis of the market for properties such as the subject. The appraisal was developed and the report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The opinion of value reported above is as of the stated effective date and is contingent upon the certification and limiting conditions attached. It has been a pleasure to assist you. Please do not hesitate to contact me if I can be of additional service to you. Sincerely, Jayne Preusse License or Certification #: 20559939 State: MN Expires: 08/31/2023 jstrikos@msn.com APPRAISAL OF REAL PROPERTY 5243 Oregon Ave N New Hope, MN 55428-4207 LOT 001 BLOCK 005 SUNSET HEIGHTS City of New Hope 4401 Xylon Avenue N New Hope, MN 55428 220,000 04/17/2023 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 5243 Oregon Ave N AP202327 5243 Oregon Ave N New Hope MN 55428-4207 LOT 001 BLOCK 005 SUNSET HEIGHTS Hennepin 08-118-21-21-0046 2023 3,341 567 N/A DANIEL WILLKOM 0 New Hope 33460 0215.02 N/A N/A N/A City of New Hope 4401 Xylon Avenue N, New Hope, MN 55428 Jayne Preusse 7164 Crowne Oak Road, Eden Prairie, MN 55344 85 13 190 291 251 61 95 70 79 3 4 10 Other 4 Bass Lake Rd to the north, W Broadway Ave to the east, 49th Ave N to the south, and St Hwy 169 to the west. Market trends analysis was from a 1 mile radius from the subject property. Under present land use, 4% indicates "Other". The primary portion of this amount includes parks, miscellaneous, water and undeveloped land. This does not indicate any negative impact on the Subject's value & marketability at this time. Market data indicates overall property values have been stable 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. 80x95x110x80x15 10,386 sf R1-Single Family Residential AMP CB Asphalt Concrete None Yes None Generally Level Average - 10386 sf Irregular Average N;Res Average Concrete/Avg None Noted X 11/04/2016 27053C0211F 1 1 Detached Rambler Existing 71 50 Concrete/Avg Wd/Cp/Avg Asphalt/Avg None DbH/Gldr/A-G Full/A-G N/A N/A Yes None None Unknown Unknown Unknown 0 N/A N/A N/A N/A N/A Unkn Unkn Unkn Unkn 0 1 1 1 1 2 1.0 1 841 6 2 1 Carpet/Vy/F-A SR/F-A Wood/Fair CT/Avg CT/Avg Wd/Avg Yes FWA Gas Avg Yes N/A Wall Unkn 0 None Wd Deck None Wood None Yes 1 6 See Attached Addendum. C4;The subject is a "Rambler" detached single family home reflecting overall fair-average condition as compared to competing properties of a similar age and design. The subject property exhibits no apparent effects of external obsolescence. See attached addendum and photo addendum. The subject has no basement. There are comparables within the neighborhood with no basements. 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 75,000 75,000 5243 Oregon Ave N AP202327 Estimated economic life based on 100 total years. There was only one land comparable most viable to the subject from 01/01/2019 to present per RMLS. RMLS #6006382 $110,000. Remaining Economic Life: 50 5243 Oregon Ave N New Hope, MN 55428-4207 N/A RMLS/HennCA Inspection A;Res/RR Fee Simple 10,386 sf N;Res Rambler Q5 71 C4 6 2 1 841 0sf N/A Average FWA None 1gd6dw Deck None Wood 04/17/2023 RMLS/HenneCA 5220 Georgia Ave N Crystal, MN 55428-3915 0.49 miles E 242,300 219.08 RMLS#6322198/46DOM RMLS/HennAssessWeb/Dr-BIns ArmLth FHA;5000 -5,000 s02/23;Unk 0 A;Res/RR Fee Simple 10019 sf 0 N;Res; Rambler Q5 -5,000 69 0 C3 -2,000 5 2 1 0 1,106 -7,950 0sf N/A Average FWA None 1ga4dw 0 Deck None CL 0 -19,950 Net 8.2 % Gross 8.2 % None 222,350 04/17/2023 RMLS/HenneCA 7105 52nd Ave N Crystal, MN 55428-4201 0.19 miles SE 217,500 281.74 RMLS#6340387/3DOM RMLS/HennAssessWeb/Dr-BIns ArmLth VA;0 0 s04/23;Unk 0 A;Res/RR Fee Simple 9148 sf 0 N;Res; Rambler Q5 69 0 C4 -1,000 4 2 1 0 772 +2,070 0sf N/A Average FWA None 2gd4dw -5,000 None +4,000 None None 0 70 Net 0.0 % Gross 5.5 % None 217,570 04/17/2023 RMLS/HenneCA 7415 Saint Raphael Dr New Hope, MN 55428-3819 0.18 miles N 291,000 257.29 RMLS#6317602/19DOM RMLS/HennAssessWeb/Dr-BIns ArmLth Conv;0 0 s03/23;Unk 0 N;Res;-5,000 Fee Simple 10019 sf 0 B;Park -4,000 Rambler Q5 -15,000 71 C3 -2,000 -4,000 6 3 1 0 1,131 -8,700 1131sf576sfwu -19,400 1rr0br1.0ba1o 0 Average FWA C/Air -2,000 None 2gd4dw -5,000 Gaz -2,000 None CL 0 -67,100 Net 23.1 % Gross 23.1 % None 223,900 04/17/2023 RMLS/HenneCA See attached addendum. The subject property has not been a sale / re-sale during the past 36 months. All comparable sales have not been sales / resales during the past 12 months. 220,000 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. 04/2023 04/17/2023 220,000 Jayne Preusse 04/19/2023 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 5243 Oregon Ave N AP202327 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 The present state of the economy within the region and the United States is changing. Mortgage rates, inflation and other potential economic conditions may be influencing the housing market. Due the recent changing markets, RMLS statistics were analyzed from the previous three years to determine if markets are fluctuating within the specific subject neighborhood/market. Market statistics for the average/median sold price of all single family homes similar to the subject within a one mile radius from the subject property from 04/17/2020-04/16/2021 was $229,208/233,750 (respectively, data of 38). Market statistics for the average/median sold price of all single family homes similar to the subject property within a one mile radius from the subject property from 04/17/2021-04/16/2022 was $246,991/250,000 (respectively, data of 37). Overall indicating an increase in market conditions for the average and an increase in market conditions for the median. Market statistics for the average/median sold price of all single family homes similar to the subject property within a one mile radius from the subject property from 04/17/2022-04/16/2023 was $247,159/250,500 (respectively, data of 22). Indicating overall stable market conditions for the average and stable for the median. All statistics were taken under consideration, with the final observation of current market conditions being stable from the effective date of this appraisal report. Neighborhood Description The subject property is located in the 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 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 is generally level from the front to the rear. The subject home is at an angle that faces both Oregon Ave N and 53rd Street to the front. There is a concrete driveway that is entered from a lightly trafficked residential street to the detached garage. There is a concrete walkway from the front street and driveway that leads to the front and side entrances. The subject views detached single family homes on all sides. In short, the subject parcel is observed to be an average site, and is considered to be a suitable place for the home improvements. There are no apparent easements or encroachments, other than typical utility easements. In making this appraisal report, we are not aware of any testing for the existence of presence of radon, asbestos, toxic substances, or other environmental pollutants in the building, land, or other surrounding areas, and that the value assigned herein to the land and buildings assume that no such contaminants exist. We further recommend that if you have knowledge of or reason to subject the existence of such pollutants, that you obtain an environmental assessment of the property. To the best of our knowledge, there are no environmental risk factors which may affect the real estate being appraised. Additional Features Exterior features of the subject include a wood deck and fence around the parameter of the backyard. The first level consists of a foyer, living room, kitchen, kitchen dining, full bath, two bedrooms and a mud/laundry/utility room area. There is no basement. There is crawl space only. The washing machine covered the door into the crawl space and no photo was taken. The appraiser manually measured the subject with 841 GLA. The most recent RMLS listing for the subject indicates GLA of 924. RMLS Realist indicates 840 GLA. The subject's water, electricity and heat were on and working at the time of the appraisal inspection. The subject has a wall unit for AC. It is unknown if it works. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP202327 N/A 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. has a wall unit for AC. It is unknown if it works. "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. Three sold comparables were utilized for the overall opinion of value. Comparables #1, #2 and #3 are observed to be good viable comparables to the subject, many of the search parameters, and being close in proximity to the subject. Comparables #1 and #2 were given most weight in the determination of the opinion of value due to being close in proximity to the subject while being similar in most of the original search parameters. Both these comparables have no basement as the subject. Comparables #1-3 best represents the current market conditions of being sold within 90 DOM. All sold comparables are located within the same school district as the subject - #281-Robbinsdale. All sold comparables are within a 5-8% range to the subject's opinion of value. Effective ages were taken under consideration for the sales comparison grid. GLA along with the other parameters were the next most viable attributes in locating similar comparables to the subject. Due to extending the search parameters, recommended guidelines were exceeded in net adjustments, line item adjustments for condition and GLA to the subject property. Comparable #3 exceeded net adjustments primarily due to having a basement with finished basement sf. 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 CONCESSIONS: Comparable #1 has been adjusted due to the RMLS listing indicating sellers concessions. 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 Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP202327 N/A 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. properties, and the overall appeal and marketability of the respective neighborhoods in relation to the subject. Comparable #3 is further in distance from the railroad tracks and any external associated. SITE/VIEW: Adjustments for site/view were made on the basis of lot value and the availability of public utilities rather than size alone. Comparable #3 has a superior park view. 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 superior in quality upgrades and condition to the subject per the RMLS description and photos in kitchen updates and miscellaneous interior. Comparable #2 is observed to be slightly superior in condition to the subject per the RMLS description and photos. Comparable #3 is observed to be superior in quality upgrades/updates and condition to the subject per the RMLS description and photos in overall interior upkeep and maintenance. 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 - 25.00 Basement 5000.00 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 2023 estimated assessed value is as follows: Land $75,000, Building $131,000 with a total of $206,000. There is a special assessment of 567.31 for delinquent utilities. 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 financial transaction, 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. Supplemental Addendum Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE AP202327 N/A 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Borrower Lender/Client Property Address City County State Zip Code File No. 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. ANSI Standards - Method for Calculating Appraiser for this report is utilizing the Square Footage-Method for Calculating: ANSI® Z765-2021 (American National Standards Institute®) Measuring Standard for measuring, calculating, and reporting gross living area (GLA) and non-GLA areas of subject property for appraisals requiring interior and exterior inspections with effective dates of April 1, 2022 or later. Finished Area - An enclosed area in a house that is suitable for year-round use based upon its geographic region location, embodying walls, floors, and ceilings that are similar to the rest of the house. The finished square feet within this appraisal report contains a total of 841 above grade sf. There is no basement. Exterior measurements are rounded to the nearest 1/10 foot and are approximate. Exterior amenities like decks, patios, porches, etc., are drawn as close to scale as possible and are for reference only. CO/Smoke Detector The appraiser has included a photograph of one of the smoke/CO detectors as they were present at the time of inspection. 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 AP202327 N/A 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Subject Front Sales Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 5243 Oregon Ave N N/A 841 6 2 1 A;Res/RR N;Res 10,386 sf Q5 71 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Living Kitchen Foyer Living 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Side Entrance/Laundry Laundry Door to Crawl Space Bedroom CO/Smoke Detectors - Unknown if working Damaged Door Trim 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope HVAC/Utility Subject Garage/Driveway Interior of Garage Backyard Shed Subject Side 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Backyard/Deck 53rd St on North Side Subject Front/Side Subject Front Borrower Lender/Client Property Address City County State Zip Code Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Photo Page N/A 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 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 5220 Georgia Ave N 0.49 miles E 242,300 1,106 5 2 1 A;Res/RR N;Res; 10019 sf Q5 69 Comparable 2 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 7105 52nd Ave N 0.19 miles SE 217,500 772 4 2 1 A;Res/RR N;Res; 9148 sf Q5 69 Comparable 3 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age 7415 Saint Raphael Dr 0.18 miles N 291,000 1,131 6 3 1 N;Res; B;Park 10019 sf Q5 71 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Borrower Lender/Client 20.5'41'20.5'41'20'14'20'14'12'12'12'12' ShedDeck First Floor Garage Foyer Bedroom BedroomBath Living Kitchen Laundry Utility TOTAL Sketch by a la mode, inc.Area Calculations Summary Living Area Calculation Details First Floor 840.5 Sq ft 41 × 20.5 = 840.5 Total Living Area (Rounded):841 Sq ft Non-living Area Wood Deck 144 Sq ft 12 × 12 = 144 1 Car Detached 280 Sq ft 14 × 20 = 280 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 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 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope Borrower Lender/Client Property Address City County State Zip Code Hennepin County Assessor Property Information - Page 1 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Hennepin County Assessor Property Information - Page 2 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE 5243 Oregon Ave N AP202327 N/A 5243 Oregon Ave N New Hope Hennepin MN 55428-4207 City of New Hope None. None. Sources for data were from RMLS and Hennepin County Assessor Website. 0-90 0-90 Jayne Preusse 04/19/2023 20559939 MN 08/31/2023 04/17/2023 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 5243 Oregon Ave N EXPENSES AMOUNT Acquisition (200,000.00)$ Legal/closing costs for purchase (estimated)(5,000.00)$ Appraisal (350.00)$ Demolition survey (650.00)$ Demolition and site prep (estimated)(30,000.00)$ Real estate taxes (estimated at 6 months)(1,670.00)$ 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 (243,620.00)$ REVENUE AMOUNT EDA (estimated lot sale proceeds)80,000.00$ TOTAL 80,000.00$ TOTAL COST/REVENUE (163,620.00)$ Taxable Market Value 2023, Payable 2024 Projected Taxable Value 2025, Payable 2026 Change Percent Change 203,900.00$ 475,000.00$ 271,100.00$ 132.96% Estimated Taxes Allocated to City 2023, Payable 2024 Projected Taxes Allocated to City 2025, Payable 2026 Change Percent Change 1,223.40$ 2,850.00$ 1,626.60$ 132.96% Projected Project Expenses (243,620.00)$ Lot Sale Revenue 80,000.00$ Total Cost/Revenue (163,620.00)$ # of Years (Year) Additional Taxes Collected By City – Cumulative Total Total Cost/ Revenue Return On Investment 0 (present)-$ (163,620.00)$ -100.00% 1 (payable 2026)1,626.60$ (161,993.40)$ -99.01% 2 (payable 2027)3,302.00$ (160,318.00)$ -97.98% 3 (payable 2028)5,027.66$ (158,592.34)$ -96.93% 4 (payable 2029)6,805.09$ (156,814.91)$ -95.84% 5 (payable 2030)8,635.84$ (154,984.16)$ -94.72% 10 (payable 2035)18,647.15$ (144,972.85)$ -88.60% 15 (payable 2040)30,252.99$ (133,367.01)$ -81.51% 20 (payable 2045)43,707.35$ (119,912.65)$ -73.29% 25 (payable 2050)59,304.64$ (104,315.36)$ -63.75% 30 (payable 2055)77,386.17$ (86,233.83)$ -52.70% *Based on new home valued at $475,000 Estimated Tax Impact of Improvements at 5243 Oregon Ave N Estimated Return on Investment for 5243 Oregon Ave N Description Taxable Market Value Change Cash Flow Investment -$ (163,620.00)$ Return, Year 1 271,100.00$ 1,626.60$ Return, Year 2 279,233.00$ 1,675.40$ Return, Year 3 287,609.99$ 1,725.66$ Return, Year 4 296,238.29$ 1,777.43$ Return, Year 5 305,125.44$ 1,830.75$ Return, Year 6 314,279.20$ 1,885.68$ Return, Year 7 323,707.58$ 1,942.25$ Return, Year 8 333,418.80$ 2,000.51$ Return, Year 9 343,421.37$ 2,060.53$ Return, Year 10 353,724.01$ 2,122.34$ Return, Year 11 364,335.73$ 2,186.01$ Return, Year 12 375,265.80$ 2,251.59$ Return, Year 13 386,523.78$ 2,319.14$ Return, Year 14 398,119.49$ 2,388.72$ Return, Year 15 410,063.07$ 2,460.38$ Return, Year 16 422,364.97$ 2,534.19$ Return, Year 17 435,035.92$ 2,610.22$ Return, Year 18 448,086.99$ 2,688.52$ Return, Year 19 461,529.60$ 2,769.18$ Return, Year 20 475,375.49$ 2,852.25$ Return, Year 21 489,636.76$ 2,937.82$ Return, Year 22 504,325.86$ 3,025.96$ Return, Year 23 519,455.63$ 3,116.73$ Return, Year 24 535,039.30$ 3,210.24$ Return, Year 25 551,090.48$ 3,306.54$ Return, Year 26 567,623.20$ 3,405.74$ Return, Year 27 584,651.89$ 3,507.91$ Return, Year 28 602,191.45$ 3,613.15$ Return, Year 29 620,257.19$ 3,721.54$ Return, Year 30 638,864.91$ 3,833.19$ Total Returns 77,386.17$ Investment Cost 243,620.00$ Selling Price 80,000.00$ Return on Investment -52.70% Description Amount Investment (163,620.00)$ Return, Year 1 1,626.60$ Return, Year 2 1,675.40$ Return, Year 3 1,725.66$ Return, Year 4 1,777.43$ Return, Year 5 1,830.75$ Return, Year 6 1,885.68$ Return, Year 7 1,942.25$ Return, Year 8 2,000.51$ Return, Year 9 2,060.53$ Return, Year 10 2,122.34$ Return, Year 11 2,186.01$ Return, Year 12 2,251.59$ Return, Year 13 2,319.14$ Return, Year 14 2,388.72$ Return, Year 15 2,460.38$ Return, Year 16 2,534.19$ Return, Year 17 2,610.22$ Return, Year 18 2,688.52$ Return, Year 19 2,769.18$ Return, Year 20 2,852.25$ Return, Year 21 2,937.82$ Return, Year 22 3,025.96$ Return, Year 23 3,116.73$ Return, Year 24 3,210.24$ Return, Year 25 3,306.54$ Return, Year 26 3,405.74$ Return, Year 27 3,507.91$ Return, Year 28 3,613.15$ Return, Year 29 3,721.54$ Return, Year 30 3,833.19$ Total Returns 77,386.17$ Internal Rate of Return -3.86% Estimated Internal Rate of Return for 5243 Oregon 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 1 203,900.00$ 475,000.00$ 271,100.00$ 1,626.60$ 2 210,017.00$ 489,250.00$ 279,233.00$ 1,675.40$ 3 216,317.51$ 503,927.50$ 287,609.99$ 1,725.66$ 4 222,807.04$ 519,045.33$ 296,238.29$ 1,777.43$ 5 229,491.25$ 534,616.68$ 305,125.44$ 1,830.75$ 6 236,375.98$ 550,655.19$ 314,279.20$ 1,885.68$ 7 243,467.26$ 567,174.84$ 323,707.58$ 1,942.25$ 8 250,771.28$ 584,190.09$ 333,418.80$ 2,000.51$ 9 258,294.42$ 601,715.79$ 343,421.37$ 2,060.53$ 10 266,043.25$ 619,767.26$ 353,724.01$ 2,122.34$ 11 274,024.55$ 638,360.28$ 364,335.73$ 2,186.01$ 12 282,245.29$ 657,511.09$ 375,265.80$ 2,251.59$ 13 290,712.64$ 677,236.42$ 386,523.78$ 2,319.14$ 14 299,434.02$ 697,553.51$ 398,119.49$ 2,388.72$ 15 308,417.04$ 718,480.12$ 410,063.07$ 2,460.38$ 16 317,669.56$ 740,034.52$ 422,364.97$ 2,534.19$ 17 327,199.64$ 762,235.56$ 435,035.92$ 2,610.22$ 18 337,015.63$ 785,102.63$ 448,086.99$ 2,688.52$ 19 347,126.10$ 808,655.70$ 461,529.60$ 2,769.18$ 20 357,539.88$ 832,915.38$ 475,375.49$ 2,852.25$ 21 368,266.08$ 857,902.84$ 489,636.76$ 2,937.82$ 22 379,314.06$ 883,639.92$ 504,325.86$ 3,025.96$ 23 390,693.49$ 910,149.12$ 519,455.63$ 3,116.73$ 24 402,414.29$ 937,453.59$ 535,039.30$ 3,210.24$ 25 414,486.72$ 965,577.20$ 551,090.48$ 3,306.54$ 26 426,921.32$ 994,544.52$ 567,623.20$ 3,405.74$ 27 439,728.96$ 1,024,380.85$ 584,651.89$ 3,507.91$ 28 452,920.83$ 1,055,112.28$ 602,191.45$ 3,613.15$ 29 466,508.45$ 1,086,765.65$ 620,257.19$ 3,721.54$ 30 480,503.71$ 1,119,368.62$ 638,864.91$ 3,833.19$ Tax Value Growth Rate 3% City Rate 60% The equation for calculating property taxes, in its most simplistic form, is Taxable Market Value X Property Tax Class Rate X City Tax Rate. The Taxable Market Value in this calculation is assumed based on the city's projections for growth in property value due to the improvements. The Property Tax Class Rates are set by the State of MN and stay fairly consistent from year to year (there have been changes in commercial industrial, however; residential is mostly constant). The city’s Tax Rate changes every year based on the levy certified and the overall tax value of the city. So, the Tax Rate used in this illustration is an assumption. The city’s rate has varied between 58-63% in recent years. Property taxes are calculated on taxable market value, not estimated market value. It is of important note, that this calculation does not take into consideration the market value exclusion which is applied to residential properties under $413,800 in value. Tax Calculator for 5243 Oregon Ave N Comparison of Costs & Tax Impact for Recent Projects Since implementation of analysis template that utilizes tax growth rate assumptions (September of 2020) 5243 Oregon Avenue North 5802 Boone Avenue North 3611 Louisiana Avenue North 4201 Boone Avenue North 5306 Rhode Island Avenue North 5213 Pennsylvania Avenue North 4637 Aquila Avenue North 4215 Louisiana Avenue North Number of Units 1 1 1 2 1 1 1 1 Project Description Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition, lot split & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Demolition & rebuild Year Acquired TBD 2023 2022 2022 2022 2021 2021 2020 Projected or Actual Projected (at time of offer) Projected (at time of offer) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Projected (at time of lot sale) Expenses ($243,620.00) ($188,464.00) ($258,423.00) ($344,888.00) ($253,072.00) ($205,172.18) ($127,292.01) ($170,441.53) Revenue $80,000.00 $80,000.00 $75,000.00 $161,000.00 $87,000.00 $72,000.00 $81,000.00 $69,000.00 Total Cost/Revenue ($163,620.00) ($108,464.00) ($183,423.00) ($183,888.00) ($166,072.00) ($133,172.18) ($46,292.01) ($101,441.53) Estimated Taxable Value of New Home(s) $475,000 $500,000 $475,000 $475,000 per home $950,000 total $575,000 $485,000 $445,000 $380,000 *Additional Taxes Collected by City - 1 year $1,626.60 $1,596.00 $1,344.00 $5,700.00 $2,100.00 $1,902.00 $1,254.00 $786.00 *Additional Taxes Collected by City - 30 years $77,386.17 $75,930.36 $63,941.36 $271,179.87 $99,908.37 $90,488.44 $59,659.57 $37,394.28 *Return On Investment - 30 years -52.70%-29.99%-65.14%47.47% -39.84%-32.05%28.88% -63.14% *Internal Rate of Return - 30 years -3.86%-1.92%-5.26%2.33% -2.69%-2.08%1.49% -5.01% *Assumed 3% tax value growth rate I:\RFA\COMM DEV\2023\EDA\5802 Boone Ave N\Q ‐ 5802 Boone Ave N Demolition Contract 06‐26‐23.docx    Request for Action  June 26, 2023    Approved by: Reece Bertholf, City Manager  Originating Department: Community Development  By: Jeff Alger, Community Development Specialist;   Jeff Sargent, Director of Community Development  Agenda Title  Resolution approving contract with Nitti Rolloff Services Inc for hazardous material abatement, disposal of  items throughout yard and within buildings, tree removal, demolition of site improvements, well sealing, site  grading, and installation of utility improvements at 5802 Boone Avenue North (improvement project no. 1088)  Requested Action  Staff requests approval of a resolution awarding a contract for hazardous material abatement, disposal of items  throughout the yard and within buildings, tree removal, demolition of building and site improvements, well  sealing, site grading, sewer lining, and water service valve replacement at 5802 Boone Avenue North, to the  low and responsible bidder, Nitti Rolloff Services Inc, in the amount of $49,700.  Policy/Past Practice  It is a past practice of staff to present contracts to the Economic Development Authority for consideration when  public bidding is required for scattered site housing projects.  Background  The Economic Development Authority (EDA) acquired the property located at 5802 Boone Avenue North for  $119,600 in April of 2023, as part of the city’s scattered site housing program. The EDA directed staff to take  the necessary steps in preparing the building for demolition in order to facilitate redevelopment of the  property. This contract award includes hazardous material abatement, disposal of items throughout the yard  and within buildings, tree removal, demolition of building and site improvements, well sealing, site grading,  sewer lining, and water service valve replacement at the property. Staff requested quotes from seven  contractors, who submitted the following bids:   Nitti Rolloff Services Inc  $49,700   Kevitt Excavating, LLC  $56,900   All State Companies, Inc  $69,995   Bollig and Sons    $72,092   JACON LLC    Did not submit   Leadens Excavating Inc  Did not submit   Lloydʹs Construction Services Inc Did not submit    The EDA has worked with the low bidder, Nitti Rolloff Services Inc, on nine previous scattered site housing  demolition projects. The contractor most recently completed the demolition work at 3611 Louisiana Avenue  North. Staff has had good experiences working with the contractor and has no concerns with awarding them  the contract.  Funding  Funding is available in the EDA budget for the demolition contract.    Agenda Section EDA Item Number  6    Request for Action, Page 2    Recommendation  Staff recommends approval of a resolution awarding a contract for hazardous material abatement, disposal of  items throughout the yard and within buildings, tree removal, demolition of site improvements, well sealing,  site grading, and installation of utility improvements at 5802 Boone Avenue North to Nitti Rolloff Services Inc,  in the amount of $49,700.  Attachments   Resolution   Bids   Request For Quote/Project Specifications    EDA RESOLUTION NO. 23-___ 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 5802 BOONE AVENUE NORTH (IMPROVEMENT PROJECT NO. 1088) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Economic Development Authority in and for the City of New Hope (“EDA”) purchased that certain real property located at 5802 Boone Avenue North, New Hope, MN (the “Property”) with the intention of redeveloping the Property; and WHEREAS, City staff intends to redevelop the Property in accordance with the City’s scattered site housing program and policy and return the Property to the tax rolls for the benefit of all taxing jurisdictions; and WHEREAS, City staff is exercising due diligence to correct the Property’s blighted condition by performing hazardous material abatement at the Property to be followed by disposal of items throughout yard and within buildings, tree removal, demolition of all buildings on the Property, well sealing, site grading, and installation of utility improvements at the Property (“Work”); and WHEREAS, Nitti Rolloff Services Inc submitted a proposal for the Work that meets all of the Project Specifications and is the low bid; and WHEREAS, it is in the best interests of the EDA to enter into a contract with Nitti Rolloff Services Inc for the purpose of performing the Work; and WHEREAS, City staff is hereby seeking approval from the EDA of the selection of Nitti Rolloff Services Inc as the duly qualified contractor to perform the Work. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That selection of Nitti Rolloff Services Inc as the Contractor to perform the hazardous material abatement at the Property to be followed by disposal of items throughout yard and within buildings, tree removal, demolition of all buildings on the Property, well sealing, site grading, and installation of utility improvements at the Property pursuant to the Project Specifications is approved, it being in the best interest of the EDA and City to prepare the Property for redevelopment in accordance with the City’s scattered site housing program and policy. 3. That the payment of $49,700.00 to Nitti Rolloff Services Inc to perform the Work is hereby approved. 4. The President, Acting Executive Director, and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to facilitate the completion of the Work at the Property in accordance with the contract to be prepared by the City Attorney. Dated the 26th day of June, 2023. ____________________________________ Kathi Hemken, President Attest: _____________________________ Reece Bertholf, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11446 5802 Boone Ave N\Resolution approving Demolition contract for 5802 Boone Ave N.docx BOLLIG & SONS INC. 11401 COUNTY ROAD 3 HOPKINS MN 55343 952-938-4133 FAX 952-938-9615 office@bolligandsons.com June 12, 2023 City of New Hope Attn: Jeff Alger jalger@newhopemn.gov JOB SITE: 5802 Boone Avenue North, New Hope Job Description: Demo / Backfill Erosion control mobilization for install one at $150.00 per trip. Bid Price $ 150.00 Install 550’ of erosion control at $2.00 per foot as needed. Bid Price $ 1,100.00 Install 200’ of safety / tree fence at $2.00 per foot as needed. Bid Price $ 400.00 Inlet protection 3 at $300.00 each. Bid Price $ 900.00 Construction entrance and removal one load. Bid Price $ 1,000.00 Mobilization for stabilization one trip at $150.00 per trip. Bid Price $ 150.00 Hydro seed site with development mix 15,000 SF at $0.10 per SF. Bid Price $ 1,500.00 Erosion control mobilization for removal one at $150.00 per trip. Bid Price $ 150.00 Remove 550’ of erosion control at $1.50 per foot as needed. Bid Price $ 825.00 Remove 200’ of safety / tree fence at $1.50 per foot as needed. Bid Price $ 300.00 Demo permit. Bid Price $ 240.00 Disconnect water and install new curb box Disconnect sewer and line sewer to main. Bid Price $ 17,000.00 State fee for if well not found. Bid Price $ 275.00 Seal well if found. Estimate Price $ 2,800.00 Empty structure to make demo ready. (Non-demo landfill items) Bid Price $ 966.00 Asbestos removal per report. Bid Price $ 900.00 Remove trees and stumps. Bid Price $ 12,075.00 Demo house, garage, foundation, driveway, deck, fence and out buildings. Bid Price $ 22,811.00 Backfill and grade. (Compaction included) Bid Price $ 3,675.00 Supply sand backfill per spec 270 tons at $12.50 per ton. Bid Price $ 3,375.00 Soil testing per spec. Bid Price $ 1,500.00 Total Job Cost $ 72,092.00 NOTE: No winter conditions included. No hazardous removal unless stated above. No tree protection figured. Tree and stump removal not included. Machine and labor price is good for 30 days. Material price is good for 15 days. Accepted Proposal Signature: __________________________________________Date: ________________ Thank you for the opportunity to work with you on this project. We do appreciate your business. Respectfully, Dan Meyer Estimator Cell 612-322-1880 Email dmeyer@bolligandsons.com City of New Hope, Minnesota Request For Quote/Project Specifications Date: May 2, 2023 From: The Economic Development Authority (EDA) in and for the city of New Hope Subject: Request for quotes for hazardous material abatement, tree removal, demolition, well sealing, sewer lining, and water service valve replacement at 5802 Boone Avenue North. Overview: The city of New Hope EDA owns the property located at 5802 Boone Avenue North, New Hope, MN 55428 (PID 06-118-21-42-0028). The EDA is requesting quotes for the removal of hazardous material, disposal of items throughout the yard and within the buildings, tree removal, and the demolition of all building and site improvements at this location followed by sealing of the well on-site, installation of utility improvements, and re-grading of the primary excavation area. If you are interested in submitting a quote for this project, please review the enclosed specifications and inspect the site. To gain entry into the home, use the lock box on the front entrance door using the code 4401. Please call Jeff Alger in the Community Development Department with any questions at 763-531-5119. Submission: Interested bidders must submit the enclosed Bid Form by U.S. Mail, e-mail, or in person. Bids shall be submitted to Jeff Alger, Community Development Specialist. City of New Hope Community Development Department Attention: Jeff Alger 4401 Xylon Avenue North New Hope, MN 55428 jalger@newhopemn.gov Deadline: Proposals must be submitted using the enclosed bid form and received no later than June 12, 2023, at 1:00 p.m. City staff will review the submitted proposals and make a recommendation to the EDA. It is anticipated that the EDA will award the bid at the June 26, 2023, meeting. The work shall be completed in full no later than 60 days after the contract has been awarded. City of New Hope, Minnesota Bid Form Property Owner: City of New Hope Economic Development Authority (EDA) Property Address: 5802 Boone Avenue North, New Hope, MN 55428 Property Identification Number: 06-118-21-42-0028 For a price of $_______________________, the contractor named below proposes to fully complete the work in accordance with the attached specifications for hazardous material abatement, disposal of items throughout yard and within buildings, tree removal, demolition of all building and site improvements, well sealing, utility improvements, and re-grading of the primary excavation area. Contractor Name: _______________________________________________________________ License Number: ________________________________________________________________ Address: ___________________________________ ___________________________________ Telephone: ______________________________________________________________________ Email: ____________________________________________________________________________ Contractor Name & Title: _______________________________________________________ Signature: ______________________________________ Date: ____________________ City of New Hope, Minnesota Specifications For Demolition & Related Work 1. General a. Contractor shall furnish all labor, materials, and equipment, and shall perform all service and work required to remove the buildings, structures, and improvements from the site, and post demolition grading of the site, in strict accordance with these specifications and in accordance with all applicable ordinances and laws pertaining to removal of buildings, structures, grading, and erosion control. Prior to demolition, the contractor shall install silt fencing or erosion control logs around the entire perimeter of the disturbed area that shall remain in place permanently. b. Contractor shall thoroughly review these specifications and examine the site to evaluate existing and proposed conditions prior to submitting a quote. Failure to do so shall in no way relieve contractor from performing the work as required or be grounds for a claim for extra payment. 2. Asbestos & Other Hazardous Materials a. Contractor shall submit “Notification of Intent to Perform a Demolition” form to the MPCA. The city has contracted with Angstrom Analytical for the completion of a demolition survey for the property. The survey is attached to this report. Demolition contractor is to provide for the removal, and appropriate disposal of all asbestos and other hazardous items listed in the report. 3. Demolition & Disposal of Buildings & Site Improvements a. All buildings and site improvements shall be removed and properly disposed. Demolition to include, but not limited to decks, patios, stairs, ramps, floor slabs, equipment bases, foundation walls and footings, and other structure components, appurtenances, and contents associated with each structure, unless otherwise noted. Include removal of all out-buildings (sheds, gazebo) and contents within buildings, items throughout the yard, landscaping rocks and boulders, retaining walls and concrete blocks, pavers, timbers, fences, picnic tables, bridges, tires, and other miscellaneous items depicted in the attached photos. Sidewalk along Boone Avenue North and driveway apron in between sidewalk and street shall not be removed. Driveway/concrete east of sidewalk along Boone Avenue North shall be removed. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) b. All demolition materials, substrates, debris, waste, or other materials shall be collected, stored, handled, managed, and disposed in accordance with currently accepted practices at an approved, licensed, or permitted facility in accordance with applicable federal, state, and local ordinances, rules, and regulations. c. Selected demolition contractor shall meet with city staff on-site prior to beginning work to review scope of work. d. Selected demolition contractor shall walk through all buildings and outbuildings prior to beginning demolition work to verify they are empty. 4. Tree & Vegetation Removal a. All vegetation, shrubs, trees, tree stumps, and wood/brush on site shall be removed and have been marked with spray paint. This includes the two evergreen trees, shrubs, and wood located at the southwest corner of the property. It also includes the tree at the northeast corner of the property that overhangs the home to the east. All stumps shall be pulled from the ground and hauled away. Stump pits shall be backfilled. Contractor is to include tree and stump removal in the demolition bid. 5. Well Abandonment a. There is an unsealed well located at the property. Contractor shall hire a state- licensed contractor to properly locate and seal the well and record the sealing with the Minnesota Department of Health. Contractor shall provide records of the well sealing to the city upon completion. If the well cannot be located, contractor shall be responsible for obtaining a well sealing variance through Minnesota Department of Health (including $275 cost for application). 6. Utilities a. Contractor shall be responsible for calling Gopher State One to locate any underground utilities prior to beginning demolition and site grading work. b. The city has ordered the disconnection of electricity (Xcel Energy) and natural gas (CenterPoint Energy) services for the property. Contractor shall verify disconnections in field prior to demolition. Other private communication utilities such as telephone and cable may still be connected; if so, contractor shall roll them back and secure them at the pole prior to demolition. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) c. Water service has been shut off at the curb stop box off Boone Avenue North. Contractor is to remove the water line all the way to the curb stop. Contractor is to install new curb stop and box as part of the water disconnection. Contractor shall install lid shown on “Water Valve Top Sections” attachment. The location of the service termination shall be documented and marked on-site. An inspection by the city is required prior to backfilling. d. Contractor is to coordinate the termination of the private sewer line with Public Works. The sewer line is located along Boone Avenue North. It shall be removed to within three (3) feet of the property line and the remaining service stub shall be lined with CIPP lining all the way to the main. Once lined, cap the end in preparation for connection to the new house. The location of the service termination shall be documented and marked onsite. An inspection by the city is required prior to backfilling. 7. Backfill, Compaction & Grading a. No demolition material shall be left in or placed in any excavation. All excavations, unless otherwise noted, shall be back filled with clean, imported sand. Imported material shall be placed in one-foot lifts and compacted to no less than 95% standard proctor density. Contractor shall provide the city with a third-party sampling, analysis, and report to demonstrate that at least 95% compaction has been achieved. b. The finished grade shall be determined by matching the existing average grade of the excavation areas prior to demolition. The final grade shall maintain pre demolition drainage patterns. No imported topsoil is required. c. Upon completion of the finished grade, contractor shall immediately hydro- seed all disturbed areas of the site. 8. Permits & Inspections a. Contractor shall submit building permit application prior to beginning demolition work. Demolition permit fees will be waived, however the state surcharge will still be collected, as the city cannot waive that portion. Permit fees for sewer, water, and utility work will not be waived. Contractor shall have the work inspected prior to backfilling the primary excavation area. The private water and sewer service terminations must also be inspected by the city’s Public City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) Works staff. A separate water and sewer disconnection permit shall be obtained from the city. Before payment may be issued to the selected contractor, all inspections must be completed, permits must be finalized, and the compaction analysis and well sealing documents (or well sealing variance) must be provided to the city. b. If any permits from other governmental agencies are required, contractor shall be responsible for securing such permits, paying any fees at their own expense, and completing any required inspections. Copies of any such permits shall be provided to the city. c. Contractor shall submit “Notification of Intent to Perform a Demolition” form to the MPCA. 9. Miscellaneous Provisions & Notices a. Contractor shall erect and maintain all necessary barricades and warnings to adequately safeguard workers, adjacent property, and the public. b. The demolition and clearing of the site shall be carried out in such a manner to preclude damage to adjacent property or public right-of-way. Contractor shall be solely responsible for any such damage. This includes the replacement of any damaged sidewalks adjacent to the property. c. Contractor is to provide dust control during demolition process by spraying water so as to suppress airborne dust. Water tank(s) can be filled at no cost at the New Hope Public Works building at 5500 International Parkway. Please notify Public Works staff one week in advance of the request. d. Submission of a proposal will constitute an incontrovertible representation by contractor that contractor has complied with every requirement of these specifications and attachments thereto; that without exception the proposal is premised upon performing and furnishing the work including but not limited to the specific means, methods, techniques, sequences, procedures, or precautions expressly required by these specifications and attachments thereto; that contractor has received from city satisfactory written resolution of any conflicts, errors, ambiguities, and discrepancies; and that these specifications and attachments thereto are generally sufficient to indicate and convey understanding of the terms and conditions for performing and furnishing the work. City of New Hope, Minnesota Specifications For Demolition & Related Work (continued) Attachments • Site photos • Aerial map • Hazardous material report • Water valve top sections City of New Hope, Minnesota City of New Hope, Minnesota City of New Hope, Minnesota City of New Hope, Minnesota X X X X X X City of New Hope, Minnesota Do not remove fence connected to neighboring property X X X City of New Hope, Minnesota X City of New Hope, Minnesota X X City of New Hope, Minnesota X X X X X X X X X X X City of New Hope, Minnesota X X X X X X X X City of New Hope, Minnesota X X X X X City of New Hope, Minnesota City of New Hope, Minnesota Hennepin County Property Map Date: 4/27/2023 Comments: 1 inch = 100 feet PARCEL ID: 0611 82142 0028 OWNER NAME: City Of New Hop e PARCEL ADDRESS: 5 802 Boon e Ave N,New Hope MN 55428 PARCEL AREA: 0 .33 acres, 14 ,55 3 sq ft A-T-B: Torren s SALE PRICE: $24 ,00 0 SALE DATE: 09/1998 SALE CODE: Excluded From Ratio Studies ASSESSED 2022, PAYABLE 2023 PRO PERTY TYPE: Reside ntial H OMESTEAD: Ho me stead MARKET VALU E: $234,000 TAX TOTAL: $3,728.00 ASSESSED 2023, PAYABLE 2024 PROPERTY TYPE: Re sidential HOMESTEAD: Homeste ad MARKET VALUE: $94,500 This data (i) is furnished 'AS IS' with no representation as to completeness or accuracy; (ii) is furnished with no warranty of any kind; and (iii) is not suitable for legal, engineering or surveying purposes. Hennepin County shall not be liable for any damage, injury or loss resulting from this data. COPYRIGHT © HENNEPIN COUNTY 2023 Page 1 of 1 Shop Drawing Review Review Notes: Submittal #3 – Core&Main – Utilities Materials – Resubmitted #2 – Offset Curb Box Lids Approved for construction. Thank you, Ann Project:City of New Hope – 2020 Infrastructure Improvements Reviewed Reviewed As Noted Revise And Resubmit Seal & Signature Required Review by Stantec is for the sole purpose of ascertaining general conformity with design. Contractor is responsible for dimensions, fabrication and construction methods, coordination of sub- trades, detail design of components, and errors or omissions on Shop Drawings. STANTEC CONSULTING SERVICES INC. To:Northwest Asphalt Inc.-Jeremy Gylland From:Stantec Client:City of New Hope File No.: 193804756 Specification Section No.and Name: 33 10 00 – Water Utilities 33 12 12 – Water Services 33 40 00 – Storm Drainage Utilities Signed by: Ann Dienhart Date: 5/4/2020 48 49 46 TREE GRATES NEENAH FOUNDRY TREE GRATES SURE-FIT FRAMES AND FRAMES 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS &XUE %R[ 5HSDLU /LGV 9350 County Road 19 Loretto, MN 55357 ‡ P: 763.478.2027 ‡ 7) 800-.478.2027 F: 763.478.8868 ‡ www.essbrothers.com 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS 45 WATER VALVE TOP SECTIONS MALE/FEMALE TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868 REPAIR PART FOR BROKEN TOP SECTIONS ESS BROTHERS AND SONS, INC. METRO: 763-478-2027 OUT-STATE: 1-800-478-2027 FAX: 763-478-8868