042604 EDA OFFICIAL FILE COPY
CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
April 26, 2004
President Don Collier
Commissioner Doug Andersen
Commissioner Sharon Cassen
Commissioner Mary Gwin-Lenth
Commissioner Steve Sommer
1. Call to order
2. Roll call
3. Approval of regular meeting minutes of March 22, 2004
4. ~ - Resolution modifying the restated redevelopment plan and tax
increment financing plans for redevelopment project no. 1 and tax increment
financing districts nos. 80-2, 81-1, 82-1, 85-1,85-2, 86-1,02-1, and 03-1 (special
law); creating tax increment financing district no. 04-1 (special law) and adopting a
tax increment financing plan relating thereto (improvement project no. 733)
5. Resolution authorizing execution and delivery of a contract for private redevelopment
by and between the New Hope Economic Development Authority and Armory
Development II, LL:C for the redevelopment of the former Frank's Nursery property
(improvement project no. 733)
6. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes March 22, 2004
Regular Meeting City Hall
CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order
at 8:11 p.m.
ROLL CALL Present: W. Peter Enck, President
Sharon Cassen, Commissioner
Don Collier, Commissioner
Mary Gwin-Lenth, Commissioner
Steve Sommer, Commissioner
APPROVE MINUTES Motion was made by Commissioner Cassen, seconded by Commissioner Owin-
Lenth, to approve the Regular Meeting Minutes of March 8, 2004. Voting in
favor: Enck, Cassen, Collier, Gwin-Lenth; Voting Against: None; Abstained:
Sommer; Absent: None. Motion carried.
IMP. PROJECT 749 President Enck introduced for discussion Item 4, Update regarding development
Item 4 proposal for city owned property at 5501 Boone Avenue North and direction to
proceed with preliminary terms of agreement (improvement project no. 749).
Mr. Ken Doresky, Community Development Specialist, explained that the
development proposal is for two separate residential buildings on the site, one 41-
unit condominium building and one 35-unit affordable rental apartment building.
He stated in October of 2003, the EDA expressed support for the proposed project
and directed staff to coordinate with PPL and Krass Monroe, the city's financial
consultant to complete a tax increment financing analysis for the project. Krass
Monroe has prepared a financial analysis and determined that the site will generate
approximately $1.6 million of increment. PPL is requesting approximately $1.4
million (dependent on soil correction estimates). The city's initial investment of
$276,764 would be reimbursed with the generated increment. The market value of
the property is determined to be $252,100 (market value $760,000 less soil
stabilization estimate of $507,900).
Mr. Jim Casserly, Krass Monroe, was recognized. Mr. Casserly stated their analysis
of the proposed project has determined that the project is feasible. He stated
revenues from the increased taxes are sufficient to reimburse the city for its
investment in the land and to allow revenues to be invested in the project.
He stated the next phase would be preparation of a term sheet for presentation to the
EDA.
President Enck inquired whether the city would be guaranteed reimbursement of its
investment if all or part of the property becomes tax-exempt in the future.
Mr. Casserly indicated such a guarantee is a normal provision included in the
agreement in order to protect the city.
President Enck expressed his appreciation to Mr. Casserly and his staff for their
assistance to the city over the years.
EDA Meeting March 22, 2004
Page 1
Commissioner Sommer inquired regarding the city,s reimbursement costs. He asked
whether the city would retain $200,000 if it provides TIF bonds for $1.6 million and
$1.4 million to PPL.
Mr. Casserly explained that the financing could occur as Commissioner Sommer
outlined; however Krass Monroe is recommending that the city take a note back to
subordinate its position to debt that would be issued. The city would be reimbursed
with interest. This would build in added protection. He stated calculations would be
based on the city's land costs plus interest to cover carrying costs. Then a note
would be created so the city can reimburse itself from increased taxes after the
payment of debt service on any bonds that were issued.
Commissioner Sommer expressed disappointment that PPL has changed its position
from its original proposal of purchasing the property outright from the city.
Mr. Casserly indicated the city can sell the land but the project would need that
added cost so the issue becomes whether the city wants to sell debt upfront to
provide write down at the beginning of the project and reimburse itself upfront or if
the city is comfortable with taking a note to itself and repaying it over time.
Discussion ensued regarding the price of the condominiums and the impact that
sales prices will have on the outstanding debt and recovery of land costs. Mr.
Casserly commented that over $4 million of increment will be generated and it is
possible that the TIF district could be closed prior to the 25-year projection.
Commissioner Gwin-Lenth questioned the changes in the site plan and soil analysis.
Mr. Chris Wilson, Project for Pride in Living, responded to design changes. He
stated the size and footprint of the project has not changed. Based on marketing
advice the larger three or four bedroom units have changed to one or two bedroom
units. The buildings were moved closer to Boone Avenue to raise their presence and
the rear of the property (with the pond) will be more private. The side will face the
public works building to minimize its impact. The playground and bus stop will be
located near the rental building and the path and gardens will be near the
condominium property.
The estimated soil correction costs are based on both buildings.
Commissioner Cassen questioned the tax status of the property since PPL is a non-
profit organization.
Mr. Wilson stated both the rental building and the condominium building will be
taxable properties. He clarified that 15 of the 41 for sale units would have income
restrictions.
President Enck asked Mr. Wilson to elaborate on the tenant screening process. Mr.
Wilson stated PPL has a stringent selection criteria in order to ensure the efficient
use of the public's money. It was noted that owners of the condominiums would
have private financing and if an owner defaulted, the financial institute would
intervene. Commissioner Cassen pointed out that private mortgage insurance is
required by the lender to be placed on the property if the value is less than 80% loan
to value.
Mr. Steve Cramer, PPL, confnmaed that Morris Manning, Property Director, has
committed to the employment of a full-time property management position for the
New Hope properties to office at Boone Avenue Apartments.
Ms. Juanita Hoffe, 4632 Flag Avenue North, was recognized. She asked the
financial consultant to clarify the funding options.
EDA Meeting March 22, 2004
Page 2
Mr. Jim Casserly, Krass Monroe, stated the EDA purchased the property several
years ago and borrowed from available funding. So, the EDA has the right to
reimburse those funds through two different mechanisms: 1) pledge future taxes and
pay increments each year until the amount is fully repaid or 2) the city has the
option of selling a bond and including in the bond proceeds enough to reimburse
itself for the same investment. Both options will be examined as the project
proceeds.
MOTION Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner
Item 4 Collier, to proceed with preparation of preliminary terms of agreement based
on the financial/tax increment financing analysis completed by Krass Monroe.
Voting in favor: Enck, Cassen, Collier, Gwin-Lenth; Voting Against: Sommer;
Abstained: None; Absent: None. Motion carried.
IMP. PROJECT 734 President Enck introduced for discussion Item 5, Discussion and direction to
Item 5 proceed with a purchase agreement for the NCRC development proposal, 4301 and
4317 Nevada Avenue North (improvement project no. 734).
Mr. Kirk McDonald, Director of Community Development, stated staff is
requesting authorization to proceed with a purchase agreement for the sale of 4317
Nevada Avenue North to the Northwest Community Revitalization Corporation
(NCRC) Community Housing Development Organization (CHDO). He stated the
property would be incorporated into their proposal to replace two blighted single
family properties with six owner-occupied twinhomes (one accessible unit).
Mr. McDonald illustrated the sites and stated the NCRC owns 4301 Nevada and the
city owns 4317 Nevada. He stated the property was .designated in the
comprehensive plan for redevelopment with medium density residential use. The
EDA previously declined a proposal for development of 12 units primarily due to
the density and financial assistance being requested.
Mr. McDonald explained that CDBG funds of $83,000 were originally used to
purchase the property. Staff recommends demolition of the house at 4317 Nevada
utilizing CDBG funds (total CDBG contribution estimated at $100,000). The EDA
would sell the property to the NCRC for $1 and permit the NCRC to construct six
owner occupied twinhome units on the site. In return, the city will realize a
significant increase in taxes at the site. He stated a portion of the CDBG funds
invested in the project would also be returned to the city as program income upon
the sale of the units, and the program income could be utilized for future CDBG
eligible projects.
He introduced Kristine Madsen, Executive Director, and Julie Dunkle, Associate
Director, of NCRC.
Ms. Madsen explained that both properties (4301 and 4317 Nevada) are
uninhabitable. The concept is for 12 owner-occupied units (six twinhomes) targefed
at $180,000 or less. She noted they have applied for several grants and are having
conversations with the West Hermepin Affordable Land Trust. Driveways and
garages would face the rear rather than the front of the property.
Discussion ensued regarding the implications of a land trust. It was noted that there
would be no issues relating to city ordinances with a land trust owning the property
and an individual owning the structure.
Commissioner Cassen expressed support for the project. She pointed out the need
for one-level homes in New Hope. Ms. Madsen stated the property has a slope and
they will keep the need for one-level homes in mind during the design process.
Commissioner Sommer reiterated the need for one-level homes and requested that
EDA Meeting March 22, 2004
Page 3
at least two of the six structures be one-level housing.
President Enck asked that NCRC document who is responsible for maintenance of
the property. Ms. Madsen acknowledged that this issue has been part of their
discussions.
Mr. McDonald indicated the next step would be preparation of a purchase
agreement and development proposal for review by the EDA. He stated the NCRC
would be required to participate in the planning application process for rezoning and
platting, and NCRC would pay all associated fees (building permit, park dedication
fees, etc).
MOTION/PROCEED Motion was made by Commissioner Collier, seconded by Commissioner Gwin-
Item 5 Lenth, directing staff to proceed with preparation of a purchase agreement and
development proposal. All present voted in favor. Motion carried.
IMP. PROJECT 723 President Enck introduced for discussion Item 6, Discussion regarding 7615 Bass
Item 6 Lake Road (New Hope Alano), gap request and appraisal proposal (improvement
project no. 723).
Mr. Kirk McDonald, Director of Community Development, stated staff is seeking
direction regarding a gap £mancing request (7615 Bass Lake Road) and appraisal for
the property at 7550 Bass Lake Road. He stated it is proposed that the cost of the
appraisal (estimated at $3,000) be shared equally among the city, Alano, and AC
Carlson. Previously the city directed staff to coordinate with Alano regarding their
relocation needs. He explained that one of the buildings that would meet their
needs is the AC Carlson site at 7550 Bass Lake Road. AC Carlson is planning to
relocate to the comer of Science Center Drive and International Parkway. One of
the reasons for the gap request is due to the $695,000 asking price. An appraisal
could determine if the asking price is accurate.
President Enck thanked Alano for being a good community neighbor. He noted his
desire to fmd a suitable site for Alano's relocation.
MOTION Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner
Item 6 Cassen, authorizing the expenditure of $1,000 towards an appraisal of 7550
Bass Lake Road. All present voted in favor. Motion carried.
IMP. PROJECTS President Enck introduced for discussion Item 7, Resolution approving purchase
761,748,768 agreements and relocation benefits for acquisition of three properties in the
Item 7 Winnetka East housing redevelopment area (5446 Winnetka, 5512 Winnetka, and
5519 Sumter (improvement project nos. 761,748, and 768).
Mr. Ken Doresky, Community Development Specialist, stated staff is continuing to
coordinate the purchase of the remaining properties in the east Winnetka
redevelopment area. The resolution will approve purchase agreements for three
additional properties. He stated staff is negotiating the purchase of five remain/ng
properties.
EDA RESOLUTION Commissioner Sommer introduced the following resolution and moved its adoption
04-13 "RESOLUTION APPROVING PURCHASE AGREEMENTS AND
Item 7 RELOCATION BENEFITS FOR ACQUISITION OF THREE PROPERTIES
IN THE WINNETKA EAST HOUSING REDEVELOPMENT AREA (5446
WINNETKA, 5512 WINNETKA, AND 5519 SUMTER (IMPROVEMENT
PROJECT NOS. 761, 748, AND 768)." The motion for thc adoption of the
foregoing resolution was seconded by Commissioner Collier, and upon vote being
taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-
Lenth, Sommer, and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted,
EDA Meeting March 22, 2004
Page 4
signed by the president which was attested to by the executive director.
IMP. PROJECT 724 President Enck introduced for discussion Item 8, Resolution finding need to acquire
Item 8 title and possession of the Winnetka Avenue East area development properties prior
to the commissioner's award, approving the appraisal of damages for each property
resulting from the taking and ratifying and authorizing all steps taken by staff to
acquire the properties (improvement project no. 724).
Mr. Steve Sondrall, City Attorney, stated the city started the legal time table in
December relative to the "quick-take" procedure. He stated there is a hearing
scheduled on April 6 for appointment of commissioners. He stated adoption of the
resolution does not prevent the city from continuing to negotiate with the owners to
acquire their property voluntarily. However, it does start the time period running
where both parties either have to agree on a purchase price or submit the issue of
valuation and damages to a commission of three persons appointed by the court.
The resolution approves the appraisal amounts that the city will Pay into court to
satisfy the requirements of Minnesota Statutes chapter 117 that allows the city to
acquire the properties under eminent domain for the redevelopment project.
Ms. Juanita Hoffe, 4632 Flag Avenue North, questioned the number of unsold
properties.
Mr. Sondrall stated the resolution lists eleven properties for condemnation action;
however purchase agreements have been negotiated on six of the properties which
reduces the number to five properties. He noted the action does not prevent
negotiations on the remaining five properties, and the city hopes it will be
successful in acquiring all of the properties voluntarily.
EDA RESOLUTION Commissioner Cassen introduced the following resolution and moved its adoption
04-14 "RESOLUTION FINDING NEED TO ACQUIRE TITLE AND POSSESSION
Item8 OF THE WINNETKA AVENUE EAST AREA DEVELOPMENT
PROPERTIES PRIOR TO THE COMMISSIONER'S AWARD,
APPROVING THE APPRAISAL OF DAMAGES FOR EACH PROPERTY
RESULTING FROM THE TAKING AND RATIFYING AND
AUTHORIZING ALL STEPS TAKEN BY STAFF TO ACQUIRE THE
PROPERTIES (IMPROVEMENT PROJECT NO. 724)." The motion for the
adoption of the foregoing resolution was seconded by Commissioner Collier, and
upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen,
Collier, Gwin-Lenth, Sommer, 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.
ENCK FAREWELL Prior to adjournment, the EDA recognized W. Peter Enck and wished him well in
his retirement. President Enck expressed his gratitude to colleagues and staff that he
has had the opportunity to work with over the past 33 years. He pointed out that the
School District honored him at its March 15 meeting.
ADJOURNMENT Motion was made by Commissioner Collier, seconded by Commissioner Cassen, to
adjourn the meeting. All present voted in favor. Motion carried. The New Hope
EDA adjourned at 9:50 p.m.
.~ectfully submitt~ed,
Valerie Leone
City Clerk
EDA Meeting March 22, 2004
Page 5
EDA
RE( UEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development 4-26-04 EDA
Item No.
By: Kirk McDonald, Director of CD By:
Amy Baldwin, CD Assistant , 4
~: A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN AND TAX
INCREMENT FINANCING PLANS FOR REDEVELOPMENT PROJECT NO. I AND TAX INCREMENT
FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1, 02-1 AND 03-1(SPECIAL LAW);
CREATING TAX INCREMENT FINANCING DISTRICT NO. 04-1(SPECIAL LAW) AND ADOPTING A TAX
INCREMENT FINANCING PLAN RELATING THERETO. (IMPROVEMENT PROJECT NO. 733)
REQUESTED ACTION
Staff and consultants are recommending that the New Hope Economic Development Authority approve the
attached Resolution Modifying the Restated Redevelopment Plan and Tax Increment Financing Plans for
Redevelopment Project No. 1 and Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1,
02-1 and 03-1 (Special Law); Creating Tax Increment Financing District No. 04-1 (Special Law) and Adopting
a Tax Increment Financing Plan Relating Thereto. The resolution was prepared by Krass Monroe, the city's
redevelopment financial consultant, and Jim Casserly will be in attendance at the meeting to answer any
questions on this matter. This step that create the Franks Tax Increment Financing District. The EDA needs to
approve this resolution making recommendations to the City Council prior to the City Council public hearing.
POLICY/PAST PRACTICE
The EDA and City Council have created tax increment financing districts in the past to facilitate redevelopment
projects.
BACKGROUND
Extensive background information is provided on this matter under the City Council public hearing request and
it is not the intention to duplicate all of that information in this request for action. Staff is recommending that
the EDA approve the resolution and then conduct the public hearing at the City Council level.
The resolution states, in part, that:
· It has been proposed that the EDA approve and adopt the proposed modifications to the Restated
Redevelopment Plan (the "Plan") for Redevelopment Project No. 1 (the "Project Area") reflecting increased
project costs and increased bonding authority within the Project Area, pursuant to and in accordance with
Minnesota .Statutes, Sections 469.001 to 469.047, 469.124 to 469.134 and 469.090 to 469.108, inclusive,
as amended and supplemented from time to time.
MOTION BY ~ SECOND BY
!
I:RFA\pLANNING\LivabIe co'mmunities\Q -Public Hearing.doc
Request for Action Page 2 4-26-04
· It has been further proposed that the EDA approve and adopt the proposed modifications to the Tax
Increment Financing Plans (the "Existing TIF Plans") for Tax Increment Financing Districts Nos. 80-2, 81-
1, 82-1, 85-1, 85-2, 86-1, 02-1 and 03-1(Special Law) (the "Existing TIF Districts") reflecting increased
project costs and increased bonding authority within the Project Area, pursuant to and in accordance with
Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090 to 469.108, inclusive, as amended and
supplemented from time to time.
· It has been further proposed'that the EDA approve the creation of proposed Tax Increment Financing
District No. 04-1 (Special Law) (the "Proposed TIF District") within the Project Area and approve and adopt
the proposed Tax Increment Financing Plan (the "Proposed TIF Plan") relating thereto pursuant to and in
accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090 to 469.108, and Laws of
Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive, as amended and supplemented from time to
time.
· The EDA has caused to be prepared and has investigated the facts with respect thereto a modified Plan
for the Project Area and modified Existing TIF Plans for the Existing TIF Districts reflecting increased
project costs and increased bonding authority within the Project Area, and a Proposed TIF Plan for the
Proposed TIF District defining more precisely the property to be included, the public costs to be incurred
and other matters relating thereto.
· The FDA has performed all actions required by law to be performed prior to the approval and adoption of
the modifications to the Plan and Existing TIF Plans and the approval and adoption of the Proposed TIF
Plan.
· The EDA hereby determines that it is necessary and in the best interests of the City and the EDA at this
time to approve and adopt the modifications to the Plan and Existing TIF Plans, to create the Proposed TIF
Distdct and to approve and adopt the Proposed TIF Plan relating thereto.
The resolution states the following findings:
· The EDA hereby finds that the assistance to be provided through the adoption and implementation of the
modified Plan, modified Existing TIF Plans and Proposed TIF Plan (collectively the "Plans") is necessary to
assure the development and redevelopment of the Project Area.
· The EDA hereby finds that the Plans conform to the general plan for the development and redevelopment
of the City as a whole.
· The EDA hereby finds that the Plans afford maximum opportunity consistent with the sound needs of the
City as a whole for the development and redevelopment of the Project Area by private enterprise and it is
contemplated that the development and redevelopment thereof will be carried out pursuant to
redevelopment contracts with private developers.
The resolution states the following approvals and adoptions:
· The modifications to the Plan reflecting increased project costs and increased bonding authority within the
Project Area are hereby approved and adopted by the Commissioners of the EDA and are forwarded to
the New Hope City Council for public hearing, review and approval.
· The modifications to the Existing TIF Plans reflecting increased project costs and increased bonding
authority within the Project Area are hereby approved and adopted by the Commissioners of the EDA and
are forwarded to the New Hope City Council for public hearing, review and approval.
· The creation of the Proposed TIF District within the Project Area and the adoption of the Proposed TIF
Plan relating thereto are hereby approved and adopted by the Commissioners of the EDA and are
forwarded to the New Hope City Council for public hearing, review and approval.
Request for Action Page 3 4-26-04
Lastly, the resolution states that:
· Upon approval and adoption of the planS, the EDA shall cause said plans to be filed with the Minnesota
Department of Revenue.
Staff recommends approval of the resolution and forwarding the matter to the City Council for consideration at
the public hearing.
ATTACHMENTS
· Resolution
· Article IV, Map, Cash Flow Analysis, But For Analysis, Sources and Uses Statement
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN AND
TAX INCREMENT FINANCING PLANS FOR REDEVELOPMENT PROJECT NO. 1
AND TAX INCREMENT FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85-
2, 86-1, 02-1 AND 03-1(SPECIAL LAW); CREATING TAX INCREMENT
FINANCING DISTRICT NO. 04-1(SPECIAL LAW) AND ADOPTING A TAX
INCREMENT FINANCING PLAN RELATING THERETO.
BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of
the New Hope Economic Development Authority (the "EDA"), as follows:
Section 1. Recitals.
1.01. It has been proposed that the EDA approve and adopt the proposed
modifications to the Restated Redevelopment Plan (the "Plan") for Redevelopment
Project No. 1 (the "Project Area") reflecting increased project costs and increased
bonding authority within the Project Area, pursuant to and in accordance with
Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134 and 469.090
to 469.108, inclusive, as amended and supplemented from time to time.
1.02. It has been further proposed that the EDA approve and adopt the
proposed modifications to the Tax Increment Financing Plans (the "Existing TIF
Plans") for Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1,
02-1 and 03-1(Special Law) (the "Existing TIF Districts") reflecting increased project
costs and increased bonding authority within the Project Area, pursuant to and in
accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090 to
469.108, inclusive, as amended and supplemented from time to time.
1.03. It has been further proposed that the EDA approve the creation of
proposed Tax Increment Financing District No. 04-1(Special Law) (the "Proposed
TIF District") within the Project Area and approve and adopt the proposed Tax
Increment Financing Plan (the "Proposed TIF Plan") relating thereto pursuant to and
in accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090
to 469.108, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10,
inclusive, as amended and supplemented from time to time.
1.04. The EDA has caused to be prepared and has investigated the facts
with respect thereto a modified Plan for the Project Area and modified Existing TIF
Plans for the Existing TIF Districts reflecting increased project costs and increased
bonding authority within the Project Area, and a Proposed TIF Plan for the Proposed
TIF District defining more precisely the property to be included, the public costs to
be incurred and other matters relating thereto.
1.05. The EDA has performed all actions required by law to be performed
prior to the approval and adoption of the modifications to the Plan and Existing TIF
Plans and the approval and adoption of the Proposed TIF Plan.
1.06. The EDA hereby determines that it is necessary and in the best
interests of the City and the EDA at this time to approve and adopt the modifications
to the Plan and Existing TIF Plans, to create the Proposed TIF District and to
approve and adopt the Proposed TIF Plan relating thereto.
Section 2. Findinc~s.
2.01. The EDA hereby finds that the assistance to be provided through the
adoption and implementation of the modified Plan, modified Existing TIF Plans and
Proposed TIF Plan (collectively the "Plans") is necessary to assure the development
and redevelopment of the Project Area.
2.02. The EDA hereby finds that the Plans conform to the general plan for the
development and redevelopment of the City as a whole.
2.03. The EDA hereby finds that the Plans afford maximum opportunity
consistent with the sound needs of the City as a whole for the development and
redevelopment of the Project Area by private enterprise and it is contemplated that
the development and redevelopment thereof will be carried out pursuant to
redevelopment contracts with private developers.
Section 3. Approvals and Adoptions.
3.01. The modifications to the Plan reflecting increased project costs and
increased bonding authority within the Project Area are hereby approved and
adopted by the Commissioners of the EDA and are forwarded to the New Hope City
Council for public hearing, review and approval.
3.02. The modifications to the Existing TIF Plans reflecting increased project
costs and increased bonding authority within the Project Area are hereby approved
and adopted by the Commissioners of the EDA and are forwarded to the New Hope
City Council for public hearing, review and approval.
3.03. The creation of the Proposed TIF District within the Project Area and
the adoption of the Proposed TIF Plan relating thereto are hereby approved and
adopted by the Commissioners of the EDA and are forwarded to the New Hope City
Council for public hearing, review and approval.
2
Section 4. Filing of Plans.
4.01. Upon approval and adoption of the Plans, the EDA shall cause said
Plans to be filed with the Minnesota Department of Revenue.
Adopted by the Commissioners of the EDA this day of ,2004.
YES:
NO:
ABSENT:
President
ATTEST:
Executive Director
CERTIFICATION
I, , Executive Director of the New Hope
Economic Development Authority, County of Hennepin, State of Minnesota, do
hereby certify that the foregoing is a true and correct copy of Resolution
No. adopted by the EDA on the day of ,
2004.
Executive Director
G:\WPDATA~N~qEW HOPE\13\TIF~EDA RESOLUTION.DOC
3
ARTICLE IV
TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 04-1 (SPECIAL LAW)
(FRANK'S NURSERY SITE)
Section 4.1 Statement of Obiectives. See Article I, Section 1.4, Statement of
Objectives.
Section 4.2 Restated Redevelopment Plan. See Article I, Sections 1.1
through 1.11.
Section 4.3 Parcels to be Included. The boundaries of Tax Increment
Financing District No. 04-1 (Special Law) (the "TIF District") are described in Exhibit
'IV-A and illustrated on Exhibit IV-B.
Section 4.4 Parcels in Acquisition. The EDA Authority may write down or
acquire and reconvey real property, or interests therein, within this TIF District or
elsewhere within the Project Area at the time or times as the EDA Authority may
determine to be necessary or desirable to assist or implement development or
redevelopment within the Project Area or the TIF District as further described in
Article 1, Section 1.11.
Section 4.5 Development Activity for which Contracts have been Siqned. As
of the date of adoption of the TIF Plan, the EDA Authority contemplates entering into
a signed contract with Armory Development II, LLC, a Minnesota limited liability
company, for the activities discussed below.
Section 4.6 Specific Development Expbcted to Occur. At this time it is
anticipated that the construction of approximately 44 townhomes will be completed
in two phases. Phase i, to be constructed in 2004, is proposed to include 20 units
and Phase II, to be constructed in 2005, is proposed to include 24 units. Upon
completion of both phases, it is expected that the City's tax. base will increase by
approximately $9.0 million.
Section 4.7 Prior Planned Improvements. The EDA Authority shall, after due
and diligent search, accompany its request to the County Auditor for the certification
of or its notice of enlargement of the TIF District with a listing of all properties within
the TIF District for which building permits have been issued during the eighteen (18)
months immediately preceding approval of the TIF Plan by the EDA Authority.
4-1
The County Auditor shatt increase the original tax capacity of the TIF District
by the tax capacity of each improvement for which a building permit was issued. If
said listing does not accompany the aforementioned request or notice, the absence
of such listing shall indicate to the County Auditor that no building permits were
issued in the eighteen (18) months prior to the EDA Authority's approval of the TIF
Plan.
Section 4.8 Fiscal Disparities. The City hereby elects the method of tax
increment computation set forth in Minnesota Statutes, Section 469.177, Subdivision
3, clause (a) if and when commercial/industrial development occurs within the TIF
District.
Section 4.9 Estimated Project Costs. The estimated costs associated with
this portion of Redevelopment Project No. I (the "Project Area") are listed' on Exhibit
Section 4.10 Estimated Amount of Indebtedness. it is anticipated that
approximately $2,687,500 of indebtedness may be incurred with respect to this
portion of the Project Area.
Section 4.11 Sources of Revenue. The anticipated revenue sources to
finance the costs associated with the Project Area are outlined in Article 1, Section
1.5.'
Section 4.12 Estimated Odqinal and Captured Tax Cap, acity. The tax
capacity of all taxable property in the TIF District, as most recently certified by the
Commissioner of Revenue of the State of Minnesota on January 2, 2003, is
estimated to be $7,500.
The estimated captured tax capacity of the TIF District upon completion of the
proposed improvements on January 2, 2006, is estimated to be $90,420. The EDA
Authority intends to utilize 100% of the captured tax capacity, for the duration of the
TIF District, for purposes of determining tax increment revenues.
Section 4.13 Tax Capacity Rate. The pay 2003 tax capacity rate is 1.37362.
Section 4.t4 Tax Increment. Annual initial tax increment has been calculated
at approximately $124,203 assuming a static tax capacity rate and a valuation
increase of five percent (5.0%) compounded annually. A financial analysis is
provided on Exhibit IV-C. Revenue has also been projected for the duration of the
TIF District and is shown on Exhibit I-A.
4-2
Section 4.15 Type of TIF District. The TIF District is, pursuant to Minnesota
Statutes, Section 469.174, Subdivision 10, a redevelopment district.
Section 4.16 Duration of TIF District. The duration of the TIF District is
expected to be twenty-five (25) years from receipt of the first tax increment. The
date of receipt of the first tax increment is estimated to be July, 2006. Thus, it is
estimated that the TIF District, including any modifications for subsequent phases or
other changes, would terminate in the year 2031.
Section 4.17 Estimated Impact on Taxinq Jurisdictions. The estimated
impact on other taxing jurisdictions assumes construction would have occurred
without the creation of the TIF District. If the construction is a result of tax increment
financing, the impact is $0 to other entities. -Notwithstanding the fact that the fiscal
impact on the other taxing jurisdictions is $0, due to the fact that the financing would
not have occurred without the assistance of the EDA Authority, Exhibit IV-E reflects
the estimated impact of the TIF Distdct if the "but for" test were not met.
Section 4.18 Modification of the TIF District and/or TIF Plan. As of April 12,
2004, no modifications to the TIF District or the TIF Plan have been made.
G:\WPDATAh',th'q'EW HOPI~\09~TII~TIF PLAN. DOC
4-3
EXHIBIT IV-A
PARCELS TO BE INCLUDED IN
TAX INCREMENT FINANCING DISTRICT NO. 04-1 (SPECIAL LAW)
PIN 05-118-21-32-0007, including adjacent streets and rights-of-way
G:\WPDATA\N\NEW HOPE\09\TIF\TIF PLAN EXHIBIT.DOC
IV-A-1
EXHIBIT IV-C
Franks Nursery Site
ASSUMPTIONS
Area of Parcel 112/2003 Market Value (Pay 2004)
Original Market Values (Acres) (Sq. Feet) Land Building Total
Franks Nursery & Crafts 05-118-21-32-0007 3.19 138,761 $ 578,000 $172,000 $ 750,000
Totals 3.19 138,761 ~$ 578,000 $172,000 $ 750,00~
$ 4.17 per sq. ft. for Land ,
Original Tax Capacity Class Rate * 7,500
Commercial/Retail @ 2.00% = 0
Rental @ 1.25% = 0
Owner Occupied 750,000 @ 1.00% = 7,500
750,000
' Final rates for Pay 2004
Phase I Y. EAR
Estimated Market Value 20 Units @ 227,596 per unit = $4,551,g20
Estimated Tax Capacity 45,519 2005
Estimated Taxes 20 Units @ 3,126 per unit = 62,526 2006
- Estimated Tax Increment 20 Units @ 2,611 per unit = 52,224 83.5% of total taxes
Phase 2 (combined)
Estimated Market Value 44 Units @ 222,545 per unit = 9,791,960
Estimated Tax Capacity 97,920 2006
Estimated Taxes 44 Units @ 3,057 .per unit = 134,504 2007
Estimated Tax Increment 44 Units @ 2,823 per unit = 124,202 92.3% of total taxes
Phase 3 (combined)
Estimated Market Value 44 Units @ 222,545 per unit = 9,791,960 13.1 times MV increase
Estimated Tax Capacity 97,920 2007
Estimated Taxes 44 Units (~ 3,057 per unit = 134,504 2008
Estimated Tax Increment 44 Units @ 2,823 .per unit = 124,202 92.3% of total taxes
Coverage 13.8 units per acre _~
Local Tax R,te - Pay 2003 1.37362 ~ l 1'4%1
State Tax Rate - Pay 2003 0.54447 C/I only) Eft Tax Rate J
Combined Tax Rate - C/I Property Only 1.91809
· used for tax increment calculations
Admin Fees 10.00%
State Auditor Fee 0.00%
Inflation (after 2 yrs of full value in each tract) 5.00%
PV Rate - Rev. Note 6/1/2005 6.75%
PV Rate - City 611/2005 5.00%
EXHIBIT IV-C
Franks Nursery Site
CASH FLOW AND PRESENT VALUE ANALYSIS
<. ANNUAL > < SEMI - ANNUAL -- .{ >
(a) (b) (c) (d) (e) (f) (g) (h)I (i)
Original Estimated Captured Est. T.I. Less: Available Cumulative l< ~:: Present Value >
Tax Tax Tax (d) x Admin Tax Avail. Tax Semi Annual Cumulative
Date Capacity Capacity Capacity 1.37362 Fees Increment Increment Balance Balance
(see assumptions) (c) - (b) - St. Aud. Fee (e) x (e) - (f) Total of (g) P.V. of (g) Total of (i)
5.0% Inflation (prey. year) 0.000% 10.00% 6.75% 06/01105
06/01/03 7,500 7,500 0 0 0 0 0 0
12/01/03 7,500 7,500 0 0 0 0 0 0
06/01/04 7,500 7,500 0 0 0 0 0 0 0
12/01/04 7,500 7, 500 0 0 0 0 0 0 0
06/01/05 7,500 45,519 0 0 0 0 0 0 0
12/01/05 7,500 45,519 0 0 0 0 0 0 0
1 06/01/06 7,500 97,920 38,019 26,112 2,611 23,501 23,501 21,991 21 991
12/01/06 7,500 97,920 38,019 26,112 2,611 23,501 47,002 21,273 43,265
2 06/01/07 7,500 97,920 90,420 62,101 6,210 55,891 102,893 48,942 92,206
12/01/07 7,500 97,920 90,420 62,101 6,210 55,891 158,783 47,344 139,550
3 06/01/08 7,500 102,816 90,420 62,101 6,210 55,891 214,674 45,798 185,349
12/01/08 7,500 102,816 90,420 62,101 6,210 55,891 270,565 44.303 229,652
4 06/01/09 7,500 107,956 95,316 65,464 6,546 58,917 329,483 45,177 274,829
12/01/09 7,500 107,956 95,316 65,464 6,546 58,917 388,400 43,702 318,531
5 06/01/10 7,500 113,354 100,456 68,994 6,899 62,095 450,495 44,556 363,086
12/01/10 7,500 113,354 100,456 68,994 6,899 62,095 512,590 43,101 406,187
6 06/01/11 ' 7,500 119,022 105,854 72,702 7,270 65,432 578,022 43,934 450,121
12/01/11 7,500 119,022 105,854 72,702 7,270 65,432 643,453 42,500 492,621
7 06/01112 7,500 124,973 111,522 76,594 7,659 68,935 712,388 43,313 535,934
12/01/12 7,500 124,973 111,522 76,594 7,659 68,935 781,323 41,899 577,833
8 06/01/13 7,500 131,222 117,473 80,682 8,068 72.613 853,936 42,694 620,528
12/01/13 7,500 131,222 117,473 80,682 8,068 72,613 926,550 41,300 661,828
9 06/01/14 7,500 137,783 123,722 84,973 8,497 76,476 1,003,026 42,077 703,905
· 12/01/14 7,500 137,783 123,722 84,973 8,497 76,476 1,079,502 40,703 744,608
10 96/01/15 7,500 144,672 130,283 89,479 8,948 80,532 1,160,033 41,462 786,071
12/01/15 7,500 144,672 130,283 89,479 8,948 80,532 1,240,565 40,109 826,180
11 36/01/16 7,500 151,905 137,172 94,211 9,421 84,790 1,325,355 40,851 867,031
12/01/16 7,500 151,905 137,172 94,211 9,421 84,790 1,410,145 39,517 906,548
12 :)6/01/17 7,500 159,501 144,405 99,179 9,918 89,261 1,499,406 40,243 946,791
12/01/17 7,500 159,501 144,405 99,179 9,918 89,261 1,588,667 38,929 985,720
13 )6/01/18 7,500 167,476 152,001 104,396 10,440 93,956 1,682,623 39,639 . 1,025,359
12/01/18 7,500 167,476 152,001 104,396 10,440 93,956 1,776,579 38,345 1,063,704
14 )6/01/19 7,500 175,850 159,976 109,873 10,987 98,886 1,875,465 39,039 1,102,743
~2/01/19 7,500 175,850 159,976 109,873 10,987 98,886 1,974,350 37,764 1,140,507
15 16/01/20 7,500 154,642 168,350 115,624 11,562 104,062 2,078,412 38,444 1,178,951
2/01/20 7,500 184,642 168,350 115,624 11,562 104,062 2,182,474 37,189 1,216,139
16 16/01/21 7,500 193,874 177,142 121,663 ' 12,166 109,497 2,291,970 37,853 1,253,993
2/01/21 7,500 193,874 177,142 121,663 12,166 109,497 2,401,467 36,617 1,290,610
17 6/01/22 7,500 203,568 186,374 128,004 12,800 115,203 2,516,670 37,268 1,327,878
2/01/22 7,500 203,568 186,374 128,004 12,800 115,203 2,631,874 36,051 . .1,363,930
18 6/01/23 7,500 213,746 196,068 134,661 13,466 121,195 2,753,069 36,688 1,400,618
2/01/23 7,500 213,746 196,068 134,661 13,466 121,195 2,874,264 35,490 1,436,108
19 S/01/24 7,500 224,434 206,246 141,652 14,165 127,487 3,001,751 36,114 1,472,222
2/01/24 7,500 224,434 206,246 141,652 14,165 127,487 3,129,237 34,935 1,507,157
20 9/01/25 7,500 235,655 216,934 148,992 14,899 134,093 3,263,330 35,546 1,542,703
Z/01/25 7,500 235,655 216,934 148,992 14,899 134,093 3,397,423 34,385 1,577,088
21 9/01/26 7,500 247,438 228,155 156,699 15,670 141,029 3,538,453 34,983 1,612,071
-~/01/26 7,500 247,438 228,155 156,699 15,670 141,029 3,679,482 33,841 1,645,91.2
22 9/01/27 7,500 259,810 239,938 164,792 16,479 148,313 3,827,795 34,427 1,680,338
!/01/27 7,500 259,810 239,938 164,792 16,479 148,313 3,976,107 33,303 1,713,641
23 1/01/28 7,500 272,800 252,310 173,289 17,329 155,960 4,132,067 33,877 1,747,518
!/01/28 7,500 272,800 252,310 173,289 17,329 155,960 4,288,027 32,771 1,780,288
24 ;/01/29 7,500 286,440 265,300 182,211 18,221 163,990 4,452,017 33,333 1,813,621
1/01/29 7,500 286,440 265,300 182,211 18,221 163,990 4,616,007 32,245 1,845,865
25 ;/01/30 7,500 300,762 278,940 191,579 19,158 172,421 4,788,428 32,796 1,878,661
J01/30 7,500 300,762 278,940 191,579 19,158 172,421 4,960,649 31,725 1,910,386
26 /01/31 7,500 315,800 293,262 201,416 20,142 181,274 5,142,123 32,265 1,942,651
/01/31 7,500 315,800 293,262 201,416 20,142 181,274 5,323,397 31,211 1,973,862
5,914,886 591,48~ 5,323,397 5,323,397 1,973,862 1,973,862
EXHIBIT IV-D
"BUT FOR "ANALYSIS
The Frank's Nursery site is located in an area of the City that has been documented
and designated as a potential redevelopment area. The City has received a
Metropolitan Council Livable Communities Grant to study four different sites or areas
within the overall Bass Lake Road/Winnetka study area and this site is one that has
been studied extensively. Additionally, this site is identified for redevelopment and
inclusion in a tax increment financing district in the City's Comprehensive Plan.
The proposed development by Armory Development II, LLC includes the construction of
44 townhomes in 2004 and 2005. Upon completion of the project, it is anticipated that
the project will increase the City's tax base by approximately $9.0 million. Due to
extensive land acquisition costs, site improvement and preparation costs, sidewalk and
street improvements and the installation of utilities, the redeveloper is requesting tax
increment financing assistance. Without such assistance, the project would be not be
economically feasible and would not be expected to occur solely through pdvate
investment within the reasonably foreseeable future.
G:\WPDATA\N\NEW HOPE\13\TIF\TIF P~ EX}{IBIT.DOC
IV-D-1
EXHIBIT Iil - E
ESTIMATED IMPACT OF TAX INCREMENT FINANCING DISTRICT NO. 04-1 (Special Law)
IMPACT ON T~X BASE
ORIGINAL ESTIMATED CAPTURED DISTRICT
TAX TAX TAX TAX AS %
ENTITY ' BASE CAPACITY CAPACITY CAPACITY OF TOTAL
City of New Hope 13,477,113 7,500 97,920 90,420 0.671%
C(~unty of Hennepin 975,218,292 7,500 97,920 90,420 0.009%
lSD # 281 68,916,707 7,500 97,920 90,420 0.131%
IMPACT ON TAX RATE
TAX % OF TAX TAX RATE
ENTITY RATE TOTAL INCREMENT INCREASE
City of New Hope 0.49819 36.27% 45,046 0.337%
County of Hennepin 0.50607 36.84% 45,759 0.005%
lSD # 281 0.29179 21.24% 26,384 0.038%
Qther 0.07757 5.65% 7,014
1.37362 100.00% 124,203
* Assumes construction would have occurred without the creation of a Tax Increment Financing
District. If construction is a result of Tax Increment Financing, the impact is $0.
Iil - E - 1
TIF No. 04-1 (Special Law)
Cumulative
Modified
Budget
Source of Funds
Tax Increment Revenue $ 6,000,000
Investment Earnings 600,000
Bond Proceeds 2,687,500
Loan Proceeds -
Special Assessments
Sales/Lease Proceeds
Loan/Advance Repayments
Grants
Other
Transfers In
Total Source of Funds $ 9,287,500
Use of Funds
Land/building acquisition $ 1,700,000
Site Improvements/preparation costs 150,000
Installation of public utilities 150,000
Public Parking facilities
Streets and sidewalks 150,000
Public park facilities
Social, recreational or conference facilities
Interest reduction payments
Bond principal payments 2,687,500
Bond interest payments 1,612,500
Loan principal payments
Loan/note interest payments 1,612,500
Administrative costs 600,000
Other
Transfers out 625,000
Total Use of Funds $ 9,287,500
0
EDA
. REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development 4-26-04 EDA
Item
No.
By: Kirk McDonald, Director of CD BY://')Z
Amy Baldwin, CD Assistant
I
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE
REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND
ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK'S NURSERY
PROPERTY. (IMPROVEMENT PROJECT NO. 733)
REQUESTED ACTION
Staff recommends that the EDA approve the attached resolution, which approves the attached contract for
private redevelopment with Armory Development II, LLC for the former Frank's Nursery redevelopment site at
5620 Winnetka Avenue North, located in the Livable Communities study area. Jim Casserly from Krass
Monroe will be in attendance at the meeting to review the details with the EDA. The term sheet related to this
agreement was previously reviewed and approved at the January 26 City Council meeting. The redevelopment
agreement contains the same provisions as this term sheet.
POLICY/PAST PRACTICE
The EDA has previously entered into contracts for private redevelopment with developers to facilitate
improvements in the city. This agreement will facilitate the construction of 44 owner-occupied, market rate
townhomes units in the Livable Communities area and address life cycle housing goals outlined in the
Comprehensive Plan.
BACKGROUND
The City Council previously selected the developer as the preferred developer for this site at the conclusion of
the Livable Communities study in February 2003. Details of this development have been discussed over the
past year and the attached development agreement finalizes all details on the contract portion of the
development. The developer began the planning process in March and presented plans to the Planning
Commission last week and to the City Council this evening. Construction is scheduled to begin in summer
2004, with the first units ready for occupancy in spring 2005.
ATI'ACHMENTS
· Resolution
· Development Contract
· o:
h\RFA\PLANNING\Livable Communities\Q-Franks da aprvl.doc
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY'OF A
CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND ARMORY
DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER
FRANK'S NURSERY PROPERTY
BE IT RESOLVED by the New Hope Economic Development Authority (the "EDA")
as follows:
Section 1. Recitals.
1.01 It has been proposed that the EDA enter into a Contract for Private
Redevelopment (the "Contract") with Armory Development II, LLC (the "Redeveloper") to
redevelop the former Frank's Nursery site at 5620 Winnetka Avenue North.
Section 2. Findings.
2.01 The EDA hereby finds that the Contract promotes the objectives as outlined
in its Restated Redevelopment Plan for Redevelopment Project No. 1 established pursuant
to Minnesota Statutes, Section 469.001 et seq.
2.02 The EDA hereby finds that it has approved and adopted Tax Increment
Financing District No. 04-1 (Special Law) and the EDA has approved and adopted the Tax
Increment Financing Plan relating thereto pursuant to Minnesota Statutes, Sections
469.174 through 469.1799, inclusive, as amended and supplemented from time to time.
Section 3. Authorizations.
3.01 The President and the Executive Director (the "Officers") are hereby
authorized to execute and deliver the Contract when the following condition is met:
Substantial conformity to the Contract presented to the EDA as of this
date with such additions and modifications as those Officers may
deem desirable or necessary as evidenced by the execution thereof.
Adopted by the EDA this day of ,2004.
Don Collier, President
ATTEST:
Daniel J. Donahue, Executive Director
G:\WPDATA~\NEW HOPE\18~DOC\EDA RESOL AUTHG EXEC Of REDEV AGR. DOC
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made as of the 26th day of April, 2004, by and between the New
Hope Economic Development Authority (the "Authority"), a public body corporate and politic
(the "Authority"), having its principal offices at 4401 Xylon Avenue North, New Hope,
Minnesota 55428, and Armory Development 1/, LLC, a Minnesota limited liability company (the
"Redeveloper"), having offices at 2104 Fourth Avenue South, Minneapolis, Minnesota 55404.
WITNESSETH:
WHEREAS, the Authority is a political subdivision of the State of Minnesota and is
governed by a Board of Commissioners (the "Board");
WHEREAS, in furtherance of the Authority's objectives, there has been established a
Restated Redevelopment Plan (the "Project Plan") for Redevelopment Project No. 1 (the "Project
Area") in the City of New Hope, Minnesota (the "City") to encourage and provide maximum
opportunity for private development and redevelopment of certain property in the City which is
not now in its highest and best use;
WHEREAS, as of the date of this Agreement the Project Plan has been prepared and
approved, and the Project Area has been established, pursuant to Minnesota Statutes, Sections
469.001 through 469.047 and 469.090 through 469.108;
WHEREAS, in connection with the Project Area and to assist with the financing of the
redevelopment contemplated by this Agreement, the City Council of the City has created Tax
Increment Financing District No. 04-1 (Special Law) (the "Tax Increment District") pursuant to
Minnesota Statutes Section 469.174 et seq. (the "Tax Increment Act") which includes the
Redevelopment Property;
WHEREAS, in connection with the establishment of the Tax Increment District, the
Council has prepared and approved a tax increment financing plan and shall forward it to the
County of Hennepin for certification of the original net tax capacity;
WHEREAS, the major objectives in establishing the Project Area are to:
1. Promote and secure the prompt development or redevelopment of certain property
in the Project Area, which property is not now in productive use or in its highest and best use, in
a manner consistent with the City's comprehensive plan and with a minimum adverse impact on
the environment and thereby promote and secure the development of other land in the City.
2. Promote and secure additional employment opportunities within the Project Area
and the City for residents of the City and surrounding area, thereby improving living standards,
reducing unemployment and the loss of skilled and unskilled labor and other human resources in
the City.
3. Secure the inCreased valuation of property subject to taxation by the City, County,
School District and other taxing jurisdictions in order to better enable such entities to pay for
governmental services and programs required to be provided by them.
4. Provide for the financing and construction of public improvements in and adjacent
to the Project Area necessary for the orderly and beneficial development or redevelopment of the
Project Area and adjacent areas of the City.
5. Promote the concentration of new desirable residential, commercial, office and
other appropriate development or redevelopment in the Project Area so as to maintain the area in
a manner compatible with its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, development or
redevelopment whenever possible.
7. Create a desirable and unique character within the Project Area through quality
land use alternatives and design quality in new and remodeled buildings.
8. Encourage and provide maximum opportunity for private development or
redevelopment of existing areas and structures which are compatible with the Plan.
9. Create viable environments which would upgrade and maintain housing stock,
maintain housing health and safety quality standards, and maintain and strengthen individual
neighborhoods.
10. Stimulate private activity and investment to stabilize and balance the City's
housing supply.
11. Eliminate code violations and nuisance conditions that adversely affect
neighborhoods.
12. Revitalize property to create a safe, attractive, comfortable, convenient and
efficient area for residential use.
13. Recreate and reinforce a sense of residential place and security which creates
neighborhood cohesiveness through City investment in neighborhood infi-astrucmre and public
improvements, including landscaping, park improvements, local street modifications to reduce
traffic impacts, street repaving, curb and gutter replacement, and streetlight updating.
14. Encourage infill development and redevelopment that is compatible in use and
scale with surrounding neighborhoods.
15. Rehabilitate the existing housing stock and preserve existing residential
neighborhoods wherever possible.
16. Demolish and reconstruct, where necessary, aging residential buildings to
preserve neighborhoods.
17. Removal of substandard structures.
WHEREAS, under the Tax Increment Act, the Authority is authorized to finance certain
costs of a redevelopment project with tax increment revenues derived from a tax increment
financing district established within such redevelopment project;
WHEREAS, in order to achieve the objectives of the Authority and City in creating the
Project Area and in adopting the Project Plan, the Authority is prepared to provide assistance in
accordance with this Agreement; and
WHEREAS, the Authority believes that the development and redevelopment of the
Project Area pursuant to this Agreement, and fulfillment generally of the terms of this
Agreement, are in the vital and best interests of the Authority and the health, safety, morals and
welfare of its residents, and in accord with the public purposes and provisions of applicable
federal, state and local laws under which the development and redevelopment are being
undertaken and assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligation of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definiticms. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Section 469.001 et seq., as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the New Hope Economic Development Authority.
"Authority Grant" shall have the meaning given that term in Section 3.4.
"Available Tax Increment" means 100% of the Tax Increment from the TIF District.
"Building" means one of the structures containing one or more individual residential units
as described in the Minimum Improvements and shown on the Site Plan.
"Certificate of Completion" means the certification in the form of Sc. hedule Fl to be
provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment
Property, pursuant to Section 4.4.
"City" means the City of New Hope, Minnesota.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be performed by the Redeveloper on the Redevelopment Property which
shall be as detailed as the plans, specifications, drawings and related documents which are
submitted to the building inspector of the City, and shall include at least the following for each
building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5)
cross sections of each (length and width); (6) elevations (all sides, except as to a side of existing
structure where no construction is to take place); (7) faCade and landscape plan; and (8) such
other plans or supplements to the foregoing plans as the City may reasonably request.
"County" means the County of Hennepin, Minnesota.
"Declaration of Restrictive Covenants and Prohibition Against Tax Exemption" means
those restrictive covenants substantially in the form of~.
"Developer Fee" means the fee that the Redeveloper may earn for its performance of its
development activities pursuant to this Agreement, subject to the limitations set forth in Section
3.3.
"Event of Default" means an action by the Redeveloper described in Section 7.1.
"Minimum Improvements" means the improvements to be constructed by the Redeveloper
on the Redevelopment Property, which improvements shall consist of 44 townhomes with an
average sales price of approximately $222,000 per unit.
"Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes,
Section 116B.01 et seq., as amended.
"Note" means the Limited Revenue Tax Increment Note in a principal amount not to
exceed Four Hundred Thousand Dollars ($400,000), substantially in the form of Schedule C and
to be issued by the Authority payable to the order of the Redeveloper in accordance with Article
llI.
"Plan" means, collectively, (i) the Restated Redevelopment Plan adopted by the Authority
and approved by the City for Redevelopment Project No. 1, and (ii) the Tax Increment Plan.
"Pledged Tax Increment" means, in any year, 35% of the Available Tax Increment
generated by the Redevelopment Property.
"Project" means the Redevelopment Property and Minimum Improvements.
"Project Area" means Redevelopment Project No. 1 established in accordance with the
Act.
"Reconciliation Date" means the earlier of December 31, 2007 or 30 days following the
sale of all residential units comprising the Minimum Improvements.
"Redeveloper" means Armory Development II, LLC, a Minnesota limited liability
company, and its permitted successors or assigns.
"Redevelopment Property" means the real property upon which the Minimum
Improvements are to be constructed, which real property is described in Schedule A.
"Site Improvements, means acquisition of the Redevelopment Property and the
improvements to be constructed thereon by the Redeveloper as described in Schedule F, and in
Article 1II.
"Site Plan" means the plan attached hereto as Schedule D showing the nature and location
of the Minimum Improvements.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real estate taxes paid with respect to the
Redevelopment Property which is remitted to the Authority as tax increment pursuant to the Tax
Increment Act.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1799, as amended and as it may be amended.
"Tax Increment District" means Tax Increment Financing District No. 04-1 (Special
Law), which includes the Redevelopment Property and which was approved and adopted by the
AUthority and the City within Redevelopment Project No. 1 pursuant to the Tax Increment Act.
"Termination Date" means the expiration date of this Agreement described in Article IX.
"Unavoidable Delays" means delays which are the direct result of strikes, delays which
are the direct result of unforeseeable and unavoidable casualties to the Minimum Improvements,
the Redevelopment Property or the equipment used to construct the Minimum Improvements,
delays which are the direct result of governmental actions, delays which are the direct result of
judicial action commenced by third parties, citizen opposition or action affecting this Agreement
or adverse weather conditions or acts of God.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Repre.qentation~q and C. nvenant~ by the Authority. The Authority makes the
following representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a public body corporate and politic and a political subdivision of
the State of Minnesota and is governed by a board of commissioners. Under the provisions of
the Act, the Authority has the power to enter into this Agreement and carry out its obligations
hereunder.
(b) The Authority has created, adopted and approved the Project Area in accordance
with the terms of the Act.
(c) The Authority has complied with all statutory requirements the Tax Increment Act
relating to the creation of the Tax Increment District.
(d) The Authority proposes to assist the Redeveloper for the costs of Site
Improvements in accordance with the Plan and this Agreement.
(e) The Authority proposes to make the Note payable to the Redeveloper in
accordance with the provisions of this Agreement and to pledge tax increment generated by the
Tax Increment District to the payment of the principal of and interest on the Note according to its
terms.
(f) The Authority will cooperate with the Redeveloper with respect to any litigation
commenced by third parties in connection with this Agreement.
Section 2.2. Repre.qentation~% Warranties and Covenant~q By the Redeveloper. The
Redeveloper represents and warrants that:
6
(a) The Redeveloper is a Minnesota limited liability company organized and in good
standing under the laws of the State.
(b) The Redeveloper will cooperate with the Authority to rezone the Redevelopment
Property for construction of the Minimum Improvements.
(c) The Redeveloper has received no notice or communication from any local, state or
federal official that the activities of the Redeveloper or the Authority in the Project Area with
respect to the Minimum Improvements may or will be in violation of any environmental law or
regulation. The Redeveloper is aware of no facts with respect to the Minimum Improvements,
the existence of which would cause it to be in violation of any local, state or federal
environmental law, regulation or review procedure or which would give any person a valid claim
under the Minnesota Environmental Rights Act.
(d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required
permits, licenses and approvals, and will meet, in a timely manner, all requirements of all
applicable local, state and federal laws and regulations which must be obtained or met before the
Minimum Improvements may be lawfully constructed.
(e) The Redeveloper will construct, operate and maintain the Minimum
Improvements in accordance with the terms of this Agreement, the Plan and all local, state and
federal laws and regulations (including, but not limited to, environmental, zoning, building code
and public health laws and regulations).
(f) If an Event of Default on the part of the Redeveloper occurs and if the Authority
shall employ attorneys or incur other expenses for the collection of payments due or to become
due or for the enforcement of performance or observance of any obligation or agreement on the
part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within ten
days of written demand by the Authority, pay to the Authority the reasonable fees of such
attorneys and such other expenses so incurred by the Authority.
(g) The financing arrangements which the Redeveloper has obtained or will obtain to
finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper
to successfully complete the Minimum Improvements as contemplated in this Agreement.
(h) The Redeveloper shall pay all costs for plats, replats, lot sphts, preparation of
restrictive covenants, easements and any other documentation necessary for the acquisition,
construction and sale of the Minimum Improvements and all costs of recording.
(i) The construction of the Minimum Improvements, in the opinion of the
Redeveloper, would not reasonably be expected to occur solely through private investment
within the reasonably foreseeable future without the assistance provided by the Authority
pursuant to this Agreement.
(j) The Redeveloper shall construct the Minimum Improvements using the products
and materials described in Schedule F.
(k) The Redeveloper shall pay the normal and customary City fees and expenses for
the approval and construction of the Project including, but not limited to, bonding requirements,
building permit fees, state surcharges, sewer accessibility charges (SAC), water accessibility
charges (WAC) and park dedication fees.
(I) Once acquired by the Redeveloper, the Redevelopment Property shall not become
exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, and
any improvements of any kind constructed on the Redevelopment Property shall similarly not
become exempt until after the later of the dissolution or other termination of the Tax Increment
District or December 31, 2031. Notwithstanding the foregoing language, this restriction shall
end upon any termination of this Agreement due to a default by the Authority that is not timely
cured as allowed under this Agreement.
(m) The Redeveloper agrees, notwithstanding the provisions of Article VI, that it will
not assign, convey or lease any interest in the Redevelopment Property or any portion thereof, or
this Agreement or any portion thereof, to any tax-exempt entity under the U.S. Internal Revenue
Code of 1986, as the same may be amended from time to time, without the prior written approval
of the Authority (whose approval shall be conditioned upon the Redeveloper obtaining an
agreement upon terms reasonably satisfactory to the Authority from its assignee or lessee to make
payments in lieu of tax).
(n) The Redeveloper will pay for relocation services and benefits for all owners or
tenants of the Redevelopment Property. The Redeveloper may, in lieu of funding such services
and benefits, provide a written waiver by the owner or tenant. Such waiver must be in a form
acceptable to the Authority. The Redeveloper shall indemnify the Authority for any relocation
liabilities arising under applicable law with respect to any portion of the Redevelopment
Property.
ARTICLE m
SITE IMPROVEMENTS; PUBLIC ASSISTANCE;
UNDERTAKINGS OF AUTHORITY AND REDEVELOPER
Section 3.1. Cnngtmetinn nf Minimum Impmvement.q and Rite lmprovement.q. The
Redeveloper shall construct the Minimum Improvements and Site Improvements on the
Redevelopment Property in accordance with the Construction Plans and will maintain, preserve
and keep the Minimum Improvements and Site Improvements in good repair and condition.
All contracts for construction of the Minimum Improvements and Site Improvements
shall provide that payments for the work thereunder are the sole obligation of the Redeveloper.
Neither the City nor the Authority shall have any obligation under such contracts.
8
Section 3.2. Metropolitan Ce,nell Grant Asd~tance. The Redeveloper shall provide all
documentation required by the Authority to apply for a Metropolitan Council grant to reimburse
the Redeveloper for approximately $21,000 of eligible expenses. Upon receipt of all such
documentation, the Authority will apply for the grant. The Authority will provide any grant
funds received to the Redeveloper on terms consistent with the provisions of the grant. The
Redeveloper is responsible for any required environmental remediation; however, the Authority
will make, or assist the Redeveloper in making, applications to other public agencies requesting
grants or loans for reimbursement of such costs. Funds received for such purpose shall be
provided to the Redeveloper to the extent the Redeveloper supplies the Authority with evidence
reasonably acceptable to the Authority that Redeveloper has incurred such costs.
Section 3.3. Developer Fee, The Developer Fee shall not exceed 5% of the total of
actual land and construction costs, calculated as shown on the Final Sources and Uses Schedule
attached as ,qchednle H.
Section 3.4. R eimbnmenqent for gite lrnprovementg.
(a) The RedeveloPer shall pay contractors, subcontractors and construction managers
with whom the Redeveloper has entered into contracts. Upon submission to thc Authority of
invoices fi:om such contractors and certifications signed by the Redevcloper's project architect or
general contractor to the effect that the costs for which payment was made have been incurred in
connection with the Site Improvements and upon receipt of lien waivers fi:om such contractors,
subcontractors, and construction managers, the Authority shall reimburse a portion of the cost of
Site Improvements as follows:
(i) Upon the issuance of certificates of occupancy for the first 20 townhomes,
the Authority shall reimburse the Redeveloper for up to $400,000 of qualified tax increment-
eligible costs (the "Authority Grant"); and
(ii) Upon completion of construction of the final 24 townhomes such that
those Buildings may be locked and secured, the Authority shall deliver the Note.
(b) The Redeveloper shall reimburse the Authority for the Authority Grant if the
Redeveloper fails to complete construction of the Minimum Improvements pursuant to the terms
of Article IV.
Section 3.5. Aggignment of Note; No Regi.~tration
(a) The Redeveloper represents that it will not assign the Note to any entity other than
its construction lender or another entity approved by the Authority, such approval to be
evidenced by the Authority's written consent. The Redeveloper acknowledges that the Authority
will not consent to any assignment of the Note to any entity that is not a financial institution or
"accredited investor" as defined in the regulations promulgated under the Securities Act of 1933,
as amended.
(b) The Redeveloper understands that the Note will not be registered or otherwise
qualified for sale under the securities laws and regulations of the State or under Federal securities
laws or regulations, the Note will not be listed on any stock or other securities exchange, and the
Note will not carry a rating from any rating service.
Section 3.6. Tax Increment Certification. Pursuant to the Plan, the Authority has
pledged and shall appropriate the Pledged Tax Increment to the payment of the principal of and
interest on the Note, with said payment to be made in accordance with the terms and provisions
of the Note.
Section 3.7. l lse of Tax Increment. The Authority shall be free to use the Tax
Increment, other than the Pledged Tax Increment, for any purpose for which the Tax Increment
may lawfully be used pursuant to applicable provisions of Miunesota law.
Section 3.8. Reconciliatinn Date~ Authnhty Participation.
(a) The Redeveloper shall maintain books and records relating to the financing,
construction and sales of the Minimum Improvements in accordance with generally accepted
accounting principles consistently applied.
(b) It is the intention of the Authority and the Redeveloper that the Redeveloper's
profit not exceed 15% of gross sales proceeds, calculated as shown on the Final Sources and
Uses Schedule attached as Schedule Il. On the Reconciliation Date, the Redeveloper shall
furnish to the Authority a full and complete copy of such books and records and a completed
Final Sources and Uses Schedule certified by the Redeveloper. If all of the residential units have
not been sold by December 31, 2007, for purposes of completing the Final Sources and Uses
Schedule the sale price of the unsold units shall be deemed to be the average of the sale price of
all units sold in the six (6) months preceding December 31, 2007.
(c) In the event the Redeveloper's profit exceeds 15% as calculated above, the
Authority shall receive participation to reflect a reduction in necessary public assistance in the
amount of one-half (1/2) of any amounts over 15%. The Authority shall receive such
partiCipation in the following order of priority:
(i) The principal amount of the Note shall be reduced by means of the
Authority executing and delivering Annex A to the Note to the Redeveloper; then
(ii) The Redeveloper shall repay any payments of principal and interest on the
Note made by the Authority prior to the Reconciliation Date together with interest at the rate of
6.75% per annum; then
(iii) The Redeveloper shall repay the Authority Grant to the Authority together
with interest at the rate of 6.75% per annum.
ARTICLE IV
10
CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 4.1. Con~qtnmtion of Minimum lmprovement~q, The Redeveloper shall perform
and pay for all Site Improvements described in Schedule F,. Subject to Unavoidable Delays, the
Redeveloper shall begin construction of the Minimum Improvements on or about July 1, 2004.
The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment
Property in accordance with this agreement and the Construction Plans to be approved by the
City.
Section 4.2. C. on~qtnmtion Plans.
(a) Prior to the commencement of construction of the Minimum Improvements, the
Redeveloper shall submit Preliminary Plans to the Authority consisting of typical floor plans and
sketches of the typical exterior and interior of the proposed Minimum Improvements which
illustrate the size and character of the proposed Buildings. The Preliminary Plans shall not be
inconsistent with the Site Plan, this Agreement or any applicable state and local laws and
regulations, insofar as said consistency may be determined at said preliminary stage. If approval
of the Preliminary Plans is requested in writing by the Redeveloper at the time of submissign
thereof to the Authority, the Authority shall approve or reject (in whole or in part) such
Preliminary Plans in writing within twenty (20) days after the date of receipt thereof. If no
written rejection is made within said twenty (20) days, the Preliminary Plans shall be deemed
approved by the Authority. Any rejection shall set forth in detail the reasons therefor. If the
Authority rejects the Preliminary Plans, in whole or in part, the Redeveloper may submit new or
corrected Preliminary Plans at any time after receipt by the Redeveloper of the notice of
rejection. The Authority's approval of the Preliminary Plans shall not be tmreasonably withheld.
(b) Prior to the Redeveloper's commencement of construction of the Minimum
Improvements, the Redeveloper shall submit to the Authority Construction Plans for the
Minimum Improvements. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in conformity in all material respects with this Agreement,
the Preliminary Plans, and all applicable state and local laws and regulations. The .Authority
shall approve the Construction Plans in writing if: (i) the Construction Plans conform in all
material respects to the terms and conditions of the Preliminary Plans and this Agreement; (ii) the
Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and
regulations: (iii) the Construction Plans are adequate to provide for the construction of the
Minimum Improvements; (iv) the Construction Plans do not provide for expenditures in excess
of the funds available to the Redeveloper for the construction of the Minimum Improvements;
and (v) no Event of Default has occurred and is continuing.
No approval by the Authority shall relieve the Redeveloper of the obligation to comply
with the terms of this Agreement and applicable federal, State and local laws, ordinances, rules
and regulations, or to construct the Minimum Improvements in accordance therewith. No
approval by the Authority shall constitute a waiver of any Event of Default.
11
Upon the Redeveloper's submittal of the Construction Plans to the Authority, such
Construction Plans shall be deemed approved unless rejected in writing by the Authority, in
whole or in part, within twenty (20) days after the date of their receipt by the Authority. Such
rejection shall set forth in detail the reasons therefor. If the Authority rejects any Construction
Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans
within thirty (30) days after written notification to the Redeveloper of the rejection. The
provisions of this Section relating to approval, rejection and resubmission of corrected
Construction Plans shall continue to apply until the Construction Plans have been approved by
the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall
constitute a conclusive determination that the Construction Plans (and the Minimum
Improvements, if constructed in accordance with said plans) comply with the provisions of this
Agreement relating thereto. The Construction Plans shall not be rejected due to any objection
which could have been raised upon review of the Preliminary Plans and corrected more
economically at that time.
(c) If the Redeveloper desires to make any material change in the Preliminary Plans
or Construction Plans after their approval by the Authority, then the Redeveloper shall submit the
proposed change to the Authority for its approval. If the Preliminary Plans or Construction
Plans, as modified by the proposed change, conform to the requirements of this Section with
respect to such previously apprOved Construction Plans, the Authority shall approve the proposed
change and notify the Redeveloper in writing of its approval. Such change in the Preliminary
Plans or Construction Plans shall, in any event, be deemed approved by the Authority unless
rejected in writing by the Authority, in whole or in part, within twenty (20) days after receipt of
the notice of such change, setting forth in detail the reasons therefor.
Section 4.3. Completion n£ Con~qtnmtinn. Subject to Unavoidable Delays, the
Redeveloper shall have substantially completed the construction of the Minimum Improvements '
by June 30, 2007. All work with respect to the Minimum Improvements to be constructed or
provided by the Redeveloper on the Redevelopment Property shall be in conformity with the
Construction Plans as submitted by the Redeveloper and approved by the City. The Redeveloper
agrees for itself, it successors and assigns, and every successor in interest to the Redevelopment
Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall
diligently prosecute to completion the development of the Redevelopment Property through the
construction of the Minimum Improvements thereon, and that such construction shall in any
event be completed within the period specified in this Section.
Section 4.4. Certificate of Cnmpletion.
(a) Promptly after completion of the Minimum Improvements for each Building
in accordance with the provisions of this Agreement relating to the obligations of the
Redeveloper to construct such improvements (including the date for completion thereof), the
Authority will furnish the Redeveloper with a Certificate of Completion for such Building. The
Certificate of Completion shall be a conclusive determination and conclusive evidence of the
satisfaction and termination of the agreements and covenants in this Agreement and in the
Redevelopment Property Deed with respect to the obligations of the Redeveloper and its
12
successors and assigns, to construct the Minimum Improvements for each Building and the date
for the completion thereof.
(b) If the Authority shall refuse or fail to provide any certificate in accordance with
the provisions of this Section 4.4, the Authority shall, within ten (10) days after written request
by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate
detail in what respects the Redeveloper has failed to complete the Minimum Improvements in
accordance with the provisions of this Agreement, or is otherwise in default, and what measures
or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform
in order to obtain such certification.
(c)' The construction of the Minimum Improvements for each Building shall be
deemed to be completed in accordance with the Redeveloper's obligations hereunder when the
City has issued a Certificate of Occupancy for any individual residential unit of that Building.
ARTICLE V
INSURANCE
Section 5.1. Inm]rance,
(a) The Redeveloper will provide and maintain at all times during the process of
constructing the Minimum Improvements and, from time to time at the request of the Authority,
furnish the Authority with proof of payment of premiums on:
(i) builder's risk insurance, written on the so-called "Builder's Risk -
Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable
value of the Minimum Improvements at the date of completion, and with coverage available in
nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall
be protected in accordance with a clause in form and content reasonably satisfactory to the
Authority;
(ii) comprehensive general liability insurance together with an Owner's
Contractor's Policy with limits against bodily injury and property damage of not less than
$2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess
liability policy may be used); and
(iii) workers' compensation insurance, with statutory coverage.
(b) All insurance required by this Article V shall be taken out and maintained in
responsible insurance companies selected by the Redeveloper which are authorized under the
laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually
with the Authority policies evidencing all such insurance, or a certificate(s) or binder(s) of the
respective insurers stating that such insurance is in force and effect. Unless otherwise provided
in this Article V, each policy shall contain a provision that the insurer shall not cancel or modify
13
it without 'giving written notice to the Redeveloper and the Authority at least thirty (30) days
before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to
the expiration of any policy, the Redeveloper shall furnish the Authority with evidence
satisfactory to the Authority that the policy has been renewed or replaced by another policy
conforming to the provisions of this Article V, or that there is no necessity therefor under the
terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket
or umbrella policies, or a combination thereof, having the coverage required herein, in which
event the Redeveloper shall deposit with the Authority a certificate or certificates of the
respective insurers as to the mount of coverage in force upon the Minimum Improvements.
(c) The Redeveloper shall, for time to time, provide the Authority with evidence
satisfactory to the Authority that the Redeveloper's subcontractors are maintaining workers'
compensation insurance with statutory coverage.
ARTICLE VI
PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION
Section 6.1. Repre.qentaticm a~q tn Redevelnpment. The Redeveloper represents and
agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to
this Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment
Property and not for speculation in land holding. The Redeveloper further recognizes that, in
view of (a) the importance of the redevelopment of the Redevelopment Property to the general
welfare of the Authority; (b) the substantial financing and other public aids that have been made
available by the City or the Authority for the purpose of making such redevelopment possible;
and (c) the fact that any act or transaction involving or resulting in a significant change in the
identity of the parties in control of the Redeveloper or the degree of their control is for practical
purposes a transfer or disposition of the property then owned by the Redeveloper, the
qualifications and identity of the Redeveloper are of particular concern to the Authority. The
Redeveloper further recognizes that it is because of such qualifications and identity that the
Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further
willing to accept and rely on the obligations of the Redeveloper for the faithful performance of
all undertakings and covenants hereby by it to be performed.
Section 6.2. Prohibition Again.qt Tran.qfer of Pronerty and A~q.qi~nment of A~m'eement.
The Redeveloper represents and agrees that prior to the issuance of the final Certificate of
Completion for the Minimum Improvements or the Termination Date:
(a) Except only by way of security for the purpose of obtaining financing necessary to
enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part
thereof, to perform its obligations with respect to the Project under this Agreement, or any other
,purpose authorized by this Agreement, the Redeveloper (except as so authorized) 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 any transfer in any other mode or
form, of this Agreement or the Redevelopment Property or any part thereof or any interest
14
therein, or any contract or agreement to do any of the same, without prior written approval by the
Authority in its sole discretion. Notwithstanding the foregoing, the Redeveloper may transfer the
Redevelopment Property to any corporation, partnership, or limited liability company controlling,
controlled by, or under common control with the Redeveloper. In addition, the Redeveloper may
enter into purchase agreements for the sale of individual residential units in the ordinary course
of the Redeveloper's business.
(b) The Authority shall be entitled to require, except as otherwise provided in this
Agreement, as conditions to any such approval that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the
Redeveloper's obligations hereunder.
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the
Authority, have expressly assumed all of the obligations of the Redeveloper hereunder from
which the Redeveloper seeks to be released and agrees to be subject to all of the conditions and
restrictions to which the Redeveloper is subject unless the Redeveloper agrees to continue to
fulfill those obligations.
(iii) There shall be submitted to the Authority for review and prior written
approval all instruments and other documents involved in effecting the transfer of any interest in
this Agreement or the Redevelopment Property.
Section 6.3. Releage and Indemnification Covenants.
(a) The Redeveloper covenants and agrees that the City, the Authority and the
governing body members, officers,, agents, servants and employees of either of them
(collectively, the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold
harmless the Indemnified Parties against any loss or damage to property or any injury to or death
of any person occurring at or resulting from any defect in the Minimum Improvements, due to
any act, including negligence, of the Redeveloper or of others acting on the behalf or under the
direction or control of the Redeveloper; provided, however, that the Redeveloper's
indemnification obligations in this subparagraph (a) shall not apply to any loss resulting from
negligent, willful or wanton misconduct of any of the Indemnified Parties.
(b) The Redeveloper agrees to protect and defend the Indemnified Parties, now or
forever, and further agrees to hold the Indemnified Parties harmless from any claim, demand,
suit, action or other proceeding by any person or entity arising or purportedly arising from this
Agreement or the transactions contemplated hereby or the acquisition, construction, installation,
ownership, and operation of the Minimum Improvements, due to any act, including negligence,
of the Redeveloper or of others acting on the behalf or under the direction or control of the
Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this
subparagraph (b) shall not apply to (i) any loss resulting from any negligent or willful
misrepresentation or any negligent, willful or wanton misconduct of any of the Indemnified
15
Parties or (ii) the use of eminent domain if exercised by the Authority to acquire the Private
Property.
(c) None of the Indemnified Parties shall be liable for any damage or injury to the
person or property of the Redeveloper or its officers, agents, servants or employees or any other
person who may be on or about the Redevelopment Property or Minimum Improvements due to
any act or negligence of any person, other than the negligence or misconduct of an Indemnified
Party.
(d) None of the Indemnified Parties shall be liable to the Redeveloper or to any third
party for any consequential or other damages that may arise out of delays of any kind relating to
activities undertaken pursuant to this Agreement, including but not limited to delays due to
environmental conditions, court challenges or elements outside the control of the Authority.
(e) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
(f) Nothing in this Section 6.3 is intended to waive any municipal liability limitations
contained in Minnesota Statutes, particularly Chapter 466.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. F. vent~ of Default Defined. The following are Events of Default hereunder:
(a) Failure of the Redeveloper to submit reasonably satisfactory Construction Plans in
accordance with Section 4.2.
(b) Failure by the Redeveloper to commence or complete construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Article IV.
(c) Failure by the Redeveloper to substantially observe or perform any other
covenant, condition, obligation or agreement on its part to be observed or performed hereunder.
(d) The Redeveloper shall:
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the United States
Bankruptcy Code or under any similar federal or state law; or
(ii) make an assignment for the benefit of its creditors; or
16
(iii) admit in writing its inability to pay its debts generally as they become due;
or
(iv) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Redeveloper as a bankrupt or proposing its reorganization
under any present or future federal bankruptcy act or any similar federal or State law shall be
filed in any court and such petition or answer shall not be discharged or denied within ninety (90)
days after the filing thereof; or a receiver, trustee or liquidator of the Redeveloper or of the
Redevelopment Property, or part thereof shall be appointed in any proceeding brought against the
Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the
Redeveloper shall consent to or acquiesce in such appointment.
(e) Any occurrence which would with the passage of time or giving of notice become
an Event of Default as defined above.
Section 7.2. Remedie.q on Default. Whenever any Event of Default referred to in Section
7.1 occurs, the Authority may take any one or more of the following actions after providing thirty
(30) days' written notice to the Redeveloper of the Event of Default, but only if the Event of
Default has not been cured within said thirty (30) days, or if the Event of Default is not
reasonably susceptible to being cured within said thirty (30)-day period (whether due to
Unavoidable Delays or otherwise), and the Redeveloper fails to provide the Authority with
written assurances, deemed satisfactory in the reasonable discretion of the Authority, that the
Event of Default will be cured as soon as reasonably possible:
(a) Suspend its performance under this Agreement until it receives assurances from
the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default
and continue its performance under this Agreement.
(b) Terminate this Agreement.
(c) Withhold any Certificate of Completion.
(d) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to the Authority, including any actions to collect any payments
due under this Agreement, or to enforce performance and observance of any obligation,
agreement, or covenant of the Redeveloper under this Agreement.
Section 7.3. Nn Remedy F, xchmive. No remedy herein conferred upon or reserved to the
Authority is intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient.
17
Section 7.4. No Aclditinnal Waiver Implied by One Waiver. In the event any agreement
contained herein should be breached by either party and thereafter waived by the non-breaching
party, such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereunder.
ARTICLE VllI
ADDITIONAL PROVISIONS
Section 8.1. Cnnflict of Interest. No member, official, or employee of the Authority
shall haVe any personal interest, direct or indirect, in this Agreement, nor shall any such member,
official, or employee participate in any decision relating to the Agreement which affects his or
her personal interests or the interests of any corporation, partnership, or association in which he
or she is interested, directly or indirectly.
Section 8.2. Authority Renre.qentatives NTnt Individually TJahle. No member, official, or
employee of the Authority shall be personally liable to the Redeveloper, or any successor in
interest, in the event of any default or breach by the Authority or for any mount which may
become due to the Redeveloper or successor or on any obligations under the terms of this
Agreement, except in the case of willful misconduct.
Section 8.3. Eq, ml F, mployment Opportunity. The Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements it will
comply with all applicable equal employment opPommity and non-discrimination laws,
ordinances and regulations.
Section 8.4. Re.qtrictinns nn 1 lse. The Redeveloper shall not discriminate upon the basis
of race, color, creed, sex or national origin in the sale, lease, rental, use or occupancy of the
Redevelopment Property or any part thereof.
Section 8.5. Title.q of Articles and ~qeetions. Any titles of the several Articles, and
Sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 8.6. Nntiee,q and Demandq. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under this Agreement by either party to
the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, transmitted bY facsimile, delivered by a recognized
overnight courier or delivered personally to the address of such party below, or at such other
address as a party may, fi:om time to time, designate in writing and forward to the other:
18
Redeveloper: Authority:
Armory Development II, LLC New Hope Economic Development Authority
2104 Fourth Avenue South 4401 Xylon Av N
Minneapolis, MN 55404 New Hope, MN 55428
Atto: Douglas G. Hoskin Attn: Daniel J. Donahue, City Manager
Section 8.7. Counterpart.q. This agreement may be executed in any number of
counterparts, which counterparts shall together constitute one and the same instrument.
ARTICLE IX
TERMINATION OF AGREEMENT
Section 9.1. Termination: The Authority may terminate this Agreement as provided
herein, and otherwise this Agreement shall terminate upon payment of the Note in accordance
with its terms and the discharge of all of the Authority's and Redeveloper's respective obligations
hereunder, but no such termination shall terminate any indemnification or other rights or
remedies arising hereunder due to any Event of Default which occurred prior to such termination.
Section 9.2. Seetinn.q tn ~qnrvive Termination. Section 6.3 shall, in addition to the other
surviving provisions referenced in Section 9.1, survive the termination of this Agreement. In
addition, the terms and conditions of the Declaration of Protective Covenants and Prohibition
Against Tax Exemption shall remain in effect until December 31,2031.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf by its duly authorized representatives, and the Redeveloper has caused this
Agreement to be duly executed in its name and behalf by its duly authorized representative, on or
as of the date of first above written.
G:\WPDATA\N\NEW HOPE\13\DOC~CONTRACT V2.DOC
(Signature pages follow)
19
Dated: ,2004.
NEW HOPE ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
)ss
COUNTY OF HENNEPIN )
On this day of ,2004, before me, a notary public within and for
Hennepin County, personally appeared and
to me personally known who by me duly sworn, did say that
they are the President and Executive Director, respectively, of the New Hope Economic
Development Authority, and acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page- Contract for Private Redevelopment
20
Dated: ., 2004.
ARMORY DEVELOPMENT Il, LLC,
· a Minnesota limited liability company
By
Douglas G. Hoskin
Its: Managing Member
STATE OF MINNESOTA )
) ss
COUNTY OF )
On this ~ day of ,2004, before me, a notary public within
and for County, personally appeared Douglas G. Hoskin, to me personally
known and who by me duly sworn, did say that he is the Managing Member of Armory
Development II, LLC, a Minnesota limited liability company, and acknowledged the foregoing
instrument on behalf of said company.
Notary Public
Redeveloper Signature Page - Contract for Private Redevelopment
21
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
The former Frank's Nursery & Crafts site, 5620 Winnetka Avenue North, New Hope, Minnesota,
PIN# 05-118-21-32-0007.
22
SCHEDULE B
CERTIFICATE OF COMPLETION
WHEREAS, the New Hope Economic Development Authority, a body corporate and
politic (the "Authority") and Armory Development 11, LLC, a Minnesota limited liability
company (the "Redeveloper"), have entered into a Contract for Private Redevelopment (the
"Agreement") dated April 26, 2004, regarding certain real property located in a tax increment
financing district in the City (hereinafter referred to and referred to in the Agreement as the
"Redevelopment Property"); and
WHEREAS, the Agreement contains certain conditions and provisions requiring the
Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred
to and referred to in the Agreement as the "Minimum Improvements"); and
WHEREAS, Section 4.4 of the Agreement requires the Authority to provide an
appropriate instrument promptly after the substantial completion (as defined in the Agreement)
of the Minimum Improvements so certifying said substantial completion;
NOW, THEREFORE, in compliance with said Section 4.4 of the Agreement, this is to
certify that the Redeveloper has substantially completed the Minimum Improvements in
accordance with the conditions and provisions of the Agreement relating solely to the obligations
of the Redeveloper to construct the Minimum Improvements (including the dates for beginning
and completion thereof), and this certification shall be a conclusive determination of satisfaction
and termination of the agreements and covenants in the Agreement with respect to the
obligations of the Redeveloper, and its successors and assigns, to construct the Minimum
Improvements and the dates for the beginning and completion thereof.
23
Dated: ., 2004
NEW HOPE ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On this ~ day of ,2004, before me, a notary public, within and for
Hennepin County, personally appeared and
to me personally known who by me duly sworn, did say that
they are the President and Executive Director, respectively, of the New Hope Economic
Development Authority, and acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
24
SCHEDULE C
NOTE
$400,000.00 ., 200__
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
LIMITED REVENUE TAX INCREMENT NOTE
The New Hope Economic Development Authority (the "Authority"), hereby
acknowledges itself to be indebted and, for value received, promises to pay to the order of
Armory Development II, LLC (the "Owner"), solely from the source, to the extent and in the
manner hereinafter provided, the principal amount of this Note, being Four Hundred Thousand
Dollars ($400,000.00) (the "Principal Amount"), together with interest on the unpaid principal
balance from the date of this Note until paid at the rate of Six and Three/Fourths Percent (6.75%)
per annum and payable on the dates described below (the "Payment Dates") and in the amounts
as hereinafter defined (the "Payments").
This Note is issued pursuant to that certain Contract for Private Redevelopment by and
between the Authority and the Owner dated April 26, 2004 (as amended, modified, supplemented
or restated from time to time, the "Agreement"). This Note is subject to the terms, conditions
and provisions of the Agreement and the notations on Annex A attached to this Note and made a
part hereof. Capitalized terms in this Note not defined herein shall have the definitions given
those terms in the Agreement.
The Principal Amount of this Note may be reduced by the Authority in the circumstances
described in Section 3.8 of the Agreement and to the extent provided therein. The adjustment, if
any, in the principal amount of this Note shall be noted on Annex A hereto and certified by the
Authority.
The Payment Dates shall commence on August 1 of the first year of receipt of Tax
Increment from the construction of the Minimum Improvements and on each February 1 and
August 1 thereafter until and including December 31,2031 unless earlier paid in accordance with
the terms of this Note.
All Payments made by the Authority on this Note shall be applied first to accrued interest
and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be
added on such Payment Date to the principal amount of this Note.
The Principal Amount is subject to prepayment at the option of the Authority in whole or
in part at any time without penalty.
25
Each Payment on this Note is payable in any coin or currency of the United States of
America which on the date of such Payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at its postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
which has been issued by the Authority pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision
4, to aid in financing a project, as therein defined, of the Authority consisting generally of
defraying certain public redevelopment costs incurred and to be incurred by the Authority within
and for the benefit of its Redevelopment Project No. 1.
THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE
STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE
STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE
NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN PLEDGED TAX INCREMENT, AS DEFINED BELOW.
The Payment of this Note due on any Payment Date is payable solely fi.om and only to the
extent that the Authority shall have received as of such Payment Date Pledged Tax Increment, as
defined in the Agreement. In the event that Pledged Tax Increment is not sufficient to pay when
due the principal of and interest on this Note, the failure of the Authority to pay the principal of
and interest on this Note then due shall not constitute a default hereunder.
The Authority shall pay on each Payment Date to the Owner the Pledged Tax Increment.
On December 31,2031, the maturity date of this Note, any unpaid portion shall be deemed to
have been paid in full.
This Note shall not be payable fi.om or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to have
obligated itself to pay hereon fi.om any funds, except the Pledged Tax Increment, and then only to
the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or of any other public body, and neither the Authority nor any
director, commissioner, council member, board member, officer, employee or agent of the
Authority, nor any person executing or registering this Note, shall be liable personally hereon by
reason of the issuance or registration hereof or otherwise.
The Authority makes no representation or covenant, express or implied, that the revenues
described herein will be sufficient to pay, in whole or in part, the amounts which are or may
otherwise become due and payable hereunder.
The AuthorityJs payment obligations hereunder shall be further conditioned on the fact
that there shall not at the time have occurred and be continuing an Event of Default under the
26
Agreement,. and, further, if pursuant to the occurrence of an Event of Default under the
Agreement the Authority elects to terminate the Agreement, the Authority shall have no further
debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the
Agreement for a fuller statement of the obligations of the Redeveloper and of the rights of the
Authority thereunder, and said provisions are hereby incorporated by reference into this Note to
the same extent as though set out in full herein. The execution and delivery of this Note by the
Authority, and the acceptance thereof by the Redeveloper, as the initial Registered Owner hereof,
shall conclusively establish this Note as the "Note" (and shall conclusively constitute discharge
of the Authority's obligation to issue and deliver the same to the Redeveloper) under the
Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Authority outstanding on the
date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of
the Authority to exceed any constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the New Hope Economic
Development Authority, by its Commission Members, has caused this Note to be executed by the
manual signatures' of the President and the Executive Director of the Authority and has caused
this Note to be dated ., 200
NEW HOPE ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
27
C~.RTTFTCATF, OF RF, CtT.~TR ATTON
It is hereby certified that the foregoing Note, as originally issued on the day of
, 200__, was on said date registered in the name of the New Hope Economic
Development Authority, a public body corporate and politic and that, at the request of said
Registered Owner of this Note, the undersigned has this day registered this Note as to principal
and interest on the Note in the name of such Registered Owner, as indicated in the registration
blank below, on the books kept by the undersigned for such purposes.
Name of Date of Signature of
Registered Owner R e~qtration S.e, cr. el~
Armory Development II, LLC, ,200
a Minnesota limited liability
company
28
Anne× A
The undersigned hereby certify that, as a result of the calculation set forth in Section 3.8
of the Agreement, the original principal amount of the.Note is $
Dated: ., 20
NEW HOPE ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
29
SCHEDULE D
SITE PLAN
30
SCHEDULE E
SITE IMPROVEMENTS
· Acquisition of Redevelopment Property
· Building demolition
· Site clearance
· Environmental remediation, if necessary
· Sanitary sewer
· Water mains and stubs
· Storm sewers and storm water system elements, including ponding, both on and off site
· Private streets, including curb and gutter
· Landscaping and irrigation according to City-approved landscape plans
· Pedestrian improvements pursuant to City-approved site plans
· Grading and import/export of soil in accordance with City-approved grading plans
· Retaining walls and fences
31
SCHEDULE F
DESCRIPTION OF PRODUCTS AND MATERIALS
[Redeveloper to furnish]
32
SCHEDULE G
DECLARATION OF RESTRICTIVE COVENANTS
AND PROHIBITION AGAINST TAX EXEMPTION
This Declaration is made and executed as of the ~ day of ,200__
by Armory Development II, LLC, a Minnesota limited liability company ("Declarant").
Recitals
A. Declarant is fee owner of the premises located in the County of Hennepin, State of
Minnesota described on Exhibit A attached hereto (the "Property").
B. The New Hope Economic Development Authority, a public body corporate and
politic (the "Authority") has entered into a Contract for Private Redevelopment dated Aril 26,
2004 with the Declarant (the "Redevelopment Agreement"). The Redevelopment Agreement
provides for certain assistance, financial and otherwise, to be provided by the Authority in
connection with the construction oftownhomes by the Declarant on the Property.
NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself and its
successors and assigns, does hereby declare that the Property shall be owned, used, occupied,
sold and conveyed subject to the following covenants and restrictions:
1. No part of the Property shall become tax exempt from the levy of ad valorem
property taxes, or any statutorily authorized alternative, until December 31,2031.
2. The covenants and restriction~ herein contained shall mn with the title to the
Property and shall be binding upon all present and future owners and occupants of the Property;
provided, however, that the covenants and restrictions herein contained shall inure only to the
benefit of the Authority and may be released or waived in whole or in part at any time, and from
time to time, by the sole act of the Authority, and variances may be granted to the covenants and
restrictions herein contained by the sole act of the Authority. These covenants and restrictions
shall be enforceable only by the Authority, and only the Authority shall have the right to sue for
and obtain an injunction, prohibitive or mandatory, to prevent the breach of the covenants and
restrictions herein contained, or to enforce the performance or observance thereof.
3. The covenants and restrictions herein contained shall remain in effect until
December 31,2031 and thereafter shall be null and void.
4. If any one or more of the covenants or restrictions contained in this Declaration
are held to be invalid or enforceable, the same shall in no way affect any of the other provisions
of this Declaration, which shall remain in full force and effect.
33
ARMORY DEVELOPMENT II, LLC,
a Minnesota limited liability company
By
Douglas G. Hoskin
Its: Managing Member
STATE OF MINNESOTA )
) ss
COUNTY OF )
On this __ day of ., 2004, before me, a notary public within
and for County, personally appeared Douglas G. Hoskin, to me personally known
and who by me duly sworn, did say that he is the Managing Member of Armory Development II,
LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on
behalf of said company.
Notary Public
34
E×hihit A
Legal Description for Declaration of Restrictive Covenants
and Prohibition Against Tax Exemption
[to be added]
35
SCHEDULE H
FINAL SOURCES AND USES SCHEDULE
RF:VFNI IF:.~
1 Gross Sales Proceeds .................................................. $
2 TOTAL SOURCES .................................................... $
Land Costs:
Land and Building Acquisition:
3 Acquisition .................................................................
4 Lease Buyout .............................................................
Site Preparation:
5 Geotechnical ..............................................................
6 Grading ......................................................................
7 Engineering ...............................................................
8 Survey ........................................................................
9 Demolition ..................................................................
I0 Environmental Testing - Phase 2 ................................
Public Improvements:
11 Water and Sanitary Sewer .........................................
12 Staking and Layout ....................................................
13 Irrigation .....................................................................
14 Landscaping ..............................................................
15 Lighting ......................................................................
16 Site Utilities ................................................................
17 Fencing ......................................................................
Streets and Sidewalks:
18 Paving ........................................................................
19 Sidewalk Improvements .............................................
20 Total Land Costs .................................................. $
21 Construction Costs .........................................................
Soft Costs:
22 Soft Costs ......................................................................
23 Taxes .............................................................................
24 Finance Fees ..................... ; ..........................................
25 Developer Fee (not to exceed 5% of lines 20+21) ........
26
27 TOTAL USES (lines 20+21+26) ............................... $~
Less:
28 Authority Grant .......................................................
29 Limited Tax Increment Revenue Note ....................
30 Metropolitan Council and Other Grants ..................
31
32 Net Development Costs (line 27 - line 31) ...............
33 PROFIT (line 2 - line 32) ............................................
34 PROFIT % (line 33 + line 2) (may not exceed 15%) .. %