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IP #844PROJECT NO. 844 Holiday StationStore EDA Item 4 5/27/08 Resolution approving BCD Holdings, LLC/Holiday Stationstore loan documents for the redevelopment of 7180 42nd Avenue North (improvement project no. 844) Postponed until June 9, 2008 (revise loan documents to identify the debt the city will subordinate; eliminate language relating to mortgage) EDA Item 4 7/28/08 Resolution approving BCD Holdings, LLC/Holiday Station loan documents for the redevelopment of 7180 42nd Avenue North (improvement project no. 844). Postpone until 8/11/08. (to address language regarding subordination language in loan documents) EDA Res. 08-12 10/13/08 Resolution Approving Low Interest Loan Request Of Bcd Holdings, Llc (Improvement Project No. 844)." Res. 08-157 11/10/08 Resolution accepting petition for public improvement and assessment agreement and ordering project, 7180 42nd Avenue North (storm sewer improvement project no. 844 COUNCIL '� T Y Request for Action Originating Department Approved for Agenda Agenda Section Development Community Development January 14, 2008 and Planning Item No. By: Curtis Jacobsen, CD S ecialist By: 8.2 Discuss request for financial assistance for the development of a Holiday Station Store and Car Wash at 7180 42nd Avenue North, Mph Durand applicant. Requested Action Staff requests the Council discuss and provide direction on a request for financial assistance as part of the redevelopment of the property at 7180 42nd Avenue North, site of the G.I Joe surplus store. The business owners requesting assistance will be present at the meeting. Policy/Past Practice It is the policy of the city to consider the merits of providing assistance for redevelopment purposes on a case by case basis as projects are brought forward. Background As the City Manager has informed the Council, staff has been communicating with Mr. Durand for the last four months regarding the potential redevelopment of the Lasky property. Mr. Durand and his family currently operate two other Holiday StationStores and Car Washes in the metro area, Lakeville and Mounds View. They would like to redevelop this site into a modern Holiday StationStore and Car Wash. This site is underutilized currently and offers some significant challenges to a redeveloper due to site grades, which slope off to the north. The petitioner is requesting $225,000 in tax increment assistance (TIF) from the city toward the overall project development cost of $2,950,000.00. The city has offered TIF assistance once previously (1996) for a different redevelopment proposal for the site. Per the attached narrative the developer proposes to build a high quality gas/convenience store/car wash facility. This project would have a projected $2.95 million development cost and create and anticipated 27 'obs, seven full-time and 20 art -time. In the gas portion of the operation they would propose to have eight Motion by _�_ J Second by ALI.& To: / �oLdn I: \ RFA\ PLANNING\ PLANNING\ Q - Discuss Durand TIF request 1-14-08.doc Request for Action Page 2 January 14, 2008 filling stations with a total of 16 pumps, and carry a total of five grades of fuel including E85. The convenience store is proposed to be constructed of brick, block and glass and be approximately 4,500 square feet. The car wash would be a tunnel design and be at least 90 foot in length using soft cloth technology. The developer suggests that the "but for" test in tax increment financing can be met due to the site topography and soils corrections necessary for development. The developer has specifically requested $225,000 in city assistance for this project and they state this assistance is necessary for the project to proceed. Funding The funding for this TIP request could be structured as a'pay-as-you-go', whereby the developer fronts the money for the development and only gets reimbursed based on payment of the projects property taxes. This method does not require the use of any city resources or bonding capacity. While staff is certainly supportive of some type of redevelopment on this site, we are unaware if the Council is supportive of financial assistance for this development. To date, the city's redevelopment financial consultant has not been involved with this request. If the Council indicates and interest in assisting the project, the next prudent step would be to examine the project more closely to determine if city financial assistance is warranted and at what level of funding. Attachment(s) Durand memo (12-4-07) Durand memo (12-28-07) Site concept MEMORANDUM Date: December 4, 2007 To: Mr. Kirk McDonald Director of Community Development City Of brew Hope MN. Fr: Robert Durand — President RCD Properties, LLC aka New Hope Holiday Convenience Services 13025 44 Avenue North, Plymouth MN. 55442 Re: TIF Application associated with the development of the Lasky property located at 7180 40t` Avenue New Hope, MN Holiday Convenience Services — New Hope ("Holiday Services") wishes to develop the property currently known as the Lasky property into a high quality gas/convenient store/car wash facility. The property is currently controlled under contract by RCD Properties, LLC ("Developer "). The purpose of this memorandum is to outline the scope of the project being undertaken by the Developer and to make formal application for TIF required for the project to successfully proceed. I) THE DEVELOPERS --- consist of a team of Robert Durand, Charles Durand and Dan Young. The Developers currently own and operate two successful Holiday convenience stores in the Twin Cites area (Moundsview and Lakeville) and continue to expand its operations in the greater metro area. Holiday StationStores is a recognized leader in the convenience store industry with 400 corporately owned and franchise stores Iocated throughout 12 states in the northern tier region of the United States: Minnesota, Wisconsin, Michigan, Iowa, North Dakota, South Dakota, Nebraska, Montana, Wyoming, Idaho, Washington also in Alaska. Holiday StationStores is headquartered in Bloomington, Minnesota. They have been committed to providing customers with high quality gasoline products along with an unusually wide selection of prepared food, groceries and general merchandise items..... aimed at satisfying the everyday needs of our convenience store customers. II) THE BUILIDING SITE --- located in New Hope at the corner of Highway 42 and Nevada Avenue, is approximately 1.5 acres in size and has great potential for a high quality, well managed convenience store operation. The land is currently zoned appropriately for gas, convenience and car wash activity. The size and Iayout of the site allows for safe, efficient and high quality customer service. III) BUILDING AND SITE DEVELOPMENT --- is scheduled to begin in the spring of 2008 and will be conclude by mid summer 2008. The first task in site development will be to undertake land correction to make it suitable for gas, convenience and car wash activity. Currently, it appears that 40% to 60% of the land surface will require some type of correction. We believe this area of the pro'ect will uahfvforTIF. The petroleum portion of the site will have approximately 8 fuel filling statioris with a total of 16 pumps. Five grades of petroleum will be made available --- Regular, Premium, Supra, E 85 and Diesel. Currently, we believe that the New Hope area is underserved with E 85, a renewable petroleum. The convenience store will be approximatgly 4,500 SQ FT and will be located behind the pumps and incorporate the latest innovations Holiday Corporate has to offer. Construction material will be of the highest grade brick, block and glass. It will also incorporate "state of the art" interior design, layout and equipment. The carwash will be located on the east side of the property depending on site corrections. The car wash will be housed in a 90 to 110 foot tunnel and use "soft cloth" brushes and high pressure water spray for maximum safe and efficient cleaning. The wash will also have a full time attendant to ensure safe entry and maximum customer service. Adjacent to the car wash area will be 5 high powered vacuums which we intend to offer our car wash customers free of charge. TV) THE COST OF THE PROJECT --- will be approximately $2.95 MM and be made up of approximately: Land: $ 850,000 Building, Equipment and Carwash: $ 2,100,000 -------------- Total $ 2,95'0,000 V) NEW EINIPLOY"MWNT OPPORTUNITIES --- will be made up of the following, including benefits: Position Number Total Annual salary Manager 1 $45,000 Assistant Manager 3 $25,000 Assistant Manager — Car wash 1 $20000 Full Time Associates 2 $18,000 Part Time Associates 20 $7.50 to 9.001 hour Total 27 $240,000 VI) FINANCIAL ASSISTANCE (TIF) ---- will be required to allow the overall project to succeed. The demographics of the business area reflect: 1) A maturing population 2) Moderate traffic flow. 3) Average house hold income. 4) A general need for new development or redevelopment in the area. THE ACHEVE.MENT OF ECONOMIC SUCCESS OF THIS PROJECT WILL BE WILL REQURE TIF SUPPORT. Currently, we believe that the attached land improvement bids quality for TIF support. See attached Hageberg Excavating Inc. and Sandness Construction, Inc bids totaling $481,000. VII) IN SUMMERY --- we see the following benefits of our development for the city of New Hope: 1) Continued revitalization within the city of New Hope. 2) Provides a vital service in partnership with the leader in gasoline, carwash and convenience store business. 3) Creates new full and part time job positions within the city. 4) Adds $2.5 to $3.0 million dollars of increased tax base. 5) Expanding development with a high quality companies such as Holiday will promote additional developments within the New Hope business corridor. 6) Within access of 1100 customers per day, the entire New Hope business communities will benefit from increased business activity. On behalf of our Development team, we wish to thank you for your consideration to this exciting project. We look forward to following up with you at your earliest convenience. Please feel free to contact Bob Durand with any questions. Bob can be reached at 612- 226-5465. Thank You. MEMORANDUM Date: December 28, 2007 To: Mr. Kirk McDonald Director of Community Development City Of New Hope MN. Fr: Chuck Durand RCD Properties, LLC aka New Hope Holiday Convenience Services 13025 44th Avenue North, Plymouth MN. 55442 Re: Supplement to the TIF Application associated with the development of the Lasky property located at 7180 40th Avenue New Hope, MN Please allow this memo to supplement our original requested for city assistance dated December 4, 2007. After much discussion and review, we believe that this project meets most, if not all of the city's overall criteria of the Policy for Business Subsidies adopted in 2000. Specifically, we believe that this project will increase jobs and increase the tax base. Furthermore, we have received a favorable response to receive least 50% of the necessary funds from a private bank, the owners have a long-term commitment to the project and the project will continue to increase the viability of the community. First, our new employment opportunities will immediately add an additional 27 new jobs, many whom will hopefully be New Hope residents. Our goal would be to have as many local qualified residents as possible, but not less than 50%. Our success will be based largely upon high quality and committed customer service personnel providing quality products and services at a fair and reasonable price. Furthermore, we are committed to maintaining a friendly, fair and creative work environment which respects diversity, ideas and hard work. This has been the cornerstone of the success we have achieved at the Holiday StationStores in Moundsview and Lakeville and desire to continue this focus as we expand into New Hope. Second, we believe that this project will vastly increase the tax base by increasing the overall value of the property. The current 2007 taxable market value is $590,000. in reviewing similar convenience store sites in and the surrounding area, we find that the taxable market is varies from $675,000 to $910,000. This is a difference varying from 13.6% to a 36.2% increase in the taxable market value. See attached tax records. Third, we believe that this property layout and topography is unique and "but for" such city assistance, it would make a project of this magnitude not financially feasible. As you are aware, the property slopes severally from the front (along 42"1 Avenue to the back). As the attached preliminary drawing shows, the main building sits to the back of the property, thus requiring numerous amounts of the backfill and the retaining wall along the north line of the property. Also, due to this serve slope there is a need for site reclamation related to historical storm water issues, ponding will be needed to adequately address that issue. Lastly, at a project cost of approximately $2.95MM, we as operators and owners of the store are committed to the long terms viability of the project and to continue with the cities vision of the development of the 42nd street corridor. Moreover, as franchisees and partners with the state's premier leaders in the convenience store industry, we believe that as a Holiday StationStore the community will support our business as long as we continue to provide a wide range of services at a first rate and clean facility. Therefore, we are requesting $225,000 of city assistance in the form of TIF based upon these submissions and the costs estimates to make the land corrections necessary to proceed with the project. Specifically: Hagberg Excavating estimate: $147,000 Sandness Construction Ponding $55,000 Survey and soil tests $23,000 Total $225,000 We wish to thank you for your consideration to this exciting project. We look forward to following up with you at your earliest convenience. Please feel free to contact Chuck Durand with any questions. Chuck can be reached at 612-803-0080. Thank You. IIAGBERG EXCAVATING INC 34497 Nacre st nw Princton MN 55371 Name I Address f RALPH DURAND Estimate Date Estimate # 10/19/2007 26 Signature Phone it Fax # 763-286-4611 763-552-8112 Terms PROJECT JOB 1% 10 Net 30 SITE CORRECTION/DE... Description Qty Rate Total Demo EXISTING BUILDINGi BID DOES NOT INCLUDE 16,400.00 16,400.00 ABATEMENT MLL PARKING IAT STOCK PILE ON SITE 11,000.00 11,000.00 CURB AND SIDE WALKS REMOVAL 1,680.00 1,680.00 IMPORT FILL AND PACK 56,056.00 56,056.00 SILT FENCE 1000 FT 2,500.00 2,500.00 EROSION CONTROL 1,100.00 1,100-00 PERMITS /DEMG,SEWER&WATER PERMITS 663.50 663.50 RETAINING WALL 3000 SQ FT 58,000-00 58,000.00 WE LOOK FORWARD TO WORKING WITH YOU. Total $147,399.50 Signature Phone it Fax # 763-286-4611 763-552-8112 );' '19/2007- 12 55 UAX #ax@iourrizirr.Cra; inbcLunic fax 00Z/J1i; 12.j'2.07 3`3:62 I T 612,6.11&'444 LAF OFFICES 01)02 �•e� c CJs GoMgUN � (1.61-2) "2$-8665 'Tr) ?p�; i �a(?) . 18-669 i4C3i ember 19, 2400 Proposal Durand Holiday Stare 4224 and Nevada Avenue Naris. New Mope, MN RE Un'tl' Pricing SAC charge 5 a3,OW(:.c3r= PGndin$ 55, 0: oxio., Irrigation kystem 9.000-00 Curb and sidswalk 47.00O.00 Survey 9,000.00 Sail Tests 12,000.00 ula&'tov 120,000.00 site lighting 9,00.00 Sewerlwater hookup 25,000.00 ufiding Permit 5,000.00 2626 j.``t k'*`tmue Soud} o SrliS[r:4}��?C?i3`. '1 6rL"lE'tiUiy 5�406-128 Ne L F- Lp rnk CARVIA39 I V-1 PROPOSED as SITE PIAN STATIONSTORE #Xn OPTION 7 1 NEW HOPE, MN A&ow4nA,,Ary 0-muiziA 0 BOUNDARY, LOCATION, TOPOORAPmc a UTILITY SURVEY FOR: ]LASKY COMPANY REAJL ESTATE �..r."A, x ..f.w`..•ah....».' .•4w Y..r'a.��w. .ru�.wx' •.••• a .. ^, .dun w'wxw. ..rMu.. y�M.�6.�r.. i!"'tleJ� Wa'"Yfl•'� LY ...f..W. ., .er .x.r r 4ra.sNUMur.a�..� —_ P.wr. •'••"' u w Vw'�wrf � ��'. r �—J-...e4a�i �.•}—•-rrYaiif-rlr..Y•wrw� O w''rx�.u—s••�..µ� I -.•sir I.xi•". Iw w1 .Mr ww� ,r_�y. w! u.. • .r- _ ne Ne. rt... n..xwi a r. wi•'••.•... i.M 1w ... ,W: u•'y.x...�r^ii x.—•�rww.N r.. 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' ro Your Proposed Property Tax LASKY CO REAL ESTATE 2506 MONTEREY AVE S ST LOUIS PARK MN 55416-3956 2006 TAXABLE MARKET VALUE FOR 2007 TAXES: 2007 TAXABLE MARKET VALUE FOR 2008 TAXES: Your Proposed Property Tax for 2008 -- This is Not a Bill - Do Not Pay -- Property 10 NO: 17-118-21 21 0031 7180 42ND AVE N $400,000.00 COM -PREFERRED J $590,000.00 COM -PREFERRED / Page 1 of 1 The taxable market values for property tax payable in 2008 was sent to you in the spring of 2007. The period to discuss possible changes has passed and changes can no longer be made to your property valuation. It is included here for your information only. (1) (2) Actual 2007 Proposed 2008 Pronertv Tax Pronertv Tax TOTAL excluding special assessments $12,680.29 $18,779.25 Addresses for Correspondence Hennepin County A2400 Government Center Minneapolis MN 55487 612-348-3011 City of NEW HOPE New Hope City Hail 4401 Xylon Ave N New Hope MN 55428 763-531-5100 STATE GENERAL TAX School District 281 Voter Approved Levy: Other Local Levies: School District Total Educational Service Center 4148 Winnetka Ave N New Hope MN 55427 763-504-8000 Metropolitan Council 390 Robert Street North St Paul MN 55101 651-602-1374 $211.48 $76.07 $223.66 $80.76 $3,482.32 $5,083.00 $493.84 $699.30 $230.02 $160.28 -- $723.86 $859.58 Your school district was scheduled to hold a referendum at the November general election. If this referendum was approved by voters, the school district's property tax for 2008 may be higher than the proposed amount on this notice. $14.12 $4.90 Percent of Change 48.1% Budget Hearing Dates Times and Locations Dec 6, 2007 5:30 PM Commissioner Board Room A2400 Government Center Minneapolis MN 55487 Dec 3, 2007 7:00 PM Council Chambers New Hope City Hall 4401 Xylon Ave N New Hope MN 55428 No meeting required Dec 4, 2007 7:00 PM Educational Service Center 4148 Winnetka Ave N New Hope MN 55427 No meeting required Other Special Taxing Dist: $19.96 $7.99 No meeting required Fiscal Disparity Tax: $2,756.36 $4,215.62 No meeting required Tax increment Tax: $5,185.69 $8,357.94 No meeting required Solid Waste Mgmt Fee: $62.84 $93.39 Not applicable Check out the rnnvenient oavment notions available to oav NEXT YEAR"s property taxes at http://www.hennepin.us or call 612 348-3011 Click for detailed information on this property -- This is Not a Sill - Do Not Pay — http://tivw-kvl6.co.hernepin.mn.us/pinsltruthintaxation jsp?pid=1711821210031 12/10/2007 Your Proposed Property Tax M�r1i -n- SPEEDWAY i SPEEDWAY SUPERAMERICA LLC C/O PROPERTY TAX RECORDS 539 MAIN ST S FINDLAY OH 45840-3229 Your Proposed Property Tax for 2008 -- This is Not a Bill - Do Not Pay -- Property ID NO: 17-118-2133 0006 7818 36TH AVE N 2006 TAXABLE MARKET VALUE FOR 2007 TAXES: $875,090.00 COM -PREFERRED / 2007 TAXABLE MARKET VALUE FOR 2008 TAXES: $900,000.00 COM -PREFERRED / Page t of 1 The taxable market values for property tax payable In 2008 was sent to you in the spring of 2007. The period to discuss possible changes has passed and changes can no longer be made to your property valuation_ It is included here for your information only. TOTAL excluding special assessments Addresses for Correspondence Hennepin County A2400 Government Center Minneapolis MN 55487 612-348-3011 City of CRYSTAL Crystal City Hail 4141 Douglas Dr N Crystal MN 55422 763-531-1000 STATE GENERAL TAX School District 281 Voter Approved Levy: Other Local Levies: School District Total Educational Service Center 4148 Winnetka Ave N New Hope MN 55427 763-504-8000 Actual 2407 Proposed 2008 Propertv Tax Pra a Tax $28,734.12 $28,948.74 $4,683.77 $4,715.47 $4,331.67 $4,439.02 $8,045.36 $7,935.00 $1,174.78 $1,158.46 $3.444.07 $3.303.79 $4,618.85 $4,462.25 Your school district was scheduled to hold a referendum at the November general election. If this referendum was approved by voters, the school district's property tax for 2008 may be higher than the proposed amount on this notice. Metropolitan Council $312.90 $303.94 390 Robert Street North St Paul MN 55101 651-602-1374 Other Special Taxing Dist: $585.78 $725.00 Fiscal Disparity Tax: $6,018.33 $6,225.59 Tax Increment Tax: Solid Waste Mgmt Fee: $137.46 $142.47 r'hprie niit Fhp rnn vanipnt nav mpnt nntinn< availah lP to nav NEXT Percent of Change .7% Budget Hearing Dates Times and Locations Dec 6, 2007 5:30 PM Commissioner Board Room A2400 Government Center Minneapolis MN 55487 Dec 3, 2007 7:40 PM Council Chambers Crystal City Hall 4141 Douglas Dr N Crystal MN 55422 No meeting required Dec 4, 2007 7:00 PM Educational Service Center 4148 Winnetka Ave N New Hope MN 55427 No meeting required No meeting required No meeting required No meeting required Not applicable YEAR's oronerty taxes at http_//www.hennepin.us or tali 612 348-3011 Click for detailed information an this property -- This is Not a Bill - Do Not Pay -- http://wwwl6.co.hennepin.Inn.us/pins/truthintaxation.jsp?pid=1711821330006 12/11/2007 Ycal,ru' Proposed Property Tax b#�rinepi� M G ASTLEFORD CO C/O PROPERTY TAX DEPT 539 MAIN ST S FINDLAY OH 45640-3229 Your Proposed Property Tax for 2008 -- This is Not a 8111 - do Not Pay -- Property ID NO: 01-118-22 42 0009 5750 NATHAN LA N 2006 TAXABLE MARKET VALUE FOR 2007 TAXES: $770,000.00 COM -NON / PREFERRED 2o07 TAXABLE MARKET VALUE FOR 2008 TAXES: $886,000.00 COM -NON / PREFERRED The taxable market values for property tax payable in 2008 was sent to you in the spring of 2007. The period to discuss possible changes has passed and changes can no longer be made to your property valuation. It is included here for your information only. TOTAL excluding special assessments Addresses for Correspondence Hennepin County A2400 Government Center Minneapolis MN 55487 612-348-3011 City of PLYMOUTH City Hall 3400 Plymouth Blvd Plymouth MN 55447 763-509-5000 STATE GENERAL TAX School District 279 Voter Approved Levy. Other Local Levies: School District Total Educational Service Center 11200 93rd Ave N Maple Grove MN 55369 763-391-7000 Metropolitan Council 390 Robert Street North St Paul MN 55101 651-602-1374 Other Special Taxing Dist: Fiscal Disparity Tax: Tax Increment Tax: Solid Waste Mgmt Fee: (1) (2) Actual 2007 Proposed 2008 Property Tax Property Tax $24,763.08 $76,772.97 $3,966.11 $4,695.22 $2,365.67 $2,765.52 $7,396.92 $8,151.20 $2,368.19 $1,493.58 $1,309.50 $1,851.08 $3,677.69 $3,344.66 Your school district was scheduled to hold a referendum at the November general election. If this referendum was approved by voters, the school district's property tax for 2008 may be higher than the proposed amount on this notice. $264.96 $302.64 $420.53 $544.66 $6,550.24 $6,828.82 $L20.96 $140.25 Percent of Change 0.1% Budget Hearing Oates Times and Locations Dee 6, 2007 5:30 PM Commissioner Board Room A2400 Government Center Minneapolis MN 55487 Dec 3, 2007 7:00 PM City Hall 3400 Plymouth Blvd Plymouth MN 55447 No meeting required Dec 4, 2007 5:30 PM Educational Service Center L1200 93rd Ave N Maple Grove MN 55369 No meeting required No meeting required No meeting required No meeting required Not applicable "M -K EJUL Lnc (;V{IVC411MM Pd YI PC[IL Vi]OVOIIGLJIC LV NdY 1-1 -- � }—P—T Banca a� http://www.hennepin.us or call 612 348-3011 Click for detailed information on this property -- This is Not a Bill - Do Not Pay -- Page 1 of 1 http://wwwi6.co.hennepi,n.mn.us/pins/truthintaxation.jsp?pid=Ot 11822420009 .12/ l 1/2007 Ybur Proposed Property Tax SPEEDWAY SUPERAMERICA LLC C/O PROPERTY TAX RECORDS 539 MAIN ST S FINDLAY OH 45840-3229 Your Proposed Property Tax for 2008 -- This is Not a Bill - Do Not Pay -- Property ID NO: 05-118-21 210035 6144 WEST BROADWAY 2006 TAXABLE MARKET VAWE FOR 2007 TAXES: $542,000.00 COM -PREFERRED 1 2007 TAXABLE MARKET VALUE FOR 2008 TAXES: $675,000.00 COM -PREFERRED / Page 1 of 1 The taxable market values far property tax payable in 2008 was sent to you in the spring of 2007. The period to discuss possible changes has passed and changes can no longer be made to your property valuation. It is included here for your information only. 00 (2) Actual 2007 Proposed 2008 TOTAL excluding special assessments $17,624.14 $21,659.56 Addresses for Correspondence Hennepin County A2400 Government Center Minneapolis MN 55487 612-348-3011 City of NEW HOPE New Hope City Hall 4401 Xylon Ave N New Hope MN 55428 763-531-5100 STATE GENERAL TAX School District 281 Voter Approved Levy: Other Local Levies: School District Total Educational Service Center 4148 Winnetka Ave N New Hope MN 55427 763-504-8000 $2,750.68 $3,395.31 $2,909.20 $3,604.59 $4,846.42 $5,865.00 $724.31 $666.02 $2,028.46 $2,383.86 $2,752.77 $3,249.88 Your school district was scheduled to hold a referendum at the November general election. If this referendum was approved by voters, the school district's property tax for Z008 may be higher than the proposed amount on this notice. Metropolitan COuncii $183.76 $218.85 390 Robert Street North St Paui MN 55101 651-602-1374 Other Special Taxing Dist: $259.26 $355.08 Fiscal Disparity Tax_ $3,836.91 $4,864.00 Tax Increment Tax: Solid Waste Mgmt Fee: $85.14 $106.85 r -hone nut, the rnnvaniPnt navmpnt nntinne availahle to nav N Percent of Change 22.9% Budget Hearing Dates Times and Locations Dec 6, 2007 5:30 PM Commissioner Board Room A2400 Government Center Minneapolis MN 55487 Dec 3, 2007 7:40 PM Council Chambers New Hope City Hall 4401 Xylnn Ave N New Hope MN 55428 No meeting required Dec 4, 2007 7.00 PM Educational Service Center 4148 Winnetka Ave N New Hope MN 55427 No meeting required No meeting required No meeting required No meeting required Not applicable YEAR ' s nronertv taxes at http://www.hennepin.us or call 612 348-301 t Click for detailed information on this property -- This is Not a Bill - 00 Not Pay -- http://wwwI6.co-hennepin.mn.us/pins/truthintaxation jsp?pid=0511821210035 12/11/2007 Your Proposed Property Tax t r�r�ep�rr H HOLIDAY STATIONSTORES INC 4567 BOTH ST W #300 2 BLOOMINGTON MN 55437 Your Proposed Property Tax for 2008 -- This is Not a Bill - Do Not Pay -- Property ID NO: 04-118-21 34 0062 5410 LAKELAND AVE N 2006 TAXABLE MARKET VALUE FOR 2007 TAXES: $625,000.00 COM -PREFERRED / 2007 TAXABLE MARKET VALUE FOR 2008 TAXES: $650,000.00 COM -PREFERRED / Page IofI The taxable market values for property tax payable in 2008 was sent to you in the spring of 2007. -The period to discuss possible changes has passed and changes can no longer be made to your property valuation. It is included here for your information only. TOTAL. excluding special assessments Addresses for Correspondence Hennepin County A2400 Government Center Minneapolis MN 55487 612-348-3011 City of CRYSTAL Crystal City Hall 4141 Douglas Dr N Crystal MN 55422 763-531-1000 i1? Actual 2007 Property Tax (2) Proposed 2006 Property Tax — -- Percent of Change $20,L66.26 $20,505.63 1.7% Voter Approved Levy: $837.78 $835.53 Budget Hearing hates Other Local Levies: $2,418.30 $2,348.30 Times and Locations $3,285.63 $3,348.85 Dec 6, 2007 5:30 PM Educational Service Center Your school district was Commissioner Board Room 4148 Winnetka Ave N scheduled to hold a A2400 Government Center New Hope MN 55427 referendum at the November Minneapolis MN 55487 $3,040.02 $3,153.76 Dec 3, 2007 7:00 PM referendum was approved by Council Chambers voters, the school district's Crystal City Hall property tax for 2008 may be 4141 Douglas Or N higher than the proposed Crystal MN 55422 STATE GENERAL TAX $5,643.76 $5,635.00 No meeting required School District 281 Tax Increment Tax: Dec 4, 2007 7-00 PM Voter Approved Levy: $837.78 $835.53 Educational Service Center Other Local Levies: $2,418.30 $2,348.30 4148 Winnetka Ave N School District Total $3,256.08 $3,183.83 New Hope MN 55427 Educational Service Center Your school district was 4148 Winnetka Ave N scheduled to hold a New Hope MN 55427 referendum at the November 763-504-8000 general election. If this referendum was approved by voters, the school district's property tax for 2008 may be higher than the proposed amount on this notice. Metropolitan Council $219.50 $215.85 No meeting required 390 Robert Street North St Paul MN 55101 651-602-1374 Other Special Taxing Dist: $401.30 $444.90 No meeting required Fiscal Disparity Tax: $4,221.79 $4,420.55 No meeting required Tax Increment Tax: No meeting required Solid Waste Mgmt Fee: $98.18 $102.89 Not applicable Cherk nut the rnnvpn1p t- n n...., p.,r.,.,ti H�1,le w_ ..,.. NCVT VaAft,_ http://www.henriepin.us or tali 612 348 -3011~ - Click for detailed information on this property --;his is Not a Bill - Do Not Pay — http://wwwl6.co.herinepin.mn.Ils/pins/truthintaxation jsp?pid=041 I821340062 12/11/2007 Yp4r Proposed Property Tax HOLIDAY STATIONSTORES INC 4567 BOTH ST W #300 3 BLOOMINGTON MN 55437 Page i of I Your Proposed Property Tax for 2008 -- This is Not a Bill - Do Not l=ay -- Property ID NO: 04-118-21 34 0063 5410 LAKELAND AVE N 2006 TAXABLE MARKET VALUE FOR 2007 TAXES: $220,000.00 COM -NON / PREFERRED 2007 TAXABLE MARKET VALUE FOR 2008 TAXES: $260,000.00 COM -NON / PREFERRED The taxable market values for property tax payable in 2006 was sent to you in the spring of 2007- The period to discuss possible changes has passed and changes can no longer be made to your property valuation. It is included here for your Information only. (3) (2) Actual 2007 Proposed 2008 Percent of Change TOTAL excluding special assessments $7,527.64 $8,678.28 15.3% No meeting required Budget Nearing Dates Addresses for Correspondence Times and Locations Hennepin County $1,230.21 $!.,421.43 Dec 6, 2007 5:30 PM A2400 Government Center Commissioner Board Room Minneapolis MN 55487 A2400 Government Center 612-348-3011 Minneapolis MN 55487 City of CRYSTAL $1,136.53 $1,336.78 Dec 3, 2007 7:00 PM Crystal City Hall Council Chambers 4141 Douglas Dr N Crystal City Hall Crystal MN 55422 4141 Douglas Dr N 763-531-1000 Crystal MN 55422 STATE GENERAL 'TAX $2,113.40 $2,392.00 No meeting required School District 281 Dec 4, 2007 7:00 PM Voter Approved Levy: $296.54 $335.84 Educational Service Center Other Local Levies: $902.56 $993.79 4148 Wlnnetka Ave N School District Total $1,199.10 $1,329.63 New Hope MN 55427 Educational Service Center Your school district was 4148 Winnetka Ave N scheduled to hold a New Hope MN 55427 referendum at the November 763-504-8000 general election. If this referendum was approved by voters, the school district's property tax for 2008 may be higher than the proposed amount on this notice. Metropolitan Council $82.18 $91.62 No meeting required 390 Robert Street North St Paul MN 55101 651-602-1374 Other Special Taxing Dist: $150.28 $188.85 No meeting required Fiscal Disparity Tax: $1,581-36 $1,876.82 No meeting required Tax Increment Tax: No meeting required Solid Waste Mgmt Fee: $34.56 $41.15 Not applicable -p—.w PVO,IOL,G — yoy .—I .— a P-1—ly La Nub aL tittp://www.hennepin.us or call 612 348-3011 Click for detailed information on this property -- This is Not a Bill - Do Not Pay -- http:/Iwww16.co.hennepin.mn.us/pins/truthintaxation.jsp?pid=041 1821340063 12/11/2007 Page 1 of 2 Leone Valerie From: McDonald Kirk Sent: Monday, January 14, 2008 11:31 AM To: Jacobsen Curtis; Leone Valerie; Weiss Eric; Sylvester Pam Cc: Beck Jerry; Johnson Guy; French Shari; Linnihan Julie; Link Gary; Axel Roger Subject: FW: "Downtown" New Hope Importance: High FYI, in support of new development From: Opem Martin V~6 ly Sent: Monday, January 14, 2008 11:13 AM To: McDonald Kirk Subject: FW: "Downtown" New Hope Importance: High Mayor Opem From: Mike Terres [mailto:mterres@comcastlom; Sent: Sat 1/12/2008 4:05 PM To: 'Mike Terres'; 'Scott Croonquist; 'Anthonyel; 'W RREN KAREN SAAP; 'Jen Berg; 'JUDY ALEXANDER'; 'Cheryl Zbaracki; 'Jane Hagstrom'; 'Steve Sommer'; 'alvor n'; bob@allstarsportsinc.com; 'Bob & Kathy Johnson-homel'; bkunza@comcast.net; 'Ackerman, Brent (BLMnn line; 'John and Jyl McIntosh'; `Mark & Leslie Stokka'; 'Nancy Weffler; 'Scott Dornfeld'; 'Shirley/Dave Lingone 95@hotmaii.com; Bob &Kathy Johnson-homel; Dave Baumann; Debra Wessel; Don Babineau; Doug Polacek; P Jacek; Gina Johnson; Gina Johnson (work); Greg Erickson; GREGG LURIE; Jeff Harper; Jerry Wollak; jfkrollin27@.net; jrsiede@comcast.net; JUDY ALEXANDER; Katie Wahl; Kim & Dave McDonough; Larry Gonrowski; Igonrowsom; LISA Babineau; Lisa Rogers; lisababineau75@yahoo.com; Mark & Leslie Stokka; Mary Arnold; Mary Anderson;g@cuningham.com; Nancy Weffler; Patsy Green; sbaggenstoss@arrow.com; Scott Croonquist; James; Stephanie gonrowski; Steve Sommer; Thiede, Dana; Todd Weisjahn; Cara Croonquist; Peter Zbaracki; JeClineCc: mark norman; Carla Durand; Stauner Danmmer Steve; Nolte Karen; Hoffe Andy; Opem Martin Subject: "Downtown" New Hope New Hope Neighbors, Our New Hope officials are once agai discussing development in the "downtown" area at 42nd and Winnetka. In the 15 years Pam and l havelive here this is either the third or fourth time this discussion has coma up and we've seen nothing happen. What e have seen is the development of a lot of low income housing and a number of thrift store operations o en. We've also watched Golden Valley discuss the opportunity on Winnetka north of Hwy 55 and wqFve seen that development happen and flourish. Crystal has redeveloped the West Broadway and Bass Lake fRoad area and business seems to be going well there as well. My understanding is that Targ t Corporation and Ryan Companies are proposing a Target or SuperTarget on the District 281 property (SE uadrant), Lifetime is proposing an expanded facility where the unique Thrift Store is located and Holiday ompanies is proposing a convenience station/store with a car wash on 42nd where the GI Joe store is located. These are three significant opportunities for New Hope to finally start a significant enhancement io this community. Our feeling is that we as residents need to get out and show our leaders that we're interested in seeing our city move forward rather than watch everyone else do it. 1/14/2008 Page 2 of 2 There are a couple of upcoming council meetings where I am told there will be discussion of at least two of these projects. Presence at these meetings by New Hope residents would be a creat way to show our interest in the city and the fate of its future. This Monday, January 14th the council will be hearing from the group proposing the Holiday Stationlsiore and on Monday, January 28th the council will be hearing from folks representing the Target project. Both of these meetings start at 7 PM. I am planning to attend and I hope to see many of you there too. Anoiher great way to support the re -development oppertunities would be to write to city council members and the mayor expressing your opinion. In case any of you are so motivated I'll provide email addresses for each as follows: Martin Opem, Mayor Andy HofFe, Council Member Karen Nolte, Council Member Steve Sommer, Council Member Daniel Stauner, Council Member mopemOci.new- hope, mn.us ahoffe[@ci, new-hope.mn.us knottePci. new -hope. mn. us ssommerPci, new -hope. mn. us dstauner(@ci.new_h pe.mn.us Finally, forwarding this or something of your own to additional New Hope residents would also be a fantastic method of support. Thanks for your time. Mike Terres 1/14/2008 oet.ess • PartnFl$\%% January 10, 2008 City of New Hope Attn: Mayor Opem and City Council 4401 Xylon Avenue North New Hope, MN 55428 Dear Mayor Opem and City Council Members: Phone: (763) 717-4000 Fax: (763) 784-3462 Mr. Chuck Durand recently asked if I would be willing to provide you with a professional reference in regards to his proposed project within your community. In my opinion, Chuck Durand exemplifies what it means to be a first-class and respectable businessman. Mr. Durand constructed his Holiday Station Store and full car wash in 1998 on our main commercial corridor—County Highway 10. The business was constructed with the highest attention paid to design specifications and site amenities. When Mr. Durand constructed his facility, it had been many years since any new development had occurred on the corridor; however after his store opened, significant redevelopment followed such as Walgreens, Carmike's Wynnsong Cinema, Abbey Carpet, Mounds View Animal Hospital, Caribou Coffee, an Americinn fiotel, CVS Pharmacy, and other businesses. The latest development on our corridor is Totino's Italian Restaurant which should be open this spring. The Holiday Station Store has been a great corporate citizen for Mounds View. Mr. Durand is active in the day to day operations of the store and many times over the years I have stopped in and found him working in the store -and interacting with customers. He takes great pride in his business and it shows! This place of business has provided local jobs and positively impacts property values. It is clear through my interactions with other business owners in the community that that they too hold Mr. Durand in high regard. In summary, i would recommend you favorably consider any actions in Mr. Durand's regard, as his business is first-rate and I believe it would be an asset to any community. 1 invite you and your council members to come to Mounds View and see for yourself how this business contributes to our community. Feel free to contact me with any questions or concerns at my home phone at 763-780-8876 or on my cell at 612-310-3864. Sinceref , :j R4 Marty, Mayor City of Mounds View 2401 Highway 10 - Mounds View, MN 55112-1499 sornriK TM Website address: http://www.ci.mounds-view.mn.us Equal Opportunity Employer recycled peper L A A January 16, 2008 Mr. Chuck Durand 16255 Ipava Avenue Lakeville, MN 55044 RE: Redevelopment of 7180 42nd Avenue North Dear Mr. Durand: Congratulations, the Council felt there was merit to your proposal and has agreed to move this along to the next step. That next step will be the review of the project with the city's redevelopment fiscal advisor, Klass Monroe. As was discussed at the meeting, the proposed fee for the review is $2,000.00, which the Council is willing to share 50/50 with you the developer. Please submit a deposit check for $1,000.00 to my attention at the city at your earliest convenience. I will be setting up a meeting with the redevelopment fiscal advisor in the near future. Please give me a call if you have any questions. Sincerely, Curtis Jacobsen Community Development Specialist CITY OF NEw DOPE 4,401 Xylon Avenue North + New Hope, Minnesota 55428-4898 + www. ci.new-hope.mn.us City Hall: 763-531-5100 o Police (non -emergency): 763-531-5170 + Public Works: 763-592-6777 + TDD: 763-531-5109 City Hall Fax: 763-531-5136 + Police Fax: 763-531-5174 + Public Works Fax: 763-592-6776 COUNCIL.: Request for Action Originating Department Approved for Agenda Agenda Section Development Community Development February 11, 2008 and Planning Item No. By: Curtis Jacobsen, CDS ecialist By: Kirk McDonald, City Manager 8.1 Discuss request for financial assistance for the development of a Holiday Station Store and Car Wash at 7180 42nd Avenue North, Ralph Durand, applicant Requested Action Staff requests the Council discuss and provide direction regarding the request for financial assistance for the redevelopment of the property at 7180 42nd Avenue North, based on the TIF financial analysis provided by Krass Monroe, the city's redevelopment advisor. The developer requesting assistance will be present at the meeting as will a representative of Krass Monroe. Policy/Past Practice It is the policy of the city to consider the merits of providing assistance for redevelopment purposes on a case by case basis as projects are brought forward. Background The Council last discussed this matter on January 14, 2008, at which time the Council authorized staff to continue working with the developers to obtain preliminary financial analysis from Krass Monroe at a cost of up to $2,000.00 with that cost being split 50/50 with the developer. The developer would like to redevelop this site into a modern Holiday Station Store and Car Wash. This site is underutilized currently and offers some significant challenges to a redeveloper due to site grades, which slope off to the north. The petitioner is requesting $225,000 in tax increment assistance (TIF) from the city toward the overall project development cost of $2,950,000. The city had offered $100,000 in TIF assistance once previously (1996) for a different redevelopment proposal for the site. The city's redevelopment counsel has provided a memorandum discussing the parcels eligibility for inclusion in a TIF district and also an analysis of its eligibility for the use of tax abatement. The TIF analysis shows that Motion by Second by To: . 'AaA=L -k- 164 I:1 RFA1 PLANNING 1 PLANNING 1 Q - Discuss Durand TCF request 2-111-08. doc Request for Action Page 2 February 11, 2008 this parcel is currently included in an existing TIF district (85-2) and that district is set to terminate in three years. For this development to proceed with any significant assistance through TIF the parcel would have to be decertified from the existing district and a new TIF district created. Using all the assumptions in the Krass Monroe report; 25 year redevelopment district, $500,000 increase in parcel value, two percent in parcel value inflation going forward and the city capturing the 10 percent administrative fee it would appear that the parcel will generate approximately $155,291 in tax increment. For comparison purposes the $100,000 in TIF assistance offered in 1996 would currently be worth $138,000 based on inflation. The abatement analysis shows that as a funding mechanism for this purpose it does not generate very much funding. It also would be detrimental to the city in that it would actually reduce the amount of taxes the city would receive from this parcel of land. After careful review of the developers projected expenses, staff has concluded that generally only three items would be appropriate for the city to fund; existing building demolition ($16,400), importation of fill and its compaction ($56,056) and construction of the retaining wall ($58,000). These three items have a total estimated cost of $130,456. All other items proposed by the developer are truly no different than those faced by any other redeveloper in the city. Review of the city's business subsidy policy identifies that it funding is provided to this redevelopment proposal it would be exempt from classification as a business subsidy per the exemption criteria No. 17 in both the city's policy and state law which reads; "Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value" is exempt. Per the development counsels review, the BUT/FOR TEST for the creation of a redevelopment TIF district requires that two tests be met and based on the current information provided both of these tests are met, provided that any potential assistance given to the project does not exceed $140,030. (See complete report for detailed analysis of the BUT/FOR TEST.) The developer has submitted additional information on the merits of a new Holiday Station in town including the joining forces with Cub Foods to offer discount coupons for gas at Holiday Stations. Also included within the information are four contacts in other communities who are able to discuss the redevelopment trends around new Holidays. Funding Should the Council be supportive of the redevelopment of this parcel the funding for this redevelopment would be provided through the creation of a new TIF district through the EDA. Recommendation Staff is certainly supportive of some type of redevelopment on this site, and recommends that the Council discuss whether assistance will be offered to this project and establish a maximum amount of assistance that the Council feels is appropriate. Request for Action Page 3 Attachment(s) • Krass Monroe memo (2-5-08) • Site concept • Developer memo (2-6-08) • Developer memo (12-28-07) Developer memo (12-4-07) • Developer provided photos of other existing Holidays February 11, 2008 Gay L. Carney goemey@krassmonroe.com Direct 952.885.4393 Also admitted in New York Greg D. Johnson gjoh nson@krassmonroe. com Direct 952.885.5994 MEMORANDUM r0 t. MONROE To: City of New Hope Attn: Kirk McDonald, City Manager Attn: Curtis Jacobsen, Community Development Specialist From: Gay L. Cerney, Esq. Greg D. Johnson, CPA Date: February 5, 2008 Re: City of New Hope/Proposed Holiday Stationstore at 7180 42nd Ave N. Our File No. 10048-31 RCD Properties, LLC has approached the City with a proposal to redevelop the G.I. Joe surplus store property at 7180 42nd Avenue. This site is 63,297 square feet, with a market value for taxes payable in 2008 of $590,000. Of this total, $7,000 is allocated to the building and $583,000 to the land ($9.21 per square foot). In memoranda to the City dated December 4, 2007 and December 28, 2007, the redeveloper has indicated that it plans to construct a convenience store of approximately 4,500 square feet, a 90 to 110 -foot car wash tunnel and 8 fuel filling stations (16 pumps). The redeveloper will have a total project cost of $2,950,000, of which $500,000 will be the initial land purchase price (with an additional $200,000 payable in the future if the redeveloper meets certain gasoline sales targets). Attached as Exhibit A are estimates provided by the redeveloper for certain project costs. The Hagberg Excavating proposal lists approximately $147,000 in costs for building, parking lot, curb and sidewalk demolition, site leveling and construction of a retaining wall along the north edge of the site. The Sandness Construction proposal 8000 NORMAN CENTER DRIVE, SUITE 1000 • MINNEAPOLIS, MINNESOTA 55437-1178 TELEPHONE 9521885-5999 • FACSIMILE 9521885-5969 www.krassmonroe.com lists additional project costs. The redeveloper has requested the City for a total of $223,000 in assistance to cover all of the costs on the Hagberg estimate ($147,000) and the ponding, survey and soil tests costs on the Sandness proposal ($76,000). This memorandum will review inclusion of this parcel in a tax increment district and the projected tax revenue which would result from the planned development on the site, and whether tax abatement could be used as an alternative means to provide assistance to the project. Inclusion in a Tax Increment District This parcel is already within the City's Tax Increment District 85-2, which only has three years left. Thus, this parcel would have to be decertified from this district and a new tax increment district created for it in order for more tax increment revenue to be available. A determination would have to be made whether this parcel qualifies for inclusion on its own in a new redevelopment tax increment district. For the purposes of this memorandum, we will assume that the parcel would qualify. Projected Tax Increment In order to analyze projected tax increment from the redeveloped site, an estimate of the increase in market value of the parcel resulting from the redevelopment must be made. The chart at Exhibit B shows current market value data as to some potentially comparable gas station/convenience store properties. A number of these were suggested by the redeveloper, and some we found listed on Holiday's website in surrounding communities. The building value of each of these properties has been highlighted in a box on the chart. Based on that chart and discussions with the redeveloper at a meeting at the City on January 24, we assumed that the proposed redevelopment would increase the value of the parcel by $500,000. Using the City's expected pay 2008 local tax rate of 1.15802 over the life of a 25 -year district and further assuming: (1) the project is completed in 2008, (2) the value of the parcel increases at an inflation rate of 2.0% per year, (3) a present value rate of 7.0% and (4) the City takes a 10% administrative fee, we project that the redevelopment will generate a present value of $155,291 of tax increment (see Exhibit C, pages C-1 and C-2.) It should be noted that, after administrative fees are deducted, the annual available tax increment (before inflation) is about 31% of the property taxes actually paid. This low fraction is due in part to the property's current market value of $590,000, but also because the State property tax on commercial/industrial property, which is not considered tax increment, is over 28% of the total taxes paid on the property. e Page 2 Tax Abatement This site has a relatively high "base" of $590,000 going into the project. This is important because, as described above, tax increment is generated only by increases in market value over this amount. However, the City can choose to abate all or part of the City portion of the property taxes paid, even those paid on the "base". If the City decided to use abatement, the site would also have to be decertified from Tax Increment District 85-2. Abatement can be helpful for sites with a fairly high base. However, this benefit can be offset by other factors, namely: (1) abatement can only be granted for a maximum of 15 years, or 20 years if either the school district or the County or both refuse to participate in the abatement, and (2) the City can only unilaterally abate its portion of the taxes, while in a TIF district all taxing jurisdictions must participate. Abatement analyses using the same assumptions listed above are shown at Pages C-3 and C-4. We have also assumed that the school district and County would Lot elect to participate in the abatement. Page C-3 shows that a 15 -year abatement would yield a present value of $85,673 for the project and Page C-4 shows that a 20 - year abatement (the maximum) would yield a present value of $104,227. Thus, it can be seen that abatement would not generate as much assistance as would tax increment. It is also important to note that, dollar for dollar, abatement is more expensive for the City than tax increment. For pay 2008, the City's portion of the local tax rate is approximately 37.8%; this means that the City funds only 37.8% of the total tax increment made available to the redeveloper. However, assuming only the City would participate in an abatement, the City would be funding 100% of any abatement assistance. The other reason that abatement is more expensive for the City is that abatement would most likely include existing taxes being paid on the "base", not just the increased taxes resulting from the redevelopment. Thus, the City would be agreeing to give up taxes it is currently collecting. BuVFor Test One of the statutory requirements for creation of a redevelopment TIF district is that a two-part "but/for" test must be met, namely: (1) the proposed redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; and (2) the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed 0 Page 3 redevelopment after subtracting the present value of the projected tax increment for the maximum duration of the district. Each of these tests will be considered in turn. The First Test The first test involves a finding that the costs to acquire and redevelop the site are so high that redevelopment is not likely to occur in the near future without assistance. In this kind of redevelopment, where the redeveloper is redeveloping a parcel into a commercial income-producing property, a frequently -used method to make this finding is to compare the costs to acquire and redevelop the land to its estimated fair market value once it is buildable. A redeveloper is unlikely to undertake a redevelopment project if it costs more to acquire and prepare land for new construction than the land is inherently worth. As mentioned above, the land has market value for taxes payable in 2008 of $583,000 ($9.21 per square foot). We spoke to Ray Shudy at the Hennepin County Assessor's Office, who appraises commercial properties in Crystal and New Hope. He believes that commercial property in this area is worth approximately $10.00 per square foot. The redeveloper will pay $500,000 to acquire the property initially and will invest $223,000 in site improvements so that the land will be buildable. We have not included the additional $200,000 purchase price payment that may have to be made in the future because it is contingent and will only be made in the future if the business is doing well. The land cost analysis then proceeds as follows: The Second Test This test is a mathematical test. Based on the fact that land acquisition and site improvement costs exceed the estimated market value of the land, we will assume for this purpose that, without assistance, in the near future the building may be remodeled but redevelopment is unlikely. Remodeling by itself is unlikely to increase the value of the site. • Page 4 Total Per sq. ft. Land acquisition cost .......................... $ 500,000 $ 7.90 Site improvement costs ...................... 223.000 3.52 Total ............................................... 773,000 11.42 Less: market value of land ................632 970 10.00) Difference = The amount of costs for which assistance can be justified under this test .................... $ 1.42 The Second Test This test is a mathematical test. Based on the fact that land acquisition and site improvement costs exceed the estimated market value of the land, we will assume for this purpose that, without assistance, in the near future the building may be remodeled but redevelopment is unlikely. Remodeling by itself is unlikely to increase the value of the site. • Page 4 Thus, based on the information presented earlier, the analysis would proceed as follows: (a) increased market value of the site that could reasonably be expected to occur without the use of tax increment financing ................................................ $ -0- (b) Estimated market value after redevelopment .................. 1,090,000 (c) Original market value ...................................................... (590.000) (d) Increase in market value (b -c) ......................................... 500,000 (e) Less: Present value at 7.0% of projected tax increment for the maximum duration of the district.......... (155.291) (f) Net increase in market value (d -e) .................................. 344,709 The test is satisfied because (f), the net increase in market value, is greater than (a), the increased market value which can reasonably be expected to occur without tax increment assistance. In conclusion, based upon our review, we believe that City Council could find that this project is not likely to proceed in the immediately foreseeable future without public assistance and that the but/for tests are satisfied if the amount of assistance is limited to approximately $140,000. G:%WPDATAWNEW HOPE1311CORWCDONALD JACOBSEN GLC GDJ 01.DOC 0 Page 5 EXHIBIT A IIAGBEI.G EXCAVATING INC 34497 Nacre st nw Princton MN 5537I Name I Address { RALPH DURAND Estimate Date Estimate # 10/19/2007 26 Signature Phone 9 Teras PROJECT JOB l% 10 Net 30 SITE CORRECTION/DE... Description Qty Rate Tu tat Dema EXISTING BUILD1NW BID DOES NOT INCLUDE 16,-400,00 16,400.00 ABATEMENT MLL PARKING LOT STOCK PILE ON SITE 11,000.00 11,000.00 CURB AND SIDE WALKS REMOVAL 1,680.00 1,680.00 IMPORT FILL AND PACK 56,056.00 56,056.00 SILT FENCE 10001sT 2,500.00 2,500.00 EROSION CONTROL 1,100.00 1,100.00 PERMITS IDEMO,SEWER&WATER PERMITS 663M 663.50 RETAMG WALL 3000 SQ F1' 58,000.00 58,000.00 WE LOOK FORWARD TO WORKING WITH YOU. Total 5147,399.50 Signature Phone 9 Fax f# 763-286-4611 763 -55? -8112 y; 1212007 12:55 !RX f?Xl hUj'l%anE. CON 1nL%ound fax lln 01)k 0 U'd 0/12-107. p, "JA` 6 -18118444 LAA OFFICES (612) 728-866� L -D *202178 71 No%lr ber 19, 2007 Procosal Durand MoMayStore 42" and Nevada Avenue No r&. New Hope, Mrr' RE: Lnir Pricing SAS: charge s` 43,000.00 Ponding 55,OW.00 Irrigation system 9.000.00 Curb and sidawaN 47,000.00 Surveys 9,0:14.00 Soar Tests .12,00•:7.00 6ka&aop iZ0,040.00 Site Righting 9,000.00 5ewor/grater hookup 25,400.00 Building Permit 5,000.00 Fa,—, (612).728-73669 620 51.si ,kvi nue Soiitl1 c 5Mirr.,.-anclli • -Minn soiz 5:4061-165, 3 Holiday comparable properties.xls Prepared by Krass Monroe, P.A. 2/5/2008 x 03 UO New Hope, Minnesota 7180 42nd Ave N - Holiday Redevelopment Proposal _ Pa 2008 Market Value Land MV Address city Parcel= Land Building Total Land area per sq. ft. Subject Property: 7180 42nd Ave N New Hope 1711821210031 583,000 7,000 590,000 63,297 9.21 Other gas/convenience stores In the area: Suggested_by Redeveloper: _ SuperAmerica - 7818 36th Ave N C stal 1711821330006 369,000 531,000 900,000 SuperAmerica - 5750 Nathan Lane N Plymouth 0111822420009 695,300 190,700 886,000 SuperAmerica - 6144 W Broadway New Hope 0511821210035 276,000 399;OQ0 675,000 Holiday - 5410_Lakeland Ave N C_ rystal 041_1821340062 _ and 0411821340063 418,000492,000 _ 910,000 Other Holida s in area with carwash: _ Holiday- 9705 Schmidt Lake Rd Plymouth 1211822410008 521,000 424,000 945,000 (49th Ave & Hwy. 169) Holiday- 10100 Rockford Rd Plymouth 1311822120009 533,500 542,500 1,076,000 42nd Ave & Hwy. 169) Holiday- 420 66th Ave N Brooklyn Center 3611921130113 645,000 490,000 1,135,000 Holiday - 8517 Jefferson Lane N Brooklyn Park 1811921330029 751,800 580,000 1,331,800 Holiday - 9399 West Broadway Brooklyn Park 811921330012 702,400 583,600 1,286,000 Holiday comparable properties.xls Prepared by Krass Monroe, P.A. 2/5/2008 x 03 UO EXHIBIT C Page C-1 Holiday Station 2008a.xis Prepared by Krass Monroe, P.A. 1/25/2008 CITY OF NEW HOPE Holiday Station ASSUMPTIONS Area of Parcel 1/2/2007 Market Value Pay 2008) Original Market Values (Acres) (Sq. Feet) Land Building Total Lasky Co Real Estate 17-118-21-21-0031 1.45 63,297 $ 583,000 $ 7,000 $ 590,000 f Totals ; 1.45 63,297 $ 583,000 $ 7,000 $ 590,000 $ 9.21 per sq. ft. for Land Original Tax Capacity Class Rate 11,800 Commercial/Retail 590,000 @ 2.00% = 11,800 Rental @ 1.25% = 0 Owner Occu led @ 1.00% = 0 590,000 —J I Phase 1 YEAR Estimated Market Value Holiday Station $1,090,000 Estimated Tax Capacity 2009 21,800 Estimated Taxes 2010 36,925 )Estimated Tax Increment 11,539 31.2% of total taxes Phase 2 (combined) Estimated Market Value Holida Station 1,090,000 1.8 times MV incr. Estimated Tax Capacity 2010 21,800 Estimated Taxes 2011 36,925 Estimated Tax Increment 11,539 31.2% of total taxes Local Tax Rate - Pay 2008 TNT 1.15802 3.4% State Tax Rate - Pay 2008 TNT 0.45949 (CII only) Eff Tax Rate Eff. Incr, on local tax rate for taxes at F.D. rate 0,00007) (C/l only) Combined Tax Rate - C/I Property Only 1.61744 * used for tax increment calculations City Tax Rate - Pay 2008 TNT 0.42164 ! Market Value Referendum Tax Rate 0.15269% Admin Fees 10.00% State Auditor Fee 0,36% Inflation (after 2 yrs of ful! value in each tract) 2,00% ! FF V Rate - Rev. Note 1 6/11/20081 7.00% ! Holiday Station 2008a.xis Prepared by Krass Monroe, P.A. 1/25/2008 Holiday Station 2008a,xls Prepared by Krass Monroe, P.A. 1125/2008 CITY OF NEW HOPE Holiday Station TAX INCREMENT CASH FLOW AND PRESENT VALUE ANALYSIS Page C-2 < ANNUAL c -- SEMI -ANNUAL (a) b) (c) (d) (e) M (9) (b Original Estimated I Captured Est, T.I. Less: Available Cumulative <- Present Value --� Tax Tax Tax d x Admin Tax Avail. Tax Seml Annual Cumulative Date Capacity 1 Capacity Capacity 1.15802 Fees Increment Increment Balance Balance see assumptions) c - b - St Aud. Fee e x e - Total of P.V. of Total of i 2.0% Inflation (prev, year) 0.350%a 10.00% 7.00% 06/01/08 06!01107 11,800 11,800 0 0 0 0 0 0 12/01/07 11,800 11,800 0 0 0 0 0 0 06/01/08 1 11,800 11,800 0 0 0 0 0 0 0 12/01/08 11,800 11,800 0 0 0 0 0 0 0 06/01/09 11,800 21,800 0 0 0 0 0 0 0 12/01/09 11,800 21800 0 0 0 0 0 0 0 9 1 06/01/10 11,800 21,800 10,000 5,769 577 5,192 5,192 4,525 4,525 12/01/10 1 11,800 21,800 10,000 5,769 577 5,192 10,385 4,372 8,897 2 06/01/11 11,800 22,236 10,000 5,769 577 5,192 16,577 4,22413,121 12/01/11 11,800 22,236 10,000 5,769 577 5,192 20,769 4,081 17,202 3 06101/12 11,800 22,681 10,436 6,021 602 5,419 26,188 4,115 21,317 12/01/12 11,800 22,681 10,436 6,021 602 5,419 31,607 3,976 25293 4 06/01/13 11,800 23,134 10,881 6,277 628 5,650 37,255 4,005 29,298 12/01/13 11,800 23,134 10,881 fi 277 628 5,650 42,906 3,870 33,167 5 1 06/01/141 11,800 23,597 11,334 6 539 654 5,885 48,791 3,895 37,062 12/01/14 1 11,800 23,597 11 334 6 539 654 5,885 54 676 3,763 40,825 6 06/01/15 1 11,800 24,069 11,797 6,806 681 6,125 60,802 3,784 44,609 12/01/15 11,800 24,069 11,797 6,806 681 6,125 66,927 1 3,656 48,265 7 06/01/16 11,800 1 24,550 12,269 7,078 708 6,370 73,298 3,674 51,939 12/01/16 11,800 24,550 12,269 7,078 708 6,370 79,668 3,550 55,489 8 06/01/17 11,800 25,041 12,750 7,356 736 6,620 86,288 3,564 59,D53 12/01/17 11,800 25,041 12,750 7,356 736 6,620 92,909 3,444 62,497 9 06/01/18 11,800 25,542 13,241 7.639 764 6,875 99 784 3,455 65,952 12/01/18 11.800.1.25,542 13,241 7,639 764 6,875 106,660 3,338 69,291 10 06/01/19 .11,800 26,053 13.742 7,928 793 7,135 113,7951 3,348 72,638 12/01/19 11 800 26,053 13,742 7 928 793 7135 120,930 3,234 75,873 11 06/01/20 11,800 • 26,674, 14,253 8223 822 7 401 128,331 3 241 79114 12/01/20 11,800: 26,574 14,253 8,223 822 7,401 135,732 3132 82 245 12 06101/21 11,800 27,106 14,774 8,524 852 7,671 143,403 3,136 85,382 12/01/21 11,8001 27,106 14,774 8,524 852 7,671 151,074 3,030 88,412 13 06/01/22 11,800 1 27,648 15,306 8,830 883 7,947 159 021 3,033 91,445 12/01/22 11,800 27,648 15,306 8,830 883 7,947 166,968 2,930 94,375 14 06/01/23 11,800 1 28,201 15,848 9,143 914 8,229 175,197 2,932 97,307 12/01/23 11,800 1 28,201 15,848 9,143 914 8,229 183,426 2,833 100140 15 06/01/24 11,800 1 28,765 16.40 9,462 946 8,516 191.941 2,832 102 972 12/01/241 11,800 28,765 16,401 9,462 946 8,516 200,4571 2,736 105,708 16 06/01/25 11,800 F 29,340 16,965 9,787 979 8,809 209,266 2,735 108,443 12/01/25 11,800 29,340 16,965 9 787 979 8,809 218,074 2,642 111,085 17 06/01/26 11,800: 29,927 17,540 10,119 1,012 9,107 227,182 2,6401- 113,725 12/01/26 11,800 ; 29,927 17,540 10,119 1,012 9,107 236,289 2,550 116,275 18 06/01/27 11,800 30,525 18,127 10,458 1,046 9,412 245,701 2,547 118,822 12/01/27 11,800 30 525 18,127 10,458 1,046 9,412 255,113 2,460 121,282 19 06/01/28 11,800 31 136 18,725 10,803 1,080 9,723 264,836 2,456 123,738 12101/28 11,800 31,136 18,725 10,803 1,080 9,723 274,558 2,373 126,111 20 06/01/29 11,800 31,758 19,336 11,155 1,116 10,040 284,598 2,367 128,478 12/01/29 11,800 31,758 19,336 11,155 1,116 10,040 294,638 2,287 130,765 21 06/01130 11,800 32,394 19,958 11,515 1,151 10,363 305,001 2,281 133,046 12/01/30 11,800 32,394 19,958 11,515 1,151 10,363 315,364 2,204 135,250 22 06101131 11,800 33,042 20,594 11,881 1,188 10,693 326,057 2,197 137,447 12/01/31 11,800 33,042 20 594 11 881 1,188 10,693 336,750 2,123 139,570 23 06/01/32 11,800 33,702 21,242 12,255 1,225 11,029 347,779 2,115 141,685 12/01/32 11,840 33,702 21,242 12,255 ` 1225 11,029 358,809 2,044 143,729 24 06/01/33 11,800 34.376 21,90 12,636 1,264 11,372 1 370,181 1 2,036 145,765 12/01/33 11,800 34,376 21,902 12,636 1,264 11,372 1 381,553 1,967 147,733 25 06/01/34 11,800 35,064 22,576 13,025 1,302 11722 393276 1,959 149,692 12/01/34 11,800 35,064 22,576 13,025 1,302 11,722 404,998 1,893 151,585 26 06/01/35 11,800 35,765 23,264 13,422 1,342 12,079 417,078 1,885 153,470 12/09/35 11,800 35,765 23,264, 13,422 1,342 12 079 429,157 1,821 155 291 478,841_L_47,684 1 429,157 429,157 155,29 155,291 Holiday Station 2008a,xls Prepared by Krass Monroe, P.A. 1125/2008 Holiday Station 2008a.xls Prepared by Krass Monroe, P.A. 1125/2008 CITY OF NEW HOPE Holiday Station Page C-3 ABATEMENT CASH FLOW AND PRESENT VALUE ANALYSIS ANNUAL <----------- --- SEM! - ANNUAL -----_--• --- ----------_� (a) (b) (c) (d) (e)(f) (g) (h) Original : Estimated Estimated City Portion Cumulative <----- Present Value -----� Tax Tax Taxes to be Abated Taxes Semi Annual Cumulative Date Capacity Capacity Local Tax Rate City Tax Rate Abated Balance Balance (see assumptions) 1.13802 0.42164 Total of (e) ! P.V. of (e) Total of (g) 2.00/61 Inflation 7.00% 06101/08 1 06/01/08 11,800 11,800 6,832 2,488 2,488 2,488 2,488 12/01/08 11,800 11,800 6,832 2,488 4,975 2,404 4,891 2 06/01/09 11,800 21,800 6,832 2,488 7,463 2,322 7,213 12/01/09 11,800 21,800 6,832 2,488 9,951 2,244 9,457 3 06/01/10 11,800 21,800 12,622 4,596 14,547 4,005 13,462 12/01/10 11,800 21,800 12,622 4,596 19,142 3,870 17,332 4 06/01/11 11,800 22,236 12,622 4,596 23,738 3,739 21,071 12/01/11 11,800 22,236 12,622 4,596 28,334 3,612 24,683 5 06/01/12 11,800 22,681 12,875 4,688 33,022 3,560 28,243 12101/12 11,800 22,681 12,875 4,688 37,710 3,440 31,682 6 06/01/13 11,800 23,134 13,132 4,782 42,491 3,390 35,072 12/01/13 11,800 23,134 13,132 4,782 47,273 3,275 38,347 7 06/01/14 11,800 1 23,597 13,395 4,877 52,150 3,228 41,575 12/01/14 11,800 23,597 13,395 4,877 57,027 3,1181 44,693 8 06/01/15 11,800 24,069 13,663 4,975 62,002 3,073 47,767 12/01/15 11,800 24,069 13,663 4,975 66,977 2,969 50,736 9 06/01/16 11,800 24,550 13,936 5,074 72,051 2,926 53,662 12/01/16 11,800 24,550 13,936 5,074 77,125 2,827 56,490 10 06/01/17 11,800 25,041 14,215 5,176 8Z,301 2,786 .59,276 12/01/17 11,800 25,041 _ 14,21_5 14,499 5,176 5,279 87,477 92,75Q2 2,692 61,968 11 06/01/18 11,800 25,542 2,653 64,622 12/01/18 11,800 25,542 14,499 5,279 98,035 2,563 67,185 12 06/01119 11,800 26,053 14,789 5,385 103,420 2,526 69,791 121.01119 11,800 26,053 14,789 5,385 108,805 2,441 72,152 13 06/01/20 11,800 26,574 15,085 5,492 114,297 2,406 74,558 12101/20 11,800 26,574 15,085 5,492 119,790 2,324 76,882 14 06101/21 11,800 27,106 15,387 5,602 125,392 2,290 79,172 12101/21 11,800 27,106 15,387 5,602 130,994 2,213 81,385 15 06101/22 11,800 , 27,648 15,694 5,714 136,709 2,181 83,566 12101/22 11,800 27,648 15,694 5,714 142,42341_2,107 85,673 391,160 142,423 142,423 , 85,67 85,673 Holiday Station 2008a.xls Prepared by Krass Monroe, P.A. 1125/2008 Holiday Station 2008a.xls Prepared by Krass Monroe, P.A. 1/25/2008 CITY OF NEW HOPE Holiday Station Page C-4 ABATEMENT CASH FLOW AND PRESENT VALUE ANALYSIS E ANNUAL - --- SEMI - ANNUAL (a) (b) (C) (d) (e) (f) (g) (h) Original Est -.mated Estimated City Portion I Cumulative Present Value -----> Tax Tax Taxes to be Abated Taxes Semi Annual Cumulative Date Capacity Capacity Local Tax Rate City Tax Rate Abated Balance Balance (see assumptions) 1.13802 0.42164 Total of (e) P.V. of (e) Total of (g) 2.0% Inflation 7.00% 06/01/08 1 06/01/08 "1,800 11,800 6,832 2,488 2,488 2,488 2,488 12/01/08 11,800 11,800 6,832 2,488 4,975 2,404 4,891 2 06/01/09 11,800 21,800 6,832 2,488 7,463 2,322 7,213 12101109 11,800 21,800 6,832 2,488 9,951 2,244 9,457 3 06/01/10 11,800 21,800 12,622 4,5V6 14,547 4,0051 13,462 12/01/10 11,800 21,800 12,622 4,596 19,142 3,870 17,332 4 06/01/11 11,800 22,236 12,622 4,596 23,738 3,739 21,071 12/01111 11,800 22,2.36 12,622 4,596 28,334 3,612. 24,683 5 06/01/12 11,800 22,681 12,875 4,688 33,022 3,560 28,243 12/01/12 11,800 22,681 12,875 4,688 37,710 3,440 31,682 6 06/01/13 11,800 23,134 13,132 4,782 42,491 3,390 35,072 12/01/13 11,800 23,134 13,132 4,782 47,273 3,275 38,347 7 06/01/14 11,800 23,597 13,395. 4,877 52,150 3,228 41,575 12/01/14 11,8001 23,597 13,395 ; 4,877 57,027 3,118 44,693 8 06/01/15 11,800 24,069 13,663 4,975 62,002 3,073 47,767 12/01/15 11,800 24,069 13,663 4,975 66,977 2,969 50,736 9 06/01/16 11,800 24,550 13,936 5,074 72,051 2,926 53,662 12/01/16 11,800 24,550 13,936 5,074 77,125 2,827 56,490 10 06/01/17 11,800 25,041 14,215 5,176 82,301 2,786 59,276 12/01/17 11,800 25,041 14,215 5,176 87,477 2,692 61,968 11 06/01/18 11,800 25,542 ' 14,499 5,279 92,756 2,653 64,622 12/01/18 11,800 25,542 14,499 5,279 98,035 2,563 67,185 12 06/01119 11,800 26,053 14,789 5,385 103,420 2,526 69,711 12/01/19 11,800 26,053 14,789 5,385 108,805 2,441 72,152 13 06/01/20 11,800 26,574 15,085 5,492 114,297 2,405 74,558 12/01/20 11,800 26,574 15,085 5,492 119,790 2,324 76,882 14 06/01/21 11 11,8001 27,106 15,387 5,602 125,392 2,290 79,172 12101'121 11,800 27,106 15,387 5,602 130,994 2,213 81,385 15 06/01/22 11,800 27,648 15,694 , 5,714 136,709 2,181 83,566 12/01/22 11,800 27,648 15,694 5,714 142,423 2,107 85,673 16 06/01/23 11,800 28,201 16,008 5,829 148,252 2,077 87,750 12/01/23 11,800 28,201 16,008 5,829 154,080 2,006 89,756 17 06/01/24 11,800 28,765 16,328 5,945 160,026 1,977 91,734 12/01/24 11,800 28,765 16,328 5,945 '165,971 1,910 93,644 18 06/01/25 11,800 1 29,340 16,655 6,0641 172,035 1,883 95,527 12/01/25 11,800 29,340 16,655 6,064 178,099 1,819 97,346 19 06/01/26 11,800 29,927 16,988 6,185 184,285 1,793 99,139 12/01/26 11,800 29,927 16,988 6,185 190,470 1,732 100,871 20 06/01/27 11,800 30,525 17,328 6,309 196,779 1,707 102,578 12/01/27 11,800 30,525 17,328 6,309 203,088 1,649 104,227 557,776 203,088 203,088 104,227 104,227 Holiday Station 2008a.xls Prepared by Krass Monroe, P.A. 1/25/2008 MEMORANDUM TO: Kirk McDonald FROM: BCD Holdings, LLC DATE: February 6, 2008 RE: Holiday Station Store on 42 Id Avenue Dear Kirk: Please allow this memorandum to supplement the presentation to be made to the City Council regarding the benefits of the TIF application on February 11, 2008. As we have discussed with you and your staff, we believe there is a variety of material benefits to the Citv and its citizens in supporting the re -development of the corner of 42nd Avenue and Nevada and the use of TIF. First, we believe that this project corresponds with the objectives of the City to re -develop and clean up the corridor on 42nd Avenue. With our significant investment in the project of approximately $3MM, we strongly believe that this will bring additional commercial development to the area and help clean up businesses that are either blighted or closed. We also believe that we are a good compliment to most of the other businesses in the area and believe most support our overall project. This re -development and clean up has happened in other communities such as South Robert Street in St. Paul as well as Arcadia Street. In speaking with representatives at the Holiday Corporate Headquarters, they indicated that their studies have shown the majority of people that shop at convenience stores do so because the stores are either close to their work or close to their home. They pointed out that with anew high class facility people will start shopping closer to home. In addition, as customer counts increase other developers will take notice which also helps with redevelopment. Our goal is to make our facility the cleanest and safest in the area as well as providing products and services that the community wants. We also believe that with the improvement to this corner, our project will force competitors to clean-up and make major improvements to their specific property as well as insure that pricing of their products are in line with additional competition. As a result of the competition improving their properties, others will have the desire to redevelop and relocate to the area. Next, as we have mentioned, we will be the only convenience store that provides E-85 gasoline, a renewable resource that is friendly to the environment. On the average E-85 gasoline is 40 cents less than regular gas. Further, as you may be aware, Holiday provides significant discounts through its partnership with many companies, including Cub Foods. This particular promotion has been such a success that Cub Foods and Holiday have extended the program indefinitely. The goal of these partnerships is to increase customer traffic in the respective locations as well as decrease the price of gasoline for its customers. We believe this has a material benefit to the New Hope Community. Lastly, we are aware of four communities in the Twin Cities area, that in addition to the Mounds View and Lakeville locations where our current stores are located, have determined that it has been a positive community impact as a result of the Holiday StationStores. In addition to the letter from the Mayor of Moundsview, the following cities support Holidays and are available to discuss their attributes: 1. The City of Cottage Grove, Howard Blair, 651-458-2824 2. The City of Eagan, Michael Riddlay, 651-675-5650 3. The City of Bloomington, Bob Hawbaker, 952-563-8922 4. The City of Plymouth, Barb Jemess, 763-509-5452 Additionally, we are very community minded. We work with school and local groups throughout the year helping them with fund raising. 1 am sure the citizens of City of New Hope will really appreciate the involvement we put into the community. We hope this information is helpful to supplement the benefits we believe our project will provide the Community of New Hope and reiterate our appreciation for the work that you have provided to us thus far in the project life. We look forward to working with you and having a positive presentation on Monday, February 11, 2008. •'' \9 MU Date: December 28, 2007 To: Mr. Kirk McDonald Director of Community Development City Of New Hope MN. Fr: Chuck Durand RCD Properties, LLC aka New Hope Holiday Convenience Services 13025 44t' Avenue North, Plymouth MN. 55442 Re: Supplement to the TIF Application associated with the development of the Lasky property located at 7180 40th Avenue New Hope, MN Please allow this memo to supplement our original requested for city assistance dated December 4, 2007. After much discussion and review, we believe that this project meets most, if not all of the city's overall criteria of the Policy for Business Subsidies adopted in 2000. Specifically, we believe that this project will increase jobs and increase the tax base. Furthermore, we have received a favorable response to receive least 50% of the necessary funds from a private bank, the owners have a long-term commitment to the project and the project will continue to increase the viability of the community. First, our new employment opportunities will immediately add an additional 27 new jobs, many whom will hopefully be New Hope residents. Our goal would be to have as many local qualified residents as possible, but not less than 50%. Our success will be based largely upon high quality and committed customer service personnel providing quality products and services at a fair and reasonable price. Furthermore, we are committed to maintaining a friendly, fair and creative work environment which respects diversity, ideas and hard work. This has been the cornerstone of the success we have achieved at the Holiday StationStores in Moundsview and Lakeville and desire to continue this focus as we expand into New Hope. Second, we believe that this project will vastly increase the tax base by increasing the overall value of the property. The current 2007 taxable market value is $590,000. In reviewing similar convenience store sites in and the surrounding area, we find that the taxable market is varies from $675,000 to $910,000. This is a difference varying from 13.6% to a 36.2% increase in the taxable market value. See attached tax records. Third, we believe that this property layout and topography is unique and "but for" such city assistance, it would make a project of this magnitude not financially feasible. As you are aware, the property slopes severally from the front (along 42nd Avenue to the back). As the attached preliminary drawing shows, the main building sits to the back of the property, thus requiring numerous amounts of the backfill and the retaining wall along the north line of the property. Also, due to this serve slope there is a need for site reclamation related to historical storm water issues, ponding will be needed to adequately address that issue. Lastly, at a project cost of approximately $295MM, we as operators and owners of the store are committed to the long terms viability of the project and to continue with the cities vision of the development of the 42nd street corridor. Moreover, as franchisees and partners with the state's premier leaders in the convenience store industry, we believe that as a Holiday StationStore the community will support our business as long as we continue to provide a wide range of services at a first rate and clean facility. Therefore, we are requesting $225,000 of city assistance in the form of TIE' based upon these submissions and the costs estimates to make the land corrections necessary to proceed with the project. Specifically: Hagberg Excavating estimate: $147,000 Sandness Construction Ponding $55,000 Survey and soil tests $23,000 Total $225,000 We wish to thank you for your consideration to this exciting project. We look forward to following up with you at your earliest convenience. Please feel free to contact Chuck Durand with any questions. Chuck can be reached at 612-803-0080. Thank You. HAGBERG EXCAVATING INC 34497 Nacre st aw Prirlcton MN 55371 Name 1 Address RALPH DURAND Estimate Date Estimate # 10/19/2007 26 Signature Phone # Fax # 763-286-461f 763-552-8112 Terms PROJECT JOS 1% 10 Net 30 SITE CORRECTION/DE... Description Qty Rate Total Demo EXISTING BUILDING& BID DOES NOT INCLUDE 16,400.00 16,400.00 ABATEMENT MLL PARKING LOT STOCK PILE ON SITE 11,000.00 11,000.00 CURB AND SIDE WALKS REMOVAL 1,680.00 1,680.00 IMPORT FILL AND PACK 56,056.00 56,056.00 SILT FENCE 1006 FT 2,500.00 2,500.00 EROSION CONTROL 1,100.00 1,100.00 PERMITS IDEMO,SEWER&WATER PERMITS 663.50 663.50 RETAINING WALL 3000 SQ FT 58,000.00 58.000.00 WE LOOK FORWARD TO WORKING WITH YOU. Tota[ $147,399.50 Signature Phone # Fax # 763-286-461f 763-552-8112 -- 2 5/ .24,,2k );)7 1155 IM f&YOWU: RanECOV lriboutlid Fay 002!00�j MOM 12"124 13:02 F.MT 6128118444 LA'� OFFICES 002' D ura nd Holiday Store in M Ir New Hope, MN j FE: Unit PricinC SAC charge (612) 1128-866] M.) *22021,178-111 Fax (1612) 725-81669 November 19, 2007 D ura nd Holiday Store 42" and Nevada Avertue No 1.1. New Hope, MN FE: Unit PricinC SAC charge S 43,000.00 , Ji Pondlq 5s, 000.01-1 Imfg-atio" Wtem 9,OM-00 Curb and sidawalk 47 - Survey 9,000.00 Soil Tests Blackt-00 Site fighting 9,000.00 Sewt0yater hookup 25,100.00 Building Permit 5,DOO.00 Sy tgg 4626 51 s', Al�,�--nue Sojtj-j %fi.rneapolis �-S"f-iT-Lnesota 55406-1638 MEMORANDUM Date: December 4, 2007 To: Mr. Kirk McDonald Director of Community Development City Of New Hope MN. Fr: Robert Durand — President RCD Properties, LLC aka New Hope Holiday Convenience Services 13025 44th Avenue North, Plymouth MN. 55442 Re: TIF Application associated with thedevelopment of the Lasky property located at 7180 40s' Avenue New Hope, MN Holiday Convenience Services — New Hope ("Holiday Services") wishes to develop the property currently known as the Lasky property into a high quality gas/convenient store/car wash facility. The property is currently controlled under contract by RCD Properties, LLC ("Developer "). The purpose of this memorandum is to outline the scope of the project being undertaken by the Developer and to make formal application for TIF required for the project to successfully proceed. I) THE DEVELOPERS --- consist of a team of Robert Durand, Charles Durand and Dan Young. The Developers currently own and operate two successful Holiday convenience stores in the Twin Cites area (Mounds -view and Lakeville) and continue to expand its operations in the greater metro area. Holiday StationStores is a recognized Ieader in the convenience store industry with 400 corporately owned and franchise stores located throughout 12 states in the northern tier region of the United States: Minnesota, Wisconsin, Michigan, Iowa, North Dakota, South Dakota, Nebraska, Montana, Wyoming, Idaho, Washington also in Alaska. Holiday StationStores is headquartered in Bloomington, Minnesota. They have been conunitted to providing customers with high quality gasoline products along with an unusually wide selection of prepared food, groceries and general merchandise items..... aimed at satisfying the everyday needs of our convenience store customers. II) THE BUILIDING SITE --- located in New Hope at the corner of Highway 42 and Nevada Avenue, is approximately 1.5 acres in size and has great potential for a high quality, well managed convenience store operation. The land is currently zoned appropriately for gas, convenience and car wash activity. The size and layout of the site allows for safe, efficient and high quality customer service. III) BUILDING AND SITE DEVELOPMENT --- is scheduled to begin in the spring of 2008 and will be conclude by mid summer 2008. The first task in site development will be to undertake land correction to make it suitable for gas, convenience and car wash activity. Currently, it appears that 40% to 60% of the land surface will require some type of correction. We believe this area of the proiect will gualify for TIF. The petroleum portion of the site will have approxim8 fuel staff with a total of 16 pumps. Five grades of petroleum will be made'avai`Mable --- Regular, Premium, Supra, E 85 and Diesel. Currently, we believe that the New Hope area is underserved with E 85, a renewable petroleum. The convenience store will be approximatcl4,500 SQ FT n ll be located behind the pumps and incorporate the latest innovations o`F oliZay Corporate has to offer. Construction material will be of the highest grade brick, block and glass. It will also incorporate "state of the art" interior design, Iayout and equipment. The carwash will be located on the east side of the property depending on site corrections. The car wash will be housed in a 90 to 110 foot tunnel and use "soft cloth" brushes and high pressure water spray for maximum safe and efficient cleaning. The wash will also have a full time attendant to ensure safe entry and maximum customer service. Adjacent to the car wash area will 'b�'S'high powered cuums which we intend to offer our car wash customers free of charge:---._._..._.. -- IV) THE COST OF THE PROJECT --- will be approximately $2.95 MM and be made up of approximately: Land: $ 850,000 Building, Equipment and Carwash: $ 2,100,000 Total $ 2,95'0,000 V) NEW EMPLOYMWNT OPPORTUNITIES --- will be made up of the following, including benefits: Position Number Total Annual salary Manager 1 $45,000 Assistant Manager 3 $25,000 Assistant Manager — Car wash 1 $20,000 Full Time Associates 2 $18,000 Part Time Associates 20 $7.50 to 9.00/ hour Total 27 $240,000 VI) FINANCIAL ASSISTANCE (TIF) ---- will be required to allow the overall project to succeed. The demographics of the business area reflect: 1) A maturing population 2) Moderate traffic flow. 3) Average house hold income. 4) A general need for new development or redevelopment in the area. THE ACHEVEMENT OF ECONOMIC SUCCESS OF THIS PROJECT WILL BE WILL REQURE TIF SUPPORT. Currently, we believe that the attached land improvement bids quality for TIF support. See attached Hageberg Excavating Inc. and Sandness Construction, Inc bids totaling $481,000. VII) IN SUMMERY --- we see the following benefits of our development for the city of New Hope: 1) Continued revitalization within the city of New Hope. 2) Provides a vital service in partnership with the leader in gasoline, carwash and convenience store business. 3) Creates new full and part time job positions within the city. 4) Adds $2.5 to $3.0 million dollars of increased tax base. 5) Expanding development with a high quality companies such as Holiday will promote additional developments within the New Hope business corridor. 6) Within access of 1100 customers per day, the entire New Hope business communities will benefit from increased business activity. On behalf of our Development team, we wish to thank you for your consideration to this exciting project. We look forward to following up with you at your earliest convenience. Please feel free to contact Bob Durand with any questions. Bob can be reached at 612- 226-5465. Thank You. ] s . I7, �97 --� ya.Ja' -..-�� I�r:��r�..! � 1 I� d' - } - Fri e � a .I. � 4 o' u yw�'"i: �. — ,.��F� ��•'� it Yv _ .,��irs:i►. ,_ �rl4 � ".��p;i'�I �ply4 �_"�' le. tl—— ' uM - r h - ,I ' - Y 6� C �li! 44 Originating Department Community Development Curtis Jacobsen, CD EDA 1 I Request for Action Approved for Agenda I Agenda Section February 25, 2008 EDA Item No. : Kirk McDonald, City Manager 1 4 Motion to authorize staff and city attorney to proceed with drafting a loan agreement for a Holiday StationStore at 7180 42nd Avenue North, BCD Holdings, LLC applicant. Requested Action Staff requests that the Council approve a motion authorizing city staff and city attorney to draft appropriate loan documents for BCD Holding, LLC, the applicant, to construct a Holiday StationStore at 7180 42nd Avenue North. Policy/Past Practice It is the past practice of the Council/EDA to consider loans to businesses on a case by case basis and set the terms and interest rates according to the merits of the project. Background The Council last considered this project at the Council work session on February 19 at which time it was indicated to the developer that the Council would consider a business loan for the project. The developer had previously met with the Mayor, City Manager and CD Specialist on February 12 to discuss other options which may allow the project to proceed. One idea that was discussed was to eliminate the second separate building for the car wash and attach that to the back of the convenience store a potential savings of $50,000 to $60,000 to the project. Additionally, the idea of a low interest loan was discussed. Mayor Opem suggested that he could support a loan to the project but not the use of TIF. At the work session the Council was in general agreement that they could support a small low interest business loan to the project, with proper security and possible personal guarantees. As part of the process, staff was directed to perform appropriate due diligence, and a thorough review of the projects pro -forma. The request is for a $60,000.00 low interest loan at three (3) percent interest with a ten year amortization period and payments starting 18 months after the project has been completed. Motion by J4au4UA, Second by To: I. \ RFA\ PLANNING\ PLANNING\ Q - Holiday authorize loan agreement 2-25-08.doc Request for Action February 25, 2008 Page 2 Funding Funding for this business loan will be provided through the economic development reserves of the EDA. Attachment • BCD Holdings, LLC (memo) MEMORANDUM TO: Curtis Jacobson FROM: BCD Holdings, LLC DATE: February 14, 2008 RE: Holiday Station Store on 42nd Avenue Dear Curtis: We appreciated the opportunity to meet with everyone on last Monday. As we discussed. we would like to explore the possibility of moving the car wash behind the building which should be a large savings for us. In addition, we would ask that the City of New Hope give us a low interest loan (3%) for $60,000 with a 10 year amortization period and payments starting 18 months after the project has been completed. With these modifications we feel that we can move ahead without any Tax Increment Financing assistance. Thank You Chuck Durand EDA Request for Action q Originating Department Approved for Agenda Agenda Section Community Development May 27, 2008 EDA Item No. By: Curtis Jacobsen, Director of CD By: Kirk McDonald, City Manager 4 Resolution approving BCD Holdings, LLC/Holiday Station loan documents for the redevelopment of 7180 42nd Avenue North (improvement project no. 844) Requested Action Staff requests the EDA approve the resolution and loan documents for the $60,000 business loan to BCD Holdings, LLC/Holiday Station, Chuck Durand, owner. Policy/Past Practice One of the city's strategic goals is that the city will encourage maintenance, redevelopment, and reinvestment of existing properties to improve or enhance its tax base. As a past practice the city has offered various forms of business subsidy loans to assist businesses on a case by case basis. Background On February 25, the Council authorized staff and the city attorney to begin working with BCD Holdings, LLC to draft the appropriate loan documents for a $60,000 business loan for the redevelopment of 7180 42nd Avenue North. Initially, BCD Holdings, LLC had requested tax increment financing assistance for their proposed redevelopment of 7180 42nd Avenue North. The Council was not supportive of using TIF for this commercial venture. The applicant next proposed a loan from the city. The Council after deliberation was supportive of that financial assistance vehicle. The attached documents were drafted by the attorney for BCD Holdings and reviewed by the city attorney. The city attorney states that the documents provided are acceptable, but raises the following issues in his correspondence: • The city's willingness to subordinate its loan to other future loans. • The need for BCD Holdings to provide evidence of fee ownership. • The need for BCD Holdings to provide proof of their equity in collateral property. • Shall the city require Chuck Durand to personally guarantee the loan? • The date the city intends to fund the loan. Motion by Second by I:1REA\PLANNING IPLANNIIVG1Q&R-Holiday loan5-27-08.doc Request for Action May 27, 2008 Page 2 The city attorney's concerns have been incorporated as conditions of approval as follows: 1. The loan will be for a maximum of ten (10) years. 2. The loan will bear an interest rate of three (3) percent. 3. The loan amount will be $60,000.00. 4. Prepayment of the loan is encouraged. 5. The loan will not be subordinate to any loans dated after the date of this loan. 6. BCD Holdings, LLC shall provide evidence of fee ownership. 7. BCD Holdings, LLC shall provide evidence of current equity. 8. Mr. Chuck Durand shall personally guarantee the loan. 9. The loan shall be funded no earlier than June 18, 2008. 10. The loan documents shall be updated to reflect all of the preceding conditions. Recommendation Staff recommends the EDA approve the resolution as presented. Attachments • City attorney letter - 5-21-08 • Mortgage Deed Mortgage subordination Agreement • Term Promissory Note • Loan Calculator Excerpt of the February 25, 2008, EDA Minutes HOLIDAY President Opem introduced for discussion Item 4, Motion to authorize staff STATIONSTORE and city attorney to proceed with drafting a loan agreement for a Holiday IMP. PROJECT 844 StationStore at 7180 42nd Avenue North, BCD Holdings, LLC applicant. Item 4 Mr. Kirk McDonald, executive director, explained that the applicant could not be in attendance tonight. He stated the Council originally discussed the developer's request for tax increment financing assistance at the February 11 council meeting. Subsequently the mayor and staff met with the developer on February 12 to discuss other funding options such as a business loan. At the February 19 work session the Council expressed general support of the developer's modified request for a $60,000 low interest loan. Mr. McDonald stated the request is for a $60,000 low interest loan at three percent interest with a ten year amortization and payments starting 18 months after project completion. He stated funding of the business loan would be provided through EDA reserves. Mr. McDonald stated as recommended by Council, staff will perform appropriate due diligence and a thorough review of the project pro -forma. Mr. McDonald stated if the EDA is agreeable the next step is to authorize staff and the city attorney to draft the appropriate loan documents. President Opem stated three percent is the current prime rate. He pointed out that based on the increased property value the city would net an additional $150,000 in taxes over the next 25 years. The EDA commented on their preference for a business loan rather than tax increment financing to enable the development of the property. MOTION Motion was made by Commissioner Stauner, seconded by Commissioner Item 4 Nolte, authorizing staff and city attorney to proceed with drafting a loan agreement for a Holiday StationStore at 7180 42nd Avenue North, BCD Holdings, LLC applicant. Voting in favor: Opem, Hoffe, Nolte, Stauner; Voting against: None; Absent: Sommer; Abstained: None. Motion carried. LESLIE A. ANDERSON TUCKER J.HUMMEL GORDON L. JENSEN' MELANIE P. PERSELLIN=.3 STEPHEN M. RiNGQUIST' STEVEN A.SONDRALL 'Real Property Law Specialist Certified By The Minnesota State Har Association 'Licensed in Illinois/Colorado 'Qualified Neutral Mediator under Rule 114 JENSEN ANDERSON SONDRALL, P.A. Attorneys At Law 8525 EDINBROOK CROSSING, STE. 201 BRooKLYN PARK, MINNESOTA 55443-1968 TELEPHONE (763) 424-8811 $ TELEFAX (763) 493-5193 e-mail law@j asattorneys.com Writer's Direct Dial No.: (763) 201-0211 e-mail sas&asattorneys.com May 21, 2008 Curtis Jacobsen Community Development Director City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Re: BCD Holdings, LLC/Holiday Station Loan Documents Our File: 99-11343 Dear Curtis: This letter is in follow up to the loan documents we have received from Chuck Durand in connection with the Holiday Store development project at 42nd and Quebec. As I pointed out in my May 20`s e-mail to attorney Dan Young, the documents they have provided are acceptable with one minor modification. Specifically, the Mortgage Subordination Agreement requires the City to subordinate its lien to future liens against the property created after our lien. (see item 1. on page 2 of the agreement). I would recommend against this provision and require its deletion from the agreement. I suggest we handle future subordination requests on a case by case basis as they arise. Also, we will need title evidence that BCD Holdings is the fee owner of the mortgaged property and some documentation to indicate BCD Holdings has at least $60,000.00 of equity in the property. Finally, we should still require that Chuck Durand personally guarantee the loan. I am also questioning whether the City intends to fund this loan as of June 1, 2008. I suspect we wouldn't be able to fund the loan until BCD Holdings executes the CUP Site Agreement, provides a financial guarantee for any public improvements required as part of this project and provides the required title evidence and equity documentation. I doubt this can all be pulled together in four days after the Council meeting. Very truly yours, Steven A. SondraIl, City Attorney, City of New Hope cc: Kirk McDonald P:1Attomey\SASl1 Client Pilesl2 City of New Hope199-1:343(Holiday loan)Iltr. C. Jacobsen to documents.doc MORTGAGE DEED THIS MORTGAGE, dated this 1st day of dune, 2008, between BCD Holdings, LLC, a Minnesota limited liability company, (hereinafter called the "Mortgagor', regardless of whether one or more persons or entities), and the City of New Hope, a Minnesota municipality, (hereinafter called the "Mortgagee"). WITNESSETH, that to secure the payment of Sixty Thousand and 001100ths Dollars ($60,000.00), with interest, according to the terms of a Term Promissory Note bearing even date herewith, together with any renewals or extensions thereof, and all other liabilities and indebtedness of the Mortgagor to the Mortgagee, due or to become due, now existing or hereafter arising, the Mortgagor hereby mortgages to the Mortgagee the tract of land lying in the County of Ramsey, State of Minnesota, described as follows, to -wit: See Exhibit A attached hereto and made a part hereof (the "Premises"). 1. In addition to making and including in this Mortgage the covenants and other provisions set forth in Minnesota Statutes, Section 507.15, or any future Minnesota Statute providing for a statutory form of real estate mortgage, the Mortgagor makes the following covenants and agreements with the Mortgagee: (a) The Mortgagor and Mortgagee have entered into a Mortgage Subordination Agreement dated even date whereby Mortgagee has agreed to subordinate its interests and liens in the Premises to any other currently existing or those that may arise from time to time in the future. See Exhibit B attached hereto and made a part hereof. (a) The Mortgagor will permit the Mortgagee, or its agents, at all reasonable times, to enter upon and inspect the Premises. 2. The Mortgagor covenants with the Mortgagee the following statutory covenants: (a) To warrant title to the Premises. (b) To pay all taxes and assessments promptly before a penalty might attach for nonpayment thereof. (c) To keep the buildings and other improvements now existing or hereafter erected on the Premises insured against fire for the amounts specified by the Mortgagee and against other hazards under the usual extended coverage endorsement and all other hazards and risks of direct physical loss occasioned by any cause whatsoever, subject only to the exceptions and exclusions, if any, agreed to by the Mortgagee. The policy or policies of such insurance shall be in a form acceptable to Mortgagee and shall have a loss payable provision in favor of and in a form acceptable to Mortgagee. In the event of foreclosure of this Mortgage, all right, title and interest of the Mortgagor in and to any insurance policies then in force shall pass to the purchaser at the foreclosure sale. (d) That the Premises shall be kept in good repair and no waste shall be committed. (e) That all indebtedness secured by this Mortgage shall become due after default in the payment of any installment of principal or interest, at the option of the Mortgagee. 3. If default has been made in any payment or covenant herein, the Mortgagee is hereby authorized and empowered to declare the whole amount secured by this Mortgage due and payable. The Mortgagee shall have the authority and power to proceed to protect and enforce its rights by suit or suits in equity or at law, either for the specific performance of any covenant or agreement contained herein or in the indebtedness secured by this Mortgage or for the foreclosure of this Mortgage or for the enforcement of any other appropriate legal or equitable remedy and, in the event of foreclosure, shall be entitled to the immediate appointment of a receiver to operate and protect the Premises and to collect all rents during the pendency of the foreclosure, and, in addition, the Mortgagor authorizes the Mortgagee to sell the Premises, as one tract or otherwise, at public auction and convey the same to the purchaser and, out of the proceeds arising from such sale, to pay all indebtedness secured hereby, with interest, and all legal costs and charges of such foreclosure and the maximum attorney's fees permitted by law, which costs, charges and fees the Mortgagor hereby agrees to pay. The Mortgagor hereby expressly consents to the sale of the Premises by advertisement, pursuant to the Minnesota Statutes, Chapter 580, which provides for sale after service of notice thereof upon the occupant of the Premises and the publication of said notice. Service may not be made upon the Mortgagor personally, and no hearing of any type is required in connection with the sale. Except as required by the aforesaid statutory provision, the Mortgagor hereby expressly waives any and all rights to notice of sale of the Premises and any and all rights to a hearing of any "type in connection with the sale of the Premises. 794775 1 2 4. If the Mortgagor fails to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which does or may adversely affect the Premises or the interest of the Mortgagor or the Mortgagee therein, then the Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against and/or instigate such action or proceeding and take such other action as the Mortgagee deems necessary to protect the Mortgagee's interest. Any amounts disbursed by the Mortgagee pursuant to this paragraph, including reasonable attorneys' fees, with interest thereon, shall become additional indebtedness of the Mortgagor secured by this Mortgage. Such amounts shall be payable upon notice from the Mortgagee to the Mortgagor requesting payment thereof and shall bear interest from the date of disbursement at the rate set forth in the Note which this Mortgage secures. Nothing contained in this paragraph 4 shall require the Mortgagee to incur any expense or do any act hereunder. 5. Any delay by the Mortgagee in exercising any right or remedy hereunder or otherwise afforded by law or equity shall not be a waiver of or preclude the exercise of such right or remedy or any other right or remedy hereunder or at law or equity. 6. All remedies of the Mortgagee are distinct and cumulative to any other right or remedy under this Mortgage or afforded by law or equity and may be exercised concurrently or independently and as often as the occasion therefor arises. 7. The covenants and agreements herein shall bind and the rights hereunder shall inure to the successors and assigns of the Mortgagee and the heirs, personal representatives, successors and assigns of the Mortgagor. 8. In the event any provision or clause of this mortgage conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage which can be given effect without conflicting provisions, and, to the end, the provisions of this Mortgage are declared to be severable. 9. The Mortgagor acknowledges and agrees that this right of inspection allows the Mortgagee, or the Mortgagee's agents, to enter the premises at reasonable times to conduct environmental tests to establish the presence, or absence, of hazardous substances or pollutants upon the premises. 10. The Mortgage shall be governed by the laws of the State of Minnesota. 11. The maximum principal indebtedness secured by this Mortgage is $60,000.00. IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day and year first above written. BCD Holdings, LLC (a Minnesota limited liability company) 794775 1 3 By: Charles E. Durand Its: Chief Manager STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing was acknowledged before me this 20 , by , the , on behalf of the Notary Public THIS INSTRUMENT WAS DRAFTED BY: MURNANE BRANDT 30 EAST SEVENTH STREET SUITE 3200 ST. PAUL, MN 55101-4919 Telephone: (651) 227-9411 794775.1 4 _ day of , of a EXHIBIT A LEGAL DESCRIPTION The following described real property located in the County of Ramsey and State of Minnesota: Silverview Estates Lot 1, Block 1 794775.1 5 MORTGAGE SUBORDINATION AGREEMENT THIS MORTGAGE SUBORDINATION AGREEMENT is entered into this 1st day of June, 2008, by and between the City of New Hope (the "City") and BCD Holdings, LLC, a Minnesota limited liability company, (the "Mortgagor"). RECITALS The City has agreed to lend to Mortgagor the sum of Sixty Thousand and no1100's Dollars ($60,000.00) to be evidenced by a Term Promissory Note of even date herewith in the amount of $60,000.00, executed by the Mortgagor in favor of the City (hereinafter referred to as the "City Note"), which City Note is secured by a Mortgage Deed of even date herewith in the amount of Sixty Thousand Dollars ($60,000.00), executed by the Mortgagor in favor of the City and filed for record on , 2008 in the Office of the County Recorder, Ramsey County, Minnesota as Document No. (hereinafter referred to as the "City Mortgage") (hereinafter the City Note and the City Mortgage will be collectively referred to as the "City Loan Documents"), provided that the City will agree that the interests and lien of the City in the Property arising from the City Loan Documents will be junior and subordinate to any interest, mortgage, or lien that may currently exist or may arise in the future on the Property. 2. The real estate covered by the lien of the City Mortgage is located in Ramsey County, Minnesota, and legally described as: Silverview Estates Lot 1, Block 1 (hereinafter referred to as the "Property"). NOW THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby covenant and agree as follows: All of the City's right, title and interest in and to the City Mortgage shall be subordinate and junior in all respects to any other liens or security interest currently existing or those that may arise from time to time in the future. 2. This Agreement may not be amended or modified in any manner other than by an Agreement in writing signed by the parties hereto. 3. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above. CITY OF NEW HOPE 4401 Xylon Avenue New Hope, MN 55428 Its: STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this 1st day of June, 2008, by the of the City of New Hope. Notary Public 794622.1 2 BCD HOLDINGS, LLC, a Minnesota limited liability company By: Charles E. Durand Its: Chief Manager STATE OF MINNESOTA ) ) ss. COUNTY The foregoing instrument was acknowledged before me this I st day of June, 2008, by Charles E. Durand, Chief Manager of BCD Holdings, LLC, a Minnesota limited liability company. This Instrument was drafted by: MURNANE BRANDT 30 EAST SEVENTH STREET, SUITE 3200 ST. PAUL, MN 55101 (651) 227-9411 794622.1 TERM PROMISSORY NOTE (BCD Holdings, LLC) Amount: $60,000.00 Interest: 3% per annum Term: 10 years New Hope, Minnesota June 1, 2008 FOR VALUE RECEIVED, BCD Holdings, LLC, a Minnesota limited liability company (the "Borrower"), agrees and promises to pay to the order of City of New Hope, a Minnesota municipality, its endorsees, successors and assigns (the "Lender"), at, 4401 Xylon Avenue, New Hope, Minnesota 55428, or such other place as the Lender may from time to time designate, the principal sum of Sixty Thousand and 001100 Dollars ($60,000.00), as set forth in the Loan Agreement referenced below, together with interest on the Principal Balance (as later defined) at the rate or rates of interest hereinafter set forth, payable in the following manner and on all the following terms and at the following times: 1. Definitions. For purposes of this Note, the following terms shall have the following meanings: a. "Business Day" shall mean any day that national banks are open for business in New Hope, Minnesota. b. "Loan Documents" shall mean this Note, the Mortgage, Subordination Agreement, and any other instruments given to evidence or secure this Note. C. "Maturity Date" shall mean June 1, 2018 d. "Mortgage" shall mean the Mortgage Deed dated the same date as this Note and given by the Borrower to the Lender, granting a lien on the Property described in that Mortgage as security for this Note and granting a security interest to the Lender. e. "Principal" shall mean the sums of money from time to time disbursed by the Lender pursuant to this Note. f. "Principal Balance" shall mean the amount of Principal remaining unpaid from time to time. g. "Property" shall mean the real property described in the Mortgage. h. "Term" shall mean the period from the date of this Note through the Maturity Date. 2. Interest Rate. The Principal Balance of this Note outstanding at the close of each day shall bear interest ("Interest") at the rate of three percent (3%) per annum ("Interest Rate"). 3. Basis of Computation. Interest shall be calculated by multiplying the actual number of days elapsed in the period for which interest is being calculated by a daily rate based on a 360 -day year. 4. Late Charge. In the event that any payment required hereunder is not paid when due, the Borrower agrees to pay a late charge ("Late Charge") of $.05 per $1.00 of the unpaid payment to defray the costs of the Lender incident to collecting such late payment. This late charge shall apply individually to all payments past due and there will be no daily pro rata adjustment. This provision shall not be deemed to excuse a late payment or be deemed a waiver of any other rights the Lender may have, including the right to declare the entire Principal Balance and accrued interest immediately due and payable. Terms of Payment. This Note shall be payable as follows: Commencing on June 1, 2008 Interest will accrue at a rate of 3% per annum and beginning December 1, 2009, and on the first day of each and every month thereafter until the Maturity Date, when the entire unpaid principal balance and accrued interest thereon shall be due and payable, monthly installments of principal and interest shall be paid, each of such installments to be applied first to the payment of late charges, if any, then to the payment of interest and then to the reduction of principal. The monthly installment of principal and interest payable on December 1, 2009, and thereafter shall be Six Hundred Five and 631100ths Dollars ($605.63). The monthly payments recited herein are based upon an assumed amortization schedule of ten (10) years. 6. Application of Payments. All payments shall be applied first to any Costs of Collection, then to Late Charges, then to accrued interest and then to Principal Balance, except that if any advance made by the Lender under the terms of any instruments securing this Note is not repaid, any monies received, at the option of the Lender, may first be applied to repay such advances, plus interest thereon, and the balance, if any, shall be applied as above. If any payment of Principal, Interest, Late Charge or other sum to be made hereunder becomes due and payable on a day other than a Business Day, the due date of such payment shall be extended to the next succeeding Business Day and interest thereon shall be payable at the applicable interest rate during such extension. Upon a Default (as herein defined) any monies received shall, at the option and direction of the Lender, be applied to any sums due under this Note or any instrument securing this Note in such order and priority as the Lender shall determine. 7. Security. This Note is the Note referred to in and secured by the Mortgage dated the same date as this Note herewith each encumbering the Property (the "Collateral"). 8. Default. If (a) any payment not be made within fifteen (15) days after the date when due in accordance with the terms and conditions of this Note (other than on the Maturity Date when payments shall be due on such date), or (b) an Event of Default (as defined therein) occurs under the Mortgage, (all of the above being herein singularly and collectively referred to as a "Default"), the entire Principal Balance, together with accrued interest thereon and Late Charges, if any, shall become immediately due and payable at the option of the Lender hereof upon notice to the Borrower. 9. Time of Essence. Time is of the essence. No delay or omission on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right or of any other remedy under this Note. A waiver on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on a future occasion. 10. Costs of Collection. In the event of any default hereunder the Borrower agrees to pay the costs of collection, including reasonable attorneys' fees and costs incurred, all other costs and fees incurred in litigation, mediation, bankruptcy and administrative proceedings and all appeals therefrom and all other costs and expenses incurred in the collection of the amounts due under this Note ("Costs of Collection"). 11. Waiver of Presentment, Etc. Presentment for payment, protest and notice of non-payment are waived. Consent is given to any extension or alteration of the time or terms of payment hereof, any renewal, any release of any part or all of the security given for the payment hereof, any acceptance of additional security of any kind, and any release of, or resort to any party liable for payment hereof. To the extent permitted by law all rights and benefits of any statute of limitations, and any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead laws are waived. 12. Savings Clause. It is expressly stipulated and agreed to be the intent of the Borrower and Lender at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than permitted under state law) and that this section shall control every other covenant and agreement in this Note and any other Loan Document. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under this Note or under any other Loan Documents, or contracted for, charged, taken, reserved, or received with respect to the indebtedness evidenced by this Note ("Indebtedness"), or if the Lender's exercise of the option to accelerate the maturity of this Note, or if any prepayment by the Borrower results in the Borrower having paid any interest in excess of that permitted by applicable law, then it is the express intent of the Borrower and Lender that all excess amounts theretofore collected by Lender shall be credited on the Principal Balance and all other amounts theretofore collected by Lender shall be credited on the Principal Balance and all other Indebtedness (or, if this Note and all other Indebtedness have been or would thereby be paid in full, refunded to the Borrower), and the provisions of this Note and 3 the other Loan Documents shall immediately be deemed retormed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the Indebtedness shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Indebtedness until payment in full so that the rate or amount of interest on account of the Indebtedness does not exceed the maximum lawful rate from time to time in effect and applicable to the Indebtedness for so long as the Indebtedness is outstanding. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. 13. Notices. Any notices and other communications permitted or required by the provisions of this Note (except for telephonic notices expressly permitted) shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt Requested, bearing adequate postage, or deposited with reputable private courier or overnight delivery service, and addressed as hereinafter provided. Each such notice shall be effective three (3) days after being deposited or delivered as aforesaid. The time period within which a response to any such notice must be given, however, shall commence to run from the date of receipt of the notice by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice sent. By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall have the right from time to time to change its address and shall have the right to specify as its address any other address within the United States of America. Each notice to Lender shall be addressed as follows: City of New Hope 4401 Xyl o n Ave New Hope, Minnesota 55428 Attn: Notice to Borrower shall be addressed as follows: BCD Holdings, LLC 718042 d Ave. North New Hope, MN 55427 Attn: Chuck Durand 14. Governing Law. Notwithstanding the place of execution of this 4 instrument, the parties to this instrument have contracted for Minnesota law to govern this instrument and it is agreed that this instrument is made pursuant to and shall be construed and governed by the laws of the State of Minnesota without regard to the principles of conflicts of law. 15. WAIVER. THE BORROWER WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH ANY PARTIES TO THIS INSTRUMENT ARE INVOLVED AND WHICH DIRECTLY OR INDIRECTLY IN ANY WAY ARISES OUT OF, IS RELATED TO, OR IS CONNECTED WITH THIS INSTRUMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE DATE OF THIS INSTRUMENT. Executed as of the date first above written. BCD Holdings, LLC (a Minnesota limited liability company) By: Charles E. Durand Its: Chief Manager 794602.1 Loan calculator: Bankrate.com i al #! r • I Page 1 of 4 Loan calculator and amortization advertisement Calculate your payment and more @print =Ell E-rindel Calculate your monthly payment for mortgage, auto or home equity loans. Click on the next to the input box for an item to get help on that Item. Loan calculator and amortization Lawn amount $ 62720.15,69"! D (Do not use commas.) Loan term in years or months 10.00 years or 120 months Interest rate * 3.00 ? a6 per year Loan start date Dec 1 , J 2009 MonthlyPaymentts:$ 605.63 a Show/Recalculate Amortization Table ❑? Extra Payments Calculate the impact of extra payments using any combination of the inputs below Adding $ 0 r_?] to your monthly payment Adding $ 0 a as an extra yearly payment every May Adding $ 0 �� as a one time payment in May'. 2008:.-.,; a Changes paid -off date to Dec 1, 2019 ? state Find your loan: You can get personalized results City '. based on interest rates for the location where you are looking purchase a home to purchase or refinance. use this search to compare current ` rates and lenders. $300,001 to $417,00D 30 yr fixed mtg 1 Show/Recalculate Amortization Table ?Q AmoAl:ation Table for $82720.15 borrmaed on Dec 1, 2089 MOO Year 1 2D1D 2 20111 3 2010 4 2010 5 2010 8 2010 7 2010 8 2010 9 2010 10 2D70 11 2010 12 2040 Payment (S) 805.63 805.&4 805.63 605.68 w&w ei)&W 605.63 5M.63 605.63 806.83 805.63 605,83 Principal Paid (s) 448.83 449.95 451.08 45220 453.34 454.47 455.60 456.74 457.88 459:03 460.18 461.33 Interest Paid (s) 156:8o 155.68 154.55 163.43 152.30 161.16 150.03 148.89 147.74 148.60 145A5 144.30 Total Interest (s) 156.80 312.48 487.03 620.46 77275 523:91 1073.94 1222:83 1370.57 1517.17 166262 1806,93 Balance (s) I 62271.32 61621.37 81370.29 80918A9 e0464.75 60010.28 59554:68 59097.93 58840.05 59181.02 57720.54 57259.51 http:llwww.bankrate.comfbrm/popcalc2.asp?unroundedPayment==605.6304391594809&Io... 5/13/2008 Loan calculator: Bankrate.com Month1 2 3 4 5 6 7 8 9 10 11 12 Year 2011 2011 2011 2011 2011 2011 2011 2011 2011 201) 20,1 7.011 Payment ($) 605.63 605.63 805.63 605.63 605,63 605,83 805.63 605.63 605.63 805.63 606.63 606.63 Principal 462.48 463.64 454.80 465.90 467.12 468.29 469.46 470.64 471.81 472.99 474.17 475.36 Paid IS) Interest 143.15 141.99 140,83 139,67 136,51 137.34 13&17 134.99 133.82 132.64 131.46 130.27 Paid (S) Total 1950.06 2092,07 2232.90 2372.57 2511.48 2548A2 2784.59 2919.58 3053AO 3168.04 3317AS 3447.78 Interest (S) Balance (3) 5679143 56333.39 55866.60 55402.64 54935.51 54467.22 5M7.76 53827,12 5055.91 52682.32 5210&14 61632.78 Month 1 2 3 4 5 6 7 8 9 10 11 12 Year 2012 2012 2012 2012 1 1012 2012 2012 2012 2012 2012 2012 2012 Payment ($) 605.63 605.63 605.63 605.63 605.53 606.63 605.63 605.63 805.63 805.63 606.83 605.63 Principal 47&55 477.74 478.93 480.13 481.33 482,54 483.74 484.95 466.16 487.38 48&60 489.82 Paid j8) Interest 129.08 127,89 12&70 125.50 124.90 123,16 121,89 120.88 119,47 11&25 117.03 115.81 Paid ($) Total 3576.85 3704,74 3831.43 3956,93 4081.28 42114.32 4325.21 4440,69 456626 4664.61 4801.85 4817.46 Ir4Orest {S) Balance {S} $1156.23 50678.49 50199ZG 49719A3 49238,10 48755,56 48271.82 47786.87 47300.71 46813.33 48324.73 45634.91 Month 1 2 3 4 5 6 7 6 9 10 11 12 Year 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 Payment (S) 605,63 605.63 606,83 506.63 606.63 605,63 1 605.63 605,63 805,63 805,63 805.63 005.63 Principal 481.04 492.27 493.66 494.74 495.97 497.21 498.45 499.70 500.95 502.20 503,46 504.72 Paid ($) Interest 114.59 113.36 112.13 110.90 109,66 108A2 107,18 105.93 104.68 103.43 102.17 100.91 Paid ($) Total 5432.04 5145-40 $257.53 5360.43 5478.09 5586.51 5693.68 5799,61 5904.20 6007.72 5109,69 5210.80 hit," (S) Balance (S) 45343.87 44851,60 4435&10 43863.36 43387.39 42870.18 42371.72 4107242 41371.07 40886.67 40385,41 39660,69 Month 1 2 3 4 5 8 7 8 9 10 11 12 Year 2014 2014 2014 1 1014 1 2014 1014 2014 2014 2014 2014 2014 2614 Payment (8) 605.63 605.63 605.63 805,63 605,03 806.63 605,63 606.63 606.63 605,63 606.83 605.63 Principal 506,98 607.24 608,51 609.78 511.05 51234 513.62 514.90 51&19 517.48 518.71 52&07 Pald l8) Interest 99.65 98.39 97.12 96.85 94.57 93.30 9201 90.73 89.44 81115 8646 85.56 Paid ($) Total 6310A5 6408,84 6505.96 6601,81 6898,38 6789.88 6881.69 SMA12 7081.86 715042 723&88 7322A4 inured (S) Balance%) 39354.71 38647.47 38338.96 37829.18 37318.12 36848.78 36292,17 35777.27 36281.08 34743.60 34224,83 33704.76 Month 1 2 3 4 5 6 7 9 9 10 11 12 Year 2015 2015 2015 2015 1 2015 2015 2015 2015 2015 2015 2016 2015 Paymerd ($) 605.63 605.63 005,63 505.63 805.63 605.83 605.03 605.63 005.03 605.03 606.63 605.63 Pdncipal 521.37 522,67 523.90 526.29 INAO 527.92 529.24 530.55 531,89 533.22 534.55 535.89 Paid ($) hderest 84.26 8296 81.65 80.34 79.03 77.71 7&39 75,07 73.74 72.41 71.08 69.7.0 Paid ($) Page 2 of 4 http://www.banlaate.com/brmlpopcalc2.aspr u=oundedPayment= 605.6304391594809&lo... 5/13/2008 Loan calculator: Bankrate.com Page 3 of 4 TWI Irderest (8) 7406.70 7489.66 7571,31 7651.66 7730.68 7808.39 7884.79 7959.85 8033.60 8106.01 8177.09 8246.88 Balance (4) 33183.39 32660.72 32136.74 31611,45 31084,85 30556.93 30027,70 29497.13 2896525 28432.03 27697AB 27361.59 Month Year 1 2016 2 2016 3 2016 4 2016 5 2016 6 2016 7 2018 8 2016 9 2016 10 2018 11 2016 12 2016 PapmsM(4) 605,63 605.63 80&63 606,63 605.63 605,63 605,83 805.83 605,63 605,53 605,83 605.63 Pdadpal Paw (8) 53723 538.57 539.92 54127 54162 543,96 545,34 54&70 548.07 549.44 550.81 55219 Interest Paw (S) 6&40 67.06 66.71 64.36 63.01 61.65 00.30 68.93 6758 56.19 1 64.62 53,611 Total hared (S) 831524 8382.30 8448.01 8512.38 6575.39 8637.04 8897,34 8756.77 681344 6870,03 8924.65 8978A Balance ($) 26824,37 28285.80 25745.88 25204.62 24662.00 2411&02 23572,59 29025,99 22477.92 21928.09 21377,68 20828A9 month Year 1 2017 2 2017 3 2017 4 2017 5 2017 6 2017 7 2017 8 2017 9 1 2017 10 2017 1 11 2017 12 2017 Payment ($) 605.63 605..63 606.83 605,83 605.03 805.63 805.83 WAS 605.63 605.63 606,63 606.63 Principal Paid 0) 553.57 554,95 55&34 557.73 559.12 580.52 561.92 583,33 564.74 500.15 587.56 568.98 Interest Paid (S) 5205 50.68 4929 1 47.90 4651 45.11 43,71 42.30 40.90 SAS 38.07 36.66 Total Interest 5) 9030,36 9081.04 9130.33 917823 9224.74 9289.85 9313.56 9355,86 9396,76 943624 9474.31 9510.96 Balance (4) 20271.92 1971&97 19160.63 18602.91 18043.70 1748326 16921.34 16958.01 1579328 15227.13 1466957 14090.59 Month Year 1 2018 2 2018 3 2018 4 2018 6 2018 5 2016 7 2018 8 2018 9 2018 10 2018 11 2018 12 2018 Payment P) 605.63 806.63 605.03 605,83 666.63 605.63 606.63 805.83 905.03 606.63 505.63 605.69 Principal Paid (3) 570,40 571.63 573.28 574,89 57&13 W-67 679.01 580.46 581,91 583.37 584.83 586.29 InWrest Paw ($) 35.23 33.80 32.37 30,94 29.50 2&06 28,62 25.17 23.72 2226 20,80 19.34 Tolal intarast ($) 9548.18 9579.98 9812.38 9843.29 9672.79 9700.85 9727.47 9752,94 9770,36 9796.62 9819,43 9838.77 Balance ($) 13520.18 1294825 12375.09 118MA0 1122427 10846.70 10067.69 9487.23 8905.31 8321.95 7737,12 7150.83 Month Yew 1 2049 2 2019 3 2019 4 2019 5 2019 5 1 2019 7 2019 6 2019 9 1 2019 10 2019 11 2019 12 2019 Payment ($) 605.63 605.63 605.63 605.63 605,63 605.63 605.63 605.63 605.63 605,53 W5.63 605,63 Prindpal Paid R) 507.75 589.22 590.70 692.17 593,86 695,14 696,62 59&12 598.81 601,11 602.61 604,12 Intessl Paid ($) 17.86 16,41 14.93 13.46 11.98 10,49 9.01 7151 6.02 4.52 3.02 1.61 Total Interest ($) 9856.65 9873.05 9887.999901 .45 9913.42 992 3.92 9932,92 9840A4 9946AB 9950.9E 9953.99 9955.50 Balmce (5} 6663,48 5973.56 5383.16 4790.99 4197.33 360220 1 3005.57 2407A8 1807.114 1208.73 604.12 0.00 Print Amortization Table 0 http://Www.bankrate. comlbrm/popcalc2.asp?unroundedPayment--605.6304391594809&1o... 5/13/2008 Loan calculator: Bankrate.com SPONSORLINKS J!, Q% APR" on purchases for 12 billingcycles -- Plus 3.99% APR* for Life on balance transfers made withln the first 3 billing cycles. Gat the purchasing power you need. Too Much Debi? -- Get a free quote to reduce your credit card debt up to 60%. See how fast you can be completely debt free. Discover Business Card with Cashback-Bonu --A Card with More than Great Rates, Cash Back on Purchases. Apply for a Discover Business Card Today! Balance Transfer Credit Cards -- Get a 0% rate on balance transfers. Compare 0% APR credit card offers & apply online. Find Best Credit Cards Here -- Find the best credit card for your here. Get cash back, rewards, and save thousands on Interest. Choose from many types. News & Advice I Compare Rates I C'alculatorie Mortnaoe I Home Eouity I Auto -I CDs & Investments I Credit Cards I Debt Management Calleet Finanep I Persons) Ftp About Dankrate IIfs vacv I OnlinejAedla Kit i Pertiershios I Inyrs r Relations I I r_onU I _-lepW NASDAQ, RATE I RSS Feeds I Order Rate Data I BankratCanada I " Mortgage rate may Include points. See rate tables for deteila. Click her - " To seethe deflnitlon or overnight averages slick here. 9ankratexDrn 0, Copyright 0 2008 8ankrate, Inc., All Rights Reserved, Term -If g Bankrate Privacy Policy Page 4 of 4 http://www.bankrate. com/bmVpopcalc2.asp?unroundedPayment--605.6304391594809&1o... 5/13/2008 Compound Interest Calculator J#kbWt '`r=,'*' Mathematics Page 1 of 1 Compound Interest Use this online calculator if you are borrowing money or you are lending money. This calculator enables you to determine how much interest will be paid or accumulated. See also: Free Amortization Schedule Calculator COMPOUND INTEREST Principal1:60000 Months 1 = .08 3 2 =17 3 =.25 Rate 11 4=.33 5=.42 8-.50 Years :1.5 7=.58 8=.87 8=.75 10=-83 Amount 62720.15 11 =.W Interest :2720.15 Calculate Clear Step 1: Enter the Principal (the amount of money borrowed or to be lent). Step 2: Enter the Rate (The annual percentage of interest) Step 3: Enter the length of time in years the money will be borrowed or lent for. Example: Denise wants to borrow $5000.00 to purchase a used car. She wants to be able find out how much the car will cost her if she borrows the $5000.00 at an interest rate of 8% for 4 ears. Thus, she will enter $5000.00 In the column for Principal. She will enter 8 in the column for rate and 4 in the olumn for years. She will then click calculate. The amount he is actually paying for her $5000A0 is $6802.44. The total amount of interest she will be charged for borrowing the $5000.00 is $1802.44. Free ]avaScripts provided by The JavaScript Source Related Links Regular Calculator - Online Business Math - Tutorials Mare Calculators Previous Articles From Deb Russell, Your Guide to Mathema8cs. FREE Newsletter. Sian Up Now! http://math.about.com/library/blcompoundinterest.htm 5/13/2008 EDA ' Request for Action Originating Department Approved for Agenda Agenda Section Community Development July 28, 2008 EDA Item No. By: Curtis Jacobsen, Director of CD By: Kirk McDonald, City Manager 4 Resolution approving BCD Holdings, LLC/Holiday Station loan documents for the redevelopment of 7180 42nd Avenue North (improvement project no. 844) Requested Action Staff requests the EDA approve the resolution and loan documents for the $60,000 business loan to BCD Holdings, LLC/Holiday Station, Chuck Durand, owner. Policy/Past Practice One of the city's strategic goals is that the city will encourage maintenance, redevelopment, and reinvestment of existing properties to improve or enhance its tax base. As a past practice the city has offered various forms of business subsidy loans to assist businesses on a case by case basis. Background On February 25, the Council authorized staff and the city attorney to begin working with BCD Holdings, LLC to draft the appropriate loan documents for a $60,000 business loan for the redevelopment of 7180 42nd Avenue North. Initially, BCD Holdings, LLC had requested tax increment financing assistance for their proposed redevelopment of 7180 42nd Avenue North. The Council was not supportive of using TIF for this commercial venture. The applicant next proposed a loan from the city, The Council after deliberation was supportive of that financial assistance vehicle. The attached documents were drafted by the attorney for BCD Holdings and the city attorney. The loan funds will come from the EDA fund. Recommendation Staff recommends the EDA approve the resolution as presented. Attachments • Resolution • Resolution of the board of directors and majority shareholders of BCD Holdings • Resolution of the board of directors and majority shareholders of Five D Motion by Second by To: .14 I:1R'All'LANNING\PLANNING\Q&R-Holiday loan7-28-08.doc Request for Action Page 2 July 28, 2008 • Term promissory note • Mortgage deed • Mortgage subordination agreement RESOLUTIONS OF THE BOARD OF DIRECTORS And MAJORITY SHAREHOLDERS OF BCD HOLDINGS, LLC The undersigned being directors and majority shareholders of BCD Holdings, LLC a Minnesota limited liability company, do hereby adopt the following resolutions effective as of this day of 2008: WHEREAS, BCD Holdings, LLC, has acquired property in the City of New Hope for constructing and operating a Holiday StationStore, and WHEREAS, as part of the closing process and approval with the City of New Hope, the Economic Development Authority in and for the City of New Hope has agreed to provide BCD Holdings, LLC a low interest loan in the amount of $60,000.00 to assist BCD Holdings, LLC with the development, and WHEREAS, BCD Holdings, LLC does hereby request Five D, Limited, a Minnesota corporation to secure this referenced loan with the New Hope EDA by giving the New Hope EDA a mortgage to be placed on the property owned by Five D Limited, located in the city of Moundsview, county of Ramsey, and as legally described as follow: Silverview Estates Lot 1, Block 1 WHEREAS, Five D, Limited, has a direct or indirect interest in BCD Holdings' development of the Holiday StationStore in New hope which will constitute sufficient and adequate consideration for the requested mortgage. NOW, THEREFORE, BE IT RESOLVED that BCD Holdings, LLC does hereby request Five D, Limited to give a mortgage in favor of the Economic Development Authority in and for the City of New Hope to be placed on its property located in Ramsey County, as legally described above, in connection with the BCD Holdings, LLC 1 City of New Hope transaction and low interest loan. Charles Durand, Director and Shareholder Robert Durand, Director and Shareholder 799168.1 RESOLUTIONS OF THE BOARD OF DIRECTORS and MAJORITY SHAREHOLDERS OF FIVE D, LIMITED The undersigned being directors and majority shareholders of Five D, Limited, a Minnesota corporation, do hereby adopt the following resolutions effective as of this day of June 2008: WHEREAS, BCD Holdings, LLC, has acquired property in the City of New Hope for constructing and operating a Holiday StationStore, and WHEREAS, as part of the closing process and approval with the City of New Hope, the Economic Development Authority in and for the City of New Hope has agreed to provide BCD Holdings, LLC a low interest loan in the amount of $60,000.00 to assist BCD Holdings, LLC with the development, and WHEREAS, BCD Holdings, LLC has requested Five D, Limited to secure the referenced loan with the New Hope EDA by giving the New Hope EDA a mortgage to be placed on the property owned by Five D Limited, located in the city of Moundsview, county of Ramsey, and as legally described as follow: Silverview Estates Lot 1, Block 1 WHEREAS, Five D, Limited, Limited hereby agrees to provide the requested mortgage and acknowledges and agrees it has a direct or indirect interest in the development of the Holiday StationStore in New hope which constitutes adequate consideration for the requested mortgage. NOW, THEREFORE, BE IT RESOLVED that Five D, Limited authorizes and agrees to give a mortgage in favor of the Economic Development Authority in and for the City of New Hope to be placed on its property located in Ramsey County, as legally described above, in connection with the BCD Holdings, LLC 1 City of New Hope transaction. Charles Durand, Director and Shareholder Robert Durand, Director and Shareholder 799168.1 TERM PROMISSORY NOTE (BCD Holdings, LLC) Amount: $60,000.00 Interest: 3% per annum Term: 10 years New Hope, Minnesota July 1, 2008 FOR VALUE RECEIVED, BCD Holdings, LL(;, a Minnesota limited liability company (the "Borrower"), agrees and promises to pay to the order of the Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation, its endorsees, successors and assigns (the "Lender"), at, 4401 Xylon Avenue, New Hope, Minnesota 55428, or such other place as the Lender may from time to time designate, the principal sum of Sixty Thousand and 001100 Dollars ($60,000.00), as set forth in the Loan Agreement referenced below, together with interest on the Principal Balance (as later defined) at the rate or rates of interest hereinafter set forth, payable in the following manner and on all the following terms and at the following times: 1. Definitions. For purposes of this Note, the following terms shall have the following meanings: a. "Business Day" shall mean any day that national banks are open for business in New Hope, Minnesota. b. "Loan Documents" shall mean this Note, the Mortgage, Subordination Agreement, and any other instruments given to evidence or secure this Note. C. "Maturity Date" shall mean July 1, 2018 d. "Mortgage" shall mean the Mortgage Deed dated the same date as this Note and given by the Borrower to the Lender, granting a lien on the Property described in that Mortgage as security for this Note and granting a security interest to the Lender. e. "Principal" shall mean the sums of money from time to time disbursed by the Lender pursuant to this Note. f. "Principal Balance" shall mean the amount of Principal remaining unpaid from time to time. g. "Property" shall mean the real property described in the Mortgage. h. "Term" shall mean the period from the date of this Note through the Maturity Date. 2. Interest Rate. The Principal Balance of this Note outstanding at the close of each day shall bear interest ("Interest") at the rate of three percent (3%) per annum ("Interest Rate"). 3. Basis of Computation. Interest shall be calculated by multiplying the actual number of days elapsed in the period for which interest is being calculated by a daily rate based on a 360 -day year. 4. Late Charge. In the event that any payment required hereunder is not paid when due, the Borrower agrees to pay a late charge ("Late Charge") of $.05 per $1.00 of the unpaid payment to defray the costs of the Lender incident to collecting such late payment. This late charge shall apply individually to all payments past due and there will be no daily pro rata adjustment. This provision shall not be deemed to excuse a late payment or be deemed a waiver of any other rights the Lender may have, including the right to declare the entire Principal Balance and accrued interest immediately due and payable. 5. Terms of Payment. This Note shall be payable as follows: Commencing on July 1, 2008 Interest will accrue at a rate of 3% per annum and beginning January 1, 2010, and on the first day of each and every month thereafter until the Maturity Date, when the entire unpaid principal balance and accrued interest thereon shall be due and payable, monthly installments of principal and interest shall be paid, each of such installments to be applied first to the payment of late charges, if any, then to the payment of interest and then to the reduction of principal. The monthly installment of principal and interest payable on January 1, 2010, and thereafter shall be Six Hundred Five and 63/100ths Dollars ($605.63). The monthly payments recited herein are based upon an assumed amortization schedule of ten (10) years. 6. Application of Payments. Ali payments shall be appiiea first to any Costs of Collection, then to Late Charges, then to accrued interest and then to Principal Balance, except that if any advance made by the Lender under the terms of any instruments securing this Note is not repaid, any monies received, at the option of the Lender, may first be applied to repay such advances, plus interest thereon, and the balance, if any, shall be applied as above. If any payment of Principal, Interest, Late Charge or other sum to be made hereunder becomes due and payable on a day other than a Business Day, the due date of such payment shall be extended to the next succeeding Business Day and interest thereon shall be payable at the applicable Interest rate during such extension. Upon a Default (as herein defined) any monies received shall, at the option and direction of the Lender, be applied to any sums due under this Note or any instrument securing this Note in such order and priority as the Lender shall determine. 7. Security. This Note is the Note referred to in and secured by the 6 Mortgage dated the same date as this Note herewith each encumbering the Property (the "Collateral"). 8. Default. If (a) any payment not be made within titteen (15) days after the date when due in accordance with the terms and conditions of this Note (other than on the Maturity Date when payments shall be due on such date), or (b) an Event of Default (as defined therein) occurs under the Mortgage, (all of the above being herein singularly and collectively referred to as a "Default"), the entire Principal Balance, together with accrued interest thereon and Late Charges, if any, shall become immediately due and payable at the option of the Lender hereof upon notice to the Borrower. 9. Time of Essence. Time is of the essence. No delay or omission on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right or of any other remedy under this Note. A waiver on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on a future occasion. 10. Costs of Collection. In the event of any default hereunder the Borrower agrees to pay the costs of collection, including reasonable attorneys' fees and costs incurred, all other costs and fees incurred in litigation, mediation, bankruptcy and administrative proceedings and all appeals therefrom and all other costs and expenses incurred in the collection of the amounts due under this Note ("Costs of Collection"). 11. Waiver of Presentment, Etc. Presentment for payment, protest and notice of non-payment are waived. Consent is given to any extension or alteration of the time or terms of payment hereof, any renewal, any release of any part or all of the security given for the payment hereof, any acceptance of additional security of any kind, and any release of, or resort to any party liable for payment hereof. To the extent permitted by law all rights and benefits of any statute of limitations, and any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead laws are waived. 12. Savings Clause. It is expressly stipulated and agreed to be the intent of the Borrower and Lender at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than permitted under state law) and that this section shall control every other covenant and agreement in this Note and any other Loan Document. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under this Note or under any other Loan Documents, or contracted for, charged, taken, reserved, or received with respect to the indebtedness evidenced by this Note ("Indebtedness"), or if the Lender's exercise of the option to accelerate the maturity of this Note, or if any prepayment by the Borrower results in the Borrower having paid any interest in excess of that permitted by applicable law, then it is the express intent of the Borrower and Lender that all excess amounts theretofore collected by Lender shall be credited on the Principal Balance and all other amounts theretofore collected by Lender shall be credited on the Principal Balance and all other Indebtedness (or, if this Note and all other Indebtedness have been or would 3 thereby be paid in full, refunded to the Borrower), and the provisions of this Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the indebtedness shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Indebtedness until payment in full so that the rate or amount of interest on account of the Indebtedness does not exceed the maximum lawful rate from time to time in effect and applicable to the Indebtedness for so long as the Indebtedness is outstanding. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. 13. Notices. Any notices and other communications permitted or required by the provisions of this Note (except for telephonic notices expressly permitted) shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt Requested, bearing adequate postage, or deposited with reputable private courier or overnight delivery service, and addressed as hereinafter provided. Each such notice shall be effective three (3) days after being deposited or delivered as aforesaid. The time period within which a response to any such notice must be given, however, shall commence to run from the date of receipt of the notice by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice sent. By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall have the right from time to time to change its address and shall have the right to specify as its address any other address within the United States of America. Each notice to Lender shall be addressed as follows: Economic Development Authority in and for the City of New Hope 4401 Xylon Ave New Hope, Minnesota 55428 Attn: Kirk McDonald Notice to Borrower shall be addressed as follows: BCD Holdings, LLC 718042 nd Ave. North New Hope, MN 55427 Attn: Chuck Durand 4 14. Governing Law. Notwithstanding the place of execution of this instrument, the parties to this instrument have contracted for Minnesota law to govern this instrument and it is agreed that this instrument is made pursuant to and shall be construed and governed by the laws of the State of Minnesota without regard to the principles of conflicts of law. 15. WAIVER. THE BORROWER WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH ANY PARTIES TO THIS INSTRUMENT ARE INVOLVED AND WHICH DIRECTLY OR INDIRECTLY IN ANY. WAY ARISES OUT OF, IS RELATED TO, OR IS CONNECTED WITH THIS INSTRUMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE DATE OF THIS INSTRUMENT. 794602.1 Executed as of the date first above written. BCD Holdings, LLC (a Minnesota limited liability company) By: Charles E. Durand Its: Chief Manager 5 MORTGAGE DEED THIS MORTGAGE, dated this day of June, 2008, between rive D, Limited, a Minnesota corporation (hereinafter called the "Mortgagor", regardless of whether one or more persons or entities), and the Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation, (hereinafter called the "Mortgagee"). WITNESSETH, that to secure the payment of Sixty Thousand and 001100ths Dollars ($60,000.00), with interest, according to the terms of a Term Promissory Note bearing even date herewith, together with any renewals or extensions thereof, and all other liabilities and indebtedness of the Mortgagor to the Mortgagee, due or to become due, now existing or hereafter arising, the Mortgagor hereby mortgages to the Mortgagee the tract of land lying in the County of Ramsey, State of Minnesota, described as follows, to -wit: See Exhibit A attached hereto and made a part hereof (the 'Premises"). 1. In addition to making and including in this Mortgage the covenants and other provisions set forth in Minnesota Statutes, Section 507.15, or any future Minnesota Statute providing for a statutory form of real estate mortgage, the Mortgagor makes the following covenants and agreements with the Mortgagee: (a) The Mortgagor and Mortgagee have entered into a Mortgage Subordination Agreement dated even date whereby Mortgagee has agreed to subordinate its interests and liens in the Premises to any other currently existing or those that may arise from time to time in the future. See Exhibit B attached hereto and made a part hereof. (a) The Mortgagor will permit the Mortgagee, or its agents, at all reasonable times, to enter upon and inspect the Premises. 2. The Mortgagor covenants with the Mortgagee the following statutory covenants: (a) To warrant title to the Premises. (b) To pay all taxes and assessments promptly before a penalty might attach for nonpayment thereof. (c) To keep the buildings and other improvements now existing or hereafter erected on the Premises insured against fire for the amounts specified by the Mortgagee and against other hazards under the usual extended coverage endorsement and all other hazards and risks of direct physical loss occasioned by any cause whatsoever, subject only to the exceptions and exclusions, if any, agreed to by the Mortgagee. The policy or policies of such insurance shall be in a form acceptable to Mortgagee and shall have a loss payable provision in favor of and in a form acceptable to Mortgagee. In the event of foreclosure of this Mortgage, all right, title and interest of the Mortgagor in and to any insurance policies then in force shall pass to the purchaser at the foreclosure sale. (d) That the Premises shall be kept in good repair and no waste shall be committed. (e) That all indebtedness secured by this Mortgage shall become due after default in the payment of any installment of principal or interest, at the option of the Mortgagee. 3. If default has been made in any payment or covenant herein, the Mortgagee is hereby authorized and empowered to declare the whole amount secured by this Mortgage due and payable. The Mortgagee shall have the authority and power to proceed to protect and enforce its rights by suit or suits in equity or at law, either for the specific performance of any covenant or agreement contained herein or in the indebtedness secured by this Mortgage or for the foreclosure of this Mortgage or for the enforcement of any other appropriate legal or equitable remedy and, in the event of foreclosure, shall be entitled to the immediate appointment of a receiver to operate and protect the Premises and to collect all rents during the pendency of the foreclosure, and, in addition, the Mortgagor authorizes the Mortgagee to sell the Premises, as one tract or otherwise, at public auction and convey the same to the purchaser and, out of the proceeds arising from such sale, to pay all indebtedness secured hereby, with interest, and all legal costs and charges of such foreclosure and the maximum attorney's fees permitted by law, which costs, charges and fees the Mortgagor hereby agrees to pay. The Mortgagor hereby expressly consents to the sale of the Premises by advertisement, pursuant to the Minnesota Statutes, Chapter 580, which provides for sale after service of notice thereof upon the occupant of the Premises and the publication of said notice. Service may not be made upon the Mortgagor personally, and no hearing of any type is required in connection with the sale. Except as required by the aforesaid statutory provision, the Mortgagor hereby expressly waives any and all rights to notice of sale of the Premises and any and all rights to a hearing of any type in connection with the sale of the Premises. 794775 1 2 4. If the Mortgagor fails to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which does or may adversely affect the Premises or the interest of the Mortgagor or the Mortgagee therein, then the Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against and/or instigate such action or proceeding and take such other action as the Mortgagee deems necessary to protect the Mortgagee's interest. Any amounts disbursed by the Mortgagee pursuant to this paragraph, including reasonable attorneys' fees, with interest thereon, shall become additional indebtedness of the Mortgagor secured by this Mortgage. Such amounts shall be payable upon notice from the Mortgagee to the Mortgagor requesting payment thereof and shall bear interest from the date of disbursement at the rate set forth in the Note which this Mortgage secures. Nothing contained in this paragraph 4 shall require the Mortgagee to incur any expense or do any act hereunder. 5. Any delay by the Mortgagee in exercising any right or remedy hereunder or otherwise afforded by law or equity shall not be a waiver of or preclude the exercise of such right or remedy or any other right or remedy hereunder or at law or equity. 6. All remedies of the Mortgagee are distinct and cumulative to any other right or remedy under this Mortgage or afforded by law or equity and may be exercised concurrently or independently and as often as the occasion therefor arises. 7. The covenants and agreements herein shall bind and the rights hereunder shall inure to the successors and assigns of the Mortgagee and the heirs, personal representatives, successors and assigns of the Mortgagor. 8. In the event any provision or clause of this mortgage conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage which can be given effect without conflicting provisions, and, to the end, the provisions of this Mortgage are declared to be severable. 9. The Mortgagor acknowledges and agrees that this right of inspection allows the Mortgagee, or the Mortgagee's agents, to enter the premises at reasonable times to conduct environmental tests to establish the presence, or absence, of hazardous substances or pollutants upon the premises. 10. The Mortgage shall be governed by the laws of the State of Minnesota. 11. The maximum principal indebtedness secured by this Mortgage is $60,000.00. IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day and year first above written. Five D, Limited (a Minnesota corporation) 794775.1 By: Charles E. Durand Its: STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing was acknowledged before me this 20 , by , the on behalf of the 71 RT Mal .7 „ THIS INSTRUMENT WAS DRAFTED BY: MURNANE BRANDT 30 EAST SEVENTH STREET SUITE 3200 ST. PAUL, MN 55101-4919 Telephone: (651) 227-9411 794775.1 4 _day of , of a EXHIBIT A LEGAL DESCRIPTION The following described real property located in the County of Ramsey and State of Minnesota: Silverview Estates Lot 1, Block 1 794775.1 5 MORTGAGE SUBORDINATION AGREEMENT THIS MORTGAGE SUBORDINATION AGREEMENT is entered into this 1St day of July, 2008, by and between the Economic Development Authority in and for the City of New Hope (the "EDA") and Five D, Limited, a Minnesota corporation, (the "Mortgagor"). RECITALS The EDA has agreed to lend to Mortgagor the sum of Sixty Thousand and no1100's Dollars ($60,000.00) to be evidenced by a Term Promissory Note of even date herewith in the amount of $60,000.00, executed by BCD Holdings, LLC at the request of Mortgagor in favor of the EDA (hereinafter referred to as the "EDA Note"), which EDA Note is secured by a Mortgage Deed of even date herewith in the amount of Sixty Thousand Dollars ($60,000.00), executed by the Mortgagor in favor of the EDA and filed for record on , 2008 in the Office of the County Recorder, Ramsey County, Minnesota as Document No. (hereinafter referred to as the "EDA Mortgage") (hereinafter the EDA Note and the EDA Mortgage will be collectively referred to as the "EDA Loan Documents"), provided that the EDA will agree that the interests and lien of the EDA in the Property arising from the EDA Loan Documents will be junior and subordinate to any interest, mortgage, or lien that may currently exist or may arise in the future on the Property resulting only from a refinancing of the primary debt on the property held by Western Bank and the U.S. Small Business Administration (SBA) as more fully described herein. 2. The real estate covered by the lien of the EDA Mortgage is located in Ramsey County, Minnesota, and legally described as: Silverview Estates Lot 1, Block 1 (hereinafter referred to as the "Property") NOW THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby covenant and agree as follows: All of the EDA's right, title and interest in and to the EDA Mortgage shall be subordinate and junior in all respects to the liens or security interests currently existing and those future liens and security interests, if any, that may arise only from the refinancing of the primary debt currently held by Western Bank in the current principal amount of $ .00 and the SBA in the current principal amount of $ .00 on the mortgaged property and not to exceed the sum total of these current principal amounts. Nothwithstanding the subordination rights mentioned above, the EDA Mortgage will not be subordinate to any other liens or security interest and shall be valid and enforceable against the mortgaged property upon filing all such documentation with the county. 2. This Agreement may not be amended or modified in any manner other than by an Agreement in writing signed by the parties hereto. 3. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above. The Economic Development Authority in and for the CITY OF NEW HOPE 4401 Xylon Avenue New Hope, MN 55428 By: Its: By: Its: STATE OF MINNESOTA ) ) ss 794622.1 2 COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this 1St day of July, 2008, by and , the and of the Economic Development Authority in and for the City of New Hope. Notary Public Five D, Limited a Minnesota corporation By: Charles E. Durand Its: STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this 1St day of June, 2008, by Charles E. Durand, of Five D, Limited, a Minnesota corporation. This Instrument was drafted by: MURNANE BRANDT 30 EAST SEVENTH STREET, SUITE 3200 ST. PAUL, MN 55101 (651)227-9411 794622.1 3 51- lPoi U ff /0" nil due. EDA Request for Action Originating Department Approved for Agenda Agenda Section Community Development October 13, 2008 EDA Item No. By: Curtis Jacobsen, Director of CD By: Kirk McDonald, City Manager 4 Resolution approving low interest loan request of BCD Holdings, LLC (improvement project no. 844) Requested Action Staff requests the Council approve the resolution approving a low interest loan for BCD Holdings in conjunction with the Holiday Station redevelopment project at 7180 42nd Avenue North in New Hope. Policy/Past Practice The Council considers and approves commercial loan requests on a case by case basis as may be beneficial to the city's redevelopment efforts. Background On February 25, the Council authorized staff and the city attorney to begin working with BCD Holdings, LLC to draft the appropriate loan documents for a $60,000 business loan for the redevelopment of 7180 42nd Avenue North. The attached resolution authorizes the President and Executive Director to take any and all necessary steps to fund a low interest loan in the amount of $60,000 to BCD Holdings, LLC for a term of 10 years at an annual interest rate of 3 percent. The city attorney can provide a more detailed explanation of the loan documents. Staff recommends approval of the resolution. As the Council is aware, subsequent to an agreement on the initial loan amount, the developer requested additional funding for the project. Several discussions at the staff level that included Mayor Opem and Council Member Stauner resulted in an agreement whereby the storm water costs would be paid for via an assessment agreement (which will be presented at the October 27 Council Meeting). Motion by Second by To: 9 JA 1� N c� I:\RFA\PL ANNINGIPLANNINCIQ & R - EDA Holiday Loan 10-13-08.doc Funding The loan funds will come from the EDA reserves. Attachment(s) + Resolution + Mortgage DEED Term Promissory Note • Guaranty + City Manager letter • Resolution BCD Holdings • Resolution Five D Limited * Personal Financial Statement (on file - not provided due to data privacy) • Appraisal Report • Endorsement • Budget for New Hope store EDA RESOLUTION NO. 2008- 12 RESOLUTION APPROVING LOW INTEREST LOAN REQUEST OF BCD HOLDING, LLC (improvement project no. 844) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, BCD Holdings, LLC, a Minnesota limited liability company (hereafter BCD Holdings) has entered into a Conditional Use Permit Site Improvement Agreement with the City as part of New Hope Planning Case 08-06 for the redevelopment of its property at 7180 42°a Avenue North, and WHEREAS, as part of planning case 08-06 BCD Holdings has requested that the New Hope EDA provide it with a low interest business loan to assist with the financing of various public improvements required by the City as part of planning case 08-06, and WHEREAS, the EDA hereby determines it is in the best interests of the City to approve BCD Holdings loan request for the redevelopment of its property which will provide additional j obs within the City and add significantly to the City's tax base. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. BCD Holdings, LLC's loan request for $60,000.00 from the New Hope EDA is hereby approved. 2. The President and Executive Director are hereby authorized and directed to take any and all necessary steps to fund a low interest loan in the Amount of $60,000.00 to BCD Holdings, LLC for a term of 10 years at an annual interest rate of 3% as more fully set out in the loan documents as approved by the New Hope City Attorney in connection with said request. Dated the 13t' day of October 2008. Attest: Kirk McDonald, Executive Director -1— Martin E. Opem SrOPresident TUCKER J. HUMMEL GORDON L. JENSEN' MELANIE P. PERSELLIN'= STEPHEN M. RINGQUIST` STEVEN A.SONDRALL 'Rea: Property Law Specialist Certified By The Minnesota State Bar Association Licensed in Illinois/Colorado 3Quali£ted Neutral Mediator under Rule 114 JENSEN SONDRALL & PERSELLIN, P.A. Attorneys At Law 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443-1968 TELEPHONE (763) 424-8811 • TELEFAX (763) 493-5193 e-mail law(gjaspattorneys.com Writer's Direct Dial No.: (763) 201-0211 e-mail sas@iaspattomeys.com January 5, 2009 Valerie Leone City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Re: Holiday Station Store - Five D Limited and Charles Durand Mortgage - 7180 42" Avenue Our File No. 99.1.1.343 Dear Val: In follow up to my December 30, 2008 letter, enclosed is a copy of the first page of the referenced mortgage. The information on this page indicates the mortgage has now been recorded in the Registrar of Titles office. Since the property is both Torrens and abstract property, the mortgage has been recorded in both the County Recorder's and the Registrar of Title's offices. Simply attach this page to the mortgage document I sent you in my December 30"' letter. Contact me if you have any questions or comments regarding the recorded mortgage. Very truly yours, Steven A. Sondrall Enclosure(s) cc -Curtis Jacobson p:lAttorneylSAS%t Client Filesl2 City of New Hope09-11343(11oiida) loan)llrr. V. Leonel re recorded mortgage torTens.doc LESLIE A. ANDERSON TUCKER J. HUMMEL GORDON L. JENSEN` MELANIE P. PERSELLUVA STEPHEN M. RINGQUIST' STEVEN A.SONDRALL 'Real Property Law Specialist Certified By The Minnesota State Bar Association 'Licensed in Illinois/Colorado 'QuAifled Neutral Mediator under Rule 1:4 JENSEN ANDERSON SONDRALL, P.A. Attorneys At Law 85251EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443-1968 TELEPHONE (763) 424-88I1 • TELEFAX (763) 493-5193 e-mail law@jasattorneys.com Writer's Direct Dial No.: (763) 201-0211 e-mail sas c?'aspattorneys.com December 30, 2008 Valerie Leone City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Re: Holiday Station Store - Five D Limited and Charles Durand Mortgage - 7180 42' Avenue Our File No. 99.11343 Dear Val: Please find enclosed for the city records in connection with the referenced development a recorded Mortgage signed by Five D Limited. This is the original recorded document and should be maintained in the cities property records. Contact me if you have any questions or comments regarding the recorded easement. Very truly yours, Steven A. Sondrall Enclosure(s) cc: Curtis Jacobson RaAttorney5SAS11 Client Files%2 City of New Hope199-11343(Holiday loan)iltr. V. Loon, :-e rx., rded mortpge.doc L Document# 4131556 Recorded 12!15120081400 County Recorder, Ramsey County, MN Mortgage Registration Tax Paid 12115/2006 1.2.5 417589 ,r MORTGAGE DEED TMS MORTGAGE, effective as -of November 1 2008, between Five D, Limited,, - a Minnesota corporation' (hereinafter called the "Mortgagor", regardless of whether one or more persons or entities), and the Economic Development Authority"in and for the City of New Hope, a• Minnesota municipal corporation, (hereinafter called 'the "Mortgagee"). WITNESSETH, that to secure the payment of Sixty Thousand and 001100ths Dollars ($60,000.00),�ith' interest, according to the terms of a Term Promissory Note bearing even date herewith, together with any renewals or extensions thereof,. and all other liabilities and indebtedness of the Mortgagor to the Mortgagee, due or to become due, now existing or hereafter arising, .the Mortgagor hereby mortgages to the Mortgagee the tract of 'land lying in -the County of Ramsey, State of Minnesota, described as follows, to -wit: See Exhibit A attached hereto and made a part hereof (the "Premises"), I: In addition to making and including in this Mortgage the covenants and other provisions set forth in Minnesota Statutes, Section 507.15, or any future Minnesota Statute providing for a statutory form of real estate mortgage, the Mortgagor covenants and agrees with the Mortgagee: (a) The Mortgagor will permit the Mortgagee, or its agents, at all reasonable times, to enter upon and inspect the Premises. 2. The Mortgagor covenants with the Mortgagee the following statutory covenants: (a) To warrant title to the Premises. (b) 'To pay all taxes and assessments promptly before a penalty might attach for nonpayment thereof. ;' , ' �' � 0tt 3 9 ("L 5-03%9 Docuinent# 2058679 1 Certified Filed on 12115120081400 Registrar of Titles, Ramsey County, MN Mortgage Registration Tax Paid NIA 12115/2008 Certificate# 508769 1.2.2.417718 MORTGAGE DEED I THIS MORTGAGE, effective as of November 1, 2006 bdtween Five D, Limited;' a -Minnesota corporation, (hereinafter called the "Mortgagor", regardless of whether one or more persons or entities), and the Economic Development Auth'ority'in and for the City. of. -New Hope, a Minnesota municipal corporation,' (hereinafter called the "Mortgagee"). WITNESSETH, that to secure the payment of Sixty Thousand and 001100ths Dollars ,($60,000.00) 4with interest, according to the terms of a Term Promissory Note bearing even date herewith, together with 'any renewals or extensions thereof, 'and all other liabilities and indebtedness of the. Mortgagor to the Mortgagee, due or to become due, now existing or hereafter arising; -the, Mortgagor hereby i mortgages to the Mortgagee the tract, of land lying • in the County of Ramsey; State of Minnesota, described as follows, to' -wit: See Exhibit A attached hereto and made a part hereof (the "Premises"). i 1.In addition to making and including in this Mortgage the covenant's and other provisions set forth in Minnesota Statutes, Section 507.15,. or a y future Minnesota Statute,providing for a.statutory form of real estate mortgsge,- the Mortgagor covenants and agrees with the Mortgagee: (a) - The Mortgagor will permit the Mortgagee, or -its agents, at all t,: reasonable times, to enter upon and inspect the Premises. C2I� 2, The Mortgagor covenants. with the Mortgagee the ifollowing statutory 2�e covenants: I� 1 it (a) To warrant title to the Premises. (b) To pay all --taxes and assessments promptly before a penalty '* might attach for nonpayment -thereof. —1S"'..01 a _ 30".z3 "Y3, D038 MORTGAGE DEED THIS MORTGAGE, effect;.,.,-- as of November 1, 2008, between Five D, Limited,-- a imited,-a Minnesota corporation (hereinafter called the "Mortgagor", regardless of whether one or more persons or entities), and the Economic Development Authority" in and for the City of New Hope, a Minnesota municipal corporation, (hereinafter called the "Mortgagee"). WITNESSETH, that to secure the payment of Sixty Thousand and 00/100ths Dollars ($60,000.00),�Qth interest, according to the terms of a Term Promissory Note bearing even date herewith, together with any renewals or extensions thereof, and all other liabilities and indebtedness of the Mortgagor to the Mortgagee, due or to become due, now existing or hereafter arising, the Mortgagor hereby mortgages to the Mortgagee the tract of land lying in the County of Ramsey, State of Minnesota, described as follows, to -wit: See Exhibit A attached hereto and made a part hereof (the "Premises"). 1. In addition to making and including in this Mortgage the covenants and other provisions set torth in Minnesota Statutes, Section 507.15, or any future Minnesota Statute providing for a statutory form of real estate mortgage, the Mortgagor covenants and agrees with the Mortgagee: (a) The Mortgagor will permit the Mortgagee, or its agents, at all reasonable times, to enter upon and inspect the Premises. 2. The Mortgagor covenants with the Mortgagee the following statutory covenants: (a) To warrant title to the Premises. (b) To pay all taxes and assessments promptly before a penalty might attach for nonpayment thereof. (c) To keepthe buildings and other improvements now existing or hereafter erected on the Premises insured against fire for the amounts specified by the Mortgagee and against other hazards under the usual extended coverage endorsement and all other hazards and risks of direct physical loss occasioned by any cause whatsoever, subject only to the exceptions and exclusions, if any, agreed to by the Mortgagee. The policy or policies of such insurance shall be in a form acceptable to Mortgagee and shall have a loss payable provision in favor of and in a form acceptable to Mortgagee. In the event of foreclosure of this Mortgage, all right, title and interest of the Mortgagor in and to any insurance policies then in force shall pass to the purchaser at the foreclosure sale. (d) That the Premises shall be kept in good repair and no waste shall be committed. (e) That all indebtedness secured by this Mortgage shall become due after default in the payment of any installment of principal or interest, at the option of the Mortgagee. 3. If default has been made in any payment or covenant herein, the Mortgagee is hereby authorized and empowered to declare the whole amount secured by this Mortgage due and payable. The Mortgagee shall have the authority and power to proceed to protect and enforce its rights by suit or suits in equity or at law, either for the specific performance of any covenant or agreement contained herein or in the indebtedness secured by this Mortgage or for the foreclosure of this Mortgage or for the enforcement of any other appropriate legal or equitable remedy and, in the event of foreclosure, shall be entitled to the immediate appointment of a receiver to operate and protect the Premises and to collect all rents during the pendency of the foreclosure, and, in addition, the Mortgagor authorizes the Mortgagee to sell the Premises, as one tract or otherwise, at public auction and convey the same to the purchaser and, out of the proceeds arising from such sale, to pay all indebtedness secured hereby, with interest, and all legal costs and charges of such foreclosure and the maximum attorney's fees permitted by law, which costs, charges and fees the Mortgagor hereby agrees to pay. The Mortgagor hereby expressly consents to the sale of the Premises by advertisement, pursuant to the Mi.nnesota Statutes, Chapter 580, which provides for sale after service of notice thereof upon the occupant of the Premises and the publication of said notice. Service may not be made upon the Mortgagor personally, and no hearing of any type is requiredin connection with the sale. Except as required by the aforesaid statutory provision, the Mortgagor hereby expressly waives any and all rights to notice of sale of the Premises and any and all rights to a hearing of any type in connection with the sale of the Premises. 4. if the Mortgagor fails to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which does or may adversely affect the Premises or the interest of the Mortgagor or the Mortgagee therein, then the Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against and/or instigate such action or proceeding and take such 794775. 2 other action as the Mortgagee deems necessary to protect the Mortgagee's interest. Any amounts disbursed by the Mortgagee pursuant to this paragraph, including reasonable attorneys' fees, with interest thereon, shall become additional indebtedness of the Mortgagor secured by this Mortgage. Such amounts shall be payable upon notice from the Mortgagee to the Mortgagor requesting payment thereof and shall bear interest from the date of disbursement at the rate set forth in the Note which this Mortgage secures. Nothing contained in this paragraph 4 shall require the Mortgagee to incur any expense or do any act hereunder. 5. Any delay by the Mortgagee in exercising any right or remedy hereunder or otherwise afforded by law or equity shall not be a waiver of or preclude the exercise of such right or remedy or any other right or remedy hereunder or at law or equity. B. All remedies of the Mortgagee are distinct and cumulative to any other right or remedy under this Mortgage or afforded by law or equity and may be exercised concurrently or independently and as often as the occasion therefor arises. 7. The covenants and agreements herein shall bind and the rights hereunder shall inure to the successors and assigns of the Mortgagee and the heirs, personal representatives, successors and assigns of the Mortgagor. 8. In the event any provision or clause of this mortgage conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage which can be given effect without conflicting provisions, and, to the end, the provisions of this Mortgage are declared to be severable. 9. The Mortgagor acknowledges and agrees that this right of inspection allows the Mortgagee, or the Mortgagee's agents, to enter the premises at reasonable times to conduct environmental tests to establish the presence, or absence, of hazardous substances or pollutants upon the premises. 10. The Mortgage shall be governed by the laws of the State of Minnesota. 11. The maximum principal indebtedness secured by this Mortgage is $60,000.00. IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day and year first above written. Five D, Limited (a Mi co oration By: Ch rle rand Its: 794775.1 3 STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) 0 The foregoing was acknowledged before me this;4 day of November, 2008, by Charles E. Durand the Chief Manager of Five D Limited, a Minnesota corporation on behalf of the corporation. Notary Public This Instrument was Drafted By: MURNANE BRANDT 30 EAST SEVENTH STREET SUITE 3200 ST. PAUL, MN 55101-4919 Telephone: (651) 227-9411 794775.1 0 STEVEN A. SONDRA Notary Pudic -Minnesota MY C—M'"10n F-viresdan 31,mo ARAMMMn EXHIBIT A LEGAL DESCRIPTION The following described real property located in the County of Ramsey and State of Minnesota. Parcel One - Torrens (Certificate of Title No. 508769) That part of Lot 1, Block 1, Silverview Estates, lying southeasterly of the following described line: Commencing at the intersection of the south line of the Southeast quarter of Section 6, Township 30, Range 23 and the center line of State Trunk Highway No. 10- 62; thence northwesterly along said centerline 1311.9 feet to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot 1 and said line there terminating. Parcel Two — Abstract Lot 1, Block 1, Silverview Estates, except that part lying southeasterly of the following described line: Commencing at the intersection of the south line of the Southeast quarter of Section 6, Township 30, Range 23 and the center line of State Trunk Highway No. 10- 62; thence northwesterly along said centerline 1311.9 feet to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot 1 and said line there terminating. 794775.1 67 T 1 1 [ Qf Lgq "o d ! z jd .J Page Z of 2 Pa� .J i-��ai 61 3 �ze4eeze, Amortization Table for $62720.15 borrowed on Apr 1, 2010 Month. 5 6 7 B 9 10 11 12 1 2 3 4 Year 2010 2010 2010 2010 2010 2010. 2010 2010 2011 2011 2011 2011 Payment {$} 605.63 605.63 605.63 605.63 605.63 605.63 605,63 605.63 605.63 605.63 605.63 605.63 Principal Paid ($) 448.83 449.95 451.08 452.20 453.34 454.47 455.60 456.74 457.89 .459.03 460.18 461.33 Interest Paid ($) 156.80 155.68 154.55 153.43 152.30 151.16 150.03 148,89 147.74 146.60 145.45 144.30 Total [Monet {$) 156.80 312.48 467.03 620A6 772.75 923.91 1073.94 1222.83 1370.57 1517.47 1662.62 1806.93 Balance ($) 62271.32 61821.37 61370.29 60918.09 60464,75 60010.28 59554.68 59097.93 58640.05 58181.02 57720.84 57259.51 Month 5 6 7 8 9 10 11 12 1 2 3 4 Year 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 21112 2012 Payment ($) 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Paid {$) 462.48 463.64 464.80 465.96 467.12 468.29 469.46 470.64 471.81 472.99 474.17 475.36 Interest Paid ($} 143.15 141.99 140.83 139.67 138.51 137.34 136.17 134.99 133.62 132.64 131.46 130.27 Total Interest ($) 1950.08 2092.07 2232.90 2372.57 2541.08 2648.42 2784.59 2919.58 3053.40 3186.04 3317.49 3447.76 Balance {$) 56797.03 56333.39 5586B.60 55402.64 54935.51 54467.22 53997.76 53527.12 53055.31 52582.32 52108.14 51632.78 Month 56 7 8 9 .10 11 12 1 2 3 4 Year 2012 2012 2012 1 2012 2012. 2012 2012 2012 2013 2013 2013 ' 2013 Payment ($) 605.63 605.63. 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Paid ($) 476.55 477.74 478.93 480.13 481.33 482.54 483.74 484.95 486.16 487.38 468.60 489.82 Interest Paid {$) 129.08 127.89 126.70 ',25.50 124.30 123.10 121.89 120.68 119.47 118.25 117.03 -115.111 Total Interest ($} 3576.85 3704.74 3831.43 3956.93 4081.23 4204.32 4326:21 4446.89 4566.36 4684.61 4801.65 4917.46 Balance ($} 51156.23 50678.49 50199.56 49719.43 49238.10. 48755.56 48271.82 47786.87 47300.74 46813.33 46324.73 45834.91 Month 5 6 7 8" 9 10 11 12 1 .2 3 4 Year 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Payment ($) 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Pard (S) 491.04 492.27 493.50 494.74 495.97 497.21 " 498A5 499.70 500,95 502.20 503.46 504.72- InterestPaid ($� 114.59 113.36 112.13 110.90 109.66 . 108.42 107.18 105.93 104.68 103.43 102.17 100.91 Total Interest {$) 5032.04 5145.40 5257.53 5366.43 5478.09 5586.51 5693.68 5799.61 5904.29. 6007.72 6109.89 6210.80 Balance (4) 45343.87 44851,60 44358.10 43863.36 43367.39 42870.18 42371.72 41872.02 41371.07 40868.87 40365.41 39860.69 Month - 5 6' 7 8 9 10 11 12 1 2 3 4 Year 2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2045 24 015 Payment (8) 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Paid {$) 505.98 507.24 508.51 509.78 511.06 512.34 513.62 514.90 516.19 517.48 518.77 520.07 interest Paid ($) 99.65 98.39 97.12 95.85 94.57 93.30 . 92.01 90.73 89.44 88.15 86.86 85.56 Total imarest ($) 6310.46 6408.84 6505.96 6601.81 6696.38 6789.68 6881.69 6972,42 7061.86 7150.02 7236.88 7322.44 Balance ($) 39354.71 38847.47 38338.96 37829.18_ 37318.12 36805.78 36292.17 35777.27 35261.08 34743.60 34224.83 33704.76 Month 5 6 7 8 9 10 11 12 1 2 3 4 Year 2015 2015 2015 201'5 2045 2015 2015 2015 2016 2016 2016 2016 Payment (S} 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Paid ($) 521.37 522.67 523.98 525.29 526.60 527.92 529.24 530.56 531.89 533.22 534.55 535.89 interest Paid {$) 84.26 82.96 81.65 80.34 79.03 77.71 76.39 75.07 73T4 72A1 71.08 69.74 Total Interest ($} 7406.70 7489.66 7571"31 7651.65 7730.68 7808.39 7884.79 7959.85 8033.60 8108"81 8177.09 8246.83 Balance {$) 33183.39 32660.72 32136.74 31611.45 31064.85 30555.93 30027.70 29497.13 28965.25 28432.03 27897.481 27361.59 Month 5 6 7 B 910 11 12 1 2 3 4 Year 2016 2016 2016 2046 2016 2046 2016 2016 2017 2017 2017 2017 Payment {$} 605.63 805.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Pdrnclpai Paid ($} 537.23 538.57 539.92 541.27 542.62 543.98 545.34 546.70 548.07 549.44 550.81 552.19 Interest Paid ($j 68.40 67.06 65.71 64.3fi 63.01 61.65 60.30 58.93 57.56 1 56.19 54.82 53.44 Lttp:/Iwww.bankrate.coil]/brm/morfparsi-,_ralrIllatnrac„'h..,,�,,,,� Page 2 of 2 Total Interest (S} 8315.24 8382.30 8448.01 8512.38 8575.39 8637.04 8697.34 8756.27 8813.84 8870.03 8924.85 8978.30 Balance ($} 26824.37 26285.80 25745.88 25204.62 24662.00 24118.02 23572.69 23025.99 22477.92 21928.49 21377.fi8 20825.49 Month 5 6 1 7 8 9 i0 11 12 1 2 3 4 Year 2017 2017 2017 2017 2017 2017 2017 2317 2018 2018 2016 2018 Payment (S) 605.63 605.63 J 605.63 605.63 605,63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Paid ($} 553.57 554.95 1 556,34 557.73 559.12 560.52 561.92 563.33 564,74 566.15 567.56 568.98 Interest Paid {$) 52.06 50.68 49.29 47.90 46.51 45.11 43.71 42.30 1 40,90 39.48 1 38.07 36.65 Total feterest(S) 9030.36 9081.04 9130.33 9178.23 9224.74 , 9269.85 9313.56 9355.86 9396.76 9436.24 9474.31 9510.96 Balance ($) 20271.92 119716.97 19160.63 18602.91 18043.78[605.63 48326 16921.34 16358.01 15793.28 15227.13 14659.57 14090.59 Month 5 6 7 8 9 10 11 12 1 2 3 4 Year 2018 2018 2018 2018 20182018 2018 2018 2019 2019 2019 2019 Payment {$) 605.63 605.63 605,63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 605.63 Prinelpal Paid ($} . 570.40 571.83 573.26 574.69 576.13 577.57 579.01 580.46 581.91 583.37 5B4.83 1 586,29 Interest Paid S) 35.23 33.80 32.37 30,94 29.50 28.06 26.62 25,17 23.72 22.26 20.80 19.34 Total Interest ($) 9546.18 9579.98 9612.36 964329 9672.79 9700.85 9727.47 9752.64 9776.36 9798.62 9819.43 9838.77 Balance ($} 13520,18 12948.35 12375.09 11800.40 11224.27 10646,70 10067.69 9487.23 8905.31 8321.95 7737.12 7150.83 Montle 5 6 7 B. 9 10 11 12 1 2 3 4 Year 2019 2019 2019 - 2019 2019 2019 2019 2019 2020 2020 2020 2020 Payment ($) 605.63 605.63 605.63 605.63 605,63 605,63 605.63 605.63 605.63 605.63 605.63 605.63 Principal Paid ($) 7.75 g 589.22 590.70 592.17 593.65 595.14 596.62 598.12 599.61 601.11 602.61 604.12 Interest Pald.($) .88 16.41 14.93 13.4$ 11.98 10.49 9.01 7.51 6.02 4,52 3.02 1.51 Total Interest {$) 9856.65 9873.05 9887.99 9901.45 9913.42 9923.92 9932.92 9940.44 9946.46 9950.98 9953.99 9955.50 Balance (S} 6563.08 5973.86 5383.16 4790.99 4197.33 3602.20 3005.57 2407,46. 1807.84 1206.73 604.12 0.00 E http://www.bankrate.com/bnn/mortgage-calculator.aSn?UnroundedP.qvmi-nt=fin{ r,'ZndzOlconQi'%np_i...._ TERM PROMISSORY NOTE (BCD Holdings, LLC) Amount: $60,000.00 Interest: 3% per annum Term: 10 years New Hope, Minnesota Effective November 1, 2008 FOR VALUE RECEIVED, BCD Holdings, LLC, a Minnesota limited liability company (the "Borrower"), agrees and promises to pay to the order of the Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation, its endorsees, successors and assigns (the "Lender"), at, 4401 Xylon Avenue, New Hope, Minnesota 55428, or such other place as the Lender may from time to time designate, the principal sum of Sixty Thousand- and 001100 Dollars ($60,000.00), as set forth in the Loan Agreement referenced below, together with interest on the Principal Balance (as later defined) at the rate or rates of interest hereinafter set forth, payable in the following manner and on all the following terms and at the following times: 1. Definitions. For purposes of this Note, the following terms shall have the following meanings: a. "Business Day" shall mean any day that national banks are open for business in New Hope, Minnesota. b. "Loan Documents" shall mean this Note, the Mortgage and any other instruments given to evidence or secure this Note. C. "Maturity Date" shall mean November 1, 2018 d. "Mortgage" shall mean the Mortgage Deed dated the same date as this Note and given by FIVE D, LIMITED to the Lender, pursuant to June 30, 2008 corporate resolutions of FIVE D, LIMITED and Borrower, granting a lien on Property owned by FIVE D, LIMITED described in that Mortgage as security for this Note and granting a security interest to the Lender. e. "Principal" shall mean the sums of money from time to time disbursed by the Lender pursuant to this Note. f. "Principal Balance" shall mean the amount of Principal remaining unpaid from time to time. g. "Property" shall mean the real property described in the Mortgage. h. "Term" shall mean the period from the date of this Note through the Maturity Date. 2. Interest Rate. The Principal Balance of this Note outstanding at the close of each day shall bear interest ("Interest") at the rate of three percent (3%) per annum ("Interest Rate"). 3. Basis of Computation. Interest shall be calculated by multiplying the actual number of days elapsed in the period for which interest is being calculated by a daily rate based on a 360 -day year. 4. Late Charge. In the event that any payment required hereunder is not paid when due, the Borrower agrees to pay a late charge ("Late Charge") of $.05 per $1.00 of the unpaid payment to defray the costs of the Lender incident to collecting such late payment. This late charge shall apply individually to all payments past due and there will be no daily pro rata adjustment. This provision shall not be deemed to excuse a late payment or be deemed a waiver of any other rights the Lender may have, including the right to declare the entire Principal Balance and accrued interest immediately due and payable. 5. Terms of Payment. This Note shall be payable as follows: Commencing on November 1, 2008 Interest will accrue at a rate of 3% per annum and beginning May 1, 2010, and on the first day of each and every month thereafter until the Maturity Date, when the entire unpaid principal balance and accrued interest thereon shall be due and payable, monthly installments of principal and interest shall be paid, each of such installments to be applied first to the payment of late charges, if any, then to the payment of interest and then to the reduction of principal. The monthly installment of principal and interest payable on May 1, 2010, and thereafter shall be Six Hundred Five and 631100ths Dollars ($605:63). The monthly payments recited herein are based upon an assumed amortization schedule of ten (10) years. b. Application of Payments. All payments shall be applied first to any Costs of Collection, then to Late Charges, then to accrued interest and then to Principal Balance, except that if any advance made by the Lender under the terms of any instruments securing this Note is not repaid, any monies received, at the option of the Lender, may first be applied to repay such advances, plus interest thereon, and the balance, if. any, shall be applied as above. If any payment of Principal, Interest, Late Charge or other sum to be made hereunder becomes due and payable on a day other than a Business Day, the due date of such payment shall be extended to the next succeeding Business Day and interest thereon shall be payable at the applicable interest rate during such extension. Upon a Default (as herein defined) any monies received shall, at the option and direction of the Lender, be applied to any sums due under this Note or any instrument securing this Note in such order and priority as the Lender shall determine. 7. Security. This Note is the Note referred to in and secured by the N Mortgage dated the same date as this Note herewith each encumbering the Property (the "Collateral"). 8. Default. If (a) any payment not be made within fifteen (15) days after the date when due in accordance with the terms and conditions of this Note (other than on the Maturity Date when payments shall be due on such date), or (b) an Event of Default (as defined therein) occurs under the Mortgage, (all of the above being herein singularly and collectively referred to as a "Default"), the entire Principal Balance, together with accrued interest thereon and Late Charges, if any, shall become immediately due and payable at the option of the Lender hereof upon notice to the Borrower. 9. Time of Essence. Time is of the essence. No delay or omission on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right or of any other remedy under this Note. A waiver on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on a future occasion. 10. Costs of Collection. In the event of any default hereunder the Borrower agrees to pay the costs of collection, including reasonable attorneys' fees and costs incurred, all other costs and fees incurred in litigation, mediation, bankruptcy and administrative proceedings and all appeals therefrom and all other costs and expenses incurred in the collection of the amounts due under this Note ("Costs of Collection"). 11. Waiver of Presentment, Etc. Presentment for payment, protest and notice of non-payment are waived. Consent is given to any extension or alteration of the time or terms of payment hereof, any renewal, any release of any part or all of the security given for the payment hereof, any acceptance of additional security of any kind, and any release of, or resort to any party liable for payment hereof. To the extent permitted by law all rights and benefits of any statute of limitations, and any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead laws are waived. 12. Savings Clause. It is expressly stipulated and agreed to be the intent of the Borrower and Lender at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than permitted under state law) and that this section shall control every other covenant and agreement in this Note and any other Loan Document. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under this Note or under any other Loan Documents, or contracted for, charged, taken, reserved, or received with respect to the indebtedness evidenced by this Note ("Indebtedness"), or if the Lender's exercise of the option to accelerate the maturity of this Note, or if any prepayment by the Borrower results in the Borrower having paid any interest in excess of that permitted by applicable law, then it is the express intent of the Borrower and Lender that all excess amounts theretofore collected by Lender shall be credited on the Principal Balance and all other amounts theretofore collected by Lender shall be credited on the Principal Balance and all other Indebtedness (or, if this Note and all other Indebtedness have been or would M thereby be paid in full, retunded to the Borrower), and the provisions of this Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the Indebtedness shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Indebtedness until payment in full so that the rate or amount of interest on account of the Indebtedness does not exceed the maximum lawful rate from time to time in effect and applicable to the Indebtedness for so long as the Indebtedness is outstanding. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. 13. Notices. Any notices and other communications permitted or required by the provisions of this Note (except for telephonic notices expressly permitted) shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Service, or any official successor thereto, designated as Certified Mail, Return Receipt Requested, bearing adequate postage, or deposited with reputable private courier or overnight delivery service, and addressed as hereinafter provided. Each such notice shall be effective three (3) days after being deposited or delivered as aforesaid. The time period within which a response to any such notice must be given, however, shall commence to ran from the date of receipt of the notice by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice sent. By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall have the right from time to time to change its address and shall have the right to specify as its address any other address within the United States of America. Each notice to Lender shall be addressed as follows: Economic Development Authority in and for the City of New Hope 4401 Xylon Ave New Hope, Minnesota 55428 Attn: Kirk McDonald, City Manager Notice to Borrower shall be addressed as follows: BCD Holdings, LLC 7180 42nd Ave. North New Hope, MN 55427 Attn: Chuck Durand 4 14 Governing Law. Notwithstanding the place of execution of this instrument, the parties to this instrument have contracted for Minnesota law to govern this instrument and it is agreed that this instrument is made pursuant to and shall be construed and governed by the laws of the State of Minnesota without regard to the principles of conflicts of law. 15. WAIVER. THE BORROWER WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH ANY PARTIES TO THIS INSTRUMENT ARE INVOLVED AND WHICH DIRECTLY OR INDIRECTLY IN ANY WAY ARISES OUT OF, IS RELATED TO, OR IS CONNECTED WITH THIS INSTRUMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE DATE OF THIS INSTRUMENT. 794602.1 Executed as of the date first above written. BCD Holdings, LLC (a Minnesota limited liability company) By: Charles E. Durand Its: Chief Manager 5 GUARANTY New Hope, Minnesota Effective Date: November 1, 2008 FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, and further in consideration of the credit given by the City of New Hope, (hereinafter called the "Secured Party") to BCD Holdings, LLC, a Minnesota limited liability company (hereinafter called the "Debtor"), I, Charles Durand, hereby guaranty the payment, whether at maturity or earlier by reason of the acceleration, or otherwise, of that certain note of even date herewith from the Debtor to the Secured Party in the original principal amount of Sixty Thousand and no1100 DOLLARS ($60,000), and any extensions, renewals, replacements or modifications of the interest rate, maturity, other contractual terms applicable thereto. Such debt, liability, obligation and all costs and expenses for the collection thereon, including but not limited to, reasonable attorney's fees for trial or for the pursuance of, or defense of, any appellate procedure are hereinafter collectively referred to as the "Obligations." This is an absolute guaranty delivered by me to the Secured Party at his request. 2. 1 waive notice of acceptance of this guaranty by the Secured Party as to present and future Obligations of the Debtor to the Secured Party, and I waive presentment, demand, protest, notice of protest and notice of dishonor as to each and all items constituting the Obligations hereby guarantied. No renewal, modification or extension of the time for payment of any of the Obligations shall affect my liability hereunder, whether made before or after written notice of revocation of this guaranty is given. 3. This guaranty is not conditioned upon any other person or party signing the same. 4. My liability hereunder, however, shall not at anytime exceed the Obligations, plus all costs and expenses, including reasonable attorney's fees and legal expenses incurred by the Secured Party in connection with the protection, defense or enforcement of this guaranty in any bankruptcy or litigation or insolvency proceedings. 5. 1 specifically agree that in the event of the sale of any personal property securing the Obligations guarantied hereby and in the event of a deficiency resulting therefrom, I shall be, and hereby am, expressly made liable to the Secured Party for the amount of such deficiency, notwithstanding any provision of Minnesota law which may prevent the Secured Party from enforcing such deficiency against the Debtor. 6. I agree to deliver to the Secured Party: 593730.1 (i) Such other financial information respecting my financial condition as the Secured Party may from time to time reasonably request. 7 1 further agree that, if at any time all or any part of any payment theretofore applied by the Secured Party to any of the Obligations of the Debtor is or must be rescinded or returned by the Secured Party for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of the Debtor) or if at anytime all or any part of the Obligations of the Debtor shall be discharged or released in bankruptcy, such Obligations shall, for the purposes of this guaranty, to the extent that such payment is or must be rescinded or returned or to the extent that such Obligations are discharged or released in bankruptcy, be deemed to have continued in existence, notwithstanding such application by the Secured Party or such discharge or release in bankruptcy, and this guaranty shall continue to be effective or be reinstated, as the case may be, as to such Obligations, all as though such application by the Secured Party or discharge or release in bankruptcy had not been made. 8. Any demand or notice by the Secured Party may be given to me by, and will be effective upon, depositing it first class in the U.S. mails to the address set forth below, or such other address as I may notify the Secured Party of in writing. SHOULD IT BE NECESSARY FOR THE SECURED PARTY TO BRING LEGAL ACTION AGAINST ME ON THIS GUARANTY, I HEREBY CONSENT TO JURISDICTION IN THE COURTS OF THE STATE OF MINNESOTA AND TO VENUE IN THE COUNTY OF HENNEPIN. 9. This guaranty small be construed in accordance with and governed by the laws of the State of Minnesota. Wherever possible, each provision of this guaranty shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this guaranty. 10. Nothing shall affect the liability of me or the liability of my heirs, executors, administrators and assigns on this guaranty, except the receipt of a written notice of the cancellation and surrender of this guaranty by the Secured Party. 11 THE SECURED PARTY AND THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONJUNCTION WITH THIS GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTY MAKING THE LOAN EVIDENCED BY THE NOTE. 591730.1 2 Address: Charles Durand Social Security No. STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing Guaranty was acknowledged before me this day of 2008, by Charles Durand as his free act and deed. 591730.1 3 � hf AF � • t , i September 29, 2008 FIVE D, LIMITED c/o Charles Durand, Director 12533 Everest Trail Apple Valley, MN 55124 RE: Mortgage Subordination Agreement Lot 1, Block I Silverview Estates Dear Mr. Durand: I am the Executive Director of the Economic Development Authority in and for the City of New Hope. I have been authorized and directed by the EDA to provide this letter agreement to Five D, Limited regarding the mortgage given by Five D, Limited on the referenced property to secure the $60,000.00 loan given to BCD Holdings, LLC by the EDA for the construction and development of a Holiday Convenience Store and Gas Station located in the City of New Hope. The New Hope EDA acknowledges the referenced property is encumbered by an existing Mortgage, Security Agreement and Fixture Financing Statement executed by Five D, Limited on May 27, 1998 and filed May 29, 1998 as document number 3061201 in the Ramsey County Recorder's office and filed July 15, 1998 as document number 1500998 in the Office of the Registrar of Titles, Ramsey County, Minnesota. The EDA further acknowledges the Mortgage was assigned to Western Bank by an Assignment of Mortgage filed June 5, 2002 as document number 3505680 (Abstract) and document number 169086 (Torrens) and the leases and rents were assigned to Western Bank by Assignment of Leases and Rents filed June 5, 2002 as document number 3505681 (Abstract) and document number 169087 (Torrens). The New Hope EDA agrees that if this existing Mortgage, Security Agreement and Fixture Financing Statement evidenced above is refinanced by Five D, Limited, the New Hope EDA will subordinate its $60,000.00 mortgage to any refinancing of the existing Mortgage provided the subordination is limited to a refinanced indebtedness not exceeding the then existing principal indebtedness of Five D, Limited on the Mortgage dated May 27, 1998. e y, :3 Kirk McDonald Executive Director, New Hope EDA cc: New Hope Economic Development Authority CITY OF NEW HOPE 4401 Xylon Avenue North + New Hope, Minnesota 55428-4898 + www. ci.new-hope.mn.us City Hall: 763-531-5100 • Police (non -emergency): 763-531-5170 + Public Works: 763-592-6777 + TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 RESOLUTIONS OF THE BOARD OF DIRECTORS And MAJORITY SHAREHOLDERS OF BCD HOLDINGS, LLC The undersigned being directors and majority shareholders of BCD Holdings, LLC a Minnesota limited liability company, do hereby adopt the following resolutions effective as of this _,31? day of`YUAAL- 2008: WHEREAS, BCD Holdings, LLC, has acquired property in the City of New Hope for constructing and operating a Holiday StationStore, and WHEREAS, as part of the closing process and approval with the City of New Hope, the Economic Development Authority in and for the City of New Hope has agreed to provide BCD Holdings, LLC a low interest loan in the amount of $60,000.00 to assist BCD Holdings, LLC with the development, and WHEREAS, BCD Holdings, LLC does hereby request Five D, Limited, a Minnesota corporation to secure this referenced loan with the New Hope EDA by giving the New Hope EDA a mortgage to be placed on the property owned by Five D Limited, located in the city of Moundsview, county of Ramsey, and as legally described as follow: Silverview Estates Lot 1, Block 1 WHEREAS, Five D, Limited, has a direct or indirect interest in BCD Holdings' development of the Holiday StationStore in New hope which will constitute sufficient and adequate consideration for the requested mortgage. NOW, THEREFORE, BE IT RESOLVED that BCD Holdings, LLC does hereby request Five D, Limited to give a mortgage in favor of the Economic Development Authority in and for the City of New Hope to be placed on its property located in Ramsey County, as legally described above, in connection with the BCD Holdings, LLC / City of New Hope transaction and low interest loan. Charles Durand, Director and Shareholder �6� Robert Durand, Director and Shareholder 803146.1 RESOLUTIONS OF THE BOARD OF DIRECTORS and MAJORITY SHAREHOLDERS OF FIVE D, LIMITED The undersigned being directors and majority shareholders of Five D, Limited, a Minnesota corporation, do hereby adopt the following resolutions effective as of this day of June 2008: WHEREAS, BCD Holdings, LLC, has acquired property in the City of New Hope for constructing and operating a Holiday StationStore, and WHEREAS, as part of the closing process and approval with the City of New Hope, the Economic Development Authority in and for the City of New Hope has agreed to provide BCD Holdings, LLC a low interest loan in the amount of $60,000.00 to assist BCD Holdings, LLC with the development, and WHEREAS, BCD Holdings, LLC has requested Five D, Limited to secure the referenced loan with the New Hope EDA by giving the New Hope EDA a mortgage to be placed on the property owned by Five D Limited, located in the city of Moundsview, county of Ramsey, and as legally described as follow: Silverview Estates Lot 1, Block 1 WHEREAS, Five D, Limited, Limited hereby agrees to provide the requested mortgage and acknowledges and agrees it has a direct or indirect interest in the development of the Holiday StationStore in New hope which constitutes adequate consideration for the requested mortgage. NOW, THEREFORE, BE iT RESOLVED that l=ive U, Limited authorizes and agrees to give a mortgage in favor of the Economic Development Authority in and for the City of New Hope to be placed on its property located in Ramsey County, as legally described above, in connection with the BCD Holdings, LLC 1 City ofd nsaction. Charles Durand, Director and Shareholder Robert Durand, Dire for and Shareholder 803147.1 Personal Financial Statement Applicant [`Tame Charles Durand Social Security # 476-78-7648 Address 12500 Empress Court Time at Residence 3 '/2 years Telephone Number 952-322-3322 Date of Birth 7-13-59 Present Employer Five D, Limited dba Position President, CEO Holiday StationStore _ Address 2732 County Road 10 Time at Employer 10 years Business Phone 763-792-1002 * Round amounts to the nearest $100 Assets You Own Amount Liabilities/Debts You Owe Amount Cash Bank: Checking $13,000 Loans Payable to Banks (Schedule G Northwest Airlines Federal Credit Union Savings Loans Payable to Others Schedule G CD's Installment Contracts Payable (Schedule G IRA's Amount owed to dept stores, etc. Cash in Other Banks Credit Cards (Mastercard. Visa & Others) Due from Others Schedule A $50,000 Mortgages Owned (Schedule B) Income Taxes Payable Securities Owned/Retirement Accounts (Schedule C) $200,000 Other Taxes Payable Cash Surrender Value of Life Insurance Schedule D $200,000 Homestead Schedule E $580,000 Loans on Life Insurance (Schedule D Other Real Estate Owned (Schedule E) $960,000 Automobiles ear, make mode[ Mortgage on Homestead (Schedule F) $430,000 96 Ford Explorer $5,000 Mortgage or Liens on Other Real $155,000 Estate Owned Schedule F Contracts For Deed (Schedule F) Personal Property $50,000 Other assets (Detail) Home in Duluth $175,000 Other Liabilities (Detail) 20 % ownership in Florida Condo $200,000 51 % ownership in BCD Holdings $250,000 36 % ownership in Five D, Limited $960,000 200 Shares Merck 57.500 Total Liabilities $605.000 Total $2,440,500I Net Worth (Total assets less total liabilities) $1,835,500 Total " Annual Income Applicant Co -applicant Contingent Liabilities Amount Salary $90,000 As Endorser Commissions As Guarantor Dividends Pending Lawsuits Interest Taxes Rentals Other (Detail) Alimony, Child Support or Maintenance (you need not show this unless you wish us to consider it) Other Rental property — Duluth Home $18,600 Check here if none Total Income $108,600 I Total Contingent Liabilities I 0 Schedule A Due From Others Name of Debtor Owed To Collateral How Payable Maturity Date Unpaid Balance $ per $ per $ per Total Schedule B Mortgages and Contracts for Deed Owned Name of Debtor I Type of Property 1; or 2"d Lien Owed To How Payable Unpaid Balance $ per Total Schedule C Securities Owned/Retirement Accounts No. Shares or Descriptions Name Registered Cost Present Market L -listed Bond Amount Value U -Unlisted 401 K Plan Charles Durand $200,000 Schedule D Life Insurance Insured Insurance Company Total Beneficiary I Face Value Total Cash Value I Loans Address and type of property Title in Name of Monthly Cost/ Present Market Amount of Insurance ❑ Married Income Year Acquired Value (Homestead) Charles Durand $7,500 $550,000 $580,000 12500 Empress Court Nancy Durand $2,000 Year 2003 Duluth Home Charles Durand $155,000 $175,000 Caitlin Durand Year 2007 Year Year $ Year $775,000 Total Schedule IF Mortgaees or Liens on Real Estate To Whom Payable How Payable Interest Maturity Date Unpaid Balance Rate (Homestead)US Bank $ 2500 per Month interest 5.75 2013 $450,000 only $ 1300 per Month 5.25 1 2037 $155,000 Schedule G_ Loans Payable To Whom Payable Address Contracts Payable Collateral or I How Have 1 ever gone through bankruptcy or had a judgment against me? Are any assets pledged or debts secured except as shown? Number of dependents Marital status (answer only if this financial statement is provided in connection with a request for secured credit, applicant is seeking a joint account with spouse, or applicant or co -applicant is a resident of Arizona, New Mexico, Texas, or Wisconsin) $650,000 Total Maturity Date I Unpaid Balance Applicant ❑ Yes x No ❑ Yes x No 5 X Married Co -Applicant ❑ Yes ❑ No ❑ Yes ❑ No ❑ Yes ❑ No ❑ Married The foregoing statement, submitted for the purpose of obtaining credit, is true and correct in every detail and fairly shows my/our financial condition at the time indicated. I/we will give you prompt written notice of any subsequent substantial change in such financial condition occurring before discharge of my/our obligations to you. I/we understand that you will retain this personal financial statement whether or not you approve the credit in connection with which it is submitted. You are authorized to check my/our credit and employment history or any other information contained herein, including obtaining a written credit report from a credit-reporting agency. THE UNDERSIGNED CERTIFY THAT THE INFORMATION CONTAINED ON THIS FORM HAS BEEN CAREFULLY REVIEWED AND THAT IT IS TRUE AND CORRECT RESPECTS. _August 20, 2008 Date My Signature Co -applicant Signature (if you are requesting a joint transaction)) A REAL PROPERTYAPPRAISAL REPORT Holiday Stationstore Convenience Store w/Car Wash & Fuel Service 2732 County Highway 10 NE Mounds View, MN 55112 Appraisal Report Date: June 17, 2008 Effective Date of the Appraisal: "As Is" June 10, 2008 Prepared For: Ms. Cynthia R. Carlson Vice President Western Bank 2791 Highway 10 NE Mounds View, Minnesota 55112 651/290-7866 By: COMMERCIAL APPRAISAL & CONSULTING GROUP 708 Cleveland Avenue S.W. Suite 950 New Brighton, MN 651/604-9182 Jack Prill, MSA Ryan D Herlofsky 2008 67w1rh 4 1 , SUMMARY OF SALIENT FACTS AND CONCLUSIONS !` Holiday Stationstore E p raised Pro ert L.; 2732 County Highway 10, Mounds View, MN Address/Lacation: Current ownerFive D Limited Use of Appraisal Documentation for Financing .Highest and Best Use: Commercial 195dR9 n Site Size: Gross Building Area: Age of Improvements✓Year Built Legal IntbrInatiOn Property Identification Number'. Assessor's Market Value (01109) 2008 Tax Levy: Zoning: Value By Cost A roach: Value of Site: Value By Sales i Comparison A roach: Value per Square Foot: Value By The Income Ca italization A roach: Overall Capitalization Rate: Appraiser's Estimate of Market Value: Appraisal Re ort Date: Effective Date of the Appraisal: Appraisers: 71,438 square feet or 1.64 acres per the county Convenience Store 4,489 square feet Car Wash 2,500 square feet Total 6,989 square feet 10 years, constructed in 1998. 06-30-23-43-0038 $1,500,000 $52,004 PUD $3,141,000 $1,072,000, $15.00/sq. ft. $3,075,000 $440.00 $3,142,000 10.0% Land Value: improvement Value Equipment Value: Total Value: June 17, 2008 June 10, 2008 As Is $1,072,000 $1,543,000 525,000 $3,140,000 Jack Prill, Ryan D Herlofsky 1 =0 �a i GRAPHS OF SUBJECT PROPERTY Subject Property LooKing z5outnwesteny North and West Elevations or ine uornveniencru %,.,wi u 2 1 pOTOGRAPHS OF SUBJECT PROPERTY 3 5outn and East Elevations or the c,onvemui Lu OLu, VV East and North Elevations of the Car Was 3 r.. 8 Elm 3 imi 40 � '� �F �'-• — ,�� '..b . '� __..:��' Iw a °� rt� '�:y! � led ■ � rl Fal � - 7Yi� I ti. � � L.4S Ark r e - At Olt ,x f�{r - 141 III •, A - � PHOTOGRAPHS OF SUBJECT PROPERTY Interior Trash Area 7 -OGRAPHS OF SUBJECT PROPERTY Car Wash Entrance uar vvasn exit 1.1 PHS OF STREET SCENES OHOTOGRA county hignway I v LUUMLI Iy v. V county hignway 1v Lvwrnniy —. -.; E HS OF STREET SCENES� IL Silver Lake Road Looking Southerly 7-: Silver Lake Road LOOKing INUTUMMY CIL ILI 10 AERIAL 11 w 0 R1 ONE Am— C-2 M r~� o- 0 Cm METROPOLITAN LOCATION 1 3 » 4- Gl eNatT ?- e5 _� Car _ 19 \ .mrrf_m `,-•y e.. ;'Rafuge .:74._ "ae n .-�' li-�W_wM.aINVEL6s5IROM CENTER SHAT +1 , J :Park- Iei' F .....i5 s n� 71 E S yCrnxrl •• 1'E' ro... ti -'Rim River-` � SAINT FRANdS Ytll a. i3- . ___._ i 61 CFL m 0 UI l - 6 D� [},YaS T 7 "' - #•. . ��Lake 4 1 m- ttsffi l� u, £AST - M'N 69 ... , S`+.; II Gaerga 1SETHEL , r Martin`' 3p ('dl,.4h A. . ! 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SALIENT FACTS AND r-ONCLUSIONS ......................... .................................. ................................ ........ - ......... ........................... .2 OF SUBJECT PROPERTY ......................................... 14 pHOTOORAPNS ...........................'......*............... .............................. VAWAjjON PROCESS ................................................... ............................................ .................. 14 10im"FICATION OF APPRAISED PROPERTY ........................ I ................................ 14 OF PROPERTY RIGHTS TO BE VALUED ..................................................... .................. ,gNTIFICA-rioN ......... ...... ...... "....14 INTENDED USE OF APPRAISAL .............................................. ................ ..... .............15 ........................................ ..................................................................... DEFINITION OF VALUE ................................... ...................................... .... 15 MARKET VALUE DEFINED ..................................................... ............. I .... ........................ .................. 16 HISTORY .... . . ..... ; ............... ....................................................... ... ........... .................................. ................ 16 DESCRIPTION OF SCOPE OF APPRAISAL ................................................ ............. ... 18 GENERAL ASSUMPTIONS AND LIMITING CONDITIONS ..................................................... , ............ * ................. ........................................... 21 CITY DATA ............................................. .............................. ........ ................................... ............................. 24 NEIGHBORHOODDESCRIPTION ................................................................................. .................... 26 SITEDATA ...................................................................................................................................................................................... I .... .............................. 31 BUILDINGDESCRIPTION ................................................................................ .............. I ........................... �35 HIGHESTAND BEST USE ANALYSIS ....................................................................................... .................................................. 45 COSTAPPROACH........................................................... 53 SALES COMPARISON APPROACH ........................................................................................... ....... .................. 66 INCOME CAPITALIZATION APPROACH.............................................................. 74 .................,..................... RECONCILIATION AND FINAL ESTIMATE OF VALUE ................................................................................ .75 EXPOSURETIME .................................. I ........ I ................. I ......... 76 MARKETING TIME ................................... I .................................... 77 CERTIFICATION ................................................................................................ I .......... ..... 78 QUALIFICATIONS.................................................. I ......................... ....... , ........... .................................... ............ 82 ADDENDA.................................................................... I .............. .......................................................... 13 mpg rn �pTIVA ON PROCESS I E� CATION OF APPRAISED PROPERTIES Holiday Stationstore BURN Name: p�per� Address: 2732 County Highway 10 NE Mounds View, MN 55112 Typd of Building: Convenience store with a car wash and fuel service. e car oaross Building Area: The convenience s quare containsre 4 s feet. There square,489 feet a 48 square foot wash contains 2, q cashier booth near the car wash. :Site. Area: 71438 square feet or 1.64 acres according to Ramsey County. We were not provided with an equipment list. However, we have personal property- estimated the value of the equipment, which includes the fuel tanks, fuel dispensers, car wash equipment and convenience store fixtures and equipment, at $525,000 as explained in the Cost Approach. Pro a Identification Number. 06-30-23-43-0038 Legal Description: Lot 1, Block 1, Silverview Estates, Ramsey County, Minnesota, IDENTIFICATION OF PROPERTY RIGHTS TO BE VALUED Fee Simple: The subject real estate will be appraised in fee simple interest. Fee simple interest to is defined as: absolute ownership unencumbered by any interest or estate, subject only cee the limitations imposed by the governmental powers of taxation, eminent domain, p power and escheat. INTENDED USE OF APPRAISAL The valuation process is applied in this report t� estimate Maret Value (as CFR Part 4,kSubpart C) of fee simple by the Office of the Comptroller of the Currency under 1 interest. This appraisal addresses the "As is" value of the subject property. 1 rhe Appraisal of Flea! Estate, Tenth Edition, pg. 122 14 ------------ ta1t�It��n process - continued manned in the er in which a client employs the 'information �o��inbas s for g.. an appraisal is the be used to determine price, amount T* ort. A value estimate may sisal is to be used by: �Ip�f,O*al,rep eminent domain, etc. This app terms of a lease, Intended User: Ms. Cynthia R. Carlson, Vice President, Western Bank. >rl<ent & financing. ,.tended Use. For the sole purpose of assisting the client in underwrlting WiN:iTIpN OF VALUE use value, going concern value, investment Types of appra9Sed value include market value, , is "Market Value"The defined value of the subject property to be value, assess oed valuert and insurable value. estimated in this rep MARKET VALUE should bring in a competitive and open market under buyer and seller each acting prudently and The most probable price which a property the buy all conditions requisite to a fair sa. is not affected by undue stimulus. Implicit in this knowledgeably, and assuming the price assing of title from definition is the consummation of a sale as of a specified date and the p seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; rties are well informed or well advised, and acting in what they consider their own 2. Both pa best interests; ' 3. A reasonable time is allowed for exposure in the open market; ial arrangements 4. Payment is made in terms of cash in U.S. dollars or in terms of financial comparable thereto; and s ecial or 5. The rice represents the normal consideration for the property sold,. unaffected al p anyone associated with the sale. creative financing or sales concessions granted by Y APPRAISAL REPORT DATE: June 17, 2008 APPRAISAL EFFECTIVE DATE: June 10, 2008 "As Is" titutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). This couid be modified to provide for valuation ZFinanciai !ns With specified financing terms. 15 CO �2 rnR Process - continued n010,2008 pETENCY PROVISION: COM raisers with a Master Senior Priii, a Member of the National Association of Master App United States for designation, has been afull-time commercial Society of the Unite Tonal since �pr�iser {MSA) raiser for the Equitable Life Ass ur banker for the Iia working as an app Associates, Inc., as a mortgageGroup eight years, as a branch manager for Mortgagesisal &Consulting P Rgthsa ,ild Financial Corporation, and as a principal of Commercial Appraisal and finance of a wide for approximately 15 years. He has extensive, in the app variety of comm ercial, industrial,: multi -family residential and residential land developments, and, therefore, has the experience and knowledge to complete this appraisal assignment. of 2001 rearaiser since October raiser" from the State Ryan D Herlofsky has bofmCertfi d Gene allReal P operty Appraiser' requirements. He holds the designation/licenseall necessary education and appraisal exp of Minnesota, after completing P es including car washes He has experience appraising a wide range of commercial property types and convenience stores with fuel service. HISS sisal is a Holiday Stationstore. This property includes a 4,489 square foot The subject of this app wash and full fuel service. The improvements were convenience store, a 2,500 square foot car constructed in 1998: ast corner of The subject site totals 71,438 square feet and k situated Mo the View.eThe current owner intersection of County Highway 10 NE and Silver Lake Road he foot in 1998 and has owned the property that the site for $5.00 per square indicated P since. on convenience store was recently remodeled at a cosof sign was a6so69. reeent recently at a The con Pant A newg includes a new check-out area and the Holiday ry. cost of $35,000. DESCRIPTION OF SCOPE OF APPRAISAL roaches to appraised utilizing all three recognized standard app Sales Comparison Approach and the Income Capitalization The subject property has been valuation; the Cost Approach, Approach. or the This a sisal also includes an estimate of value for equipment, but not for inventory PP business enterprise. 16 G0 ;3 Vim luafi � Process -continued g this appraisal, the appraiser: ,.,_, n p Herlofsky inspected the subject property with the owner, Chuck Durand, on June 10, ed information on comparable land 2' . gather and improved ales,researched data files, ,. ed past sales, inspected and photographed comparables. noon and Income 3. confirmed and analyzed Capitalization APA ,pEtallzation. members of the local real estate community, including brokers and other They also provided information to assist us in. the valuation of the subject the data and applied the Cost, Safes Compa . In the income Capitalization Approach, the appraiser used direct spoke with appraisers. property. There are no Hypothetical Conditions, Supplemental Standards or Jurisdictional Exceptions in this report. See the following General Assumptions and Limiting Conditions section for further details regarding the scope of work. As mentioned previously, we are appraising the subject under the Extraordinary Assumption that the subject property is free and clear of any environmental issues. it was also appraised under the Extraordinary Assumption thattheinformation provided by the owner, including the income and expense information, is accurate. 17 kSUMPTIONS AND LIMITING CONDITIONS appraisal report is subject to the following conditions 15ees certification presented in this app raiser in the report: 1111 ' specific and limiting conditions as are set forth by the App 9th _r 14, onsgbility is assumed for the 1e9�a�description be goadran'ded or for d ma ketable unless othrerwise stated.al or e $ d patianS. Title to the property is ass f is appraised free and Gear of any or all liens or encumbrances unless otherwise stated. 2. TMe Pro(aeertY '.'3ppnsible ownership and competent property management are assumed. is iven for its accuracy. The rnforrnabon furnished by others is believed to be tellable, but no warranty ' g 4, sketches or illustrative material in this report are Ail engineering studies are assumed to be correct. Any 6.included only to help the reader visualize the property. rs assumed that there are no hidden or unapparent conditions of the properties, subsoil, or structures that �, It render it more at less valuable. , No responsibility meassumed for such conditions or for obtaining e or engineering studies that may be required to discover e is in full compliance with all applicable federal, state and local environmental 7. It g unless that the property regulations and laws the lack of compliance is stated, described and considered in the appraisal report 8 It is assumed that the property conforms to all applicable zoning and usere arts and restrictions unless a nonconformity has been identified, described and considered in the appraisal r e ts, and other legislative or g, it is assumed that all required licenses, certificates of occupancy, administrative authority from any Vocal, state or a on whichf ment or the va ugoveme estimatencontained in this report is based. been or can be obtained or renewed for any use hues of thin 14. it is assumed that the use of the land and improvements achment o trespass ned unlessthe no ed nthe property " the property described and that there is no e y not be present 11. Unless otherwise stated in this report, the appraiser. Thea appraiser as nous s, which knowledge of thor e exist existence o The on the property, was not observed by the apprais materials on or. in the property. The appraiser, however, is not qualified to detect such substances. presence of substances such as asbestos, thea foh Thede oam valuens estimated is predicated ulation, and other Contithen hazardous materials may affect the value of property. that would cause a loss in value assumption that there is no such material on or in the property responsibility is assumed for such conditions or for any expertise or engineering knowledge required to discover them. n the land and the 12. Any allocation of the total value estimated in this report a a t betweevalues allocated o the land �and buildings musmprovements t not be under the stated program of atheaa°nraisal and are invalid if so used. used in conjunction with any pp with it the right of publication. 13. Possession of this report, or a copy thereof, does not carry mony or to be in nsultation or 14. The appraiser, by reason of this appraisal, thel�p� perfies in question unlesquired to give s arrangements have been previously attendance in court with reference made. 9 - AM 18 t. umptions and Limiting Conditions -continued g . a Bnbans with Disabilities Act ('ADA") became effective January the 26, 1992. We have not made �rApliance survey and analysis of this property to determine whether or not it is in conformityt with � dgtailed requirements of the ADA. It is possible that a compliance survey orty f the property, compkiance yDt an of m rrequirements of equirements of the ct.ttlf so this actcoule ADA,dcould have a negareveal that the tive effect upon the value of d�more of the requi to this issue, we did not consider possible non- e One Since we have no direct evidence relating i �e Propel• the value of the properties and assume no liarrce with the requirements of ADA in estimating e�R for measuring the effects of an non-compliance with this act on the value of this property responsibiliiy Y art of the contents of this report (especially any conclusions as to value, the identity of the 16, Neither all nor any p raiser is connected) shall be disseminated to the public through appraiser; or the firm with which the app rtis�ng, public relations, news, sales, or other media without the prior written consent and approval of e adve appraiser Any value estimates provided in the report apply to the entire property, and any proration or division of e 17.AY total into fractional interests will invalidate the value estimate, unless such proration or division of interests as been set forth in the report. ordan 18. Disclosure by the Appraiser of the contents of this appraisal report is subject to review a�ser is affili to ed with the by-laws and regulations of the professional appraisal organizations with which the pp 19. This appraisal report and its contents must be regarded as a whole. Any excerpts from this appraisal cannot be used separately, and if used separately, this appraisal is not to be considered valid. 20. The forecasts, projections, or operating estimates and a icnoed herein nued stableabaseeconomy.nurrent market conditions, anticipated short-term supply and demand factors, 21. Acceptance of and/or use of this appraisal report constitutes acceptance of the foregoing general assumptions and general limiting conditions. 19 =a MEw COMPLIANCE WITH USPAP e tsirement Cost I'.. r a reasonincome able valuation methoaddresses appoa h ssand exp apnslthe el mination of each of . �proaches to market value, reconciles those : approach not used. Identify and separately value any persona property, fixtures, or intangible items that are not real r property but are included in the appraisal, and discuss the impact of their inclusion or exclusion prop on the estimate of market value. ment, ust be a sufficient documentation to support the appraiser's logic, reasoning, judg f• There ML analysis to enable the client to determine the reasonableness of the final market value an estimate. The report must be written and in a narrative rValue format a Ban understanding enough of the basis client to a h h appraisal determination of the estimated "Mar such an estimate is made, and detailed enough to reflect the complexity of the P 36-77 NA ALL ALL 14 The reports must be based upon "Market Value" as defined by USPAP. 5. Disclosure of the manner in which the appraiser satisfies the "Competency Provision" of USPAP. 6. "Scope of 7• Conformance to the Uniform Standards of Professional Appraisal Practice (USPAP), Work." fic B. There must be a statement in the certiation that the appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or approval of any proposed financing. eriod for the property. g. The appraisal must include an estimate of a reasonable marketing p appropriate deductions or discounts for any proposed construction, 16. The report must discuss any appro P partial leases, below economic leases, or tract development with unsold units. 11. The report must include a legal description of the property in addition to the description required by USPAP. nor sales of the property one (1) year prior for 1 - 4 family residential 12. Analyze and report any p properties, or three (3) prior years for all other properties. 13. (For income producing properties) an anablysenof current or expected revenues, vacancies, and cumbered ed under a triple net lease). expenses (even though the property may 14. The appraisal must include mention of current tie market valuons ed trends that M of the subject property projected absorption and income as they, in turn, affect COMPLIANCE WITH FIRREA 1. Conform to USPAP? 2, Be written and contain sufficient information? 3. Deductionsldiscounts to value "ps is"? 4. Correct value definition? censer or certified appraisers? 5. Be performed by 20 Yes No X x NA x 16 16 77 76 NA 14 16 66-73 75 =as CA rcA M s ry DATAA r �'f t Location of City Sad Metro Area: The subject property is located in the City of Mounds View, which is a north central suburb of the Twin Cities metropolitan area. Mounds View is a third ring suburb of both St. Paul and Minneapolis. Interstate 35W extends along the eastern boundary of Mounds View which separates Mounds View from Arden Hills. It is also traversed by U.S. Highway 10 (new alignment) and County Road 10 (old U.S. Highway 10 alignment). population & i. T i Demographics: population 2005 2000 1994 1980 Big Est. Census Census Census Mbunds View 12,442 12,738 12,541 12,593 Ramsey County 515,258 511,035 485,783 459,784 Employer Metro Area 3,207,067 2,968,806 2,538,776 2,198,190 J< # Source of Estimate: State Demographer, U.S. Census Sysco Minnesota As of 2000, there were approximately 5,018 households with an CISa �� average of 2.53 persons per household living in the City of g � Mounds View. Of the total number of households, 59% of them MF resided in single family dwellings, 30% lived in multiple family Multi -tech Systems dwellings, and 11% lived in mobile homes. 264 Percentage of City Developed: The City of Mounds View is a developing community. The city is oM well known for its large residential lots and wooded areas. A larged amount of vacant land is still available for development. r..s Economic Base) Employment Analysis: The largest employers in Mounds View are presented below: Employer Products/Services # s Sysco Minnesota Special Food Services 615 Liberty Enterprises Printing & Related Activities 308 Multi -tech Systems Comm. Equipment Mfg. 264 Midwest Medical Services Mounds View School District Home Health Care Svcs. Elementary & Sec. Schools 192 183 0 Tyson Companies General Freight Trucking 175 . W Vitran Express General Freight Trucking 140 110 rn Mermaid Supper Club & Banquet Other Amusement & The total labor force in Ramsey County is estimated at 298,605 workers. The annual average unemployment rate is 4.2% for Ramsey County compared to 2.9% for the City of Mounds View. 21 i ity_Qata - continued ;rowth Patterns/ ;onstruction Starts= The City of Mounds nd consistentsdemand and explosive g growth. growth The area but has exp relatively slow development is reflected Metro Area. n its land prices, which are below the averagefor the ather Significant actors: Mounds View is relatively small, encompassing only our square miles. Access to the city from the interstate freeway system is good, and a high quality workforce is available in the area. 22 Rim 14 . 22 wRi B r AI CITY OF MOUNDS VIEW 23 ,- -A21.--- - I L-- HBORHOOD DESCRIPTION `The subject neighborhood is located in the west central portion of .ocation in City: the City of Mounds View. 3oondaries: North: U. S. Highway 10 South: County Road H2 East: Long Lake Road West: Highway 65 Factors: The land is relatively flat in the subject neighborhood with a good T= Geographicaldeal of wetland and few distinctive natural features. Q. w m General Description of Land Uses Uses along County Road l v are mostly commercial with a relatively small number of residential properties interspersed among the commercial properties. The properties immediately surrounding the subject include a newer CVS pharmacy to the i west, a day care center to the northwest, Western Bank to the �Q north, an office building to the east and a large apartment complex to the south. Environmentals in Considerations: e 3 We are not aware of any environmenWe are bnot}trainedtin =3 Consider immediate area of the subject property. and accept no responsibility environmental discovery, however, for such discovery. Economic Considerations/ Elm Factors Influencing M The hi h traffic volume on County Road 10 and the exposure of Value of Subject: g the subject neighborhood to that traffic are the major factors influencing its valuteis sect35Wloandf County HighwayRoad 65, Northtown -- traffic between Interstate Shopping Center, and State Highway 610. Trends/Change/ Life Cycle: The subject neighborhood is considered to be in the growth phase of, its life cycle, with limited development in recent years. 24 ITE DATA )caner: !oning: Real Estate Tax information: Size. Shape: Corner influence: Land to Building Ratio: Site Coverage Ratio: Five D Limited The zoning designation currently applied by the City of Mounds view to the subject property is PUD, Planned Unit Development District. Reference is made to the applicable excerpts from the city's d'nance presented in the Addenda and to the zoning zoning or i map shown on a following page. _ General Discussion of Zoning: The purpose of the PUD, is to a district for a� T j Planned Unit Development District provide determined by the city council y� wide variety of uses allowed as The subject use is a legal, conforming use. a The following tax information was obtained from Ramsey County: rn o a 2009 Assessor's Market Value571,000 Land: Building:L_jL29 00 CO Total: $1,500,000 Qw' 99 2008 Tax Data b General Tax: $52,004 0.00 ` Special Assessments: Total: $52,004 71,438 square feet or 1.64 acres according to Ramsey County. M Trapezoidal. 1 The subject is located on the southeast corner of the intersection of County Highway 10 and Silver Lake Road. {fin MIg 10.2 to 1 including the convenience store and the car wash. 0 m 9.8% including the convenience store and the car wash. g 25 to pata - continued improve Curbs: Paving: Bituminous and concrete ite imp Curbs: Concrete ite and along Silver Lake Road; Walks: Concrete on-s bituminous along County Highway 10. Alley: None Fences: None Landscaping: Sod, with some trees and shrubs. :asements: We were not provided with a survey, but we assume typical roadway and utility easements. encroachments: We were not provided with a survey, but no encroachments were noted during our inspection. Utilities: Electric: Excel Energy Gas: Centerpoint Energy Sewer: Metropolitan Council Environmental Services Water: Mounds View Municipal Storm: Mounds View Municipal Parking: Ample on-site parking along with a large fueling area under a 45' by 130' canopy. Flood Data: Zone C, area of minimal flood hazard rd according to FEMA Map #2703790001 C, dated March Access: One curb cut each from tt hiehdraveway on they ilvsou heer lm Road, along with two curb cuts portion of the site that leads to Silver Lake Road. G edi �. =q cm Visibility: The site has excellent visibility from County Highway 10 and Silver Lake Road. c Soils: We were not provided with a soil test report- We did not observe Ma any unusual settling of the improvemenforthe imprduring our ovements.. ction and assume the soils provide sufficient support Topography: The site stapes gradually away from street grade. 26 Data - continued ,ironmenta! We have not received an enof ourninspection, we did not observe ntal Site Assessment on the :fors: subject property. At the tim any site conditions that would lead trained to believe there might of problem. However, we a no responsibility for such environmental hazards and accept discovery. The average daily count on County Highway 10 at Silver Lake Oft: Road is reported by the Minnesota Department of Transportation to be 21,600 vehicles per day, with 5,900 along Silver Lake Road south of County Highway 10 on the 2007 traffic count map. The site layout is very well planned to accommodate building Ifher. functions, access, and parking. 27 E a rn= i w Go Grn ;5! 1 d rn ZONING MAP I O R„t i 5io r14N.En65-10,} .-..371.89'108699 5954A599_ 0946 5945 ROW 89392 9953 _ -8W9 83L R9?5._. _ R92-...-tlOIR R911 Ax0 k ` GG�y acx I6a7 8916 Aoa 60pe ' Y 8998 Roos bol3 1999 , 7i51 ._r9i0 791M 9908 777 Y96s _65941 riJBC 7959 7510 7179 �.�. I I I 1 _.,. X7980. 7975 7HB9j 7998 ,7979 7955 _ 1951 7955 79tl5 .,_.� 7249 7954 ?969 I�5 I. I ! 7779 7975 -7946 7945 51010 ]9Y ...'!&54 '1933 , 79.-'s93o793� ALL 79c I �� •- n _3 ' � �.��, 'ate NI g 70 I- 1 Spring Lake CRP _ f 76 _�.. Y1 I1 k 46- 7837. 7i k Ira 7989 7 7.97'. _. _k h 761, 7694 ' ..._.... .. —•.. ....• 7564 7..569 —I 7555 .. 75Y3� — ly13 75DI 74 I S j _ 3ry ' 74771{ 7w9 I � 28 � X81 Y � 9p96� dI — '9977 8c 6;.71 nR ppcg _ 904E _ 0.Y b.3t A536 a 8 IC5 R901 I 9919 7.795 Yk 7997 7990 T 8tl 7495 197(1 7664 7• 14tl9 N91 - 7950 74.51 7958 i r� H'LLY4EW ' 7949 rxt PARe, 7, �.I i9C 7999 � 1 w m 1'fl � �mu w m cm R 0 rn C” O� s� 0 29 3 cQ) WATMWO s 9 r� R9} 109 f los b 107 an r�. 106 Com} r� �tiQ 3 cQ) WATMWO s 9 600 InterFlood. +r*U by A 18 nStdC www.interftood.com • 1-800-252-6633 Prepared for: Commercial Appraisal & Cansufting Mounds View, MN patents C-1•1 =a mm w M= S 'LptNG DESCRIPTION 1erai Description: ronalogical Age: ass Building Area: Exterior Descrl tiara: A. Substructure: 1. Footings: a Superstructure: 1. Framing: 2. Floor System: 3. Exterior Walls: 4. Wall Height: 5. Exterior Doors: 6. Windows: 7. Roof & Drain System: a. Special Features: The subject is a typical Holiday Stationstore. it consists of a slab -on -grade, masonry convenience store and a masonry, conveyor -type tunnel car wash. 10 years, constructed in 1998. Convenience Store Car Wash Total 4,489 square feet 2 500 square feet 6,989 square feet There is also a 48 square foot cashier's booth near the car wash. Continuous poured concrete footings with reinforcement steel bars for both buildings. Steel frame with concrete wth alock�nll�#erthepan convenienpanel for to store and concrete car wash. Poured concrete slab -on -grade for the convenience store and car wash. Concrete block with brick veneer for the convenience store and the car wash. 14' for both buildings. The entry doors for the convenience store are typical single Paine glass, aluminum frame doors. The rear overhead service or doors are metal. There is an 8' by 81 10' overhead doors for the door fthe convenience store and two 8' by car wash. Fixed double pane glass, aluminum frame storefront Windows. The convenience store has a rubber membrane roof with and river rock ballast. The drainage is via a scupper downspout system. A fuel service island with a 45' by 130' canopy and three underground fuel tanks. 31 r,. 9 ;3l s Building Description - continued il, interior Description: A. Interior Walls. B. Doors: C. Ceiling Height: D. Interior Finish: 1. Walls. 2. Floor Covering: Gypsum board throughout the convenience store. The car wash has exposed concrete block. The interior doors are mainly hollow metal service doors. The ceiling height is ten feet in the convenience store and 13 feet in the car wash. The convenience store walls are mainly painted gypsum board in the customer service area, with ceramic rile in the restrooms and fiberglass wall covering in the food prep area. Quarry tile throughout the convenience store, ceramic the in the restrooms and sealed concrete in the rear storage areas and in the car wash. 3. Ceiling: The ceilings in the convenience store are dropped 2' by 4' acoustic ceiling tile with recessed florescent lighting. The ceiling in the car wash is exposed concrete panels. Iii. Equipment and Mechanical Systems: A. Plumbing System: 1. Piping. Plumbing system for two three -fixture restrooms as well as plumbing for the sinks in the food prep area and for the convenience store. The car wash has the appropriate plumbing for a conveyor -type car wash. B. Energy Systems: 1. Heating System/ Air Conditioning: Two combination rooftop HVAC units in the convenience store. 2. Electrical Systems: 600 amp service. Rigid conduit wiring. Duplex outlets. IV. Miscellaneous Equipment: A. Fire Protection. Wet type sprinkler system. B. Elevators/Escalators: None C. Alarms/Call Systems: Fire alarm and security systems and cameras. D. Unloading Facilities: Service door. 32 H 0 CD O M a a ON M x —J gff mI Building Description - continued V. Renovations/Additions: The interior of the convenience store was recently renovated at a cost of $143,886.69. This renovation included a new check-out area, a new Holiday Pantry area and a new exterior sign. Defermd Maintenance: Nothing major of note, considering the improvements are only ten years old and the convenience store was recently remodeled. Mi VII. Quality & Condition: € A. Quality. Excellent masonry construction for both buildings. B. Condifion: Good. Vlll. Environmental Conditions: Our inspection of the subject property indicates that the property is constructed of the latest design and materials and that no adverse environmental condition is evident within the improvements. However, we are not experts in this matter and will not be held liable for any conditions subsequently found that may affect the property. 33 CO ZIA rnm V" NO9j 9 PH b� IS D P. gig= rn SAW n HIGHEST AND BEST USE ANALYSIS DEFINITION: Highest and Best Use may be defined as; The reasonably probable and legal use of vacant land or an improved property, which is pl �ysically possible, appropriately supported, financially feasible, and that results in the highest value.' Highest and Best Use Analysis identifies the most profitable, competitive use to which.a property can be put. PURPOSE OF HIGHEST AND BEST USE ANALYSIS Highest and Best Use of the subject property is examined on an "As Vacant" and an "As Improved" basis. The Highest and Best Use of land or a site "As Though Vacant", assumes that a parcel of land is vacant or that it can be made vacant through the demolition of any improvement. The question to be answered in this analysis is, if the land is or were vacant, what use should be made of it? What type of improvements, if any, should be constructed on the land and when? The purpose of estimating Highest and Best Use for land or a site is to identify the potential uses of the land. "As Improved", Highest and Best Use analysis identifies the property use that can be expected to produce the highest overall return for each dollar of capital invested and to identify comparable properties. As long as the value of the property "As Improved" is greater than the value of the site as unimproved, the Highest and Best Use is the use of the property "As Improved". Once the value of the vacant land exceeds the value of the improved property, the Highest Best Use becomes use of the land as though vacant. CRITERIA IN HIGHEST AND BEST USE ANALYSIS The Highest and Best Use of both land "As Though Vacant" and property "As Improved" must meet four criteria. The Highest and Best Use must be legally permissible, physically possible, financially feasible, and maximally productive. In this case, "As Improved' will refer to the subject as it is to be completed. The tests of legal permissibility and physical possibility must be relevant before the tests of financial feasibility and maximum productivity can be examined. AS THOUGH VACANT Legally Permissible - The zoning designation currently applied by the City of Mounds View to the subject property is PUD. The purpose of the PUD, Planned Unit Development District is to provide a district for a wide variety of uses allowed as determined by the city council. A complete descriptive copy of the zoning ordinance is found in the Addenda. A commercial use.is legally permissible, Appraisal of Real Estate, Tenth Edition, Appraisal Institute, Chicago, Illinois; 1992, pg. 275. 35 .Highest and Best Use Analysis - continued Physically Possible - The size, shape, terrain ana accessibility of a parcel of land affect the uses under which it can be developed. Frontage, depth and ease of access determine its utility. The Capacity ' and availability of public utilities as well as topography and subsoil conditions also determine its potential use. The subject site can physically accommodate a variety of retail, office or general commercial developments. It is well located on the comer of a busy intersection with excellent visibility from both roadways. Public utilities are available, and the entire site is buildable. Financially Feasible - Of the potential uses discussed previously, we believe that the use of the subject parcel based on our income analysis and the character of the neighborhood have determined that most general commercial uses could likely produce a positive return and, therefore, be financially feasible. A use is financially feasible if the net revenue generated by the use satisfies the required rate of return on the investment and provides the requisite return on land. A total feasibility study is beyond the scope of this report. Maximally Productive - Of the financially feasible uses, the use that produces the highest residual land value consistent with the rate of return warranted by the market is the Highest and Best Use. We are of the opinion that a variety of retail, office and general commercial uses could produce the highest value of the subject property and are, therefore, its Highest and Best Uses. AS IMPROVED Legally Permissible The subject use is a legal, conforming use under the current PUD zoning. Physically Possible - The subject has been developed to conform to the physical characteristics of the site. The layout is typical for a convenience store with a car wash and fuel service. Therefore, it meets the criteria of being physically possible. Financially Feasible - The potential uses of the subject property were discussed above. The current use of the property has proven to be economically feasible sine its construction in 1998, Maximally Productive - Of the financially feasible uses, the use that produces the highest residual land value consistent with the rate of return warranted by the market is the Highest and Best Use. We are of the opinion that the current use produces the highest value of the subject property and is, therefore, its Highest and Best Use. CONCLUSION Highest and Best Use, as Vacant - Based on the preceding analysis, it is our conclusion that the Highest and Best Use of the subject property "as though vacant" is for general commercial development. Highest and Best Use, as Improved - Based on the preceding analysis, it is our conclusion that the Highest and Best Use of the subject property is for the existing improvements as a convenience store with fuel service and a car wash. 36 7 APPLICATION OF THE THREE APPROACHES There are three recognized approaches to value that may be used in real properly valuation. These three approaches provide for analysis of market data from three different premises when all are available. These three approaches are the Cost Approach, the Sales Comparison Approach and the Income Capitalization Approach. One or more of these approaches are used in all estimations of value. The Cost Approach provides an estimate of value based on the cost of replacing or reproducing the. property with a property of similar utility (replacement) or the cost of reproducing an exact replica (reproduction). It first involves valuation of the site, usually by comparison with sales of similar sites. The cost of the improvements, less any applicable depreciation, is then added to the site value to obtain an indication of total properly value. The Sales Comparison Approach involves obtaining an indication of the property's value from analysis of the most recent sales of the most comparable properties available, with adjustments for characteristics of the comparable sales property or for other items of comparison to the subject property. The Income Capitalization Approach provides an indication of value based on the discounting of an anticipated net income stream to present value by means of an overall capitalization rate, S which includes recapture of the original investment. The Discounted Cash Flow Method can also be used to discount the anticipated net income to present value, with the discounted value of the me net sale proceeds from the property at the end of the income projection period being added to the value of the income stream to obtain the total indicated present value of the property. The indications of value obtained from the applicable approaches to value are then correlated into a final estimate of value after carefully weighing all the factors in each approach which may affect value and the relative strength of each approach utilized. In some cases, not all of the approaches to value are relevant. In those cases, the appraiser is required to explain the A reasoning involved in eliminating any approach that is not applicable. GO 37 SITE VALUATION BY SALES COMPARISON APPROACH The Sales Comparison Approach is the most commonly used method utilized in valuation of land that is actually vacant or land that is being considered as though vacant for appraisal purposes. Sales comparison is the most common technique for valuing land, and it is the preferred method when comparable sales are available. To apply this method, sales of similar parcels of land are analyzed, compared, and adjusted to provide a value indication for the land being appraised. In the comparison process the similarity or dissimilarity of the parcels is considered. The appraiser gathers data on actual sales and ground leases as well as listings, offers, and other data; identifies the similarities and differences in the data; ranks the data according to relevance; adjusts the sale prices of the comparables to account for the dissimilar characteristics of the land being appraised; and forms a conclusion as to the most reasonable and probable market value of the subject land. In arriving at the market value of the subject site, we have relied entirely upon the sales and offerings of vacant land. We have investigated the terms and conditions of the comparable sale transactions to determine the attitude and intent of the purchaser, and we have attempted to be objective in the analysis of the comparable sale transactions without inferring motivations. It should, however, be realized that there is a wide spectrum of buyer and user motivations and purposes in the commercial real estate field. A comparison has been made on the basis of the subject property having a Highest and Best Use "as if vacant" for commercial development similar to that of most of the comparable properties. The sales and offerings of land considered possessing the highest degree of similarity to the subject property and, therefore, to provide the best available indicators of the value of the subject site are presented on the following pages. 38 Site Valuation By Sales Comparison Approach - continued SUMMARY OF LAND SALE COMPARISONS A summary of comparable land sales data utilized in the valuation of the subject site is presented below Sale Addre#S Buyer/Seller PID # Saki/ Zoning site Sale Pdoe Price/ Close Date size Sq Ft. #1 913 Manor Drive Bayer Investments, LLC/ Chris 01-30-24-22- 05/07/07 C2 27,900 $338,000 $12.11 Spring take Park, MN & Diane Johnson 0134 #2 9933 Ulysses St. NE EAE Holiday Blaine, LLC/ 29-31-23-21- 04/06/07 B2 65,340 $1,111,295 $17.00 Blaine, MN Blaine Rentals, LLC 0050 #3 8097 Highway 65 KTJ LP 128/ 01-30-24-31- 03/21/06 C1 33,046 $625,000 $18.91 Spring Lake Park, MN Burger King Corp. 0047 #4 2381 108th Lane NE New Horizon Real Estate Dev./ 21-31-23-12- 02/07/06 DF 55,855 $750,000 $13.43 Blaine, MN Sherman Associates, Inc. 0027 #5 2865 County Rd. 10 Current on the Market/ Exit 06-30-23-31- On Market R1* 104,108 $1,341,592 $12.94 Mounds View, MN Realty 0028 to 0030 Sub. 2732 County.Highway 10 PUD 71,438 Range of $12.11 - Mounds View, MN Prices $18.91 *City is open to a change to commercial according to the broker. 39 31TIVA OL H3VOdddV 301VA O1 311'IVA 10 31 A 01111O9O11VdW00 S31VS 4 HO 0HO 1500 unAmmN WN1.1.33.7VNLi NOVOIIddV 3W00H1 - .. : .. ., .. ... MAP OF COMPARABLE LAND SALES d m ; -k ail it3th Ave NE ~ I w - AbrP r," z Oak Perk m a 12 z I=h Aw NE I t�th Ave NE J ; rzgrat BW Nw z Park dt t651hLnNwd 104th, r_n NVO� � Airport w �0.s,peri a Park�z — Park. CL sC d tai Ft AV& NE , M E N�V b gietA °nth Ave WW LU -"h Ate NE ` � a National Sports Carter Ln NE 7th Ave NE �Anoka County-9iaine m - ct Airport„ 9.511% Ave ME + %Py WE11 LU 93rd Lm NE Blidne E 2 &.'fid Aft NEca G5 LA � G 9f3t Ave" ' t,r Stat Ave NE 91st Aire NEE S1 lea a7 a Mh Ave NE i0Dano '. f. Norlhiown s Meadows y Mali 871h Ln NEfirth Ave NE Ave NW 13r'k � � � _« ofilb Ave rqE iME "o' 32 84th Ave NE F cn �u- m .Ardis F< to ~ $Prinig Laky raHc 0 {0' ° 125i1ati Al 8MhAve M z 0, 79th way NE nth Ave Nle m `i. Hlllvie�v Rd dr E�kdid Hl8afieW Rd C47:j Unity III Park'# Terrame Or ~ Haspaal ® 1trS ® E3]caanhy Road I t ' . wStivar a . River': a 0 NE 754h Ave NE VWw ; 4Mounds Vl aw IN F'$rk w� Onondaga St NE 125 Park IN 73rdAua N� 35 c � L � € 9 � 1 3 ! eu Un 1hRveN id'Nriiie 2 z4=4Rid • _ . 2' "� 1Naa�igle Df -i EO 40 Site Valuation By Sales Comparison Approach - continued ADJUSTMENT ANALYSIS The Sales Comparison Approach requires adjusting and analyzing comparables to derive a value estimate for the subject. The various sale prices are adjusted after identifying relevant adjustment factors and after quantifying the effect of a difference between the comparable and subject. Before any adjustment can be identified or quantified, a sale must be sufficiently comparable to the subject. Even if sufficiently comparable, a determination must be made as to the adequacy of information collected concerning a sale. The elements of comparison include property rights, legal encumbrances, financing terms, conditions of sale (motivation), market conditions (sale date), location, physical characteristics, available utilities, zoning, and Highest and Best Use. The most variable elements of comparison are the physical characteristics,of the site, which include its size and shape, frontage, topography, location and view. The difficulty in quantifying adjustments is a result of real estate being unique in nature, with no two properties being identical. Additionally, not all differences require an adjustment. This is true if the market does not pay a premium or lower the price for a difference between similar properties. The appraiser typically will have to rely on reason and experience to decide which differences should be adjusted, as well as the magnitude of any adjustment. ANALYSIS OF LAND SALES The subject is located on a high traffic county highway in a well established suburban community. We have selected five properties that are all in similar locations in Spring Lake Park, Mounds View and Blaine. One comparable is one lot removed from County Highway 10, two are nearby on Highway 65, one is in the Blaine Town Center commercial development at Radisson Road and 10e Avenue and one is on County Highway 10 east of Highway 65. They were all used for commercial developments. l=our of the properties represent sales and the fifth comparable is a current listing. ADJUSTMENT ANALYSIS The necessary adjustments are as follows: No adjustments were necessary for "Property Rights Conveyed" or "Financing Terms". Comparable #5 was adjusted downward for "Conditions of Sale" because it is a listing, not an actual sale. All the comparables were adjusted upward at 3% per year for "marKet Conditions" to reflect market increases for inflation and appreciation, adjusted to the effective date of the appraisal "As Is" as of June 10, 2008. This adjustment reflects the demand for vacant land in the metro area, especially in areas that are fully developed like the subject neighborhood. All of the comparables except for comparable #3 were adjusted for location. Comparable #1 was adjusted upward significantly. It has limited visibility from County Highway 10 because it fronts Manor Drive, not the highway. 41 site Valuation By Sales Comparison Approach - continued Comparable #2 was adjusted downward for location because it is on the corner of a superior intersection of Highway 65 and 93`d Avenue, just north of U. S. Highway 10 (not County Highway 10). Comparable #4 was adjusted upward slightly for location. It is located in the new Blaine Town Center area at the intersection of 109 Avenue and Radisson Road. It is a popular new commercial area, but development has slowed and this intersection lacks the traffic of County Highway 10 near the subject. Comparable #5 was adjusted slightly upward for location even though it is on County Highway 10 because it is in an inferior location east of Highway 65. All of the comparables were adjusted for size using Size Adjustment Tables as a guide on the premise that usually the larger the site, the lower the unit price. This adjustment is based on the entire site area of 71,438 square feet because the entire subject site is buildable. Only comparable #5 was adjusted for zoning. It was adjusted downward because it is zoned for residential use. The adjustment was minimal, however, because the City of Mounds View has cm already indicated that they would be amenable to a zoning change. The other four comparables were not adjusted because they were all zoned for commercial uses like the M�, subject. x No other adjustments were deemed to be necessary. 42 Site Valuation by Sales Comparison Approach - continued LAND SALES ADJUSTMENT GRID COMPARABLE SALE DATA pomp # Iom.q #2 Camp -_m #4 p _ $13.43 �c #S , P.. $12.94 SALE PRICE PER SQUARE FOOT $12.11 May -07 $17.00 Apr -07 $18.91 Mar -06 Feb -06 On Market DATE OF SALE Jun -08 ELEMENTS OF COMPARISON Fee Smpl. 0% 0% 0% 0% 0% • Property Rights Conveyed Market 0% 0% 0% 0% 0% • Financing Terms Market 0% 0% 0% 0% -5% • Conditions of Sale 3% 3% 4% 7% 7% 0% • Market Conditions ADJUSTED PRICE PER SQ. FT. $12.47 $17.68 $20.23 $14.37 $112.29 CUMULATIVE LOCATION Cty Rd 10 20% -10% 0% 6% 5 ° PHYSICAL CHARACTERISTICS 71,438 SF -13% -2% -11% -3% 6% • Square Foot Size Level 0% 0% 0% 0% 0% • Shape, Topography All 0% 0% 0% 0% 0% • Municipal Utilities B2 0% 0% 0% 0% 5% •tonin Zoning 7% -12% -111% ° 2% 16% ET ADDITNE ADJUSTMENT E_ $13.34 = $15;56. $18.00 $14.66 $14.26 LN INDICATED SUBJECT VALUE PER SQ. I=T. and must beuad�latustmentsl tiying the iout are Note: Adjustments for the first four items in the Adjustment Analysis Grid above and are netted after the cumulativeive last three items which are additive have been percentage adjustments before the applied. Adjusted Price Range $13.34 to $18.00 Mean Adjusted Price $15.16 Median Adjusted Price $14.66 43 ]MVA 0l smvA n UWWAu , ulwMLI V icn1 Site Valuation by Sales Comparison Approach - continued CORRELATION OF ADJUSTED LAND SALES The subject site has been valued as if vacant. It was compared to the properties listed above. The range in adjusted sale/fisting prices of the foregoing properties is $13.34 to $18.00 per square foot. The mean adjusted price is $15.16 and the median adjusted price is $14.66. Comparable #1 is the least comparable property even though it is near the subject on County Highway 10 because it does not front the highway. The mean adjusted price of the remaining four properties is $15.62 per square foot and the median is $15.11 per square foot. Based on our analysis, it was concluded that a value of $15.00 per square foot reflects the current market attitude for the subject site. This value is between the overall mean and median prices and near the median of our four best comparables. 71,438 Square Feet x 15.00 Rate per Square Foot $1,071,570 Indicated Value for Entire Site $1,072,000 Site Value Rounded THE INDICATED VALUE OF THE SUBJECT LAND IS: ONE MILLION SEVENTY-TWO THOUSAND DOLLARS $1,072,000 44 A- THE COST APPROACH TO VALUE In the Cost Approach to Value, the cost to develop a property is compared with the value of an existing property or a similarly developed property. The Cost Approach reflects market thinking by recognizing that market participants relate value to cost. Buyers tend to judge the value of an eAsting structure by considering the prices and rents of similar buildings and the cost to create a new building with optimum physical condition and functional utility. Buyers adjust the prices they are willing to pay by estimating the costs to bring an existing structure up to the physical condition and functional utilities they desire. In applying the Cost Approach, an attempt is made to estimate the difference in worth to a buyer between the property being appraised and a newly constructed building with optimal utility. The appraiser estimates the cost to construct a reproduction of, or replacement for, the existing structure and site improvements (including direct costs, indirect costs, and an appropriate entrepreneurial profit), and then deducts all the accrued depreciation of the property being appraised from the reproduction or replacement cost of the structure as of the effective appraisal date. The value of the site is then added to this figure, with the result being an indication of the value of the fee simple interest in the property. PROCEDURE: The following steps are used to derive a value indication by the Cost Approach. 1. Estimate the value of land as though vacant and available to be developed to its Highest and Best Use. 2. Estimate the reproduction or replacement cost of the primary structure as of the effective appraisal date. This estimate includes both direct (hard) costs and indirect (soft) costs. 3. Estimate other costs (indirect costs) incurred after construction to bring the new vacant primary structure up to market conditions and occupancy levels. 4. Estimate an appropriate entrepreneurial profit from an analysis of the market. 5. Add estimated reproduction or replacement cost, indirect costs, and the entrepreneurial profit, often expressed as a percentage of total direct and indirect costs, to arrive at the total reproduction or replacement cost of the primary structure. 6. Estimate the amount of accrued depreciation in the structure which is divided into three major categories; physical deterioration, functional obsolescence, and external obsolescence. 7. Deduct the estimated accrued depreciation from the total reproduction or replacement cost of the primary structure to derive an estimate of the depreciated reproduction or replacement cost. 8. Estimate reproduction or replacement costs and depreciation for any accessory buildings and site improvements and then deduct the estimated depreciation from the reproduction or replacement costs of these improvements. Site improvements in minor buildings are often appraised at their net value, i.e. directly on a depreciated cost basis. 9. Add the depreciated reproduction or replacement cost of the primary structures, accessory buildings and the site improvements to obtain the estimated total depreciated reproduction or replacement cost of all the improvements. 10. Add the site value to the total depreciated reproduction or replacement cost to arrive at the indicated value of the fee simple interest in the property. 11. Adjust the indicated fee simple value to reflect the property interest being appraised, if necessary, to arrive at the indicated value of the interest in the subject property being appraised. 45 CM =3 �CM C C IP PHI The Cost Approach to Value - continued For purposes of this appraisal the Reproduction Cost Approach will be used in estimating total construction costs. Reproduction cost is the estimated cost to construct, at current prices as of the effective appraisal date, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design layout, and quality of workmanship, and embodying all of the deficiencies, superadequacies, and obsolescence of the subject building. Reproduction cost is sometimes difficult to estimate because identical materials may be unavailable and construction standards may have changed. Reproduction cost does provide a basis for measuring depreciation from all causes. The use of replacement cost eliminates the need to estimate some forms of functional obsolescence, but many forms of functional obsolescence, physical deterioration, and external obsolescence must be measured. Replacement cost is the estimated cost to construct, at current prices as of the effective appraisal date, a building with utility equivalent to the building being appraised, using modem materials and current standards, design, and layout. in estimating the reproduction costs new of the subject property, we have utilized the Marshall & Swift Valuation Service, a nationally recognized cost data service. The Marshall and Swift Valuation Service is a complete, authoritative appraisal guide for developing replacement costs, depreciated values, and insurable values of buildings and other improvements. It provides costs for a wide range of construction classes and types of occupancies, from warehouses to medical buildings. This service is an aid in determining values of nearly every kind of improved property where replacement or reproduction cost is desired. Modifiers are included to make the cost applicable to any size building in any locality. We have utilized this nationally recognized cost data service to estimate the reproduction cost of the subject improvements. WHAT THE COSTS CONTAIN 1. The actual costs used are final costs to the owner and will include average architect's and engineer's fees. These, in turn, include plans, plan check and building permits, and survey to establish building lines and grades. 2. Normal interest on building funds during period of construction and processing fee or service charge is included. Typically, this will average half of the going rate over the time period plus the service fee. 3. Sales taxes on materials. 4. Normal site preparation including finish grading and excavation for foundation and backfill. b. Utilities from structure to lot line figured for typical setback except where noted in some Unit - in -Place cost sections. 6. Contractor's overhead and profit including job supervisiori, workmen's compensation, fire and liability insurance, unemployment insurance, equipment, temporary facilities, security, etc. 46 The Cost Approach to Value - continued WHAT THE COSTS DO NOT CONTAIN 1. Costs of buying or assembling land such as escrow fees, legal fees, property taxes, demolition, storm drains, or rough grading, are considered costs of doing business or land improvement costs. 2. Pilings or hillside foundations are priced separately in the manual and are considered an improvement to the land. This also refers to soil compaction and vibration, terracing, etc. I Costs of land planning or preliminary concept and layout for large developments inclusive of developer's overhead and profit are not included, nor is interest or taxes on the land, feasibility studies, E.I.R., appraisal or consulting fees, etc. 4. Discounts or bonuses paid for financing are considered a cost of doing business, as are funds for operating start up, developmental overhead or fixture and equipment purchases, etc. 5. Yard improvements including signs, landscaping, paving, wails, yard lighting, etc. fi. Off site costs including roads, utilities, park fees, jurisdictional hook-up, tap -in, impact or entitlement fees and assessments, etc. 7. Furnishings and fixtures, usually not found in the general contract, that are peculiar to a definite tenant, such as seating or kitchen equipment, etc. 8. Marketing costs to create first occupancy including model or advertising expenses, leasing or broker's commissions or temporary operation of property owners associations. O �co o M= m 47 The Cost Approach to Value - continued MARSHALL: & SWIFT CONSTR4C7ION,COST ESTIMATE LOCATED AT: 2732 Cty. Highway 10 NE, Mounds View OCCUPANCY/USE: Convenience Store w/ Gas & Car Wash BUILDING CLASS & QUALITY: Class C; Excellent Quality for Both EXTERIOR WALL: Brick NO. OF STORIES & HEIGHT PER STORY: One Story; 14 Feet for Both Buildings AVERAGE SQUARE FOOT FLOOR AREA: 4,489 & 2,500 Square Feet AVERAGE PERIMETER: 282 & 250 Feet REGION: Central CLIMATE: Extreme SECTION & PAGE Section 13, Page 22 & Section 64, Page 5 SPACE TYPE: Conv. Store Car Wash .. . $QLtAR FOOT REMMEMENTS : BASE SQUARE FOOT COST: $109.00 $144.21 HEATING, COOLING & VENTILATION: $3.80 $0.00 SPRINKLER: $4.00 $0.00 ADJUSTED SQUARE FOOT COSTS: $116.80 $144.21 HEIaGi-IT & SIZE.RE_F_IAtI M_ENTS`'. '. _ NUMBER OF STORIES MULTIPLIER: 1.000 1.000 HEIGHT PER STORY MULTIPLIER: 1.042 1.040 FLOOR AREA/PERIMETER MULTIPLIER: 1.021 0.896 COMBINED HEIGHT & SIZE MULTIPLIER: 1.064 0.932 FINAL CALCULATIONS _ REFINED SQUARE FOOT COST: $124.28 $134.40 CURRENT COST MULTIPLIER: 0.98 1.00 LOCAL MULTIPLIER: 1.14 1.14 F01AL.SQUARE FOOT -COST.:: -'$130.86 $' 53.22 "The proposed car wash is a limited service conveyor style car wash. Because there is no corresponding category in Marshall & Swift, we have estimated the costs at an amount between that of a full-service car wash and a drive-through car wash. 48 � y O 9 a Iit MR 9 CJ 4 The Cost Approach to Value - continued DEPRECIATION Accrued depreciation is the difference between the reproduction or replacement cost new of the improvements on the effective date of the appraisal and the market value of the improvements on the same day. Depreciation is caused by deterioration or obsolescence in the property. Deterioration is evidenced by wear and tear, while functional obsolescence is caused by internal property characteristics, functional inadequacy or superadequacy. External obsolescence is caused by conditions outside the property such as changing property uses in the area or lack of demand. Physical Depreciation - Modified EconomicAge/Life Method: Marshall & Swift guidelines for a convenience store of Excellent Class C construction inaicate that the typical building life is 45 years. Marshall & Swift guidelines for a car wash of Excellent Class C construction indicate that the typical building life is 30 years. This is a forecast of the time period over which the improved property is expected in accordance with market standards to be a competitive economic entity. Both structures were constructed in 1998, and have been well maintained for ten years. We, therefore, believe the effective age for both buildings is five years. Therefore, the subject improvements have an estimated 40 and 25 years of Remaining Economic Life. This is a forecast of the remaining time period over which the entire improved property is expected, in accordance with market standards and investor -purchaser behavior, to be a competitive economic entity. C -Store Car Wash 10 years 10 years Actual Age 45 years 30 years Total Economic Life 5 years 5 years Effective Age 40 years 25 years Remaining Economic Life The physical depreciation factor for the convenience store and the car wash are 4% and 9% respectively based on the Marshall & Swift Cost Service depreciation table for commercial property. The Marshall & Swift depreciation tables are based on market experience which has shown that the rate of depreciation is not a constant annual percentage. Rather, experience shows that the rate (percentage of original cost) begins at a low percentage and increases over the effective life of the improvements. We will apply the stated depreciation rates to the total costs based on the proportionate amount of area. Therefore, we will apply a 4% depreciation rate to 64% of the total costs minus land value and a 9% depreciation rate to 36% of the total costs minus land value. This equates to an overall depreciation rate of 6%. Given the recent $144,000 renovation to the convenience store, we will apply a percentage slightly lower than this weighted average, say 5%. The total physical depreciation of the subject improvements, therefore, is estimated at $81,257 (5% of $1,625,136, the total costs minus land value), rounded to $81,000. 49 at CO �a -Cost Approach to Value - continued Functional Obsolescence: Functional obsolescence is a loss in value resulting from defects in design. It can also be caused by changes that, over time, have made some aspect of a structure, such as its materials or design, obsolete by current standards. The defect may be curable or incurable. Curable functional obsolescence may be divided into three subcategories: 1) deficiency requiring addition, 2) deficiency requiring substitution or modernization, 3) superadequacy. The subject improvements are only ten years old and were recently renovated. They were constructed with the latest materials and are of the latest design, typical of other recently constructed Holiday Stationstores with detached car washes. There is nothing that would indicate any functional obsolescence. Market Analysis Suggests: No Functional Obsolescence External Obsolescence External obsolescence, the diminished utility of a structure aue to negative influences emanating from outside the building, is usually incurable on the part of the owner. External obsolescence can be caused by a variety of factors, e.g., neighborhood decline, the property's location in a community, state, or region, or local market conditions. The resulting loss of value is measured by capitalization of the net rent loss. The subject property is in a good commercial location on a high traffic county highway in Mounds View. It is in a commercial area that is well established and is experiencing some redevelopment. The demand for vacant land in this area is steady. Therefore, we believe there is no external obsolescence associated with this property. Market Analysis Suggests: No External Obsolescence TOTAL ACCRUED DEPRECIATION FROM ALL CAUSES Physical Depreciation $81,000 Functional Obsolescence -0- External Obsolescence -0- TOTAL ACCRUED DEPRECIATION $81,000 EUIPMENT VALUE The equipment value in our cost estimate is a rough estimate. It is based on the total costs of the equipment as given to us by Joel Geil, the Project Manager/Construction Supervisor with Holiday Stationstores, Inc. for a very similar Holiday Stationstore that is currently under construction in New Hope. The equipment, including all of the fuel tanks, dispensing equipment, the canopy and the convenience store equipment totaled $788,000. 50 6- itE 4 � C H O rost Approach to Value — continued The estimated life of the equipment varies from approximately 30 years for the underground tanks to ten years for the convenience store equipment according to Marshall & Sw#t. The improvements are ten years old and much of the interior was remodeled at a cost of $143,886.69. We have, therefore, estimated that overall the equipment has depreciated approximately one third of its original costs. Based on the cost new of $788,000, the resulting equipment value would be $525,333, rounded to $525,000. Our estimate of value for the subject's equipment equates to $75.12 per square foot of gross building area. Four of the sales used in the Sales Comparison Approach had equipment value allocations (all had car washes). The equipment value averaged $78 per square foot of gross building area. This average is very near our estimate of value for the subject's equipment and helps support our estimate. n� a b ME A x -7 9 rn Cm C � cam MMA ;a 9- 0 0 O Q a 51 7" Cost Approach to Value — continued _- REPRQD(7CT1lDN C©ST APIPRQACH SUMMARY g. Marsh/Swift REPRODUCTION COST NEW Convenience Store 4,489 sq. ft. @ $138.851 sq. ft. $623,298 Car Wash 2,500 sq. ft. @ $153.221 sq. ft. $383,050 Cashier's Booth* 48 sq. ft. @ $169.58 / sq. ft. $8,140 Total Base Construction Cost of Buildings $1,014,488 SITE IMPROVEMENT COSTS Paving, Striping & Curbs 47,000 sq. ft. Q $3.50 / sq. ft. $164,500 $1;44$,688 Landscaping, Irrigation 11,600 sq. ft. @ $4.50 / sq. ft. $52,200 SITE VALUE BY SALES COMPARISON: Concrete 6,000 sq. ft. @ $5.00 / sq. ft. $30,000 Fuel Eq. Installation $95,000 $2,520,688 Signage $35,000 ° ,ENTREPRENEURIAL PROFIT 7% Total Site Improvement Costs $376,700 INDIRECT COSTS .(NOT INCLUDED IN MARSHALL & SWIFT $2„ 697136 Appraisal Fee $3,500 a� Land Taxes (3 mos. const.) $5,000 Offsite Costs** $30,000 $2,616,136 Legal, Title & Recording Fees $19,000 EQUIPMENT VALUE (1/3rd Depreciation of Total Costs at $788,000): Total Indirect Costs (Rounded) $57,500 SUBTOTAL171 IAF'F1MIT CO$T $1;44$,688 SITE VALUE BY SALES COMPARISON: $1,072,000 SUBTOTAL OF COSTS: $2,520,688 =� ° ,ENTREPRENEURIAL PROFIT 7% $176,448 JOT AI_„DEVELOWIPIITCC�ST ,.,; . , $2„ 697136 o a LESS ACCRUED DEPRECIATION: $81,000 INDICATED FEE SIMPLE VALUE BY THE COST APPROACH: $2,616,136 EQUIPMENT VALUE (1/3rd Depreciation of Total Costs at $788,000): $525,000 TOTAL VALUE: wRounded $3,141,136 0,m TOTAL VALUE ; $3.,141.,000 ;The cost of the cashier's booth is a flat amount of $148.75/sf as found on Pg. 10, Sec. 63, plus current— urrent(1.00) (11 .00)and local (1.14) cost multipliers. "Includes hook-up fees, utility extensions, park and other city fees (excluding building permits). M� 9 4 rn O A 52 THE SALES COMPARISON APPROACH The Sales Comparison Approach is the process in which a marKet value estimate is derived by analyzing the market for similar properties and comparing these properties to the subject property. Market value is estimated by comparing the subject property to similar properties that have recently sold, are listed for sale, or are under contract (recently drawn up purchase offers accompanied by a cash or equivalent deposit). The major premise of the Sales Comparison Approach is that the market value of a property is directly related to the prices of. comparable properties. The concepts of anticipation and change, together with the principles of supply and demand, substitution, balance, and externalities, are basic to the Sales Comparison Approach. The Sales Comparison Approach is applicable to all types of real property interest when there are sufficient reliable transactions to indicate value patterns or trends in the market. When the number of market transactions is insufficient, the applicability of the Sales Comparison Approach may be limited. It usually provides the primary indication of market value in appraisals of properties that are not purchased for their income producing characteristics. Buyers of income producing properties usually concentrate on a property's economic characteristics, most often focusing on the rate of return on an investment made in anticipation of future cash flows. PROCEDURE: A genera[ outline of the basic procedure follows: 1. Research the market to obtain information on sales transactions, listings, and otters to purchase or sell properties that are similar to the subject in terms of characteristics such as property type, date of sale, size, location, and zoning. 2. Verify the information by confirming that the data obtained is factually accurate and that the transactions reflect arms -length market considerations. Verifications may also illicit additional information about the market. 3. Select relevant units of comparison, e.g., dollars per square foot, and develop a comparative analysis for each unit. 4. Compare comparable sale properties with the subject property using the elements of comparison and make appropriate adjustments of the sale price of each comparable property to the subject property or eliminate the sale property as a comparable. 5. Reconcile the various value indications produced from the analysis of comparables into a single value indication or a range of values. In an imprecise market subject to varying occupancies and economic factors, a range of values may be a better conclusion than a single value estimate. The application of the Sales Comparison Approach is found on the following pages. Comparable sales data is presented, summarized, and analyzed in an adjustment grid. Relevant adjustments to the sales are made for real property rights conveyed, financing, conditions of sale, and market conditions. In addition, the properties are adjusted for location, physical differences, and any other characteristics deemed appropriate. 53 a COMPARABLE SALE #1 PROPERTY DATA Former Kwik Trip ADDRESS: 14160 Wilds Path NW CITYICOUNTY: Prior Lake 1 Scott MAP INDEX: 500 B2 LEGAUPIDI#: 25-434-0010 BUILDING DATA. Shakopee Mdewakanton Sioux Community GROSS BUILDING AREA. 7,665 SF (Inc. car wash) STORIES: One CONSTRUCTION TYPE: Steel 1 Masonry YEAR BUILT: 2005 CONDITION: Good SPECIAL FEATURES: None noted SITE DATA SITE AREA: 155,944 square feet PARKING: Adequate surface parking ZONING: C1 LAND TO BUILDING RATIO: 20.34 to 1 SALE DATA: SALE PRICE., $5,500,000 EQUIPMENT INCLUDED: $4,500,000 for real estate, $1,000,000 for equipment. ASSESSMENTS: None PRICE PER SQ.FT. OF GBA: $717.55 DATE OF SALE: 07/26/07 BUYER: Shakopee Mdewakanton Sioux Community SELLER: Convenience Store Investments SOURCE: Files 1 Buyer COMMENTS: This property was a former Kwik Trip that was purchased and renamed the Shakopee Dakota Convenience Store and reopened on October 8, 2007. The purchase price of $5,500,000 included $1,000,000 towards 13 fuel dispensers, car wash equipment, canopy, and other FF&E. It is a less developed area, but it is on a high traffic county road near the Wilds golf course. 54 M g 0 2 rA i PROPERTY DATA COMPARABLE SALE #2 ADDRESS: 2960 West 82"d Street CITY/COUNTY: Chanhassen / Carver LEGALIPID#: 25-0760010 BUILDING DATA: None GROSS BUILDING AREA: 6,320 SF STORIES: One CONSTRUCTION TYPE: Masonry YEAR BUILT: 2000 CONDITION: Good SPECIAL FEATURES: Car wash attached to the convenience store. SITE DA TA This property is located on the northeast comer of the intersection SITE AREA: 81,457 square feet PARKING: Ample surface parking ZONING: PUD LAND TO BUILDING RATIO: 12.9 to 1 SALE DATA: SALE PRICE: $3,000,000 EQUIPMENT INCLUDED: $2,750,000 for real estate, $$200,000 for equipment and $50,000 for non -compete clause. ASSESSMENTS: None PRICE PER SQ.FT. OF GBA: $474.68 DATE OF SALE: 01/11/2007 TERMS/FINANCING: Cash to new financing. BUYER: FAE Holiday Chanhassen, LLC SELLER: Michael & Jane Schlanger SOURCE: County records COMMENTS: This property is located on the northeast comer of the intersection of Highway 41 and 82`d Street East, approximately one half mile south of Highway 5. This is a comparable secondary location on a high -traffic roadway. 55 9 vL =- e, ADDRESS: 5970 Highway 61 CITYICOUNTY: White Bear Township I Ramsey LEGALIPID#: 01-30-22-22-0024 BUILDING DATA: ZONING: GROSS BUILDING AREA: 5,130 SF STORIES: One CONSTRUCTION TYPE: Masonry YEAR BUILT: 1996 CONDITION: SPECIAL FEATURES: Good Car wash attached to the convenience store. SALE PRICE: EQUIPMENT INCLUDED: $2,250,000 $2,000,000 for real estate, $200,000 for equipment, $50,000 for non -compete clause. ASSESSMENTS: None =` PRICE PER SQ.FT. OF GBA: $43$-60 �Q DATE OF SALE: fir" �� v 9 �• � �� BUYER: �'•Mv�.3 3�_ .� t. �. ._ , . Steven D. and Sharon L. Bartness i �.�Y'.—s....:. _�.iiA�'.�-3s � _ � _ _..u_if"i .�iM1a COMPARABLE SALE #3 SOURCE: PROPERTY DA TA ADDRESS: 5970 Highway 61 CITYICOUNTY: White Bear Township I Ramsey LEGALIPID#: 01-30-22-22-0024 BUILDING DATA: ZONING: GROSS BUILDING AREA: 5,130 SF STORIES: One CONSTRUCTION TYPE: Masonry YEAR BUILT: 1996 CONDITION: SPECIAL FEATURES: Good Car wash attached to the convenience store. SITE DATA SITE AREA; 100,623 square feet PARKING: Ample surface parking ZONING: B2 8 �. LAND TO BUILDING RATIO: 19.6 to 1 �o SALE DATA: SALE PRICE: EQUIPMENT INCLUDED: $2,250,000 $2,000,000 for real estate, $200,000 for equipment, $50,000 for non -compete clause. ASSESSMENTS: None =` PRICE PER SQ.FT. OF GBA: $43$-60 �Q DATE OF SALE: 01/09/2007 Mel TERMS/FINANCING: Cash to new financing. BUYER: FAE Holiday White Bear Lake, LLC; SELLER: Steven D. and Sharon L. Bartness SOURCE: County records This property, is in a slightly inferior location on Highway 61. It is COMMENTS: surrounded by a large amount of vacant land. 56 d d " p�p P' COMPARABLE SALE #4 PROPERTY DA TA ADDRESS: 1605 Annapolis Lane CITYICOUNTY: Plymouth 1 Hennepin LEGALIPID#: 27-118-22-31-0019 GROSS BUILDING AREA: 9,115 SF STORIES: One CONSTRUCTION TYPE: Masonry YEAR BUILT: 1999 CONDITION: Good SPECIAL FEATURES: Car wash attached to the convenience store. SITE DATA SITE AREA: 102,272 square feet PARKING: Ample surface parking ZONING: CC LAND TO BUILDING RATIO: 11.2 to 1 COMMENTS: This property is in a superior location in a newer retail area anchored by a new Home Depot on the northeast' quadrant of a 494 and County Road 6. 4 0 x v. a 57 i A SALE DATA: SALE PRICE: $2,900,000 x EQUIPMENT INCLUDED: Purchase for real estate only according to CREV. ASSESSMENTS: None PRICE PER SQ.FT. OF GBA: $318.16 DATE OF SALE: 11/01/2006 TERMSIFINANCING: Cash to new financing. o BUYER: HD Plymouth MN, Outlots, LLC igmt SELLER: Annapolis, LLP �y SOURCE: County records COMMENTS: This property is in a superior location in a newer retail area anchored by a new Home Depot on the northeast' quadrant of a 494 and County Road 6. 4 0 x v. a 57 i COMPARABLE SALE #5 PROPERTY DA TA ADDRESS: 11430 Jefferson Court N CITY/COUNTY: Champlin 1 Hennepin LEGALIP I D#: 31-120-21-24-0075 BUILDING DATA: $396.50 GROSS BUILDING AREA: 8,676 SF STORIES: One CONSTRUCTION TYPE: Masonry YEAR BUILT: 2002 CONDITION: Good SPECIAL FEATURES: Car wash attached to the convenience store. SITE DATA SITE AREA: 69,452 square feet PARKING: Adequate surface parking ZONING: PUD LAND TO BUILDING RATIO: 8.0 to 1 SALE DATA: SALE PRICE: $3,440,000 EQUIPMENT INCLUDED: $2,479,000 for real estate, $961,000 for equipment. ASSESSMENTS: None PRICE PER SQ.FT. OF GBA: $396.50 DATE OF SALE: 01/23/2006 TERMS/FINANCING: Cash to new financing. BUYER: Wash n' Fill Property Champlin, LLC SELLER: Jenibu Properties, LLP SOURCE: County records COMMENTS: This property is in a superior location on the northwest quadrant of Highway 169 and Elm Creek Boulevard, an intersection surrounded by retail development. ' +. =Ig = n , P d= T= r_ MAP OF COMPARABLE SALES i' tiq �-a as leach hlarn Lake t.� 13arnsay8 Andover. ¢ . Alhertviele i _ ° b gBernine, MTJ Anakl "�t Qrs Hassan v� Thornpip Fi Champ 0Bur,chnrille q Corcoran � Dupunto 61Wla le Gno. �9 �retto e 47 Jah.nsville Lino Lakes w � ' •,1a; roakl+Y'n Park A illr'rxiki • l_ Center ;F Crystal ° � gColurnf�Ca� 3. ° l•ielghts .1,1rem MOOS 'Forest Lak S 4Weston Maple Hugo tNirhrorh q aWhite Bear E 14�r+eulew c1lNhi.rs Sear Lak gl`,tahtcri �. Plea $p Ica Medina Plymouth F) rl i1 581f11f� 01 a a a7�W Omission, FArrn� [ Gw � orth St Peal �, Ditter �f& Plain = L. aQey Falcnrti kelght a °�#i[a le�rvaod dais orpno ' Wayzata -� � . Glaristane p saga Rill ° i2 llillirfR9S1a11 r,+lidua€ q Oakdale q Woodiandq - al Louis3M ,. Mound 0 4 prim Park L.a ndlall 17.. lrinatarriia St Paul ilfacius Greenwood, "Deep -n Hopkins � Y {l Wast St Paul : � Worsc Edina. .�-�Lfl dale q n Shoraurnr�da : Excelsior d South St Pauli -.:. 212 =dRlcltlield r _ l �. ar S ° i�l.endota' X110 diGtor! o CF seem Eden'rairirleti�- 'Meights�(,{ "� Newport 41 ;312 ,,5a 4 _ ��" 1 J �', $t Paul Park 77 q la' y �' Gattagr Hazeltine- $JiColgirl tflrl 3 o a A �Eacan Inver Grove 4'> gu Austa Heights Lag( ^hakope$ *Cedar Grows _. �Cf�tska • j �► rra i. .: �= - 1G1 FtttsepeSrRPir�e Eteni�sic9�pp; _ Carver;^ Swage`, a'1 ° ° { °' pSureWrlle, SedEl Marnam IP Apple Valley° ase eau t o M.�er stau�m Grai stunnd Oirhard Garden ° i [ 55 �ZsttJnian Y q q - LlnlVamity of 1C tes q Baden Spring Lalta Prier lake Minnesota, p a Deer Park Rosemount a �ganr,e l�tudlsa n I2621 aCredit River CeRe2earch e 4 r rmfNor Ica Jordan o ,din Ar�ters�Park Lakeville Ernpir ¢', a grrrSFnc�tan _ '•' Ube Helona r � i 10 miles 59 -9ales Comparison Approach - continued SUMMARY A summary of comparable improved properties is presented below. Comp Sale Date Year Built GBA Car Wash Sale Price $1SF - #1 07%26/07 2005 7,665 sf Yes $5,500,000 $717.55 ' .#2 01111/07 2000 6,320 sf Yes $3,000,000 $474.68 #3 01/09/07 1996 5,130 sf Yes $2,250,000 $438.60 #4 11/01/06 1999 9,115 sf Yes $2,900,000 $318.16* #5 01/23/06 2002 8,676 sf Yes $3,440,000 $396.50 Sub. 1998 6,989 sf Yes *Real estate only. Because comparable #3 is a real estate only transaction, we will have to estimate the value of the equipment. We will compare it to the other four comparables for which we have an allocation for equipment value. The average equipment value for those four properties is $78.22 per square foot overall. We will, therefore, add $78 per square foot to the sale price for comparable #3. ADJUSTMENT ANALYSIS The elements of comparison are the cnaractenstics of properties and transactions that cause the prices paid for real estate to vary. The appraiser considers and compares all reasonable differences between the comparable properties and the subject property that could affect their values. Adjustments for differences are made to the price of each comparable property to indicate the value of the subject property as of the effective date of the appraisal. This adjustment analysis utilizes generally utilizes accepted adjustment categories. The first four categories, "real. property rights conveyed", "financing", "conditions of sale", and "market conditions" are cumulative. Normally a sale should be adjusted for the cumulative adjustments before the remaining adjustments ("location", "physical", and "other") are applied. "Location", "Physical characteristics" and "other" adjustments are additive and may be made in any order. , 1. Real Properfy Rights Conveyed - A transaction price is always predicated on the real property interest conveyed. A preliminary step in the valuation process is to determine the real property interest to be appraised. The appraiser can then relate the market data to the subject. Adjustments must be made to reflect the difference between properties leased at market rent and those leased at rents either below or above market. In practice, the sale of a fee simple interest is typically not compared to a leased fee or leasehold estate. Typically, comparability requires omitting sales of different property interests. However, a sale of a leased fee estate may be used (if appraising a fee simple interest) if the appraiser is convinced that the. rental structure is at market, if there is a short time left on existing leases and the effect of the leases can be adjusted, or if substantial information is available to adjust for the value of the leased fee to fee simple (for example having an indication of the value of the leasehold estate). All comparable sales are of comparable fee simple interests, so no adjustments were necessary for this factor. JM r � C To c -Sales Comparison Approach - continued 2. Financing - The transaction price of one property may differ from that of an identical property due to different financing arrangements. An appraiser investigates the sale prices of comparable properties that were sold with apparent non -market financing to determine whether adjustments to reflect typical market terms are warranted. Market evidence must support the adjustment. Adjustments are calculated for atypical financing by analyzing paired data sets or discounting the cash flows created by the mortgage contract at market interest rates. The most commonly used market value definition requires appraising to cash, with typical institutional financing or other stated terms. Furthermore, if the subject is assumed to have other than typical institutional terms, the terms and the effects of the financing on the appraised value should be set forth in the report. None of the comparable sales required adjustment for financing, since they are all cash transactions or indicate market financing terms. 3. Conditions of Sale (Motivation) - Adjustments for conditions of sale usually reflect the motivations of the buyer and the seller. In many situations the conditions of sale significantly affect transaction prices. Although conditions of sale are often perceived as applying only to sales that are not arm's-length transactions, some arm's-length sales may reflect atypical motivations or sale conditions due to unusual tax considerations, lack of exposure on the open market, or the complexity of eminent domain proceedings. if the sales used in the sales comparison approach reflect unusual situations, an appropriate adjustment must be made for motivation or conditions of sale. Plottage value, purchasing additional land for expansion or parking, and other typically motivated sales may have an adjustment that may be inferred from the market by comparison or from information provided by the buyer or seller. No adjustments for conditions of sale were considered necessary. a 4. Market Conditions (Time) - Comparable sales that occurred under different market conditions than those applicable to the subject on the effective date of the value estimate require adjustment for any differences that affect their values. A common adjustment for =E market conditions is made for differences occurring since the date of sale. Since the time the s comparable sales were transacted, general values may have appreciated or depreciated due to inflation or deflation and investors' perceptions of market conditions may have changed. ` Although the adjustment for market conditions is often referred to as a "time" adjustment, time is not the cause of the adjustment. Market conditions which shift over time create the need for an adjustment, not time itself. If market conditions have not changed, no adjustment is required, even though considerable time may have elapsed. Conservative adjustments of 3% per year for changes in "market conditions" were made to reflect inflation and appreciation as the commercial real estate market in the metro area remains fairly steady despite the downturn in the overall economy. This adjustment is calculated to the "As Is" effective date of appraisal, June 10, 2008. 4 M 61 Sales Comparison Approach - continued g. Location - An adjustment for location may be required when the locational characteristics of a comparable properly are different from that of the subject property. Although no location is inherently desirable or undesirable, an appraiser can conclude that the market recognizes that one location is better than, equal to, or worse than another. Properties selected for comparison to the subject should be of similar Highest and Best Use. Generally, it is inappropriate to use sales of properties differing in Highest and Best Use from that of the subject property and to then attempt to adjust the differences for location. All the comparable sales were considered to have commercial purposes as their Highest and Best Use. Adjustments were, however, made for location as follows: Comparables #1, #3, #4 and #5 were adjusted for location. Comparables #1 and #3 were adjusted upward because they are in less developed areas. The adjustment was minimal because they are both on high traffic roadways. Comparable #4 was adjusted downward because it is essentially an outlot for a new Home Depot that abuts Highway 169. Comparable #5 was adjusted downward because it is located on the corner of Highway 969 and Elm Creek Boulevard, a high traffic intersection surrounded by dense retail development. 6. Economic Factors - Adjustments for economic factors may be required when the economic characteristics of a comparable property are different from that of the subject property. No adjustments were made to the comparables for this characteristic. 7. Land to Building Ratio - The "land to building ratio" reflects the size of the subject lot relative to the size of the improvements. The adjustments are calculated by subtracting the lowest ratio from the highest ratio, multiplying the difference by the marginal value per square foot, and dividing by the comparable's Cumulative Adjusted Price per Sq. Ft." in the Market Sales Adjustment Grid. The adjustments for this category were as follows: The adjustments for land -to -building ratio were estimated by assigning a value to the land needed to equalize the ratios. Neither the subject nor any of the comparables have excess land (land that could be sold off separately), so the adjustment is based on what is considered surplus land. When the land is defined as surplus land and not excess land, the value assigned to that land is typically half of the market value. The subject site is valued at $15.00 per square foot In the Cost Approach. We will, therefore, apply a value of $7.50 per square foot to the surplus land. 8. Other Physical Characteristics - If the physical characteristics of a comparable property and the subject property differ in many ways, each of these differences may require comparison and adjustment. Physical differences may include differences in building size, quality of construction, architectural style, building materials, age, condition, functional utility, site size, attractiveness, and amenities. On-site environmental conditions are also considered. I.1 -M ME _ -n= T r- 11_ Mks r;r a 9 M 0 A 0 Sales Comparison Approach - continued Because real estate is unique and there are generally numerous differences between properties, only quantifiable or significant differences should be adjusted. The physical differences are best obtained (as are all adjustments) from a direct comparison of comparables. However, because properties generally differ in terms of more than one characteristic, physical (and other) adjustments are not easily abstracted from sales. The adjustments for this category were as follows: Only comparable #1 was adjusted for the age, quality and condition characteristic. It was adjusted downward because it is significantly newer. The other comparables are all of a similar age and condition as the subject. No other adjustments were deemed necessary. 9 63 r Sales Comparison Approach - continued MARKET SALES ADJUSTMENT GRID COMPARABLE SALE DATA Subject _ Comp. #1 Comp #2 < Comp'- :: Cgop #4. Cothp _ ....'. SALE PRICE PER SQUARE FOOT $717.55 $474.68 $438.60 $396.16 $396.50 DATE OF SALE Jun -08 Jul -07 Jan -07 Jan -07 Nov -06 Jan -06 ELEMENTS OF COMPARISON .-- .. • Property Rights Conveyed Fee Smpl. 0% 0% 0% 0% 0% • Financing Terms Market 0% 0% 0% 0% 0% • Conditions of4Sale Market 0% 0% 0% 0% 0% • Market Conditions 3% 3% 4% 4% 5% 7% CUMULATIVE ADJUSTED PRICE PER SQ. FT. $739.08 $493.67 $456.14 $415.97 $424.26 LOCATION MV 5% 0% 5% -5% -5% PHYSICAL CHARACTERISTICS •Square Foot Si . ze 6,989 0% 0% -5% 5% 5% • Land -to -Building Ratio 10.2 to 1 -10% -4% -15% -2% 4% • Age, Quality, Condition 1998 -5% 0% 0% 0% 0% NET ADDITIVE ADJUSTMENT 10% -4% 15% .2%. _4% INDICATED SUBJECT VALUE PER SQ. FT. -, $66517 - $473.92 $387.73 .$407.65. $441.23 !Vote: Adjustments for the first four items in the Adjustment Analysis Grid above are cumulative and must be calculated by multiplying the percentage been adjustments before the last three items which are additive and are netted out after the cumulative adjustments have applied. Adjusted Price Range: $387.73 to $665.17 Adjusted Mean Price: $475.14 Adjusted Median Price: $441.23 64 3MVA U Y4H300Y UVALLVS31VNW H3VOVddV 311001 NOIIVII13N033U Sales Comparison Approach - continued CORRELATION OF THE SALES COMPARISON APPROACH The range in adjusted sale prices of the foregoing properties is from $387.72 to $665.17 per square foot. The mean adjusted price is $475.14 per square foot. The median adjusted price is $441.23 per square foot. Comparable #1, even after adjustments, is significantly higher than the remaining four comparables. The mean adjusted price of the remaining four properties is $427.63 per square foot. In consideration of the data presented and after analysis and adjustment of the previously reported comparable sales, we have estimated a value between the overall mean and median adjusted prices, near the mean adjusted price of the comparables excluding comparable #1. We have determined that $440.00 per square foot is a reasonable estimate of the current market value for the subject. Therefore: 6,989 Square Feet x $ 440.00 Value per Square Foot $3,075,160 Total Value $3,075,000 Rounded - 525,000 Value of the Equipment $2,550,000 Value of the Real Estate INDICATED VALUE, INCLUDING EQUIPMENT, BY THE SALES COMPARISON APPROACH: THREE MILLION SEVENTY-FIVE THOUSAND DOLLARS $3,075,000 65 3 � a -n x �C"e_ A0 o r" x f Ji INCOME CAPITALIZATION APPROACH The Income Capitalization Approach to value consists of methods, techniques, and mathematical procedures that an appraiser uses to analyze a property's capacity to generate benefits (i.e., usually the monetary benefits of income and reversion) and convert these benefits into an indication of present value. All income capitalization methods, techniques, and procedures attempt to consider anticipated future benefits and estimate their present value. This may involve either forecasting the anticipated future income or selecting a capitalization rate that implicitly reflects the anticipated pattern of change in income over time. The principle of supply and demand and the related concept of competition are particularly relevant in forecasting future benefits and estimating rates of return in the Income Capitalization Approach. The prices, rents, and rates of return for property tend to be set by the prevailing prices, rents, and rates of return for equally desirable substitute properties. A good balance between the types and locations of income producing properties creates and sustains value; an imbalance in efficient land use may result in a decline in value. External forces can then affect the value of income producing property either positively or negatively. The net operating income and pre-tax cash flow expectancy of a property are analyzed to determine its earning power. The appraiser examines 1) the income and expense history of the subject property; 2) the income and expense histories of competitive properties; 3) recently signed leases, proposed leases, and asking rents for the subject and competitive properties; 4) actual vacancy levels for the subject and competitive properties; 5) published operating data; 6) market expectations; and 7) tax assessment policies. INCOME CAPITALIZATION APPROACH METHODS Two capitalization methods - direct capitalization and yield capitalization are used. These methods are based on different measures of expected earnings and include different assumptions concerning the relationship between expected earnings and value. Direct Capitalization Direct capitalization is a method used to convert an estimate of a single years income expectancy into an indication of value in one direct step - either by dividing the income estimate by an appropriate income rate or by multiplying the income estimate by an appropriate factor. A satisfactory rate of return for the investor and recapture of the capital invested are implicit in the rates or factors applied in direct capitalization because they are derived from similar investment properties. The income expectancy considered is frequently the anticipated income for the 'RE following year. m Yield Capitalization Yield capitalization is I method used to convert suture benefits into present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investment's income pattern, value change and yield rate. a M s 0 66 Income Capitalization Approach - continued The procedure used to convert periodic income and reversion into present value is called discounting; the required yield rate of return is called the discount rate. The discounting procedure presumes that the investor will receive a satisfactory return on the investment and complete recovery of the capital invested. The method is referred to as yield capitalization because it analyzes whether an investment property will produce the particular level of profit or yield required. Yield capitalization is also called discounted cash flow analysis because a discount rate is used to calculate the present value of anticipated future cash flows. The subject properly is the type of real estate which if leased would be a completely net leased facility, whereby the operator is responsible for the total maintenance, repairs, and replacement concerning the subject property. The tenant is responsible for all of the ongoing expense, including utilities, real-estate taxes, insurance, and any and all other expense. The only expense an owner may be charged with would be a slight allotment for management, releasing expense and reserve expense. It is our experience, however, that the rental of gasrconvenience stores varies widely depending on their operating history and cost. Rentals can range from $15 per square foot to as much as $50 per square foot according to our records. It is difficult to correlate a rental, as this type of property is more of a business than traditional real estate. Also, most convenience stores are owner occupied. According to the zoo? State of the lnaustry: Convenience & Petroleum Retailing Totals, Trends and Averages, published by the Association for Convenience & Petroleum Retailing (NACS), 60.9% of all convenience stores were owner occupied in 2006. This type of property is typically bought and sold on an economic basis. We have, therefore, analyzed the subject based upon its actual operating history instead of using rent comparables. EXPLANATION OF THE OPERATING STATEMENT We will calculate the income to the real estate by first projecting the 1008 income ana expenses. These projections will be based on the three previous years' statements and budgets as well as industry averages. From these projections we arrive at the EBITDARL, or earnings before interest, taxes, depreciation, amortization, rents and leases as defined in the 2007 State of the Industry report and in the book Convenience Stores and Retail Fuel Properties. Essential Appraisal Issues available through the Appraisal Institute. EBITDARL includes the income attributable to three different components, real property, tangible personal property or FF&E, and intangible business assets. The following portion of the Income Capitalization Approach involves the analysis of the operating statements of the subject. We were provided with the overall summary of the subject's actual performance for the years 2005 through 2007. However, the detailed expense information wasn't provided because the owner's computer with all of the relevant information was recently stolen. The owner was able to find the budgets for 2006 and 2008 which did have detailed expense information. All of these statements can be found in the Addenda. 67 M M rs o�Og C13 M 9 Income Capitalization Approach - continued The actual operating statements provided include two summaries for 2006 that do not match. The owner couldn't explain the difference, but indicated that the first statement is probably the flawed statement, as it was created immediately after the year's end, whereas the information in the second statement is probably more accurate, because there has been time to go over the numbers thoroughly. We have, therefore, relied upon this second statement for the purposes of this analysis. The owner explained that the expense totals in both the actual income and expense statements and the budgets are somewhat misleading. A large portion of the expenses included are not applicable to the operation of the store and are instead applicable to the owner's outside business and personal expenses. We have then compared the subject's operating information with the industry averages as published in the 2007 State of the Industry report. We have included the information for the industry averages overall, as well as for the first quartile based on performance (which includes the subject). On the following page is a reconstruction of the 2006 and 2008 budgets along with the (VACS industry averages and our projections for 2008. rM 9 C:1 T Z Q RECONSTRUCTED OPERATING STATEMENT 31i1Vh 30 V0111300Y 31VINLLS31VNIA t R011V1110N003111 NAGS NAGS 200B..=.' Catego 2006 Budget. %.of: Gross Profits 2008 %of Budget Gross Profits TopQusrtlle ss . % 0f GP overall as a 9'6 of GP Apgraisefs Projections ' %of , Gross Profits Sales • Gas $5,154,100 $7,575,232 $7,575,232 • Merchandise $1,799,450 $1,980,000 $1,980,000 • Car Wash $235,000 $295,000 $295,000 • Other Sales $476,000 $495,000 $495,000 Total Sales $7,664,550 $10,345,232 $10,345,232 Cost of Goods Sold • Gas $4,817,800 $7,149,472 $7,149,472 • Merchandise $1,370,838 $1,511,298 $1,511,298 • Car Wash $25,000 $30,000 $30,000 • Other $386,000 $396,000 $396,000 Total Costs of Goods Sold $6,599,638 $9,086,770 $9,086,770 Gross profit V r1,064�812 -1,00.0%_ T-1A8Am- . _ - 100.0°%• 100.00%: 1p0.00°!0 _.41260,462 _100.0% Operating Expenses • Labor $339,000 31.8% $372,000 29.6% 33.60% 35.90% $372,000 29.6% • Utilities $58,000 5.4% $73,000 5.8% 4.64% 6.28% $73,000 5.8% • Property Taxes $52,000 4.9% $55,000 4.4% 1.98% 2.10% $52,004 4.1% • Insurance $16,000 1.5% $15,000 1.2% 0.59% 1.45% $15,000 1.2% • Advertising $21,000 2.0% $28,000 2.2% 1.79% 1.90% $28,000 2.2% • Royalty & Franchise Fees $55,600 5.2% $62,760 5.0% 0.10% 0.42% $62,760 5.0% • Security $250 0.0% $260 0.0% 0.38% 0.43% $260 0.0% • Supplies $13,650 1.3% $21,500 1.7% 2.18% 2.02% $21,500 1.7% • Credit/Debit Card Fees $87,000 8.2% $135,241 10.7% 9.49% 7.57% $135,241 10.7% • Communications $300 0.0% $500 0.0% 0.70% 0.97% $500 0.0% • Repairs & Maintenance $26,000 2.4% $52,000 4.1% 4.40% 5.40% $55,372 4.4% • Cash Over/Short $5,500 0.5% $5,500 0.4% 0.84% 0.83% $5,500 0.4% • Other $40,112 3.8% $39,790 3.2% 3.87% 4.89% $39,790 3.2% Total Opgratft Expenses. .','$714,4.12 67.1% $$60�551 - 76.18°% 860 927 :68.4% EBIDTARL .$350,500 32,9°1!p $3971911. 31.6% 35_.48%_ .29.84%, $397,535 Return to Intangible Assets FF&F $43,257 Income to Real Property$261;720 $92,558 69 31i1Vh 30 V0111300Y 31VINLLS31VNIA t R011V1110N003111 -_Income Capitalization Approach - continued EXPLANATION OF THE 2008 PROJECTION For the purposes of this analysis, we will focus on gross profit (the bottom fine atter the cost of goods sold is subtracted from gross sales) as opposed to gross sales. The reason we are focusing on gross profit versus gross sales (which was more common in the past) is the recent history of significantly increasing fuel prices. These increases will skew any ratios based on gross sales because the fuel cost increases have far outpaced increases in gross profits. For example, gross sales increased 24% from 2006 to 2007. However, the gross profit only increased 5%, mainly because the cost of goods sold for fuel increased 34%. So to base projections off of gross sales from year to year in this market of rapidly increasing fuel prices would not be a true reflection of actual performance and would be misleading. Our projection of gross profit is based on the owner's projection for 2008. The owner indicated that year-to-date the sales and gross profits for 2008 are on pace with the 2008 budget. The gross profit according to the 2008 budget is $1,258,460, which is an increase of 6.8% over the 2007 figures. The increase from 2005 to 2006 was 17.9% and the increase from 2006 to 2007 was 4.9%. The projected 6.8% increase in gross profit from 2007 to 2008 is less than the average increase of the previous two years and, therefore, appears to be appropriate. As mentioned previously, the 2008 budget from the owner as presented in the Addenda includes a number of expenses that are not a part of the calculation of EBITDARL. The expenses that are not included in the calculation of EBITDARL by definition include depreciation, amortization, interest, occupancy costs, SBA amortization, and equipment rental. In addition, there are outside business and personal expenses included in the budget that are not direct expenses of running the convenience store. The personal expenses that were excluded from the 2008 budget are as follows: $55,000 Excess wages taken by the owner ($48,000 remains for management wage). $8,000 Car payments. $5,500 Personal and outside business phone expenses. $6,000 Personal and outside business accounting. $90,500 Personal and outside business gas costs. The that differ from the 2008 budget are property taxes and repairs and is only remaining expenses maintenance. For property taxes we have applied the actual 2008 taxes according to Ramsey County. For repairs and maintenance we have applied the NACS average for stores in the first N quartile, because the actual expenses for repairs and maintenance are inconsistent, as would be ,,P65 expected. M M It must also be noted that the maintenance and repair expense according to NACS includes both M Y What is typically classified as repairs and maintenance as well as replacement reserves. Because of this, there is not a separate line item for reserves. Our projection of expenses equates to 31.6% of gross profits. This total is between the overall NACS average (29.84%) and the average for the top quartile (35.44%). Our projection of rn expenses, therefore, appears to be reasonable_ Based on our projections of income and expense for 2008, the resulting EBITDARL is $397,535. 70 9 J income Capitalization Approach - continued ALLOCATION OF EBITDARL As explained previously, EBITDARL includes the income attributable to three different components, real property, tangible personal property or FF&E, and intangible business assets. In order to arrive at the income to the real estate, we must subtract the income applicable to the other components. For the calculation of the income applicable to the FF&E, we began with the estimated costs of the equipment as given to us by Joel Geil, the Project Manager/Construction Supervisor with Holiday Stationstores, Inc. These costs are for a very similar Holiday Stationstore that is currently under construction in New Hope. The equipment, including all of the fuel tanks, dispensing equipment, the canopy and the convenience store equipment totaled $788,000. Being that the estimated life of the equipment varies from approximately 30 years for the underground tanks to ten years for the convenience store equipment, we will apply a total term in the middle, say 20 years. The resulting annual amount at these terms, $788,000 based on a 20 year amortization at 10%, equals $92,558 annually. We have allocated $43,257 for the intangible business assets category. This is the average pre- tax profit in 2006 for stores that are part of chains with 201 to 500 stores according to the 2007 State of the Industry report (Holiday Stationstores, Inc. has just over 400 stores according to their website). The overall average for all stores was $45,177. Pre-tax profit is the category that most closely relates to intangible business assets according to the Convenience Stores and Retail Fuel Properties book. This results in a net income to the real estate of $261,720. This is the amount that will be capitalized to arrive at a value for the real estate. VACANCY AND CREDIT LOSS ALLOWANCE The subject property is valued based upon its operating history. Projections are based upon actual experience, and vacancy is not a part of the analysis. SELECTION OF THE CAPITALIZATION RATE An overall capitalization rate can be estimated by the following techniques: 1) derivation from comparable sales; 2) band of investment or 3) mortgage and equity components; 4) land & building components and; 5) by debt coverage formula. When significant data on sales of similar properties are available, deriving capitalization rates from comparable sales is preferred. The capitalization rate for each sale is derived by dividing the net income by the sale price. The capitalization rate to be applied to the subject property is then selected based on correlation of the indicated rates. We have estimated the capitalization rate based on comparable sales. We have reviewed the sales of convenience store properties with fuel service in' suburban locations throughout the metro area. These sales indicate a range of capitalization rates of between 8.0% and 12.0%, with an average of 9.9% (see market derived capitalization rate summary below). 71 MPH T LN TAN M= 0 1� Income Capitalization Approach - continued SUM14ARY O#_ MARKT- CAPITAL. RATION RATES INDICATED. BY .PROPERTIF SALES.IN THE TWIN CiTIlwS, MAR#CEI"" SALE ADDRESS SALE NET OPERATING PRICE CAP YEAR BUILT I GBA DATE INCOME RATE #1 BP Service Station 01/27/06 $114,680 $1,103,145 10.4% 9009 Lyndale Ave. S Bloomington, MN 1970 3,595 sf #2 BP Gas Station 01/27/06 $109,000 $1,093,809 10.0% 7905 Great Plains Blvd. Chanhassen, MN 1990 2,156 sf #3 BP Service Station 01/26/06 $56,000 $700,000 8.0% 304 E. Wheelock Parkway St Paul, MN 1971 3,432 sf #4 BP Gas Station 10/27/05 $118,788 $1,368,667 8.7% 1569 Woodlane Drive Woodbury, MN 1988 2,860 sf #5 Oakdale Convenience & Gas 07/27/05 $40,491 $390,000 10.4% 7445 North 16' St. Oakdale, MN 1987 2,457 sf 96 Kw1k Mart 04/29/05 $33,000 $275,000 12.0% 234 First Avenue West Shakopee, MN 1954 2,108 sf CAPITALIZATION RATE RANGE FOR THE SIX SALES - $.0%a TO 12.0% AVERAGE .RATE— 9.9% According to the 2008 First Quarter Korpacz Real Estate Investor Survey, the average overall cap rate for the non -institutional grade national strip shopping center market is 8.75% with a range of 7.00% to 11.00%. The average overall cap rate for the institutional grade national strip shopping center market is 7.28% with a range of 5.80% to 9.00%. We have presented the figures for the strip shopping center market because it is the most appropriate category for the subject property. The subject, considering its age, size, condition and favorable location, should have a cap rate within the above ranges. �65 o a JM5:1 SUMMARY M 11 As summarized in the table above, our market capitalization rates range from 8.0% to 12.0% with an average rate of 9.9%. The subject is comparable to these six properties and should have a cap rate near the average. We have determined the appropriate overall capitalization rate for the subject property to be 10.0%. This rate is within the range for both institutional and non -institutional retail strip centers according to the Korpacz report. g 0 72 Income Capitalization Approach — continued DIRECT CAPITALIZATION METHOD Indicated Value = Net Operating Income (NOI) + Overall Capitalization Rate (OAR) $ 261,720 Net Operating Income + 10.0% Capitalization Rate $2,617,200 Indicated Value of the Real Estate $2,617,000 Rounded Value of the Real Estate + 525,000 Value of the Equipment $3,142,000 Total Value INDICATED VALUE, INCLUDING THE EQUIPMENT, BY THE INCOME CAPITALIZATION APPROACH IS: THREE MILLION ONE HUNDRED FORTY-TWO THOUSAND DOLLARS $3,142,000 73 RECONCILIATION AND FINAL ESTIMATE OF VALUE In summary, the value indications for the approaches to value utilized in this appraisal are as follows: COST APPROACH: $3,141,000 Equipment Value: $ 525,000 Land Value: $1,072,000 SALES COMPARISON APPROACH: $3,075,000 INCOME CAPITALIZATION APPROACH: $3,142,000 In the appraisal process, the Reproduction Cost new generally tends to set the upper limit of value for a property, since an informed buyer cannot be expected to pay more for an existing property than it would cost to construct a new building of equal quality and utility. The Sales Comparison Approach is based on the analysis of sales of generally comparable industrial properties. These sales were thoroughly analyzed, and adjustments were made for those dissimilarities between the comparable sales and the subject property. The sales comparables selected were of similar newer convenience store properties with car washes and fuel service in the Twin Cities market. This approach is considered to be a reliable indicator of value. The Income Capitalization Approach is generally emphasized in the appraisal of income producing properties. A potential buyer or developer is primarily interested in the income producing capability of a property, while underwriters are also interested in the income producing aspects as a measure of the property's ability to cover the mortgage debt service in an amount representing an adequate debt coverage ratio (DCR). We have utilized the actual income and expenses for this property and have compared this information to industry averages. This type of property is typically bought and sold on an income basis. This approach is considered to be a reliable indicator of value for the subject property. In correlating the three approaches into a final estimate of value, we have considered the purpose of the appraisal, the type and plans for the property, and the adequacy of data processed in each of the approaches. These considerations influenced the weight to be given each approach. The Income Capitalization Approach was given the most consideration in our final estimate of value. It is our opinion that the value of the subject property "As Is", including equipment, as of June 10, 2008, the effective date of this appraisal, based on an exposure time of one year, is: THREE MILLION ONE HUNDRED FORTY THOUSAND DOLLARS $3,140,000 Composed of: Land Value $1,072,000 improvement Value $1,543,000 Equipment Value $ 525,000 74 EXPOSURE TIME When estimating market value, the appraiser should be specific as to the estimate of "Exposure Time" linked to the value estimate. Reasonable exposure time may be defined as follows: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market.4 The estimate of the time period for reasonable exposure may be expressed as a range and can be based on one or more of the following: 1. Statistical information about days on the market. 2. Information gathered through sales verification. 3. Interviews of market participants. Reasonable exposure time is different for various types of real estate and under various market conditions. It is noted that the overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. This statement focuses on the time component. The fact that exposure time is always presumed to occur prior to the errective date of the appraisal is substantiated by related facts in the appraisal process; supply/demand conditions as of the effective date of the appraisal; the use of current cost information; the analysis of historical sales information (sold after exposure and after completion of negotiations between the seller and buyer); and the analysis of future income expectancy estimated from the effective date of the appraisal. The subject property is located on a high traffic, county highway in the third ring suburb of Mounds View. The demand for commercial properties in Mounds View and in the surrounding area has remained stable. We were not able to obtain information on the exposure time for any of the sales comparables included in this report. According to area brokers, a property that is priced properly and adequately marketed should have an exposure time of less than one year. 9 Co M 2 t7 4 USPAP Advisory opinion G7 75 MARKETING TIME Reasonable "Marketing Time" may be defined as follows: An estimate of the amount of time it might take to sell a property interest in real estate at the estimated market value during the period immediately after the effective date of an appraisal.5 The estimate of the time period for reasonable marketing time may be expressed as a range and can be based upon one or more of the following: 1. Statistical information about days on the market. 2. Information gathered through sales verification. 3. Interviews of market participants. The estimate of a reasonable marketing time period may also be expressed as a range and can be based on the same criteria listed as items numbered 1, 2, and 3 above but with one additional item to be considered - anticipated changes in market conditions. In the case of the subject property, we do not anticipate any significant changes in market conditions and estimate a marketing time of one year or less to coincide with the exposure times being experienced in the market. 5 USPAP Advisory Opinion G-7 76 0 0 a CERTIFICATION We certify that, to the best of our knowledge and belief: the statements of fact contained in this report are true and correct. the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial and unbiased professional analyses, opinions, and conclusions, we have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. we have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. neither our engagement to make this appraisal (or any future appraisals for this client), nor any compensation, therefore, are contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. our engagement in this assignment was not contingent upon developing or reporting predetermined results. our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. Mr. Herlofsky made a personal inspection of the property that is the subject of this report on June 10, 2008. no one provided significant professional assistance to the persons signing this report. It is our opinion that the value of the subject property "As Is" as of June 10, 2008, the effective date of this appraisal, based on an exposure time of one year, is: THREE MILLION ONE HUNDRED FORTY THOUSAND DOLLARS $3,140,000 Composed of: Land Value $1,072,000 Improvement Value $1,543,000 Equipment Value $ 525,000 4ack Priil, MSA Ryan D Herlofsky Certified General Real Property Appraiser #4001494 Certified General Real Property Appraiser #20285610 0 National Association of Master Appraisers #8312 General Associate Member of the Appraisal Institute g: 0 A QUALIFICATIONS Jack Prill, M5A Certified General Real Property Appraiser #4001494 National Association of Master Appraisers #8312 Types of Appraisals Expedenoe Includes appraising and financial analysis of many types of commercial real estate including: Warehouses Manufacturing Piants Shopping Centers Supermarkets Office Buildings Truck Terminals Apartments Retail Stores Medical Buildings Condominiums Churches Greenhouses Hotels Research and Development Buildings Restaurants Auto Washes Auto & Boat Dealerships Sub -Divisions AipigMlLsals of Sjpedai Interest A small sample of specialized appraisals includes: IDS Center, Minneapolis, MN Brandon Mall, Brandon, Manitoba Kennedy Mall, Dubuque, IA Murphy Mart Center, Youngstown, OH Governors Square, Columbus, OH Five Lakes Center, Fairmont, MN Hawthorne Suites Hotel, Duluth, MN Wingate Inn, Coon Rapids, MN American National Bank Building, St. Paul, MN Central National Bank Building, Des Moines, lA Glen Pond Estates (300 Unit Apartment) Eagan, MN Grant Park Plaza Shopping Center, Winnipeg, Manitoba Ridgedale Shopping Center, Minnetonka, MN Giants Ridge Hotel, Biwabik, MN Country Inn & Suites, Hastings, MN Hampton Inn & Suites, Lino Lakes, MN Business Experience ■ Commercial Appraisal & Consulting Group - Owner. r Senior Commercial Real Estate Appraiser, Forsythe Appraisals, Inc. ■ The Equitable Life Assurance Society of the United States, City Mortgage Department from 1964 to 1972. Completed Equitable's formal two-year training program in commercial real estate finance, construction, and appraisal; and subsequently headed the appraisal staff in the Minneapolis office. Education University of Minnesota, B.A. English Specialized Education "Fundamentals of Real Estate Practice", "Real Estate Law", and "Real Estate Appraisal", 1965 University of Minnesota, "Real Estate Appraisal I" Indiana University, 1968 and `Real Estate Appraisal II", University of Missouri, 1968, sponsored by the Appraisal Institute. Accredited Real Estate Schools, Minneapolis, Minnesota: (Continuing Education) "Investment Analysis," "Syndication for Profit," and "Legal Documentation," 1984; "Commercial & Industrial Financing," "Condemnation Valuation" "Financial Concepts," "Investment Property Sales Analysis," 1987; "Introduction to Small Business Sales," "Investment Cash Flow Analysis;' "How to Put Together a Real Estate Exchange," "Real Estate Investment and Taxation," "How to Put Together a Real Estate Syndicate," "Business of Real Estate," 1990; "Condemnation and Tax Appeals," "Financing with Contract for Deed," and "The Power of Appraisals," 1991; "Intro to Standards & Ethics," "Fair Housing," and "Advanced Yield Capitalization," 1992; "Obtaining Market Data by Abstraction," "Direct Capitalization," "Discounted Cash "Flow Analysis," "Retail and Shopping Center Trends," "Appraiser Licensing and Certification issues," 1993; "Appraisal Standards & Regulations; "How to Avoid Environmental Hazards Liability," 1994; "Expert Testimony," "Contract for Deed", and "Real Estate Closing," 1995; "Special Purpose Properties," and "Hotel/Motel Valuation," 1996; "Real Estate Exchanges; "Real Estate Practice Update" 1997; "Minnesota Real Estate," "The Farm Sale" 1998; "USPAP Update," Energy Efficient Housing," 1999; "Environmental Issues affecting Real Estate," 2000; "MN Building Codes," 2001; "Appraisal Standard and Ethics," 2002 and 2005; Appraisal Investment and Financial Analysis," 2005; 'Advanced Residential Construction" 2005; "National Uniform Standards of Professional Appraisal Practice(USPAP) Update," 2006; "2006 USPAP Update and Scope of Work," "Appraisal Liability: Are you Exposed?," Houses from the Ground Up," and "F -AL -2007 Agency/Fair Housing: Culture, Custom and Communication," 2007. 9 FRILL, JOHN M 12085 - 284TH ST CHISAGO CITY, MN 55413 STATE OF MINNESOTA Department of Commerce The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that JOHN M PRILL 12085 - 284TH ST CHISAGO CITY, MN 55013 has complied with the laws of the State of Minnesota and is hereby licensed to transact the business of Resident Appraiser : Certified General License Number: 4001494 unless this authority is suspended, revoked, or otherwise legally terminated. This license shall be in effect until August 31, 2009. IN TESTIMONY WHEREOF, I have hereunto set my hand this October 12, 2007. COMMISSIONER OF COMMERCE Minnesota Department of Commerce Ucensing Dlvlslon 85 7th Place East, Sulte 500 St. Paul, MN 55101-3165 Telephone: (651) 296-6319 Email: licensing. commerceCstate, mia-us Website: commeree.state.mmus Notes: Continuing Education: CE Reguirement Type Total - Appraiser USPAP CE Required Hours 30 7 Contlnuin Education: 15 hours is required in the.fi[st renewal period, which includes a 7 hour USPAP course. 30 hours is required or each subsequent renewal period, which includes a 7 hour USPAP course. raisers: You must hold a licensed Residential, Certified Residential, or Certified Genera! qualification in order to pe appraisals for federally -related transactions. Trainees do not qualify. For further details, please visit our website at commerce.state.mn.us. QUALIFICATIONS Ryan D Herlofsky Certified General Real Property Appraiser #20285610 General Associate Member of the Appraisal Institute Types of Appraisals Experience includes appraising and financial analysis of many types of commercial real estate including: Retail Industrial Office Mixed -Use Subdivision Analysis Multi-Famlly Residential Vacant Residential Land Vacant Commercial Land Vacant Industrial Land Day Care Facilities Religious Facilities Auto Repair Facilities Convenience Stores Office Condominiums Industrial Condominiums Institutional Properties Mini -storage Golf Courses Student Housing Professional Experience Real Estate Appraiser Commercial Appraisal & Consulting Group October 2001 -Present Participant Services Advisor The Vanguard Group August 1999 -June 2000 Education University of Minnesota, B.A. in Philosophy September 1998 Specialized Trainin_g Appraisal Institute Comprehensive Exam Successful Completion of all Four Modules August 2007 Appraisal Institute Courses Course 420: Business Practices and Ethics August 2007 Course 520: Highest & Best Use and Market Analysis June 2007 Course 550: Advanced Applications February 2007 Course 530: Advanced Sales Comparison & Cost Approaches November 2006 Course 540: Report Writing & Valuation Analysis May 2006 Course 510: Advanced Income Capitalization March 2006 Course 310: Basic Income Capitalization April 2004 General Education Appraisal Institute: General Demonstration Appraisal Writing January 2008 Appraisal 107: How to Perform FHA Appraisals October 2003 Appraisal Institute: Effective Appraisal Writing Seminar July 2003 Appraisal 106: Appraisal Investment & Financial Analysis June 2003 45 Hours of Minnesota Certified Real Estate Appraisal Training May 2001 Real Estate Appraisal License Certified General Real Property Appraiser License #20285610 r 11 HERLOFSKY. RYAN D 21353 ULYSSES ST. NE MINNEAPOLIS, NPN 55418 STATE OF MINNESOTA The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that RYAN D HERLOFSKY 2853 ULYSSES ST. NE MINNEAPOLIS, MN 55418 has complied with the laves of the State of Minnesota and is hereby licensed to transact the business of Resident Appraiser 'Certified General License Number: 202856/0 unless this authority is suspended, revoked, or otherwise legally terminated. This license shall be in effect until August 31, 2009. IN TESTIMONY WHEREOF, I have hereunto set my hand this October 15, 2007. COMIViIISSIONER OF COMMERCE Minnesota Deparlment of Commerce Licensing Division 85 7th Place East, Sutte 500 St. Paul, WIN 55191-3165 Telephone: (651) 296-6319 Email: IPcensing_cnmmerceQstate.mn.us Website: commerce.stalle.mmus Notes: Continuing Education: E Requirement Type Total -Appraiser USPAP QE Required Hours 30 7 Continuing Education: 15 hours Is reyired in the first renewal period, which includes a 7 hour USPAP course. 31) hours Is required for each subSequerd renewal period, which includes a 7 hour USPAP course, �pprraayers: You must hold a licensed Residential, Certified Residential, Of Certified General quallflcatlon in orderto rtorm appralsais for fede,-aGy-related transactions. Trainees do not qualify. For twtherdstals, please visit ourw site at commerce.state.min,us. CONTENTS OF ADDENDA ZONING CODE TAX DATA INCOME & EXPENSE STATEMENT BUDGETS ENGAGEMENT LETTER ZONING CODE 1119.01 CHAPTER 1119 PUD, PLANTED UNIT DENTL•OYMENT DISTRICT SECTION - 1119.01 : ECT ION: 1119.01: Pose 1119.02: Permitted Uses 1119.03: Special Procedures 1119.03 1119.01: PURPOSE: The purpose of the PUD, Plamied Unit Development District :.s to provide for the integration and coordination of land parcels as well as the combination of varying types of residential, conuuercial and industrial uses. (1988 Code §40.23) 1119.02: PERMITTED i'SES: All peimiitted accessory or conditional uses contaiuied in Chapters 1106 through•. 1115 of this Title shall be treated as permitted uses to eliminate the overlapping procedural requirements of ands-7dual conditional use provisions. (1988 Code §40.23) 1119.03: SPECIAL PROCEDURES: The establisluuent of a PUD. Planned Unit Development District shall be subject to the amendment requirements as outlined in Section 1125.01 of this Title phis the procedures and conditions imposed by Chapter 11.210 of this Chapter. (1985 Code 540.23) Cifiy ql fojotds View 1120.01 CHAPTER 1120 PLAMNED i1NIT DEVELORMENTS SECTION: 1120.01: Purpose and Intent 1120.02: General Requirements and Standards 1120.03: Special Requirements and Standards 1120.04: Procedure 1120.05: Submittals 1120.01 1120.01: PURPOSE AND INTENT- The purpose of this Chaptcr of the Zoning Code is to provide for the _o_rouping of laud parcels for development as an integrated, coordinated unit as opposed to traditional Marcel by parcel, piecemeal. sporadic and unplanned approach to development. This Section is intended to introduce flexibility of site design and architecture for the conseLvation of land and open space tluough clustering of buildings and actiFitizs thraurh conditional use provisions. It is firther intended that planned limit developments are to be characterized by central management, integrated planning and architecture, joint or common use of parking, maintenance of open space and other similar facilities and a harmonious selection acid efficient distribution of uses. Specifically, it is intended to encourage: Subd. 1. Innovations Iii residential development to the end that the g otnag demands for housing of all economic levels may be met by greater variety in tenure, type, design and siting, of dwellings and by the conservation and more efficient use of land in such developments. Subd. 2. Hi¢her standards of site and building design through the use of trained and experienced land planners. architects and landscape architects. Subd. 3. More convenience in location of accessory commercial and service area. Subd. 4. The preservation and enhancement of desirable site chaiacteristics, such as natural topography and geologic features and the prevention of soil erosion. Subd. 5. A creative use of land and related physical development which allott-s a phased and orderly transition of land fi•om rural to urb ail uses. 1120.01 1120.02 Subd_ 6. An efficient use of land resulting in smaller networks of utilities and streets_ thereby- lowerina housing costs and public investments. Subd. 7. A development pattern in han pony with the objectives of the Mounds View Comprehensive Plan. Subd_ S. A more desirable eavironmem than tivould be possible through the strict application of aosnng acid subdivision regulations of the City'. Subd. 9. To give the landow-ner and developer reasonable assurance of ultimate approval before expending complete design monies while providing City officials with assurances that the project will retain the character envisioned at the time of conetntrence. Subd. 10. To allow variation from the provisions of this Title, including Setbacks. height, lot area, width and depth. Wards_ etc. (19 88 Code §40,24) 1120.02: GENERAL REQU REIIENTS -A-ND STANDARDS: Subd. I. Ownership: An application for PUD approval must be filed by the landoEvner or jointly- by all Imidwaners of the property included in a project_ The application and all submissions must be directed to the development of the property as a unified whole. In the case of multiple ownership, the approval of the final plat shall be binding on all ci xners.. Subd_ 2. Comprehensive Plan Consistency: The proposed PUD shall be cotnsistesnt with the adopted City Comprehensive Plan. Subd. �. Conation Open Space: Common open space at least sufficient to meet the minilmuin requirements established in this Chapter and such complementary structures and improvements as are necessary aid appropritate for the bestefit and enjoyment of the residents of the PUD shall be provided within the area of the PUD. Subd. 4. Operating and Maintezence Requirements for FUD Common Opesh Space.Facilities: Whenever common open space or service facilities are provided tt,,ithin the PUD, the P1 TD plain shall contain proN isiuns to assure the continued operation and maintenance of such open space and service facilities to a predetermined reasonable standard. Common open space and sen -ice facilities nvithin a PUD may be placed tinder the ownership of one (1) or more of the following as approved by the Comicil: a. Landlord control, where' only use by tenants is anticipated. I 1 See Bele 121 01D of this Cocke for subdi-,7sioan rerulations. 0-3. o, f -Wort id i• reiv TAX DATA PROPERTY ADDRESS ! ABBREVIATED TAX DESCRIPTION Ramsey County Web: www.co.ramsey.mn.us 2732 COUNTY HIGHWAY 10 Property Records and Revenue Taxinfo@co.rarnse n.us Emaih P .m P.O. Box 64097 Phone: 651.266.2000 SILVERVIEW ESTATES Saint Paul, MN 55164-0097 Located sh 90 West Plato Blvd, Saint Paul, MN LOT i BLK 1 INE D LIMITED .F32 HIGHWAY 10 MOUNDS VIEW MN 55112-4042 06.30.23.43.0038 5917 For taxes Payable For taxes Payable 1 I i a a - 1151 �' in x007 in 2008 1. Use this amount on Form M1PR to see if you're eligible for a property tax refund. iI � i $ 0.00 File by August 15. If box is checked, you owe delinquent taxes and are not eligible. IL 0.00 2. Use this amount for the special property tax refund on schedule 1 of Form M1 PR Your property tax and how it Is reduced by the State of Minnesota 76,946.01 80,440.20 3. Your property tax before reducton by state -paid aids and credits 25,190.01 28,436.20 4. Aid paid by the State of Minnesota to reduce your property tax Homestead and Agricultural credits paid by the State of Minnesota to reduce your property tax 0.00 51,756.00 0.00 52,004.00 5. 6. Your property tax after reduction by state -paid aids and a edits Where your property tax dollars go 8,119.41 9,025.04 7, Ramsey County 772.33 763.71 a. Regional Rail Authority 73,40 76.29 b. Public Safety Radio System 580.98 633.55 c. County Library 7,287.55 7,730.45 8. City or Town -MOUNDS VIEW 14,288.56 14,370.09 9. State General Tax 10. School District 4,343.24 4,425.80 a. Voter approved levies 2,968,27 3,110.53 b. Other local levies 11. Special taxing districts 52234 559,41 a. Metropolitan special taxing districts 578.08 700.03 b. Other special taxing districts 0.00 0.00 c. Tax increment 0 12,221.94 10,609.10 d. Fiscal disparity 12. Non voter approved referenda IeVas 0.00 51,756.00 0.00 52,004.00 -school 13. Total property tax before special assessments charges added to this property tax statement for taxes payable in 2008 0.00 0.00 14. Special assessmentslservice a. b. C. d. e. 0.00 0.00 Contamination Tax $ 51,756.00 $ 52,004.00 15. Total Property Tax and Special Assessments ELAVICIGMAL'IW19 N 2008 Estimated Market Value and Classification shown in the box below will be used to determine the payable 2im taxes. Prior Tor comparisons are shown for your convenience. if you do not believe you could sell your property for the Estimated Market lalue shown for January 2, 20081 payable 2009 (line 17), you may appeal this proposed value by attending the Open Book %%ting indicated below. For tips on how to prepare for this meeting and other important appeal information see the back of this ement. yable 2009 T6. Assessment Date! Tax payable year Janus 2 2006 ! ablle 2007 Janus 2, 20071 a able 2006 Janus 2, 20081 1,500,000 17. Estimated Market Value $ 1,524,900 $ 1,601,200 $ 18. Limited Market Value 19. Value of New Improvements 20. Green Acres Value " 21. Plat Deferment 22. This Old House Exclusion 1,500,000 i 23. Taxable Market Value 1,524,900 1,601,200 24. Property Classification+^ COMMERCIAL COMMERCIAL COMMERCIAL Open BooklPreliminary Market Value Review Meeting read the back of statement for Important Appeal Information and Definitions INCOME & EXPENSE STATEMENT JUN -11-2008 6937 WESTERN BRNK 663 661 290 816E F'.[d.i nil �UUJIUUti ' FIVE D LIMITED - STATION STATEMENT OF oPERATIONS AM RETAINED EARNINGS (DEFICIT) YRARS ENVSD DBCEMSER 31, 2006 AND 2005 2006 t 200s t 6Ai,SS Gas Merchandise car wash other Sales Total Sales COST OF COOPS 50= GAB Merchandise Total Cost of Goods 5014 GROSS PROFIT OPEXATING EXPENM 'JERATIMG INCOME OTHER ZNCOMS VM (ZXPENSE) Interest Income Intereat EXpenae Total other Incime and (Expense) NET INCOME (LOSS) 5 4,774,661 66.1 S 4,018,S14 68.5 1.723,7.76 23-8 1.1535,082 25.6 221,317 3.1 155.474 2.6 508,806 7.D 184,927 3.1 7.228,062 100.0 5,953,997 100.0 4.353,113 60.2 3,726.922 62.6 1,770,305 24.5 1,273,275 11.4 6,122,419 64_7 5,000,197 84.0 1,20S,644 15.3 953,600 16.0 1,007,566 13.9 915,324 15:4 99,079 1.4 37,876 0.6 22 - - {314,074] (114,057] (7..6) (15,979) (0.2) (70.969) (1.2) RETILiKED EARNINGS (DEFICIT)-864innimg of Yaatr (165, 005) ! - (79, 400) 'PPANSFSRS (TO) FROM CORPORATE (14.636) (14,636) 6RTATRZI) SAMINCS (DEFICIT) .End of Year see aCco=tont'6 report Page 3 JLk4-11-2WR 09:37 WESTERN BANG 663 FIVE D LIMITED STA'T'ION STATEMENT OF' OPERATIONS AND RETAINED EARNINGS 1DEFICIT i 2 YEARS ENDED DECEMBER 31, 2007 AND 2006 *:. 2007 � 651 296 BIBB P.02 2006 % See accountaric , 6 reporL . Page 3 6,257,758 73 9 $ 4,774.661 70.0 F"._balam 1,855,492 21.9 1,722,724 25.3 255,780 3.0 221,317 3,2 102,179 I.2 101,394 1.5 •yaps- : otal Sales 8,471,209 100.0 6,820,096 100.0 15T: OF GOODS SOLD 5,929,001 r;b68.8 4, 352, 113 63.8 Merchandise . 1,463,556 17.3 1, 343,68377.9A 9.7 Total Coat of Goods Sold 7,292,557 56.1 5.695,996 83.5 togs PROFIT 1,178,652 13.9 1,124,100 16.5 eE&kTTNG EXPENSES 1,104,136 13.0 1,026,022 15.0 F=TING INCOP4E , 74,516 0.9 9d,076 MER INCOME AND ( EXPENSE ) Interest InCome - - 22 interest =penwe (172,507) 11.3) (114,079) (1.7) Total Other Income.and (ExpenCia) (117,802) (1.3) (114,057) (1.7) M INCOME (LOSS) (37,286) (0.4) (15,979) (0.2) £TAINED EARNINCS (DEFICIT) -Beginning of Year (398.717) - (368,103} - sANSPERS (TO) FROM CORPORATE 60,364 - STAINED EARNINGS tnEFICIT)-End of Year $ (375,639) - $ (398,718) - See accountaric , 6 reporL . Page 3 BUDGETS iday Mounds View 2006 Budget Mounds View 06 Budget Detroleum Sales I ,..ales 5,154,100 1 COS (4,815,800) Cpns (2,000) Petroleum Gross Profit 336,300 Ions Sold 1,990,000 ss Profit Per Galion 0.170 Price Per Gallon $ 2.59 Inside Merch Sales chandise 1,059,230 740,220 ik Bar/Deli emissary ery )aid Comm al Inside Merch Sales 1,799,450 inside Merch COS ch 752,053 abates 'e Cpns (3,000) ; 621,785 ik Bar/Deli nmissary ery paid Comm. Total Inside Merch COS 1,370,838 aside Merch Gross Profit 'chandise 310,177 3rettes 118,435 ik Bar/DeIVA[cohol emissary ;ery Paid Comm. Total Inside Merch GP 428,612 Car Wash Wash 1 Vac 235,000 Wash COS (25,000) Carwash Gross Profit 210,000 Other Income teryllotto sales 400,000 +--.1lotto COS (378,000) nu.jement fee 48,000 M income 12,000 ire Services 16,000 ire Services COS (8,000) ger Income Gross Profit 90,000 Total Gross Profit 1,064,912 Payroll & Benefits Iges 277,000 inagement Fee - r Wash Wages 65,000 INGE yroll Taxes 29,000 3 fit Sharing iployee ins benefits 20,000 Total Wages & Fringe 391,000 i Controllable Expenses iployee Disc 1,600 ire Supplies/mgt gas 23,000 image Car Wash - iiforms/Rugs 1,400 )S Stamps/copies 675 l t General - ivrt Car Wash 5,000 a ivrt Holiday 16,000 f 4 Debt 5,000 Ak Charges 6,500 4 Mributions - adit Card Fees 87,000 je Ipt Music 720 Ipt Sign Rent 1,330 Ipt telxon 254 M Disc Charge 8,000 anchise fee gas 15,600 anchise fee merch 40,000 surance Liab 16,000 lint store 14,000 lint Car wash 12,000 tc Exp - ke Supplies 1,000 gfee acct 4,000 Wfees Radiant 4,983 �f fees Inventory 1,750 f fees SBA 6,562 'fees CDC 4,678 'fees Legal Acct 'fees CSA 750 'fees Payroll 700 ' '1,350 h 6 /short 5,500 NIGras (48,000) ;r Paid outs Car I ne Relay 1,380 irity 250 uses & Permits 1,100 phone 7,000 h 4,500 ies Elec 52,000 les Gas o ies water 6,000 =:XP 3,000 Total Controllable Exp 360,582 Controllable Expenses 11Depreciation 132,000 ing Rent - ;st Exp 115,000 Brty Taxes 52,000 Non Controllable Exp 299,000 Total Expenses 1,050,582 Irofitt(Loss) 14,330 flow 146,330 kR 261,330 Fran Fee 60,600 Acct 4,000 SBA 11,990 Life Ins 1,800 Managemant fee (48,000) Car 3,000 Telephone 5,700 Mgt Gas 10,350 Excess Sal 100,000 Sign 1,330 Ins Liab 16,000 music 720 Total 167,490 R with extra exp 428,820 Vaule at 8 3,430,559 12.50% Vaule at 7.5 3,216,149 13.33% Vaule at 7 3,001,739 14.29% Vaule at 6.5 2,787,329 15.38% Vaule at 6 2,572,919 16.67% Petroleum Sales Fuel Sales Fuel COS Gas Cpns Petroleum Gross Profit Gallons Sold Gross Profit Per Gallon Avg Price Per Gallon Inside Merch.Sales Merchandise Cigs Total Inside Merch Sales Inside Merch COS Merch V rebates Store Cpns Cigs Total Inside Merch COS Inside Merch Gross Profit Merchandise Total Inside Merch GP Car Wash Car Wash 1 Vac Car Wash COS Carwash Gross Profit Other Income Lottery/lotto sales Lotteryllotto COS Management fee ATM income Propane 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 Budget 08 BL r A 08 Budget Merch 7.40% 7.10% 7.90% 7.90% 9.00% 9.30% 9.00% 8.90% 8.30% 8.40% 8.00% 8.80% Gallons 8.00% 7.20% 7.30% 7.30% 9.10% 8.70% 8.80% 8.00% 8.10% 8.70% 9.00% 9.80% Car Wash 12.40% 14.40% 11.40% 8.90% 6.20% 7.10% 6.90% 4.80% 4.70% 4.90% 5.60% 12.70% 7,575,232 606,019 545,417 552,992 552,992 689,346 659,045 666,620 606,019 613,594 659,045 681,771 742,373 (7,113,472) (569,078) (512,170) (519,283) (519,283) (647,326) (618,872) (625,986) (569,078) (576,191) (618,872) (640,212) (697,120) (36,000) (2,880) (2,592) (2,628) (2,628) (3,276) (3,132) (3,168) (2,880) (2,916) (3,132) (3,240) (3,528) 425,760 34,061 30,655 31,080 31,080 38,744 37,041 37,467 34,061 34,487 37,041 38,318 41,724 2,368,000 189,440 170,496 172,864 172,864 215,488 206,016 208,384 189,440 191,808 206,016 213,120 232,064 0.180 0.180 0.180 0.180 0.180 0.180 0,180 0.180 0,180 0.180 0.180 0.180 0.180 $ 3.199 3.199 3.199 3.199 3.199 3.199 3.199 3.199 3.199 3.199 3.199 3.199 3.199 1,195,000 88,430 84,845 94,405 94,405 107,550 111,135 107,550 106,355 99,185 100,380 95,600 105,160 785,000 58,090 55,735 62,015 62,015 70,650 73,005 70,650 69,865 65,155 65,940 62,800 69,080 1,980,000 146,520 140,580 156,420 156,420 178,200 184,140 178,200 176,220 164,340 166,320 158,400 174,240 764,800 56,595 54,301 60,419 60,419 68,832 71,126 68,832 68,067 63,478 64,243 61,184 67,302 40,000 3,333 -3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 706,500 48,796 46,817 52,093 52,093 59,346 61,324 59,346 58,687 54,730 55,390 52,752 58,027 1,511,300 108,724 104,452 115,845 115,845 131,511 135,784 131,511 130,087 121,542 122,966 117,269 128,663 23.67% 430,200 37,796 36,128 40,575 40,575 46,689 48,356 46,689 46,133 42,798 43,354 41,131 45,577 468,700 37,796 36,128 40,575 40,575 46,689 48,356 46,689 46,133 42,798 43,354 41,131 45,577 295,000 36,580 42,480 33,630 26,255 18,290 20,945 20,355 14,160 13,865 14,455 16,520 37,465 (30,000) (3,720) (4,320) (3,420) (2,670) (1,860) (2,130) (2,070) (1,440) (1,410) (1,470) (1,680) (3,810) 265,000 32,860 38,160 30,210 23,585 16,430 18,815 18,285 12,720 12,455 12,985 14,840 33,655 400,000 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 (378,000) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) (31,500) 48,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 17,000 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 30,000 2,220 2,130 2,370 2,370 2,700 2,790 2,700 2,670 2,490 2,520 2,400 2,640 Other Income Gross Profit 99,000 Total Gross Profit 1,256,460 Payroll & Benefits 8,102 Wages 300,000 Car Wash Wages 62,000 FRINGE 8,318 Payroll Taxes 29,000 Profs Sharing - Employee ins benefits 33,000 Total Wages $ Fringe 424,000 Controllable Expenses 112,578 Employee Disc 1,500 Ston: Supplies/mgt gas 30,000 Damage Car Wash 1,000 Uniforms/Rugs 1,000 COS Stamps/copies 700 Advrt General 3,000 Advrt Car Wash 8,000 Advrt Holiday 17,000 Bad Debt 600 Bank Charges 5,000 Contributions - Credit Card Fees 135,241 Dues 1,000 Eqpt Music 800 Eqpt Sign Rent 3,200 Eqpt telxon - Fleet Disc Charge 6,000 Franchise fee gas 17,760 Franchise fee merch 45,000 Insurance Liab 15,000 Maint stare 12,000 Maint Car wash 40,000 Mise Exp 2,750 Office Supplies 2,000 Prof fee acct 8,000 Prof fees Radiant 6,960 Prof fees Inventory 2,000 Prof fees SBA 6,562 Prof fees CDC 4,678 Prof fees Legal 37,469 Prof fees CSA 750 Prof fees Payroll - ADP 2,500 Cash overlshort 5,500 8,138 8,102 8,198 8,198 8,330 8,366 8,330 8,318 8,246 8,258 e t 8,306 112,855 113,045 110,063 103,438 110,193 112,578 110,771 101,232 97,986 101,638 102,499 129,263 22,200 21,300 23,700 23,700 27,000 27,900 27,000 26,700 24,900 25,200 24,000 26,400 7,688 8,928 7,068 5,518 3,844 4,402 4,278 2,976 2,914 3,038 3,472 7,874 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 35,055 35,395 35,935 34,385 36,011 37,469 36,445 34,843 32,981 33,405 32,639 39,441 125 125 125- 125 125 125 125 125 125 125 125 125 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 58 58 58 58 58 58 58 58 58 58 58 58 250 250 250 250 250 250 250 250 250 250 250 250 667 667 667 667 667 667 667 667 667 667 667 667 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 50 50 50 50 50 50 50 50 50 50 50 50 417 417 417 417 417 417 417 417 417 417 417 417 11,270 11,270 11,270 11,270 11,270 11,270 11,270 11,270 11,270 11,270 11,270 11,270 83 83 83 83 83 83 83 83 83 83 83 83 67 67 67 67 67 67 67 67 67 67 67 67 267 267 267 267 267 267 267 267 267 267 267 267 500 600 500 500 500 500 500 500 500 500 500 500 1,480 1,480 1,480 1,480 1,480 1,480 1,480 1,480 1,480 1,480 1,480 1,480 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 3,333 167 167 167 167 167 167 167 167 167 167 167 167 667 667 667 667 667 667 667 667 667 667 667 667 580 580 580 580 580 580 580 580 580 580 580 580 167 167 167 167 167 167 167 167 167 167 167 167 547 547 547 547 547 547 547 547 547 547 547 547 390 390 390 390 390 390 390 390 390 390 390 390 63 63 63 63 63 63 63 63 -63 63 -63 `63 208 208 208 208 208 208 208 208 208 208 208 208 458 458 458 458 458 458 458 458 458 468 458 458 --: n Theft _ Frame Relay Security 260 22 r22 22 22 22 22 22 ^22 22 22 22 22 T&E Licenses & Permits - 1,400 _ 117 117 _ 117 117 - 117 - 117 - 117 117 117 117 117 500 117 500 Telephone 6,000 500 500 500 408 500 408 500 408 500 408 500 408 500 408 500 408 500 408 408 408 Trash Utilities Elec 4,900 65,000 408 5,417 408 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 Utilities Gas Utilities water - 8,000 - 667 - 667 667 - 667 667 667 667 667 667 667 667 667 Car Exp 8,000 667 667 667 667 667 667 667 667 667 667 667 667 Total Controllable Earp 476,311 39,693 30,693 39,693 39,693 39,693 39,693 39,693 39,693 39,693 39,693 39,693 39,693 Non Controllable Expenses Amort/Depreciation 132,000 11,000 11,000 11,000 11,000 11,000 11,000 11.,000 11,000 11,000 11,000 11,000 11,000 Building Rent Interest Exp - 113,000 - 9,417 9,417 9,417 9,417 9,417 9,417 9,417 9,417 9,417 9,417 9,417 9,417 Property Taxes 55,000 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 Non Controllable Exp 300,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Total Expenses 1,200,311 99,747 100,087 100,627 99,077 100,703 102,161 101,137 99,535 97,673 98,097 97,331 104,133 Net Arofitl(L.oss) 58,149 13,107 12,958 9,436 4,361 9,490 10,417 9,633 1,696 312 3,541 5,168 25,129 . 9 Cacti flow 190,149 24,107 23,958 20,436. 15,361 20,490 21,417 20,633 12,696 11,312 14,541 16,168 36,129 ENGAGEMENT LETTER WESTERN BANKMb: page http.11www.western-bankcom Member FDIC Equal Housing Lender f] June 4, 2008 Mr. Ryan Herlofsky Commercial Appraisal & Consulting Group 708 Cleveland Ave. SW New Brighton, MN 55112 RE: Five D, Ltd. Dba Holiday StationStore Mounds View; 2732 NE Co Rd 10, Mounds View, MN 55112 Dear Ryan: This letter shall serve to provide you with instructions for appraising the above referenced property per bank policy. It is required that the requested appraisal would comply with FIRREA in all respects. I understand the appraisal fee for this assignment will be $3,500.00, and the report will be completed by July 2,2008. The appraisal relates to anticipated refinancing of subordinated debt. Please provide the requested appraisal in accordance with the following instructions: 1. The appraisal must be in compliance with USPAP and the individual appraiser should disclose his or her compliance with the USPAP competency provision as well as disclose his or her certification level or designation. in addition, the appraisal should include the scope of work performed in the assignment. 2. The appraisal should estimate the project's market value, whereby market value is defined as the most probable price which the property should bring in all conditions requisite to a fair sale, the buyer and the seller, each acting prudently, and knowledgeably, and assuming the price is not affected by undue stimulus whereby: i) buyer and seller are typically motivated; both parties are well advised, each acting in what he considers his own best interest; a reasonable time is allowed for exposure in the open market; iv) payment is made in terms of cash in US dollars, or in terms of financial arrangements comparable thereto; and V) the price represents a normal consideration for the property .,sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Jniversity Avenue 1740 Rice Street 1155 Hadley Ave. N. 2711 N.E. Highway 10 3033 University Avenue S.E. 4700 W. 77th Street, Suite 160 aul, MN 55104 Maplewood, MN 55113 Oakdale, MN 55128 Mounds View, MN 55112 Minneapolis, MN 55414 Edina, MN 55435 290-8100 (651)290-7822 (651)290-7844 (651)290-7866 (651)290-7888 (952)857-1707 Mr. Ryan Herlofsky June 4, 2008 'age 2 3. The written appraisal must be sufficiently descriptive 'to enable a reviewer to readily ascertain the estimated value reported and the rationale for all assumptions leading to the valuation estimate. The appraisal must also contain appropriate disclosures to allow the reviewer to understand the research and analysis performed in the assignment. 4. The appraisal must analyze and report any prior sales of the property for a three year period (one-year period for one to four -family residential properties only). 5. The appraisal should disclose current income produced by the property, and the appraised value withrespect to the income approach should be predicated upon current rents, expenses, and vacancies for the subject project or, if a proposed project, based upon pro forma rents, expenses and vacancies that can be realistically achieved under current market and economic conditions. 6. The appraisal must disclose the assumed marketing period needed to sell the appraised property in light of the property's characteristics and current market conditions, which assumption should be reflected in the arrived -at value. 7. Current market trends, including: vacancy rates, rent concessions, and sale prices or market values, should be disclosed in the appraisal report. B. The appraisal is to state "as is" the value which is the value. of the property in its current physical condition and subject to zoning in effect as of the date of the appraisal. Appropriate deductions or discounts for items such as leasing commissions, rent losses, and tenant improvements, are to be made from an estimated retail or stabilized value to arrive at the market value as of the date of valuation. 9. The appraisal must contain a legal description of the property being appraised. 10. The appraisal must identify and separately value any personal property, fixtures, or intangible items that are not real property but are included in the appraisal, and discuss the impact of their inclusion or exclusion on the estimate of market value. If the estimated market value does not include said personal property, fixtures or intangible items, then that fact should be stated in the report. Mr. Ryan Herlofsky June 4, 2008 Page 3 11. The three approaches to value: direct sales, comparison, income approach, and cost approach, should be utilized, or an explanation should be included if one of these approaches is not utilized (i.e. the income approach for residential owner - occupied real estate). Likewise, if any information required for the completion of the appraisal is unavailable, it should be disclosed and explained in the appraisal report. 12. In the market or direct sales approach, an analysis of comparable sales should include both narrative explanation of adjustments and a tabular adjustment grid. 13. If the estimated absorption period is greater than 12 months, or if substantial additional expenditures, e.g. leasing commissions, tenant improvements, or other landlord expenses need to be made over the rear term, or otherwise warranted, the discounted cash flow method of valuation should be utilized. 14. The appraisal report itself must recite these instruction, as well as the attached appraiser certification (Exhibit A). Please contact Chuck Durand at 612--803-0080 to arrange for an inspection of the property. Please do not hesitate to contact me regarding any questions on the above instructions or the project itself. Sincerely, Western Bank �✓, LAG. Cindy Ca lson Vice President EXHIBIT A CERTIFICATE OF APPRAISAL The undersigned do hereby certify as follows: 1. We have inspected the property. 2. We have no present or contemplated future interest in the real estate that is the subject of this appraisal report or the parties involved. Our compensation is not contingent on an action or event resulting from the analysis, opinions, or conclusions in, or the use of, this report. 3. We have no personal interest or bias with respect to the subject matter of this appraisal report or the parties involved. 4. To the best of our knowledge and belief, the statements of fact contained in this appraisal report, upon which the analysis, opinions, and conclusions expressed herein are based, are true and correct. 5. This appraisal report sets forth the scope of work and a disclosure of the research and analysis performed in the assignment. 6. No one other than the undersigned assisted in the preparation of the analysis, opinions, and conclusions concerning real estate that are set forth in this appraisal report. 7. This appraisal report has been made in conformity with and is subject to the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP), adopted by the Appraisal Standards Practice (USPAP), adopted by the Appraisal Standards Board of the Appraisal Foundation. 8. This appraisal assignment was not based on a requested minimum valuation or specific valuation or approval of a loan. 9. We have the appropriate knowledge of the specific market and I relevant experience appraising properties similar in size and complexity to the property under consideration to complete this assignment. with competence. (State appraiser's designation and license number) He No. 'Q" 74190(A) ENDORSEMENT Attached to and forming a part of Loan Pols No.24 0070 107 00005909 Issued By CHICAGO TITLE INSURANCE COMPANY Item No. 1 of Schedule A is amended to read: Western Bank, its successors and/or assigns The following is added to Item No. 4 of Schedule A: OWNERS ❑ LOAN 99 The insured mortgage was subsequently assigned to Western Bank, by Assignment of Mortgage filed June 5, 2002 as Document Number 3505680 (Abstract) and. as Document dumber 1690986 (Torrens). The following is added to Item No. 1 of Schedule B, Part II: The above Assignment of Leases and Rents was subsequently assigned to Western Bank, by Assignment of Assignment of Leases and Rents filed June 5, 2002 as Document Dumber 3505681 (Abstract) and as Document Number 1690987 (Torrens). This endorsement is made a part of the policy or commitment and is subject to all the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy or commitment and prior endorsements, if any, nor does it extend the effective date of the policy or commitment and prior endorsements or increase the face amount thereof. Dated: October 6, 2002 Lard Title, Inc. Authorized Signatory Gregory A. Booth Note: This endarsement shall tmt be valid or binding until countersigned by an authorized signatory. Form 3594 R 629 CrIP3594 CHICAGO TITLE INSURANCE COMPANY By: Patrick F. Stone President By: Brad Brigante Secretary LOAN SCHEDULE A OFFICE FILE NUMBER POLICY NUMBER GATE OF POLICY AMOUNT OF INSURANCE ' @ flay 29, 1998 (Abstract 4 TC- 74190(A) 24 0070 107 00005909 ulv 15, 1998(Torrens) i 1.219,598.00 1. Name of Insured: Signal Bank National Association, its successors and/or assigns 2. The estate or interest in the land which is encumbered by the insured mortgage is: Pee Simple 3. Titie to the estate or interest in the land is vested in: FIVE D, LIMITED, a Minnesota corporation 4. The insured mortgage and assignments thereof, if any, are described as follows: Combination Mortgage, Security Agreement and Fixture Financing Statement executed by FIVE D, LIMITED, a Minnesota corporation, dated May 27, 1998, filed May 29, 1998 as Document Number 3061201 in the office of the County Recorder, and filed July 15, 1998 as Document Number 1500998 in the office of the Registrar of Titles, within and for Ramsey County, Minnesota, in the original amount of $1,219,598.00, in favor of Signal Bank National Association, a National Banking Association. 5. The sand referred to in this Policy is described as follows: Lot 1, Bloc]; 1, Silverview Estates SCHEDULE A Loan Form This Policy valid only If Schedule 8 Is atteehed. Reorder Form No. 3524 (Rev. 1/89) t _ LOAN Policy Number: 24 0070 107 00005909 Loam SCHEDULE B EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: Special Exceptions: 1. The lien of all taxes payable in the year 1999, and thereafter, and taxes and assessments levied subsequent to the date of this policy. First half taxes are due and payable on or before May 15, 1999. Second half taxes are due and payable on or before October 15, 1999. (Taxes payable in the year 1998, and prior, have been paid in full.) 2. Subject to Certif icate in favor of the City of Mounds view, filed October 22, 1965 as Document Number 491880. 3. subject to a perpetual easement for signage purposes and a perpetual easement for design improvement purposes, including the purposes of constructing, laying, operating, inspecting and maintaining, altering, replacing, repairing and putting into operation all necessary public facilities and appurtenances in favor of the City of Mounds View as contained in Document dated April 3, 1998, filed April 30, 1998 as Document Number 3055239. 4. Subject to Developers Agreement as contained in Document dated April 20, 1998, filed April 30, 1998 as Document Number 3055236. Coun#e ned AuMoftW Sig SCHEDULE B (MCMNOEID COVERAGE) Schedule S of this Policy consists of 2 pages. Owners Form Reorder Form No. 9626 (Rev. 1/89) Form 1588 Attached to Policy No. 24 0070 107 00005909 SCHEDULE 8 PART II In addition to the matters set forth in Part I of this Schedule, the title to the estate or interest in the land described or referred to in Schedule A is subject to the following matters, if any be shown, but the Company insures that such matters are subordinate to the lien or charge of the insured mortgage upon said estate or interest: 1. Assignment of Leases and Rents by FIVE D, LIMITED, a Minnesota corporation, to Signal Bank National Association, dated May 27, 1998, filed May 29, 1998 as Document Number 3061202 (Abstract) and filed July 15, 1998 as Document Number 1500999 (Torrens). 2. Combination Mortgage, Security Agreement and Fixture Financing Statement executed by FIVE D, LIMITED, a Minnesota corporation, dated May 27, 1998, filed May 291 1998 as Document Number 3061203 (Abstract), and filed_July 15, 1998 as Document Number 1501000 (Torrens), in the amount of $729,000.00, in favor of Signal Bank National Association, a National Banking Association. 3. Assignment of Leases and Rents by FIVE D, LIMITED, a Minnesota corporation, to Signal Bank National Association, dated May 27, 1998, filed May 29, 1998 as Document Number 3061204 (Abstract) and filed July 15, 1998 as Document Number 1501001 (Torrens). Ll"10 Y iL1&tX-'%tC�� Loan Number: �3 - Current Balance: $1,036,808.82 Original Balance: $1,219,598.00 This agreement made this 17th day of April, 2002, between Western Bank (hereinafter referred to as Lender) and Five D, Limited (hereinafter referred to as Borrower}. Whereas, on May 27, 1998, Signal Bank National Association made a loan to Borrower in the amount of $1,219,598.00; -and Whereas, on April 17, 2002, said Loan has been assigned by Signal Bank National Association to Western Bank. Whereas the Borrower and Lender mutually desire and agree to modify certain terms of the Promissory Note dated May 27, 1998 in the original principal amount of $1,219,580.00. It is therefore mutually agreed that: 1. The Interest rate shall be fixed at 7.5%,per annum until April 17, 2007. On April 17, 2007 the Interest rate shall be adjusted to a current market interest rate that is determined by the Lender. 2. The monthly payments shall be due on the 1st day of the month beginning June 1, 2002. 3. Monthly principal and interest payments shall be $9,096.37 assuming interest is paid through May 1, 2002, and the final amortization date is February 1, 2019. Payments will be changed on -or around April 17, 2007 based on the new interest rate. 4. The monthly payment shall be increased to include an amount necessary to escrow for property taxes. Initially the monthly amount shall be $3,234.00. 5. The final payment date (Maturity Date) shall be February 1, 2009. 6. There shall be a -pre-payment penalty if the loan is pre -paid any time until 12 months prior to the a anniversary of the loan. The pre -payment penalty shall be equal to 2% of the current loan balance as of the date of this agreement, Borrower may, however, make principal reductions up to an additional 20% of the January 1' balance each year without any penalty assessed. All other terms and conditions shall remain the same. It is mutually agreed that said security instruments shall continue as a first lien upon the collateral and that neither the obligation evidencing the aforesaid indebtedness nor the security instruments securing the same shall in any way be prejudiced by this agreement, but said obligation and security instruments and all the covenants shall remain in full force and effect except as herein expressly mod Fied. IN WITNESS WHEREOF, the parties have signed, sealed and delivered this agreement on the date above written. Western Bank FiveD, Limited BY:� BY: ITS: Vice President ITS: President New Hope Budget First Second Third Year Year Year Petroleum Sales Fuel Sales 7,677,600 8,797,250 9,916,900 Fuel COS (7,389,600) (8,467,250) (9,513,900) Gas Cpns - - - Petroleurn Gross Profit 288,000 330,000 403,000 Gallons Sold 2,400,000 2,750,000 3,100,000 Gross Profit Per Gallon 0.120 0.120 0.130 Avg Price Per Gallon $ 3.199 $ 3.199 $ 3.199 Inside Merch Sales Merchandise 800,000 1,000,000 1,200, 000 Cigs 425,000 600,000 750,000 Pop Drink Bar/Deli Commissary Bakery Prepaid Comm Total Inside Merch Sales 1,225,000 1,600,000 1,950,000 Inside Merch COS Merch 528,000 660,000 792,000 V rebates (18,000) (18,000) (18,000) Multi Store Disc. (15,000) (15,000) (15,000) Cigs 391,000 552,000 690,000 Pop Drink Bar/Deli Commissary Bakery Prepaid Comm. Total Inside Merch COS 886,000 1,179,000 1,449,000 27.67% 26.31% 25.69% Inside Merch Gross Profit Merchandise 305,000 373,000 441,000 Cigarettes 34,000 48,000 60,000 Pop Drink Bar/Deli/Alcohol Commissary Bakery Prepaid Comm. - - - Cigs 34,000 48,000 60,000 Total Inside Merch GP 339,000 421,000 501,000 Car Wash 867,863 993,853 1,171,853 Car Wash / Vac 225,000 225,000 250,000 Car Wash COS (28,000) (28,000) (30,000) Carwash Gross Profit 197,000 197,000 220,000 Other Income Lottery/lotto sales 251,867 251,867 251,867 Lottery/lotto COS (238,014) (238,014) (238,014) Management fee - - - ATM income 12,000 12,000 12,000 Propane 18,000 20,000 22,000 Store Services COS Other Income Gross Profit 43,853 45,853 47,853 Total Gross Profit 867,863 993,853 1,171,853 Payroll & Benefits Wages 240,000 240,000 250,000 Management Fee 48,000 48,000 48,000 Car Wash Wages FRINGE Payroll Taxes 19,000 19,000 20,000 Profit Sharing - - - Employee ins benefits 10,000 10,000 12,000 Total Wages & Fringe 317,000 317,000 330,000 Controllable Expenses Employee Disc 1,800 1,800 1,800 Store Supplies 6,000 6,000 6,000 Damage Car Wash 500 500 500 Uniforms/Rugs 1,500 1,500 1,500 COS Stamps/copies - - - Comm Freight 4,225 4,225 4,225 Advrt Car Wash Advrt Holiday Bad Debt Bank Charges Contributions Credit Card Fees Store/Gas Coupons Eqpt Music Eqpt Sign Rent Eqpt telxon Fleet Disc Charge Franchise fee gas Franchise fee merch Insurance Liab Maint store Main# Car wash Misc Exp Office Supplies Prof fee acct Prof fees Radiant Prof fees Inventory Prof fees SBA Prof fees CDC Prof fees Legal Prof fees CSA Prof fees Payroll ADP Cash over/short Snow/Gras Other Paid outs Theft Frame Relay Security T&E Licenses & Permits Telephone Trash Utilities Elec Utilities Gas Utilities water Car Exp Total Controllable Exp Non Controllable Expenses 5,000 5, 000 5,000 10,000 11, 000 12,500 1,000 1,000 1,200 6,500 6,500 6,500 125,185 145,671 166,157 12,000 12,000 13,000 2,688 2,688 2,680 2,200 2,200 2,400 20,625 20,625 23,250 30,250 30,250 34,375 16,000 16,000 16,000 8,000 8,000 8,000 8,000 8,000 8,000 1,000 1,000 1,000 7,000 7,000 7,000 5,000 5,000 5,000 1,800 1,800 1,800 1,300 1,300 1,300 5,500 5,500 5,500 1,000 1,000 1,000 1,400 1,400 1,400 1,000 1,000 1,000 2,000 2,000 2,000 2,000 2,000 2,000 2,500 2,500 2,500 52,000 52,000 55,000 7,200 7,200 7,400 352,173 373,659 406,995 David Lasky Deprecation Interest Exp Property Taxes Non Controllable Exp Total Expenses Net Profit 50,000 144,000 144,000 144,000 154,050 154,050_ 154,050 15,000 15,000 25,000 313,050 313,050 373,050 982,223 1,003,709 1,110, 045 (114,370) (9,856) 61,808 X011 M14 14 Request for Action Originating Department Approved for Agenda Agenda Section Development Community Development November 10, 2008 and Planning Item No. By: Curtis Jacobsen, Director of CD BY: Kirk McDonald, City Manager 8.1 Resolution accepting petition for public improvement and assessment agreement and ordering project, 7180 42nd Avenue North (Storm Sewer Improvement No. 844) Requested Action Staff requests the Council accept the petition for public improvements and assessment agreement and order the project (Storm Sewer Improvement No. 844). Policy/Past Practice It is a past practice of the Council to assist redevelopment efforts in various ways including using assessments for various utility improvements to aid the project. Background The developer initially requested that the Council provide TIF assistance to this project. The Council was not convinced the project merited TIF assistance and alternately proposed to provide a small business loan in the amount of $60,000.00 and to spread the costs for storm water improvements in the amount of $20,600.00 through the use of the assessment process over 10 years. This action culminates a process that began in late February 2008. Staff recommends the Council approve the resolution accepting the petition for public improvements and the assessment agreement and order the project. Funding Funding for this assessment project will come from reserves held for economic development purposes. Attachment(s) • Resolution • Petition and Assessment Agreement Motion by Second by r To: /S-7 1ARFA\PL ANIVING\PLANNfIVG\Q & R Holiday Assessments 11-10-08.doc RESOLUTION N O. 08-157 RESOLUTION ACCEPTING PETITION FOR PUBLIC IMPROVEMENT AND ASSESSMENT AGREEMENT AND ORDERING PROJECT (Storm Sewer Improvement No. 844) BE IT RESOLVED by the City Council of the City of New Hope as follows: WHEREAS, BCD Holdings, LLC, a Minnesota limited liability company (hereafter BCD Holdings) has submitted to the City a signed Petition For Public Improvement and Assessment Agreement, attached as Exhibit B (hereafter Petition) to construct a storm sewer improvement (hereafter Improvement No. 844) within Nevada Avenue North as part of New Hope Planning Case 08-06. The improvement will serve the redevelopment of BCD Holdings' property at 7180 42"d Avenue North as legally described on attached Exhibit A, and WHEREAS, the Petition submitted by BCD Holdings further requests that the entire cost of Improvement No. 844 be assessed against the property described in Exhibit A and the City Council hereby determines that BCD Holdings is the 100% fee owner of the property described on Exhibit A, and WHEREAS, the City Council has also reviewed the plans for Improvement No. 844 and further determines the property described on Exhibit A is all of the property abutting on Nevada Avenue North to be served by construction of Improvement No. 844, and WHEREAS, in light of the fact BCD Holdings is the 100% fee owner of all the property abutting on Nevada Avenue North to be served by the construction of Improvement No. 844 this Council also determines that Minn. Stat §429.031 subd 3. permits this Council to order Improvement No. 844 without holding a public hearing to consider the project, and WHEREAS, this Council hereby determines it is in the best interests of the City to order Improvement No. 844 providing for construction of a storm sewer improvement within Nevada Avenue North subject to BCD Holdings agreement to pay the entire cost of the improvement as an assessment against its property as set out in its Petition For Public Improvement and Assessment Agreement attached as Exhibit B. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofNew Hope as follows: 1. The Petition For Public Improvement and AssessmentAgreementattachedheretoas Exhibit B is hereby approved and accepted. —1— 2. The Storm Sewer Improvement No. 844 is hereby ordered pursuant to the Petition For Public Improvement and Assessment Agreement without a public hearing as authorized by Minn. Stat. §429.031 subd 3. 3. The Mayor and City Manager are hereby authorized and directed to sign all documents and take all actions necessary to implement the directives of this resolution Dated the l 0'h day of November 2008. (24' Mayor Pro tem f Attest:_ Valerie Leone, City Clerk P:IATTORNEYSS"I CLE3NT PE.ESV CPFY OF N&W IiOFff&9-20606(HOUDAY CUP)1MOLOTIONACCEPTON PE=1ON FGR] IMPROVEMENT AND ORDERING PROLDOC —2— Exhibit A Legal DescLiption Parcel A: Lot 33, Auditor's Subdivision No. 324, Hennepin County, Minnesota Torrens Property Torrens Certificate No. 1196767 Parcel B: That part of the East Half of the Northeast Quarter of the Northwest Quarter of Section 17, Township 118, Range 21, lying West of Lot 33, "Auditor's Subdivision No. 324, Hennepin County, Minnesota", lying Northerly of a line drawn parallel with and distant 21 feet North of the North line of County State Aid Highway No. 9, as shown on County State Aid Highway No. 9, Plat 58, Registrar of Titles, as Document No. 1359773, lying South of the Westerly extension of the North line of said Lot 33 and lying Easterly of the Easterly right-of-way line of Nevada Avenue North as described in Registrar of Titles, as Document No. 2176775. Hennepin County, Minnesota. Torrens Property Torrens Certificate No. 1169611 4 EXHIBIT B PETITION FOR PUBLIC IMPROVEMENT AND ASSESSMENT AGREEMENT 1. Parties - The parties to this Agreement are the City of New Hope, a Minnesota municipal corporation (hereafter City) and BCD Holdings, LLC, a Minnesota limited liability company (hereafter Owner). 2. Request for and Description of Project - The Owner hereby requests and petitions the City for permission to construct a new storm sewer within Nevada Avenue North to serve Owner's property as more fully described in paragraph 4 of this agreement. This public improvement project is limited to the construction of approximately 154 feet of 27 inch RCP storm sewer with appurtenant structures. Resulting from the construction of the storm sewer, this project will also require street and curb restoration within Nevada Avenue North including the replacement of approximately 6,000 square feet ofbituminous paving and approximately 200 lineal feet of B618 concrete curb. This public improvement project is identified as New Hope Improvement Project 844 (the Project) and will serve and specially benefit the property located at 7180 42nd Avenue North (PID number 17-118-21-21-0031) located in the City of New Hope, County of Hennepin, and State of Minnesota, (hereafter Property) legally described as follows: (see Exhibit A attached) 3. Purpose - The purpose of this Agreement is to set out how the costs for construction of the Project will be paid and assessed to the Property per Minn. Stat. Chap. 429. The City agrees to pay the Owner's contractor for the total public improvement costs of the Project. Owner acknowledges and agrees the Property legally described on Exhibit A will be specially benefited from the Project and hereby requests the City to assess the Property for the total public improvement costs paid by the City. The Owner also submits this petition for the purposes set out in Minn. Stat. §429.031 subd. 3. Further, the Owner agrees the total costs to be paid by the City for the construction of the Project may exceed the estimated cost as set out in paragraph 5 of this agreement. In this event, the Owner agrees the actual cost paid by the City will be the assessed amount against the Property. 4. Description of Work - The public improvements described above shall be constructed as shown on the final Utility Plan submitted by Sunde Engineering, PLLC for Holiday Station Store 3586 in New Hope, Minnesota. The parties agree the final Utility Plan is subject to and conditional upon the approval of the New Hope City Engineer. The Owner agrees the Project must be constructed in accordance with the Utility Plan as approved by the New Hope City Engineer. The approved Utility Plan is attached as Exhibit B. 5. Costs — The total public improvement cost of the project is established as $20,600.00. Owner acknowledges and agrees this is the final total cost of the Project, The Owner further agrees the entire cost of this Project shall be assessed against the Property, This cost 1 is deemed by the parties as the cost attributable to the construction of this Project specially benefiting the referenced Property (hereafter the Assessed Amount). This Assessed Amount is based only on the construction costs for the Project. The Owner acknowledges and agrees the actual cost to construct the Project may exceed the estimated cost. The Owner agrees that change orders can affect the cost of the Project, including change orders based upon "per unit costs". Change orders are generally the result of unforeseen construction circumstances or project design changes. Owner agrees the Assessed Amount will include any change order costs which increase the total public improvement costs paid by the City under this Agreement as determined by the New Hope City Engineer. Owner further agrees the Assessed Amount will be calculated upon the actual unit costs used by the contractor for completion of the project which may increase the estimated total public improvement costs and the Assessed Amount referenced herein. 6. Special Assessment - The Owner acknowledges and agrees that the -proposed construction of the Project specially benefits the Property legally described on Exhibit A. In consideration for the City's action to pay Owner's contractor for the construction of the Project at the Owner's request, the Owner agrees that the fair market value of the Property will increase in an amount equal to or greater than the actual public improvement cost paid by the City. Owner agrees the actual cost paid by the City for construction of the Project shall be specially assessed against the Property pursuant to Minn. Stat. Chapter 429. The assessment shall be levied over a period of ten (10) years at an interest rate of seven (7) per cent per annum. The first installment is anticipated to be payable with real estate taxes due in 2009. The Owner expressly waives all objections to any irregularity with regard to the special assessment for the Project and any claim that the estimated Assessed Amount of $20,600.00 or the final Assessed Amount to be levied against the Property is excessive. The Owner further waives any and all rights to appeal the special assessment in District Court under Minn. Stat. Chapter 429 and more specifically Minn. Stat. §429.081 or any other federal, state, or local law, rule, or regulation. Provided, however, the Owner shall retain the right to object to any arbitrary, unreasonable or capricious actions of the City in connection with the Project, other than the propriety of this project, the Owner's agreement to the Assessed Amount as set out above, or the City's right to levy the assessment against the Property. Dated: November 10, , 200$ 2 BCD7Vs,LC, B its f6t6e4 Its STATE OF MLN, NESOTA ) ) ss. COUNTY OF HEaV'NEPIN ) The foregoing was 2008 by City of New Hope Kirk before me this — day of/ and the respectively, of BCD Holdings, company, on behalf of said company. PAMELA R. TATRO NOTARY PUBLIC -MINNESOTA My Tn'missbe Expires Jan. 31,2010 Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) and a Minnesota limited liability The foregoing was acknowledged before me this f day of 2008, by Martin E. Opem Sr. and Kirk McDonald, the Mayor and City Manager, respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. rF�_:it e'F , • � 11 THIS INSTRUMENT DRAFTED BY: Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (753) 424-8811 3 Notary Public N � .werea�r w �L1A 1� f Bake Alw�l ;200$ inn .died upm m In -Mkre O GB G.rmlr mlcb h.aln CGemtr pnnlyd hes CoxC.nlm memuemllm ee: �c xv- , �9R ,'INIS'a9 i a'� 6+19J'1J' ^l 20 0 9p 4C L�1I.tFB- .—�- 't SONE IN IEET . ee9lxepe.,^A ..: VL:LI V r..: /'Vr yr x CNH praatw .wnmwimtim m.Mele eNN 11rm1r mala ml menwre Paces B A- Cl. E 4.) 69,529 5a, FL ar 1.596 Awev Ncl =63.654 54 Fl..r 1.461 Anr kC� I[u m +000 rlNu as w pep+�3 soeas Pw[tl A: Sxtim IT, Tn.ndip Ila_ trmge 21, yr, Wml of Lol 95, wawl'a Sabal Ne. 3a I'mnepn CeunlK meselo , Iylrig Nerueny of pN prrel.. M1. linkup prstm wore tNwl k I her.bNy ceaiy Ihet Ih r..y, plan, pmol woe ???... I re or by m. tlFeel UIW" i aM1.rtn n pwrlhmv ... pr Gxumenl Nn. 1969113]. ,�� rwmw�j d u•. /3r AY V/"eas npF Y .ra " 111 WtO'W 73g ,mrr. properly 1 � se�n'Ir .•y6 rY x peNb lrw roc .xw1 ItNN IFNR yr ..2 A N69'19'/O'E JLtll3i i � .werea�r w �L1A ij Bake Alw�l ;200$ inn .died upm m In -Mkre O GB G.rmlr mlcb h.aln CGemtr pnnlyd hes CoxC.nlm memuemllm ee: �c xv- , I i GP Omml® ee.l Yin pipe __-_ BENmeYAlIKS flail I . ee9lxepe.,^A ..: VL:LI V r..: /'Vr yr x CNH praatw .wnmwimtim m.Mele eNN 11rm1r mala ml menwre Paces B A- Cl. 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Na t6jr,ey Na 9. es .hewn en Caunt1 Stade Aid NyM1way Ne. 9, pn! 54 R b, el Itllee, uv umumm Na 1359TT3, Irr,9 Soum d the 6N.le.ly .rtenelm el IM1e Naln Ilne a nl 42nd Avenue x, una Nuyma A.mue x- I Elelaina . 90].46 1111 � l..e pl tns State of Yinnemre- �OFAEW VFE ,mrr. properly anis L. dna I11n9 Ewlwly d the E.atwly a9M1t-.1-wy line .1 N- lll. 21.t 1., .1 Jrvwy, 9009 w on lmmn canli<ote Nn II9s]s, Nevod. Arrau, NMh m armeN h Red.lror o1 Ti41e; m O.mmrt Na 21]6]]5. IIIILITY CONTRACTpC $TOG6]i E6C/,VAl6VC 9IC SLNCE C vEnuc, LLe SUNDE ��l m rrv. .�u�p,F u„„e 6x � ptn C..tx uhml.ob Twr.na prroIN, -IL -IL J, sok b, .S YM. Lle No. 11256 .w newly ea4 Tetra C.rlllFd. Na 1169611 Iarml YM am x aNsawl) /Mterpr9Mm...Ape6 A' ®IIIIIIIIIII N MUNICIPALITYI�ew e DOCUMENT NO: MUNlG GODS 86 AUTHORIZED BY: . DATE: 11/26/2008 LEVY NUMBER: PROJECT NUMBER: LEVY DESCRIPTION: TOTAL PROD ASSMT. 017263. #844 STORM SEWER IMP PROj #844 $20,600.00 SERVICE CHARGE: .$1.50 _ ...LUMPED (WOR SPREAD (S) INTEREST RATE: NO. OF YEARS PAY4BLE: FIRST YEAR PAYABLE: MONTHS INT. FIRST YEAR: --------------- 7� IO . 2009 12 Llmst,ne A. ANDERsoN TUCKER J. IiUMMEL GORDON L. JENsW MELANIE P. PERSELLm - STEPNN M. RiNGQuuw STEVEN A.SONDRALL 'Real Property Law Specialist certified By The Minnesota State Bar Association 'Licensed in IL'iooislColarado 'Qualified Neutral Mediator wrier Rule 114 JENSEN ANDERSON SONDRALL, P.A. Attorneys At Law 5525 EDIN13ROOK CROSSING, STE. 201 BRooKLYN PARK, MINNESOTA 55443-1968 TELEPHONE (763) 424-8811 a TELEFAX (763) 493-5193 e-mail law@jasattorneys.com Writer's Direct Dial No.: (763) 201-0211 e-mail sas@jaspattorneys.com December 30, 2008 Valerie Leone City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Re: Holiday Station Store - Five D Limited and Charles Durand Mortgage - 7180 42"d Avenue Our File No. 99.11343 Dear Val: Please find enclosed for the city records in connection with :the referenced development a recorded Mortgage signed by Five D Limited. This is the original recorded document and should be maintained in the cities property records. Contact me if you have any questions or comments regarding the recorded easement. Very truly yours, �0 Wf 221- Steven A. Sondrall Enclosure(s) cc: Curtis Jacobson P:1Attomey�SAS5I Cliern Filcgd City"of New HopeLWil343(Holiday loan)11tr. V.:.eor,c're ^corded mortgige.doe' t VW I JL/ v 7 r0 1 _ [Ydcument# 2058679 I. Certified Piled on 12!15120081400 Registrar of Titles, Ramsey County, MN Mortgage Registratiog Tax Paid NIA 1211512008 Certificate# 508769 1.2.2.417714 MORTGAGE DEED 1 THIS -MORTGAGE, effective as of November 1, 2004 between Five D', Limited a Minnesota corporation (hereinafter called the "Mortgagor", regardless of whether one or more persons or entities), and the Economic Development Authority'in and for the City. of. '-New Hope, a Minnesota municipal corporation, (hereinafter called the "Mortgagee") WITNESSETH, that, to secure the -payment of Sixty Thousnd and 00M00ths Dollars ($60,000.00)6with interest, according to the terms of a Term Promissory Note bearing even date herewith,, together with any renewals or extensions thereof, ' and all other liabilities and indebtedness of the. Mortgagor to the Mortgagee due or to become due, now existing or hereafter arising; - the . Mortgagor- hereby j mortgages to the Mortgagee ' the tract, of land lying "in the County of Ramsey, State of Minnesota, ,described as follows to=wit: See Exhibit A attached hereto and made a part hereof (the "Premises"). i i 1. .' In addition to making and including in this Mortgage's he covenant's and other provisions set forth in Minnesota Statutes, Section 507.15,, or any future Minnesota Statute -providing for a.statutory form of real estate mortgage,• the Mrtgagor covenants and agrees -with -the Mortgagee; . (a) .. The Mortgagor will permit the Mortgagee,i or•its agents, at all reasonable times, to enter upon and inspect the Premises. 2. The Mortgagor covenants. with the Mortgagee the 1following statutory covenants: I (a) ' To warrant title to the Premises. 41 (b) To pay all -taxes and assessments promptly before a penalty might attach for nonpaymbnt-the reof. ` —1I 0 ii 36,-.23: q3, ooh Document# 4131556 Recorded 12115120081400 County Recorder, Ramsey County, MN Mortgage Registration Tax Paid 12/1512008 1.2.5 417589 MORTGAGE DEED THIS MORTGAGE, effective as of November 1, 2008, between Five D, Limited, - a. Minnesota corporation' (hereinafter called the "Mortgagor", regardless of whether one or more persons or entities), and the Economic Development Authority -'in and for the City. of New Hope, 'a. Minnesota municipal corporation, (hereinafter called 'the „Mortgagee"). WITNESSETH, that to secure the payment of Sixty Thousand and 001100ths Dollars ($60,000.00)�ith interest, according to the terms of a Term Promissory Note bearing even date herewith, together with any renewals or extensions thereof,. and .all other liabilities and indebtedness of the Mortgagor to the Mortgagee, due or to become due, now existing or hereafter arising, ..the Mortgagor hereby mortgages to the Mortgagee the tract of ' land lying in -the County of Ramsey, State of Minnesota; described as follows, to -wit: See Exhibit A attached hereto and made a part hereof (the "Premises"). 1: In addition to making and including in this Mortgage the covenants and other provisions set forth io Minnesota Statutes, Section 507.15, or any future Minnesota Statute providing for a statutory form of real estate mortgage, the Mortgagor covenants and agrees with the Mortgagee: '(a) The Mortgagor will permit the Mortgagee, or its agents, at all reasonable times, to enter upon and inspect the Premises. 2. The Mortgagor covenants with the Mortgagee the fallowing statutory covenants: (a) To warrant title to the Premises. ' " (b) `To pay all taxes and assessments promptly before a penalty might attach for nonpayment thereof. r 0 ° 30.. �4z • 413, D0-39 a (c) To keep, the buildings and other improvements now existing or hereafter erected on the Premises insured against fire for the amounts specified by the Mortgagee and against other hazards under the usual extended coverage endorsement and all other hazards and risks of direct physical loss occasioned by airy cause whatsoever, subject only to the exceptions and exclusions, if any; agreed to by the Mortgagee. The policy or policies of such insurance shall be in 'a form acceptable to Mortgagee and shall have a loss -payable provision in favor of and in a form acceptable to Mortgagee. In the event of foreclosure of this Mortgage, all right, title -and interest of the Mortgagor in and to any insurance policies then in force shall pass to the purchaser at the foreclosure sale. (d) That the Premises shall be kept in good repair and no waste shall be committed. (e) That all indebtedness secured by this Mortgage shall become due after default in the payment of any installment of principal or interest, at the option of -the Mortcagee. 3. If default has been made in any payment or covenant herein, the Mortgagee is hereby authorized and empowered to declare the whole amount secured by this Mortgage due and payable. The Mortgagee shall have the authority and power to proceed to protect and enforce its rights by suit or suits in equity or at law, either for the specific performance of any covenant or agreement contained herein or in the indebtedness secured by this Mortgage or for the foreclosure of this Mortgage or for the enforcement of any other appropriate legal or equitable remedy and; in the event of foreclosure, shall be entitled to the immediate appointment of a receiver to operate and protect the Premises and to collect all rents during the pendency of the foreclosure, and, in addition, the Mortgagor authorizes the Mortgagee to sell the Premises, as one tract or otherwise, at public auction and convey the same to the purchaser and, out of the proceeds arising. from such sale, to pay all indebtedness secured hereby, with interest, and all legal costs and charges of such foreclosure and the maximum -attorney's fees permitted by law, which costs, charges and fees the Mortgagor hereby agrees to pay. The Mortgagor hereby expressly consents to the sale of the Premises by advertisement, pursuant to .the Minnesota Statutes, Chapter 580, which provides for sale after service of notice thereof upon the occupant of the, Premises and the publication of said notice. Service may not be made upon the Mortgagor personally, -and no hearing of any type is required in connection with the sale. Except as required by the aforesaid statutory provision, the Mortgagor hereby expressly waives any and all rights to notice of sale of the Premises and any and all rights to a hearing of any type in connection with the sale of the Premises. 4. If the Mortgagor fails, to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which does or may adversely affect the Premises or the interest of the Mortgagor or the Mortgagee therein, then the Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against and/or instigate such action or proceeding and take such 794775.1 2 other action as the Mortgagee deems necessary to protect the Mortgagee's interest. Any amounts disbursed by the Mortgagee pursuant to this paragraph, including reasonable attorneys' fees, with interest thereon, shall become additional indebtedness of the Mortgagor secured by this Mortgage. Such amounts shall be payable upon notice from the Mortgagee to the Mortgagor requesting payment thereof and shall bear interest from the date of disbursement at the rate set forth in the Note which this Mortgage secures. Nothing contained in this .paragraph 4 shall req -wire the Mortgagee to incur any expense or do any act hereunder. 6. Any delay by�the Mortgagee in exercising any right or remedy hereunder or otherwise afforded by law or equity shall not be a waiver of or preclude the exercise of such right or remedy or any other right or remedy hereunder or at law or equity. 6. All remedies of the Mortgagee are distinct and cumulative to .any other right or remedy urider this Mortgage or afforded bylaw or equity and may be exercised concurrently or independently and as often as the occasion therefor arises. 7. The covenants and agreements herein shall bind and the rights hereunder shall inure to the .successors and assigns of the Mortgagee and the heirs, personal representatives, successors and assigns of the Mortgagor. B. In the event any provision or clause- of this mortgage conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage which can be given effect without conflicting provisions, and, to the end, the provisions of this Mortgage are declared to be severable. 9. The Mortgagor acknowledges. and agrees that this right of inspection .allows the Mortgagee, or the Mortgagee's agents, to enter the premises at reasonable times to conduct environmental tests to establish the presence, or absence, of hazardous substances or pollutants upon the premises. 10. The Mortgage shall be governed by the laws'of the State of Minnesota. 11. The maximum principal indebtedness secured by this Mortgage is $60,000.00. IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day and year first above written. Five D, Limited (a Mi co oration F By: C rles rand Its: 794775.1 3 STATE OF MINNESOTA) ss. COUNTY OF HENNEPIN) The foregoing was acknowledged before me, this; day of November, 2008, by Charles E. Durand the Chief Manager of Five D Limited, a Minnesota corporation on behalf of the corporation. This Instrument was Drafted By: MURNANE BRANDT 30 EAST SEVENTH STREET SUITE 3200 ST. PAUL, MN 55101-4919 Telephone: (651) 227-9411 794775.1 4 Notary Public STEVEN A. SDND i Notary Public-Minnesom • y ComnMian Expires Jan 31.3410 EXHIBIT A LEGAL DESCRIPTION The following described- real property located in the County of Ramsey and State of Minnesota. ,t Parcel One— Torrens (Certificate of Title No. 508769) That part of Lot 1, Block 1, Silverview Estates, lying southeasterly of the following described line: Commencing at the intersection of the south line. of the Southeast quarter of Section 6, Township 10, Range 23 and the center Eine of State Trunk Highway No. 10- 62; thence northwesterly along said centerline 1311.9 feet to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot I and said line there terminating. Parcel -Two — Abstract *-* Lot 1, Block 1, Silverview Estates, except that part lying southeasterly of the following described line; Commencing at the intersection of the south line of the Southeast quarter of Section 6, Township 30, Range 23 and the center Iine of State Trunk Highway No. 10- 62; thence northwesterly along said centerline 1311.9 feet to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot 1 and said line there terminating. 794775.1 CITY OF NEW HOPE AND NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY BUSINESS ASSISTANCE POLICY Adopted by City Council: June 28, 2010 Adopted by EDA: June 28, 2010 1. PURPOSE Subd. 1.01. The purpose of this policy is to establish the City of New Hope and the New Hope Economic Development Authority's (City/EDA) position as it relates to the use of Tax Increment Financing, Tax Abatement and other business assistance programs for private development. This policy shall be used as a guide in processing and reviewing applications requesting business assistance. Subd: 1.02. The City shall have the option of amending or waiving sections of this policy when determined necessary or appropriate. Minnesota Statutes 1161.994, Subd. 2, allows the City to deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the department. 2. STATUTORY LIMITATIONS Subd 2.01. In accordance with the City/EDA Business Assistance Policy, assistance requests must comply with applicable State Statutes. 3. ELIGIBLE USES FOR THE RECEIPT OF BUSINESS ASSISTANCE Subd. 3.01. As a matter of adopted policy, the City/EDA will consider using a business assistance tool to assist private developments only in those circumstances in which the proposed private projects meet one or more of the following uses: A. To meet the following housing related uses: 1. To provide a diversity of housing not currently provided by the private market. 2. To provide a variety of housing ownership alternatives and housing choices. 3. To promote affordable housing for low or moderate income individuals. 4. To promote neighborhood stabilization and revitalization by the removal of blight and the upgrading in existing housing stock in residential areas. B. To remove blight and encourage redevelopment in the commercial and industrial areas of the City in order to encourage high levels of property maintenance and private reinvestment in those areas; including faeade improvement. C. To increase the tax base of the City in order to ensure the long-term ability of the City to provide adequate services for its residents while lessening the reliance on residential property tax. D. To retain local jobs, increase the local job base, and provide diversity in that job base. E. To increase the local business and industrial market potential of the City of New Hope. F. To encourage additional unsubsidized private development in the area, either directly, or through secondary "spinoff" development. G. To offset increased costs of redevelopment, over and above the costs that a developer would incur in normal development. H. To accelerate the development process and to achieve development on sites which would not be developed without this assistance. 4. BUSINESS ASSISTANCE PROJECT APPROVAL CRITERIA Subd. 4.01. All new projects approved by the City/EDA should meet the following mandatory minimum approval criteria, However, it should not be presumed that a project meeting these criteria will automatically be approved. Meeting these criteria creates no contractual rights on the part of any potential developer. A. The assistance shall be provided within applicable state legislative restrictions, State Auditor interpretation, debt limit guidelines, and other appropriate financial requirements and policies. B. The project should meet one or more of the uses identified in Section 3, Eligible Uses for the Receipt of Business Assistance. C. The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or required changes to the Comprehensive Plan and Zoning Ordinances which would accommodate the project must be under active consideration by the City at the time of approval. D. The assistance will not be provided to projects that have the financial feasibility to proceed without the benefit of the assistance. Assistance will not be provided solely to broaden a 2 developer's profit margins on a project. Prior to consideration of a business assistance request, the City may undertake an independent underwriting of the project to help ensure that the request for assistance is consistent as set forth in Appendix A. E. Prior to approval of business assistance, the developer shall provide any required market and financial feasibility studies, appraisals, soil boring, information provided to private lenders for the project, and other information or data that the City or its financial consultants may require in order to proceed with an independent underwriting. Any developer requesting business assistance should be able to demonstrate past successful general development capability as well as specific capability in the type and size of development proposed. G. It is desirable if the developer retains ownership of the project at least long enough to complete construction, to stabilize its occupancy, to establish the project management, and to initiate repayment of the business assistance. H. The level of business assistance funding should be reduced to the lowest possible level and least amount of time by maximizing the use of private debt and equity financing first, and then using other funding sources or income producing vehicles that can be structured into the project financing, prior to using additional business assistance funding. S. BUSINESS ASSISTANCE PROJECT EVALUATION CRITERIA Subd. 5.01, All projects will be evaluated by the City/EDA on the following criteria (as set forth in Section 5.03) for comparison with other proposed business assistance projects reviewed by the City and for comparison with other subsidy standards (where appropriate). It is realized that changes in local markets, costs of construction, and interest rates may cause changes in the amounts of business assistance subsidies that a given project may require at any given time. Subd. 5.02. Some criteria, by their very nature, must remain subjective. However, wherever possible, "benchmark" criteria have been established for review purposes. The fact that a given proposal meets one or more 'benchmark" criteria does not mean that it is entitled to funding under this policy, but rather that the City is in a position to proceed with evaluations of (and comparisons between) various business assistance proposals, using uniform standards whenever possible. Subd. 5.03. Following are the evaluation criteria that will be used by the City/EDA: A. All proposals should, in the opinion of the City/EDA, optimize the private development potential of a site. 3 B. All proposals should, in the opinion of the City/EDA, create the highest feasible number of jobs on the site. All proposals will meet the Business Assistance Project Approval Criteria established by the City/EDA. C. When considering business assistance for a relocating or new business request, the City/EDA should weigh the impact on existing competition/businesses which are already established in the community. D. All proposals should, in the opinion of the City/EDA, create the highest possible ratio of property taxes paid before and after redevelopment. Given the different assessment circumstances in the City, this ratio will vary widely. E. Proposals should usually not be used to support speculative industrial, commercial, and office projects. F. Assistance will usually not be used in a project that involves an excessive land and/or property price. G. All business assistance projects will need to meet the "but for" test. Assistance will not be used unless the need for the City/EDA's economic participation is sufficient that, without that assistance the project could not proceed in the manner as proposed. H. Business assistance will not be used when the developer's credentials, in the sole judgment of the City/EDA, are inadequate due to past track record relating to: completion of projects, general reputation and/or bankruptcy, or other problems or issues considered relevant by the. City/EDA. i. Business assistance will not normally be used for projects that would generate significant environmental problems in the opinion of the local, state, or federal governments. J. Business assistance funding should not be provided to those projects that fail to meet good public policy criteria as determined by the City/EDA, including: poor project quality; projects that are not in accord with the Comprehensive Plan, zoning, redevelopment plans, and city policies; projects that provide no significant improvement to surrounding land uses, the neighborhood, and/or the City in the opinion of City/EDA; projects that do not have significant new, or retained, employment; projects that do not meet financial feasibility criteria established by the City/EDA; and projects that do not provide the highest and best desired use for the property. K. The following supplemental policies are attached hereto and made part of the Business Assistance Policy: Attachment 1: Tax Increment Financing Policy 4 Attachment 2: Tax Abatement Policy ATTACHMENT 1 Tax Increment Financing Policy 1. PURPOSE Subd. 1.01. The purpose of this policy is to establish the City of New Hope and the New Hope Economic Development Authority's (City/EDA) position as it relates to the use of Tax Increment Financing (TTP) for private development. This policy shall be used as a guide in processing and reviewing applications requesting business assistance, and in conjunction with the City/EDA's Business Assistance Policy. The City/EDA shall have the option of amending or waiving sections of this policy when determined necessary or appropriate. 2. STATUTORY LIMITATIONS Subd. 2.01. In accordance with the City/EDA's Tax Increment Financing Policy, assistance requests must comply with applicable State Statutes. Minnesota Statutes, Section 469.174 through 469.179 (Tax Increment Finance Act), as amended, authorizes local governments to utilize Tax Increment Financing to assist development and redevelopment of certain parcels within its boundaries. 3. POLICY BACKGROUND Subd. 3.01. The City/EDA recognizes that local government plays a critical role in enhancing the vitality of our community. This is particularly true as the city reaches full development. Subd. 3.02. All reasonable means shall be utilized to leverage private business development and redevelopment in the city consistent with this and other policies. Tax increment financing is an important and useful tool in attracting and retraining businesses. Subd. 3.03. The fundamental principle that makes tax increment financing viable is that it is designed to encourage development that would not otherwise occur. The City/EDA shall be responsible to determine that (1) a project would not occur "but for" the assistance provided through tax increment financing; and (2) no other development would occur on the relevant site without tax increment assistance, that could create a larger market value increase than the increase expected from the proposed development (after adjusting for the value of the tax increment). Subd. 3.04. The City/EDA shall consider tax increment financing in cases that serve to accomplish targeted city goals for development and redevelopment as they may change over time. These goals include, but are not limited to projects that will (1) foster and support redevelopment, (2) result in the creation or retention of a significant number of jobs that pay 2 wages adequate to support households; or (3) assist with the retention and expansion of businesses, and (4) expand the city's tax base. 4. CREATION OF TIF DISTRICTS Subd. 4.01. The City/EDA shall consider the creation of any of the general types of TIF Districts allowed by Minnesota Statutes or the creation of other types of TIF Districts allowed by Special Legislation, when doing so is consistent with the development and redevelopment goals of the City/EDA. Subd. 4.02. 'TIF Districts are the specific parcels within a Project Area from which tax increment is captured. MN Statutes currently defines five general types of TIF Districts which the City/EDA shall consider: 1) Redevelopment District 2) Renewal and Renovation District 3) Soils Condition District 4) Housing District 5) Economic Development District Subd. 4.03. In addition to these five general types of TIF Districts, defined by Minnesota Statutes, the City/EDA may also consider the creation of TIF Districts as authorized by applicable special tax increment financing legislation. Subd.. 4.04. The City/EDA shall consider the creation of a TIF District based on qualifications and term restrictions, as defined in Minnesota Statutes. The City/EDA shall consider a range of attributes including but not limited to the following: 1) Projects consistent with development and redevelopment goals of the City/EDA 2) Development of office, office/corporate headquarters, office/service/warehouse and manufacturing 3) Maximized use of other financial resources 4) Projects that provide funding for appropriate public improvements that may benefit numerous development projects 5) Low percentage of public investment; high percentage of private investment 6) Analysis of detailed business pro forma with reasonable timeline for completion and occupancy 7) Project has potential to enhance spin-off development and redevelopment 8) Exceeds minimum design standards per City Ordinance 9) Presents minimal risk to the City/EDA 10) Maximizes increased tax base and contributes to higher market values 11) Number of jobs and pay level of positions will be a consideration but not a requirement if other appropriate public purpose(s) is met WA 5, ELIGIBLE COSTS Subd. 5.01. The City/EDA shall consider the use of tax increment financing to cover project costs as allowed for under Minnesota Statutes. The types of project costs that are eligible for tax increment financing (under current state law) are as follows: 1) TIF application deposit 2) Architectural and engineering fees directly attributable to site work 3) Earthwork/excavation 4) Landscaping 5) Streets and roads 6) Street/parking lot lighting 7) Sidewalks S) Special assessments 9) Soils test and environmental studies 10) Site related permits 11) Soils correction 12) Utilities (sanitary sewer, storm sewer, and water) 13) Street/parking lot paving 14) Curb and gutter 15) Land acquisition 16) Legal (acquisition, financing, and closing fees) 17) Surveys 18) Title insurance 6, DETERMINATION OF AMOUNT OF ASSISTANCE 6.01 Whether in a new or existing TIF District, the amount of tax increment financing provided to an applicant shall be based on a review of the following: Request for Financial Assistance Form (Exhibit A) Review of Applicant Pro Forma Amount of Increment Generated by the Project Subd. 6.02. The level of assistance shall be evaluated on a case-by-case basis and may reflect an increase or decrease in requested financial assistance. When considering a request for tax increment financing for a project, there shall be consideration of the level of financial assistance provided for other previously approved projects in the TIF District or Project Area. 7. FORMS OF ASSISTANCE Subd. 7.01. Tax increment financing shall generally be provided on a "pay-as-you-go" basis wherein the City/EDA compensates the applicant for a predetermined amount for a stated number of years, The City/EDA shall have the option to issue a TIF Note with or without interest, where the principal amount of the TIF Note is equal to the amount of eligible project costs incurred and proven by the developer. In all cases, semi-annual TIF payments shall be based on 8 available increment generated from the project. TIF payments shall be made after collection of property taxes. Subd. 7.02. Another form of assistance that shall be considered only in extraordinary circumstances is an "up -front payment' to the applicant. This may be in the form of a revenue or general obligation bond or an internal loan. The tax increment generated from the applicant's project is a source of revenue for repayment of the bonds or loan. This form of assistance is not one the City/EDA will generally consider because under this form of assistance the City/EDA assumes the risk that the tax increment will be sufficient for repayment of the bonds or interfund loan. 8. APPLICATION Subd. 8.01. The City/EDA will require a deposit in the amount of $10,000 from the applicant to investigate the feasibility of providing assistance to the applicant. If the City incurs additional expense beyond the $10,000 prior to execution of the Developer's Agreement, the City/EDA shall notify the applicant in writing and the applicant must deposit additional funds for work on the application to continue. If the project is approved and the applicant proceeds with the project, the applicant's deposit may be reimbursed as an eligible project cost to the extent permissible under MN Statutes. Subd. 8.02. In addition to the $10,000 deposit fee, the applicant must submit the following forms and documentation at time of application for the application to be complete and review of the application to begin: • Request for Financial. Assistance Form (Exhibit A) • Project Pro Forma Documentation (Developed by Applicant) 7 ATTACHMENT Tax Abatement Policy 1. PURPOSE Subd. 1.01, The purpose of this policy is to establish the City of New Hope and the New Hope Economic Development Authority's (City/EDA) position as it relates to the use of Tax Abatement for private development. This policy shall be used as a guide in processing and reviewing applications requesting business assistance, and in conjunction with the City's Business Assistance Policy. The City shall have the option of amending or waiving sections of this policy when determined necessary or appropriate. 2. STATUTORY LIMITATIONS Subd. 2.01. In accordance with the City/EDA's Tax Abatement Policy, assistance requests must comply with applicable State Statutes. MN Statutes, Sections 469.1812 through 469.1815, authorizes a political subdivision to utilize property tax abatement on certain parcels of land within its boundaries. 3. POLICY BACKGROUND Subd 3.01. The City/EDA recognizes that local government plays a critical role in enhancing the vitality of our community. This is particularly true as the city reaches full development. Subd. 3.02. All reasonable means shall be utilized to leverage private business development and redevelopment in the city consistent with this and other policies. Tax abatement is an important and useful tool in attracting and retaining businesses. Subd. 3.03. The tax abatement tool provides the ability to capture and use all or a portion of the property tax revenues within a defined geographic area. In practice, it is a tax "rebate" rather than an exemption from paying property taxes. Tax abatement is an important economic development tool that when used appropriately can be useful to accomplish the City/EDA's development and redevelopment goals and objectives. Requests for tax abatement must serve to accomplish the city's targeted goals for development and redevelopment. These goals include, but are not limited to projects that will result in the creation or retention of a significant number of jobs that pay wages adequate to support households, projects that will assist with the retention and expansion of businesses, and projects that will expand the city's tax base. Projects must meet the requirements established by the Business Assistance Policy of the City/EDA, to the extent it is applicable, in order to receive abatement. 10 4. PROJECT ELIGIBILITY Subd. 4.01. Projects eligible for consideration of property tax abatement include but are not Iimited to the following: • Mixed use projects including new and redevelopment projects • Commercial and industrial redevelopment projects • New commercial and industrial developments • Residential business properties (with some restrictions as defined in this policy) 5. OBJECTIVES Subd. 5.01. A property tax abatement must meet at least one of the following public purposes: 1) Increase or preserve the tax base 2) Provide employment opportunities in the City 3) Provide or help acquire or construct public facilities 4) Help redevelop or renew blighted areas 5) Help provide access to services for City residents 6) Finance or provide public infrastructure Subd. 5.02. The developer/landowner shall be able to demonstrate a market demand for a proposed project. Surd. 5.03. Tax abatement shall not be used for projects that would place extraordinary demands on City services or for projects that would generate significant environmental impacts. Subd. 5.04. Because it is not possible to anticipate every type of project, which may in its context and time present desirable community building, development, or redevelopment goals and objectives, the City/EDA retains the right in its discretion to approve projects and tax abatements that may vary from the principles and criteria of this policy. 6. DETERMINATION OF AMOUNT OF ASSISTANCE Subd. 6.01. Tax abatement assistance available shall generally be limited to the incremental taxes generated on the improvements to the property. The City/EDA may consider a greater level of financial assistance, up to the maximum allowed under Minnesota Statutes, in limited circumstances. The level of assistance will be evaluated on a case-by-case basis and may reflect an increase or decrease in requested financial assistance from the applicant. Subd. 6.02. The amount of tax abatement assistance provided to an applicant shall be based on a review of the following: Request for Financial Assistance Form (Exhibit A) * Review of Applicant Pro Forma 11 « Amount of Increment Generated by the Project Subd. 6.03. In any year, the total amount of property taxes abated (city-wide) may not exceed (1) ten percent of the current levy, or (2) $200,000, whichever is greater. The limit does not apply to an uncollected abatement from a prior year that is added to the abatement levy. Subd. 6.04. The developer/landowner must adequately demonstrate, to the City/EDA's sole satisfaction, an ability to complete the proposed project based on past development experience, general reputation, and credit history, among other factors, including the size and scope of the proposed project. The developer/landowner must provide adequate financial guarantees to ensure completion of the project, including, but not limited to: assessment agreements and letters of credit. 7. FORMS OF ASSISTANCE Subd. 7.01. Tax abatement shall generally be provided on a "pay-as-you-go" basis wherein the City/EDA compensates the applicant for a predetermined amount for stated number of years. In all cases, semi-annual abatement payments are based on available (as approved by agreement) tax revenue from the property and issued to the applicant after payment of property taxes by the applicant. Subd. 7.02. Another form of assistance that shall be considered only in extraordinary circumstances is an "up -front payment" to the applicant. This may be in the form of a revenue or general obligation bond or an internal loan. (The City/EDA would consider revenue bond financing where the terms of the financing are satisfactory to the City/EDA.) The tax increment generated from the applicant's project is a source of revenue for repayment of the bonds or loan. This form of assistance is not one the City/EDA will generally consider because under this form of assistance the taxpayers assume the risk that the tax increment will be sufficient for repayment of the bonds or the interfund loan. 8. DURATION AND RESTRICTIONS Subd. 8.01. The City/EDA may grant an abatement for a period no longer than 15 years, except as provided under 8.02. The City/EDA may specify in the abatement resolution a shorter duration. Subd. 8.02, The City/EDA, when proposing to abate taxes for a parcel, may make a written request to Hermepin County or a Independent School District 281 in which a parcel is located to grant an abatement of county or school taxes for the property. If one of the two political subdivisions declines, in writing, to grant an abatement or if 90 days pass after receipt of the request to grant an abatement without a written response from one of the political subdivisions, the duration limit for an abatement for the parcel may be increased to 20 years. 12 Subd. 8.03. The City/EDA may not enter into a property tax abatement agreement that provides for abatement of taxes on a parcel, if the abatement will occur while the parcel is located in a tax increment financing district. 9. APPLICATION Subd. 9.01. The City/EDA will require a deposit in the amount of $5,000 from the applicant to investigate the feasibility of providing assistance to the applicant. If the City/EDA incurs additional expense beyond the $5,000 prior to execution of the Developer's Agreement, the City/EDA shall notify the applicant in writing and the applicant must deposit additional funds for work on the application to continue. If the project is approved and the applicant proceeds with the project, the applicant's deposit may be reimbursed as an eligible project cost to the extent permissible under MN Statutes. Subd. 9.02, In addition to the $5,000 deposit fee, the applicant must submit the following forms and documentation at time of application for the application to be complete and review of the application to begin. • Request for Financial Assistance Form (Exhibit A) • Project Pro Forma Documentation (Developed by Applicant) 13 EXHIBIT A REQUEST FOR FINANCIAL ASSISTANCE FORM 1. Provide a brief project description and the following information: Existing Building square footage: Building addition square footage: Size of property: Description of building: Materials and other additional relevant building information: 2. Provide a brief description of your business and the following information: Business Name: Address: Telephone: Contact Name: E-mail: 3. Provide information on the present ownership of the site Name: Address: Phone Number: Contact Name: E-mail: 4. Estimated Project Costs a. Land acquisition $ b. Site development c. Building cost d. Equipment e. Architectural/engineering fee f. Legal fees g. Off-site development costs TOTAL ESTIMATED COSTS 5. Estimated Project Funding a. Private financing institution - b. Tax increment/abatement funds c. Other public funds �® d. Developer equity TOTAL ESTIMATED SOURCES 14 (Should equal Total Estimated Costs) 6. Describe amount and purpose for which TIF or Tax Abatement is required. 7. State specific reasons why TIF or Tax Abatement is necessary for the project ("but for" test). 8. List project costs that may be eligible for assistance and provide basis for that belief. 9. Provide market value information. Current market value (from County Assessor): Proposed market value at completion: 10. Provide real estate property tax information. Existing real estate taxes of property: $ Estimated real estate taxes of property upon completion: $ 11. Provide name and address of architect, engineer, and general contractor for the project. 12. Provide project construction schedule. Estimated construction start date: Estimated construction completion date: If phased project: Year _ Year % Complete % Complete 13. Provides names of any other municipalities wherein the applicant, or other corporations the applicant has been involved with, has completed developments within the last five years. 14. Provide the following required supplemental information: • Project Pro Formas (one showing with assistance and one without assistance) • Legal description of the property • Application fee of $10,000 for TIF projects %,000 for Abatement projects payable to the City of New Hope • Site plan and building rendering In addition to the required information from above (items 1-14), the following information is requested and will be considered as part of the application approval process: 15 + Provide number of years in business a Provide number of years located in the City of New Hope (if applicable) + Describe potential for business growth or future development Explain whether the building will be owner -occupied (Yes/No) + If rental space, provide the targeted rental rates + Provide land costs per acre or square foot + Provide the projected building cost per square foot + Provide documentation as to private financial commitment and amount + Provide details of financial structure of the deal including developer equity Additional comments 16 CITY OF NEW HOPE POLICY FOR BUSDMSS SUBSIDIES Purpose: TbC purpose of this policy is to set guldelim that would enable the City of New Hope to comply with Minnesota Statutes 1161.93, et seq. Objective: The objective of the City of New Hope is to attract and enhance commercial and industrial development hereby increasing or retaining employment opportunities for New Hope residents and developing the job base and tax base of the City. De, jird ions. A. Business Subsidy. A business subsidy mans it state or local government agency grant, contribution of personalpropeity, real property, infrastructure; the principal amount of a loan at rates below those cammercially available to the recipient, any reduction or deferral of nay tax or fee, any guamntee of any payment under any loan, lease, or other obligation, or any preferential we of government facilities given to a business. R. Comprehensive Health Insurance is defined as: • Employer 100' premium payment for individual coyerage or 80% Premium payment far family coverage, Employer minimum payment of 80% for office visits, emergency' raze, surgery and prescriptions, A maximum yearly deduction of $1,0()0; and • Maternity coverage. C Living Wage will be defined as 125%v Y Pa3' Pour. Husirtesses that provide employer Of the federal poverty level for a family of _Paid comprehensive health insurance may a living wage as defined at 110% of the federal P verty level for a family of four. I3- Responsible Labor Relations are defined as neutrality an union organizing, Providing a complete and accurate list of names and addresses of employees, reasonable access to employees and facilities during non working periods, voluntary recognition based on a card check demonstrating that a union represems a majority of employees in a bargaining unit, and binding arbitration on the first contract. -3- Procedure; This policy will be used for business subsidies that equal, or exceed $257000. In the event a subsidy is in excess of $100,000, the determination shall bepreceded by a public hearing, A proposed subsidy shall be considered to offset land costs, site development, building costs and design specifications that exceed the City's maximum requiremen#s. Minimum Requirements: A recipient of a business subsidy must meet the following minimum requirements. Any deviation from these minimum requi =encs shall be documented in a written resolution setting forth the reasons for the deviation. A certified copy of said resolution shall be attached to the next DIED annual report. The City shall evaluate each request for a business subsidy based on the best interests of the City and its residents. In determining whether to approve a subsidy, the City shall consider facts it deems appropriate, which shall include the following. 1. A business subsidy must have a defined public purpose which may include, but not be limited to, increasing the tax base of the City. Job retention may also be a valid public purpose if the job Ioss is specific and demonstrable. 2. Proposals for direct loans must be unable to obtain full private financing before applying for city funding, 3. Loan guarantees must have participation by a private lender to assume at least 50% of the risk. 4. Business subsidies in the form of grants must be structured as forgivable loans. For other types of subsidies, the agreement must state the fair market value of the subsidy to the business, including the value of conveying property at less than a fair market price, or other in-kind benefits to the business. 5. A business must set goals to be achieved within twoyears for the number of jobs that they will create (or retain when job loss is specific and demonstrable) and the wages that these jobs willpay. Businesses must create (or retain) one full-time living wage job per $50,000 of assistance. Jobs will only be considered created if they are in addition to the highest number of employees that the business has had in the 18 months prior to receiving the subsidy. 6. A business must have a goal for the percentage of new jobs that will be held by City residents. 7. After a public hearing, if the creation or retention of jobs is determined not to be a goal, the wage and job goals may be set at zero. -4- S. The commitment of the proposed development to continue operations at the site where the subsidy is used for at least five years after the benefit date. 9. The ability of the proposed development to fulfill or provide a desired amenity, facility or service that is not provided by the City. 10. The business must disclose any potential adverse impact on the environment that could result from this project. Exceptions to CrUerk: Consistent with Minnesota Statutes 1161.993, Subdivision 3, the following forms of financial assistance are not a business subsidy, and recipients will not typically be required to meet the criteria for business subsidies set forth in this policy statement. I. Business subsidy of less than $25,000; 2. Assistance that is generally available to all businesses or to a general class of similar business, such as a line of business, size, location, or similar general criteria; 3. Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business yr defined group of businesses at the time the improvements are made; 4. Redevelopment property Polluted by contaminants as defined in Minnesota Statutes, Section 1161.552, Subdivision 3; 5. Assistance for designated historic preservation districts or assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance its equal to or less than 50 percent of the total cost; 6. Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; 7. Assistance for housing; 8. Assistance fnr pollution control or abatement, including a hazardous substance tax increment financing subdistrict as defined in Mihn. Stat. § 469.174(23); 9. Assistance far energy conservation; 10. Tax reductions resulting from conformity with federal tax law; 11. Worker's compensation and unemployment compensation; 12. Benefits derived from regulation; 13. Indirect benefits derived from assistance to educational institutions; 14. Pbnds from bonds allocated under Minnesota Statutes, Chapter 474A, bonds issued to refund outstanding bonds and bonds issued for the benefit of an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended; 15. assistance for a collaboration between a Minnesota higher education institution and a business; 16. Assistance for a tax increment financing soils condition district as defined under Minnesota Statutes, Section 469.174, Subdivision 19; 17. Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; -5- 18. General changes in tax increment financing law and other generated tax law changes of a principally twImical fie; 19. Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; 20. Funds from dock and wharf bonds issued by a seaway port authority; 21. Business loans and loan guarantees of $75,000 or less; 22. Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and. 23. Any other forms of assistance that may be defned by law as not constituting a business subsidy under Minnesota Statutes, Section 116J.993, Subdivision 3. 'references. All other things being equal, and to the extent legally possible, preference will be given to applicants meeting the following criteria: 1. Businesses that contribute to employee child care and retirement accounts; 2. Businesses that are locally owned; 3. Businesses that engage in responsible labor relations; 4. Businesses that have a goal that 25% or more of the new jobs will be held by City residents; 5. Businesses that have traditionally paid living wages. NA--yW.A Ruch wWfao E7t 8i d=I Sufis* CKWID - BDA. W9 G,� lP�`Nv �'lR w,� SUBORDINATION AGREEMENT WHEREAS, the undersigned Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation, is the holder of a Mortgage dated November 1. 2008from Five D Limited, a Minnesota corporation in the original amount of $ 60,000.00 , filed December 15, 2008 in the office of the County Recorder as Document Number 4131556 and in the office of the Registrar of Titles as Document Number 2058679 covering the following described property situated in Ramsey County, Minnesota, to -wit: See legal description on attached Exhibit A AND WHEREAS, it is desired that said Mortgage be subordinate to that certain Mortgage dated May 15, 2013 from Five D Limited, a Minnesota corporation, to Western Bank a Minnesota corporation in the amount of $ 400.000.00 filed on in the Ramsey County Registrar of Title's Office as Document Number Ramsey County Recorder's Office on as Document Number and in the NOW THEREFORE, For One Dollar ($1.00) and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned does hereby agree that said Mortgage to Western Bank dated May 15, 2013 _shall have priority in lien, right and remedy over said Mortgage held by the Economic Development Authority in and for the City of New Hope. Econ mic Development Authority in an r the City of New Hope By. ti1\ Y Kirk McDonald, its Executive Director STATE OF MINNESOTA ) )ss' COUNTY OF HENNEPIN� The foregoing was acknowledged before me this NtZ day of May, 2013, by Kirk McDonald the Executive Director of the Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation, under the laws of the State of Minnesota, on behalf of the municipal corporation .- Drafted by: Western Bank Notary Public 2711 NE Co Rd. 20 E(Aeft R.TATRO .rt o ilJ6i. C - MINNESOTAommission EVW Jen. 8f. 2015 Mounds View, MN 55112 EXHIBIT A Parcel One — Torrens (Certificate No. 508769) That part of Lot 1, Block 1, Silverview Estates, lying southeasterly of the following described line: Commencing at the intersection of the south line of the Southeast quarter of Section 6, Township 30, Range 23 and the center line of State Trunk Highway No. 10-62; thence northwesterly along said centerline 1311.9 feet to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot 1 and said line there terminating. Together with easement for driveway filed July 15, 1998 as Document Number 1501003 and Underground Utility Easement filed May 4, 2001 as Document Number 1634738. Parcel Two — Abstract Lot 1, Block 1, Silverview Estates, except that part lying southeasterly of the following described line: Commencing at the intersection of the south line of the Southeast quarter of Section 6, Township 30, Range 23 and the center line of State Trunk Highway No. 10-62; thence northwesterly along said centerline 1311.9 feet to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot 1 and said line there terminating. Together with easement for driveway filed July 6, 1998 as Document Number 3068979 and Underground Utility Easement filed April 26, 2001 as Document Number 3387192. Commonly known as 2732 NE Co Rd 10, Mounds View, MN 55112 MAY -14-2013 10:06 P. 02/08 SUmmit1 of $AI.IIENT FACTS SUMMARY OF SALIENT FACTS Property Ngme Location Assessor's Parcel Number Highest and Vest Use As If Vacant As Improved Property Rights Appraised Land Area Improvements Property Type Number of Buildings Number of Stories Gross Leasable Area Year Built condition lestlmated Exposure/Marketing Time Plnancial' Indicators Current Occupancy Stabilized Occupancy Overall Capitaliiatton Rate Pro Forma Operating Data Effective Gross Inwme Operating Expanses Expense Ratio Net Operating Income VALUATION! Soles Comparison Approach !naome Capitalization Appfoach Insurable Value (Repiaeement Cost) Holiday Statianstore - Mounds View 2732 Highway 10, Mounds View, Ramsey County, Minnesota 55112 06.30.23.43,0038 Retail Retail Fee Simple Estate 1.64 AC 71,438 SF Retail (Convenience Store/Gas Station) 2 7,048 SF 1998 Good 12 Months 100.0°.6 95.096 . 7.5096 7otaf Per 5F $277,070 $39.31 $79,780 511,32 28.79% $197,290 $27.99 Tota! per 51: 52,550,006 $361.80 $2,630,000 $373.16 $ 700,000 $99.32 CONCLUDED MARKET VALU5 Appraisal Premise interest Appraised Date of Vales Value As Is Fee Simple Estate r April 16, 2013 $2,600,000 Compiled by CORE MAY -14-2013 10:08 {Stewwn Tit% Guaranty Company Issued by its Agent, Laud Title, Lae, 2MO West County Road C, Suite 2205 Roseville, AIN 55113 CoMbUaNT SMERDLLE A Commitment No. 399270 Cass No. 399270 1. Effbadva Dale: Pebruaxy 2$, 2013 at 7:00 A-. 2. Policy or Policies to be issued: (a) 13 ALFA Owner's Policy - 6/17/06 Amount - 4 - Proposed Insured: NONE (b) ® ALTA Long Force faun Policy -- 6/17106 Amount $400,000.00 Proposed Inshhred: Western Bank its respective successors and assigns as their interests may appomr_ 3. Title to the Fee Simple estate or interest in the land descrc"bed or refentd to in this C numitnhent is at the effective, date hereof vested in: Five D Limited. a Mumesom corporation 4. The land referred to in the Commit rant is descriW as follows: SLE A7TA(3=D EXE A 2732 County Road 10 Northeast Mounds VI W, MhMcsota Absbaotllbrrens Property, Ramsey County Cmrtflone Number•. 509769 This aoanmhmeut is invalid =k= 4w Iosuriag Provisions and Schodvles A and B are ==had. Schedule A consim of 2 page(S) MRY-14-2013 10:03 Stewart Title Guaranty Compal Issued by its Agent, Land Title, Xue, 22Oo West County Road G Sulto 2205 Roseviilc, MN 55113 COIVIIVnTMENT SC3Mi1I.E A Commitment No. 399270 Case No. 399270 RXIDBIT A Parcel One — Torrens (Certificate No. 508769) That part of Lot 1, Block 1, Silverview Mafts, lying southeastedy of the following described line: Con=encing at the mtcraaation of the south lite of the Southeast quarter of Section 6, Tow"Up 30, hangs 23 and the cattier line of State Trunk sway No. 10-62--, thence northwesterly along said conterlines 1311.9 That to the point of beghwing o'fthe li.•ue to be desar'bed; thence at a right angle to said centerline to the southwest Buse of said Lot I and said line there terminating. Together with easement for driveway filed July 15, 199 8 as Document Nuutber 1501003 and Undergoumd Utility Easeneut Sled may 4, 2001 as Document Number 163473 S. Parcel Two — Abstraot Lot 1, Block 1, Silvervierw Estates, except that part lying southeasterly of the following desortbed line: Coinmenaing at the intersection of the south line of the Southeast quwter of Sectiou 6, Township 30, Range 23 and the cmter line of State Trunk Highway No. 10-62; thence aoathwegoerly along Said centerline 1311.911m to the point of beginning of the line to be described; thence at a right angle to said centerline to the southwest line of said Lot I and said line there terminating. Together with easement far driveway filed July 6, 1998 as Dooutnent Number 3068979 and Undergmund Utility Sa ment filed April 26, 2001 a Document' Number 3387192. This commitment is invalid unless flu iuswi33g Provisions and Schedules A and Bare attached. Schedule A consists of 2 pag*) MAY -14-2013 10:09 Stewart Tl le-Gaamty CompmW Issued by its Agent, Lead Tifle, lac. 2200 Wean County Road C, Saito =05 RosevMre MN 551X3 CONMTMMNT SCmM)B - sawou I Ragalirements 1. The following we the requirements to be complied with: P.05/08 A. Payments to, or for the account of, the sellers or mortgages of the full consideration for the estate or interest to be insured. B. Insaumsrns in insurable fossa which must be exwuted, delivered and duly filed for record. C. Your artention 1A called to mortgages shmm as Items 13, 1S and 17. Determine ifmor4 ages are to be satisfied. D. If any work or labor has been performed on the subject property+, within the last 120 days .(from the effective date, of this commitraera), we require that we be furnished with swore construction AstomEents and al lien waivers prior to elosiug. E. Mortgage Deed duty exoouted by rive D, Limited, a Minnesota oorpomdon, M favor of Western Baur in the original amount of $400.000.00. F. The standard form of Seller°s and/or PurcbasWs Affidavit, satisfactory to tItc Company, will be Case Na 899270 C4mmitmeatNo. 399270 ALTA Co=2itment —2466 This =uunitmentt i8 Wvalid wMiras the Insuring Provisions and Scbeduies A and B are =cbed. 9chedula Bl consists of 1 Page(s) MAY -14--2013 10:09 Stewart Tide Gunmaty Company Issued by its Agent, rand Tide, Tae. 2200 West County Rand C, Suite: 2205 Rosavx"lle:, NX ss113 CKOJ5IJ,rYMk .`My SCREEDVLE B - Section U EMPtione 10. Tmwr> payable in the year 2013 in The amount of $45,650.00 Total, unpaid. (06-30-23-43-003 9) Base Tau: 545,650.00, Non-Romestead. Note: Ist Half Tuxes we payable on ar beforeMay I5th and 2nd Half Tones arepayable on or before October 15& 11. There are no levied or pending special asseucnts. 12. Drainage and utility easements over the subject property as shown on the recorded plat 13. Combination Mortgage, Security Agreement and ] haure Finauciug Statement executed by Five D Limited, a Mmne'sota eomporation, dated May 27, 1999, filed May 29, 1998 as Dooument Number 3061201 (Abmact) and filed July 15, 1998 as Docsmnant Number 1500998 (Torrens), in the original amount of $1,219,598.00, inn favor of 8ipal Baal; which was assigned to Western Bank by Assignment filed June $, 2002 as DocrmoentNumber 3505690 and DoeumentNumber 1690986, 14. Assignment of Leases and Rents between Five D Limited, a Minnesota Corporation, and Signal Bank; filed May 29, 1998 as Document Number 3061202 (Abstmet) and filed Suly 15,1998 as Doa==t Number 1500999, which was assigned to Western Beak by A.ssig=eat filed June 5, 2002 as Docun4emt Number 3505681 and DoeumentNumaber L690987. 15. Mortgage executed by F!ve D 11,Wted, a Minnesota ooepomtion, dated Novesnbor 16, 1998, filed xazraw 25, 1999 as Document Numbax 3116206 (Abstract) and filed May 4, 1999 as Document Number 1555624 (Toxxe=X in the amount of $750,000.00, in favor of Twin Cities -Metra Certified Development Company; Which mOrtgago was subsequently assigned to U.S. Small Business Administration by Assignment filed January 7.$,1999 as Doo mentNumber 3116208 and filed May 4, 1999 as DocunmcM Number 1555627. NOTE: Request for Notice ofForeclosure filed January 25, 1999 as Document Number 3116207 and filed May 4, 1999 as, Document Number 1SSS625. 16. Subject to the following Financing St w==t= Five D Limited, Debbor, to Western Bank, filed May 12, 2008 as Document Number 2039397, wbiah was continued by Document Number 2202313, filed May 25, 2013. Case No. 399270 COM -Rent No. 399270 ALTA Commicmant-7006 TLb co:mmimrear is 9ava3id unless ft lnsurkg Provision and Schedules A and B are atmobed . S&e3nle 132 consists of 3 pne(s) MRY-14-2013 10:09 Stewgrt Tftie Guaranty Company Issued by fts Agent, Land Th* lac. 2200 West county litoad q Suite 2205 ROSevOle, MN 55173 CQNIlVIITMENT SCIZDQLE B . Section II Fscsplions 17. Mortgage eo,;eouted by Five D Limitc3, a hil mesota corporatiom6 datrd November 1, 2008, filed December 15, 2008 as Docuunent Nuunber4131556 (Alsbract) and Document Number 2058679 (T'orrms), in the original amount of $60,000.00, in favor of 150000mic Development Anthorfty in and for the City of New Hope. 19. Easement In favor of City of Mounds View, dated Apri13,1999, filed April 30,1999 as Document Xm6ber 3055239. 19. Memorandum of Optiam to Purchase and. Right of First Refusal A.gm=ent between Five D Limited and Holiday diversified Services filed June 2, 2008 as Document Number 2041188. 20. if there are any quests xs regarding tido CWnxui mon% please contact .Ton $datum at (651) 697-6127 or by email at jedstrom@landti+.ia na4onL ; Calc No. 399270 CommitmcatNo, SM70 ALTA Ca®mitm mt-2006 This commitmmt is invalid unless the LMKb)8 Prooisi= and Schedules A and.B are attached. Schedule B2 comfits of 3 pages) - .- TOTAL P.08 MPY-14-2013 10:09 Stewart Me Guaranty Company Issued by its Agent, Land Tale, Tur- 2200 West County Road C, Suite 7205 Roseville, MN 5517,3 SC7:[EDULE ll - Section 11 options P. 07/0a The policy or policies to be issued will oontdn exceptions to the following unless the sa= are disposed of to the satisfaat = of'the Company. I. Defects, liens, tncumin=oes, adverse claims or other matters, if any, created,, first appearing in the public records or attaching subsequ=t to the Motive Date hereof but prior to the date the Proposed i uMed acquires for value of record the este or interest or mMWV thereon covered by this Comment. NOTE, Upon closing with Land Title, Inc., Item 1 on Schedule $-YY WM be deleted_ Tote )Ffuaual Polfcywill extend coverage as to the gap between the Lfleckive Date lfsted in Item X of Schedule A and the date of recording of the instraments rri+atiitg the f>aterest to be imured. 2. Rights or claims of parties in possession not shown by the public records_ 3, Any encroachment, encumbrance, violation, variation, -or adverse circumstance offtflytg the Titic- that would be disclosed by an &carate and complete laud survey of the Land. 4. meets or claims of easements, which ara not shown, by the public records. 5. Any lien or right to alien for services, labor or material herefnforc or hereaf#er furnished, imposed by law and not shown by the public records. 6. Taxes or speoiel, assessments whiob are not u#1XO as existing Berta by the records. 7. Genal and special taxes and assessments as herenker listed, if stay (a19 amounts shown being ercclnAve of interest, penalties and costs). S. No coverage is provided for municipal code compliance mattars and has including, bort not limited to, utilities, right O:tw'LY maintenance, water or sewer services, or foss for tree, weeds, grass, and snow or garbage removal, polioe boardiing, vacant building registratlon and zoning. 9. Any lease, grant, exception or reservation ofminerals or ndneral rights appearing W the public records. Casa No. 399270 Commiftetrt No. 399270 ALTA CCmmitsneM — 2006 This Domrnibneut is mvaUd Mess the bsusintg Prvisiens and ScbedWes A scud B are ait=hcd_ Schcdctla 82 caoesists of 3 page(s)